Cyprus enforces Russian mafia law

Cyprus is helping Russian officials to hush up a mafia scam and to hunt down the people who exposed it.

Its justice ministry, last week, invited Russian sleuths to conduct a joint raid with Cypriot police on the offices, in Nicosia, of lawyers acting on behalf of Bill Browder.

Browder is the former employer of Sergei Magnitsky, a Russian auditor who, in 2007, uncovered a huge tax embezzlement scam by Russian officials acting in league with an organised crime syndicate, the Kluyev Group.

When Magnitsky went public, his office was raided, he was jailed, and later killed in prison. The stolen money was never recovered.

Browder has campaigned for EU sanctions against the killers and for member states to seize the money, which was, in part, laundered in European banks.

Back in 2012, he gave 133 pages of documents, seen by this website, to Cyprus' anti-corruption agency, Mokas, showing that the Kluyev gang moved $31 million of the funds out of Russia via Cypriot banks: Alpha Bank; Cyprus Popular Bank; FBME Bank; Privatbank International; and Komercbanka.

Mokas never recovered the funds.

Instead, in an echo of events in Moscow in 2007, Cypriot police, on Friday (29 November), together with two Russian investigators, Sergei Petryashov and Artem Ranchenkov, snatched Hermitage Fund documents and interrogated its lawyers.

EUobserver i contacted the Cypriot foreign ministry for a comment on Monday.

It said on Tuesday afternoon: “Your questions have been forwarded to the competent authorities … and we will forward to you their reply when we have it.”

This website understands Cyprus granted the request for legal assistance in relation to Russia’s prosecution of Magnitsky, posthumously, and Browder, in absentia, for fraud.

The prosecution has been ridiculed, not least by the EU, as an attempt to conceal the tax embezzlement.

The EU foreign service, in 2013, spoke of “unconvicing evidence” and called it “a disturbing message to those who fight corruption in Russia.”

The UK, by contrast, denied similar requests for legal assistance. Other EU states, such as Luxembourg, also froze stolen funds.

Friend of Russia

Cyprus is often described by EU diplomats as a “friend of Russia.”

Also in November, it extradited to Russia Natalia Konovalova, a former employee of Yukos Oil, the energy firm seized by the Kremlin when its then owner, Mikheil Khodorkovsky, tried to enter politics.

The Cypriot president, Nicos Anastasiades i was the only EU leader at Russia’s WWII parade in Moscow in May.

He says the EU should lift Russia sanctions and recently let Russian warships use Cypriot ports.

Meanwhile, Cyprus’ appetite for dodgy Russian money was exposed by German intelligence during the 2012 talks on its EU bailout.

The BND intelligence service compiled a report, leaked to German media, showing that Russian oligarchs and organised crime chiefs held deposits worth $26 billion (€25 billion) in Cypriot banks.

The figure is roughly equivalent to Cyprus’ annual GDP.