By Lucy Komisar
Dec 21, 2017
President Trump yesterday signed a Magnitsky Act order, banning listed individuals from entering the U.S and having connections to U.S. financial institutions if they are complicit, even indirectly, with human rights abuses as determined by the Treasury Department. Attempts to get Treasury to supply evidence against the latest Magnitsky Act targets were unavailing. In the past, the Russian names have been supplied by Browder, with evidence never published.
A new person on the list, lawyer Andrey Pavlov, is probably suffering retribution for his statement in my article for 100Reporters that disputes Browder‘s claims about a scam central to Magnitsky Act. He is charged with participation in the criminal conspiracy uncovered by Sergei Magnitsky concerning alleged illegal return of tax payments in 2007.
In fact, it is likely that investigators discovered the fraud through information from Rimma Starova, a hired “name” fronting as a director of the company to which the shells had been transferred. She saw a newspaper article April 3, 2008, in the Russian business daily Kommersant reporting that three Hermitage companies had allegedly used tax evasion schemes, and that Russian law enforcement agencies had brought criminal charges against Browder and his partner Cherkasov in absentia. She didn‘t want to take a fall and went to the police. Her complaint April 9th detailed the fraudulent theft of three Hermitage companies.
Investigators would normally have followed up to find out what the fraudsters had done with the companies. By then the re-registered companies had participated in the $230 million tax refund fraud.
Browder in his book Red Notice says says that his group first filed official complaints about the tax rebate fraud on July 23, 2008.
Magnitsky cited the article in his testimony June 2008. He did not voluntarily go to authorities, he was a suspect in tax evasion called for questioning by them. He expanded on a report already in the press. What kind of whistleblower is that?
Did the American bureaucrats who signed on to this attack on Browder-critic Pavlov not even read Magnitsky’s testimony? There are English translations. See 100Reporters.
Pavlov, who admits his minor role in the tax scam, is targeted for acts that occurred ten years ago and have long been public, but he was put on the ban list only now, two months to the day after publication of the 100Reporters article, probably because he said the man who was jailed by the Russians for the fraud implicated Magnitsky was a co-conspirator.
Such retaliation by the U.S. against sources who speak to the American reporters chills a free press. Who would talk to you if they would get banned from the country? Their accounts frozen? Without evidence? Is that the rule of law? Or the new McCarthyism?
OFAC, Office of Foreign Assets Control, the Treasury agency that determines the Magnitsky Act’s targets, has not replied to requests for evidence on why it listed Pavlov.
Will the U.S. media look into this? As they have drunk Browder’s Kool-Aid till now, it’s not very likely. Here are the quotes that got Pavlov in trouble. Decide if that is a reason to ban him from the U.S., where he can now no longer visit clients. Or to block any bank accounts. Or is the ban Browder’s personal revenge, nicely facilitated by the U.S. government?
Andrey Pavlov‘s statements in the Oct 20, 2017 100Reporters article:
Moscow lawyer Andrey Pavlov in an interview in New York, told 100Reporters that he assisted in obtaining court orders based on the fake lawsuits claiming liabilities for the Hermitage companies that resulted in the $230 million tax refund fraud.
However, Pavlov contends that Browder knew the purpose of the raids on his company and on Firestone Duncan: authorities were looking for evidence to support Russian charges of tax evasion and illegal purchase of shares of Gazprom by his and the Ziffs‘ companies. He disputes Browder‘s contention that the tax investigators who did the raid were responsible for the Treasury scam.
Pavlov said the tax refund fraud he participated in was common in Russia at the time: firms agreed to settle claims from fake shell companies about bogus contract violations. The companies would then file amended tax returns to deduct the settlements, recouping money as tax refunds.
Pavlov said he was approached by Viktor Markelov, a convicted felon, who wanted to hire him. Markelov wanted Pavlov to obtain a court order based on an invented liability for the Hermitage companies, which would then lead to a claim for a tax refund. Pavlov said the refund application would require detailed information from the companies‘ books for the year, which he said pointed to inside involvement. However, Pavlov said he was never told the identity of the client who would benefit from the refund scheme.
Pavlov was questioned by Russian authorities, and Markelov was convicted and sentenced to five years for the scam. At his trial, Markelov testified that one of the people he worked with to secure the fraudulent tax refund was Sergei Leonidovich. Magnitsky‘s full name was Sergei Leonidovich Magnitsky.
“In October  the whole Browder team knew about these claims and didn‘t appeal the decision [allowing the take-over of his companies] which had been granted,” Pavlov said. “They did nothing till the money was paid out of the budget [the Russian Treasury].” This corresponds with Browder‘s book, which states that he and Magnitsky found out about the theft of the companies in October 2007. Just the same, Browder didn‘t immediately go to court to challenge the re-registration of the companies and the court‘s decision.
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