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Suspect in Fraud Exposed By Magnitsky Gets Minimum Sentence - Hermitage Capital

MOSCOW. March 23 (Interfax) - The Tverskoy court in Moscow has imposed a minimum sentence on Vyacheslav Khlebnikov, who was accused by auditor Sergei Magnitsky of stealing 5.4 billion rubles from the federal budget, Hermitage Capital said.

"It emerged today that Moscow's Tverskoy court presiding judge Igor Alisov completed the hearing of the criminal case against Vyacheslav Khlebnikov, whose 5.4-billion ruble embezzlement had been exposed earlier by Sergei Magnitsky," the company said in a statement obtained by Interfax on Wednesday.

The judge ignored "the repeated demands for a public hearing of the Khlebnikov case and the media presence in the courtroom," it said.

"Judge Alisov sentenced Khlebnikov to five years of imprisonment without property confiscation or indemnification, that is to the minimum possible prison term, despite his previous convictions and the gravity of the offense," the press release said.

The hearing of this high-profile case was held in a "special manner," "i.e. without hearing any evidence and relying solely on the 'confessionary' statements from Khlebnikov himself," the company said.

"It was done in order to avoid publicity around issues concerning the whereabouts of the stolen money and those officials who were involved in organizing this embezzlement," the company said.

Judicial officials were not immediately available for comment on the matter.

In November 2010, the Russian Investigative Committee said that businessman Vyacheslav Khlebnikov detained as part of a criminal investigation into multibillion embezzlements by Capital Hermitage had confessed to being involved in the fraud of Magnitsky's employer.

Magnitsky, a lawyer for the investment foundation Hermitage Capital, died in the Matrosskaya Tishina detention facility on November 16, 2009 at the age of 37, he was charged with tax evasion.

Magnitsky's death drew a broad public response. The Investigations Committee opened a criminal case on charges of failure to provide assistance to a patient and negligence.

According to two forensic evaluations, Magnitsky died of acute heart insufficiency. The experts confirmed that Magnitsky was suffering from the illnesses he was diagnosed with earlier, but said those illnesses were not at an acute stage.

Despite the dismissals in the Federal Service for the Enforcement of Punishments, human rights activists believe no real investigation into the causes of Magnitsky's death was conducted.

The prosecution of Hermitage Capital officials in Russia began in June 2007. Moscow police then searched the offices of Hermitage Capital and the law firm Firestone Duncan.

Magnitsky said the criminal case against him was retaliation for his testimony alleging the possibility of law enforcement officials' involvement in the embezzlement of budget funds.

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