William Felix Browder is an international financier and investor. He is an author and ideologist of the Magnitsky Act, bill sanctioning Russian officials after death of Sergei Magnitsky, Browder’s accountant. He is also a co-founder and the CEO of one of the biggest investment funds “Hermitage Capital Management,” specializing in Russian stock market between 1996 and 2007.
In 2005 Browder was denied entry to Russia, convicted in July, 2013, for tax evasion he was tried, in absentia, and sentenced to 9 years in prison by Tverskoy district court of Moscow on December 29th, 2017.
American politicians and mass media under political control have been widely supporting Browder’s version of events, which reflects him being a victim of “Russian aggression.” However, there is the other side of the coin American media has been silent about.
We managed to get a verified copy of the verdict by Tverskoy district court of Moscow and scrutinize the details of Browder’s masterminded criminal act and now we want to make the results available to the public.
In the late 90s a number of individuals in control of the foreign banking group HSBC, one of the largest financial corporations, intended to get access to management of global energy oil and gas companies in order to make super profits for personal purposes. William Browder, now accused of tax evasion and theft of funds from the Russian budget, suggested to the heads of the Group of Foreign Companies to develop a scheme for purchasing highly liquid shares of the Russian Joint-Stock Company RAO Gazprom, which allowed to participate in its management and get significant income through increasing their value and receiving dividends.
Browder then sought help from Firestone Duncan, a commercial organization providing services in registration, taxation, accounting and audit of legal entities.
Together with Firestone Duncan employees Browder developed a mechanism, which made possible the acquisition of Gazprom’s shares by foreign companies and organized companies in the offshore zone of the Republic of Cyprus, which, according to the verdict, established dependent legal entities in Russia in order to be able to acquire the shares, as they could not be purchased by the foreign company.
To give a veneer of legality to this scheme, W.F. Browder organized the registration in the Russian Federation of legal entities in the name of controlled Russian citizens for the acquisition of the shares of Gazprom, including employees of Firestone Duncan. Legal entities were incorporated under the control of W.F. Browder in the Republic of Kalmykia, which provides for the exemption of the taxpayer from payment of regional and local income tax of 24%, and when using the labor of disabled citizens, the number of which totals to more than 50% of the payroll of employees of the entity, the amount of income tax to be withheld and paid to the Federal budget was reduced to 5.5% instead of 11%.
Hiding foreign participation in Russian legal entities, which were planned to be used for purchase and sale of shares and receipt of dividends on them, W.F. Browder and other unidentified persons developed schemes of their incorporation by citizens of the Russian Federation controlled by them. After that, Russian companies acquired from each other a share of 51%, the remaining shares of 49% would be acquired by offshore foreign companies controlled by W.F. Browder, and the founders of Russian legal entities would resign from membership. As a result, two Russian legal entities would become members of each other (with a share in the authorized capital of 51%), and a foreign company controlled by W.F. Browder would become a member of both companies (with a share in the authorized capital of 49%). Thus, the offshore company deprived of independence, the real beneficiaries of which were W.F. Browder, the Fund, HSBC foreign group of companies, and other unidentified persons in fact fully owned Russian legal entities that were the shareholders of RAO Gazprom.
When carrying out business activities in the Russian Federation, W.F. Browder knew that foreign organizations receiving income from sources in Russia are recognized as income tax payers in the Russian Federation, including income received in the form of dividends paid to a foreign organization that is a shareholder of Russian organizations. Russian company, in the case of payment of dividend to a foreign shareholder, is regarded as a tax agent.
Browder had a criminal intent, according to which he, pursuing the purpose of obtaining benefits of pecuniary nature for himself and the Fund, acting in the interests of HSBC banking group, decided to arrange to their personal advantage for non-fulfillment of the duty of the tax agent – limited liability companies he created for the acquisition of shares of RAO Gazprom, the ones he managed when calculating, withholding and transferring to the appropriate budget of taxes from the profits paid to the participants of those companies – offshore companies under the guise of payment of dividends, illegally applying the Agreement between the Governments of the Russian Federation and the Republic of Cyprus for the avoidance of double taxation with respect to taxes on income and on capital. Browder involved I.S. Cherkasov, his subordinate at the Moscow representative office, as well as other unidentified persons, to assist in the commission of the specified crime. Also, W.F. Browder organized deliberate bankruptcy, that is, performance of actions that obviously entail inability of a legal entity to fully satisfy the creditors’ demands and fulfill the obligation to pay mandatory payments, that caused major damage.
The investigation found that Browder masterminded non-performance for personal purposes of the tax agent of duties on calculation, deduction and transfer of the taxes. As a result of Browder’s criminal acts, budget of the Russian Federation suffered losses amounted to 4,658,811,206 Russian rubles in total.
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