NEW YORK (AP) U.S. authorities announced Tuesday that they are seeking forfeiture of pricey Manhattan real estate linked to a fraud they say was uncovered by a whistleblowing Russian lawyer before he died behind bars.
A civil forfeiture complaint filed against the assets of a Cyprus-based real estate corporation and other holding companies alleges that some of the proceeds from the $230 million tax fraud in Russia were laundered through the purchase of four luxury condominiums located in a Wall Street doorman building and two commercial spaces in prime locations in midtown and Chelsea.
"Today's forfeiture action is a significant step toward uncovering and unwinding a complex money-laundering scheme arising from a notorious foreign fraud," U.S. Attorney Preet Bharara said in a statement. "While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place."
The whistleblower, Sergei Magnitsky, was a lawyer for U.S.-born British investor William Browder. He alleged in 2008 that organized criminals colluded with corrupt Russian Interior Ministry officials to claim a fraudulent $230 million tax rebate after illegally seizing subsidiaries of Browder's Hermitage Capital investment company.
He subsequently was arrested on tax evasion charges and died in prison in November 2009 of untreated pancreatitis at age 37. His death prompted widespread criticism from human rights activists, and the Russian presidential human rights council found in 2011 that he had been beaten and deliberately denied medical treatment.