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Almost two decades after a sprawling $230 million tax fraud involving Russian officials led to the imprisonment of a whistleblower, the Paris Judicial Tribunal convenes on Monday for the first hearing on criminal charges against the scheme’s alleged architect.
Dmitry Klyuev, a Russian businessman who U.S. authorities have previously sanctioned as an alleged organized crime figure, faces charges of aggravated money laundering. French prosecutors describe Klyuev as “one of the primary organizers” of a vast conspiracy that siphoned hundreds of millions of dollars from the Russian Treasury through a labyrinth of offshore shell companies.
The scandal gained global notoriety and was dubbed the "Magnitsky Affair." It was uncovered by Russian tax lawyer Sergei Magnitsky, who died in a Moscow prison in 2009 after exposing the theft. His death prompted the U.S. to pass the Magnitsky Act, a landmark law that imposes visa bans and asset freezes on human rights abusers and corrupt officials worldwide. A coalition of other nations passed similar laws.
While the fraud originated in Moscow, French prosecutors allege that the stolen funds financed a lavish lifestyle across Western Europe. According to the indictment, between April 2008 and October 2012, accounts allegedly controlled by Klyuev funneled more than 2.1 million euros ($2.42 million) into the French luxury sector.
The spending spree included: 668,517 euros ($771,703) at a Parisian art and antique gallery; 696,015 euros ($803,445) across two high-end French women’s fashion brands; 96,814 euros ($111,757) at a luxury jewelry store in Courchevel, an exclusive ski resort in the French Alps; and 127,182 euros ($146,813) for a Courchevel tour package which, according to invoice and bank records reviewed by OCCRP, covered Russian Senator Dmitry Saveliev and his guests.
Investigative outlet Important Stories previously reported that Saveliev’s company additionally received almost $8 million from the same entity that paid this invoice.
Prosecutors allege these payments were routed through FBME Bank accounts held by two British Virgin Islands (BVI) companies: Altem Invest Limited and Zibar Management Inc. Although other individuals were listed as the beneficial owners, investigators allege Klyuev controlled the accounts. The paper trail includes incoming transfers from his personal Swiss bank account and outflows covering personal family expenses, such as tuition for his son’s boarding school in Switzerland.
FBME Bank was ultimately taken over by Cypriot authorities in 2014 following U.S. allegations that it facilitated money laundering and illicit transactions. It entered liquidation proceedings in 2023.
Klyuev did not respond to requests for comment and is being tried in absentia. If convicted and eventually arrested, he faces a maximum sentence of 10 years in prison.
His physical absence from the courtroom highlights the enduring geopolitical friction surrounding the case. A European Arrest Warrant issued in March 2025 at the request of France’s financial prosecutor concluded that Klyuev likely resides in Russia, noting he “has probable links to organized crime” and “significant local support.”
The warrant was deliberately not shared with Moscow. French law enforcement officials described Russia as a non-cooperative state, determining there were zero prospects for his extradition.
The French investigation stems from a 2014 criminal complaint filed by Hermitage Capital Management Limited, the investment fund and asset management company that was originally targeted by the Russian tax fraud.
For the firm's founder, Bill Browder, who has spent the last 15 years spearheading the global campaign for Magnitsky sanctions, the Paris trial marks a critical milestone.
“The Magnitsky investigation, which led to some of the biggest journalistic exposés of the past decade, revealed how Russian officials and criminals laundered millions through Western banks,” Browder told OCCRP.
“With both French authorities and the U.S. Department of Justice identifying Dmitry Klyuev as the mastermind of the $230 million fraud, we are now seeing long-overdue justice being done,” he added.
Beyond the French borders, the stolen funds have seeped into other global luxury markets. Previous reporting by OCCRP revealed that Klyuev’s other BVI-based companies — which received deposits from offshore firms linked by U.S. authorities to the tax fraud — were used to invest millions in a seaside resort in Cyprus and luxury real estate on Dubai’s exclusive Palm Jumeirah.
