Hermitage Lawyer Dies In Russian Prison

Nov 18 2009 | 12:55pm ET

A lawyer for hedge fund Hermitage Capital has died in a Russian jail more than a year after his arrest.

Sergei Magnitsky was arrested on Nov. 14, 2008 on suspicion of tax fraud, just over a month after he had accused Russian officials of stealing three companies from Hermitage, which was once one of the largest foreign investors in the country. Mangnitsky had reportedly complained for weeks about the conditions at Moscow’s Butyrskaya prison, one of the most notorious in the country, and claimed that he had been refused medical treatment for pancreatic and stomach conditions.

Russia’s interior ministry said he died of heart failure. But his lawyer, Dmitry Kharitonov, said prison doctors had told him the 37-year-old died of “toxic shock and pancreatic necrosis.”

Russia has accused Hermitage and its founder, William Browder, of tax fraud. Browder, in turn, has alleged that Hermitage has been the victim of a US$230 million scam, the money stolen using documents he says were seized by the Russian government. Browder, an outspoken critic of corporate governance in Russia, was barred from the country in 2005, although Russian officials now say they wish to arrest him.

Magnitsky “was a brave and innocent man taken hostage by the very officials he implicated in a major crime against the Russian state,” Browder told The Wall Street Journal. “He never thought he’d be arrested. He believed there was rule of law in Russia.”

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