MOSCOW -- Russian prosecutors said Friday they will seek a 14-year prison sentence for onetime oil tycoon Mikhail Khodorkovsky, who is currently on trial for embezzlement and money laundering while already in his seventh year of incarceration for a tax-evasion conviction -- all charges he has vehemently denied.
Khodorkovsky, once the richest man in Russia and a personal foe of Premier Vladimir Putin, is widely seen as the nation's leading political prisoner. The current trial of the head of the once-massive Yukos oil has been regarded by some observers as a referendum on whether Russia has changed since Putin was succeeded in the presidency by Dmitry Medvedev, a lawyer who in the past complained about judicial corruption and manipulation that he described as "legal nihilism."
During the current trial, the prosecution has insisted that Khodorkovsky and his partner Platon Lebedev embezzled more than $27.5 billion of oil from three production companies they controlled.
According to the prosecution, the pair set up front companies in Russian rural tax havens that bought the oil from the production companies at significantly reduced prices and then channeled the purchased oil to refineries in Russia and off-shore companies abroad which sold it at twice the initial purchase price or more.
"All the profits would accumulate in foreign offshore companies which became profit centers as the production companies in Russia accumulated losses," read prosecutor Valery Lakhtin. "Thus the rights of their shareholders and the rights of the state were violated as the taxes and dividends wouldn't come forth."
The defense considers the allegations as absurd and the legal action a form of selective punishment on political grounds.
In the dead silence that fell after the prosecution ended its presentation, Khodorkovsky, dressed in a black tweed jacket and a black shirt, his face pale, appeared to take it stoically. "It is normal," he said, a smile on his lips, his eyes pensive and sad, as he was led out of the courtroom, chained to the wrist of his guard.
"We didn't expect anything good from the prosecution but what they ask for is way beyond any reason," his lawyer, Natalya Terekhova, said in an interview to the Los Angeles Times.
The defense argued the transfer prices were within accepted norms, and Yukos, as a vertically integrated company, created such transfer mechanisms legally.
"The position of the prosecutors is also self-contradictory," said another Khodorkovsky lawyer, Karina Moskalenko, in an interview with the Times. "Khodorkovsky is now serving a sentence for tax evasion and if they are asserting that he stole all the oil his company produced what did he go to prison the first time for if there was nothing to be taxed?"
Khodorkovsky and Lebedev have already served most of their eight year sentences for fraud and tax evasion. Khodorkovsky was arrested in 2003, found guilty in 2005 and sent off to a labor colony in far eastern Siberia from where he was shipped back to the Matrosskaya Tishina prison in Moscow for the current trial.
In the meantime, Yukos with an estimated value of $40 billion in 2003, went bankrupt and was sold to a front company that soon handed it to the state-controlled Rosneft company headed by a friend and close ally of Putin.
Putin launched the prosection of Khodorkovsky after the stubborn oligarch, who supported opposition parties and funded human rights institutions, fell out of favor with the Kremlin, said Dmitry Oreshkin, an independent political analyst.
According to the Levada polling center, a recent survey showed that only 13 percent of Russians believe Khodorkovsky is guilty of the current charges. Back in February, the number was 29 percent.
The prosecutors implied that their 14-year request includes time Khodorkovsky has already served awaiting his second trial, so that as a maximum, he would remain behind bars one more year for the initial conviction and another 10 years if found guilty on the new charges.
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