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Swiss prosecutor to shut down Russian money laundering probe

The grave of Sergei Magnitsky
Sergei Magnitsky was a lawyer for Hermitage Capital when the fraud took place. Keystone / Misha Japaridze

The Swiss Attorney General’s office has confirmed it intends to close an investigation into a suspected $230 million (CHF210 million) Russian fraud case. The whistleblower who alerted the authorities says he will contest the decision.

For nine years, Swiss prosecutors have been investigating allegations that Russian officials defrauded the investment fund Hermitage Capital. Some CHF18 million related to the probe has been frozen in Swiss banks, but it now looks like most of this amount will be returned to Russia.

The case has drawn international headlines and condemnation following the death of a key witness, Sergei Magnitsky, in a Russian jail in 2009 and subsequent claims that Swiss prosecutors, including former Attorney General Michael Lauber, had been compromised by receiving favours from Russia.

In May, the federal prosecutor drew further complaints when it said it would share sensitive information surrounding the case with the Kremlin.

On Friday, the Attorney General’s office has confirmed a report in the Tages Anzeiger newspaper that it plans to drop most of its proceedings into the suspected money laundering case. Prosecutors only have enough evidence to keep between CHF1 million and CHF4 million frozen.

William Browder, who founded Hermitage Capital and alerted prosecutors to the alleged fraud, said he would fight the decision to drop the case. The financier, who has been convicted in absentia of fraud and tax evasion by the Russian courts, has been highly critical of Swiss prosecutors in the past.

“The termination of the investigation is an invitation for money launderers to come to Switzerland,” Browder told the Tages AnzeigerExternal link. “Here, they have nothing to fear.”

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