Police probe UK links to Magnitsky money

The snow clad grave of Russian lawyer Sergei Magnitsky with his portrait on the tomb in Moscow in 2012Image copyright
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Sergei Magnitsky died in prison while awaiting trial

Police are investigating how £6.6m through a Russian organised crime group has been allegedly traced to a banking firm inside UK, the BBC has learned.

US court papers have linked some of the so-called “Magnitsky money” – a £150m tax fraud scheme in Russia – to Renaissance Capital.

The information has been handed to police by Hermitage Capital, the original victim of the Russian fraud.

City of London Police say an active investigation can be under way.

Sergei Magnitsky was an auditor at a Moscow law firm when he discovered what he said was a massive fraud by Russian tax officials in addition to police officers.

After reporting the alleged theft of $230m (£150m) to the authorities, he was himself detained in 2008 on suspicion of aiding tax evasion in addition to died in custody in November 2009.

He acted as a legal adviser for London-based Hermitage Capital Management (HCM), where colleagues insist the case against him was fabricated to make him halt his investigations.

Despite his death Russian prosecutors decided to put him on trial – a case dismissed as a “circus” by his family in addition to by HCM founder Bill Browder, who was himself tried in absentia.

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  • William Browder: The man behind the Magnitsky List

The US Justice Department highlighted the UK connection to suspected illicit funds after investigating how proceeds of the Russian tax fraud were allegedly laundered into luxury apartments in fresh York.

US court documents, seen by the BBC, show alleged wire transfers through the Russian organised crime group going into the UK bank account of Renaissance Capital – a Russian investment banking firm, which has offices in London.

The US investigation led to $6m being recovered by the fresh York district attorney.

The files given to British police highlight quite a few “money laundering red flags” over Renaissance Capital’s activities, although the US authorities have not suggested Renaissance played a role in, or were aware of, the original Russian tax fraud.

Renaissance Capital has been contacted by the BBC however has not provided a response.

‘Dirty money’

Mr Browder, who has campaigned for authorities to investigate where the Magnitsky money went, in addition to who benefitted through the fraud, says the outcome inside US should right now prompt UK authorities to act.

“This particular should show various other law enforcement agencies around the globe of which This particular can be a solid case which leads to big financial recoveries in addition to This particular’s worthwhile to pursue,” he said.

“This particular should show the City of London Police of which the information led to a significant financial recovery for the US in addition to there can be a strong argument for them to devote resources to fight a much larger possible discovery of money laundering inside UK.”

The US attorney’s office of fresh York said the organised Russian crime group, along with corrupt Russian government officials, “engaged in a broad pattern of money laundering in order to conceal the proceeds of the fraud scheme”.

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Mr Browder says the outcome in America should right now prompt UK authorities to act

This particular said in a complex series of transfers through shell corporations, the $230m through the Russian treasury was laundered into numerous accounts in Russia in addition to various other countries.

Mr Browder in addition to various other anti-corruption campaigners have urged authorities to do more to clamp down on suspected “dirty money”.

He said corrupt foreign officials must be prevented through enjoying lavish lifestyles in places like London in addition to fresh York with the suspected proceeds of crime.

“This particular’s a scary thing for the Russian government to see of which their money can be not safe inside West,” he said.

A fresh Criminal Finances Bill was passed inside UK in April 2017 giving authorities stronger powers to freeze assets where suspected illicit wealth can be flowing into the UK.

Duncan Hames through campaign group Transparency International said This particular was right now time for authorities to “turn up the heat”.

“The strongest laws are only paper without a genuine commitment to enforce them. We are looking to the police to actively investigate money laundering in addition to This particular can be vital they are properly resourced to do so.”

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