Storchak Formally Charged With Fraud, Abuse of Office

Deputy Finance Minister Sergei Storchak has been charged with attempted fraud and abuse of office, the Investigative Committee of the Prosecutor General's Office said in a statement Monday.

The charges against Storchak, who was responsible for overseeing negotiations with debtor countries for the Foreign Ministry prior to his arrest on Nov. 15, stem from allegations that he and three accomplices attempted to defraud the federal budget out of $43.4 million.

Investigators say Storchak, Sodexim head Viktor Zakharov and two bankers from Interregional Investment Bank channeled money to Sodexim disguised as compensation for losses the company suffered because of Russia's decision to write off Algerian debt.

If convicted, Storchak faces a prison sentence of up to 10 years.

Zakharov and Vadim Volkov, president of Interregional Investment Bank, were also charged. The second official from the bank, Igor Kruglyakov, was released for medical reasons last month after promising not to leave Moscow.

The Storchak case has been widely seen as the byproduct of a government power struggle between the so-called St. Petersburg economists, led by Finance Minster Alexei Kudrin, and the siloviki — officials within or with close ties to security and law enforcement agencies.

Storchak's lawyer, Andrei Romashov, said the final version of the charges filed did not specify a figure for the amount of funds allegedly stolen.

"How can they charge him with fraud without these figures," he said.