The head of the law firm that employed Sergei Magnitsky, the 37-year-old lawyer who died in pretrial detention last November, has fled the country and accused law enforcement authorities of implicating him in a multimillion-dollar corporate fraud scheme.
The case deals another blow to the battered image of the country's judicial system, despite repeated assurances by President Dmitry Medvedev to battle "legal nihilism" and endemic police corruption.
Speaking by telephone from London, Jamison Firestone, a U.S. citizen and founding partner of Moscow-based law and audit firm Firestone Duncan, told The Moscow Times on Tuesday that he decided not to return from his New Year's vacation because he feared that he might suffer the same fate as Magnitsky.
Magnitsky, who acted as a lawyer for the Hermitage Capital, once the largest investment fund in Russia, died under unclear circumstances after being detained on charges of helping Hermitage head William Browder evade some $3.25 million in taxes in 2002.
Firestone said the criminal scheme against him was similar to the one brought against Hermitage Capital, and that he suspected a group of corrupt Interior Ministry officials stood behind both cases.
He said unknown people twice last year submitted to the tax inspectorate a fraudulent tax declaration for Anrider, a company that he is a director of, asking for a refund worth $21 million. The documents, sealed with a fake corporate seal and with his signature forged almost 50 times, were returned to him in August 2009 after inspectors noticed that the signatures were forgeries, Firestone said.
Another set of fraudulent tax declarations were submitted in December.
"This is legal nihilism at its ugliest," Firestone said.
"I was shocked. … I feared it could also be a setup, someone trying to make it look like I am trying to steal $21 million from the budget so that I can be arrested and killed like my colleague Magnitsky," he said, adding that a number of similarities between his case and the Hermitage matter suggested that the same people were behind both cases.
Firestone said he had complained to the Prosecutor General's Office but to no avail. "My complaint was effectively killed by the same official who ignored all the Hermitage complaints and the complaints about Magnitsky's detention," he said.
Spokespeople for the Interior Ministry and the prosecutor's office were unavailable for comment Tuesday, a public holiday.
The Prosecutor General’s Office has refused to open a criminal case into Magnitsky’s death, although President Dmitry Medvedev has ordered an investigation and fired 20 prison officials.
An independent report released in December blamed Interior Ministry investigators, judges and prosecutors as well as squalid conditions at the Butyrskaya detention center for the death. Interior Ministry officials have said the lawyer died of heart failure and had never complained about his health.
Firestone said the authorities' inaction was all the more baffling because the two cases were not about corporate profits. "The crazy thing is that what is at stake is Russian government money," he said.
Sergei Markov, a State Duma deputy for the ruling United Russia party, said that while the case might highlight problems with corruption, the country also suffers from investors prone to take big risks for the sake of profits.
"It is extremely negative when the government cannot guarantee the safety of businesses. But it is also a fact that those who come here [as investors] are not normal ones but willing to gamble. When the law of the jungle applies only, those prepared to work according to the law of the jungle will come," he said by telephone.
Chris Weafer, chief strategist at UralSib Capital, said that while investors in emerging markets are not easily dissuaded, a buildup of bad news could evoke doubts even among those who are the most tolerant to risk.
"Russia has been pushing that boundary since the summer of 2008," he said.
In August of that year Prime Minister Vladimir Putin harshly criticized mining giant Mechel, sending the company's shares into a 40 percent plunge.
Weafer said that while investors in the lucrative natural resources sector will still come, events like this would make it more difficult "to attract the sort of investors that Russia needs to create a more diverse economy."
"It makes President Medvedev's job that much more difficult," he said in e-mailed comments.
Firestone said he planned to set up an office for his law firm in London, while his staff of about 20 would continue business in Moscow.
But he was adamant that he would continue filing complaints with the Russian authorities. "I will make as much noise as I can," he said.
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