WASHINGTON, December 13 (By Carl Schreck for RIA Novosti) – A Manhattan attorney has been accused of violating legal obligations by representing a firm purportedly tied to money stolen from Russian coffers in an alleged scam revealed by whistleblowing lawyer Sergei Magnitsky.
White-collar lawyer John Moscow was previously hired to help free Magnitsky from the Russian jail where he died in 2009 but is now representing a firm that US prosecutors accuse of laundering money that Magnitsky claimed was stolen in a massive tax fraud, according to a grievance complaint in US federal court.
“It is one of the most blatant conflicts of interest that I’ve ever seen in the legal profession,” William Browder, head of the Hermitage Capital investment fund, which submitted the complaint to the US District Court for the Southern District of New York, told RIA Novosti on Friday.
News of the December 5 complaint, a copy of which was obtained by RIA Novosti, was first reported by the New York Post on its website Friday morning.
Court records show that Moscow, a former federal prosecutor who works for the law firm BakerHostetler in New York City, has served as an attorney for Prevezon Holdings, a Cyprus-based company that owns several pricey Manhattan properties that have been frozen as US prosecutors try to seize them.
The properties, including four luxury residences and two upscale commercial spaces, were used to launder some of the $230 million in Russian government money that Magnitsky claimed was embezzled in a tax fraud involving Russian law enforcement and tax officials, US Attorney Preet Bharara alleged in September.
Browder told RIA Novosti on Friday that Hermitage hired Moscow in 2008 after Magnitsky was arrested in Russia on fraud charges that his friends and family called retribution for blowing the whistle on the purported scam.
It was Moscow who formulated the original strategy to subpoena bank records to track the flow of the allegedly stolen funds throughout the world, Browder said.
He said the documents obtained using the strategy have been central in his campaign in recent years to publicly disclose assets held by Russian officials he accuses of involvement in Magnitsky’s death.
Moscow ceased working with Hermitage on the Magnitsky case in 2009, but his direct access to the matter should disqualify him from representing Prevezon, Hermitage argues in its complaint.
“This conflict of interest is contrary to the principles of justice, where Sergei Magnitsky, a legal adviser of Baker Hostetler’s former client, was killed for exposing the fraud from which their current client (Prevezon) has allegedly benefited,” Hermitage says in the complaint.
Reached by telephone Friday, Moscow declined to comment or confirm whether he had seen the complaint.
“I have nothing to say on this,” Moscow told RIA Novosti.
BakerHostetler told Hermitage last month that “without more information, we cannot agree that the Prevezon interests are adverse to Hermitage’s,” according to the complaint.
Magnitsky, who worked as a tax lawyer for Hermitage, was arrested in 2008 on tax evasion charges after exposing the alleged $230 million fraud. He died in disputed circumstances while in pretrial custody in 2009, but nevertheless was subsequently prosecuted on tax evasion and embezzlement charges and convicted by a Russian court in July.
Magnitsky’s family and friends say he was tortured and denied medical treatment while he was in custody, allegations that Russian officials deny.
Russian President Vladimir Putin in April said that Magnitsky’s death was a “tragedy” but insisted no crime had been committed.
“There was no torture,” Putin said. “There was nothing that would demand any criminal charges being brought.”
In December 2012 the United States adopted the Magnitsky Act, which slaps travel and financial sanctions on Russian officials and other individuals believed to have been involved in Magnistky’s death, the case against him and other alleged human rights abuses. Russia quickly responded in part by banning US citizens from adopting Russian children.
In April, Washington published a list of 18 Russian citizens targeted under the sanctions, prompting Moscow to release its own list 18 US citizens barred from entering Russia and facing a freeze of any assets they may hold in Russia.
