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. Last Updated: 07/27/2016

Construction Bosses Charged With Fraud

Two groups of would-be owners of apartments in unfinished buildings saw developments in their case last week, as authorities promised to complete the buildings of one construction company and arrested the heads of another.

The Moscow region prosecutor's office announced on Dec. 13 that Igor Segeda, director of Print.Kapital, and Valery Mustafin, the former director of the construction company, had been charged with large-scale fraud in connection with the illegal construction of the Zvezda Rossii apartment complex in the northern suburb of Khimki. The prosecutor's office estimated that 1,500 people would be deemed injured parties in the criminal case. Segeda and Mustafin were arrested on Dec. 6 and remained custody.

The Zvezda Rossii initiative group has issued a statement saying it meant the "end of agonizing suspense" and that it hoped for a speedy resumption of construction under a new company.

The arrests came after a series of protests in Moscow and the surrounding region in recent months, held by people who say they paid for apartments in buildings under construction but never got them.

Last week, Alexander Kosovan, first deputy head of construction operations at Moscow City Hall, met with the people whose apartments were to be built by Masterok, a construction company whose management was charged with fraud in November, and informed them that the city had appointed four companies to finish their buildings.

However, Anastasia Antonycheva, press secretary of the Masterok initiative group, said the group had questions about the companies named to finish the work. She said that the group had a list of construction companies against which there had been complaints, and that one of the companies named by Kosovan was in the list.

She also complained that the group was told to make its own agreements with the new builders instead of receiving firm guarantees from the city, including a construction deadline.

She also said that Kosovan had told the group that the new law on the construction of apartment buildings, which is designed to protect consumer rights and came into effect in April, would not cover their contracts with new builders.

A spokesman for the city construction authorities, however, said the new builders were reliable and had worked in Moscow for many years. Two of the buildings will be completed in 2007 and the rest in 2006, he said.

Apartment buyers from Moscow and the Moscow region who cannot move into their apartments because of legal complications or delayed construction are planning to block Ryazansky Prospekt in protest at 11 a.m. on Dec. 21, the united co-investor committee has announced. Several thousand people are expected to attend and appeal to President Vladimir Putin to address the issue of construction fraud.