Magnitsky affair: sanctions sought against ex-Swiss attorney general

Former attorney general Michael Lauber is accused of helping conceal the fraudulent tax scheme exposed by Sergei Magnitsky Keystone / Peter Klaunzer

The US Helsinki Commission has called for sanctions to be imposed against three Swiss citizens in connection with a Russian tax scandal. Among them are former attorney general Michael Lauber and a former federal public prosecutor, Patrick Lamon.

The third Swiss is Vinzenz Schnell, a Russia expert at the Federal Office of Police (Fedpol).

The Office of the Attorney General of Switzerland (OAG) on Saturday rejected the accusations and demands for sanctions.

The Helsinki Commission sent a letterExternal link to Secretary of State Antony Blinken and Secretary of the Treasury Janet Yellen asking them to consider the sanctions. This was done at the behest of investor Bill Browder.

The Helsinki Commission

The Helsinki CommissionExternal link is a US government commission that promotes human rights, military security, and economic cooperation in 57 countries in Europe, Eurasia, and North America. Nine Commissioners are members of the Senate, nine are members of the House of Representatives, and three are executive branch officials.

According to the letter, dated July 27, the three Swiss nationals are to be sanctioned under the Magnitsky Act. This authorises the US government to sanction individuals who financially profited from the murder in 2009 of Sergei Magnitsky, the lawyer for Hermitage Capital Management in Russia, which Bill Browder co-founded. Magnitsky had uncovered a $230 million (CHF200 million) tax fraud scandal perpetrated by Russian nationals.

In its letter, the Helsinki Commission said the three Swiss citizens were being targeted “for their involvement in efforts to conceal the fraudulent tax scheme” exposed by Sergei Magnitsky. “These individuals have abetted Russian nationals sanctioned under the Magnitsky Act to regain access to funds, originally frozen in connection with the fraudulent tax scheme, and accepted unauthorised gifts and trips paid by Russian officials and oligarchs.”

Frozen francs

The funds in question are the CHF18 million ($20.7 million) that had been frozen in Switzerland in the early 2010s as part of the Magnitsky affair. The OAG closed the money-laundering case in connection with the $230 million tax fraud in Russia in 2021 and wanted to confiscate only CHF4 million of the CHF18 million. The OAG said it had only been possible to prove a connection between some of the assets seized in Switzerland and the crime committed in Russia.

“We were appalled to learn that the [OAG] has decided to return approximately 80% of that frozen money to these Russian individuals, including those sanctioned by us,” the letter said.

The Helsinki Commission said the OAG justified the decision to return the stolen money to the perpetrators by repeating the “false narrative” of Russian officials claiming that “no criminal group was identified” in this fraud and that the tax officials who authorised the refund were “tricked”.

“These findings are in direct contradiction to the findings of our government and many of our allies. The [OAG] repeated verbatim the statements they received from the Russian government,” it wrote.

More worrying, it continued, was that the leading Swiss investigator on the case, Vinzenz Schnell, was found to have taken bribes in the form of hunting trips funded by Russian oligarchs.

“When the investigator was convicted, he revealed that he was asked to derail the Magnitsky investigation.” Lauber and Lamon were also found to have gone on trips paid by the Russians, it added.

Official rejection

On Saturday the OAG rejected “in no uncertain terms” the accusations and demands for sanctions made by the US Helsinki Commission against the three Swiss citizens. They are groundless, it said in response to a request from the Swiss News Agency Keystone-SDA.

“The [OAG] does not intend to comment on Mr Browder’s statements and the resulting claims,” the authority said, pointing out that the proceedings in question before the Federal Court were still pending.