By Lucy Komisar
March 5, 2020 –
The Fault Lines broadcast today is about two main elements of the Browder hoax, an introduction to the story.
First, Browder‘s tax evasion: he took the 5% profits tax allowed by the Russia-Cyprus double taxation treaty for Cyprus investors when he wasn‘t entitled to it.
Second, Browder set up the shell companies in the Kalmykia region, through which he bought and sold Russian shares. That is because Kalmykia gave a big tax write-off if 50% of a firm’s employees were disabled. Except Browder claimed the 50% were “stock analysts” when they were actually manual workers he had paid to use their work papers.
Third, he took a big tax cut for investing in the Kalmykia region when he just moved money from one shell to another.
Finally, he bought shares of Gazprom, the major energy conglomerate, that were restricted to Russian nationals except as American Depository Receipts in London that cost more and were limited in number. He bought them on the exchanges in Moscow and St. Petersburg through shell companies, pretending the purchasers were Russian.
Then Browder’s hoax promotes the fake claim that Magnitsky uncovered a massive tax refund fraud against the Russian Treasury. That refers to a scam wherein companies engaged in collusive lawsuits, “lost” the suits, and “agreed” to pay damages equal to their entire year‘s profits. They then requested a full refund of taxes paid on the now zero profits. The scam was stopped after Russian authorities realized what was happening.
The declaration that Magnitsky discovered this was a lie, aimed at muddying the waters and deflecting attention from his central role in Browder‘s tax evasion.
The tax refund fraud was reported first in April 2008 by Rimma Starova, the figurehead director of Virgin Islands shell company Boily Systems which had taken over Browder‘s Kalmykia shell companies.
A Browder/Hermitage director Paul Wrench filed a complaint about the theft of the Hermitage companies used in the scam in July, and Browder gave the story then to NYTimes and Vedomosti. But Starova had already reported it.
And Magnitsky didn‘t mention it in testimony till October 2008.
The broadcast discusses how the Magnitsky Act was created to block the Russian from going after Browder for his tax frauds by, in part, targeting people it claimed were involved in the “criminal conspiracy” (ie the tax refund fraud) Magnitsky uncovered. Except he didn‘t uncover it.
It directed the U.S. president to determine who was involved in that conspiracy and freeze assets U.S. could get its hands on and order the targets banned from travel to the U.S. It‘s in the best tradition of dictators, a Star Chamber with no due process, no evidence required, no way to challenge charges, no court of law.
Calling it a human rights law is an irony apparently lost on its supporters.