“Illegal money” should not be returned to Russia, say British MPs in Switzerland

Jonathan Djanogly Dame Margaret Hodge Russia Cash Switzerland Invasion Europe – Chris McAndrew/UK Parliament/Ian Vogler/Pool/Getty Images

British MPs have urged Swiss authorities to scrap plans to return millions of pounds to a group of Russians sanctioned for their links to the Putin regime.

The funds were part of a $230million (£190million) scam uncovered by Sergei Magnitsky, a lawyer who died in a Russian prison after being beaten and denied medical treatment.

Swiss courts have ruled that $15.3m (£12.7m) should now be returned to three Russians involved in the scam, although a senior investigator in the case was convicted of taking bribes after authorities failed to provide proof could bring for a criminal conspiracy.

MEPs are urging Secretary of State James Cleverly not only to raise the matter with his Swiss counterpart, but also to consider ending cooperation with the Swiss authorities.

In a joint letter, Tory MP for Huntingdon Jonathan Djanogly and Labor MP for Barking Dame Margaret Hodge said: “Britain has made every effort to hold Russia accountable for Putin’s invasion [sanctions] and support for Ukraine.

“It seems unreasonable that our supposed ally is returning clearly ill-gotten gains to these Kremlin-linked perpetrators. It also raises the serious question of how much more illicit Russian funds are available to Putin officials in Switzerland.”

Sergei Magnitsky investigation into Russian lawyer Vladimir Putin – AFP Photo/Hermitage Capital Management

Swiss courts froze US$19.6 million (£16.2 million) in 2011 as part of an investigation into alleged money laundering from Vladlen Stepanov, husband of a Russian tax official; Dmitry Klyuev, owner of a Russian bank and head of an organized crime group; and Denis Katsyv, the son of a senior Russian official.

The three were under investigation for allegedly receiving funds from Russian Interior Ministry officials as part of a conspiracy to defraud the Hermitage Capital investment fund of $230 million in taxes through fake tax refunds.

When Magnitsky, the fund’s lawyer and accountant, exposed the conspiracy, he was arrested and tortured and died without a trial in November 2009.

Mr Stepanov and Mr Klyuev were later sanctioned by the British government under anti-corruption laws named after Magnitsky. The pair have also been sanctioned under similar laws by the US, Canada and Australia.

Mr Katsyv paid $6million (£5million) to the US Department of Justice to settle his investigation into the Hermitage Capital case.

James Cleverly Foreign Minister Conservative Party Russia Invasion of Ukraine – Wiktor Szymanowicz/Anadolu Agency/ Getty Images

However, the Swiss Federal Criminal Court ruled last year that there was no evidence of a “criminal organization” operating the tax refund fraud, paving the way for the release and return of funds traced back to Swiss bank accounts.

The three Russians have not been held responsible for bribery or money laundering by the Swiss courts.

In their letter to the Foreign Secretary, Mr Djanogly and Dame Margaret said: “During the Swiss investigation, the senior investigator accepted bribes from his Russian colleagues to sabotage the case.

“Although he was released and later convicted, Swiss law enforcement ruled last year that $15.3 million could be returned to the Russian individuals.”

They added: “We ask that you immediately make representations to Ignazio Cassis, the Swiss Foreign Minister, and seek assurances that these funds will not be returned to Russia.”

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