Commissioner under the President of the Russian Federation for the protection of the rights of entrepreneurs Boris Titov said that the basis of the accusation in the case of the former chairman of the board of directors of Ust-Luga Company JSC Valery Izrailit is a special declaration, which the defendant filed under the law on capital amnesty. The business ombudsman recalled that back in 2019, the Presidium of the Supreme Court of the Russian Federation (SC RF) categorically prohibited the use for criminal prosecution of materials that participants in the capital amnesty voluntarily handed over to the tax authorities. Nevertheless, the prosecutor’s office requested nine and a half years for the entrepreneur for embezzlement and withdrawal of funds abroad.
The day before, on June 20, it became known that in the Smolninsky District Court of St. Petersburg, where the case of the co-owner of the Ust-Luga company Valery Izrailit is being considered, the city prosecutor’s office requested nine and a half years in a penal colony for the accused. The state prosecution asks to recognize the entrepreneur as guilty of transferring about $2 million abroad to the accounts of non-residents of the Russian Federation using false documents (parts 2 and 3 of article 193.1 of the Criminal Code of the Russian Federation) during the construction of an oil depot. The reason for the persecution of the defendant was the information specified in the special declaration.
The investigation claims that the businessman, taking advantage of the capital amnesty announced by Russian President Vladimir Putin in 2016, declared foreign companies controlled by him, an apartment in London, shares and bank accounts, and in order to explain the withdrawal of currency abroad, he allegedly planned to buy his own yacht from one of their firms. The damage from the actions of the defendant is estimated at 3.5 billion rubles.
The case of Valery Izrailit was the first time that the FSB used this declaration as evidence of guilt. At the same time, earlier the head of state argued that when legalizing his funds and property in Russia, a person “will receive firm guarantees that he will not be dragged to various authorities.”
Mr. Izrailit’s defense several times asked to exclude the tax declaration from the list of evidence of the prosecution, but the court considered its use legal, since the accused was charged with crimes to which the amnesty does not apply.
In a conversation with Kommersant, Valery Izrailit’s lawyer Victoria Burkovskaya said that they would continue to challenge the legality of initiating a criminal case in connection with a special declaration under Art. 193.1. The businessman’s defense insists that such information cannot be used as evidence, referring to the law “On Voluntary Declaration”. In particular, she points out, in part 6 of Art. 4 of this Federal Law states that “other state or non-state bodies and organizations are not entitled to access such information and documents.”
“The law also states that employees of the Federal Tax Service cannot be interrogated as witnesses. At the same time, the case contains the conclusion of a tax authority specialist, who was provided with a declaration for study, which can be called a classic abuse of the right, ”explained the defender.
Valery Izrailit was detained at the end of 2016 on suspicion of fraud. In December 2018, the Smolninsky District Court registered a criminal case against the businessman. The preliminary investigation was carried out by the investigative service of the Federal Security Service for St. Petersburg and the Leningrad Region. In March 2020, after 38 months in jail, the court released the businessman under house arrest. Commissioner under the President of the Russian Federation for the Protection of the Rights of Entrepreneurs Boris Titov positively assessed then this decision to change the measure of restraint.
The Ombudsman insists that there are violations of the law on capital amnesty in the case of Valery Izraylit and the use of a special declaration in the case is contrary to the letter of the law.
In 2019, the Presidium of the Supreme Court of the Russian Federation prohibited the use of information declared by the declarants themselves (.pdf) to initiate criminal cases. Thus, the highest court responded to the businessman Valery Izraylit’s case. The decision of the Supreme Court of the Russian Federation states that such information is recognized as a tax secret. Access to them is provided exclusively by the Federal Tax Service. Other bodies, noted the plenum, are not entitled to access them, including by court decisions. The declarant himself can use them, including as evidence in a criminal case.
The business ombudsman expressed the hope that the Smolninsky District Court would not go against the position of the RF Armed Forces. “The question here is not the presence of a crime. The issue is that their own rules are violated. Just now, the President at SPIEF mentioned a possible amnesty for currency violations over the past year. But how to start a new amnesty if you haven’t dealt with the old one?” — said Boris Titov.
In early May, the court stopped due to the expiration of the statute of limitations in the case of fraud on an especially large scale (part 4 of article 159 of the Criminal Code of the Russian Federation) and the legalization of funds received by Valery Izraylit while working as chairman of the board of directors of Ust Company OJSC -Luga “” (clause “b” part 4 of article 174.1 of the Criminal Code of the Russian Federation). The prosecutor’s office asked to assign the defendant four years in prison and release him from punishment.
At a meeting where the issue of closing the mentioned cases was decided, the businessman said that he considers “an endless battle that will lead to nothing” is pointless.
However, Mr. Izraylit himself from the first days does not admit his guilt on any of the offenses and earlier stated that the defense side has a sufficient number of documents that can be attached as evidence of his innocence.