By Lucy Komisar
April 11, 2021
A new Australian “light news” show, Channel 10’s The Project, broadcast a 29 March 2021 attack on the government for not passing legislation designed by a British fraudster to save his bloated bank account from Russian law enforcement. The Russians have evidence the fraudster stole hundreds of millions of dollars through evaded taxes, illicit stock buys and fraud against the Russian Treasury, but host Waleed Aly, with zero evidence, orchestrated a video aimed at getting public support for a bill the fraudster designed, which is a William Browder Protection Act.
The charlatan Aly likes is William Browder, and the law he wants is the Magnitsky Act. It’s all about mega-tax evasion. Browder might be a recidivist tax evader. He was born American but changed his citizenship in 1998 when he started making money in Russian stocks. He stashed his profits in offshore tax havens, and though America taxes offshore profits, the UK does not. So now, blimey, he’s a limey!
The Project runs a “light” news format, and the show’s producers are comedy people, but Aly is regarded as a heavyweight political analyst. Does he own up to producing that segment himself? Will he provide the evidence behind the story?
Aly says Australia is “dragging its feet when it come to the Magnitsky Act.… “a powerful global legal movement that holds all the world’s baddies to account.” Well, not all, as he admits at the very end: “It’s just another way of doing politics. You would never impose it on an American.” His conclusion kills the premise of the story. But let’s go through the lies that The Project’s reporters, editors and fact checkers apparently never bothered to fact-check.
First, Aly says “The Magnitsky Act was named after this bloke, Russian lawyer Sergei Magnitsky.” No, Magnitsky was not a lawyer. Here is the first page of testimonies Magnitsky gave to Russian authorities in 2006 and 2008 which, #8, list him as an auditor at Firestone Duncan, the firm handling Browder’s Hermitage Fund account.
First page of Magnitsky testimony. #8 lists him as auditor at Firestone Duncan.
Here is Browder in a sworn U.S. federal court deposition April 2015.
The lawyer asked if Magnitsky had a law degree in Russia.
“I’m not aware that he did,” Browder said.
Did he know if Magnitsky “went to law school?”
“No,” Browder answered.
Following up, Aly says, “In 2007 Sergei was hired by American financier Bill Browder to work out why Russian police were swarming over his office in Moscow.” Minor issue, Browder was born American but ditched his citizenship for a UK passport because he was making millions in Russian investments, parking the profits offshore and wanted to avoid U.S. taxes. The UK doesn’t tax offshore profits.
No, Browder didn’t hire Magnitsky in 2007. Magnitsky worked for him since 1997 as the accountant who handled the Hermitage Fund at the Moscow firm Firestone Duncan. They were “swarming” because Magnitsky had organized a tax fraud that Russian authorities had investigated since 2002. That led to charges of tax evasion by his Kalmykia shell companies that claimed it hired disabled people to cut their taxes when they just held shares and hired no one, and that it invested in the region, which was a lie, it just moved shares between shells.
Here’s are details of his fraud filed in U.S. Federal Court, Southern District of New York.
And note that the European Court of Human Rights said in 2019, “The Russians had good reason to arrest Sergei Magnitsky for Hermitage tax evasion.”
The Court said: “The accusations were based on documentary evidence relating to the payment of taxes by those companies and statements by several disabled persons who had confessed to sham work for the two companies. One of them testified that he had been in contact with Mr Magnitskiy, had received money from him and had assisted him in finding other sham employees. He also said that Mr Magnitskiy had told him what to say if questioned by the authorities and had asked him to participate in a tax dispute as a witness.”
The Russians were also after Browder for having illicitly bought shares of Gazprom, the major Russian energy company, as a time that only nationals could buy them in Russia. He used shell company cut-outs with Russian fake owners. With typical audacity, he attempted to use the shares to get seats on the board, but failed.
Back to Browder: “Sergei was probably the smartest lawyer I knew in Russia.” So, we know “lawyer” is a lie. You’ve seen what Browder said under oath in U.S. federal court, when lying can get you a perjury charge. Looks like Aly didn’t read Browder’s deposition.
Then Aly says, “Sergei discovered that corrupt Russian government officials were scheming to save a $230mil tax payment made legitimately by Bowder but [which had] actually been refunded back into their own grubby little pockets. It was tax fraud backed by the Kremlin. In Russia…..” Browder picks up, “Organized crime is merged into the government.”
There is zero evidence to back up Browder’s charges. Or Aly’s. So they don’t attempt it. For those who like financial mysteries, here’s the very interesting story of what is known as the tax refund fraud. Browder knows more about it than he lets on.
The tax refund fraud was a scam that some crooked Russian and Western entrepreneurs had been operating for a few years. There were some “professionals” who specialized in it.
One of them, Moscow lawyer Andrey Pavlov, told me, in several hours-long interviews in New York, that he was approached by Viktor Markelov, a convicted felon, who proposed to hire him. Markelov wanted him 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. (“You didn’t comply with a contract, we lost money, you owe us $1 billion,” which was Hermitage’s entire 2006 profits.)
Pavlov said the refund application would require detailed information from the companies’ books for the year, which he said pointed to inside involvement. Browder’s shells didn’t defend the cases and paid out $230 million, their taxes on the entire 2006 profits.
Markelov went to prison for managing the tax refund fraud. At his interrogation, Markelov talked about the role of Pavlov and also recalled getting documents from a man he knew only as Sergei Leonidovich, as in Sergei Leonidovich Magnitsky, who was the agent of the unnamed client.
Transferring the Browder shell companies
Browder claimed he didn’t know anything about the scam, that his companies had been stolen. But Hermitage received legal letters at their old mailboxes about the lawsuits leading to transfer of ownership in July, which was the time of the legal actions. These were mailboxes accessed by Magnitsky as the accountant handling Hermitage.
Browder didn’t challenge the suits. Exhibits to prove Hermitage got the legal notices in July 2007 were filed in U.S. federal court.
Browder‘s complaint says that the true owners of the companies Mahaon, Parfenion, and Riland, learned about these lawsuits by pure chance, and long after the fact. Not true, as the lawsuit notice went to the companies‘ legal addresses, from which Firestone Duncan, specifically Magnitsky, monitored the mailboxes, got them.
Later Browder would say that the officers who searched the offices had taken documents and used them to re-register the firms. However, that is not possible under Russian law. Police, government authorities or others with documents cannot do it. Registered owners must appear in person at the official company registration office or they must request a change of ownership though powers of attorney.
That’s what happened. Powers of attorney were provided by Browder‘s Cyprus shells to Oktai Gasanov, cited by Markelov as his collaborator. Here‘s the power of attorney (translation) from Browder‘s Kone Holdings. Browder claims the powers of attorney are forgeries, but Yianna Alexandrou, employed at the Cyprus company formation agent that set up Browder’s shells, swore in a deposition in U.S. federal court that she recognized her signature.
Then the three Browder shell companies were sold to a new figurehead owner July 31, 2007 per this sale agreement. See the reference to Glendora, a Browder shell company in Cyprus which was the owner of the Kalmykia shell Parfenion. (It’s called layering, a classic offshore tactic: one shell owns another shell.)
Here is a photo of the bill of sale of Parfenion, one of the shell companies involved in the tax refund fraud. It says Parfenion in English in big red letters. Glendora in English is underlined.
Pluton LLC, represented by Viktor Alexandrovich Markelov, is the buyer. Glendora Holdings Limited, represented by Oktai Gasanovich Gasanov, is the seller. Glendora was Browder‘s Cyprus shell company, owner of his Russian shell Parfenion. In his interrogation, Markelov says Gasanov was his collaborator in the tax refund scheme.
Reregistration of the shell companies
The companies were, according to Magnitsky, not officially re-registered till September. Magnitsky, in June 2008 testimony, says that after “rulings dated 3 and 7 September 2007 by the Arbitration Court of Saint-Petersburg and Leningrad Region” the companies were “were re-registered on 11 September 2007 and 20 September 2007 under new legal addresses in Moscow.” The rulings related to the collusive lawsuits. If that is true, the companies till then would have been registered as owned by Glendora, with their old addresses.
But Glendora is prominent in the July bill of sale. So, why wasn’t the company re-registered for five or six weeks? Did the old (Browder) owners want to keep control, along with the old mailing address?
Magnitsky testified that he received the law suit notifications only on October 16, which conflicts with the July date on the Parfenion notification receipt, sent to an address he confirms is correct. He didn‘t explain why mail was apparently not picked up for months.
Browder ignores the lawsuits
Pavlov told me, “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.” That October 16 notice said there would be a hearing October 22. Hermitage sent no lawyer to the hearing. Pavlov said, “They did nothing till the money was paid out of the budget [the Russian Treasury]” at the end of December.
All this points to Browder organizing the tax refund fraud along with Magnitsky. It means Browder is the guilty one, the tax refund fraud crook! How to cover that up! (Browder refuses to talk to me so I can’t ask him about it. Maybe some Australian official or member of Parliament would. Or even Waleed Aly.)
Browder put Pavlov on his Magnitsky list in 2017, four years after the initial list and just weeks after I ran a story quoting Pavlov about the scam. It was revenge and to prevent him from traveling to the U.S., where he often went to see clients, so he could not talk to other reporters.
Magnitsky as whistleblower. No it was Rimma Starova
Let’s get back to Aly: “Sergei discovered that corrupt Russian government officials were scheming to save a $230mil tax payment made legitimately by Bowder but [which had] actually been refunded back into their own grubby little pockets.”
If Magnitsky discovered anything before his November 2008 arrest, there is no record that he wrote it down or told anybody. In his testimonies of June and October 2008, after the 2007 fraud, he accused no government officials or anybody else.
In fact, the whistleblower was Rimma Starova, a pensioner living in Kazan, capital of the Republic of Tatarstan in southwest Russia, who saw a Kommersant article about an investigation into Hermitage shell companies. She was the “hired name” sham director of the three Browder shell companies which now were owned by Boily Systems, a British Virgin Islands shell. The companies had been re-registered by Markelov‘s Russian shell, Pluton, used in the tax refund scheme, and then transferred to Boily. (Shell companies, of course, being legal structures in tax havens set up to carry out myriad nefarious activities.)
Starova was concerned the trail would lead to her, and to put herself in the clear, she went to the local police. She told them about the fake re-registration of the companies and false certificates of debt in the amount of 13.5 million rubles (that would be equivalent to the companies‘ profits) that were key elements of the tax refund fraud. Starova doesn‘t talk about a theft of companies by outsiders and certainly not by government officials, but links the scam to Glendora and Kone, Browder‘s Cyprus shells. Her April 9th complaint; English translation.
Her first complaint was April, the second July.
A Hermitage press release dated September 16, 2008, later removed from the web but saved by the Wayback Machine, claimed that Starova in April had filed a complaint with the Russian Interior Ministry in Kazan “falsely accusing representatives of HSBC‘s companies of the theft of state funds.” Browder‘s shell companies were legally “owned” by HSBC as the Hermitage trustee. Starova was accusing Browder of the scam.
Not till October did the alleged “whistleblower” Magnitsky mention this in testimony he was summoned (not volunteered) to give. If there is organized crime here, Browder was smack in the middle of it.
Aly: “Locked up for almost a year, Magnitsky was tortured and ultimately killed by a government who believed it had acted with impunity.” And Browder declared, “They chained him to a bed and eight riot guards with rubber batons beat him to death.” Evidence? No, a Browder fabrication. Aly, a Browder stenographer not a reporter, didn’t need evidence.
For real reporters who looked, there were two important independent reports about Magnitsky in prison and death, one by the Russian Public Oversight Commission for Human Rights Observance, an NGO charged with investigating prison conditions, and the other by Physicians for Human Rights in Cambridge, Mass, to which Browder had given documents. Neither claims Magnitsky was tortured or beaten.
The Public Oversight Commission report November 16, 2009 said: 6:30 p.m. Review by the doctor on duty. Diagnosis: Acute Cholecystitis and Pancreatitis. Hospitalized to the surgery department. For dynamic monitoring and treatment. 7:00 p.m. The patient behaves inadequately. Talks to a “voice,” looks disorientated, and shouts that someone wants to kill him. He condition is diagnosed as psychosis. The emergency doctor was called (order No. 904253). There are no body damages apart from traces of handcuffs on the wrists. It was planned to make an anti-spasm therapy prior to the arrival of the psychiatrist but such therapy was not possible due to the aggressive behavior of the patient.
9:15 p.m. The patient was surveyed again as his condition deteriorated. When the psychiatrist was examining the patient the latter’s condition deteriorated sharply. He lost conscience. The reanimation procedure was started (indirect heart massage and ventilation of lungs using the Ambu pillow). The patient was transferred to the special room where he was received an artificial ventilation of lungs and a hormones injection. Reanimation procedure lasted 30 minutes. At 9:50pm the patient died. The report.
The Physicians for Human Rights, Cambridge, Mass. also made no claims of beating. The report. The death stories were invented by Browder with zero evidence.
Yes, conditions were pretty bad. The building was over 100 years old and obviously had problems. Browder claimed that the toilet in the cell overflowed, doesn’t mention the inmates were moved to other cells.
Perhaps of some relevance, I just read in the NY Times that the U.S. is closing part of its Guantánamo facility that still holds 40 people for decades accused and never tried for acts of Islamic terrorism. It said: “The plan to consolidate the prisoners was devised during the Trump administration, when their former compound, Camp 7, was failing. Raw sewage sloshed through the tiers, the power sometimes went out and some cell doors would not close at the site.” So sewage can be a problem in even newer prisons.
The European Court of Human Rights report also did not back up Browder’s claim that Magnitsky had been tortured and beaten to death.
Though the reports said nothing about a beating, and forensic photos showed no indications of a beating, that did not stop Browder. He simply fabricated “evidence” for his gullible or politically enthusiastic audience. He faked a death certificate claim, highlighting “closed cerebral cranial injury,” to “prove” that Magnitsky must have been beaten on his head. But look at the real death certificate, that gives the lie to Browder’s forgery.
Magnitsky’s mother (a lot more honest than her son’s pseudo-defender) told forensic investigators that her son had fallen and hit his head in 1993, 16 years earlier, and suffered a concussion, which was treated. The investigators found the medical reports and included them in the forensic document Browder received, so the shameless prevaricator knew his connection of a cranial injury to the invented Magnitsky beating was a fabrication. Here’s what the forensic report said:
Aly, in appropriately measured reporter language, declared, “To hold the bastards available in 2012, the U.S. government with Bill Browder’s help, passed the Magnitsky Act, legislation designed specifically to target the individuals responsible, right where they’d hurt most, their wallets.”
Interesting that Browder didn’t start out making the beating claim, which is specified in the Magnitsky Act. Check the text of his talk at Chatham House in London or the video of his talk at San Diego Law School. Here’s how that progressed.
As one can see, Browder said at Chatham House in 2009 that he didn’t know how Magnitsky died and at the University of Diego Law School in 2010 that he’d been put in an isolation cell and left to die. He didn’t invent the beating till December 2011 when, with the collaboration of former State Department official Jonathan Winer, he was lobbying for the Magnitsky Act, really the William Browder Protection Act, aimed at using U.S. power to block the Russians for going after him for massive tax evasion and theft. Ironic to call on the U.S. as his defender, since he had quit his citizenship to avoid paying American taxes.
Winer worked for APCO, the international PR firm that represented Mikhail Khodorkovsky, the former Russian “oligarch” who donated $385,000 to the Magnitsky Act campaign through his Corbiere Trust. It bought him a section in the bill that named him as another Russian victim.
In fact, Khodorkovsky stole billions from Russia through the 1995 rigged auction (run by his own Menatep bank!) of the Yukos oil company at a fraction of its worth. He used shell companies to book fraudulent oil sales at fake low prices and then sell on the market at real prices to evade paying taxes to Russia and dividends to minority shareholders. For evidence about his “transfer pricing,” go here and here.
Jennifer Robinson, an Australian lawyer who lives in the UK, is shown saying, “the imposition of the Magnitsky Act in the U.S. in 2012 had a huge impact. It targeted individuals, froze their U.S. bank accounts.” She doesn’t tell the specifics of any frozen U.S. accounts much less their human rights impact. Because she can’t.
Aly says “eighteen Russian officials were identified and banned from entering the US., banned from using its banking system and banned from holding any assets in the country.” “Identified” by Browder with zero evidence, banned with no trial or other due process. Even Browder’s friend former U.S. Ambassador to Russia Michael McFaul admitted he had a problem with the lack of due process.
Of course, the low-level tax investigators, legal and medical personnel on Browder’s list didn’t travel to the U.S. or use U.S. banking, but naming them was necessary for his elaborate cover. Who could he name who mattered who had bank accounts or traveled to the U.S.? Major Russian “oligarchs” who even Browder could not link to the Magnitsky story? And who would have had the resources to fight back.
The only judicial examination of any Browder target was by British Judge Simon considering a defamation suit by one of the unlucky 18, a tax investigator who obviously had nothing to do with Magnitsky’s death except finding the evidence that landed the accountant in jail. Simon ruled against the defamation charge on grounds the Russian plaintiff had no reputation in the UK to protect, but he said clearly that Browder’s attacks on the Russian were not true.
In 2016 the law was expanded globally, meaning anyone in the world who was guilty of “corruption and or gross human rights abuses” could find themselves on the U.S. Magnitsky list.
U.S. Congressman Jim McGovern, a Democrat, says on camera, “We thought it was important that they know there’s a consequence to their behavior.” When I asked McGovern personally at a Council on Foreign Relations meeting in New York July 22, 2019 to provide me with evidence about claims of Magnitsky’s death that were cited in the Magnitsky Act he cosponsored, he said he would. But his staff refused. Because they didn’t have any. Here are the details.
Aly, “They can now be personally held to account, punished financially, their bank accounts frozen, properties seized, visas cancelled. I also meant fewer sanctions were imposed on nations as a whole, which mean only the bad guys felt the sting, not innocent citizens.”
As per Pavel Karpov who London Justice Simon says was clearly innocent of Browder’s charges?
Aly, using a metaphor of lynching, “Tightening the noose, other countries have since joined in with their versions of Magnitsky Act.” Browder intones “Estonia, Latvia, Lithuania, Gibraltar…” Aly says, “The EU, the UK and Canada now all add horrendous human beings to their lists and banks duly complied by locking them out.” He did not explain that the “horrendous” people appear to live mostly in US-UK targeted countries.
The UK parliament adopted the law, but authorities have not enforced it. Canada adopted it because of Chrystia Freeland, an ethnic Ukrainian well-known as a Russophobe, who was foreign minister. The Balkans have a long visceral hatred of Russia, and what they might do with the Act is irrelevant. Citing the EU is false. Browder tried very hard to get a human rights act adopted by the European Commission named after Magnitsky, but it refused. The sponsor, Dutch Foreign Minister Stef Blok, said he didn’t want it appear to be targeted at Russia. It probably didn’t help that Browder had previously threatened him. But it’s Browder’s way.
Here’s how Browder attacked French Member of the European Parliament Nicolas Bay, who at a hearing talked about the film “The Magnitsky Act: Behind the Scenes” by Russian director Andrei Nekrasov. It was going to be screened at the European Parliament in 2016 till Browder got his supporters to block it. (His legal threats have gotten the film censored by European TV.)
Bay asked “why the screening was cancelled, even though film had gone through all the checks and controls in advance. Why are we seeing this censorship in area where we are supposed to have this perfect democracy?” He cited his own investigation, which showed “inconsistencies in what Mr. Browder saying” a nice way of saying Browder was lying.
Browder responded typically: “Thank you for your question. I knew there would be one from the FSB [the Russian Security Agency] fed into here.” If you challenge Browder, you are attacked as an asset of Putin. See the exchange. (He lies at the end about the Nekrasov film, which was well-received in Washington.)
Aly mentions people cited under the act in Saudi Arabia, Burmese military on the issue of the Rohingya, the leader of Hong Kong, and others in the Maldives, South Sudan, Uganda, Cambodia, Belarus, Uzbekistan, and Pakistan. He does not provide any evidence that this had any effect, that it improved human rights. Take a look at Burma/Myanmar today!
Aly notes that, “Britain, Canada and the EU joined the U.S. in slapping Magnitsky sanctions on four Chinese government officials responsible for the persecution of Uyghurs in Xinjiang province.” As in the other cases, there is no evidence sanctions have had any effect. China simply told told the countries to stop lecturing on the claimed persecution and to mind their own business.
Then Aly finally gets to the reason for this litany of fabrications. “Human rights groups and concerned Ozzies want Australia to implement our version of a Magnitsky Act to prevent us becoming a safe haven for devious despots and dirty money.
Browder: “It gives Australia the moral authority to say people who do terrible things shouldn’t come in.” But I assume he gets a pass on stealing some $350 million in evaded taxes and looted Russian Treasury funds. He notes that last December “a bi-partisan parliamentary inquiry recommended we write one up.”
Browder: “If the United States and the UK and Canada have it, then the bad guys will just keep their money in Australia.” More likely offshore. Actually, Browder kept his Russian “profits” in shell companies in the British Virgin Islands, set up by Mossack Fonseca of Panama Papers fame.
Aly says “$3.5 mil of the $230 million uncovered by Magnitsky himself has been tracked to Australian bank accounts.”
Evidence? None. Browder has made such claims in numerous countries, and none led anywhere. In the U.S., Prevezon case Judge William Pauley laughed and told government prosecutors at a pretrial hearing I attended in 2017 that their graphic of bank flows might be ok as modern art (the converging lines were bright red), but were not acceptable as evidence. The Swiss using documents Browder supplied, froze some $20 million of a handful of targets who had deposits in Swiss banks, and investigated for nine years. Browder’s story turned out to be fake, the documents led nowhere. See the letter from the Office of Attorney General, here as pdf and English translation. The Swiss dropped the case.
The British have ignored Browder’s claims, even calling him “a pain…..” which he repeats almost with gusto, then accuses members of the House of Lords of being crooks who have blocked proper law enforcement. Again, that’s his way. But when it comes to actual law cases, prosecutors need evidence, not Browder’s unsupported claims.
Aly: “With our own act, we could apply the squeeze to the jerks who thought they could hide it here. Then, here comes the reason for this piece, the Browder attack in Aly’s mouth. “But our government appears to be in no rush.” No rush? Does that mean they are against fighting human rights abuses? Then the film targets those responsible, the foreign minister and chief legal officer, caught and Browdered!, indicted as bad guys.
Rice: “That’s disappointing because I think I had heard by the end of the first quarter, was anticipated.”
Robinson: “Australia could lead the world in the type of human rights abuse that we target. We could go beyond extrajudicial killings and war crimes and look at labor exploitation, the impact of climate change, environmental degradation. These are the kinds of cases we could be taking action on here in Australia if we had a Magnitsky Act.” It’s called “mission creep.” She wants Australia to intervene in countries all over the world to promote her good causes. It’s called “liberal interventionism.” Remember Iraq? Afghanistan? Libya?
Some hosts on the show appeared more measured.
Peter Hellier wondered if the targets of the Magnitsky Act would go as far as individual crimes.
Steve Price: “I think that’s part of the problem. It’s so open-ended, that’s the legal issue, right? I think that’s why the government’s being a little bit patient about whether they do it.”
Carrie Bickmore: “Isn’t it up to the foreign minister to decide who to sanction. It’s up to the foreign minister to keep diplomatic relationships smooth, so it’s a bit of a conflict.”
Aly admits, “At the worst, it just becomes another way of doing politics. You would never impose it on an America.”
Bickmore: “Yes.” Aly: “But you will impose it on someone who’s Chinese!”
Maybe that’s why the Australian parliament and foreign ministry will not be steamrolled by William Browder’s fabrications and attempts at intimidation, parroted by a slipshod and irresponsible pseudo-journalist, into harming the country’s own interests by protecting a fraudster from the consequences of his massive thievery.
I detailed Browder’s thievery and fabrications in my March 2020 testimony to the Australian parliamentary subcommittee considering a Magnitsky Act. People responsible for posting the testimony redacted (censored) much of my evidence and links. See here. Then when Browder attacked me personally, they declined my request to respond. Hardly a good beginning for a human rights regime.