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United States begins to enforce Magnitsky Act

September 11, 2013, 12:09 UTC+3
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The United States begins to apply the Magnitsky Act in practice. The first suit is filed against those who are believed to be involved in embezzlement of 5.4 billion rubles ($164 mln) from the Russian budget with the use of companies of the Bill Browder Hermitage Capital Foundation.

The federal prosecutor's office of New York's southern district brought the first civil suit to a court in accordance with the Magnitsky law, Kommersant says. The key defendant is the Cypriot company Prevezon Holdings Ltd and its subsidiaries in the United States, which are owned by Denis Katsyv, son of an official of the Moscow regional government. According to the investigators, together with business partners, he used the money stolen as a result of fraud from the Hermitage fund to buy luxury housing and commercial real estate in New York.

The prosecutors state that Katsyv and his two business partners were directly involved in the laundering of money stolen in fraudulent operations with tax payments of the Hermitage foundation. The owners may face confiscation of property. Their bank accounts must be attached, and the businessmen must be brought to justice for money laundering.

Denis Katsyv's attorney in Russia Natalia Veselnitskaya told Kommersant that the accusations of the U.S. authorities against her client were quite unexpected. The story was published by an American-Romanian anti-corruption agency on the Internet in August last year. It was based on false accusations against Katsyv, Veselnitskaya said. At the moment of the transaction from the Hermitage fund, Katsyv had no connection with Prevezon. He obtained the company six months later, she said.

The American prosecutors' accusations in the suit repeat statements reiterated by Browder and Hermitage for many years that swindlers had stolen three companies from the foundation, had them declared unprofitable in courts, and then filed their applications to receive compensation from the budget for the earlier paid value-added tax, Vedomosti writes.

The daily notes that Denis Katsyv is not on the Magnitsky list.

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