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. Last Updated: 07/27/2016

Brazil Case Raises the Stakes for Berezovsky

ReutersArgentine striker Tevez laughing during national team practice on Friday.
Brazil has issued an arrest warrant for Boris Berezovsky on suspicion of money laundering at Sao Paulo football club Corinthians, a step that raises the stakes in the billionaire's standoff with the Kremlin.

The warrant piles more pressure on Berezovsky, whose trial in absentia on fraud charges began in Moscow last week. Russian prosecutors have also accused him of fomenting a coup.

Berezovsky, who denies wrong doing, on Friday dismissed the Brazilian warrant as "an extension of the Kremlin's politicized campaign" against him.

If sent to face trial in Brazil, Berezovsky could be in danger of being handed over to Russia. Britain and Brazil signed an extradition treaty in 1997, and a Russian-Brazilian extradition treaty came into force in January.

A Brazilian federal judge, Fausto Martin de Sanctis, in Sao Paulo on Thursday ruled to freeze the football club's bank accounts and said he would ask for an Interpol arrest warrant for Berezovsky and two other suspects, including Kia Joorabchian, a one-time business associate of Berezovsky's who briefly owned Kommersant in 1999.

Brazilian authorities have accused Berezovsky of laundering money by bankrolling the management group Media Sports Investment, or MSI, which bought control of Corinthians in 2004. Joorabchian ran MSI, registered on the British Virgin Islands, until August, but Brazilian authorities believe that Berezovsky provided the funding.

"MSI belongs and has always belonged to the accused, Boris Berezovsky," Brazilian court documents claim, the Financial Times reported Friday. The documents were based on taped telephone conversations over the past 18 months, the newspaper said.

MSI and Corinthians, which also faces accusations of match fixing dating back to the 2004 to 2005 football season, denied the charges Thursday and said they obeyed all laws, Reuters reported. Berezovsky last year denied he had any links to MSI.

Two or three European countries would follow Brazil's lead in the near future, a Moscow source said, Interfax reported. The Brazilian warrant was the result of joint work by several countries to fight organized crime, the source said.

"The arrest warrant for Berezovsky that was issued by the Brazilian court is just the first step," the source said. "A number of other countries, which have complaints about the entrepreneur, will take similar measures in the near future."

Igor Tabakov / MT
Boris Berezovsky
The latest allegations against Berezovsky led Russian television newscasts Friday, with extensive reports in afternoon and evening bulletins.

Apart from a statement denouncing the "Brazilian story" as "an extension of the Kremlin's politicized campaign" against him, Berezovsky did not respond to requests for further comment passed to his London office on Friday.

Berezovsky's associate Alex Goldfarb said he believed the charges would have been impossible without the involvement of Russian prosecutors.

The prosecutors had apparently told their Brazilian counterparts that Berezovsky made his money in Russia fraudulently, thus prompting the belief that anything Berezovsky's spent money on should be regarded as an attempt at money laundering, Goldfarb said.

"Berezovsky is not a criminal, but a political and personal foe of [President Vladimir] Putin," Goldfarb said by telephone Friday from New York. "President Putin uses his government's resources to get Berezovsky in every country."

Berezovsky's lawyer in Moscow, Andrei Borovkov, downplayed the impact of the Brazilian arrest warrant. "Britain will hardly extradite Berezovsky to Brazil because he is protected by his status as a political refugee," he said by telephone Friday. "I think this is all in the area of theory."

Berezovsky's longtime business partner Badri Patarkatsishvili told Britain's Observer newspaper in August that they had "a wonderful football club in Brazil: Corinthians. We have invested in the Brazil team with Boris Berezovsky."

Kia Joorabchian
Despite denying links to MSI, Berezovsky offered to invest $50 million in the construction of a new stadium for Corinthians in 2005. Brazilian prosecutors questioned Berezovsky at a Sao Paulo airport for several hours in May 2006 in connection with their investigation into MSI. Four months later, he said he had no interest in football assets.

MSI acquired control of Corinthians under a 10-year deal that gave the company 51 percent of the club's profits in return for paying off its debts and investing in new players. After MSI spent millions of dollars on the club, Sao Paolo prosecutors opened an inquiry into the origin of the money.

"Who would invest this much money in a soccer team that has been in the red for years? And why?" prosecutor Jose Reinaldo Guimaraes Carneiro said when he started his investigation in February 2005, The Associated Press reported.

Later that year, Carneiro said the inquiry was looking into possible involvement by Berezovsky in money laundering. "There is enough circumstantial evidence indicating that the MSI-Corinthians partnership is being used for the laundering of money, most of which was received from Boris Berezovsky, who is wanted for crimes committed against the Russian financial system," Carneiro said in the summary of a 15-page report released after the investigation, the AP said.

Joorabchian, an Iranian-born British citizen who bought Kommersant in July 1999 before ceding it to Berezovsky a month later, has said he quit MSI in August 2006.

The timing of the Brazilian warrant could hardly come at a worse time for Berezovsky. Apart from the Russian cases against him, fresh allegations about links with Joorabchian could receive huge publicity, as Joorabchian's name has been splashed across the sports pages of British newspapers in recent days in connection with the controversial transfer of former Corinthians player Carlos Tevez from London club West Ham to Manchester United.

Last summer Joorabchian brokered the transfer of Tevez and fellow Argentine international Javier Mascherano from Corinthians to West Ham. The deal, which saw MSI retain the rights to the players, was eventually deemed be in breach of English Premier League rules and led to West Ham being fined ?5.5 million ($11.2 million).

Now Joorabchian, acting as Tevez's agent, is attempting to complete the player's transfer to league champion Manchester United, despite objections from the Premier League over the player's registration.

Berezovsky has previously acknowledged how potent an issue football can be in Britain, and has said he advised former associate Roman Abramovich against buying Chelsea Football Club in 2003.

"Football in England is an immense social and political tool," Berezovsky said in an interview last September.