Sergei Magnitsky, a Russian lawyer who died nearly four years ago in a Moscow pretrial detention facility under mysterious circumstances, has been convicted of fraud in a controversial case that has contributed to a deepening rift between the Kremlin and U.S. government.

The Tverskoy District Court in Moscow issued the unusual posthumous ruling Thursday in a case that Russian prosecutors said last year they would reopen against Magnitsky for allegedly conspiring with corrupt government officials in a $230 million fraud. Following several delays, court-appointed attorneys were appointed earlier this year to represent Magnitsky. The late lawyer's family refused to mount a defense or participate in the case, likening the proceedings to a Soviet show trial.
The former head of the tax practice at Moscow’s Firestone Duncan, Magnitsky ran afoul of Russian authorities when he attempted to expose what he said was a massive tax fraud perpetrated against his client, London-based hedge fund Hermitage Capital Management, by crooked bureaucrats employed by the Russian state’s tax office and interior ministry.
Firestone Duncan’s cofounder and managing partner, U.S. lawyer Jamison Firestone, who himself fled Moscow for London in 2010 because of a fear that he might suffer a fate similar to Magnitsky's, expressed little surprise at Thursday's ruling.
“A fabricated case and illegal trial against a dead man who cannot defend himself makes it clear that the Russian government feels murder is justified in order to protect its corrupt officials,” Firestone told The Am Law Daily via email. “It sends a clear message that those who fight government corruption can expect to be falsely imprisoned and killed with impunity.”
Hermitage, Firestone Duncan’s client, was cofounded by William Browder, a British citizen and grandson of Earl Browder, the former leader of the Communist Party in the United States. The hedge fund drew the Kremlin’s ire nearly a decade ago by publicly railing against what it claimed was rampant corruption at Russian companies. Hermitage, Browder, and Magnitsky soon found themselves targeted in a government inquiry focused on their business practices. While Browder ended up leaving Russia for London in 2005, Magnitsky was taken into custody in November 2008.
A year later Magnitsky was found dead in his jail cell at age 37, even though supporters claim he had filed hundreds of complaints about his treatment, including the alleged denial of medical care. The official cause of death was identified as heart failure and toxic shock. Magnitsky had suffered from pancreatitis and gallbladder disease during his confinement. Russian authorities have cleared two doctors and prison officials on charges related to his death.
With Magnitsky deceased, the trial judge declined to impose any sentence in connection with Thursday's conviction, and ordered no sanctions against his estate. Browder, tried in absentia as Magnitsky's codefendant, faces up to nine years in a Russian prison in the event he returns to the country. (In May, international police body Interpol denied Russia’s request to track Browder’s whereabouts.)
Browder, who on Thursday called the Moscow court’s ruling against his former lawyer “ one of the most shameful moments for Russia since the days of Joseph Stalin,” has remained a thorn in the Kremlin’s side.
Over the past few years, he and his supporters have funded a minidocumentary— ominously titled Russian Untouchables—about the scheme they claim was hatched against Hermitage by members of the Russian state who are complicit in Magnitsky’s death.
Browder and Firestone also backed U.S. human rights legislation named in Magnitsky’s honor that has helped drive U.S.–Russia relations to their lowest point since the Cold War after it was passed by Congress late last year.
The Sergei Magnitsky Rule of Law Accountability Act of 2012 bars certain Russian officials accused of human rights abuses from entering the U.S. or owning assets in the country. It drew a quick response from the Kremlin, with Russian president Vladimir Putin backing anti-Magnitsky legislation, a provision of which bans U.S. citizens from adopting Russian children.
And when the U.S. Treasury Department in April released a list of 18 Russians sanctioned under the Magnitsky Act—16 of them linked to the Magnitsky case—the Kremlin answered with its own list of 18 Americans banned from entering the Russian Federation.
Among the U.S. citizens whose names appear on the Kremlin’s ledger: former Bush administration lawyers John Yoo and David Addington, a onetime Holland & Knight partner, who were listed for allegedly authorizing torture and a system of indefinite detention for prisoners held at Guantanamo Bay.
Also landing on the list are several current and former federal prosecutors and judges who allegedly violated the “rights and freedoms” of Russian citizens living abroad. That group includes federal prosecutors Jenna Minicucci Dabbs, Christian Everdell, Brendan McGuire, and Anjan Sahni; U.S. Attorney for the Southern District of New York and Time magazine cover star Preet Bharara; Bharara predecessor and current Kirkland & Ellis partner Michael Garcia; former federal prosecutor and current Shearman & Sterling counsel Christopher LaVigne; ex–federal prosecutor and current Katten Muchin Rosenman partner Michael Rosensaft; and U.S. District Judge Jed Rakoff.
The Magnitsky Act's passage has had other repercussions for U.S. lawyers in Russia. The Am Law Daily reported in May on former Justice Department official and current Baker & McKenzie senior counsel Thomas Firestone being stopped and interrogated by Russian authorities as he tried to return to the country from a trip abroad through Moscow’s Sheremetyevo International Airport.
Firestone, a former legal adviser to the U.S. embassy in Moscow who is not related to Jamie Firestone, had been based out of Baker & McKenzie’s office in the Russian capital. He was temporarily detained amid yet another spying spat between Russia and the U.S., and subsequently relocated to Baker & McKenzie’s Washington, D.C., office after being ordered to leave Moscow.
As it happens, Moscow’s Sheremetyevo airport is currently serving as the temporary home of another high-profile figure in the ongoing back-and-forth between Washington and the Kremlin: Edward Snowden, the former National Security Agency contractor and CIA employee who has unveiled a vast secret surveillance program by the federal government.
Snowden has reportedly taken up residence in an airport transit lounge while waiting to learn whether he will be granted political asylum in Latin America. Though Russian government officials have sought not to embrace Snowden too closely since his arrival on a flight from Hong Kong late last month, recent media reports suggest he could be swapped for Russian citizens being held in the U.S., including imprisoned arms trafficker Viktor Bout, who was caught in a DEA sting in 2008.
Known as the “ Merchant of Death,” Bout was sentenced to 25 years in prison last year by federal judge Shira Scheindlin. And though Scheindlin, recently profiled in The New Yorker, is not on the Kremlin’s list of banned U.S. citizens, the four federal prosecutors who handled Bout’s case—Dabbs, Everdell, McGuire, and Sahni—and those who handled another case against a Russian pilot convicted before Rakoff of drug smuggling are part of the ban.