MOSCOW, March 27 - RAPSI, Diana Gutsul. A former colleague of Hermitage Capital lawyer Sergei Magnitsky, who was charged with evading taxes and died in a pretrial detention center in 2009, told the Tverskoy District Court of Moscow that Magnitsky had used an illegal business scheme, a RAPSI correspondent reported from the court on Wednesday.

Konstantin Ponomaryov said he compiled a plan on his client's business optimization upon the latter's request. The plan included ways to bypass the law, such as by registering firms under the names of Ponomaryov's colleagues and then re-registering them in the name of Cypriot citizens.

According to Ponomaryov, Magnitsky criticized the business plan in the presence of Hermitage Capital CEO William Browder. Ponomaryov said he stopped involving Magnitsky in business negotiations after this occasion.

However, in the course of the preliminary investigation, Ponomaryov said, he was shown documents in English that showed that Magnitsky had used the business schemes that he outlined in the optimization plan.

"I was surprised that Magnitsky has spoken out against doing so, but then used the schemes," he said.

When answering his lawyer's question as to how he knew the documents that he had seen were genuine, Ponomaryov said they bore Magnitsky's signature.
Magnitsky and Browder have both been accused of tax evasion.

Magnitsky was arrested on November 24, 2008. He died in a Moscow pretrial detention center on November 16, 2009 after spending a year behind bars. According to the Prosecutor General's Office, Magnitsky died of heart failure.

Magnitsky's death evoked an international public outcry, triggering amendments to the Criminal Code and a reshuffling of officials in the penal system. Dmitry Kratov, the former deputy chief of the Butyrka pretrial detention center, and the ward's doctor, Larisa Litvinova, were defendants in the case of Magnitsky's death.

In December 2012, the court acquitted Kratov of negligence resulting in Magnitsky's death. The case against Litvinova was closed in spring 2012 following amendments to the Criminal Code affecting the statute of limitations.

According to investigators, Magnitsky and his accomplices embezzled hundreds of millions of rubles from the budget by manipulating tax returns between September and October 2007. Meanwhile, Hermitage Capital maintains that it paid 5.4 billion rubles (around $180 million) in taxes, but that the money was stolen by corporate raiders with the assistance of law enforcement officials.The case against Magnitsky was closed after his death, only to later be reopened. Under Russian law, it is possible to prosecute an individual even after their death.

In May 2012, the Moscow City Court rejected an application filed by Magnitsky's relatives to have the criminal case against him closed.