WSJ won’t respond to evidence its Browder story is full of fabrications

By Lucy Komisar
July 8, 2019

On June 20th, the Wall Street Journal ran this article by reporter Kristin Broughton, “Financier Bill Browder Plays the Long Game to Expose Russian Money-Laundering.” The paper invited comments to, so I sent this, first explaining my background as a prize-winning journalist on financial crime whose past stories have been published by the Journal.

Kristin Broughton @kcbroughton

I asked the moderator to consider seriously the evidence I present here that William Browder is a conman and everything he told your reporter is a lie. Like most U.S. reporters on the subject, the reporter was Browder’s stenographer and apparently never bothered to check out what he told her. As I have received no response to my June 28th email, I am publishing key parts of the story and present evidence that they are false.

“….Bill Browder, the American-born financier who has been on a decade-long campaign to expose Russian corruption”

** No, he has been on a campaign to block the Russians from collecting some $100 million in evaded taxes.

“…has asked prosecutors across Europe to open criminal investigations into suspicious transactions linked to the death of Sergei Magnitsky, who died in 2009 while in Russian custody after he was detained on charges related to the tax fraud he uncovered. Mr. Magnitsky was an attorney for Mr. Browder.”

** They don‘t open them because he has no evidence. He complained publicly at a hearing in Europe that British investigators had called him “a pain in the ass!”

** Magnitsky was detained for his role in Browder‘s Hermitage Fund tax evasion not for any tax fraud he uncovered. And he was Browder‘s auditor, not an attorney.


Start with documents filed in U.S. Federal Court Southern District of New York in the Prevezon case, which Browder got Preet Bharara to bring against a Russian Browder accused of receiving money laundered from the tax refund fraud.

See the deposition where Browder admits that the alleged “lawyer” Magnitsky did not go to law school or have a law degree and Magnitsky‘s own testimony that identifies him as an “auditor” working for Firestone Duncan, the firm that handled Browder‘s accounting.  See #8 on each first page.

Why does that matter?

Magnitsky was an accountant who had worked for Browder since 1997, handling tax evasion on profits from sales of shares held by Russian shell companies run by his Hermitage Fund. One scam was to claim as a deduction a write-off for hiring disabled workers. Browder admits in his deposition that he did that. He said his accountants advised him he could. Except his shell companies existed only to hold shares and had no employees.

He also took deductions for investing in the Kalmykia region where his shells were registered. But he made no investments, just moved funds from one account to another. He bought Gazprom shares through pass-throughs at a time it was illegal for non-Russians to buy them in Russia. They could get them only as ADRs in London at a much higher price.

The Russians filed charges beginning in the early 2000s and found Browder guilty of tax evasion in 2004. But he refused to pay up. The Russians continued to press, and in 2006 called Magnitsky to an interrogation.

After Magnitsky died (more about that later) Browder invented a story about how he had hired Magnitsky, “a lawyer,” to investigate a fraud carried out by Russian officials. In May 2010 testimony at the Congressional Human Rights Commission, chaired by Rep. James McGovern (D-MA), that after an 2007 search of Browder‘s office and that of his accountant by tax police, he had hired “a young man named Sergei Magnitsky, a 36-year-old lawyer” to investigate. That was a lie since Magnitsky had been doing Hermitage accounting for ten years. And he wasn‘t an attorney. And the search happened six months before the fraud.

Let me explain what the fraud was.

The tax refund fraud involved criminals re-registering several Hermitage companies and using them in collusive lawsuits where other plaintiffs claimed the shells had failed to carry out contracts and sued for huge damages. It‘s a scam that had been done before.

The shells paid the fake claims, which turned out to be the amount of the last taxes filed, $230 million. So, they asked for tax refunds. The money went to two Russian banks and then through layers of other banks out of the country. Several private individuals, who provided details of the scam in testimony, went to jail for it.

He says Russian officials stole his companies, re-registered them, and organized the fraud. The Russians say he was involved. I don‘t have direct proof, but some circumstantial evidence indicates that he could have been involved. He says he found out about the re-registration of the companies in October 2007, but his trustee, HSBC, in July 2007 added $7 million to a legal fund to cover costs relating to the theft of the companies. The HSBC comptroller gave a deposition about that in the Prevezon case.

Magnitsky didn‘t expose the fraud; that was done by Rimma Starova, the Russian nominee director of a British Virgin Islands shell that held the re-registered companies and who gave testimony to the police in April 9 and July 10, 2008. [Original Russian April and July]

Paul Wrench, a professional figurehead director fronting many different offshore firms including those controlled by Browder, filed a complaint for Browder about the fraud July 23, 2008. It claimed $230 million was stolen [from the Russian Treasury] with the help of police. Browder gave the story to the New York Times and Vedomosti, which ran it July 24th, months before Magnitsky mentioned it in a witness interrogation to which he had been summoned October 7.

Wrench was asked in a deposition in U.S. federal court in the Prevezon case in 2015 who he had discussed the complaint with.

Q. Did you discuss this document with anyone at the time you signed it?
A. At the time I signed it? I would have discussed this document before signing it.
Q. With whom?
A. With Ivan Cherkasov. [Browder‘s partner.]
Q. Anyone else that you recall?
A. Not that I recall.

Six years after Magnitsky‘s death, with Browder shouting to the world his “lawyer” was a whistleblower, Wrench under oath and cognizant of the rules of perjury, did not back Browder up.

Though Browder now calls Magnitsky the “whistleblower,” a Hermitage press release September 16, 2008 says that Starova went to the police in April 2008 and accused representatives of the shell companies of the theft of state funds. The release was removed from the internet but exists on the Wayback Machine.

The refund occurred at the end of December 2007. However, Magnitsky had already been interrogated in October 2006 by tax investigators about fake tax returns for Hermitage.

Then he says, “Our top targets are the people who tortured and killed Sergei Magnitsky. But our secondary targets are those people who profited from the crime that he was killed over or facilitated the money laundering for those people.

** Magnitsky died on November 16, 2009. There is no evidence that he was tortured or killed.

Browder is on the record, on separate occasions saying that Magnitsky died of natural causes, was tied up and left to die, was tied up and beaten with rubber batons by prison guards until dead, and finally tortured to death.

Here is how the story changed through time.

How Browder changed his story on how Magnitsky died, graphic Michael Thau.

Official Hermitage video, October 2009 (before his November death): Magnitsky a lawyer and accountant mentioned once, briefly, at very end of video. No mention of his ‘whistleblowing’, no mention of him being tortured in prison, etc.

Browder tells Chatham House, London, about the circumstances of Magnitsky‘s death, a month earlier, in December 2009: “I don‘t know what they were thinking. I don‘t know whether they killed him deliberately on the night of the 16th, or if he died of neglect” 

“They him in a straight-jacket put him in an isolation room and waited 1 hour and 18 minutes until he died”Š”Š6 Dec 2010. San Diego Law School.

“They put him isolation cell, tied him to bed, then allowed eight guards guards beat him with rubber batons for 118 minutes until he was dead”Š”Š13 Dec 2011. University of Cambridge Judge Business School

The story changed when Browder started promoting the Magnitsky Act, and by the time he testified before the Senate Judiciary Committee in July 2017, he declared: “…. they put him in an isolation cell, chained him to a bed, and eight riot guards came in and beat him with rubber batons.” Video.

On a website devoted to Magnitsky, Browder posted the hospital death certificate, highlighting the notation, “closed craniocerebral injury?” But the report in full, not just Browder‘s excerpt, puts a question mark after the finding, which wasn‘t explained, and provided no evidence to indicate Magnitsky was beaten to death. In fact, it said there was no sign of violence. The selected “injury” was more Browder fakery.

The report of the Public Oversight Commission, to which the Wall Street Journal links on its website, and the report of the Physicians for Human Rights in Cambridge, Mass., to which Browder sent 44 documents and photos to argue his case, say he died of illness made worse by medical neglect. No evidence of a beating has ever been made public by Browder or anyone else.

By the way, there is a Browder fabrication on that WSJ-linked POC report, a paragraph he inserted to buttress the story that Magnitsky was jailed as a whistleblower. It says:

Magnitsky wrote: I believe that [Interior Ministry Lieutenant Colonel Artem] Kuznetsov and other law enforcement officers in conspiracy with him could be involved in the theft of OOO Rilend, OOO Makhaon, OOO Parfenion and the subsequent theft of 5.4 billion rubles from the State Treasury and were extremely interested in suppressing my activity relating to assisting my client in investigating the circumstances connected with these criminal offences. This was the reason for my unlawful criminal prosecution being carried out by investigator Silchenko. I believe that with Silchenko’s participation or with his tacit approval, inhuman conditions were created for me in the detention center, which humiliate human dignity.

The underlined part, in the report the Journal linked to, a copy of the one on Browder’s website, does not appear in the notarized translation of the POC report filed in U.S. federal court in the Prevezon case. See top of page 3 for both. That paragraph is a forgery. Browder told a reporter that it was the result of a clerical error, that the original Russian included that paragraph. Except the error was never “corrected” in the Russian or the notarized translation filed in U.S. court.

Plus the fact Browder‘s fabrication was deliberate is shown by the fake labels he put on links to the Magnitsky testimonies on his website to “prove” that Magnitsky was arrested for fingering Russian police.

ï‚·  Magnitsky names Lt Col Kuznetsov and Major Karpov and their role in the thefts (5 June 2008)
ï‚·  Magnitsky describes the role of Interior Ministry officers in the thefts (7 October 2008)

The links go to documents in Russian, with no English translations. However, the translated testimonies filed in U.S. federal court in the Prevezon case show these labels are lies and do not describe the texts, which make no such claims.

Finally, regarding Browder‘s assertion: “We took all of the information that we got from [a previous] case file, and we collaborated with Berlingske newspaper, which is one of the major Danish newspapers. Then that led to eventually Danske Bank sort of coming clean…..”

After I sent the long email cited above to, I contacted Flemming Rose, the author of this article in Berlingske, which asserts that Browder is a fraud. When I asked Rose to explain Browder’s declaration that the paper collaborated with him, he replied that the paper says Browder is just a source.

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2 Responses to "WSJ won’t respond to evidence its Browder story is full of fabrications"

  1. Frank   Aug 27, 2019 at 4:31 am

    Lucy: I have a few questions that I can’t answer if you are right about Browder’s story is a hoax. Perhaps you can enlighten me. I’m a “big-picture” person, so these are “big picture” questions

    Is there any doubt that Russian authorities returned $230 million in tax payments to Hermitage shell companies after those shell companies submitted phony losses? Haven’t similar tax frauds been committed in Russia in the past?

    L: YES they did. And I know of at least one previous case (Renaissance RenGaz) and believe there were more.

    Is there any doubt that Russian authorities raided the law offices used by those shell companies and seized evidence, possibly including documents and seals needed to request the return of taxes that had already been paid?

    L: YES They raided the office to get evidence of tax evasion scams. The documents and seals were not needed to request the return of the taxes.

    It certainly is possible that Hermitage created the phony losses that eventually resulted in their getting the $230 million back. However, why pay $230M in taxes in the first place and risk the government not paying them back? If Hermitage wanted to cheat, why not submit tax returns with phony losses and launder that $230M as quickly as possible?

    L: They already did cheat on their taxes, so the $230 mil was way below what they really owed. They had been in touch with Renaissance who apparently told them how to get it all back.

    Whoever collected the $230M needed the cooperation of Russian authorities. Would you bet that this fraud was committed by Russians or foreigners?

    L: May have needed cooperation of lower level tax authorities. I would suspect it was done by Browder with cooperation of some Russians.

    Can’t Browder’s changing and increasingly detailed stories about Magnitsky’s death be explained by the likelihood that information about Magnitsky’s death leaked and reached him gradually, probably from more than one source?

    L: What source? No other source was ever suggested.

    I would find it suspicious if Browder knew all the details about how Magnitsky died when he first announced Magnitsky’s death. There are plenty of reasons to doubt some of the details Browder later reported. There appear to be no eye-witnesses.

    L: There were eyewitnesses in the prison.

    Those details may be right, they may contain some elements of truth, or they could be totally fabricated. If we could count on Browder to act logically, he wouldn’t risk his credibility by making up false stories: He couldn’t be sure what evidence the Russian government might later produce to damage his credibility.

    L: In a period of Russophobia you can make up anything. It wasn’t about his credibility. It was about preventing the Russians from collection multi-millions in evaded taxes.

    Magnitsky was a young man who prematurely died in jail In Russia. Would anything important change if Magnitsky died of neglect rather than torture? Would anything be different if Browder had admitted that he had no unambiguous evidence about how Magnitsky died and then repeated the rumors he had heard.

    L: Yes, the fake death story is the basis of the Magnitsky Act that prevents the Russians from collecting Browder’s evaded taxes.

    Would anything important change if Hermitage had been caught taking improper tax deductions? Improper deductions taking advantage of tax loopholes are routine problems in Kametsky addressed with a modest payment from Hermitage. Isn’t the headline story is the theft of $230M.

    L: the story is the use of the $230 mil fraud to block Russian from collecting the evaded taxes. It may also be Browder was involved in $230mil fraud.

    On Magnitsky’s death certificate, there was a question mark next to the notation of a head injury.

    L: It said “closed” meaning past. Meaning was this a possible past injury.

    Was any other explanation offered for his death?

    L: No, terrible disease that went untreated.

    Wouldn’t news of his gradual physical decline have leaked from prison?

    L: We assume Browder knew from his lawyers but obviously didn’t care since he never raised it till Magnitsky died.

    Couldn’t that question mark next to his head injury have been added later?
    L: NO

    Prison authorities everywhere are less-than-candid about how a prisoner died. Wasn’t Magnitsky beaten by the arresting authorities even before his trial and prison?
    L: NO. what evidence do you have?

    Perhaps some jurors might find the evidence for murder or manslaughter short of the “beyond a reasonable” standard. If you were forced to place a painfully large bet (your house or SS benefits, for example) on whether Magnitsky died of physical abuse, how would you bet and why?

    L: Died of untreated disease.

    If you were Browder and had stolen $230M from the Russian government, would you be crazy enough to publicize the scandal and increase the likelihood that you will be caught?
    L: NO, a smart gamble to block collection evaded taxes.

    Would you make a bigger enemy of Putin, who has assassinated (and attempted to assassinate) traitors living outside Russia?
    L: BS, prove it.

    Hasn’t Browder lived in fear of assassination for the past decade and won’t he live in fear for the rest of his life?

    L: BS, OMG, what a fake drama!

    Perhaps Browder is insane; otherwise I’m forced to assume that Russian criminals ended up with the $230M.

    L: We don’t yet have evidence. I think he has the cash offshore. Recall he set up Hermitage with Mossack Fonseca shell companies.

    Does it matter if Magnitsky wasn’t the first or only one to report the theft of $230M from the Russian government. The others may have gone into hiding, recanted or been intimidated. If so, Magnitsky might have been the last person willing to publicize the scandal.

    L: Rimma Starova made the first complaint. The fake story about Magnitsky as whistleblower is to provide an excuse for his arrest. Have you read my articles and seen the documentation?

    Isn’t anyone capable of manipulating the authorities so they received a $230M payout likely also capable modifying the record of Magnitsky’s interrogation?

    L: NO. The interrogations were filed in U.S. federal court in the Prevezon case and the govt representing Browder did not challenge them. Browder has never challenged them.

  2. Pingback: 20 fake US media articles on the Browder Magnitsky hoax and one honest reporter (from Cyprus) – The Komisar Scoop

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