Police charged Semyon Mogilevich with tax evasion

Police charged Semyon Mogilevich with tax evasion Wednesday, pursuing prosecution of a man wanted in the U.S. and suspected of playing a key role in Russia's lucrative natural-gas trade with Europe.
Semyon Mogilevich, long sought by the FBI, had been living freely near Moscow until his arrest last week on a street outside the city's World Trade Center.
Some observers say that, by removing Mogilevich, the Kremlin may be seeking to strengthen the hand of President Vladimir Putin's chosen successor, Dmitry Medvedev, who chairs the board of Gazprom, the state gas monopoly.
Police investigators charged Mogilevich in the Moscow jail where he is being held, according to his lawyer, Alexander Pogonchikov.
The charges are connected to alleged tax evasion at a Russian cosmetics store chain, whose majority owner was arrested with Mogilevich on Jan. 23. Mogilevich, who denied the charges, has no interest in the business, his lawyer said.
"He is acknowledged as a financial genius all over the world and never deals with fake companies," Pogonchikov said.
U.S. officials have accused Mogilevich, 61, a Ukrainian-born Russian citizen, of running an organized crime ring in the 1990s, initially headquartered in Budapest, Hungary.
FBI Director Robert Mueller said in a speech in 2005 that Mogilevich's organization engaged in "drug and weapons trafficking, prostitution and money laundering, and organized stock fraud in the United States and Canada in which investors lost over $150 million."
Mogilevich was considered such a key figure that the FBI for several years operated a task force in Budapest to investigate his organization.
He has been wanted by the FBI since 2003, accused of manipulating the stock of a Pennsylvania-based company, YBM Magnex Inc., which collapsed in 1998.
The U.S. Justice Department's Organized Crime and Racketeering Section has been investigating Mogilevich's suspected ties to the trading company that has a monopoly on gas sales to Ukraine and supplies gas to Europe, a Justice Department official confirmed this week.
Russia has no plans to hand over Mogilevich for prosecution in the U.S., said Anzhela Kastuyeva, a police spokeswoman. "He is a Russian citizen and we do not intend to extradite him," she said.
The Swiss-registered company, RosUkrEnergo, which is owned jointly by Gazprom and two Ukrainian businessmen, has come under growing scrutiny since it was formed four years ago.
The company played a controversial role in the settlement of a dispute between Russia and Ukraine over gas prices, which led to a brief shutdown of supplies to Ukraine in January 2006. The cutoff was also felt in Western Europe.
The arrest of Mogilevich came after Yulia Tymoshenko was named Ukraine's prime minister in December. She has called for Russia and Ukraine to scrap the gas deal, charging it is corrupt.
"I stress my position once again — Ukraine and Russia don't need any kind of intermediaries," she said Wednesday at a news conference in Kiev, the Ukrainian capital.
Tymoshenko said she believed Mogilevich was linked to RosUkrEnergo, although she acknowledged she had no hard evidence.
Ukrainian law enforcement officials investigated possible ties between RosUkrEnergo and Mogilevich in 2005, during an earlier period when Tymoshenko was prime minister. But the case was closed after Ukrainian President Viktor Yushchenko fired her later that year.
Vladimir Milov, president of the Institute of Energy Policy, said Mogilevich's arrest most likely was linked to Tymoshenko's planned visit to Moscow in February and Medvedev's bid to win the Russian presidency on March 2.
"I think that the goal ... most likely was to protect Medvedev, to remove an undesirable witness to all the various suspicious operations connected to RosUkrEnergo," Milov said in a radio interview.
Some others observers said they saw the arrest as part of a power struggle among Kremlin factions, with supporters of Medvedev pursuing the case against Mogilevich to weaken hard-liners who oppose his candidacy. Mogilevich's removal could also strengthen Medvedev's control over Gazprom, they said.