Russia: Former Minister Arrested for Fraud in Big Year for Anti-Graft

Russia’s Federal Security Service (FSB) detained Tuesday a former minister on charges of embezzlement, the second minister to face prosecution in the past two years, the country’s Investigative Committee, known as Sledkom, said in a press release.

Mikhail Abyzov was appointed the first Minister for Open Government Affairs in 2012 by Dmitry Medvedev, then-president of Russia, until the position was abolished in 2018.

Abyzov and five accomplices, four of whom were detained with him, is accused of forming a criminal group and subsequently embezzling US$62 million ($4 billion rubles) from the Siberian Energy Company and Regional Electric Grids, which produce and transmit electricity in the Novosibirsk Oblast and Altai Republic in Siberia.

Investigators say the criminal group then transferred the money abroad to an offshore company controlled by Abyzov, thus “threaten[ing] the sustainable economic development and energy security of these regions of the country.”

Abyzov, 46, faces up to 20 years in prison if found guilty and denies all charges, according to the Moscow Times. A Moscow court ordered he be held in pre-trial detention for two months on Wednesday, according to the Financial Times. His fifth accomplice is still at large.

“Abyzov had a lot of enemies. We can’t be sure yet about who ‘ordered’ this arrest, but it has all the trademarks of a corporate conflict mixed with the interests of the siloviki [an official who entered politics from the military or security forces],” Tatyana Stanovaya, founder of R.Politik, a political analysis firm, told the Moscow Times.

“Even though Dmitry Medvedev has been distancing himself from Abyzov, this doesn’t look good for the prime minister, as Abyzov was a member of his team,” she added.

The former minister was detained in Moscow by the FSB after he flew into Russia from abroad. Abyzov has lived in Italy and the United States since leaving office last year. In 2015, he received the largest salary in the entire Russian government, some $9 million. By the time he left office, his net worth had grown to $600 million, according to Forbes.

In his first interview since his arrest, Abyzov described his treatment as “proper, deferential and respectful.”

“I know what to do if my rights are violated,” he said.

Another former minister, Alexei Ulyukayev, was sentenced to eight years in prison in December 2017 for soliciting a $2 million bribe.

Although some analysts like Stanovaya seem to suggest Russia’s crackdown on corruption and organized crime may have ulterior political motivations, the country has undeniably acted swiftly to purge corrupt officials from its ranks.

Just this Wednesday Russia’s upper-house Federation Council voted in favor of a bill that would lengthen punishments for offenders holding senior positions in organized crime groups. Members of such groups are estimated to have committed more than 15,000 felonies in 2018.

The Prosecutor General’s Office announced on Tuesday that more than 1,300 state officials suspected of corruption were fired last year alone.

OCCRP | March 28, 2019
https://www.occrp.org/en/daily/9478-russia-former-minister-arrested-for-fraud-in-big-year-for-anti-graft