By Lucy Komisar
Dec 18, 2020
Here’s a little story raising questions about the integrity of someone supposed to defend our justice system. I signed on to watch a Dec 10 zoom interview by Preet Bharara, former U.S. federal attorney, with convicted tax fraudster William Browder. Though that is not how he described him.
He called him his “friend.” First point to know is that Bharara signed off on the Justice Department case which it brought in 2013 on behalf of Browder (it didn’t say that but DOJ was his proxy) against a Russian real estate company it/he accused of receiving funds stolen from the Russian Treasury. Bharara headed the press conference announcing the case.
Evidence suggests Browder was complicit in the fraud and was promoting the case as a coverup. Bharara either was naïve about that or was part of a U.S. government operation to blame Russian officials for Browder’s crime as part of a developing “target Russia” foreign policy.
At any rate, seems quite inappropriate for a Justice Department official to label his “friend” someone who got the department to file a major lawsuit on his behalf. Here is a brief summary and then to the zoomcast and my interview about it. The zoomcast is not online, so I can’t link to it. I requested a link, to no avail.
In a corrupt scam involving collusive lawsuits, Browder, an investor in Russia, got his shell companies in 2007 to pretend they had to pay out all their last year’s profits and request refunds of their taxes. The tax-refund fraud. The scam was organized by Browder with his tax accountant Sergei Magnitsky, who was named by the deal’s operative in the trial that sent him to prison. Browder would claim the shells were stolen, but evidence shows he controlled them. The victim of the scam was the Russian Treasury.
To deflect attention, Browder created a narrative that said his accountant, who he called his lawyer, discovered the fraud by Russian officials and was thereby jailed. Except Magnitsky was interrogated in Oct 2006, a year before the Dec 2007 fraud, about his role in Browder’s then $40G (now $100G) tax evasion and was detained because of that. So over a year before his “discovery.”
To build a wall against Russians getting back his stolen tax and illicit share purchase funds, Browder devised an amazing story and (apparently) got Bharara to buy into it. Bharara, former counsel to NY Sen. Chuck Schumer, was U.S. attorney in the Southern District of New York where most U.S. financial fraud cases are tried. He prosecuted the case against Browder’s target, Denis Katsyv, owner of a real estate holding company, accused first of getting the $230 mil tax refund fraud, then (when somebody checked!) amended to receiving $1.9 mil. (How could you make that mistake? Because you wrote what Browder told you instead of finding out the facts.)
There was never any evidence. But Bharara prosecuted this on behalf of his “friend,” which raises questions. How does a U.S. attorney bring a case for his “friend”?
I signed on to a Bharara-Browder zoomcast.
Browder declared, “I am under threat of murder kidnapping arrest by Russians.” Fanciful. No evidence. BTW this multi-millionaire “threatened” person admits he has no bodyguards.
Bharara said: “Browder and his lawyer Sergei Magnitsky discovered Russian government corrupt and fraud to to tune of hundreds of millions of dollars.” Bharara has access to U.S. federal court documents of the DOJ case against Prevezon in which there is no such claim. Plus a link that says Magnitsky was an accountant not a lawyer. How can Bharara lie so egregiously?
There was a chat box on the zoom meeting, and I raised some questions. I started typing: “A month after Sergei Magnitsky died Nov 2009, you [Browder] spoke at Chatham House in London and a year after that at U of San Diego Law school both times saying he’d been left alone in a room without care. And died.
Not till 2 years later, Dec 2011 at U of Cambridge Business School, England, when you were promoting a law to block the Russians from going after your tax evasion, did you announce Magnitsky had been beaten to death. But Physicians for Human Rights in Cambridge Mass 5 months earlier in July 2011 based on documents you sent them said he died of untreated illness, nothing about a beating.”
I was about to type, “What evidence did you get to back up your beating claim?” But I got knocked off the zoomcast. Here is the screen shot. Cancelled. Hmm. Sometimes evidence is not desired by officers of the court such as Bharara.
On the Backstory broadcast (23 min in) Dec 14 I talked more about the case, about the fact Albert Dabbah, comptroller for HSBC, trustee of Browder’s Hermitage Fund, confirmed in a U.S. federal court deposition that in July 2007 HSBC said it needed $7mil more in a legal fund to deal with stolen Browder companies. But Browder says he found out about theft of companies only in October. Hmmm. Because he was involved in the theft? Bharara had to know that.
As the case went on there was more and more evidence this was a crooked case. That the Justice Department had no evidence. It ended with Prevezon’s agreement to pay $6 mil to settle, which DOJ accepted as it had no evidence to try and win the case. And Prevezon didn’t have the deep pockets to pay lawyers for many more months. This is how the system gets plea bargains.
The DOJ chief witness Todd Hyman was interviewed by lawyer John Moscow who had been the chief investigator for NY District Attorney Morgenthau for decades. Hyman admitted they had no evidence or witnesses, just Browder.
(Browder had hired Moscow in 2008 to investigate Renaissance/Rengap that did a tax refund fraud the year before Browder’s companies did it. Moscow lawyer Andrei Pavlov told me he worked for the crooks in both cases. Then he was put on the U.S. “Magnitsky” sanctions list so he could not come to New York and talk to reporters.)
I think Browder copied what Renaissance/Rengaz did. He hired John Moscow to investigate Rengaz. Moscow didn’t come up with anything. After nine months he left the job. Browder’s London lawyers filed a U.S. court case to get discovery about Rengaz doing the same scam. But when Magnitsky died, they withdrew the case. Then Browder went to court to get Moscow thrown off the Prevezon case. Which was not supposed to be about Browder. Except we know it was about Browder.
That takes us back to the Prevezon case bought by Preet Bharara, ostensibly on behalf of the U.S. government, but really on behalf of William Browder to deflect attention from his tax evasion and illicit stock buys. Perhaps U.S. decision-makers had a common purpose in using the case to attack the Russian government. Otherwise why bring a case when you have no legitimate evidence?
DOJ’s chief investigator Todd Hyman admitted in his interrogation by Prevezon lawyer John Moscow that he had NO witnesses. Except Browder, of course.
What did Hyman witness? He observed the documents he was provided. (By Browder, of course.) Were there witness to the transactions? NO. Did the U.S. interview any competent witnesses? NO. His deposition.
The DOJ had to correct its complaint when it discovered it had been the stenographer for Browder’s lies, in this example that Magnitsky had been convicted in a posthumous trial. The red strike out is in the amended complaint. And no evidence it was the first such prosecution. In Russia, family members can request trials of deceased to clear their names, which is what happened in this case.
The Justice Department case was a fake. You don’t bring a case without evidence, you don’t get it from the plaintiff (ie U.S. acting as proxy for Browder.) Preet Bharara putting Browder on his program as his friend smells.
Why is this not reported? Fear of being accused of being a friend of Putin! We are in deep McCarthyite hysteria. When journalists are intimidated, Browder, the dark side, wins. With the help of corrupt operators like Preet Bharara.