Arbat Prestige Claims Dropped

Oct 10, 2010 — 23:00

Arbat Prestige Claims Dropped

Oct 10, 2010 — 23:00
Mogilevich is one of the FBI's "Ten Most Wanted" criminal fugitives. He was indicted in 2003 in connection with a Pennsylvania-based company that bilked investors out of $150 million. Russia does not Vladimir Filonov

The Moscow Arbitration Court has ruled that unpaid tax claims against the now-bankrupt cosmetics chain Arbat Prestige were illegal, raising the hopes of defense lawyers that criminal charges against former owner Vladimir Nekrasov and reputed crime boss Semyon Mogilevich will be dropped.

The court on Friday canceled the decision of a Moscow branch of the Federal Tax Service to levy 155.1 million rubles ($5.2 million) in taxes and fines against Arbat & Co., the company that operated Arbat Prestige, Arbat & Co. lawyer Olga Surovova said by telephone.

The ruling comes almost three years after Nekrasov and Mogilevich were surrounded and arrested by about 50 police commandos outside Moscow's World Trade Center.

Following the January 2008 arrests, the men were released in July 2009 after signing agreements to remain in Moscow for the duration of the trial.

Two lawyers for Nekrasov, Alexander Dobrovinsky and Alexander Asnis, told The Moscow Times that they hoped law enforcement officials would use Friday's ruling to drop tax evasion charges against their client and Mogilevich.

"If the ruling comes into force, it will be of fundamental importance to the criminal case," Asnis said.

Asked whether the criminal case could be closed, Dobrovinsky replied, "We hope so."

On Tuesday, Moscow's Tushinsky District Court returned the criminal case against Nekrasov and Mogilevich to prosecutors after ruling that it lacked "documents without which it was impossible to issue a verdict," Asnis said.

If investigators manage to produce documents implicating Nekrasov and Mogilevich in wrongdoing, the trial, which began last September, will start over, Asnis said.

Nekrasov's lawyers will appeal Tuesday's ruling within 10 days, as permitted by law, because the court was legally required to issue a verdict with the available documents, Asnis said.

After the two men were arrested, distributors cut off deliveries to Arbat Prestige's stores, which numbered about 100 nationwide. The company closed its last outlets in December.

Asked Sunday about Arbat Prestige's assets, Asnis said the company's assets no longer existed and refused to elaborate.

Mogilevich was using the name Sergei Shnaider when he was detained. Alexander Pogonchenkov, who insisted that he was a lawyer for Shnaider and not Mogilevich, refused to comment when reached by The Moscow Times.

Mogilevich is one of the FBI's "Ten Most Wanted" criminal fugitives. He was indicted in 2003 in connection with a Pennsylvania-based company that bilked investors out of $150 million. Russia does not extradite its citizens.

Nekrasov and Mogilevich have maintained their innocence, and Nekrasov has said he was the target of a corporate raider who wanted to put him out of business.