The defence for accused Nikolai Glushkov believe he cannot endure a new trial in the Aeroflot case
Photo: Dmitry Lekay
Trial in Progress, Please Wait
// The Prosecutor General's Office Opens the Second Round of the Aeroflot Case
The Moscow City Court reversed the verdict in the so-called Aeroflot case yesterday. The court agreed with the opinion of the Prosecutor General's Office that the sentence passed on the airline's former managers was excessively light and referred the case for retrial. The prosecution will now try to prove in court that the airline's former management embezzled Aeroflot's money and deserves five to ten years in prison.
The appeals instance of the Moscow City Court received two applications on the results of the trial in the Savelovsky Court. One was from representatives of the Prosecutor General's Office, who demanded a new trial, and the other was an appeal from lawyers for the accused. In the appeal, former deputy general managers of Aeroflot Nikolai Glushkov and Aleksandr Krasnenker, the company's former chief accountant Lidiya Kryzhevskaya, and head of the Incorporated Finance Company (FOK) Roman Sheinin asked to be acquitted and that the criminal case be dismissed for lack of formal elements of a crime (corpus delicti).
At the beginning of the session, presiding judge Svetlana Kolesova recalled the facts of the case. An investigation had established that in 1996 Nikolai Glushkov concluded an agreement on managing Aeroflot's funds with the Swiss firm Andava, half of whose shares were owned personally by him and his partner Boris Berezovsky. Aleksandr Krasnenker subsequently made arrangements for 80% of the foreign exchange earnings of Aeroflot's foreign representative office to be transferred to Andava (a total of $252 million was transferred). Two of Andava's subsidiaries were used for settlements with Aeroflot. These were FOK and the offshore company Grendgland, which the investigators believed began lending to Aeroflot on unfavorable terms. As a result, the company became a chronic debtor and paid its creditors high interest on bills and fines for late payments. These interest payments and fines totaled 214.9 million rubles, which the investigators believed were stolen from Aeroflot.
The prosecutor's office charged the airline's former managers with fraud, laundering of money acquired by criminal means, and failure to return foreign exchange earnings from abroad. Mr. Glushkov and three of his assistants were also charged with organizing his escape from custody during treatment at a hematology center in April 2001.
We recall that on March 12, 2004, the Savelovsky Court acquitted the defendants on the substantive charge of fraud (Kommersant reported on this on March 13). Nikolai Glushkov and Aleksandr Krasnenker were found guilty of failing to return foreign exchange earnings and abuse of official authority. In addition, in the opinion of the court, Nikolai Glushkov and his assistants were also guilty of escape. Mr. Glushkov was sentenced to three years and three months in prison, which he had already served, and released. The assistants received a year and two months each, which they had also already served in prison. Aleksandr Krasnenker and Lidiya Kryzhevskaya received two and a half years and one and a half years, respectively, but were released from penalty under amnesty. The charges against Roman Sheinin were dropped after expiry of the period of limitations.
A lawyer for Mr. Glushkov, Andrei Borovkov, who appeared in the Moscow City Court yesterday, said that his client was “not a criminal”. The lawyer noted that Evgeny Shaposhnikov, then head of Aeroflot, had personally granted Mr. Glushkov power of attorney to open accounts for the company abroad. Therefore, the lawyer concluded, Mr. Shaposhnikov was well informed about the operations with Andava. In addition, according to Mr. Borovkov, the Audit Chamber and various departmental commissions had examined the activities of Aeroflot's management and had found nothing criminal in their actions.
– It turns out that there were some ignoramuses working in these departments,” Mr Borovkov said, “and the only bright minds were found in the Prosecutor General's Office.”
Regarding the escape from the hematology center, Mr. Borovkov said that his client, Mr. Glushkov, had left the center on more than one occasion without a guard and had returned:
– If a person wants to escape, he doesn't leave his things, pictures of his children, and glasses at the hospital. This proves that Glushkov wasn't planning to escape anywhere.
Lawyer Semen Ariya said that Nikolai Glushkov's health would not allow him to endure another trial:
– This trial could be the last for him; therefore, we are asking that the prosecutor's appeal be rejected and the case dismissed.
Yury Larin, a lawyer for Aleksandr Krasnenker, maintained his client's innocence and expressed doubts about the results of an audit of Aeroflot carried out by a nonstaff employee of the Prosecutor General's Office:
– This kind of audit must be conducted only by independent auditors, but this was joke – the investigators questioned criminal investigation officers and used their testimony as the basis for the accusations.
In their response, representatives of the Prosecutor General's Office contended that fraud had been committed even as Aeroflot's partners were being chosen. In their opinion, the airline started working with Andava because the accused had misled Mr. Shaposhnikov, promising him that this cooperation was “profitable and legal”. The prosecutors asserted that Mr. Shaposhnikov did not know all the details of the cooperation. Specifically, Nikolai Glushkov had not informed him that he was a co-owner of Andava.
– Even transferring the airline's funds to Andava's account in the Swiss bank UBS was illegal,” the prosecutors maintained. “This requires a license from the Central Bank, but a license was only obtained ten months after the start of the transfers. This was in violation of both criminal and banking legislation.”
The Moscow City Court agreed with the prosecutors and reverted the case to the Savelovsky Court, which will hear it de novo. At the same time, the Moscow City Court upheld the sentence of the court of first instance in the part that found Nikolai Glushkov and his assistants guilty of attempted escape.
– They only read out the operative part of the court's decision to us after promising to deliver the statement of motivation later,” lawyer Borovkov said after the session. “When we receive it we'll decide whether or not to appeal to the presidium of the city court. Although it's not at all clear what our clients will be tried for. The period of limitations has already expired under the articles they have been accused of violating. And the court of first instance has reclassified the fraud charge as abuse of authority, which is not a serious crime.”
Aleksandr Krasnenker, who had just achieved dismissal of a case against him on charges of nonpayment of taxes (Kommersant reported on this on June 17), called the court's decision a verdict: “I say verdict, because there has been no examination of our appeals in court. This decision means that once again we'll try to prove in the Savelovsky Court that the charges preferred against us are absurd.” If the Prosecutor General's Office proves the reverse, those accused of large-scale fraud face lengthy sentences.
Kommersant will be following the proceedings.
All the Article in Russian as of June 22, 2004