By Lucy Komisar
July 20, 2020

The FCPA Blog presents itself as providing “News and commentary about white-collar crime, enforcement, and compliance.”

It deals with the Foreign Corrupt Practices Act which prohibits U.S. citizens and entities from bribing foreign government officials. It also applies to foreign firms and persons who, directly or through intermediaries, help facilitate or carry out corrupt payments in U.S. territory.

It just ran a story about Magnitsky Act sanctions based on alleged payoffs to Russian officials, so it would seem to fit. On the other hand, in due process (and the FCPA should be committed to due process), accusations should be followed by a trial, with evidence, arguments and maybe convictions. And one must be wary of criminals who target others to throw law enforcement off their trail.

That brings us again to William Browder, who invented the Magnitsky hoax, including a fraud against the Russian Treasury he claims involved Russian officials. He has a strong interest in promoting the story, since the Russians are after him for at least $100 million in evaded taxes. So his tale should be vetted by any serious law-based group, especially one that asserts a commitment to ending corruption, like the FCPA Blog.

Therefore, I‘ve been disappointed that this website repeatedly gets the Browder story wrong, buying into the Magnitsky was a lawyer who discovered a fraud invention.

After such an article July 15^th, I posted a comment. The editors have declined to run it. So, I‘m running it here. Readers who want to leave comments on the FCPA site can do so at the end of their article.

To Richard Cassin. In “UK imposes first ˜Magnitsky sanctions‘; here‘s the list,” you said: “Sergei Magnitsky…. The 37-year-old Russian lawyer died in a Moscow prison in 2009 after exposing a $230 million tax fraud.”

As you are a lawyer, you know the importance of evidence. What is your evidence?

Magnitsky was an accountant, not a lawyer. Even some of the mainstream media are getting that right now, though not the rest of it.

Browder admitted in a deposition in U.S. federal court that Magnitsky didn‘t go to law school or have a law license. See the clip. Here is text from his deposition U.S. federal court Southern District of New York.

Magnitsky didn‘t expose anything.

He did not uncover a massive fraud. That was the tax refund fraud in which 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 gains. The fake lawsuits and payouts were first revealed to police by Russian shell company director Rimma Starova April 9 and July 10, 2008. (Russian originals April and July.)

With investigators on the trail, Browder‘s Hermitage Fund director Paul Wrench filed a complaint about the fraud, and Browder gave the story to The NYTimes and the Russian paper Vedomosti, which published it July 24, 2008, long before Magnitsky mentioned it in October 2008. His testimony did not accuse any officials.

You said: British Foreign Secretary “Raab credited passage of the UK Magnitsky law to Bill Browder, whose London-based investment firm employed Sergei Magnitsky in Moscow”

No, to be precise, Magnitsky was employed by Firestone Duncan, a legal and accounting firm that handled Browder‘s accounting. See this in Magnitsky‘s Oct 2006 interrogation, first page #8. Auditor at Firestone Duncan.

Note that he gave the testimony over a year before the tax refund fraud, which occurred in December 2007 and which he exposed and, according to Browder, was therefore pursued by the authorities. Does Browder have a chronology problem here? Why the 2006 interrogation? Hint, it was about Browder’s tax fraud. Should be right up your angle. (Read it, and the others.)

Browder calls him a lawyer to obscure the fact he was his tax evasion accountant for ten years.

The FCPA Blog has made these errors before. You should correct them for the sake of your credibility and in defense of the truth.

Also see this about how the British Magnitsky Act sanctions are devoid of evidence. Not something a lawyer admitted to the DC, Virginia and Florida bars should admire.