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. Last Updated: 07/27/2016

A Crucial Verdict in Tri Kita Dispute

In a crucial ruling, a Moscow court on Wednesday cleared two senior customs officials of wrongdoing in a furniture investigation at the Tri Kita superstore that has stirred up parliamentary protests and might have led to the murder of a star witness last week.

Customs officials Alexander Volkov and Marat Faizulin were charged with abuse of office for confiscating $6 million in furniture from Tri Kita, closing the store, threatening to close sister store Grand and then agreeing to back off and return the furniture for a payment of $8 million in customs duties in 2000. The two officials said Tri Kita's suppliers had evaded import duties.

Dorogomilovsky district court Judge Sergei Solovyov ruled Wednesday that insufficient evidence had been presented during the seven-month trial to convict Volkov and Faizulin.

Prosecutor Svetlana Degtyaryova, who had demanded that the defendants each be sentenced to four years in prison, said she would appeal.

The case was brought to court by Tri Kita and Grand managers Sergei Zuyev and Andrei Latushkin.

Faizulin and Volkov, who had been suspended from their jobs and had to give a written promise not to leave town, stood with their lawyers on one side of the small courtroom, while the plaintiffs, Zuyev and Latushkin, stood just meters away on the other. Reporters and cameramen packed the room to hear the ruling.

Solovyov read the verdict in a very faint voice, never lifting his eyes during the more than hour it took him to read it.

The Moskovsky Komsomolets tabloid reported Wednesday that Solovyov had received a unsigned letter threatening him and his son with bodily harm if he made "an inappropriate decision." The letter did not elaborate, the newspaper said.

In their complaint, Latushkin and Zuyev said the confiscated furniture did not belong to them but to their suppliers and that they owed nothing to customs.

They said, however, that they agreed to pay $5 million of the customs duties soon after the confiscation in August 2000, when Volkov and Faizulin suggested that they make the downpayment or see Grand closed.

In October of that year, they paid a first installment of $2.5 million and took possession of the furniture.

But Volkov then demanded an immediate payment of another $3 million, the complaint says.

The furniture traders filed the complaint in December 2000, accusing the customs officers of abuse of office. They also demanded $3 million from customs for furniture damaged during the confiscation.

Faizulin and Volkov denied any guilt during the court proceedings, saying they had not ordered the confiscation of the furniture. Other customs officials testified that they had given the order.

The defendants also said they had not initiated contact with the plaintiffs and that the businessmen themselves had come to customs trying to resolve the dispute.

Sergei Pereverzev, Zuyev's former business partner and the head of the Association of Furniture Importers, testified in court in February that Zuyev had asked him to help arrange a meeting with high-ranking customs officials.

Pereverzev was shot dead in an apparent contract hit last week while being treated in a hospital for injuries sustained in a traffic accident.

Pereverzev apparently knew that his life was at risk, and he told Moskovsky Komsomolets in April that if he was killed, the order would be from Zuyev.

Investigators questioned Zuyev about the death Tuesday, the newspaper said.

In Wednesday's verdict, the judge cited a letter sent by Federal Security Service head Nikolai Patrushev to Prime Minister Mikhail Kasyanov last year that bluntly calls Tri Kita a criminal organization.

The court found that Faizulin and Volkov had acted within the framework of the law, Solovyov said. He dismissed Tri Kita's $3 million claim for damaged furniture.

When he finished reading, a group of customs officers attending the verdict burst into applause.

Zuyev, who wore a black suit, black shirt and a red tie, was clearly infuriated by the decision.

"What is this? I have a paper from Loskutov stating we are not guilty of anything, and now we have this verdict," he told the prosecutor, Degtyaryova.

President Vladimir Putin appointed Vladimir Loskutov, a prosecutor from St. Petersburg, to head an investigation into the Tri Kita case in December 2001. He stepped into the fray under media pressure.

Loskutov's investigation is still dragging on. The Duma tried to spur it along in March last year by urging General Prosecutor Vladimir Ustinov to personally head up the probe.

Outside the courtroom, Zuyev said he was not surprised by the verdict.

"State officials were being tried by a state court, and they could never be punished," he said.

Volkov's and Faizulin's defense lawyer, Alexander Gofshtein, retorted: "For me, it is important that the law protected state officials protecting state interests."

Zuyev said the verdict contradicted an earlier court decision.

"Look, this verdict says we are innocent, and today's verdict says we are guilty," he said, producing a copy of a ruling by the Moscow regional arbitration court on May 28.

That court ruled that customs should return $500,000 of the $2.5 million he paid customs. The court in 2001 ordered customs to return the other $2 million, but the money has not yet been returned.

In the Moscow court, Zuyev and Latushkin testified that they were not connected to the suppliers accused by customs of fraud and had only rented space to them. Customs said the suppliers evaded millions of dollars in duties by forging documents to show the furniture weighed less than it actually did.

Zuyev said he agreed to pay off some of the duties only because he feared that customs would ruin his own business.

Pavel Zaitsev, an Interior Ministry official who has led a probe of his own into the suppliers, said they were all bogus firms operated by Tri Kita management.