US Settles Russian Money Laundering Suit linked to Magnitsky
Prevezon Holdings Limited, a Cyprus-based company, agreed on Friday to pay US$5,896,333.65 to the US Treasury to settle a money laundering and civil forfeiture action uncovered by the deceased Russian lawyer Sergei Magnistsky.
Prevezon Holdings, owned by Russian businessman Denis Katsyv, and its subsidiaries were prosecuted in New York for laundering some of the US$230 million stolen by an organized crime group involving Russian government officials through a fraudulent tax refund scheme.
Some of the money was, according to the US Department of Justice, transferred to the international real estate company Prevezon, which then bought luxury New York apartments near Wall Street.
The fraud was uncovered by lawyer Sergei Magnitsky, who was arrested after he exposed in 2008 the involvement of high-ranking Russian officials in the scheme. He was subsequently arrested and died a year later in a Russian jail under suspicious circumstances.
According to the Department of Justice, an independent Russian human rights council said that Magnitsky was denied necessary medical care and that he was "beaten by eight guards with rubber batons on the last day of his life, and that the ambulance crew that was called to treat him as he was dying was deliberately kept outside of his cell for more than an hour until he was dead."
The settlement amount is triple the value of the proceeds which allegedly flowed to Prevezon and its subsidiaries (US$1,965,444.55) and more than ten times the amount of proceeds invested in the New York real estate (approximately $582,000).
"We will not allow the US financial system to be used to launder the proceeds of crimes committed anywhere – here in the US, in Russia, or anywhere else," said Acting US Attorney Joon Kim.
This settlement puts an end to a three-year trial that was scheduled to begin Monday and leaves the case unsolved as none of the defendants ever admitted any wrongdoing and cannot be charged in connection with this case.