A U.S. hedge fund says fraudsters used three of its former investment companies to steal US$230 million from Russian tax authorities.
Hermitage Capital Management, once Russia’s largest foreign investor, is best known for having manager William Browder banned from the country in 2005 after criticizing corporate governance. Now, it is filing criminal complaints, alleging that documents seized from its offices and lawyers by Russia’s interior ministry in February 2007 to fake losses at three companies owned by Hermitage and HSBC, which is backing Hermitage’s legal actions, the Financial Times reports.
The alleged perpetrators re-registered the ownership of the companies, effectively stealing them, and then using the faked losses to claim tax rebates. The fraudsters collected 5.4 billion Russian rubles (US$231.4 million) from the tax authority on claimed losses of 23 billion rubles (US$985.7 million).
The hedge fund did not lose very much due to “the falsification of evidence in court proceedings and manipulation of data,” because it had already sold off their assets.