By Lucy Komisar
Aug 1, 2019
Another @Politico Browder stenographer, lapping up his fabrications, this time targeting Cyprus.
Why would Browder aim at Cyprus? A salvo in his war to prevent Cyprus from providing the Russians with evidence of his tax evasion using Cyprus shell companies for nearly a decade till the mid-2000s. So far that has worked. But if they decide to provide evidence, he will accuse them of being crooks bought by the Russians. He already smeared a Cypriot prosecutor who was talking to Russian counterparts. It’s the way he works.
This article by Matei Rosca takes off against a Russian who bought a house on the south coast of Cyprus in the name of his son and shouldn‘t have, because he is “under sanctions for organized crime in the U.S., Canada, Lithuania, Latvia and Estonia” and also was convicted in Russia for fraud.
Dmitry Kluyev indeed got a suspended sentence in Russia in 2006 for attempting to steal shares of an iron ore processing company, but the rest, “under sanctions for organized crime” is a fabrication.
“Organized crime” is Browder’s invented fable of his enemies’ carrying out a tax refund fraud against the Russian Treasury under which criminals used collusive lawsuits to fake damages and get refunds of company taxes. The tax refund fraud using Browder’s companies netted $230 million.
Sanctions means Kluyev is on the Magnitsky List which Browder created, got the U.S. Congress to approve, and whose targets he chooses as part of a grand scheme to block the Russians from collecting on his multi-millions in cheated back taxes. It’s named after his former accountant, who Browder says was killed for exposing the tax refund fraud.
But Magnitsky didn’t expose anything, and evidence indicates Browder was involved in the fraud. For example, he says he found out about the theft of his companies, allegedly used in the fraud, October 15, 2008, but Hermitage trustee HSBC (Guernsey) in late July had put aside $7 million in a legal fund it said in a filing might be necessary to get the stolen companies back.
Then, Rosca reports how mafia influence goes deeper in Cyprus. Now, this is really funny. The reporter writes: “Campaigners and investigators have long identified Cyprus as a major destination for illicit Russian cash, and have accused Cypriot authorities of failing to crack down. The authorities say they have taken steps in recent years to address the problem.”
“I think the Cypriot authorities are effectively welcoming Russian laundered funds by not creating any consequences for the launderers,” Browder said. “Russia has been using Cyprus as the Trojan horse to getting money into Europe. It‘s one of the weak links for Europe to fight Russian organized crime.”
It is true that Cyprus is a favorite place for Russian to launder money. Maybe that is why Browder and his accounting advisor Jamison Firestone chose it, after Browder became his client in 1996, when they were looking for a place to launder Browder’s Russian profits.
Browder from about 1997 to the mid-2000s used Cyprus shell companies to move money out of Russia to cheat the country of multi-millions of dollars in taxes. He used the Russian shells to invest in shares, including Gazprom shares that were illegal for foreigners to buy in Russia, then moved the shares to Cyprus shells.
Cyprus offered another advantage, a double taxation treaty that allowed legitimate Cypriot businesses to pay only 5% on Russian profits instead of 15%. Browder had no legitimate Cypriot business, just shell companies that owned Russian shells that bought Russian shares. But for years, Browder claimed fake deductions, paying 5% on Russian profits instead of 15%.
The diagram above, which tells how Browder did it, was included in Russian lawyer Natalia Veselnitskaya‘s testimony to the U.S. Senate Judiciary Committee in 2017, but the Senators and their staffs appeared uninterested. Rosca is identified as an expert on money-laundering, so it should interest him. Call it profit-laundering.
His article says that, “Among the most important measures taken by Cypriot regulators was to ban local banks from opening accounts in the name of shell companies based abroad. This, the government says, has led to a dramatic fall in non-resident deposits.”
Browder‘s shell companies were registered in Cyprus but owned by HSBC (Guernsey) as the trustee for his Hermitage Capital Management. Below is a document for Glendora, a Cyprus shell owned by Hermitage. It was deeply involved in the 5%/15% fraud. So, the new laws would have hit Browder hard! If he bothered to obey them; his track record is not encouraging.
Browder says Kluyev registering the new property in the name of his son “appears to be a tactic to conceal Mr. Klyuev as the source of funds for the property acquisition and ownership.” What would Rosca say about Browder registering his $11-million vacation home in Aspen in the name of a nominee, a front person, to conceal Browder as the source of funds for the property acquisition and ownership?
When Browder tried to evade a summons, declaring he didn’t live at that address, a document filed in U.S. Federal Court proved that he did. For example, the Colorado car registration in his name lists the address of the shell company agent who owns Sundance Aspen and pays his property taxes.
Then reporter Rosca repeats Browder‘s fabrications that his Moscow office was raided [in 2007] by Interior Ministry officers who used documents and stamps to file bogus tax returns paid out to bank accounts controlled by Kluyev and associates, according to the U.S. government. That was the tax refund fraud, but the evidence points to Browder’s complicity.
First, original documents and stamps are not required to file the returns, and second the U.S. Justice Department has lied egregiously in the Prevezon case Rosca refers to, repeating Browder‘s claims with no evidence. Todd Hyman, the DOJ chief investigator, admitted in a deposition that the evidence to back up the Justice Department suit came from Browder and the internet. See the video.
Then Rosca says, “The scheme was discovered by lawyer Sergei Magnitsky, who was working for Browder. Magnitsky was arrested after he complained to the Russian authorities; he died in prison in 2009, following what Russia‘s human rights ombudsman said were beatings by guards.”
Amazing to put so many lies in such a small space. No, it was reported by Rimma Starova, a Russian nominee director of a shell company that held Browder‘s companies used in the scheme. Browder knows that because a Hermitage press release reported it, till Browder took it down because it got in the way of his story. It lives on the Wayback Machine.
HSBC (Guernsey) director Paul Wrench filed a complaint about the tax refund fraud in July 2008 on behalf of Hermitage (after Starova‘s complaints) and was asked in a 2015 deposition in U.S. Federal Court who he discussed it with. He said [Ivan] Cherkasov, Browder‘s partner. Not Magnitsky.
Maginitsky was arrested for being the accountant (not a lawyer) of Browder‘s tax evasion schemes, not from anything he said in his three pre-arrest testimonies, and the “human rights ombudsman” claim was repudiated by its chair Kirill Kabanov, who said that it was based on unverified Browder documents. The report by the Physicians for Human Rights of Cambridge, Mass., to which Browder sent evidence, said he died of illness made worse by terrible medical care. Nothing about a beating.
Mr. Rosca, did you check any of that out, or just take Browder‘s stenography?
Browder said, “We have filed numerous complaints about the money laundering connected with the Magnitsky case in Cyprus and the government has refused to prosecute anyone there in spite of the country being one of the key transit points for proceeds of the crime.”
By the Magnitsky case he means the tax refund fraud, a red herring he uses to deflect attention from his tax cheating. However, there is another Magnitsky case: the money-laundering connected with Browder’s use of Cyprus shells for tax evasion that Magnitsky oversaw. Cyprus authorities should investigate that. If they did, the target of prosecution would be William Browder. Reporter Rosca should look into the real Browder-Cyprus story.