Bugged offices, bogus Russian court judgments and a company named Pluton from Tatarstan run by a convicted murderer — it sounds like a Tom Clancy novel. But it's not. In a July letter to update shareholders, Hermitage Capital Management described, at length, a convoluted corporate identity theft scheme to steal assets from its Russian investment companies.
The problems for Hermitage began in 2005 when CEO William Browder — the son of Earl Browder, a one-time leader of the U.S. Communist Party — had his visa renewal request denied. An activist investor in Gazprom, Russia's largest company, Browder had apparently disrupted the flow of money to enough corrupt bureaucrats that even his friend, then-President Vladimir Putin, couldn't prevent him from being named a “threat to national security” in 2006.
Then, in June 2007, the Moscow Interior Ministry raided offices of the firm and seized files, Hermitage alleges. Soon, fraudulent lawsuits were being filed by shell companies using the stolen documents. Hermitage continues to battle the bogus claims in multiple courts. In December, it filed a 255-page complaint with the Russian authorities. Alas, the Russian Interior Ministry — which raided the Hermitage offices in the first place — is in charge of the investigation, Hermitage alleges.