A Conversation With Bill Browder
know that. They found them at the law firm, they seized them from the law firm, and the next thing we know, we no longer own our investment holding companies. They’ve been fraudulently reregistered using the documents seized by the police... and reregistered into the name of a man who had been convicted of manslaughter and let out of jail early – they put his name on the documents. At this point, I’m not worried about money because our money is safe in the West. But I’m worried that if the police are using killers and stealing companies, someday I’m going to be flying through some airport somewhere and be arrested on a Russian warrant, and I needed to find a way to untangle this mess, figure out what they were trying to do, who was doing it, and stop it so I didn’t find myself in some world of legal trouble in the future. And so I go out and hire the smartest lawyer I knew in Russia, a young man named Sergei Magnitsky. And Sergei worked for the American law firm that was raided. And he was one of these incredible people who could do like 10 things in the time it took others to do one. And I asked him to investigate, figure out what they were doing and why they were doing it, and then stop it. And so Sergei goes out, figures it all out, and he comes back to me and says, “There were two parts of the scam. The first part was they wanted to steal all of your assets, but you successfully got your money out before they could do that.” However, the second part of the scam was that when we sold everything, we had $1 billion of profit and we paid $230 million of capital gains tax to the Russian government. And what Sergei had figured out was that the people who
stole our companies went to the tax authorities on December 23, 2007, two days before Christmas, and they said to the tax authorities, “There was a mistake made in the previous year’s tax filing, and these companies didn’t make $1 billion. They made zero.” And they came up with a complicated way of explaining that. “Therefore,” they said, “the $230 million of taxes that was paid in the previous year was paid in error.” And they said, “We want the $230 million to be refunded.” So they applied for a $230 million illegal tax refund using our stolen companies on December 23, two days before Christmas, and it was approved and paid out the next day. It was the largest tax refund in the history of Russia paid out in one day on a fraud. Now, Sergei and I had seen a lot of corruption in Russia. It’s hard not to see it if you live there. But for us to imagine that Vladimir Putin would’ve been OK with his own people stealing nearly a quarter of a billion dollars of money from the Russian government – because that’s what it was. It wasn’t money stolen from us. We paid the taxes to the Russian government, and these crooks stole it from the Russian government. But we figured Putin would’ve never allowed that because he’s a patriot and a nationalist and a tough guy. And so we thought if we just publicized this and highlight it and bring it out into the open, then the good guys would get the bad guys, and that would be the end of the story. And so we wrote criminal complaints to every law enforcement agency in Russia. I went to the media, newspaper, television, TV. Sergei went to the Russian state investigative committee, their version of the FBI, and gave
82
June 2020
Made with FlippingBook Publishing Software