MIKHAIL KHODORKOVSKY

54 years old | Fraud, tax evasion and embezzlement

 

Born in 1963 in Moscow, Russia, Mikhail Khodorkovsky is the former CEO of Russian oil company Yukos. Amid allegations of fraud and tax evasion, Forbes listed Khodorkovsky in 2004 as Russia’s richest person and No. 15 in the worldwide list of billionaires, with a net worth of $15 billion. Since then, the oligarch and the Yukos case have become synonymous with the world’s most mediatized and bitterest legal battle. After being imprisoned for 10 years between 2003 and 2013, Khodorkovsky now resides in London.

 

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Russia’s overshooting star

 

After graduating from Mendeleev Russian University of Chemistry and Technology in 1986, Mikhail Khodorkovsky opened the Center for Scientific and Technical Creativity of the Youth in 1987, an association placed under the patronage of the Young Communists, with the aim to offer consulting services to state-owned companies and to commercialize technology. Profits earned from the Center allowed Khodorkovsky to found the Menatap bank in 1989, which grew very rapidly amid the collapse of the Soviet Union. In 1995, Menatap snatched in rigged auctions[1] a 78% share in the then state-owned oil production company Yukos, for $350 million only and with debts exceeding $3.5 billion.

 

Bought for a penny, with production assets and oil fields worth billions, Yukos quickly turned in profits[2], and only 8 years later, in 2003, Mikhail Khodorkovsky had become Russia’s richest man[3].

 

Accusations of fraud, embezzlement and tax evasion lead to prison

 

On 25 October 2003, Russia’s top oligarch was arrested on suspicion of fraud and tax evasion[4]. After an 11-month trial he was found guilty, ordered to pay $613 million in taxes and fines and sentenced to a 9-year prison term[5]. A second trial on charges of embezzlement and theft found Khodorkovsky guilty in December 2010 and he was sentenced to another 14 years in prison[6]. Khodorkovsky’s attempt to undo his sentence, through an appeal to the European Court of Human Rights, is rejected. The Court ruled that his arrest and trial hadn’t been politically motivated, but found that his rights had been violated during his arrest in 2003 and subsequent detention[7]. However, the oligarch did not serve his full sentence: he was pardoned by Russian President Vladimir Putin in 2013[8], on “humanitarian” grounds, as Khodorkovsky had allegedly asked for his early release from prison to take care of his dying mother.

 

Renewed accusations and political activism

 

Henceforth a free man, Khodorkovsky was granted a three-month visa by Switzerland, the home of his wife and children[9], thus allowing him to travel across the Schengen area.

 

Following the death of his mother and the Ukrainian revolution, the oligarch turned political activist expressed his wish for political change in Russia. However, his past still caught up with him. In 2015, Russia issued an international arrest warrant for Khodorkovsky alleging he ordered the murders of a town mayor and a bodyguard in 1998[10]. Refusing to attend his trial in Russia, the exiled Russian oligarch currently resides in London[11], from where he funds opposition politicians and civil society in Russia.

 

End of the Yukos case?

 

Early 2016, Russia won a major legal victory overturning a Dutch Court decision to award shareholders of the former Yukos $50 billion in damages for the sale of Yukos assets after the company got embroiled in Khodorkovsky’s tax evasion, embezzlement and fraud schemes[12].

 

 

 

CHRONOLOGICAL PROCEEDINGS OF THE KHODORKOVSKY CASE

 

2003

·         25 October: arrested on suspicion of tax evasion and fraud.

2005

·         1st conviction on 31 May: sentenced to a 9-year prison term on charges of tax evasion and fraud + ordered to pay $613 million in taxes and fines.

2007

·         Charged for a second time, this time on accounts of embezzlement and theft

2008

·         Denied parole request for his first conviction

2010

·         2nd conviction: Sentenced to 14 years in prison on charges of embezzlement and theft

2013

·         Putin pardons Khodorkovsky, allegedly following clemency request.

2015

·         Charged for a third time, this time for ordering a double murder in 1998.

 

 

[1] http://www.nytimes.com/2003/10/26/world/police-in-russia-seize-oil-tycoon.html?rref=collection%2Ftimestopic%2FKhodorkovsky%2C%20Mikhail%20B.

[2] http://news.bbc.co.uk/1/hi/business/4041551.stm

[3] https://www.theguardian.com/world/2013/dec/20/mikhail-khodorkovsky-russia-richest-man

[4] http://www.nytimes.com/2003/10/26/world/police-in-russia-seize-oil-tycoon.html?rref=collection%2Ftimestopic%2FKhodorkovsky%2C%20Mikhail%20B.

[5] http://www.nytimes.com/2005/06/01/world/europe/russia-tycoon-given-9-years-on-tax-charge.html

[6] https://www.hrw.org/news/2010/12/30/russia-khodorkovsky-sentence-spotlights-unfair-trial

[7] https://www.theguardian.com/world/2011/may/31/khodorkovsky-trial-not-political-european-court

[8] https://www.theguardian.com/world/2013/dec/20/mikhail-khodorkovsky-freed-putin-pardon-russia

[9] https://www.nytimes.com/2014/01/06/world/europe/freed-russian-oligarch-leaves-germany-for-switzerland-with-family.html

[10] https://www.nytimes.com/2015/12/12/world/europe/murder-charges-filed-against-previously-imprisoned-russian-oligarch.html?rref=collection%2Ftimestopic%2FKhodorkovsky%2C%20Mikhail%20B.

[11] http://www.bbc.com/news/world-europe-35172909

[12] https://www.ft.com/content/9d3aa3d5-432f-3b2a-96c5-d10e0f61bc3c