Carl Mortished, World Business Editor
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A Russian lawyer who represented Hermitage Capital and helped the London-based hedge fund in its allegations of theft and fraud against Kremlin officials has died in prison.
Sergei Magnitsky died on Monday at Matrosskaya Tishina detention centre while awaiting trial for conspiracy. He was arrested in 2008 after accusing senior officers in the Interior Ministry of taking part in the theft of companies owned by Hermitage and HSBC. He was refused bail and spent a year behind bars, held at four detention centres, during which he was denied medical treatment and the right to see his family.
The Russian Prosecutor-General’s office said that Mr Magnitsky, who was 37, had died of a heart attack. His lawyers say they were told yesterday that their client, who worked at Firestone Duncan, a Moscow law firm, had suffered a rupture to the abdominal membrane.
His arrest came during a long legal battle between Hermitage, its founder Bill Browder — who built the fund’s reputation with a series of high-profile campaigns against alleged corporate malfeasance at leading Russian companies — and the Russian authorities.
Mr Browder’s Russian visa was revoked in 2005 on national security grounds and the fund quit the country. Subsequently, Russia’s tax authorities raided the offices of Hermitage and Firestone Duncan and seized company documents. Hermitage said that the documents had been used to steal companies that then were used in an elaborate scam to claim hundreds of millions of dollars in tax rebates from the Russian State.
When Hermitage accused and named the Kremlin officials behind the alleged scam, the authorities accused Mr Browder of tax evasion.
Mr Magnitsky’s mother was told of her son’s death when she arrived at Butyrka detention centre to deliver some personal effects and was told he had been moved to Matrosskaya Tishina. On her arrival there, she was told her son had died the previous day.
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