Last May, a money-laundering suit brought by the United States against Prevezon Holdings Ltd., a Cyprus-based real estate corporation, was unexpectedly settled three days before it was set to go to trial. The case had been at the center of a major international political controversy. Prevezon, which is owned by a Kremlin-connected Russian businessman named Denis Katsyv, was accused by the US government of using laundered money from a 2007 Russian tax fraud to buy millions of dollars’ worth of Manhattan real estate. The fraud, which was discovered by a Russian accountant named Sergei Magnitsky, involved companies owned by Hermitage Capital Management, a Moscow-based hedge fund run by the American-born British financier William Browder.
In 2009, Magnitsky died in police custody, where he had been held in abject conditions for nearly a year; three years later, President Obama signed legislation named after Magnitsky that placed heavy sanctions on numerous Russians involved in this affair. Several Russian lobbyists with close ties to the Kremlin have urged Donald Trump and members of Congress to reconsider those sanctions. “In view of recent revelations regarding Russia’s outsized influence,” William H. Pauley III, the presiding judge in the Prevezon trial, observed in November, “there may have been more to this money laundering case than a few luxury condominiums.”
The Magnitsky affair begins with Browder. In 2005, the value of Hermitage Capital Management reportedly reached $4.5 billion, and Browder had become a vocal cheerleader for Vladimir Putin, issuing a report for Hermitage that hailed Putin’s reforms. At the same time, he was leading a successful campaign against corporate abuses by the Russian oil giant Gazprom. In his best-selling 2015 book, Red Notice, Browder writes that he assumed that Putin shared his desire to get rid of corrupt oligarchs and also that, as a foreigner, he was “somehow exempt from the informal rules [of minding one’s own business] that governed everyone else’s lives in Russia.” But as the Russian journalist Anna Arutunyan pointed out in 2014, Browder “crossed the line by presuming a degree of closeness and loyalty that no foreign investor could ever have.” Putin’s administration, she wrote, “turned away from him and left him at the mercy of the paper law [written law that is not usually enforced],” making “it clear to law enforcement predators that he was fair game.”
Browder was banned from entering Russia in November 2005, labeled a “threat to national security,” and forced to relocate to London. In February 2007, an officer with the Ministry of Internal Affairs (MVD) named Artem Kuznetsov hinted that a bribe could help resolve Browder’s visa problem, but Hermitage rejected the suggestion. “It was only a matter of time,” Arutunyan noted, “before law enforcement…
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