Lithuania Freezes Magnitsky Case Bank Accounts

VILNIUS, January 22 (RIA Novosti) – Lithuanian law enforcement agencies have frozen several bank accounts as part of a probe into the alleged embezzlement of public funds uncovered by lawyer Sergei Magnitsky, who died in a Russian pretrial detention prison in 2009, a Lithuanian prosecutor said on Tuesday.

Last summer, Hermitage Capital, who Magnitsky had been working for prior to his arrest, asked prosecutor’s offices in six countries to freeze accounts in banks that may have handled stolen funds in 2008. The banks are located in the three Baltic States, as well as in Austria, Cyprus and Finland.

The Lithuanian Prosecutor General’s Office received Hermitage Capital’s request by email and launched a preliminary investigation the following day.

“The accounts of all offshore companies carrying out transactions through Ukio bankas were frozen. That was done on September 28, when we received case files from the Prosecutor General’s Office because the bank’s office is located in our city,” Kaunas District Prosecutor Donatas Puzinas told RIA Novosti.

“The money in question is not very big – under $100,000,” he added

There are currently no suspects in the case, while all the accounts were managed from Russia and Ukraine where they were opened, as Ukio bankas has branch offices there, he said.

About $13 million was transferred to Ukio bankas via offshore company accounts, Puzinas said.

It is difficult to say at the moment whether the money in the frozen accounts will be handed over to Russia, he said. “It will have to be established whether Russia is a signatory to the relevant international conventions,” Puzinas said.

Sergei Magnitsky was arrested in November 2008, on tax evasion charges, after he exposed what he believed was a $230 million tax fraud carried out by Russian officials, who he claimed had taken over Hermitage subsidiaries and then used them to illegally claim massive tax rebates. Shortly after making his claims, he was arrested, by some of the same officials he had accused.

While in jail he suffered from pancreatitis that was left untreated and grew progressively worse. He died in November 2009, of heart failure, according to prison officials.

But an independent inquiry ordered by the Kremlin’s human rights council revealed Magnitsky had been severely beaten hours before his death.

The lawyer’s death ultimately led to passage in the US of the Magnitsky Act, which imposes sanctions against the Russian officials implicated in human rights abuses.

Russia has responded to the Magnitsky Act by banning adoptions into US families and compiling its own “Guantanamo List” of US officials it says are implicated in human rights violations.


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