Browder: Cyprus should stick to rule of law in Magnitsky case, not act as “Russian colony” (Corrected)

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(Corrects case number in second paragraph)

By Stelios Orphanides

Hermitage Capital founder Bill Browder said Cyprus should stop cooperating with Moscow in Russian “politically motivated” criminal proceeding against him and his partner Ivan Cherkasov and instead support efforts by other countries in tracing Russian illicit funds.

The investor-turned-activist who heads a worldwide campaign for justice in the case of Sergei Magnitsky, the 37-year-old Russian lawyer who died in prison after exposing a multi-million tax fraud in Russia eight years ago, said that he was seeking an emergency injunction at the Nicosia district court to prevent Cyprus from cooperating with Russia. The case, 3325/2017, is set for Monday.

Browder, who was commenting in a telephone interview on Thursday, said that the Cypriot police, who two years ago, accompanied by Russian police officers, raided the offices of Hermitage’s former lawyers to obtain documents related to a number of affiliated companies, “are either misinformed or under some kind of influence and are operating in contradiction to Interpol, the UK government, the German government and the Dutch government on the same issues who haven’t cooperated”.

“Thankfully, Cyprus has independent courts where the judges can look at this objectively and fairly and hopefully rule against the Cyprus police and the attorney-general,” he said.

A month ago, police sent a questionnaire to the Cypriot law firm that previously represented Hermitage Capital requesting information about financial transactions involving several subsidiaries of Hermitage Capital and activities of Browder and his associates.

Browder was barred from entering Russia where he ran an investment fund in late 2005 and secretly ordered the liquidation of its assets the following year, according to his book “Red Notice”. In 2007, Russian police raided the offices of Hermitage in Moscow, seized documents and the company stamps and with their use they became owners of three Hermitage subsidiaries. They subsequently filed a false application for a $230m (€192m) tax refund, which they immediately received. After Magnitsky uncovered the fraud, the police officers he implicated arrested him and left him to die in prison without access to medical care as his health deteriorated. Some of the stolen funds were brought out of Russia via the Cypriot banking system. Interpol refuses Russia’s requests in relation to Browder.

In September 2013, former Manhattan Attorney Preet Bharara opened a case against the Cyprus-based Prevezon Holdings on the grounds that it received almost €2m of the stolen funds which resulted in a $6m settlement four months ago. US President Donald Trump, investigated for his alleged ties to Russia, fired Bharara in March.

Lawyer Christos Pourgourides, the former Disy lawmaker who is meanwhile representing Browder, asked Minister of Justice and Public Order Ionas Nicolaou to cease the investigations against Browder and his previous lawyers who had been subpoenaed to deliver documents to the police.

“No state that applies the rule of law should cooperate with the Russian authorities and thus facilitate their vile work,” aiming at trying Browder, close associates in absentia, and Magnitsky posthumously, Pourgourides told the minister in a letter dated December 17, 2015.

In his February 10, 2016 response, Nicolaou said that he could not satisfy the request as he received assurances from the Russian prosecutor general that “there is no political foundation or political motivation” behind the proceedings.

Attorney-General Costas Clerides declined to comment and referred to the Ministry of Justice.

In a telephone interview on Friday, Nicolaou said that Cyprus was not passing Russian authorities information related to the Magnitsky case and instead has received related information from Russia.

“The evidence given to Russian authorities were not related to Magnitsky,” he said. “They are related to the purchase of Gazprom shares. We didn’t give any data on how the shares were purchased, or the Magnitsky crime”.

Nicolaou, married to sister of Christos Kinanis, a Nicosia-based lawyer who represented Prevezon until eight years ago, categorically dismissed the idea of being involved in a conflict of interest in the handling of the case.

Kinanis said that his law firm had no involvement in Prevezon’s operations. “The directors and registered shareholders were the clients directly and we didn’t know what they were doing, at least in the two years they were with us,” he said. “We are very careful with our customers and if we discover the slightest (irregularity), we kick them out”.

As part of Browder’s campaign for justice for Magnitsky, the US Congress in 2012 passed the Magnisky Act, which former President Barrack Obama signed into law, which bans individuals deemed responsible for the lawyer’s death from entering the US or using its financial system. This angered Russian President Vladimir Putin who in response had a law banning adoption of Russian children by US families passed by the Duma.

In 2014, the Parliamentary Assembly of the Council of Europe asked governments of its member states to follow the US example and also “adopt targeted sanctions against individuals” involved in Magnitsky’s death, including visa bans and the freezing of accounts.

“The Cypriot government should read documents produced by the Council of Europe,” Browder said and added that as a result of Russia’s influence on the island, he would never come to Cyprus, which he described “a Russian colony”.

“I would feel completely unsafe travelling to Cyprus,” he said. “The Cypriot police are a division of the Russian police in my opinion and I believe that if I went to Cyprus my life would be in danger and would risk being sent back to Russia”.

The police did not immediately respond to a request for comment.

Russia is one of Cyprus’s major commercial partners and second largest source of incoming tourism. Russian owned companies are significant sources of revenue Cypriot law and accounting firms.

President Nicos Anastasiades who was the first EU head of state to visit Russia in early 2014, after the annexation of Crimea, is scheduled to visit Moscow next month.

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About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • JS Gost

    Cyprus celebrates quick dirty money regardless of the cost. Primitive people will always marvel at shiny objects just before they become evolutionary extinct.

    • Barry White

      The Cargo Cult, JS, is indeed alive in the East Med.

    • Roc.

      You are a complete pillock in that statement, it only makes you of a very low IQ level, the biggest collector of shiny objects mate are the Americans, and BTW which country you from? really you need to spend more time thinking before you lay your fingers on the keyboards.

      • almostbroke

        Your ‘at it ‘ again ! Obsessed with calling people ‘Turks’ and T Cs . Every country has dodgy dealings but it’s an ‘art form ‘ and on an ‘industrial scale ‘ in Cyprus !!!!

        • Evergreen

          Too much obsession is a sign of mental disorder.

          • Roc.

            mixing your words, passion rather than obsession.

        • Roc.

          Read what the JS Gost wrote, he is a known Turk, and his BS statement, so I shoving right back to him.

          • Evergreen

            JS Gost ,like Frustrated is a Cypriot.You seem to be out of your mind.

          • Roc.

            I see you choose your words nicely, if he is a Anatolian, then I do not class him as Cypriot even if he lives in Cyprus, which I doubt

          • Evergreen

            “No human race is superior; no religious faith is inferior. All collective judgments are wrong. Only racists make them” By Elie Wiesel

          • JS Gost

            Just carry on listening to the voices in your head, but please don’t tell us what they say.

        • Iron mike

          Maybe you should read the Daily Mail then you would not say this about Cyprus and be shocked if what goes in Britain

          • almostbroke

            Not British , don’t read Daily Mail !!!!

      • JS Gost

        I am Cypriot by birth and returned a few years ago having lived in the ‘Real World’, I understand that for the some, the concept of a world beyond Cyprus being very hard to grasp by some, unless it is used for blame for the multitude of failings Cyprus has bought on its own head. I can also understand how nobody from this ‘real world’ can be any more knowledgeable, intellectual or perceptive as a real Cypriot because of how this countries stands head and shoulders above everyone else. You have one mouth, two ears and two eyes; how about using them in those proportions?

  • Jeremy Rigg

    And there I was thinking that we already where a Russian Colony. Silly me.

    • almostbroke

      They cannot make up their mind weather they are Greeks or Russians . They are wannabe ‘Greeks ‘ but ‘business is business ‘ the Russians have the ‘dirty money ‘ and much more lucrative , they would prefer it to be Greeks but you cannot have everything !

      • Evergreen

        Very true.

  • Pullaard

    Cyprus continues to ignore EU rules yet the EU continues to hand over money willy-billy for all sorts of projects. Who are the numbskulls – Cypriots or EU members?

  • Didier Ouzaid

    “In his February 10, 2016 response, Nicolaou said that he could not satisfy the request as he received assurances from the Russian prosecutor general that “there is no political foundation or political motivation” behind the proceedings.”

    Oh, he said so, huh? He must be right, then. After all, OJ didnt do it either. And we all know independence oozes from the Russian justice system. Greedy Blackstone or Blackrock dont even maintain offices there, when most of their attempts to deal there (through consultants or setup vehicles) have been nothing but controversial if not plain shady.

  • Roc.

    This idiot should go and investigate all the top Bankers of america and investigate the Federal bank

    Bloke wants to sweep dust but is afriad to move rocks.

  • Neroli

    It already is a Russian colony, has been for many years!

    • Roc.

      Mate Cyprus is an apprentice compared to Turkey smuggling Isis oil to make money, or USA selling Arms that kill people to make money, this is pittance compared to the real Crooks on this planet, so who cares is Cyprus makes some money, no diff to the Bahamas, Caymen Islands even UK and Ireland

      Here this is where you should direct your angelic concerns of money

      Amazon paid just €16.5m (£15m) in tax on European revenues of €21.6bn (£19.5bn) reported through Luxembourg in 2016.

      • Neroli

        Firstly I’m not your mate, which seems to be a new word for you lately, secondly we are discussing Cyprus in the article!

        • Roc.

          Figure of speech, I would not want to be your mate 100%, so lets get that out of the way, and you if you cannot expand your mind to see that it’s all the same crap and plays a massive significance on this article that Cyprus is not an exception, then you need to go back and read about financial world of politics.

          • Iron mike

            Have you heard the billions laundered by the president of Kazakhstan into British banks This makes the money brought by Russian to Cyprus quite insignificant but your mate just enjoys rubbishing Cyprus for his own pervetted pleasure

    • Vova Khavkin

      Cypriot police are not misinformed; Mr. Browder suggested this in jest. They are complicit accomplices, of the same Orthodox mindset and caveman mentality, beyond redemption. Just like most of Cypriot government and parliament.

      • Evergreen

        Exactly.There is a very deep religious bond between Cypriots and Russians .

    • Martin Standage

      But remember that there are many decent,ordinary Russians living here too who are by no means oligarchs and I know a lot who are against the Putin regime and admit that Russia is not a safe and stable country to live in for all the reasons which are well-known.

    • Martin Standage

      The British community here is still actually the largest foreign one, of course!

  • Evergreen

    I am in complete consensus with the contents in the article. I would like to add here that it is an extremely dangerous sign for the Europe as Russia is using Cyprus as a backdoor to Europe and Europe /EU needs to devise some stringent policy in future about it.

  • Paranam Kid

    Bill Browder, such a nice man, and that poor Sergei Magnitsky, it breaks one’s heart to read this article. Nevertheless, there is more than meets the eye.

    According to Browder’s narrative, companies ostensibly under his control had been hijacked by corrupt Russian officials in furtherance of a $230 million tax-fraud scheme; he then dispatched his “lawyer” Magnitsky to investigate and – after supposedly uncovering evidence of the fraud – Magnitsky blew the whistle only to be arrested by the same corrupt officials who then had him locked up in prison where he died of heart failure from physical abuse.

    This shocking tale of alleged Russian official corruption and brutality drove legislation that was a major landmark in the descent of U.S.-Russian relations under President Barack Obama to a level rivaling the worst days of the Cold War. To get this done with the objective to get the charges in Russia dropped & his “good name” cleared, Browder was undoubtedly able to hustle the all-powerful Israel Lobby to direct the US Congress to introduce the law. The Lobby cant have had too much of a job getting the legislation through considering the anti-Putin/anti-Russia hysteria that has gripped the US.

    That is also were the connection to Trump jr. & Russia-gate pops up: Natalie Veselnitskaya, as a lawyer defending Prevezon, a real-estate company registered in Cyprus, on a money-laundering charge, she was dealing with U.S. prosecutors in New York City and, in that role, became an advocate for lifting the U.S. sanctions, The Washington Post reported. That was when she turned to promoter Rob Goldstone to set up a meeting at Trump Tower with Donald Trump Jr.

    But the Trump jr. track is off topic so I will leave it at that.

    The Browder/Magnitsky story eventually attracted the attention of Russian filmmaker Andrei Nekrasov, a known critic of President Vladimir Putin. Nekrasov decided to produce a docu-drama that would present Browder’s narrative to a wider public. Nekrasov even said he hoped that he might recruit Browder as the narrator of the tale.

    However, Nekrasov’s project took an unexpected turn when his research kept turning up contradictions to Browder’s storyline, which began to look more and more like a corporate cover story. Nekrasov discovered that a woman working in Browder’s company was the actual whistleblower and that Magnitsky – rather than a crusading lawyer – was an accountant who was implicated in the scheme.

    Browder’s fabrication was designed to conceal his own corporate responsibility for the criminal theft of the money. As Browder’s widely accepted story collapses, Magnitsky is revealed not to be a whistleblower but a likely abettor to the fraud who died in prison not from an official assassination but from banal neglect of his medical condition.

    In the docu-drama well-known names in the European Parliament, in the Parliamentary Assembly of the Council of Europe and in NGOs that are reputed to be watchdogs have taken on faith the arguments and documentation (largely in Russian and inaccessible to them) which they received from William Browder and then rubber-stamped his story as validated without making any attempt to weigh the evidence. Their intellectual laziness and complacency is captured fully on film and requires no commentary by the director.

    Nekrasov largely allows William Browder to self-destruct under the weight of his own lies and the contradictions in his story-telling at various times. Nekrasov’s camera is always running, even if his subjects are not thinking about the consequences of being taped. The film also shows a videotaped deposition of Browder fumbling during an interrogation in a related civil case that is devastating to those politicians and commentators who fully swallowed Browder’s Magnitsky line.

    Browder’s supposed lapses of memory, set in the context of involuntary facial expressions of stress and nervousness, would be compelling to jurors if this matter ever got into an open court of law in an adversarial proceeding.

    Thanks to Gilbert Doctorow who saw the docu-drama it is clear the neither Browder nor his fake lawyer Magnitsky are not quite as kosher as Browder makes himself out to be. So before passing judgment people should always try to find out the real facts.

  • Muffin the Mule

    Revelation of the Phedon Express simply adds meat to the bone to this article. It’s endemic sadly in this Island and is reflected in its politics too…. anything for a fast buck. Cyprus deserves better but it’s almost impossible to break the habit of a lifetime.

  • BritCyprus

    Cyprus is afraid of any actions from Russia if they fail to help do what they are told by the Kremlin paymasters. Russia controls Cyprus.

    • Evergreen

      seems so.

  • Martin Standage

    A very interesting article which raises many questions?Anastassiades is due to visit Moscow again next month and we can only speculate on what for?But to put things in perspective, it will be interesting to see if the E.U. and the U.K. will actually impliment similar actions against Putins regime to the USA over the Magnitsky case?It seems that big financial interests are delaying things for rather obvious reasons!Whilst I fully corroborate what Bill Browder asserts from my own experiences and knowledge of living in Russia, I would still consider Cyprus to be a safer place,although the effectiveness of the police here in tackling serious crime has often been found lacking; in deed a number of ‘hits’ against Russians have taken place here over the years with their motives being no doubt dodgy business dealings?