Sergei Makhlai is suspected of corruption for tax evasion purposes

Sergei Makhlai is suspected of corruption for tax evasion purposes
The main owner of Togliattiazot PJSC, a US citizen Sergei Makhlay, convicted in absentia for especially large-scale fraud last year in July, became a defendant in another criminal case. Now Makhlay, as well as the former head of Togliattichembank Alexander Popov and the former head of the ToAZ security service Oleg Antoshin, are suspected of attempting to bribe on an especially large scale (part 3 of article 30 and part 5 of article 291 of the Criminal Code of the Russian Federation). And they tried bribe the judges of the Supreme Court of the Russian Federation in exchange for the cancellation of the decision to recover unpaid taxes from the enterprise.

Popov and Makhlay are already being held as suspects in a criminal case about organizing and participating in a criminal community (part 3 of article 210 of the Criminal Code of the Russian Federation). In addition, they are suspects in a case of especially large-scale fraud (Part 4 of Article 159 of the Criminal Code of the Russian Federation) and large tax evasion (Part 2 of Article 199 of the Criminal Code of the Russian Federation). However, if Sergei Makhlay has not appeared in Russia for quite a long time, Alexander Popov did not have time to hide abroad: the banker was arrested last year on May 31 at Vnukovo Airport, trying to escape to Georgia. Since then, the Basmanny District Court of Moscow has extended Popov’s arrest several times, and the last one it was on January 28.


The interest of law enforcement agencies in Popov and his bank is not accidental. According to the investigation, certain illegal schemes for the withdrawal of funds from ToAZ with the participation of Togliattichembank allowed not to pay taxes in colossal amounts, and now the tax authorities are to collect them in court. According to the current information, only in 2008-2013 the total amount of taxes confirmed by all authorities to ToAZ exceeded 3.5 billion rubles. The decisions of the arbitration courts on ToAZ taxes were important for the criminal case on fraud, which was rendered last July, as the fact of understating the profits of the enterprise for many years has been repeatedly proved and confirmed by all courts.


A new corruption case could become fatal for the ToAZ-controlling group, and mostly for the main controlling shareholder of ToAZ, Sergey Makhlay. And it is highly likely that this criminal case will not be the last one.


The unsuccessful attempt to bribe the Supreme Court, revealed by the investigation, is a big step forward in unraveling the chain of corruption-related crimes, when the Makhlays and their accomplices managed to plunder ToAZ, withdraw profit and its most liquid assets and get away with it. It is safe to assume that in the career of the Makhlays it is not the first attempt to give a bribe to representatives of the court, state authorities or law enforcement agencies, and not all of them ended unsuccessfully.


Corruption has accompanied the Makhlays administration at ToAZ since the time when the former “red director” Vladimir Makhlay, father of Sergei Makhlay, managed to “convince” officials to allow the privatization of a huge enterprise according to a scheme designed for small firms. Back in 1998, in the article named “Scum”  “Rossiyskaya Gazeta” newspaper wrote about illegal schemes for withdrawing profits from ToAZ, which caused enormous economic damage both to the plant itself and to the entire chemical industry. Since then, tax, supervisory and law enforcement authorities have repeatedly initiated administrative and criminal cases against the Makhlay family, but all of them at different stages fell apart due to the active and widespread corruption activities of the ToAZ owners.


However, the real scale of the corruption "octopus" of the Makhlays became clear only after the Investigative Committee of the Russian Federation opened a criminal case of fraud on a particularly large scale in 2012, which was rendered last July. People of big names and high positions, who were neither connected with justice, nor Togliatti, or the chemical industry, suddenly started demanding a complete cessation of investigation into fugitive oligarchs, and that really leads to certain thoughts about selfish motives on their part. Among them, for example, are an ex-senator from Mari El republic, deputies of the Russian State Duma, director of the Center for Political Information, popular "people's economist”, the head of the Institute for Corruption Problems, and even an expert in conspiracy studies. A special role in the Makhlays’ corruption network was played by a former senior diplomat Sergei Ordzhonikidze. He has been a member of the board of directors of ToAZ for several years, and when Sergei Makhlay was removed from the chairmanship of the council, he was replaced by the son of Ordzhonikidze, Peter.


By the way, according to reports, Peter Ordzonikidze took an active part in the search for mediators to transfer bribes to judges of the Supreme Court, participated in all negotiations with mediators, and thus was probably also an accomplice in this crime.


The Makhlays’ agents could periodically be found in Russian courts. So, when the tax authorities charged ToAZ unpaid taxes, the judge of the Federal Arbitration Court of the Moscow District V.A. Cherpukhina cancelled this decision. Later the taxes were still recovered from ToAZ, and for Judge Cherpukhina this story was one of the reasons for dismissal with a grand scandal. And when the investigators tried to satisfy the request for the arrest of the general director of ToAZ Korolev, the Nizhny Novgorod Regional Court represented by Judge M.V. Yurin refused to do so. A strange decision caused bewilderment among Yurin’s colleagues and was subsequently canceled, but by that time Korolev managed to hide abroad, where he stays up to now. And Judge Yurin was demoted and is now considering minor administrative cases in a district court.


Extensive corruption ties helped the Makhlays not only to land on their feet themselves, but also to organize contract criminal prosecutions of their opponents. Three years ago, the Krasnoglinsky District Court of Samara sentenced Yevgeny Sedykin, a 73-year-old ToAZ minority shareholder, who has been under house arrest since November 2016. A pensioner, whom the Makhlays had once taken a large stake in ToAZ from, tried to change the management of the plant, and the Makhlays could not forgive that. Sergei Makhlay personally authorized the operation to convict Sedykin a real prison sentence. The mission was entrusted to the lawyer Denis Simachev. At the first stage, he managed to bribe a notary, who withdrew her signature from the certified documents of Sedykin, and immediately made them "false." Then he agreed with the local leadership of the Investigation Committee of Russian Federation and judge Lyasyan Giniyatullina to institute criminal proceedings and later about conviction and the real prison sentence for the pensioner. And only the sluggishness of Simachev, who did not manage to transfer the entire amount to the judge, saved Sedykin from prison: he was found guilty, but escaped with a suspended sentence.


For many years, the other sphere of the Makhlays corruption activity was the “resolution of issues” with local supervisory authorities - the Federal Service for Supervision in the Sphere of Nature (Rosprirodnadzor) and Federal Service Administration for Ecological, Technological and Nuclear Supervision (Rostekhnadzor). This work was supervised by the Deputy General Director of Tolyattiazot Corporation CJSC, deputy of the Togliatti City Council Viktor Kazachkov. Due to his efforts, these departments haven’t noticed numerous violations of environmental and industrial safety laws for years. And the former employee of ToAZ Raisya Abdrakhmanova, who was introduced into the local Rostekhnadzor and who worked closely with Kazachkov, helped to resolve any issues: agreed on fake audit reports, signed false industrial safety examinations, etc. This was reported in 2019 by many media.


In a word, the business of Sergey Makhlay for many years has been based on the fact that it’s easier to pay to the right person rather than to pay taxes honestly or to maintain the safe operation of equipment, and not to allow violations of administrative and criminal laws. In an emergency case, as Makhlay probably believed, some Popov would be arrested, but he personally wouldn’t face anything in the USA. Actually, Makhlay has forgotten about the fact that in the USA it is customary to severely punish its corrupt officials, even if they’ve committed their darkest deeds abroad. Back in 1977, five years after the sensational scandal with Watergate, the Foreign Corrupt Practices Act was adopted there, which has extraterritorial effect, i.e. its jurisdiction extends beyond the United States. Under the law, US citizens that have been found guilty of corruption abroad may face fines of up to five million dollars, as well as imprisonment for up to 20 years. Undoubtedly, the US government will be aware of the corruption affairs of the Makhlays family only too well.


Also, Makhlay should not forget about the way tax evaders are treated in his new homeland ot the fact that way more legendary and resourceful figures, than Makhlay, got caught by this. And sooner or later the US Internal Revenue Service will pay attention to the fact that the American citizen Makhlay, also known as Serge Makligh and George Mack, have registered his American companies in the Caribbean, and therefore does not declare the income received from ToAZ.


Thus, Sergei Makhlay quite soon may face a chance to spend the next 20 years or more in an American prison. Perhaps then he will think about the fact that it was better to work honestly from the very beginning, and not to commit crimes in one country and try to hide in another.


In addition, Sergey Makhlay’s trobleshooters, such as Simachev, Popov, Kazachkov, and others, who distribute bribes to judges, officials, and supervisory authorities, should double think about it. Sooner or later, the truth about their corrupt activities will certainly be revealed and they will have to answer to Russian law. According to experts, the best solution for these people would be to contact the law enforcement agencies and honestly talk about the committed corruption actions before it’s too late. Thus, they could be exempted from criminal prosecution in accordance with the note to paragraph 5 of Article 291 of the Criminal Code of the Russian Federation, which states that a person who has committed a bribe is exempted from criminal liability if he voluntarily reports this to law enforcement authorities.