Mongolia pardons American, 2 Filipinos in tax case

AP News
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Posted: Feb 26, 2015 6:26 AM

ULAN BATOR, Mongolia (AP) — Mongolia's president on Thursday pardoned an American mining executive and two Filipinos sentenced to prison for tax evasion, in a case that raised questions about the Asian nation's reputation as an investment destination.

A statement from Elbegdorj Tsakhia's office said Justin Kapla, Hillarion Cajucom Jr. and Cristobal David would have the rest of their sentences of five to six years commuted.

Kapla is president and executive director of SouthGobi Sands LLC, a Mongolian mining company, while Cajucom and David were financial experts with the firm. All three were convicted and sentenced last month following a three-year investigation.

Kapla's father, a resident of Forest Lake, Minnesota, had lobbied the state's senatorial delegation for assistance with the case.

A statement from the U.S. Embassy in Mongolia's capital Ulan Batar said it appreciated the president's action and that it understood the three were now free to leave Mongolia.

"The business community has made clear to us that this case negatively affects its assessment of Mongolia as a destination for foreign direct investment," the statement said. "We hope that in the future, the Mongolian authorities will conduct such cases through a fair and transparent process, in full accordance with Mongolian law."

Mining-dependent Mongolia badly needs foreign direct investment in the face of a deteriorating economic downturn.

Despite the pardons, Elbegdorj's office said SouthGobi Sands would be held liable for tax due.

Legal advisor Unurbayar Chadraabal said the decision to pardon the three was taken out of consideration of Mongolia's international relations and economic needs, as well as flaws in the legal system.

Elbegdorj himself tweeted that he had wrestled with the decision on whether or not to issue the pardons.

"Shall I think about Mongolia or think about myself? I love Mongolia," he wrote.