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. Last Updated: 07/27/2016

4 Convicted in $180M Diamond Fraud

A Moscow court on Thursday convicted four Russians of using a U.S.-based company to steal about $180 million worth of diamonds and gold from the Russian government in the early 1990s, ending years of probes into the embarrassing episode.

The Golden ADA company, based in San Francisco, California, was established with the Russian government in 1992 to polish rough-cut diamonds and return them to Moscow for sale. Few, if any, made it back, according to the government.

In what prosecutors allege was a bold corruption scheme that took advantage of the chaos in the wake of the Soviet Union's collapse, executives sold the gems and bought yachts, a business jet, a mansion and other real estate in California. The company also showered California politicians with money.

Judges sentenced Andrei Kozlyonok, a co-founder of Golden ADA, to six years in prison for fraud and fined him 54 million rubles ($1.8 million), Interfax and television stations reported.

Time served since his 1998 arrest in Greece will count toward his sentence, the reports said.

The court also convicted Nikolai Fyodorov, head of a separate company, Star of the Urals, of being an accessory to Kozlyonok's fraud and sentenced him to three and half years in prison.

Defense lawyer Grigory Zozulya said after the verdict that he will file an appeal, RTR television reported. He had earlier argued that prosecutors showed no evidence of a theft taking place on Russian territory and asked for the case to be dismissed.

Two government officials were also convicted of abuse of power, but were freed in the courtroom because they qualified for an amnesty.

Yevgeny Bychkov, former head of the State Committee for Metals and Gems, was set free because he had previously received a state award, Interfax said.

The report did not say why Igor Moskovsky, a former finance official, qualified for the amnesty.

Such convictions of government officials on corruption charges, particular such senior ones, are quite rare in Russia.

For many Russians, the case reflected long-held suspicions that government officials have plundered the country's vast natural resources.

Suspicions in the case first arose in 1996.

During the lengthy, closed-door trial two former prime ministers and other top officials testified.

The Finance Ministry had also sued the four for $187 million in damages to the government, but judges Thursday referred this case to a civil court, Interfax said.