Russian police charge oil tycoon with fraud

Country's richest man arrested in pre-dawn raid

October 26, 2003|By David Holley | David Holley,LOS ANGELES TIMES

MOSCOW - Special forces swooped in on Russia's richest man yesterday when his plane stopped for refueling in Siberia, then handed him over to prosecutors who charged him with seven criminal counts, including tax evasion and fraud.

The action against Yukos Oil Co. chief Mikhail Khodorkovsky - which a company spokesman complained resembled the capture of a terrorist - stunningly raised the stakes in a months-long confrontation between prosecutors and the influential billionaire, a battle many people see as a struggle over political power and oil riches rather than real issues of law.

At its broadest level, the struggle pits pro-business bureaucrats led by Prime Minister Mikhail M. Kasyanov against officials who want to rein in the country's wealthiest men - so-called "oligarchs" who acquired much of the nation's wealth in questionable 1990s privatization deals.

Many people in the anti-oligarch faction come from state security services and are associated with President Vladimir V. Putin, a former KGB agent. But the president, who is expected to seek re-election in March, has not taken sides publicly.

"I would expect an outburst of conflict between those two groups after this arrest," said Sergei Markov, a prominent political analyst. "It is a big political fight, and there certainly are some political forces that might protect Khodorkovsky. Those political forces don't want law enforcement and security structures to have the major political influence in our country."

Yukos spokesman Alexander Shadrin said his boss was detained when his plane landed in the pre-dawn hours at Novosibirsk on its way to Irkutsk.

The plane was surrounded by trucks with their lights on, two buses drove up, and armed men emerged and rushed into the plane shouting: "FSB! Weapons on the floor or we'll shoot!" Shadrin told reporters.

The FSB, or Federal Security Service, is the domestic successor to the Soviet-era KGB. When one of the officers told Khodorkovsky to go with them, the Yukos chief replied, "OK. Let's go," Shadrin said.

Khodorkovsky, 40, was brought back to Moscow, questioned by prosecutors, then taken before a court that approved his formal arrest and ordered him to be kept in custody at least temporarily. He was then taken to Moscow's Matrosskaya Tishina prison.

"This was all political," Anton Drel, his attorney, told reporters. "He asked me to make it clear that he has no regrets over what he has done, no regrets over not leaving the country." Khodorkovsky had earlier described the legal attacks on Yukos as political and said he would prefer imprisonment to exile.

Khodorkovsky was accused of individual tax evasion, and at the corporate level was charged with large-scale theft by fraud, damage to the property of others through fraud and corporate tax evasion. He is also accused of forgery of official documents, embezzlement and failure to observe a court ruling. The corporate tax evasion charges total $556 million, while the individual tax evasion charges are for $1.7 million, the Russian news agency Itar-Tass reported.

Forbes magazine estimated his net worth this year at $8 billion.

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