Bill Browder, a Billionaire Accused of Being a Fraud and Liar

By John Ryan for Unz Review.

Bill Browder.

William “Bill” Browder has been a figure of some prominence on the world scene for the past decade. A few months back, Der Spiegel published a major exposé on him and the case of Sergei Magnitsky but the mainstream media completely ignored this report and so aside from Germany few people are aware of Browder’s background and the Magnitsky issue which resulted in sanctions on Russia.

Browder had gone to Moscow in 1996 to take advantage of the privatization of state companies by Russian President Boris Yeltsin. Browder founded Hermitage Capital Management, a Moscow investment firm registered in offshore Guernsey in the Channel Islands. For a time, it was the largest foreign investor in Russian securities. Hermitage Capital Management was rated as extremely successful after earning almost 3,000 percent in its operations between 1996 and December 2007.

During the corrupt Yeltsin years, with his business partner’s US $25 million, Browder amassed a fortune. Profiting from the large-scale privatizations in Russia from 1996 to 2006 his Hermitage firm eventually grew to $4.5 billion.

When Browder encountered financial difficulties with Russian authorities he portrayed himself as an anti-corruption activist and became the driving force behind the Magnitsky Act, which resulted in economic sanctions aimed at Russian officials. However, an examination of Browder’s record in Russia and his testimony in court cases reveals contradictions with his statements to the public and Congress, and raises questions about his motives in attacking corruption in Russia.

Although he has claimed that he was an ‘activist shareholder’ and campaigned for Russian companies to adopt Western-style governance, it has been reported that he cleverly destabilized companies he was targeting for takeover. Canadian blogger Mark Chapman has revealed that after Browder would buy a minority share in a company he would resort to lawsuits against this company through shell companies he controlled. This would destabilize the company with charges of corruption and insolvency. To prevent its collapse the Russian government would intervene by injecting capital into it, causing its stock market to rise—with the result that Browder’s profits would rise exponentially.

Later, through Browder’s Russian-registered subsidiaries, his accountant Magnitsky acquired extra shares in Russian gas companies such as Surgutneftegaz, Rosneft and Gazprom. This procedure enabled Browder’s companies to pay the residential tax rate of 5.5% instead of the 35% that foreigners would have to pay.

However, the procedure to bypass the Russian presidential decree that banned foreign companies and citizens from purchasing equities in Gazprom was an illegal act. Because of this and other suspected transgressions, Magnitsky was interrogated in 2006 and later in 2008. Initially he was interviewed as a suspect and then as an accused. He was then arrested and charged by Russian prosecutors with two counts of aggravated tax evasion committed in conspiracy with Bill Browder in respect of Dalnyaya Step and Saturn, two of Browder’s shell companies to hold shares that he bought. Unfortunately, in 2009 Magnitsky died in pre-trial detention because of a failure by prison officials to provide prompt medical assistance.

Browder has challenged this account and for years he has maintained that Magnitsky’s arrest and death were a targeted act of revenge by Russian authorities against a heroic anti-corruption activist.

It’s only recently that Browder’s position was challenged by the European Court of Human Rights who in its ruling on August 27, 2019 concluded that Magnitsky’s “arrest was not arbitrary, and that it was based on reasonable suspicion of his having committed a criminal offence.” And as such “The Russians had good reason to arrest Sergei Magnitsky for Hermitage tax evasion.”

“The Court observes that the inquiry into alleged tax evasion, resulting in the criminal proceedings against Mr Magnitskiy, started in 2004, long before he complained that prosecuting officials had been involved in fraudulent acts.”

Prior to Magnitsky’s arrest, because of what Russia considered to be questionable activities, Browder had been refused entry to Russia in 2005. However, he did not take lightly his rebuff by the post-Yeltsin Russian government under Vladimir Putin. As succinctly expressed by Professor Halyna Mokrushyna at the University of Ottawa:

[Browder] began to engage in a worldwide campaign against the Russian authorities, accusing them of corruption and violation of human rights. The death of his accountant and auditor Sergei Magnitsky while in prison became the occasion for Browder to launch an international campaign presenting the death as a ruthless silencing of an anti-corruption whistleblower. But the case of Magnitsky is anything but.

Despite Brower’s claims that Magnitsky died as a result of torture and beatings, authentic documents and testimonies show that Magnitsky died because of medical neglect – he was not provided adequate treatment for a gallstone condition. It was negligence typical at that time of prison bureaucracy, not a premeditated killing. Because of the resulting investigation, many high level functionaries in the prison system were fired or demoted.

For the past ten years Browder has maintained that Magnitsky was tortured and murdered by prison guards. Without any verifiable evidence he has asserted that Magnitsky was beaten to death by eight riot guards over 1 hour and 18 minutes. This was never corroborated by anybody, including by autopsy reports. It was even denied by Magnitsky’s mother in a video interview.

Nevertheless, on the basis of his questionable beliefs, he has carried on a campaign to discredit and vilify Russia and its government and leaders.

In addition to the ruling of the European Court of Human Rights, Browder’s basic underlying beliefs and assumptions are being seriously challenged. Very recently, on May 5, 2020, an American investigative journalist, Lucy Komisar, published an article with the heading Forensic photos of Magnitsky show no marks on torso:

On Fault Lines today I revealed that I have obtained never published forensic photos of the body of Sergei Magnitsky, William Browder’s accountant, that show not a mark on his torso. Browder claims he was beaten to death by prison guards. Magnitsky died at 9:30pm Nov 16, 2009, and the photos were taken the next day.

Later in her report she states:

I noted on the broadcast that though the photos and documents are solid, several dozen U.S. media – both allegedly progressive and mainstream — have refused to publish this information. And if that McCarthyite censorship continues, the result of rampant fear-inducing Russophobia, I will publish it and the evidence on this website.

Despite evidence such as this, till this day Browder maintains that Sergei Magnitsky was beaten to death with rubber batons. It’s this narrative that has attracted the attention of the US Congress, members of parliament, diplomats and human rights activists. To further refute his account, a 2011 analysis by the Physicians for Human Rights International Forensics Program of documents provided by Browder found no evidence he was beaten to death.

In his writings, as supposed evidence, Browder provides links to two untranslated Russian documents. They were compiled immediately after Magnitsky died on November 16, 2009. Recent investigative research has revealed that one of these appears to be a forgery. The first document D309 states that shortly before Magnitsky’s death: “Handcuffs were used in connection with the threat of committing an act of self-mutilation and suicide, and that the handcuffs were removed after thirty minutes.” To further support this, a forensic review states that while in the prison hospital “Magnitsky exhibited behavior diagnosed as “acute psychosis” by Dr. A. V. Gaus at which point the doctor ordered Mr. Magnitsky to be restrained with handcuffs.”

The second document D310 is identically worded to D309 except for a change in part of the preceding sentence. The sentence in D309 has the phrase special means were” is changed in D310 to “a rubber baton was.”

As such, while D309 is perfectly coherent, in D310 the reference to a rubber baton makes no sense whatsoever, given the title and text it shares with D309. This and other inconsistences, including signatures on these documents, make it apparent that D310 was copied from D309 and that D310 is a forgery. Furthermore, there is no logical reason for two almost identical reports to have been created, with only a slight difference in one sentence. There is no way of knowing who forged it and when, but this forged document forms a major basis for Browder’s claim that Magnitsky was clubbed to death.

The fact that there is no credible evidence to indicate that Magnitsky was subjected to a baton attack, combined with forensic photos of Magnitsky’s body shortly after death that show no marks on it, provides evidence that appears to repudiate Browder’s decade-long assertions that Magnitsky was viciously murdered while in jail.

With evidence such as this, it repeatedly becomes clear that Browder’s narrative contains mistakes and inconsistencies that distort the overall view of the events leading to Magnitsky’s death.

Despite Magnitsky’s death the case against him continued in Russia and he was found guilty of corruption in a posthumous trial. Actually, the trial’s main purpose was to investigate alleged fraud by Bill Browder, but to proceed with this they had to include the accountant Magnitsky as well. The Russian court found both of them guilty of fraud. Afterwards, the case against Magnitsky was closed because of his death.

After Browder was refused entry to Russia in November of 2005, he launched a campaign insisting that his departure from Russia resulted from his anti-corruption activities. However, the real reason for the cancellation of his visa that he never mentions is that in 2003 a Russian provincial court had convicted Browder of evading $40 million in taxes. In addition, his illegal purchases of shares in Gazpromthrough the use of offshore shell companies were reportedly valued at another $30 million, bringing the total figure of tax evasion to $70 million.

It’s after this that the Russian federal government next took up the case and initially went after Magnitsky, the accountant who carried out Browder’s schemes.

But back in the USA Browder portrayed himself as the ultimate truth-teller, and embellished his tale by asserting that Sergei Magnitsky was a whistleblowing “tax lawyer,” rather than one of Browder’s accountants implicated in tax fraud. As his case got more involved, he presented a convoluted explanation that he was not responsible for bogus claims made by his companies. This is indeed an extremely complicated matter and as such only a summary of some of this will be presented.

The essence of the case is that in 2007 three shell companies that had once been owned by Browder were used to claim a $232 million tax refund based on trumped-up financial loses. Browder has stated that the companies were stolen from him, and that in a murky operation organized by a convicted fraudster, they were re-registered in the names of others. There is evidence however that Magnitsky and Browder may have been part of this convoluted scheme.

Browder’s main company in Russia was Hermitage Capital Management, and associated with this firm were a large number of shell companies, some in the Russian republic of Kalmykia and some in the British Virgin Islands. A law firm in Moscow, Firestone Duncan, owned by Americans, did the legal work for Browder’s Hermitage. Sergei Magnitsky was one of the accountants for Firestone Duncan and was assigned to work for Hermitage.

An accountant colleague of Magnitsky’s at Firestone Duncan, Konstantin Ponomarev, was interviewed in 2017 by Lucy Komisar, an investigative journalist, who was doing research on Browder’s operations in Russia. In the ensuing report on this, Komisar states:

“According to Ponomarev, the firm – and Magnitsky — set up an offshore structure that Russian investigators would later say was used for tax evasion and illegal share purchases by Hermitage. . .

the structure helped Browder execute tax-evasion and illegal share purchase schemes.

“He said the holdings were layered to conceal ownership: The companies were “owned” by Cyprus shells Glendora and Kone, which, in turn, were “owned” by an HSBC Private Bank Guernsey Ltd trust. Ponomarev said the real owner was Browder’s Hermitage Fund. He said the structure allowed money to move through Cyprus to Guernsey with little or no taxes paid along the way. Profits could get cashed out in Guernsey by investors of the Hermitage Fund and HSBC.

“Ponomarev said that in 1996, the firm developed for Browder ‘a strategy of how to buy Gazprom shares in the local market, which was restricted for foreign investors.’”

In the course of their investigation, on June 2, 2007, Russian tax investigators raided the offices of Hermitage and Firestone Duncan. They seized Hermitage company documents, computers and corporate stamps and seals. They were looking for evidence to support Russian charges of tax evasion and illegal purchase of shares of Gazprom.

In a statement to US senators on July 27, 2017, Browder stated that Russian interior ministry officials “seized all the corporate documents connected to the investment holding companies of the funds that I advised. I didn’t know the purpose of these raids so I hired the smartest Russian lawyer I knew, a 35-year-old named Sergei Magnitsky. I asked Sergei to investigate the purpose of the raids and try to stop whatever illegal plans these officials had.”

Contrary to what Browder claims, Magnitsky had been his accountant for a decade. He had never acted as a lawyer, nor did he have the qualifications to do so. In fact in 2006 when questioned by Russian investigators, Magnitsky said he was an auditor on contract with Firestone Duncan. In Browder’s testimony before the Senate Judiciary Committee in 2017 he claimed Magnitsky was his lawyer, but in 2015 in his testimony under oath in the US government’s Prevezon case, Browder told a different story, as will now be related.

On Browder’s initiative, in December 2012 he presented documents to the New York District Attorney alleging that a Russian company Prevezon had “benefitted from part of the $230 million dollar theft uncovered by Magnitsky and used those funds to buy a number of luxury apartments in Manhattan.” In September 2013, the New York District Attorney’s office filed money-laundering charges against Prevezon. The company hired high-profile New York-based lawyers to defend themselves against the accusations.

As reported by Der Spiegel, Browder would not voluntarily agree to testify in court so Prevezon’s lawyers sent process servers to present him with a subpoena, which he refused to accept and was caught on video literally running away. In March 2015, the judge in the Prevezon case ruled that Browder would have to give testimony as part of pre-trial discovery. Later while in court and under oath and confronted with numerous documents, Browder was totally evasive. Lawyer Mark Cymrot spent six hours examining him, beginning with the following exchange:

Cymrot asked: Was Magnitsky a lawyer or a tax expert?

He was “acting in court representing me,” Browder replied.

And he had a law degree in Russia?

“I’m not aware he did.”

Did he go to law school?

“No.”

How many times have you said Mr. Magnitsky is a lawyer? Fifty? A hundred? Two hundred?

“I don’t know.”

Have you ever told anybody that he didn’t go to law school and didn’t have a law degree?

“No.”

Critically important, during the court case, the responsible U.S. investigator admitted during questioning that his findings were based exclusively on statements and documents from Browder and his team. Under oath, Browder was unable to explain how he and his people managed to track the flow of money and make the accusation against Prevezon. In his 2012 letter that launched the court case, Browder referred to “corrupt schemes” used by Prevezon, but when questioned under oath he admitted he didn’t know of any. In fact, to almost every question put forth by Mark Cymrot, Browder replied that he didn’t know or didn’t remember.

The case finally ended in May 2017 when the two sides reached a settlement. Denis Katsyv, the company’s sole shareholder, on a related matter agreed to pay nearly six million dollars to the US government, but would not have to admit any wrongdoing. Also the settlement contained an explicit mention that neither Katsyv nor his company Prevezon had anything to do with the Magnitsky case. Afterwards, one of Katsyv’s, lawyers, Natalia Veselnitskaya, exclaimed: “For the first time, the U.S. recognized that the Russians were in the right!”

A major exposé of the Browder-Russia story is presented in a film that came out in June 2016 The Magnitsky Act: Behind the Scenes by the well-known independent filmmaker Andrei Nekrasov. Reference to this film will be made later but to provide a summary of the Browder tax evasion case some critical information can be obtained from a report by Eric Zuesse, an investigative historian, who managed to get a private viewing of the film by the film’s Production Manager.

In the film Nekrasov proceeds to unravel Browder’s story, which was designed to conceal his own corporate responsibility for the criminal theft of the money. As Browder’s widely accepted story collapses, Magnitsky is revealed not to be a whistleblower but a likely abettor to the fraud who died in prison not from an official assassination but from banal neglect of his medical condition. The film cleverly allows William Browder to self-destruct under the weight of his own lies and the contradictions in his story-telling at various times.

Following the raid by tax officials on the Moscow Hermitage office on June 2, 2007, nothing further on these matters was reported until April 9, 2008 when Ms Rimma Starlova, the figurehead director of the three supposedly stolen Browder shell companies, filed a criminal complaint with the Russian Interior Ministry in Kazan accusing representatives of Browder companies of the theft of state funds, i.e., $232 million in a tax-rebate fraud. Although Hermitage was aware of this report they kept quiet about it because they claimed it as a false accusation against themselves.

On September 23, 2008, there was a news report about a theft of USD 232 million from the Russian state treasury, and the police probe into it. On October 7, 2008, Magnitsky was questioned by tax investigators about the $232 million fraud because he was the accountant for Browder’s companies.

The central issue was that during September of 2007 three of Browder’s shell companies had changed owners and that afterwards fraud against Russian treasury had been conducted by the new owners of these companies.

According to Magnitsky the way that ownership changed was through powers of attorney. This is a matter that Browder never mentioned. The Nekrasov film shows a document: “Purchase agreement … based on this power of attorney, Gasanov represents Glendora Holdings Ltd.” Glendora Holdings is another shell company owned by Browder. This shows that Gasanov, the middleman, had the power of attorney connecting the new nominees to the real beneficiaries. However, Gasanov could not be questioned on whose orders he was doing this because shortly afterwards, he mysteriously died. No one proved that it was murder, but if that death was a coincidence, it wasn’t the only one.

During September 2007 the three Hermitage shell companies, Rilend, Parfenion and Mahaon, were re-registered by Gasanov to a company called Pluton that was registered in Kazan, and owned by Viktor Markelov, a Russian citizen with a criminal record. Markelov through a series of sham arbitration judgments conducted fake lawsuits that demanded damages for alleged contract violations. Once the damages were paid, in December 2007 the companies filed for tax refunds that came to $232 million. These were taxes that had been paid by these companies in 2006.

On February 5, 2008 the Investigative Committee of the Russian General Prosecutor’s Office opened a criminal case to investigate the fraud committed by Markelov and other individuals.

Markelov had hired a Moscow lawyer, Andrey Pavlov, to conduct these complex operations. Afterwards Pavlov was questioned by Russian authorities and revealed what had happened. Markelov was convicted and sentenced to five years for the scam. At his trial Markelov testified that he was not in possession of the $232 million tax refund and that he did not know the identity of the client who would benefit from the refund scheme. And till this day no one knows! However, Russian tax authorities suspect it is William Browder.

At his trial, Markelov testified that one of the people he worked with to secure the fraudulent tax refund was Sergei Leonidovich. Magnitsky’s full name was Sergei Leonidovich Magnitsky. Also when questioned by the police, Markelov named Browder’s associates Khairetdinov and Kleiner as people involved in the company’s re-registration.

So this provides evidence that Magnitsky and Browder’s other officials were involved in the re-registration scheme – which Browder later called theft. In his film Nekrasov states that Browder’s team had set things up to look as if outsiders — not Browder’s team — had transferred the assets.

According to Nekrasov’s film documentation, Russian courts have established that it was the representatives of the Hermitage investment fund who had themselves voluntarily re-registered the Makhaon, Parfenion and Rilend companies in the name of other individuals, a fact that Mr Browder is seeking to conceal by shifting the blame, without any foundation, onto the law enforcement agencies of the Russian Federation.

Indeed there is cause to be skeptical of the Browder narrative, and that the fraud was in fact concocted by Browder and his accountant Magnitsky. A Russian court has supported that alternative narrative, ruling in late December 2013 that Browder had deliberately bankrupted his company and engaged in tax evasion. On the basis of this he was sentenced to nine years prison in absentia.

In the meantime, over all these years, Browder has maintained and convinced the public at large that the $232 million fraud against the Russian treasury had been perpetrated by Magnitsky’s interrogators and Russian police. With respect to the “theft” of his three companies (or “vehicles as he refers to them) on September 16, 2008 he stated on his Hermitage website“The theft of the vehicles was only possible using the vehicles’ original corporate documents seized by the Moscow Interior Ministry in its raid on Hermitage’s law firm in Moscow on 4 June 2007.”

As such, Browder is accusing Russian tax authorities and police for conducting this entire fraudulent operation.

In his film Nekrasov says that the Browder version is: “Yes, the crime took place [$232 million fraud against the public treasury but, according to Browder, actually against Browder’s firm], but somebody else did it — the police did it.”

In this convoluted tale, it should be recalled that the fraud against the Russian treasury had first been reported to the police by Rimma Starlova on April 9, 2008. This had been recorded on the Hermitage website. In preparing the material for his film, Nekrasov noted that

“In March 2009, Starlova’s report disappeared from Hermitage’s website. . . . This is the same time that Magnitsky started to be treated as an analyst . . . who discovered the $232 million fraud. Thus the Magnitsky-the-whistleblower story was born, almost a year after the matter had been reported to the police.”

Nekrasov’s film also undermines the basis of Browder’s case that Magnitsky had been killed by the police because he had accused two police officials, Karpov and Kuznetsov, but this is questionable since documents show Magnitsky had not accused anyone. As Nekrasov states in the film: “The problem is, he [Magnitsky] made no accusations. In that testimony, its record contains no accusations. … Mr. Magnitsky did not actually testify against the two officers [Karpov and Kuznetsov].” So this factual evidence should destroy Browder’s accusations.

It should be noted Magnitsky’s original interview with authorities was as a suspect, not a whistleblower. Also contradicting Browder’s claims, Nekrasov notes that Magnitsky does not even mention the names of the police officers in a key statement to authorities.

In his film Nekrasov includes an interview that he had with Browder regarding the issues about Magnitsky. Nekrasov confronts Browder with the core contradictions of his story. Incensed, Browder rises up and threatens the filmmaker:

Anybody who says that Sergei Magnitsky didn’t expose the crime before he was arrested is just trying to whitewash the Russian Government. … Are you trying to say that Pavel Karpov is innocent? I’d really be careful about your going out and saying that Magnitsky wasn’t a whistleblower. That’s not going to do well for your credibility.” Browder then walks off in a huff.

Nekrasov claims to be especially struck that the basis of Browder’s case — that Magnitsky had been killed by the police because he had accused two police officials, Karpov and Kuznetsov — is a lie because there is documentary evidence that Magnitsky had not accused anyone.

Because of Browder’s accusations, Nekrasov interviewed Pavel Karpov, the police officer who Browder accused of being involved in Magnitsky’s alleged murder, despite the fact that Karpov was not on duty the day Magnitsky died.

Karpov presents Nekrasov with documents that Browder’s case was built on. These original documents are actually fundamentally different from the way Browder had described them. This documentary evidence further exposes Browder’s story for what it is.

Nekrasov asks Karpov why Browder wants to demonize him. Karpov explains that he had pursued Browder in 2004 for tax evasion, so that seems to be the reason why Browder smears him. And then Karpov says, “Having made billions here, Browder forgot to tell how he did it. So it suits him to pose as a victim. He is wanted here, but Interpol is not looking for him.”

Afterwards in 2013, Karpov had tried to sue Browder for libel in a London court, but was not able to on the basis of procedural grounds since he was a resident of Russia and not the UK. However at the conclusion of the case, set out in his Judgment the presiding judge, Justice Simon, made some interesting comments.

“The causal link which one would expect from such a serious charge is wholly lacking; and nothing is said about torture or murder. In my view these are inadequate particulars to justify the charge that the Claimant was a primary or secondary party to Sergei Magnitsky’s torture and murder, and that he would continue to commit or ’cause’ murder, as pleaded in §60 of the Defence.

The Defendants have not come close to pleading facts which, if proved, would justify the sting of the libel.”

In other words – in plain English – in the judge’s view, Karpov was not in any sense party to Magnitsky’s death, and Browder’s claim that he was is not valid.

On the basis of the evidence that has been presented, it is undeniable that Browder’s case appears to be a total misrepresentation, not only of Magnitsky’s statements, but of just about everything else that’s important in the case .

On a separate matter, on April 15, 2015 in a New York court case involving the US government and a Russian company, Previzon Holdings, Bill Browder had been ordered by a judge to give a deposition to Prevezon’s lawyers.

Throughout this deposition, Browder (now under oath) contradicted virtually every aspect of his Magnitsky narrative and stated “I don’t recall” when pressed about key portions of his narrative that he had previously repeated unabashedly in his testimonies to Congress and interviews with Western media. Browder “remembered nothing” and could not even deny asking Magnitsky to take responsibility for his (Browder’s) crimes.

As a further example of Browder’s dishonesty, in one of his publications, he shows a photo of an alleged employee of Browder’s law firm, Firestone Duncan, named “Victor Poryugin” with vicious facial wounds from allegedly being tortured and beaten by police. However, the person shown was never with Browder’s firm. Instead, this is a photo of “an American human rights campaigner beaten up during a street protest in 1961.” It was Jim Zwerg, civil-rights demonstrator, during the 1960s, in the American South. Nekrasov was appalled and found it almost unimaginable that Browder would switch photos like that to demonize Russia and its police.

Browder was arrested by the Spanish police in June 2018. Even though Russia has on six occasions requested Browder’s arrest through Interpol for tax fraud, the Spanish national police determined that Browder had been detained in error because the international warrant was no longer valid and released him.

A further matter that reflects on his character, William Browder, the American-born co-founder of Hermitage Capital Management is now a British citizen. The US taxes offshore earnings, but the UK does not. Highly likely because of this, in 1998 he gave up his American citizenship and became a British citizen and thereby has avoided paying US taxes on foreign investments. Nevertheless, he still has his family home in Princeton, NJ and also owns a $11 million dollar vacation home in Aspen, Colorado.

To put this in political context, Browder’s narrative served a strong geopolitical purpose to demonize Russia at the dawn of the New Cold War. As such, Browder played a major role in this. In fact, the late celebrated American journalist Robert Parry thought that Browder single-handedly deserves much of the credit for the new Cold War.

Browder’s campaign was so effective that in December 2012 he exploited Congressional willingness to demonize Russia, and as a result the US Congress passed a bipartisan bill, the Magnitsky Act, which was then signed by President Obama. U.S. Senators Ben Cardin and John McCain were instrumental in pushing through the Magnitsky Act, based on Browder’s presentations.

However, key parts of the argument that passed into law in this act have been shown to be based on fraud and fabrication of ‘evidence.’ This bill blacklisted Russian officials who were accused of being involved in human-rights abuses.

In her analysis of the Magnitsky Act, Lucy Komisar, an investigative journalist, reveals a little known fact:

“A problem with the Magnitsky Act is that there is no due process. The targets are not told the evidence against them, they cannot challenge accusations or evidence in a court of law in order to get off the list. This “human rights law” violates the rule of law. There is an International Court with judges and lawyers to deal with human rights violators, but the US has not ratified its jurisdiction. Because it does not want to be subject to the rules it applies to others.”

In 2017, Congress passed the Global Magnitsky Act, which enables the U.S. to impose sanctions against Russia for human rights violations worldwide.

In a move that history will show to be ill-advised, on October 18, 2017 Canada’s Parliament and Senate unanimously approved Bill 226, a ‘Magnitsky Act.’ It mimics the US counterpart and targets Russia for further economic sanctions. Russia immediately denounced Canada’s actions as being counter-productive, pointless and reprehensible. Actually an act of this type had been opposed by Stéphane Dion while he was Canada’s minister of foreign affairs because he viewed it as a needless provocation against Russia. Dion also stated that adoption of a ‘Magnitsky Act’ would hurt the interests of Canadian businesses dealing with Russia and would thwart Canada’s attempt’s to normalize relations with Russia. However, Dion was replaced by Chrystia Freeland who immediately pushed this through. This is not surprising considering her well-documented Nazi family background and who is persona non grata in Russia.

A version of the Magnitsky Act was enacted in the UK and the Baltic republics in 1917.

In early 2020 a proposal to enact a version of the Magnitsky Act was presented to the Australian parliament and it is still under consideration. There has been considerable opposition to it including a detailed report by their Citizens Party, which exposes the full extent of Browder’s fraud and chicanery.

The investigation into Browder’s business activities in Russia is still an ongoing endeavour. On October 24, 2017 the

Russian Prosecutor General, Yuri Chaika, requested the US Attorney General Jeff Sessions to launch a probe into alleged tax evasion by Bill Browder, who in 2013 had already been sentenced in absentia to 9 years in prison in Russia for a similar crime.

Browder at that time was still being tried in Russia for suspected large-scale money laundering, also in absentia. Chaika added that Russian law enforcement possesses information that over $1 billion was illegally transferred from the country into structures connected with Bill Browder.

The Prosecutor General also asked Sessions to reconsider the Magnitsky Act. As he put it,

“… from our standpoint, the act was adopted for no actual reason, while it was lobbied by people who had committed crimes in Russia. In our view, there are grounds to claim that this law lacks real foundation and that its passing was prompted by criminals’ actions.”

It’s not known if Sessions ever responded to the Russian Prosecutor General. In any event, President Trump fired Attorney General Jeff Sessions on November 7, 2018. As such it’s evident that Russia’s concerns about Browder’s dishonest activities are stymied.

Extensive reference has already been made to the film that came out in June 2016 The Magnitsky Act: Behind the Scenes by the independent filmmaker Andrei Nekrasov. When Nekrasov started the film he had fully believed Browder’s story but as he delved into what really happened, to his surprise, he discovered that the case documents and other incontrovertible facts revealed Browder to be a fraud and a liar. The ensuing film presents a powerful deconstruction of the Magnitsky myth, but because of Browder’s political connections and threats of lawsuits, the film has been blacklisted in the entire “free world.” So much for the “free world’s” freedom of the press and media. This film is not available on YouTube.

Watch the film embedded in the Unz Review article.

The documentary was set for a premiere at the European Parliament in Brussels in April 2016, but at the last moment – faced with Browder’s legal threats – the parliamentarians cancelled the showing.

There were hopes to show the documentary to members of Congress but the offer was rebuffed. Despite the frantic attempts by Browder’s lawyers to block this documentary film from being shown anywhere, Washington’s Newseum, to its credit, had a one-time showing on June 13, 2016, including a question-and-answer session with Andrei Nekrasov, moderated by journalist Seymour Hersh. Except for that audience, the public of the United States and Europe has been essentially shielded from the documentary’s discoveries, all the better for the Magnitsky myth to retain its power as a seminal propaganda moment of the New Cold War.

Nekrasov’s powerful deconstruction of the Magnitsky myth – and the film’s subsequent blacklisting throughout the “free world” – recall other instances in which the West’s propaganda lines don’t stand up to scrutiny, so censorship and ad hominem attacks become the weapons of choice to defend “perception management.”

Other than the New York Times that had a lukewarm review, the mainstream media condemned the film and its showing. As such, with the exception of that one audience, the public in the USA, Canada and Europe has been shielded from the documentary’s discoveries. The censorship of this film has made it a good example of how political and legal pressure can effectively black out what we used to call “the other side of the story.”

Andrei Nekrasov is still prepared to go to court to defend the findings of his film, but Bill Browder has refused to do this and simply keeps maligning the film and Mr. Nekrasov.

Recent Developments

Although for almost the past ten years Browder’s self-serving story had been accepted almost worldwide and served to help vilify Russia, in the past few months there has been an awakening to the true state of affairs about Browder.

The first such article “The Case of Sergei Magnitsky: Questions Cloud Story Behind U.S. Sanctions” written by Benjamin Bidder, a German journalist, appeared on November 26, 2019 in Der Spiegel. At the outset Bidder states:

“Ten years after his death, inconsistencies in Magnitsky’s story suggest he may not have been the hero many people — and Western governments — believed him to be. Did the perfidious conspiracy to murder Magnitsky ever really take place? Or is Browder a charlatan whose story the West was too eager to believe? The certainty surrounding the Magnitsky affair becomes muddled in the documents, particularly the clear division between good and evil. The Russian authorities’ take is questionable, but so is everyone else’s — including Bill Browder’s.

But with the Magnitsky sanctions, it could be that the activist Browder used a noble cause to manipulate Western governments.”

In summation, the article raises serious questions about many aspects of Browder’s account. It concluded that his narrative was riddled with lies and said Western nations have fallen for a “convenient” story made up by a “fraudster.

The report provoked Browder’s fury, and he swiftly filed a complaint against Der Spiegel with the German Press Council as well as a complaint to the editor of Der Spiegel.

On December 17, 2019 Der Spiegel responded: “Why DER SPIEGEL Stands Behind Its Magnitsky Reporting.” In a lengthy detailed response the journal rejects all aspects of Browder’s complaint. They point out the inconsistencies in Browder’s version of events and demonstrate that he is unable to present sufficient proof for his claims. They state: We believe his complaint has no basis and would like to review why we have considerable doubts about Browder’s story and why we felt it necessary to present those doubts publicly.”

Their report is highly enlightening and will have long-term consequences. It is one of the best refutations of Browder’s falsified accounts that led to the Magnitsky Act. It exposes Browder as a fraud and his Magnitsky story as a fake. Despite all this, this exposé was ignored in the mainstream media so most people are unaware of these revelations. A good review of it is presented by Lucy Komisar in her article The Der Spiegel exposé of Bill Browder, December 6, 2019.

The German Press Council rejected Browder’s complaint against Der Spiegel in January 2020 but Browder did not disclose this so it became known only in early May. Lucy Komisar reported this on May 12 and the main points of the Council’s rejection are presented in her account. Browder had complained that the article had serious factual errors. The Press Council stated that Browder’s position lacks proof and there could be no objection to Der Spiegel’s examination of events leading to Magnitsky’s death. All other Browder objections were rejected as well. In summation the Council stated: “Overall, we could not find a violation of journalistic principles.”

But the action of the press council has not been reported in the Canadian, U.S. or UK media. Nor was the November Der Spiegel report.

The German Press Council ruling follows a December 2019 Danish Press Board ruling against another Browder complaint over an article by a Danish financial news outlet, Finans.dk, on his tax evasion and invented Magnitsky story. Significantly, both the Danish and German cases involve mainstream media, which usually toe the US-UK-NATO strategic line against Russia, which Browder’s story serves. And these press complaint rulings follow a September 2019 European Court of Human Rights ruling that there was credible evidence that Magnitsky and Browder were engaged in a conspiracy to commit tax fraud and that Magnitsky was rightfully charged.

In summation, for ten years or more, no one in the West ever seriously challenged Bill Browder’s account of what happened to his “lawyer” Sergei Magnitsky and his stories of corruption and malfeasance in Russia. This is what allowed him to get such influence that the Magnitsky Act was passed, despite Russia’s attempts to clarify matters.

But when pressure was exerted on Germany to install a Magnitsky Act, one of their most influential journals Der Spiegel published an investigative bombshell picking apart Browder’s story about his auditor Sergei Magnitsky’s death. Browder immediately lashed out at Der Spiegel, accusing it of “misrepresenting the facts.” However, his outraged objections backfired and resulted in a further even more damaging Der Spiegel article and a rebuke from the German Press Council.

At long last, thanks to Der Spiegel, its investigative reports have effectively rejected and discredited Browder’s claim that Magnitsky was a courageous whistleblower who exposed corruption in Russia and was mercilessly killed by authorities out of revenge.

Despite this important and significant course of events, because of its imbedded Russophobia, the mainstream media have completely ignored the Der Spiegel exposé and almost nowhere has this been reported. To some extent this is because Browder has used his fortune to threaten lawsuits for anyone who challenges his version of events, effectively silencing many critics. Hence aside from people in Germany, this has been a non-event and the Browder hoax still prevails. Given this, it is important for us to publicize this revelation as best we can.

John Ryan, Ph.D. is a Retired Professor of Geography and Senior Scholar, University of Winnipeg

5 thoughts on “Bill Browder, a Billionaire Accused of Being a Fraud and Liar

  1. Superb summary of the entire affair. Factually accurate as regards the essentials, but I would like to make a couple of corrections:
    -Browder WAS an activist investor as regards the largest Russian companies – including the likes of Gazprom (where he may was have had a beneficial effect on slowing the massive asset stripping my management) and Surgut (where he was not successful). He did this not out of any love for Russia or the Russians, but to line his own pockets, but I continue to believe that in the early 2000s he was a force for reform. Certainly, In smaller deals (e.g. Avisma) he engaged in Russian-style finance and greenmail, but I do not see any evidence that government money flowed in to his pockets via these schemes.
    -He did not make 3000% if one takes into account the forced reset of the high-water mark of Hermitage following the 1998 financial collapse.
    -Finally, you may wish to re-edit, changing the 1917 to 2017.
    Thank you for a superb summary of this complex matter – after more than a decade the truth is finally leaking out, though I very much doubt there will be any public apologies issued by the Western governments and/or their free and fair media.

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    • With regard to the 3000% increase I got my information from: https://en.wikipedia.org/wiki/Hermitage_Capital_Management. Unless I can find a comparable source of info, I am not going to change this.

      Also I have this statement: During the corrupt Yeltsin years, with his business partner’s US $25 million, Browder amassed a fortune. Profiting from the large-scale privatizations in Russia from 1996 to 2006 his Hermitage firm eventually grew to $4.5 billion.

      To expand his initial $25 million to $4.5 billion in ten years it would take about a 3000% increase.

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  2. I have been reading about Browder and the Magnitsky story and viewed the documentary by Mr.Andrei Nekrasov since the early developments .This article is a very good exposé of the whole affair .
    Thank you Vanessa and John Ryan .Proud to live close to Winnipeg with such well informed people .

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  3. It’s surprising how far this myth has spread, likely both because it confirms popularly held biases, and because it’s had some enthusiastic support from western narrative crafters. I’ve had a variety of otherwise intelligent and well informed friends tell me that they know all about Russia and Putin because they’ve read a book by Browder… SMH

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