Veselnitskaya reveals Browder’s fraud scheme


The story told by William Browder, the ideologist of the “Magnitsky Act,” is simple and straightforward. Many crimes were committed against him, his subsidiary companies were kidnapped, so he decided to appeal for help to one of the best Russian lawyers, Sergey Magnitsky. Magnitsky, being a real professional, hold his own investigation and went to the police. According to Magnitsky, subsidiary companies and Browder funds were stolen by representatives of Russian law enforcement and tax authorities. Having learned that Magnitsky exposed them, the police arrested him and tortured him to death. According to Browder, the Russian authorities detained and killed his lawyer, Sergey Magnitsky, because he revealed their corruption scheme.

The Browder’s plan contained the following:

  • Theft of the Browder’s subsidiaries in the Hermitage and divestment — $ 230 million — in one day;
  • Magnitsky’s investigation and the assertion that the Russian authorities stole money, therefore, should be punished;
  • Magnitsky’s detention, interrogation and torture in order to force him to state that his testimony was fabricated;
  • Sergei Magnitsky’ death in prison after a year of torture.

This is a version that has been promoted by the Western media since 2010. Let’s look at each of the statements above.

Natalia Veselnitskaya:

“Firstly, Sergei Magnitsky was never a lawyer or detective. Secondly, he didn’t hold any investigations or reveal any fraud schemes. Thirdly, he could not find out that the Hermitage’s branches were stolen by the Russian officials as this never happened. Last but not least, Magnitsky never mentioned the embezzlement of $230 million by the Russian tax authorities. He accused neither a single policeman nor official, much less the Russian president of stealing subsidiaries as Browder did. “

Now let’s talk about what really happened

Veselnitskaya reveals Browder’s fraud scheme

The detention of Magnitskiy and his death in prison are the two real facts in this story, the rest is far-fetched.

When the Russian Federation started an investigation on Browder and his allies’ multi-billion dollar frauds, portraying Magnitsky’s death in prison as a political murder was quite beneficial for Browder, and that, indeed, enabled the passing of Magnitskiy Act.

Magnitskiy was really arrested in November 2008 in Kalmykia, and charged with tax evasion. There in Kalmykia he was a CEO for a number of companies. While local companies observing certain conditions paid income tax at 11% rent instead of common 24%, Hermitage’s subsidiaries paid only 5,5% of their income as they hired people with disabilities, who did not actually do the work, but were paid for simply being taken on staff. It is worth mentioning that while drafting fake data for tax authorities, Magnitskiy was also working on financial reports for Hermitage fund.

Magntskiy and Browder worked together in Kalmykia up until 2003, when first audits of Hermitage’s financial records and first investigations were initiated. In 2006 all of the subsidiaries were overnight reregistered in Moscow and funds were accumulated on accounts of a few shell companies. Browder realized that it was impossible to stop the ongoing investigation and decided to look for escape routes.

The probe went on and by 2008 investigators had tracked down Browder and his allies. Law enforcement authorities, accused by Browder of corruption and prosecution, started a criminal investigation on his very own statement, but their findings were completely opposite from what he expected. Browder’s fraud scheme was uncovered, yet he has never talked about it.  

Here is what actually happened:

  • Insinuation of stealing Hermitage’s subsidiaries and unlawful obtaining of funds by William Browder;
  • Opening an investigation by Russian government;
  • Browder’s plea of being not involved and the statement that his subsidiaries were stolen.

The scheme is pretty simple – ‘we have stated that our subsidiaries were stolen, so do find the guilty one.’ And Browder’s plan might have worked if his associates hadn’t started to “accidently” die one by one. Browder’s allies were in fear – Markelov was the first who pleaded guilty, Khlebnikov was the next, Kurochkin was found dead in Boryspil International Airport.

On December 29th, 2017, William Browder was sentenced by Tverskoy District Court, Moscow, to 9 years in prison. He was accused of tax evasion in amount of more than 3 billion Russian rubles.

It is not hard to understand Browder’s motives and actions – people like him are always afraid of the truth. It is possible that even now Browder and his team are working on a new “ingenious” plan.

Natalia Veselnitskaya – official website

Natalia Veselnitskaya
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