Stoneage Ramblings

By John R. Stone

“Freezing Order” is probably one of the most frightening books I have read in a while.

The problem is that it is not fiction. It is the true tale of investment banker Bill Browder and what can happen if you cross Vladimir Putin. So far he has lived to tell about it.

Browder had an investment fund called the Hermitage Fund he set up in Russia in 1996. It was successful fund investing in Russian businesses.

After a while Browder began to notice that the companies he was invested in were being stripped of cash by Russian oligarchs and corrupt officials. For a while he was willing to accept this but then decided to fight back by doing more detailed studies of cash flow in the businesses.

Initially this proved to be a good move, the companies started to show better cash flows, their value improved and Hermitage made good money as a result.

However, by 2005 Putin had had enough of this and declared Browder a threat to Russian security so he and his team left Russia quickly. His offices were raided, seals and certificates for his company holdings were taken and some of the firms were re-registered in the names of Russian ex-convicts. The companies’ cash had been liquidated so that didn’t affect Browder, what did was that the convicts created fictitious documents that claimed several of the companies owed $1 billion to three shell companies. Browder’s companies were then sued for the $1 billion.

This led to some Russians claiming that Browder had applied for and received a $230 million tax fund from the Russians. Actually the refund went to the crooks through a complicated money laundering operation. But Browder became a wanted man and charges were filed against him in Russia.

One of Browder’s lawyers, Sergei Magnitsky, worked on the case and discovered that the same group has stolen $107 million the year before in a similar scam.

Eventually Magnitsky was imprisoned and killed when it became clear he had found out too much. That set Browder on a pursuit to make it easier for foreign countries to seize illegal funds overseas through the Magnitsky Act, which was passed in the U.S. and over 34 other countries including the European Union. He made it his mission in remembrance of his lawyer.

The book goes on to detail Russia’s efforts to get to Browder. Browder, a British citizen, was put on the Interpol wanted list a half dozen times by Russia. Interpol finally stopped, recognizing the Russian effort as political, and didn’t go along with it, but not until Browder had been stopped a couple of times during his international travels.

After hiring people who track money movement he found some assets purchased with the money in New York. He turned the information over to prosecutors who started a case in the matter. The Russians hired an attorney that had worked for Browder and went after him.

He survived that and a number of other scares and is still alive as of this writing.

His work not only traced the bulk of the $230 million but working with Dutch journalists discovered that the $230 million was a peanuts. The journalists figured Putin and his cronies had slipped something like over $234 billion out of Russia.

What was frightening was Putin’s reach, the ability to make life miserable for someone anywhere in the world, and deadly in Russia, if a person disagreed. He used the U.S. legal system to go after Browder in the New York case.

At one point Putin offered to President Donald J. Trump a trade of 11 people the U.S. was interested in for Browder. Putin later expanded the offer to ask for 11 more people and it fell through.

It is very well written and fast moving tale. That a foreign leader could reach so far into this country using legal means was what made this frightening.