Moscow court finds fugitive ex-head of Yukos subsidiary guilty of stealing oil

Moscow’s Basmanny District Court on Monday found guilty in absentia Antonio Valdes-Garcia, the former head of Yukos trading company Fargoil, on charges of embezzling oil and laundering the proceeds.

Valdes-Garcia was sentenced to eight years in prison. Prosecutors had requested a 13-year sentence for him.

The presiding judge cited Valdes-Garcia’s testimony in which he partially admitted his guilt.

“I signed several documents, but had no idea of what they were about. But I didn’t embezzle anything,” his statemement reads.

Russian prosecutors claimed that Yukos illegally transferred $13 billion in crude oil sales out of the country through its wholly owned subsidiary Fargoil between 2000 and 2003.

Valdes-Garcia, a Spanish citizen, was accused of buying oil from Yukos-affiliated extracting companies at a large discount and then reselling it at excessive prices between 2001 and 2003.

Transfers were also made through Ratibor, another Yukos trading arm, prosecutors claimed. Both Fargoil and Ratibor were registered in tax havens. The investigation into the embezzlement and money-laundering was launched in 2004.

Ratibor president Vladimir Malakhovsky and Vladimir Pereverzin, the former deputy head of Yukos’ foreign debt directorate, were arrested in December 2004, and in March 2007 sentenced to 11 and 12 years in prison, respectively, on those charges.

Valdes-Garcia was arrested at a Moscow airport in June 2005. Media said he had voluntarily returned from Madrid to give evidence in the money-laundering investigation, believing he would gain protection from prosecution in exchange for cooperating.

His whereabouts remained unknown to the public until September 2005, when the press said he was discovered to be in a hospital recovering from head and leg injuries sustained after jumping out of a window in a failed escape attempt. Sources at the time speculated that some of his bruises appeared inconsistent with a simple fall from a window.

Valdes-Garcia told Spanish media he was beaten and tortured by Russian investigators to force him to provide false testimony against ex-Yukos CEO Mikhail Khodorkovsky.

The ex-head of Fargoil signed a recognizance not to leave Russia, but in 2006 he once again fled the country and arrived in his motherland. Spain refused to extradite him back to Russia.

In the beginning of June 2010, Khodorkovsky at a court session dismissed allegations against Valdes-Garcia and denied claims that the former top businessman was a member of a criminal group operating within Yukos “merely because such a group did not exist.”

“If Valdes-Garcia or any other director general [of a Yukos subsidiary] violated any instructions, I would have known about it in a week maximum,” he said, adding that a violation of top executives’ orders was considered a “very big sin inside Yukos.”

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