Russian Lawyer Who Fought Corruption Dies in Prison

A Russian tax lawyer working for an investment firm that railed against government corruption died in a Moscow detention center, prompting the head of the company he was representing to charge today that he was "slowly killed through mistreatment in prison."

Sergei Magnitsky, a 37-year-old father of two, died from heart failure and toxic shock Monday night, Russia's Interior Ministry announced Tuesday.

In September, Magnitsky wrote that he had developed pancreatitis and other ailments that were being ignored by prison officials while he was held in "disgusting" conditions.

The lawyer had been arrested nearly a year ago, accused of helping the London-based investment company Hermitage Capital, evade taxes, a charge Hermitage's CEO calls absurd. Hermitage had once been the biggest investor in the Russian stock market, but gotten into hot water with the Russian authorities after alleging widespread corruption.

"They took a perfectly healthy, vital 37-year-old man, and subjected him to such horrific conditions that 11 months later he died in their custody," Hermitage CEO William Browder told ABC News.

"This is not about business, this is about the complete breakdown of the justice system," said Browder. "If you can have an innocent man on trumped-up charges taken hostage and then slowly killed through mistreatment in prison. It's medieval."

Authorities would have been forced to indict or release Magnitsky next week because Russian law does not allow anyone to be kept in pre-trial detentiion for more than a year.

"Which raises all sorts of suspicions about the timing of his death," says Browder. "It's clear the investigators were being forced into a very place where they had a very flimsy case."

In late 2005, Browder was barred from entering Russia after which Hermitage started to divest, leaving behind shell companies with no assets. In June 2007, Hermitage's offices were raided, along with the offices of their law firm Firestone Duncan, where Magnitsky worked.

Magnitsky Testified About Police Corruption

Browder says the policemen who led the raids used seized documents to reregister the shell companies and then claimed a tax rebate of $230 million. The alleged theft by the police was only discovered three months later in an investigation by the firm's lawyers, including Magnitsky.

Shortly after, Hermitage was accused of evading $17.4 million in taxes. Hermitage told its lawyers to leave the country, which several did. Magnitsky stayed behind, testifying against the police officers that spearheaded the $230 million plot.

He was arrested a month after his testimony, held without bail for aiding in the 2001 tax charge that Browder not only vehemently denies, but says Magnitsky couldn't have been a part of because he wasn't involved with the company in question.

"It's totally absurd from any independent vantage point," said Browder. "[Magnitsky] had no formal role to be paying the taxes or evading them. They just needed some pretext to put him in jail. It didn't matter for them what it was."

He was held without bail, told that he would be released if he confessed to being complicit with Browder's alleged crimes, says the Hermitage CEO. Instead, Magnitsky filed numerous legal complaints with the authorities in vain attempts to secure his release.

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