Russian billionaire businessman Ziyavudin Magomedov, a co-owner of the Summa investment group, was arrested on Saturday on charges of misappropriating millions in state funds designed for infrastructure and energy projects.
Magomedov was arrested in Moscow together with his brother and Summa co-owner, Magomed Magomedov, and the head of one of the companies involved in Summa, Artur Maksidov.
The businessmen brothers are suspected of theft by fraud and embezzlement while acting as part of an organized crime group. The prosecution believes the stolen money, some 2.5 billion rubles ($44 million), have been transferred from Russia to be deposited in offshore accounts controlled by Magomedov. The exact whereabouts of the money is unknown, the prosecutor's office admitted on Saturday.
Magomedov, who has stakes in construction, logistics, transportation and energy companies through his multi-profile Summa group, landed the sixty-third spot on the Forbes' list of Russia's richest businessmen. His personal assets are estimated to be worth $1.4 billion. His brother, Magomed Magomedov, has an estimated net worth of $0.45 billion.
In the run-up to the arrests, extensive searches were carried out in 25 Russian regions, including in Moscow, the Russian Interior Ministry reported.
Russian Kommersant daily reported that investigations were also conducted into the embezzlement of some 752 million rubles ($13.2 million) from the construction of a football stadium in Russia's exclave of Kaliningrad, which was commissioned for the upcoming FIFA World Cup in Russia
At the pre-trial hearing in Moscow's Tverskoy District Court, Magomedov pleaded not guilty, claiming that the case against him "does not stand up to scrutiny." The court ordered Magomedov and his brother be to kept in custody for two months, until May 30, thus refusing an unprecedentedly high bail, which amounted to the total sum of losses the brothers are accused of causing the state budget – 2.5 billion rubles. The investigators revealed that Magomedov had booked tickets to Miami for the following day and might flee the prosecution, as he has a private jet at his disposal. Magomedov insisted that he planned to undergo a medical procedure in the US and intended to return to Moscow by April 10.
The investigation said at least five other people face charges in what is slated to become one of the most high-profile embezzlement investigations in Russia in recent years. Two of them are on the run in the United Arab Emirates and have been arrested in absentia.
Summa's group actives include a stake in the Novorossiysk Commercial Sea Port (JSC), Russia's largest commercial seaport operator, which it co-owns with Russian state-funded oil company Transneft and FESCO Transportation Group.
Besides his investment in projects in Russia, Magomedov sits on the executive board of the Los Angeles-based Virgin Hyperloop One, a futuristic transportation startup chaired by Richard Branson.