Press Release issued by Hermitage Capital
24 October 2014 – Yesterday in the Southern District court of New York, U.S. federal judge Thomas Griesa denied Hermitage Capital’s motion to disqualify New York lawyer John Moscow, law firms Baker Hostetler and Baker Botts for conflict of interest and breaching their client’s confidences.
The New York case involves the first federal forfeiture and money laundering claim brought by the U.S. Government in relation to proceeds from the $230 million theft in Russia exposed by the murdered Hermitage’s Russian lawyer Sergei Magnitsky and the proceeds from which have been since traced to multiple jurisdictions around the world.
The US Government has stated in its submission to the court that Hermitage is a “victim” of the $230 million fraud scheme which was perpetrated by the Russian organization involving Russian government officials at issue in the forfeiture claim.
In 2008, when Hermitage’s Russian lawyers, including Sergei Magnitsky, who had investigated and reported the $230 million fraud, came under attack from corrupt Russian police officers involved in the crime, Hermitage hired John Moscow, a former New York prosecutor responsible for investigating the Russian mafia and a partner with the U.S. firm Baker Hostetler. Moscow was brought on as an anti-money laundering expert to help identify and prosecute perpetrators of the $230 million fraud with the assistance of the US Department of Justice and to trace through US banks proceeds of the $230 million fraud, the discovery of which lead to the false arrest and death of Sergei Magnitsky.
In his work, which lasted eight months, John Moscow put together a strategy of using U.S. courts for subpoenas, federal forfeiture orders and RICO in order to go after the $230 million fraud perpetrators, and presented the results of Hermitage’s investigation to the U.S. Attorney’s Office. Since then, Hermitage continued its investigation into those who benefited from Sergei Magnitsky’s killing in Russian police custody and the $230 million fraud he had uncovered in cooperation with law enforcement authorities around the world.
Last year, the U.S. Attorney’s Office filed the forfeiture claim in Southern District Court of New York in relation to the proceeds from $230 million fraud that the U.S. Government has traced to a number of multi-million dollar properties in Manhattan belonging to Prevezon, a Cyprus company owned by Russian national Denis Katsyv, a son of a former high-level Moscow regional government official.
To Hermitage’s dismay, John Moscow appeared in court to represent Prevezon in the case against the U.S. Government. He and other lawyers representing the Russian owner of Prevezon then began a campaign to discredit Hermitage as a witness for the U.S. Government.
“We feel profoundly betrayed by John Moscow and what he did and are disappointed that the court did not recognize that yesterday,” said a Hermitage Capital representative.
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