University’s anti-corruption expert charged with fraudchair of the department of criminology and criminal law and aide to the university provost, was arrested on 10 July on allegations of especially large fraud, regulated by Part 4 of Article 159 of the Criminal Code of the Russian Federation.
Stepanov-Egiyants, who is an anti-corruption expert, denies the allegation.
He is a specialist on cybercrime and money laundering, serves as a member of the Anti-Corruption Expert Council under the Presidential Administration, and occupies many other high posts. In addition to defending two dissertations in law, Stepanov-Egiyants, 37, also holds a Master of Laws from California Western School of Law in San Diego, United States.
Investigators allege that a group of criminals, including Stepanov-Egiyants, used a fake passport and fraudulent documents to deprive the unnamed director of a used-car dealership centre, Avtofinans, of his share in the business, stealing cars and cash from the company.
The vice-dean of the law faculty is alleged by the police to have been involved in an attempt to steal property worth up to RUB39 million, which is around US$650,000. Thus far, the police have recovered only RUB25 million. Stepanov-Egiyants offered around US$330,000 in bail money in an attempt to avoid detention, stating: “We know how public opinion works in Russia: if you are put in a pre-trial detention centre, you are guilty. But I have nothing to do with the crime.”
The court in Moscow has placed Stepanov-Egiyants in detention for two months until the next court hearing. If convicted, he faces up to 10 years in prison and a fine of US$15,000.
It appears that acquiring ownership of property fraudulently is at the core of the crime. Fraudulent registration documents, fake IDs, general manager replacement without the knowledge of the company, commodity raiding – in this case, used cars – and seizing the safe with cash, all point to the raiding operation.
Russian media source RosBiznesKonsalting (RBK) points to a police investigation into whether Stepanov-Egiyants played a part in a dispute over the ownership of a building of the Holiday Inn Hotel in Chelyabinsk. The building was taken over by a private security force in 2015 and guests had to be moved to another venue. The hotel was later put on sale at a highly reduced price of US$3 million.
In Russia, this type of raiding – not Wall Street style corporate raiding – may involve violence, corruption and fraud to coerce owners or staff in a business to transfer assets, land or property. Russian lawyers are instrumental in predatory corporate raiding.
Due to small salaries and the high cost of living in Moscow, professors were forced to search for supplemental income at the very start of the 1990s, taking jobs on the side, including in the growing private sector.
At the same time, Soviet universities, even the flagship ones, never had a concept of advancing community outreach, providing service to the community or encouraging extracurricular activities. In the Stalinist system of education, universities served a narrow function of educating cadres for the totalitarian regime. Ethical considerations were only secondary.
Not the first corruption scandal
The raiding scandal that is unfolding in Lomonosov Moscow State University’s law faculty is certainly not the first big corruption scandal at the university to gain broad publicity. In 2010, Polina Surina, a senior lecturer in the faculty of state government at Lomonosov Moscow State University, was arrested for taking a bribe of €35,000 (at that time US$45,000).
A video of the transaction was posted online. Polina Surina, 26 at that time and with a doctorate in economics, was caught red-handed in one of Moscow’s expensive downtown restaurants while accepting the bribe in exchange for admission to the faculty.
By coincidence, Surina’s father, Aleksei Surin, served as the dean of the faculty of state government. After the scandal, Aleksei Surin left his dean’s position, but continues to chair the department of theory and methods of governance until now.
Immediately after the arrest, there was allegedly a lot of fighting in the higher state echelons, and Surina was released from custody after spending only one night at the police station. Charges against her were changed from ‘bribery’ to a much lesser ‘fraud’. A year later, Surina was sentenced to three years on probation, carrying a suspended sentence and serving no jail time.
But these scandals have not derailed the rector of Lomonosov Moscow State University, who believes that the university he leads is free of corruption. Victor Sadovnichy, who will turn 80 next year, has served as the rector for 26 years, since 1992, and for some reason does not seem to recall Surina’s corruption scandal.
In 2015, Rector Sadovnichy acknowledged in an interview that he had a signal regarding possible corruption in the law faculty, and that he and law enforcement agencies checked this information and it turned out to be false.
A year ago, Rector Sadovnichy met with Russian President Vladimir Putin in person in order to inform him on development of the university. He proudly reported that, “for the first time in the history of Russian universities, and even Soviet [universities], a foreign ranking placed us third in terms of demand on our graduates, that is, in terms of quality … Stanford and Oxford ahead of us, and we are third,” without specifying which ranking. To this Putin responded, “[Rankings] became more objective.”
In reality, Lomonosov Moscow State University barely makes it into the top 200 in world university rankings.
Vladimir Putin, a KGB officer, knows the value of reliable information and reliable people. Sadovnichy was last reappointed as the rector by President Putin in 2014. Apparently, Putin has trust in Sadovnichy and, in keeping Stepanov-Egiyants on the Anti-Corruption Expert Council under the Presidential Administration, Putin seems to have trust in him too.
Ararat L Osipian is a fellow of the Institute of International Education, United Nations Plaza, New York, and honorary associate at the department of political science, University of Wisconsin-Madison, and holds a PhD in education and human development from Peabody College of Education at Vanderbilt University, where he came as a fellow of the US Department of State. He is the author of The Political Economy of Corporate Raiding in Russia (Routledge, 2018).