Russian corruption: crooked officials steal multi-billion-dollar company, $230M tax refund, then murder campaigning lawyer

Foreign Policy's got a chilling tell-all account of the crooked Russian tax-cops who engineered a law-office raid that ended with their criminal pals forging documents transferring a company to them, stealing a $230 million tax rebate, and murdering a partner at the firm who complained about it.

The piece is written by Jamison Firestone, who founded the Moscow law firm Firestone Duncan. Firestone Duncan represented an investment firm called Hermitage Fund. In 2007, Russian Interior Ministry officers conducted a warrantless raid on the firm and stole Hermitage's corporate seals and internal documents, severely beating a lawyer who objected and landing him in hospital. The cops turned the seals and docs over to a criminal gang, who used them to forge documents that transferred title in Hermitage to them. They also forged $1 billion in fake liabilities, entitling them to a $230M tax rebate, which then also stole.

When Firestone's partner Sergei Magnitsky refused to back off and insisted on complaining to all levels of Russian officialdom, he was arrested by members of conspiracy, tortured and murdered in jail.

The more Sergei insisted on his testimony in sworn statements and in court, the more pressure Silchenko applied to him. He was put in a cell with eight inmates and only four beds so the detainees had to sleep in shifts. In December 2008, he was put in a cell with no heat and no windowpanes -- he nearly froze to death. Later, he was moved to another cell with no toilet, just a hole in the floor where the sewage overflowed.

After six months of this treatment, Sergei -- who went into detention a healthy 36-year-old man -- had lost 40 pounds. He developed pancreatitis and gallstones and needed medical attention. In July 2009, Sergei was moved to Butyrka, a maximum-security facility that had no medical facilities. At Butyrka, Silchenko repeatedly denied medical care to Sergei, hoping that it would break him. Sergei remained defiant and continued to write complaints about his innocence and the pressure applied to him. But nearly one year after his arrest, on the night of Nov. 16, 2009, he became gravely ill. He was transferred to the intensive-care wing of Matrosskaya Tishina detention center, but instead of receiving medical attention, he was put in a straitjacket, chained to a bed, and left by himself in an isolation cell for one hour and 18 minutes while doctors waited right outside the door until they were certain he was dead.

Russia's Crime of the Century


  1. Terrifying how easy it is for many to, with some justification, look back on the Stalinist era of murder with nostalgia.

    1. Meaning at least there was some honesty to the regime of terror, it was about power more than money.

    2. The problem is all of this is an aftershock of the downfall of a dysfunctional system. Folks do this because it’s the only way they know of dealing with the world. The former Soviet Union is going to need at least 2-3 more generations of folks who stand up against this stuff for it to completely go away.

      1. You think this is bad, wait’ll you see some more of the aftershocks that emerge from the downfall of OUR dysfunctional system…

  2. @Jack:

    It goes back a lot further than that. Russia today is a Tsarist court in all but name, with oligarchs replacing the boyars of old. The good cop / bad cop leadership of Putin and Medvedev is an interesting wrinkle, but a superficial one. Putin is the Little Father and the Russian Orthodox church knows which side of its bread the caviar is on.

    The Russian people deserve better and have done since day one, but I can’t see how they’ll ever get it.

    For what it’s worth, Tsar Alexander II freed the serfs 150 years ago in March.

  3. I’d like to make an “in Russia…” joke, but this is really bad.

    I always kinda thought about going there some day, but I won’t because not only do you have to watch out for the “criminals” but you also have to watch out for the law enforcement, and everything in between.

  4. The only way to increase accountability of the powerful is to reduce the ‘gap’ by which they are more powerful than the rest of the population. Unfortunately, this can only stably be accomplished through long-term, grass-root gradual accumulation of power among those at the bottom. If this process starts taking too long, revolutions often result, but these sadly tend to do nothing but exchange one small group of overly powerful individuals for another.

    Would be nice if someone could come up with a third alternative better than the other two…

  5. What should say about thinking about going there, was that like many here, I grew up at the end of the cold war and always thought that I would never get to see any of it first hand…

  6. It helps to view Russia as an ongoing experiment where capitalism is allowed to freely evolve with little regulatory influence.

  7. Meanwhile the United States government gives their buddies running “too big to fail” corporations all the money they could want at taxpayer’s expense while spending years torturing people held at Guantanamo Bay without a trial and with little chance they’ll ever leave alive. Kinda hard to point fingers.

    1. True – I got almost the exact same feeling from reading this, as reading about the New Orleans cops yesterday.

  8. In Soviet Russia, the Government takes from those doing work, and gives to the rich, while in non-Socialist USA, wait…

  9. They obviously failed to properly support the government – and I don’t mean paying taxes.

    For potential visitors: if you are white and middle class and speak English (or Russian) and don’t stand out you would probably be ok, especially in whatever semi-decent parts of cities there may be. Also if you aren’t averse to a bit of bribery that would help, too.

    If you want a little taste of Russia without the distinct possibility of bribing or an ass-beating because you’re the wrong color or too rich or poor or just happen to exist in an irritating sort of way, consider a visit to Latvia, Lithuania, Estonia, Poland, Slovakia, the Czech Republic or Slovenia. If you want incomprehensible Cyrillic try Ukraine – its not in the EU but I haven’t heard any horror stories from the various people I know who’ve visited it. I can’t speak for the LV, TL or EE three but PL, SK, CZ and SL are all more or less fine. They are full of white people but the inhabitants aren’t normally aggressive towards non-white people, especially in bigger cities.

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