Russian mafia whistleblower found dead outside UK mansion

[Joe Higashi]

Russian mafia whistleblower found dead outside UK mansion

By Maria Golovnina
LONDON | Wed Nov 28, 2012 9:23am EST

(Reuters) - A Russian businessman helping Swiss prosecutors uncover a powerful fraud syndicate has died in mysterious circumstances outside his mansion in Britain, in a chilling twist to a Russian mafia scandal that has strained Moscow's ties with the West.

Alexander Perepilichny, 44, sought refuge in Britain three years ago and had been helping a Swiss investigation into a Russian money-laundering scheme by providing evidence against corrupt officials, his colleagues and media reports said.

He has also provided evidence against those linked to the 2009 death of anti-corruption lawyer Sergei Magnitsky, a case that caused an international outcry and prompted the United States to push for a bill cracking down on Russian corruption.

Perepilichny, a Russian citizen, collapsed and died abruptly outside his home on an upmarket estate in the English county of Surrey on November 10, police said on Wednesday, the first time the case has come to light.

Perepilichny is the fourth person linked to the Magnitsky case to have died in strange circumstances.

"It is being treated as unexplained," a police spokeswoman said. "A post-mortem examination was carried out which was inconclusive. So further tests are now being carried out."

British media reports said Perepilichny appeared to be in good health when he collapsed in the evening outside St George's Hill, one of Britain's most exclusive estates, where he was renting a house for 12,500 pounds ($20,000) a month.

Dubbed as Britain's Beverly Hills and surrounded by neatly trimmed golf courses, the sprawling leafy estate is home to many prominent magnates and celebrities, its list of one-time tenants boasting stars such as Elton John and Ringo Starr.

Far beyond Russia's borders, Magnitsky's death has become a symbol of corruption in Russia and the abuse of those who challenge the authorities there.

This month the U.S. House of Representatives voted overwhelmingly to "name and shame" Russian rights violators as part of a broader trade bill, brushing off warnings from Moscow that the move would damage relations.

William Browder, a former employer of Magnitsky and a prominent London-based investor, said Perepilichny had come forward in 2010 with evidence involving the Magnitsky case that subsequently helped Swiss prosecutors open their investigation.

"Alexander Perepilichny approached us in 2010 as a whistleblower with evidence about the complicity of a number of Russian government officials in the theft of $230 million which Sergei Magnitsky had uncovered," said Browder, founder of Hermitage Capital Management.

"He provided us with copies of many of the original bank documents. In January 2011, Hermitage filed an application to the Swiss authorities seeking an investigation. It was announced in March that the Swiss prosecutor's office opened an investigation and froze the assets in a number of accounts."

Browder, whose grandfather was the general secretary of the American Communist Party, was one of the biggest Western investors in Russia but was barred from Russia in late 2005 and most of his staff left the country as Hermitage found itself coming under increasing official pressure.

Magnitsky was jailed in 2008 on suspicion of tax evasion and fraud, charges that colleagues say were fabricated by police investigators he had accused of stealing $230 million from the state through fraudulent tax refunds. The Kremlin's own human rights council has said Magnitsky was probably beaten to death.

MAFIA STATE

Leaked secret diplomatic cables from the U.S. embassy in Moscow once described Russia as a "virtual mafia state", and London has long been the chosen destination for Russians seeking refuge from trouble at home.

But concerns have been growing in recent years that Britain might be turning into a playground for Russian mobsters as gangland violence seems to be spilling over Russian borders.

In April, a former Russian banker was shot near London's Canary Wharf financial district, sending a chill through the immigrant community. In 2006, former Russian spy Alexander Litvinenko died after drinking tea poisoned with polonium-210.

Asked about Perepilichny's case, Swiss prosecutors said it started its criminal investigation in March 2011 following a complaint made by London law firm Brown Rudnick filed on behalf of Hermitage Capital Management.

"Concerning the death of Mr Perepilichny and its consequences on the criminal proceedings, we'd like to stress that our strength resides in our ability to minimize the influence of such a regretful event on our investigation," the Swiss Office of the Attorney General said in a statement.

"A good cooperation with other judicial authorities is also essential to carry on our investigation efficiently."

Perepilichny was also a witness against Russia's notorious Klyuyev Group, a murky network of officials and underworld figures implicated in tax fraud who used European bank accounts to buy luxury property in Dubai and Montenegro, Britain's Independent newspaper reported.

"Perepilichny was the guy who brought all the evidence they needed to open the investigation," a source told The Independent. "He brought with him records of shell companies, Credit Suisse accounts, property transactions. The whole lot."

(Additional reporting by Martin de Sa'Pinto in Switzerland and Natalie Huet in Britain; Writing by Maria Golovnina; Editing by Will Waterman)

 

[Joe Higashi]

Russian supergrass, 44, found dead outside leafy Surrey mansion (and he's the FOURTH person linked to multi-million pound tax fraud to die mysteriously)

• Alexander Perepilichnyy provided evidence against corrupt tax officials involved in fraud
• His evidence showed they had become extremely wealthy shortly after a British investment fund was ripped off in a £144m scam
  
• The 44-year-old collapsed in his road, one of the most secure in the UK
• Police are treating the death as 'unexplained'
• He is the fourth person linked to the shadowy 'Klyuev Group' to have died suddenly

By EMMA REYNOLDS PUBLISHED: 08:52 GMT, 28 November 2012 | UPDATED: 12:25 GMT, 28 November 2012

Murky underworld: Alexander Perepilichnyy, 44, collapsed in his cul-de-sac after helping prosecutors investigate corrupt Russian tax officials

A Russian supergrass who was helping prosecutors to uncover a multimillion-pound money laundering scam operated by his fellow countrymen has died at his Surrey estate in mysterious circumstances.Wealthy Alexander Perepilichnyy, who collapsed outside his mansion in a gated Weybridge cul-de-sac, fled to Britain three years ago after falling foul of a powerful crime syndicate. Mr Perepilichnyy, 44, was apparently in good health and had been helping Swiss prosecutors to investigate corrupt Russian tax officials and those linked to the death in custody of whistle-blowing Moscow lawyer Sergei Magnitsky.He is the fourth person linked to the shadowy 'Klyuev Group' to have died suddenly. Surrey Police are treating the death as 'unexplained' following an 'inconclusive' post-mortem. It is thought that he may have been out running shortly before he collapsed in his exclusive cul-de-sac.Kate Winslet, Sir Cliff Richard, John Lennon, Jenson Button and Sir Elton John have all at one time lived on St George's Hill estate, which is one of the most secure in the country and protected by security guards and electronic gates.

Officers were called to the road just after 5pm on Saturday 10 November and Mr Perepilichnyy was declared dead at the scene 30 minutes later.

Exclusive: St George's Hill, in Weybridge, is one of the most secure roads in Britain and boasts many multimillion-pound properties, in which celebrities including Elton John and Kate Winslet have lived

Sorrow: Nataliya Magnitskaya, left, grieves over the body of her son Sergei Magnitsky, the lawyer investigating the fraud for the British investment fund. He died in prison of heart failure

The Russian's evidence had shown how several tax officials from Moscow suddenly became incredibly rich just after a tax fraud against a British investment fund and had used Swiss based bank accounts to buy expensive properties in Dubai and Montenegro.

THE £144M TAX FRAUD AND THE STAIN OF CORRUPTION

In late 2007, Russian police raided the offices of Hermitage Capital Management, a multibillion-pound investment fund British investment fund, ostensibly looking for information on an investor.

Company seals and corporate certificates were taken as evidence.

Over the following months, those seals were used, with the complicity of corrupt court and tax officials, to transfer ownership of a Hermitage subsidiary and apply for a tax rebate.

On December 24 2007, tax officials signed off on a 5.4billion rouble (£144m) rebate. The money was wired to Universal Savings Bank, a little known firm that was quickly liquidated following the transfer.

Russia’s Interior Ministry claims the complex scam was carried out by a retired sawmill worker and a convicted burglar, both of whom are serving five year sentences, and three others who have since died.

Hermitage began investigating and named people in the Interior Ministry as being involved, causing aworldwide scandal over the culture of corruption among government officials in Russia.

The tax officials who signed off on the deal, the Russian government insisted, were innocent pawns tricked into enabling the fraudulent request. The people named by Hermitage were promoted.

The Interior Ministry said earlier this year that records from Universal Savings Bank which police could have used to uncover what happened to much of the money were destroyed in a truck that crashed and exploded in 2008.

'Perepilichnyy was the guy who brought all the evidence they needed to open the investigation,' a source told The Independent.

'He brought with him records of shell companies, Credit Suisse accounts, property transactions. The whole lot.'Prosecutors began investigating accounts at Credit Suisse this year after Hermitage Capital Management forwarded them a dossier of evidence implicating the Russian officials.Hermitage Capital was once one of the largest foreign investors in Russia until it became the victim of a $230million (£144m) tax fraud.Corrupt officials from Russia's Interior Ministry conspired with tax officers to steal corporate seals from Hermitage Capital through a police raid.They used the seals to transfer ownership of a Hermitage subsidiary and apply for a series of tax rebates.

Complicit courts and tax offices signed off on the deal and the money was transferred into a bank, which was liquidated shortly afterwards. The case has become a major source of embarrassment for Russia thanks to the work of Bill Browder, the British CEO of Hermitage Capital.Mr Browder's findings are published regularly on the website RussianUntouchables.com, a prominent gathering point for Russians who are angered by corruption in their homeland.His lawyer, Sergei Magnitsky, named officials involved and was then imprisoned and died in prison after being tortured and denied medical treatment.

A little over a year ago, Mr Browder announced that a Russian businessman had come to him with details of how some of the stolen money was laundered. The whistleblower was part of the network that had helped the tax officials involved in the Hermitage scam hide millions of pounds in Swiss bank accounts, according to a piece published in April in US business weekly Barron’s. This man was Perepilichnyy, it has now emerged, and he handed over records for two secret accounts at a Credit Suisse branch in Zurich. These showed that in the months after the fraudulent Hermitage tax claim was approved by the Moscow tax bureau, people linked to tax officials received millions through a shell corporation registered in Cyprus.

Sudden windfall: Mr Perepilichnyy exposed the Swiss accounts linked to tax officials and used to buy luxury homes in Montenegro and on Dubai's Palm Island (pictured) shortly after the scam

The Swiss accounts were also used to make payments for a villa in Montenegro and a palatial mansion in Dubai’s Palm Island. There is talk of putting members of the Klyuev Group on visa travel ban lists in the EU and United States and Senator John McCain has called on the White House to exercise its new powers to curb international crime syndicates. A bill bearing Sergei Magnitsky's name and aimed at punishing human rights violators has been passed by the U.S. House of Representatives.If the amendment ultimately becomes law, American officials will be obliged within 120 days to compile and publish a list of Russian officials involved in Magnitsky's persecution and death.

These would be denied U.S. visas and have their financial assets in the U.S. frozen. A spokesperson for Surrey Police said today: 'Surrey Police continues to treat the death of a man in his 40s who collapsed in Weybridge on Saturday, 10 November as unexplained.

DEATHS OF THREE

OTHER
RUSSIANS LINKED TO THE SCAM

Sergei Magnitsky

The corporate lawyer from Moscow, right, was hired by British investment fund Hermitage to investigate the scam and he named a number of key Interior Ministry officials who he believed were involved.

Days later, he was arrested by the same men he had accused and was held in prison for a year. He died in November 2009, aged 37, after being refused vital medication following months of torture.

Valery Kurochkin
Mr Kurochin was put in charge of Hermitage subsidiaries after their ownership was transferred to the crime syndicate using the stolen seals and corporate certificates.

The Russian authorities claimed he was behind the scam, but he could not be questioned as he was found dead at an airport in Ukraine shortly afterwards.

Semyon Kobeinikov
Russian police said that the Russian/Hungarian national had bought Universal Savings Bank - which was liquidated shortly after the stolen money was transferred into it.

He fell from a balcony window to his death in September 2008.

'The death remains under investigation whilst officers await the results of the post mortem and toxicology tests.'Surrey Police continues to work closely with the coroner's office whilst the investigation remains ongoing.

'Officers were called to Granville Road shortly after 5.15pm following a report that a man had collapsed in the road. 'South East Coast Ambulance Service attended the scene but the man was pronounced dead just before 5.40pm.'Swiss investigators confirmed that Mr Perepilichnyy made various declarations to the prosecutor Maria-Antonella Bino.

They told Mail Online: 'Concerning the death of Mr Perepilichnyy and its consequences on the criminal proceedings, we'd like to stress that our strength resides in our ability to minimise the influence of such a regretful event on our investigation.'

The official statement reads: 'The Office of the Attorney General is currently conducting a criminal investigation against persons unknown on suspicion of money laundering.'The investigation has been triggered by a report of the Money Laundering Reporting Office Switzerland that refers to a complaint the London law firm Brown Rudnick filed on behalf of its client Hermitage Capital Management Ltd. The investigation was initiated on 7 March 2011.

'In the course of the investigation, the OAG has ordered several Swiss bank accounts blocked and the flow of suspicious assets was analyzed. The investigation is continually turning up new findings that require additional examination. No further information is being provided at present in order not to prejudice the ongoing investigations.

'The competent Russian authorities have requested mutual legal assistance from Switzerland in this matter. The Federal Office of Justice decided to grant this request and, on 15 September 2011, entrusted the OAG with the execution of the Russian request. Again, no details on the mutual legal assistance request or the measures provided in this context can be released now.'

In November 2006, former KGB agent Alexander Litvinenko, 43, died in November 2006 after he was poisoned with polonium-210 while drinking tea at the Millennium Hotel in London’s Grosvenor Square.
He was allegedly at a meeting with two Russians - former KGB contacts Andrei Lugovoy and Dmitry Kovtun.

Suspicious: Former KGB agent Alexander Litvinenko died of polonium poisoning in November 2006 in another Russian case shrouded in mystery

In a deathbed statement, he accused Mr Putin, then the Russian President, of ordering his assassination. His murder led to angry exchanges after the Russian government refused to extradite Mr Lugovoy, who denies any involvement in his death and has asserted that he was framed by MI6.

Hugh Davies, counsel to the inquest, said at a pre-inquest review in London earlier this month that it could extend to include 'the possible culpability of the Russian state', as well as 'the possible culpability of the British state in the death of Alexander Litvinenko either: one, in carrying out by itself or its agents the poisoning; or two, failing to take reasonable steps to protect Mr Litvinenko from a real and immediate risk to his life'.

Mr Davies said the Russian state has been invited since January to become an 'interested party' in the inquest, but it has not yet taken up the offer. He said there were a 'number of competing and increasingly controversial theories' surrounding Mr Litvinenko’s death and that the inquest’s scope could also include involvement of other parties, including friend Boris Berezovsky, Chechen-related groups and the Spanish mafia.

A further pre-inquest review will be held in December to decide on the full scope of the inquest.
​

 

[anchovies]

UK police order toxicology tests on dead Russian whistleblower

By Maria Golovnina
LONDON | Fri Nov 30, 2012 8:35am EST

(Reuters) - British police have carried out toxicology tests on the body of a Russian anti-corruption whistleblower whose mysterious death in England has put a new spotlight on Russian criminal groups entrenched in Europe.

Alexander Perepilichny, 44, moved to Britain three years ago and had been helping Swiss prosecutors uncover a shady Russian criminal group suspected of being involved in large-scale, cross-border tax fraud violations.

Police have struggled to establish the cause of his death since he suddenly collapsed and died near his home on an up market, heavily protected estate in Surrey, south of London, on November 10.

Following an inconclusive post-mortem on November 14, investigators conducted another examination of Perepilichny's body as well as toxicology tests.

"Toxicology tests are being carried out as part of the investigation," a Surrey police spokeswoman said on Friday, adding that it could take months to get the results.

"The death is being treated as unexplained and remains under investigation."

Although toxicology tests are often standard practice following inconclusive post-mortem examinations, the move has evoked memories of the 2006 death of former Russian spy Alexander Litvinenko who died in London after drinking tea poisoned with radioactive polonium-210.

Perepilichny's case has shed new light on a multimillion-dollar tax fraud scheme that was originally uncovered by Russian lawyer Sergei Magnitsky, who was jailed in 2008 by the Russian authorities on charges his colleagues say were fabricated.

In 2009, Magnitsky died in a Russian prison, provoking an international outcry and becoming a symbol of human rights abuse and corruption in Russia.

Perepilichny is the fourth person linked to the case to have died in unusual circumstances.

In 2010, he came forward with information linking Russian government officials to a tax fraud scheme involving a Swiss bank, a move that helped Swiss prosecutors open a far-reaching criminal investigation in 2011.

Britain is the chosen home for many Russians, some seeking employment opportunities or refuge from political persecution. But there are also fears that London is turning into a playground for Russian mobsters trying to avenge their former partners hiding abroad.

Russian officials have played down Perepilichny's link to the Magnitsky affair, which has strained Moscow's relations with the West and prompted the United States to push for a bill cracking down on Russian corruption.

"We cannot see any connection between the death of Mr. Alexander Perepilichny, the causes of which are yet to be established, and the so called 'Magnitsky case,'" the Russian embassy in London said in a statement.

Britain's Independent newspaper, financially backed by a Russian billionaire critical of the Kremlin, reported on Friday that Perepilichny received a warning a year ago that his name was on a hit list in Russia.

"It was like an order book," a source described as an acquaintance of Perepilichny told the paper.

"His name was in it."

(Writing by Maria Golovnina; editing by Andrew Roche)