Alexey Shmatko v The Russian Federation
| Jurisdiction | England & Wales |
| Judge | Lord Justice Bean |
| Judgment Date | 19 December 2018 |
| Neutral Citation | [2018] EWHC 3534 (Admin) |
| Docket Number | Case No: CO/5950/2017 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 19 December 2018 |
[2018] EWHC 3534 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Bean
Mr Justice Dove
Case No: CO/5950/2017
Mark Summers QC and Adam Payter (instructed by Kingsley Napley) for the Appellant
Peter Caldwell and Nicholas Hearn (instructed by CPS Extradition Unit) for the Respondent
Hearing dates: 20–21 November 2018
Judgment Approved
This is the judgment of the court, to which we have both contributed. It is given on an appeal from Senior District Judge Emma Arbuthnot (“the judge”), who on 23 October 2017 sent the case of Alexey Shmatko to the Secretary of State for him to decide whether Mr Shmatko is to be extradited to the Russian Federation. The request emanates from Penza, which is a rural area of Russia to the south east of Moscow.
Mr Shmatko's case was heard by the judge together with that of Mr Ayk Avdalyan: the accusations against the two men were not factually linked but each of them resisted extradition to Penza on similar grounds. The judge discharged Mr Avdalyan on the grounds that the request for his extradition, though purporting to be made on account of the extradition offence alleged against him, had in fact been made for the purpose of prosecuting him on account of his political opinions. She also found that there were substantial grounds for thinking that Mr Avdalyan might be prejudiced at his trial or punished, detained or restricted in his personal liberty by reason of his political opinions. His extradition was therefore barred under Section 81(a) and (b) of the Extradition Act 2003.
The requesting authority alleges that Mr Shmatko committed three offences of fraud in the years 2004 to 2008. The alleged fraud involved the purported purchase of boilers and their sale to an end user, before claiming back from the Russian tax authorities VAT supposedly paid by the purchaser. The frauds involved at least one alleged co-conspirator who worked in a local tax office and ensured that the VAT refund was paid without investigation.
Mr Shmatko's role was in arranging bank loans for the purported purchase and sale of the boilers. He used a number of intermediary companies, said to be shell companies, which bought and sold boilers. A Mr Mashkov was said to be at the head of the fraud. The requesting authority relied inter alia on a signed confession dated 29 April 2011 made by Mr Shmatko in the presence of one of his lawyers, giving details of how the fraud was organised and the role which he played in it.
The judge, referring to both of the cases before her, described the defence evidence as “voluminous”. Mr Shmatko did not, however, give evidence before the judge. Oral evidence was given on his behalf by Dr Juliet Cohen, a forensic physician, Mr Sergei Golubok, a Russian lawyer, and Dr Connolly, a British expert on corporate raiding or “rent-seeking” by State officials and their associates. Statements were read from Mr Shmatko's father, his wife and Mr Ruslan Bilan, one of his Penza lawyers. The judge also heard evidence on behalf of both requested persons from Professor William Bowring about prisons and the criminal justice system generally. She also heard evidence about prison conditions in Penza from Mr Obukhov, a criminal lawyer practising there and further expert evidence about prison conditions from Dr Alan Mitchell.
The defence case on the facts
“The whole premise of Mr Shmatko's case”, in the words of the judge, was that the allegations arose from corruption in the FSB (the former KGB). In Spring 2008, after the alleged frauds had taken place, he had been introduced by Mr Mashkov to a senior official of the FSB who asked him to employ an FSB security officer. Mr Shmatko fobbed them off over a period of months. There then followed a bogus allegation of assault on a police officer in the presence of Mr Mashkov and of the lawyer Mr Bilan. The appellant alleged that his wife had been told that the prosecution had been “ordered by someone senior”. The judge observed that neither Mr Bilan nor Mrs Shmatko confirms the allegation that a prosecution had been ordered or said to have been ordered by someone senior. The judge found that the appellant “used a perfectly ordinary allegation of assault on a police constable and weaved in a false story that the FSB were behind that prosecution, a story which is unsupported by the people who were at the incident”.
The next phase in the story was the stabbing of Mr Shmatko by Mr Mashkov who was trying to extract money from him and saying that if he didn't pay “them” money he would end up in prison. The judge found that “either the argument was about Mr Mashkov giving evidence against Mr Shmatko in relation to the assault on the police officer or it was a falling out between thieves”. It appears that Mr Mashkov was later imprisoned for his part in the fraud alleged against Mr Shmatko. The watch factory fraud is alleged to have been another example of the fraudulent obtaining of a VAT refund on boilers. Mr Shmatko alleged that he had seen prosecution papers in that matter with a stamp saying “secret” which made it clear to him that Mr Mashkov must have been recruited as an FSB agent. He said that he had discussed this with Mr Bilan, but there was no evidence from Mr Bilan to confirm this. The judge made a number of findings about this matter but it is not necessary for me to set them out in detail.
The allegation of torture
Mr Shmatko said that he was tortured repeatedly in the local remand prison known as SIZO-1 from June to August 2010 before he pleaded guilty to a VAT fraud on 18 August 2010. Much later he was examined by Dr Cohen who found that his scars were highly consistent with his account of what had happened, particularly on 14 July 2010 when he said he had refused to sign a confession. The judge accepted that Dr Cohen was a very experienced professional and expert but found it significant that Dr Cohen had not read the statements which were before the judge. The judge held that she was in a better position than Dr Cohen had been to assess the credibility of Mr Shmatko's account. She observed that there was no corroboration of the appellant's account of his injuries from his lawyer even though the two men were meeting two or three times a week during Mr Shmatko's period in custody in mid-2010.
The judge continued:-
“Mr Bilan, who explains that Mr Shmatko pleaded guilty to the offence of fraud, never suggests that any confession was obtained by torture. He mentions pressure, but that is a long way from the RP's account. If this torture was really happening I would have expected Mr Shmatko to tell his lawyer and for his lawyer to have seen evidence of injuries on his client.
The RP says he needed lengthy daily treatment in a private clinic. The father still lives in Penza, as does Mr Bilan and numerous statements have been from other witnesses based in Penza yet there are no medical records or reports produced that would confirm the seriousness of the injuries set out by the RP.
…
The RP did not give evidence and could not be asked about this crucial part of his evidence. I do not question that Dr Cohen saw scars and that she was correct when she attributed the stomach scar to a knife wound. I accept too that the RP is likely to have been assaulted on one occasion in SIZO-1 but I do not accept that this caused the scars seen by Dr Cohen.
…
The allegation of torture was not only not drawn to his lawyer's attention but was not drawn to the attention of the court at the time of the RP's sentence in August 2010.”
The judge's findings of fact
The judge held:-
“What I find is that throughout these proceedings and before, Mr Shmatko has cynically manipulated the system to try and avoid being prosecuted for these incidences of alleged fraud. He has been trying to avoid imprisonment by trying to blame Mr Mashkov and the FSB for the allegations made.
….
It is clear from his confession of April 2011, if it is to be taken at face value, that he was at the heart of the fraud and provided bank contacts to make it appear that genuine activity was taking place as opposed to a fraud to obtain a repayment of VAT. The detail in that confession is striking, for example the fact that he received 500,000 roubles for his role. He was represented by a different lawyer on that occasion. There is no evidence from that lawyer and no one to support the RP's contention that he only confessed as he and his family were threatened.
It is only since the RP reached the United Kingdom and had his asylum claim refused that he has suddenly started complaining that he was the victim of corruption and corporate raiding. He made no such complaint when he was in Cyprus.
…
I summarise my findings as follows: on the face of it and based on his detailed confession of April 2011 Mr Shmatko was involved in VAT frauds with Mr Mashkov and others. The assault on the police officer has nothing to do with these allegations but was an assault carried out by the RP when it is likely he knocked the hat off the officer when he was asked for a bribe. Whilst that offence is being investigated, there is a falling out between Mr Shmatko and Mr Mashkov that ends in a fight in which Mr Shmatko gets stabbed. The fight might have been over money. As a result Mr Mashkov changes his evidence and says he witnessed the assault on the police officer. Mr Mashkov and the others are the witnesses against Mr Shmatko in the watch factory case.
Mr Shmatko is remanded into custody. He is assaulted in SIZO-1 on 14 th July 2010 which leads to a complaint to the prison authorities on 15 th July 2010. I do not accept he was tortured let alone tortured by investigators in his case. The ill-treatment which I found he suffered on one...
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