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KGB kills another Russian dissident in London, in Magnitsky Case

Publication time: 28 November 2012, 23:22

A Russian dissident 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 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.

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.

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.

'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.

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 a worldwide 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.

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, 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 was killed in prison by the KGB 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.

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 US House of Representatives.

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

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

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 US visas and have their financial assets in the US frozen.

A spokesperson for Surrey Police said on Wdnesday: 'Surrey Police continues to treat the death of a man in his 40s who collapsed in Weybridge on Saturday, 10 November as unexplained.

The corporate lawyer from Moscow, Magnitsky, 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 was killed by the KGB in November 2009, aged 37, after being refused vital medication following months of torture.

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.

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 saide: '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 at a meeting with two Russians - former KGB contacts Andrei Lugovoy and Dmitry Kovtun.

In a deathbed statement, he accused Putin, 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 democratic groups and the Spanish mafia.

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


Department of Monitoring

Kavkaz Center

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