Russia formally indicts US investor for ‘large-scale fraud’ week after detention

Russian investigators on Thursday presented Calvey, an Oklahoma-born US citizen who founded the multibillion-dollar fund in 1994, with the indictment on the charge of defrauding Vostochny Bank shareholders.

The American billionaire was arrested on February 14 along with several other people from his company and other businesses on suspicion of embezzling 2.5 billion rubles (some 38 million US dollars).

He is accused of having persuaded shareholders of Vostochny Bank -- a BVCP portfolio company -- to approve a share sale at an unrealistically low price.

Moscow’s Basmanny District Court, which issued a warrant for detaining Calvey, said in a statement that the warrant was part of a case involving charges under Part 4 of Article 159 of the Criminal Code of Russia that covers fraud committed by an organized group or on a large scale.

The American investor now faces up to 10 years in prison if he is found guilty of the “large-scale fraud.”

According to his lawyer Dmitry Kletochkin, Calvey “has refused to admit his guilt or give any testimony” before consulting with his defense.

In his first court hearing on February 15 at the Basmanny court, Calvey said the charges against him were being used as an instrument in a shareholder dispute, insisting that he had done nothing wrong.

Russian business ombudsman Boris Titov also said the case was a typical corporate dispute, branding his arrest as illegal.

Moscow, however, had “no doubt that truth will prevail as a result of the investigation," Kremlin spokesman Dmitry Peskov said on Thursday. "Nobody but the court can pronounce Michael Calvey innocent.”

Separately on Thursday, the US embassy in Moscow said in a statement that Russian authorities had failed to grant American diplomats access to Calvey despite asking multiple times to visit him in custody.

It further said that such behavior flouted consular rules between the two countries, adding, “We insist on access now.”

The Russia-focused BVCP invests across a broad range of industries, including oil and gas, consumer products, media and technology, telecommunications and financial services. It is Russia’s biggest and most successful private equity fund.