Prosecutors in Russia have formally charged Baring Vostok founder Michael Calvey with fraud. The US national and investor was arrested last week with three other Baring Vostok executives on allegations of embezzlement and large-scale fraud involving around US$38.17 million and a Russian Bank partly owned by Baring Vostok.
Baring Vostok is one of the largest investment firms in Russia with over US$3.7 billion in committed capital. The firm also owns a 50 percent stake of Vostochny Express Bank, which has been the target of the Russian investigation against Calvey. The 51-year-old investor along with his executives is accused of embezzling money from the bank and running a large-scale fraud scheme.
According to local news reports, Calvey could be facing up to 10 years in a Russian prison and a US$15,000 fine over his alleged embezzlement and his participation in the alleged fraud scheme. Calvey and his lawyers have denied all the allegations against him. The businessman also mentioned in an interview that the charges may have been fabricated and could have stemmed from an ongoing dispute he has with shareholders.
The United States' embassy in Moscow has reportedly also been denied access to Calvey, with diplomats reportedly being barred from visiting. The embassy has since released an official statement demanding that they are allowed access immediately.
Reports have revealed that Calvey may have been mistreated during his detention. Some reports are claiming that he was placed in a cell with seven other people held over non-economic crimes, which is clearly against prison regulations. Calvey is also reportedly suffering from back pains and is in need of medical attention.
The Russian Direct Investment Fund (RDIF) has spoken out in response to Calvey's detention and has requested that he be placed under house arrest instead. The move is believed to have been partly caused by concerns from other foreign investors in Russia, who are starting to worry about their safety amidst the ongoing tensions. Calvey is currently being held at a pre-trial detention facility in Moscow.
Calvey's lawyers have submitted a request to have their client out on a US$75,000 bail, but the request was denied. Prosecutors insisted that Calvey was a flight risk and that it was absolutely necessary to have him detained and under constant supervision. Calvey is scheduled to appear in court next week to appeal his arrest. His lawyers have also vowed to challenge the court's decision to have him detained in the pre-trial facility.
