Former cosmetics retail king Vladimir Nekrasov and reputed crime boss Semyon Mogilevich offered on Wednesday to post bail of $7.5 million — five times more than the amount they are accused of failing to pay in taxes — as preliminary hearings opened for their high-profile trial.

Moscow's Tushinsky District Court rejected their surprise offer to post bail of 240 million rubles and ruled that the trial would be closed to the public.

Prosecutors had asked that the trial be held behind closed doors, citing classified investigative methods used to collect evidence against the two suspects.

The trial will start on June 1, the court said.

Nekrasov, founder of Arbat Prestige, once Russia's biggest chain of cosmetics stores, is accused of evading taxes of more than 49.5 million rubles ($1.5 million). Mogilevich, wanted by the FBI on racketeering, wire fraud, mail fraud and money-laundering charges since 2003, is accused of masterminding the tax evasion scheme. Both have denied wrongdoing, and Mogilevich, also known as Sergei Shnaider, has denied any involvement with Arbat Prestige. His lawyer Alexander Pogonchenkov has said he and Nekrasov only share a hobby of collecting paintings.

Mogilevich, wearing a gray windbreaker, covered his face with a plastic folder as he walked into the courtroom Wednesday. A courtroom photo published on the Life.ru news portal Wednesday shows Mogilevich sitting on a bench in the steel-barred defendants' cage, his faced buried in his palms, while Nekrasov, clad in a thick black sweater, stands beside him, reading from a pile of papers in his hands.

If convicted of tax evasion, the men face up to six years in prison.

Nekrasov's lawyer Alexander Dobrovinsky asked the court to release the men from custody on bail and with a written pledge not to leave town.

When Nekrasov and Mogilevich were detained in January 2008, Arbat Prestige had 95 stores in Russia and Ukraine and boasted a turnover of $475 million in 2007. The company is now bankrupt after its suppliers turned away and it defaulted on a loan payment to Sberbank. The retailer sold off its stores over 2008, closing the last in December.

From the very beginning, the Arbat Prestige case was unusual, even by Russian standards. Fifty commandos participated in the arrest of Nekrasov and Mogilevich as they dined in an upmarket Moscow restaurant.

Mogilevich's wife, Olga Shnaider, disappeared after being questioned by police investigators, a day after a court sanctioned the arrests of Mogilevich and Nekrasov, national media reported at the time, citing her relatives.

Shortly after the arrest, Ukrainian Prime Minister Yulia Tymoshenko said Mogilevich had gotten into trouble because of his involvement with RosUkrEnergo, a Swiss-registered company that was selling Russian and Central Asian natural gas to Ukraine. In 2006 and 2007, several Russian and Ukrainian media outlets speculated that Mogilevich owned shares in RosUkrEnergo, but no evidence to back up the claim has ever been released.

Four weeks after the arrest, Nekrasov's lawyer Dobrovinsky told journalists that "a very serious man" had made Nekrasov an offer to buy Arbat Prestige for $3 million and make the investigation disappear. If the offer was rejected, Dobrovinsky said, the man warned that more charges would follow. No new charges have been filed since.

Even before Wednesday's bail offer, the suspects had shown their eagerness to be released from custody. In April 2008, Mogilevich's lawyer offered to post bail of 50 million rubles (then worth about $2.08 million), but the Moscow City Court declined.

In January, Nekrasov, 47, wrote an open letter to President Dmitry Medvedev, calling on him to intervene in the case and accusing investigators of blackmailing him into giving evidence against Mogilevich. A native of Ukraine and educated in economics, Mogilevich, 62, has been sometimes described in the Western media as the most powerful Russian mobster alive. He reportedly holds passports from Russia, Ukraine, Israel and Hungary.