Hijacking the Hermitage Fund

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In the meantime, Hermitage alleges, unknown lawyers claiming to represent the Hermitage subsidiaries had already conceded the case in court. These lawyers had in fact been appointed by an obscure company named Pluton, registered in the central Russian city of Kazan. Hermitage alleges this was only possible because the share registrars were fraudulently tampered with, replacing the name of the Hermitage Fund's actual trustee, HSBC, with Pluton—an entirely bogus owner.

The attempted fraud ultimately failed because, unbeknownst to the fraudsters, Hermitage had already transferred all its assets out of Russia. The claims that were lodged against the company in St. Petersburg have since been annulled by subsequent court decisions. But subsequent lawsuits have also come to light, filed in Moscow and Kazan, also worth hundreds of millions of dollars, which Hermitage is continuing to contest in court. Details of the alleged fraud have been lodged with the Russian authorities, who launched an investigation into the alleged fraud in February, after receiving six 255-page reports on the case from HSBC.

Crime Scene Investigation

The most damning allegation? Throughout the entire period of the attempted fraud, Hermitage alleges, all the tools used to accomplish it were in the possession of the Moscow branch of Russia's Interior Ministry, where they have been ever since being seized by Kuznetsov's police in June. These included the corporate seals, original copies of registration, and the original corporate charters, for each of the Hermitage subsidiaries that were targeted.

So how come Hermitage is only now going public with the story, which it has previously kept carefully under wraps? Hermitage released its dossier following another mysterious twist in the story. On Apr. 3, Russian media reported that Browder himself was under criminal investigation, in connection with the Kameya tax-evasion case.

Russia's Interior Ministry immediately issued a denial that any such investigation into Browder was under way. According to a Hermitage spokesman, the reports about the criminal investigation into Browder appear to have been planted by the same ministry officials now under investigation for large-scale fraud. "The report is being issued now, because it's a crazy injustice to be accused when we are the victims," the spokesman says.

Russia's Interior Ministry has yet to respond publicly to Hermitage's allegations. "It's being investigated. We're hoping for a positive outcome," the Hermitage spokesman says.

Bush is BusinessWeek's Moscow bureau chief .