Hermitage Takes Fraud Case to U.S.
- By Tom Cahill
- Aug. 03 2009 00:00
Renaissance, its New York-based affiliate RenCap Securities and officials including Stephen Jennings, chief executive of parent Renaissance Group, and former president Igor Sagiryan may have evidence about a complex series of transactions and legal cases used to siphon refunds on taxes paid by Hermitage, the firm said in a July 28 court filing in New York.
Hans Jochum Horn, deputy CEO of Renaissance Group, said the firm wasn’t involved in the alleged fraud.
Hermitage, which has been run from London since Browder was barred from entering Russia three years ago, said it uncovered a Renaissance link during an investigation into a case of alleged corporate-identity theft that took place in 2007. Hermitage said the information it is looking for will help prove that it was a victim of fraud, not a perpetrator, as has been charged by the Interior Ministry, according to the filing in U.S. District Court in Manhattan.
The Hermitage filing seeks wire-transfer information from RenCap, as well as Citigroup and JPMorgan Chase, to show that two Russian banks that handled the tax refunds were connected to Renaissance. Neither Citigroup nor JPMorgan are being sued by Hermitage.
“The discovery Hermitage seeks from within this district covers one corner of the conspiracy that touches U.S. soil — the routing of the proceeds of the fraud through U.S. bank accounts that are connected with the real wrongdoers,” Hermitage said in the filing.
The claims are “absolutely false,” Renaissance’s Horn said by telephone. Horn said no Renaissance employees were involved in the fraud and that the firm wasn’t aware of the ruse until last November.
Hermitage’s claims were made in an application for judicial assistance, a request to the U.S. court to compel access to documents for use in foreign litigation. The filing is intended to support Hermitage in two civil and two criminal cases in Russia. Showing how funds flowed through the U.S. banking system will aid Hermitage in those cases, according to the filing.
Browder, 45, whose grandfather Earl headed the U.S. Communist Party from 1932 to 1945, hired as his U.S. legal counsel John Ashcroft, U.S. attorney general for four years under President George W. Bush and now chairman of Ashcroft Group. “Our ability to trace proceeds is essential to the survival of modern businesses that cross borders,” Ashcroft said. Browder and Hermitage declined to comment further.