Armed Raid Opens Eldorado Investigation

MTAn Interior Ministry officer entering Eldorado's main offices Wednesday morning carrying a sledge hammer, usually used to break locks as part of a search.
Interior Ministry officers, armed with assault rifles, raided the Moscow head office of leading electronics retailer Eldorado on Wednesday morning after a criminal investigation was opened into alleged nonpayment of about $300 million in taxes.

Investigators from the Interior Ministry's Central Federal District branch searched the company's headquarters after about 20 heavily armed officers, including rapid reaction troops, had cleared Eldorado employees out of the building.

A criminal case for tax evasion totaling 7 billion rubles was opened "several days ago" by the investigative arm of the Interior Ministry's Central Federal District branch, said Anzhela Kastuyeva, spokeswoman for the branch.

Kastuyeva said she had no information on whether anyone had been detained or arrested in connection with the case.

A spokeswoman for the in Interior Ministry's Investigative Committee said a criminal investigation had been opened against Eldorado's general director. Igor Demchenko, who replaced Alexander Shifrin as the company's general director earlier this year.

Eldorado spokesman Ilya Novokhatsky said the company's top management was refusing to comment on the matter Wednesday.

Reports surfaced at the beginning of March that Eldorado, which reported revenues of about $6 billion last year, could be facing mammoth back tax claims of up to 15 billion rubles.

Eldorado's major shareholder, Igor Yakovlev, put the tax claims at 8 billion rubles and conceded that the firm could be forced to sell off some of its assets to cover them, Kommersant reported March 5.

The tax claims concerned the year 2004-2005 and are being investigated by a Moscow branch of the Federal Tax Service, Kommersant reported.

The ratcheting up of the case against Eldorado comes after federal tax authorities pledged last month to target the country's booming retail sector. The service could not be reached for comment Wednesday.

The Interior Ministry's Kastuyeva could not say why her department was now handling the case.

The same Interior Ministry branch was involved in the joint arrest of Vladimir Nekrasov, head of cosmetics retailer Arbat Prestige, and reputed Mafia kingpin Semyon Mogilevich in late January on charges of tax evasion. Both men are still in custody.

Investigators inside Eldorado's offices Wednesday refused to comment on what was happening, and armed officers present could not say how long the searches were expected to take.

"Who the hell knows?" said one special forces officer as he stood on the front steps of the Eldorado offices, cradling a submachine gun and smoking.

Another officer, also gripping an automatic weapon, muttered a terse "no comment" in English before blocking the main entrance.

At one point, officers could be seen carrying a large sledgehammer and crowbar into the building.

The officers had arrived at the retailer's headquarters on Polkovaya Ulitsa in north Moscow without warning at about 10.30 a.m. in two gray-blue Ford Transit vans and moved right past building security.

By late afternoon the Interior Ministry troops seemed to have left, leaving only investigators in suits congregating in the company's reception area.

Eldorado employees leaving the offices at around 11.30 a.m. said they were in the dark over the reason for the searches and that they had been told to go home for the day.

"It's pretty easy to guess that this has something to do with the tax claims," said a member of Eldorado's middle management, refusing to give his name.

"I will be back at work tomorrow though, I hope," he said.

Buses were quickly brought in to ferry the Eldorado employees to the nearest metro stations. No one could say who had organized the buses.

"We are all going for a trip out of town," said one male employee brusquely. "Yesterday was April Fools' Day, and today we've decided to take a trip to the countryside to enjoy the sunshine."

Other Eldorado employees seemed to treat the searches and armed troops with a sense of levity.

"I wish you could come everyday so that we got more holidays," said one young female employee to a uniformed officer as he sat slumped on a sofa in the reception with his balaclava rolled up above his ears.