DOJ launches Magnitsky forfeiture action against NYC property
Tuesday, September 10, 2013 at 9:28PM
Richard L. Cassin in Cyprus, Forfeiture, Fraud, Magnitsky Act, Preet Bharara, Prevezon, Russia, Sanctions, Sergei Magnitsky, Taxes, Visa Determinations, money laundering

U.S. Attorney Preet Bharara said Tuesday the United States has filed a civil forfeiture action against the assets of nine companies that own real estate in Manhattan. The complaint targets four luxury residential units and two high-end commercial spaces.

A U.S. law called the Magnitsky Act imposes visa bans and economic sanctions against those involved with the detention, abuse, and death of Russian whistleblower Sergei Magnitsky. He died in 2009 after spending a year in police custody.

Magnitsky was jailed after exposing a $230 million tax fraud against the Russian treasury orchestrated by high-level Russian officials and mobsters. No one in Russia has been convicted for Magnitsky death or the crimes he uncovered.

The DOJ's civil complaint filed in Manhattan federal court names companies that allegedly laundered a portion of the $230 million stolen through the tax fraud.

U.S. Attorney Bharara, pictured, called the forfeiture action ‘a significant step towards uncovering and unwinding a complex money laundering scheme arising from a notorious foreign fraud.’

He said ‘pricey Manhattan real estate . . . is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place.’

The FCPA Blog called the Magnitsky Act the biggest anti-corruption story of 2012.

The DOJ Tuesday said some of the funds stolen from the Russian treasury passed through shell companies and finally to Prevezon Holdings Ltd, based in Cyprus. Prevezon used the money to buy ‘multiple units of high-end commercial space and luxury apartments in Manhattan, and created multiple other corporations, also subject to the forfeiture action, to hold these properties.,’ the DOJ said.

A copy of the DOJ's release and the civil forfeiture complaint are here.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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