Russian lawyer who died in jail is accused of fraud by ministry

A year after the death of Sergei Magnitsky, a lawyer who claimed to have uncovered huge corruption in Russia's Interior Ministry, officials from the same ministry claimed this week that Mr Magnitsky himself was implicated in the fraud.

The new allegations, dismissed by most people familiar with the case as implausible and a smokescreen, are the latest twist in a case that seems to show that Russian authorities are either unwilling or powerless to stop corruption within their own ranks. The case has been watched anxiously from abroad as a test of President Dmitry Medvedev's claim that he wants to stamp out corruption and end "legal nihilism" in Russia.

Mr Magnitsky was arrested on tax evasion charges linked to his defence of Hermitage Capital, a multibillion dollar fund headed by US investor William Browder. The firm accused Interior Ministry officials of seizing ownership of three subsidiary companies in 2007, and using them to extort $230m from the Russian treasury.

Mr Magnitsky was in good health before his arrest, but his supporters believe that prison officials were pressuring him to retract testimony implicating Interior Ministry officials in the tax fraud. He developed pancreatitis, which was left untreated, and when his condition worsened, he was transferred to another prison, supposedly to receive treatment. Instead, he was placed in a straitjacket and put in an isolation ward, where he died a year ago yesterday.

The case caused such a scandal that it prompted Mr Medvedev to change the law to ensure that those accused of economic crimes are not locked up before their cases come to trial. A number of prison officials were also fired. But nobody was prosecuted for the death, and the trails that led back to the Interior Ministry were swiftly blocked.

Now, the Interior Ministry has used the anniversary of Mr Magnitsky's death to implicate the lawyer himself in the crimes, saying that two belatedly arrested suspects in the fraud have testified that he prepared the documents they used to perpetrate the crime.

"Sergei Magnitsky discovered the fraud, blew the whistle, testified against the officials, and as a result was arrested and tortured to death in prison," said Mr Browder, who has been barred from entering Russia as a national security threat, from London yesterday. "For these same officials to now accuse Magnitsky of the fraud himself has to be the most Kafkaesque statement I've ever heard. They are spitting on his grave after killing him."