Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice

Browder hires Moscow attorneys to help. His long-time assistant, Ivan Cherkasov, is accused of tax evasion involving a company, Kameya, that Hermitage has assisted; it’s soon apparent that Ivan has done nothing wrong. Since the entire case is based on unlawful methods, so the lawyers won’t be much help.

Vadim reaches out to Aslan, who replies that the entire attack has been managed from Department K of the FSB. Department K is in charge of economic counter-espionage, and it has the full force and immunity of the secret police: “The FSB doesn’t just issue arrest warrants and extradition requests—it dispatches assassins” (204).

In the summer of 2007, Elena gives birth to their second child, Veronica. In August, they travel with their two children and Browder’s son from his first marriage to the south of France. While there, Browder learns that Colonel Kuznetsov’s men have continued staging raids, including at Credit Suisse, HSBC, and Citibank, searching for any Hermitage assets they can find: “The only thing I couldn’t understand was why they didn’t know that we no longer had any assets in Russia. Weren’t the Russian secret police smarter than that?” (209)

Browder’s Moscow lawyers discover that Kameya has overpaid its taxes, which completely exonerates Ivan. With no further news coming from Russia, Browder turns back to Hermitage’s other business. In October, he flies to South Korea to look into some investment opportunities, but trouble follows him: he learns from Vadim that a Moscow court has ordered Hermitage to pay a judgment of $71 million.

It turns out that a dormant portion of Hermitage has been stolen in a “Russian raider attack” (214) that involves collusion between corrupt judges, police, and organized crime. The theft of corporate certificates and stamps from Jamison Firestone’s law office helps make the heist possible: “The practice was so common that Vedomosti, the independent Russian newspaper, had even published a menu of ‘raider’ services with prices” (214). The stolen company’s documents are forged to make it appear that it owes the $71 million to another company.

Clearly the raiders didn’t understand that Hermitage no longer has assets in Russia. Browder laughs at their incompetence, but his Moscow lawyer warns: “Russian stories never have happy endings” (215).

One of Browder’s Russian attorneys learns that Colonel Kuznetsov is behind all the attacks. In December, the Hermitage team files a 224-page criminal complaint in Moscow. They hear from Igor Sagiryan of Renaissance Capital, who warns that they are dealing with dangerous criminals. He wants Hermitage to authorize him to liquidate its stolen companies. This proposal seems strange. Browder adds, “Besides, how could Sagiryan liquidate something he doesn’t control?” (221). Browder agrees to meet with Sagiryan in London, but wears a wire to record everything for later analysis.

At the meeting, Sagiryan tells Browder that Renaissance Capital has been raided, due to its dealings with Hermitage. He repeats his request to liquidate the stolen Hermitage companies but is unable or unwilling to further explain his reasons. After the meeting, Browder brings the recording back to the office, where they discover that the entire interview has been replaced with white noise. They suspect Sagiryan has used high-pitched jamming equipment available only to the Russian secret service: “I thought I was being clever by hiring Steven and playing the spy, but it turned out that I might just have sat down with an actual spy” (223).

They hear from the Russian State Investigative Committee regarding their criminal complaint: “Nothing wrong happened in the Saint Petersburg court, and the request to open a criminal case is declined due to lack of a crime” (223). Then the Interior Ministry’s Internal Affairs Department announces that it “is passing [their] complaint to Pavel Karpov himself to investigate” (224). Police major Karpov is in fact the point man for the criminal conspiracy against Hermitage.

The Russian State Investigative Committee—Russia’s FBI—decides to take the case in January 2008. Two months later, Browder is indicted by the Russian authorities: “‘Criminal case opened against Browder. Case No. 401052. Republic of Kalmykia. Tax evasion in large amounts’” (225).

One of Browder’s lawyers travels to Kalmykia, a small province in the middle of nowhere, where Hermitage had held some of its properties because of the tax breaks offered. The paperwork is in order, and the investigator in charge didn’t want the case but got arm-twisted by a delegation from Moscow, including Karpov and two of Kuznetsov’s men.

Things look worse than ever: “The criminal case against Ivan was just the beginning, and we had to believe that many more would follow” (227).

The ongoing Russian attacks against Browder make no sense, since nothing they are doing can benefit the Russians. Soon they find that nearly $1 billion in fraudulent lawsuits against stolen parts of Hermitage have been filed in various venues across the country. Browder writes that “[i]t still wasn’t clear how the criminals would make any money out of these claims” (230), as there is no money in Russia to pay them. Browder suspects a deeper motive.

In May 2008, they realize that Kuznetsov’s men may be trying, absurd as it sounds, to steal taxes already paid by Hermitage. Sergei files information requests, but every time he does so, Kuznetsov moves the address of the stolen companies to a new town. Sergei also sends reports to the police, knowing that the Russian bureaucratic mind can never let go of information: “[O]nce something went into the case file, procedure dictated that it would stay there forever” (232). Eventually, a semi-honest inspector might follow up on behalf of Hermitage. In June, however, Kuznetsov gets himself assigned to the investigation, thus—along with co-conspirator Karpov—effectively investigating himself.

The tax-stealing theory pans out: Sergei discovers that Kuznetsov’s team has opened a set of very small banks that begin to receive refunds against Hermitage’s tax payments. The judgments match exactly the total amount of profit Hermitage had made with the three companies stolen by Kuznetsov, an amount close to $1 billion: “This had to be a rogue operation, and we now had the evidence to expose it and bring these guys to justice” (235).

In July 2008, “we started filing detailed complaints about the tax rebate fraud, sending them to every law enforcement and regulatory agency in Russia” (236). They alert the media, and the story gets picked up in Russia and internationally. Browder gives a phone interview on an independent Russian radio station.

A month later, three of Hermitage’s men in Moscow get their offices raided. One raid comes on the heels of a DHL delivery to the office of Eduard, Hermitage’s Moscow criminal lawyer, with a return address shown as Browder in London. Browder has sent nothing of the sort. The raiders take the package and depart. London police locate security videos of two men mailing the package from a DHL office; the team doesn’t recognize them but provides information on their opponents so the police can cross-reference recent flight manifests.

Eduard, along with Vladimir Pastukhov, Hermitage’s outside counsel, are ordered east to the city of Kazan for a long weekend of interrogation. Browder fears they will be tortured. Both lawyers insist they cannot be held for interrogation, but the following week they receive a second summons, accompanied by threats: “The people behind this were criminals, and they acted as if they had full control of the police” (240). Vladimir’s health is poor; “if he was arrested, he would likely die in prison” (244). Both lawyers decide to escape. Vladimir makes it out of Russia with his family.

Eduard, reluctant to leave Russia, decides to escape to a city far from Moscow. He flies to Khabarovsk, where a friend meets him and takes him into hiding.

Browder’s team figures out what the officials want with Eduard. A criminal named Victor Markelov, who engineered the original theft of companies from Hermitage, wants blame placed elsewhere through a confession that implicates Browder instead of the real thieves. This confession would be obtained by torturing Eduard: “If he refused, they would kill him, and everything Markelov, the convicted killer who stole our companies, claimed would be accepted as the official ‘truth’ in Russia” (249).

Eduard, still in hiding, is finally convinced to leave Russia. In October 2008, a fixer meets him at the airport and eases his way through passport control and onto a plane bound for South Korea. Eduard escapes.

One person in danger, attorney Sergei Magnitsky, still lives and works in Moscow. Vadim tries to convince him to leave, but he refuses: “He insisted that nothing would happen to him because he had done nothing wrong” (252). He continues his crusade against the malefactors, adding a second testimony at the State Investigative Committee. Sergei has an idealistic faith in the new Russia: “[H]e didn’t realize that Russia had no rule of law, it had a rule of men. And those men were crooks” (253).

In November 2008, police arrest Sergei. Browder’s team does what it can, hiring defense counsel and reporting the news to the British foreign office. They hear from Aslan, who reports that the prosecution has put an unprecedented nine senior investigators onto the case. At a hearing, Major Oleg Silchenko presents falsified evidence against Sergei; when Sergei responds, the judge interrupts, saying, “I have no reason to doubt the information provided from investigative bodies” (258). Sergei is denied bail and put into detention.

For two months, Sergei is transferred from one cell block to another, each with abysmal conditions. All contact with family members is denied. Apparently, Silchenko hopes Sergei will crack and say whatever they want from him.

Sergei helps another prisoner with his case, and the man is acquitted: “Overnight he became one of the most popular and well-protected inmates in the detention center” (260). Silchenko has him moved to a private cell block accessible only by police. For months, he lingers there but refuses to sign a false confession. He is moved yet again; he becomes sick, vomiting, and by June 2009 he has lost forty pounds.

Browder contacts several prominent human-rights organizations who agree to look into Sergei’s case, but Russian authorities stonewall them. Browder approaches the US Helsinki Commission for help, but they turn him down. His attempts to interest news bureaus come up empty until he meets with Washington Post reporter Philip Pan, who goes to bat for them. In August 2009, the Post publishes his exposé, “3 Lawyers Targeted After Uncovering Seizure of Firms” (263). It goes nowhere. Browder’s team begins production of a YouTube video that explains the case.

Sergei is diagnosed with “pancreatitis, gallstones, and cholecystitis” (265). Major Silchenko transfers him again, this time to a grim prison with minimal medical facilities. His symptoms worsen until the pain is too great for him to speak; a nurse scolds him and refuses to treat him. Sergei’s legal team tries to get him medical care, but all requests are denied.

Periodically, Sergei is interviewed by an anonymous man who says, “Do what we want, or things will continue to get worse for you” (267). But he refuses to relent: “Sergei was religious, and he would not violate God’s ninth commandment: ‘Thou shalt not bear false witness’” (268).

While advocating for Sergei in the US, Browder learns from Elena that Russia has indicted both Sergei and himself. A trial will convene in absentia, they’ll be convicted, and both Sergei and Browder will receive sentences of six years in prison. Elena continues, “Russia will then issue an Interpol Red Notice for you and try to extradite you from the UK” (270).

Sergei has ok’d the YouTube video about his case, and Browder uploads it to the Internet. Within days, it has received tens of thousands of views. Friends and journalists pepper his phone with calls: “With this one film, we gained our first foothold in explaining the truth of what had happened and were able to push back against our enemies” (271).

Defying his tormenters, Sergei files a twelve-page testimony with the Interior Ministry. He declares, “I believe all members of the investigation team are acting as contractors under someone’s criminal order” (272).

The corrupt officials obtain Vladimir Pastukov’s cell phone number and begin texting threats, writing things such as, “What’s worse, prison or death?”(273), and “History has taught us that anyone can be killed.” (274). Scotland Yard determines that the texts come from an unregistered Russian phone: “the only people in Russia who had access to unregistered numbers were members of the FSB” (274).

Sergei is subjected to another hearing, where all his petitions are denied and the judge extends his detention, “[b]ut Sergei wouldn’t be silent. Instead he stood in the cage and, in a booming voice that defied his physical state, accused [the judge] of violating the law and his rights” (276).

The next evening, Browder receives an anonymous phone message: “I heard a man in the midst of a savage beating. He was screaming and pleading. The recording lasted about two minutes and cut off mid-wail” (276).

Browder learns that on November 16, 2009, Sergei is beaten to death: “He was killed because he believed in the law. He was killed because he loved his people, and because he loved Russia. He was thirty-seven years old” (278).

In 1940, Soviet agents murder 22,000 Polish POWs. Their bodies are buried in mass graves in the Katyn Forest. In 1943, this atrocity is discovered, and the Soviets insist that the Germans committed it: “To back it up, the Soviets manufactured evidence, issued official reports, and repeated their allegations so many times” (280) that it wasn’t until 1990 that the truth was revealed. With Sergei’s death, it becomes apparent that the old Soviet style of murder and lying is still entrenched in the Russian government.

The grief-stricken Hermitage team releases a press statement that includes a forty-page handwritten document by Sergei “detailing his torture, the withholding of medical attention, and the intense hardship to which the prison authorities had subjected him” (282). The press picks up the story and contacts the Russian government, which insists Sergei died of “heart failure, with no signs of violence” (283) and no complaints about medical attention in his file.

Browder calls Sergei’s mother to tell her “that [he] felt responsible for what had happened to her son and that she wasn’t alone” (283), and that he would “step into Sergei’s shoes and look after her and the family” (284). Meanwhile, all requests for a second autopsy are denied. On November 20, 2009, Sergei is buried.

The Russian government continues its coverup. Sergei, however, was meticulous, and hundreds of pages of evidence provided by him and his legal team begin to surface, which “make Sergei’s murder the most well documented human rights abuse case to come out of Russia in the last thirty-five years” (286).

President Medvedev announces an investigation into Sergei’s death. In December 2009, twenty prison officials are fired, but only one has anything to do with Sergei. The Moscow Public Oversight Commission, a human-rights organization, finds that Sergei was seriously mistreated and the government has lied about it. Sergei’s diary is published in Novaya Gazeta. The Russian government remains silent: “Evil hadn’t withered under the bright lights of publicity” (288).