Former Russian Minister Arrested on $62mn Embezzlement Charges

The Russian Investigative Committee, the country’s top prosecution agency, has arrested a former Russian government minister on charges of embezzling $62 million, RBC reported. The arrest fuelled speculation about possible fallout for Prime Minister Dmitry Medvedev, who was his political patron, the news outlet wrote.

Mikhail Abyzov, who served as minister of Open Government Affairs from 2012 to 2018, overseeing information technologies and efforts to increase the government’s transparency, is accused of presiding over a criminal group that allegedly siphoned 4 billion rubles from two energy companies in Siberia and deposited the money in foreign banks.

He has been charged with forming and leading a criminal group, abusing his office and large-scale fraud. Abyzov’s lawyer told Russia’s Interfax news agency that his client “categorically” denies the charges. Entrepreneurs and energy officials Nikolai Stepanov, Maxim Rusakov, Galina Fraidenberg, Alexander Pelipasov, and Sergey Ilyichev are also charged.

Abyzov was a close associate of former Russian President Dmitry Medvedev, who was in office during 2008-2012 when term limits forced Vladimir Putin to move into the prime minister’s seat. After Putin returned to the presidency in 2012, Medvedev became prime minister and put Abyzov in the senior Cabinet position.

Abyzov left the Cabinet last year, but continued to advise the government as a member of a working group that was developing proposals for enhancing state oversight of public spending.

Russian news reports said Abyzov recently had lived in Italy and the United States and before his arrest was lured back to Russia by a birthday party invitation from a long-time colleague. Interfax said Abyzov was arrested immediately after he arrived in Moscow on a business jet Tuesday. A court in Moscow is set to rule Wednesday on whether he should be kept in custody.

The current charges, carrying a maximum 20-year prison sentence upon conviction, relate to Abyzov’s business activities from 2011 to 2014. But Russian investigators have signalled an intention to review his tenure as a government minister for possible wrongdoing.

That could have consequences for his political patron, Medvedev. Some pundits have suggested Medvedev may hope to return as president after Putin’s current six-year term ends in 2024.

Abyzov started in business as a student in the early 1990s, importing food from Bulgaria. He bought several engineering and construction companies during the 2000s, eventually combining them to form the E4 Group, one of the biggest private construction subcontractors in Russia’s energy industry, which went bankrupt in 2016.

Forbes magazine listed Abyzov as having $1 billion worth of assets in 2014, but he dropped off the list the next year.