A cosmetic ruling: fortuitous failure to file key documents may mean wanted mobster Mogilevich walks

On 8 October, the Moscow Arbitrazh court ruled illegal unpaid tax claims and fines against Arbat & Co, the owner of Arbat Prestige (Arbat Prestizh), the now-bankrupt cosmetics chain, were illegal. The total amount, 155.1 million rubles ($5.2 million), is relatively minor and the case would hardly be worth mentioning were it not for the fact that one of the two individuals arrested in connected with this case is Sergei Schnaider, better known as Semyon Mogilevich, ‘Seva’, one of the FBI’s ten most wanted men in the world.

Mogilevich, and Arbat owner Vladimir Nekrasov, were arrested in January 2008, but persistent and plausible suggestions remain that the former was arrested essentially by accident in an operation meant to snare the latter. After all, by arresting Mogilevich the authorities found themselves holding reportedly one of the most influential movers and shakers within the underworld with a host of powerful connections – and a man whom the FBI would dearly love to put on trial in connection with a 2003 indictment for a $150 million fraud. Russia does not extradite its own citizens, but beyond that Mogilevich is presumed to know too many secrets to be allowed into US hands. The continued failure to extradite him represents a long-term bone of contention and one Moscow would presumably have wanted to avoid. Far better from Moscow’s perspective that ‘Sergei Shnaider’ had never been arrested in the first place.

In any case, this may be becoming a moot issue. The two men have been standing trial at Moscow’s Tushinsky District Court, but on 5 October the court returned the criminal case to prosecutors, ruling that it lacked key documents implicating them in any crimes. The investigators have a little time to produce those documents before the two men are set free, but it does raise in me a cynical suspicion that this is a convenient way to close the book on this embarrassing incident. Russian prosecutors are hardly all fools, and one would have expected them to prepare for such an important case with a certain rigour. It may be that Mogilevich and Nekrasov are indeed, as they themselves affirm, entirely innocent. Alternatively, allowing them freedom by mistrial also allows Moscow to rid itself of this awkward prisoner while being able to claim that it did indeed try to bring him to justice…

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