Prosecutor Arrested in Appliance Scam Case

A retired senior city prosecutor has been arrested in a multimillion-dollar fraud case that sheds light on the often bitter, opaque rivalries among law enforcement officials.

Valery Samoilov, former chief prosecutor of Moscow's northwestern district, stands accused of collaborating with Interior Ministry officials, businessmen and fellow prosecutors to sell around $10 million worth of home appliances confiscated in fabricated smuggling cases, the Investigative Committee said in a statement this week.

Samoilov, 50, was arrested in a local hospital on April 24 and charged with fraud, abuse of office and participation in a criminal group, the Investigative Committee said. He was the 17th suspect arrested in the case, it said.

Eleven suspects, including Samoilov, remain under arrest, while six others have been released from custody on the condition that they not leave the city.

Boris Nersesyan, another former city prosecutor implicated in the case, has fled the country.

Investigators say Samoilov and other officials fabricated evidence against three Moscow companies importing appliances to seize their inventories.

After declaring that the seized goods were damaged, the suspects sold the wares to collaborating private firms at a fraction of their market value as determined by the Federal Property Fund, investigators say.

The appliances were then sold by the companies at actual market value, with the suspects pocketing the illicit profits, investigators charge.

Calls to the office of Samoilov's lawyer, Vera Aseyeva, went unanswered Tuesday.

Authorities have looked into purportedly shady confiscations and subsequent resale of goods in recent years.

In 2006, Interior Ministry officials seized 167,500 Motorola cell phones worth some $20 million from Yevroset, the country's largest mobile phone retailer, claiming they had been illegally imported.

Six months later, authorities returned 116,500 handsets to Yevroset, while the remaining devices were destroyed after being damaged, according to Motorola.

But City Prosecutor's Office spokeswoman Svetlana Petrenko told the New York Times in October 2006 that an investigation had been opened into whether 30,000 of the handsets slated to be destroyed were sold on the black market at knockdown prices.

It was unclear what became of the investigation, and repeated calls to Petrenko for comment went unanswered Tuesday.

The case against Samoilov and his suspected accomplices also highlights the behind-the-scenes tussling between law enforcement officials over power, influence and, some say, money.

In June, Nersesyan, the former prosecutor accused in the case who fled the country, wrote a letter to Prosecutor General Yury Chaika in which he accused investigators in the fraud case of providing criminal protection to the companies whose home appliances had been confiscated.

The letter was leaked to the media, but no evidence of criminal behavior was found in an internal investigation, Kommersant reported Tuesday.