Millions of dollars linked to Magnitsky fraud case leave Switzerland  

Denis Katsyv, a Russian citizen tied to a major case of tax fraud against the Russian Treasury, withdrew funds he held at Swiss bank UBS and transferred most of these to banks in Israel and Armenia. SWI swissinfo.ch

A Russian citizen who held funds in Switzerland linked to a global tax fraud case wired at least CHF6 million from his UBS accounts. Our investigation shows a recent Swiss Federal Court ruling could have led to the confiscation of some of those funds.

On February 12, Denis Katsyv, a Russian citizen tied to a major case of tax fraud against the Russian Treasury, withdrew funds he held at Swiss bank UBS and transferred most of these to banks in Israel and Armenia.

In total, he wired some CHF5.5 million ($7.6 million) to his personal accounts abroad. Another roughly CHF500,000 were transferred to a Swiss business account. It’s unclear if this money is still in Switzerland.

The transaction data reviewed by Swissinfo shows that in February, Katsyv moved more than CHF6 million out of his accounts at UBS. SWI swissinfo.ch

The assets Katsyv held in personal and business bank accounts at UBS and Edmond de Rothchild Bank had been frozen during Switzerland’s investigation of the Magnitsky tax fraud case, of which Katsyv was a beneficiary. At the time they held a combined $8.2 million.

A 2021 decision by the Swiss Office of the Attorney General (OAG), which effectively closed the case, stated that Katsyv’s account was contaminated with some money obtained illegally and stated that 1% of those funds, or a total of $78,000External link, were to be permanently confiscated. Katsyv appealed that decision and lost in 2023. But he continued to have free access to the remaining 99% of the funds in his Swiss bank accounts.

Denis Katsyv, son of a senior Moscow-region official. DM

The transfer in February came just two months after a key ruling by the Swiss Federal CourtExternal link on an appeal by a company belonging to Katsyv that potentially could have led to the confiscation of more funds.

The Federal Court ruling of December 5, 2025 declared that the method used by the OAG to calculate the amounts of funds connected to the Magnitsky case that were to be permanently confiscated was “unconstitutional”. The court then ordered a new calculation.

This raises the question of why UBS allowed Katsyv to transfer his funds out of Switzerland after the court’s ruling. Why did the OAG not ask the bank to freeze the accounts until a recalculation had been finalised?

Lawyers Swissinfo spoke to said the ruling left many open questions but agreed that the funds should have been sequestrated after the decision and never left the country.

Thomas Rihm, a Zürich-based lawyer. Courtesy of

“In our preliminary view, there is indeed a legal duty by the Office of the Attorney General to sequester the assets under discussion. Pertaining omittances to do so may cause a strict state or governmental liability to be raised against the Swiss Confederation,” said Thomas Rihm, a Zürich-based lawyer.

The Swiss investigation

Switzerland’s handling of the Magnitsky case is back under scrutiny. A Federal Court ruling and a critical PACE resolution are raising fresh questions about its response to money laundering.

>>Read the full story on how Switzerland’s handling of the Magnitsky case is back under scrutiny.

The Magnitsky case goes back to 2007, when a group of Russian citizens linked to high-level officials in their country stole $230 million from the Russian Treasury.

The funds were routed through a network of shell companies and European banks. Sergei MagnitskyExternal link, a lawyer for Hermitage Capital, exposed the fraud and testified against the officials involved. He was later arrested and found dead under suspicious circumstances in a Russian jail.

The suspected beneficiaries of the fraud case were placed on international sanctions lists.External link

In 2011, Hermitage Capital, the largest asset management firm in Russia at the time, filed a criminal complaint in Switzerland. The Swiss case became one of the first international investigations initiated by Hermitage into the laundering of proceeds from that fraud.

It was followed by multiple investigations, including in the United States, France, Spain, the Netherlands, Luxembourg and the Baltic countries.

In July 2021 the OAG formally closed its decade-long money-laundering investigationExternal link.

During the investigation Swiss authorities had frozen about CHF18 million ($22.6 million) held in bank accounts controlled by three Russian citizens that had benefited from the fraud. Besides Katsyv, the son of a senior Moscow-region official, they are Vladlen Stepanov, then-husband of Russian tax official Olga Stepanova, and Dmitry Klyuev, a Russian banker previously convicted in Russia and whom the US authorities had identified as the  mastermind of the fraudExternal link.

In its decision, the OAG confirmed that some of the proceeds of the tax fraud had landed in the Swiss bank accounts of the three Russian citizens. It ordered the confiscation of CHF4 millionExternal link while releasing the remaining CHF14 million back to the account holders.

By applying what is known as the “proportional method”, the OAG concluded that only a quarter of the frozen funds should be permanently confiscated. This approach diverged from comparable cases in Europe and the United States, where a substantially larger share of the laundered funds was confiscated.

The proportional approach is based on the idea that the original proceeds had allegedly been diluted through successive layers of financial transactions. At each stage of “layering”, prosecutors estimated what share of the funds could still be traced to the predicate offence and reduced the confiscation amount accordingly.

The Federal Court ruling last DecemberExternal link deemed that the proportional method used by the OAG was unconstitutional and requested the recalculation using the “intentional corrective”External link or “sedimental methods”.External link

This reversed the OAG’s approach to the Swiss side of the Magnitsky affair and could potentially have led to the confiscation of a larger part of Katsyv’s assets – had these not left Switzerland.

The court’s decision was welcomed by the Parliamentary Assembly of the Council of Europe, (PACE) which called on Switzerland to reconsider its original proportional calculation method.External link

PACE is due to hold a final vote on a resolution on April 22External link that is critical of Switzerland’s handling of the Magnitsky caseExternal link.

Where did the money go?

The transaction data reviewed by Swissinfo shows that in February, Katsyv moved more than CHF6 million out of his accounts at UBS.

A Russian citizen who held funds in Switzerland linked to a global tax fraud case wired at least CHF6 million from his UBS accounts. Manuel Geisser / Keystone

Part of the funds was wired to Landmark Capital, a financial company registered in Armenia. Two transfers of CHF338,569 and CHF185,000 each were sent from Katsyv’s private UBS account to an account at Swiss Inсore Bank AG of Landmark Capital, with possible further credit to its Evocabank account in Yerevan, which was also referenced in the transfer.

The payment reference described the transfer as a “replenishment of the LMC client [Denis Katsyv] account”. Incore Bank is a Swiss correspondent bank for businesses with a focus on Swiss and international markets.  

It’s unclear if the funds remained in Switzerland or were wired after that transaction. Incore Bank when contacted by Swissinfo replied that Swiss law prohibits them from “disclosing any information regarding client relationships, financial situations, or the business developments of clients”.

Three transfers totalling over CHF5.5 million were sent from UBS accounts linked to Katsyv’s companies to his account at Bank Hapoalim in Rishon Lezion, Israel. Keystone / EPA

That same day, three larger transfers of CHF2,092,193, CHF1,249,352 and CHF2,193,374 were sent from three UBS accounts linked to companies associated with Katsyv.  These funds were transferred to Katsyv’s account at Bank Hapoalim in Rishon Lezion in Israel.

The payment references indicated that the transfers were made to the beneficial owner of the companies, Denis Katsyv, “because of the decision to liquidate the companies”.  

Swissinfo was unable to verify whether he also wired money out of his accounts at Edmond de Rothschild Bank. Both banks declined to comment when contacted by Swissinfo.

“According to the calculation method required by the Federal Supreme Court, there is no scope for the assumption that any funds from Russian tax fraud flowed into Prevezon’s accounts, which will lead to the full release of all funds ever seized from Prevezon,” Katsyv’s lawyers in Switzerland said when contacted by Swissinfo, in reference to the company owned by Katsyv and through which the funds transited.

They did not comment when asked if the funds had been wired following the ruling of the Federal Court.

What’s next?

The case is now with the Federal Criminal Court, which has been tasked with calculating how much of the funds held by Katsyv should ultimately be confiscated.

It remains unclear whether the Federal Court’s decision also applies to accounts held by the other two Russian citizens with Swiss banks accounts. Both the Swiss Criminal Procedure Code (Article 392)External link and the Federal Constitution (Article 8)External link require that the same legal rules be applied equally when the facts are materially identical. Of the original $18 million frozen by Switzerland, $9.8 million was linked to Stepanov and $37,607 to Klyuev.

Giorgio Campá, a Geneva-based lawyer. Keystone / Pierre Albouy

Should Switzerland now want to freeze Katsyv’s account following the withdrawal of the CHF6 million, it would need international association. This would be difficult to implement, experts Swissinfo spoke to say.

A sequestration could only target the CHF524,069 wired by Katsyv to Swiss Incore bank, should that money still be in Switzerland.

“Such a seizure can no longer be ordered if the assets are no longer in Switzerland due to the sovereignty of foreign states. In that case, it would be necessary to proceed through mutual legal assistance,” explained Giorgio Campá, a Geneva-based lawyer.

“The Federal Criminal Court in Bellinzona can still order sequestration subsequently, thereby requesting international legal assistance in criminal matters”, said Rihm, the Zurich-based lawyer.

The Federal Criminal Court confirmed to Swissinfo that two sets of proceedings related to the Magnitsky case are currently pending, both following the Federal Court’s ruling. The court declined to provide further details, noting that ongoing proceedings are not made public. 

“If an intent to launder criminal proceeds is established, the Federal Criminal Court should have ordered the sequestration of the accounts following the ruling of the Federal Court, under the Federal Court’s order to correct the method, as it was too favorable to the account holder,” Campá said.

The OAG’s decision to close the proceedings and confiscate assets was “not yet final in all respects”, a spokesperson wrote in an email to Swissinfo, without providing more details.

Edited by Virginie Mangin/gw