MOSCOW — Russia's Interior Ministry is preparing to bring criminal charges against U.S.-born investor Bill Browder, the latest turn in a feud which has led to U.S. sanctions against on some Russian officials, a Russian ban on adoptions of Russian children by Americans, and the upcoming trial of a dead man.
The dead man is Sergei Magnitsky, a lawyer who worked for Browder's Hermitage Capital, once a minority shareholder in the state-controlled gas giant, Gazprom.
Magnitsky died in jail in 2009 after his pancreatitis went untreated. The Russian presidential council on human rights said in a 2011 report that Magnitsky had been repeatedly beaten and deliberately denied medical treatment. The lawyer's death became a litmus test for the Russian government's commitment to the rule of law: no one has yet been found responsible for his killing.
Magnitsky and Browder are due to be put on trial next week for tax evasion.
Russia's top court ruled in August 2011 that posthumous trials are allowed, with the intention of letting relatives clear their loved ones' names. In Magnitsky's case, prosecutors re-filed charges although family members said they didn't want another trial.
Human rights groups have condemned the trial as glaring instance of judicial abuse, graft and blurred boundaries between the state and organized crime that have plagued Russia under President Vladimir Putin.
"The trial of a deceased person and the forcible involvement of his relatives is a dangerous precedent that would open a whole new chapter in Russia's worsening human rights record," Amnesty International said in a recent statement.
Browder, a British citizen, has been barred from Russia since 2005 as a security threat as Russian officials put it. He has campaigned to bring those responsible for Magnitsky's death to justice.
Mikhail Alexandrov from the Interior Ministry's Investigative Department said Tuesday there is sufficient evidence to charge Browder with misappropriation for allegedly using subsidiaries to amass a 3 billion rubles stake in Gazprom between 2001 to 2004. Until 2005, foreign investors were not allowed to hold more than 9 percent of Gazprom shares.
"We're talking about not only personal enrichment with the violation of Russian laws by illegally buying up stocks in strategically important gas monopolist Gazprom, but it's about intending to impose their own rules on that company."
Alexandrov also charged that Browder was trying to gain access to the company's financial reports.
Magnitsky alleged in 2008 that organized criminals colluded with corrupt Interior Ministry officials to claim a $230 million tax rebate through illegally obtained subsidiaries of Hermitage Capital, the company of Magnitsky's then-client, London-based investor Bill Browder.
Those same officials had Magnitsky arrested and placed in pre-trial detention. Magnitsky and Browder were accused of evading $16.8 million in taxes.
The so-called Magnitsky Act was passed in the United States in December, targeting the Russian officials – including the head of the Interior Ministry's Investigative Department and senior judges – who had been identified by Browder and his associates as people involved in Magnitsky's death. In retaliation, Russia banned the adoption of Russian children to the United States, sparking protests in Russia and abroad.
Browder, whose Hermitage Capital used to be Russia's largest portfolio investor, told The Associated Press that "purchasing Gazprom shares through derivative structures was entirely legal in Russia and was blessed by both the Russian Federal Securities Commission and Gazprom itself."
"Roughly 35 percent of all Gazprom shares were owned by foreigners through these products," he said.
Browder described the charges as "politically motivated charges in retaliation to my involvement in passing the Magnitsky Act in the U.S. and advocating for similar Magnitsky sanctions in Europe."
Browder no longer has any assets in Russia, and it was unclear what impact a conviction in a Russian court would have.
Browder told the AP that he expects further charges against him to be manufactured "by the Russian government based on an instruction from Putin."