MOSCOW, February 1 - RAPSI. Hermitage Capital auditor Sergei Magnitsky, who died in a Moscow investigative isolation ward in 2009, may have helped to devise a scheme to sell Gazprom shares to foreigners, which was illegal, a law enforcement source told RIA Novosti on Friday.

"He may have been involved in fraudulent activity shortly before the 1998 default crisis," the source said. "The New York Federal Reserve Bank transferred $4.8 billion for the Central Bank's stabilizing policies into an account with the Republic National Bank owned by Edmond Safra, a business partner of Bill Browder (the future head of Hermitage Capital Management in Russia). The authorities were later unable to trace the money, as Safra died in a Monaco fire in 1999."

Not long after, Hermitage Capital Management began its investment activity. The fund was managed by Browder and employed Magnitsky as an auditor.

"The first thing that Hermitage Capital did was buy up Gazprom shares, despite the ban on selling the stock to foreigners," the source said. "Investigators discovered a detailed plan to organize these transactions on Magnitsky's computer."

"Magnitsky's scheme did more than just bypass the ban," he said. "It also helped to cut taxes to one-seventh of the standard rate. Magnitsky was later involved in the creation of over 20 investment vehicles to do so... Browder fled to the UK after the fund's offices were searched in July 2007, leaving Magnitsky to deal with the consequences."

Magnitsky, a managing partner of the Firestone Duncan auditing firm, the tax and legal consultant of Hermitage Capital Management, was detained on November 24, 2008. That same day, the Investigative Committee charged Magnitsky with tax evasion as part of the Hermitage criminal case. On November 26, the Tverskoy District Court in Moscow issued an arrest warrant in his name. On November 16, 2009, Magnitksy died in the Matrosskaya Tishina investigative isolation ward where he was being held.