A Moscow tax official who approved a fraudulent $230 million tax return in 2007 has bought luxury real estate in Moscow, Dubai and Montenegro and wired money through her husband's bank accounts worth $39 million, a U.S. investor said Monday.
All that was done with an average annual household income equivalent to $38,000, according to documents released by William Browder, an American-born investor barred from Russia.
Browder has been campaigning against Russian corruption since 2009 when his lawyer died a year after being sent to prison. Authorities have not explained why Browder was himself expelled as a security risk in 2005 in the first place.
Browder, who used to head up Hermitage Capital Management in Moscow, a multibillion-dollar fund, is seeking to get justice for lawyer Sergey Magnitsky, who discovered the alleged fraud involving the Interior Ministry.
Magnitsky, who died in prison in 2009 after being charged with tax evasion linked to his defense of Hermitage, had discovered that officers at the Interior Ministry had seized ownership documents for three of the fund's subsidiaries, then used those documents to register their own people as owners and directors.
They then reportedly filed a tax claim, saying they made a much smaller profit than originally described and asked for a tax return, according to Hermitage.
The $230 million refund was made in one day.
Magnitsky's former employers, including Browder and Jamison Firestone, the head of the law firm where Magnitsky worked, revealed an array of documents Monday, which they said described the wealth of the tax official allegedly involved in the fraud.
The two are working together to expose the officials they believe are responsible for Magnitsky's death and the tax fraud. More than a year later, Magnitsky's death remains uninvestigated.
Browder and Firestone said the family of Olga Stepanova, who headed Moscow's district tax office No. 28 until January this year, had incurred $39 million in expenses in the past few years.
Copies of bank account statements and property registration papers show Stepanova's husband, an employee of a small construction firm, wire money through Switzerland's Credit Suisse to build a $8 million luxury house west of Moscow and buy a vacation home in Montenegro and multi-million dollar properties on the Palm Jumeriah in Dubai in the name of his 85-year-old mother.
These transactions were allegedly made several weeks after Stepanova's tax office authorized the $230 million tax refund.
Firestone on Monday sent the documents to Russia's chief investigator and petitioned him to open a criminal probe against Stepanova and her colleagues.
Meanwhile, Browder said in a letter to Switzerland's attorney general that criminal proceeds from the tax fraud may be held on various accounts in Credit Suisse.
The Interior Ministry has acknowledged the fraud but said it has been unable to locate the funds. The ministry said its officials had no part in the fraud and insisted the tax authorities were also innocent and had simply been deceived by the criminals.
Over the past year, authorities have turned down scores of petitions by Magnitsky's former employers and human rights groups to investigate the Interior Ministry officials that Magnitsky believed were involved in the tax fraud.
Magnitsky posthumously received a prestigious anti-corruption award from Transparency International, an international anti-corruption watchdog.
Browder told the Associated Press on Monday that the documents came from a person who worked with Stepanova and her partners. Browder would not identify the person.
"This information is so complete and so damning that the Russian government will lose any legitimacy it has left in bilateral relations with the West if it doesn't act and prosecute the officials who killed Sergei Magnitsky and stole $230 million from their own people," Browder said.
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