MOSCOW, May 8 (RAPSI) – Businessman Alexander Sabadash, a former member of the Russian parliament’s upper house, has been detained in Moscow for the alleged embezzlement of nearly 2 billion rubles (over $50 million) in the form of VAT refund, Kommersant reports Thursday.

The investigation of the attempted embezzlement by the Arkhangelsk-based developer ES-Kontaktstroy began several years ago. In April 2011, police searched the Federal Tax Service’s Moscow department, the flat of its deputy head Olga Chernichuk, and Tax Inspectorate No.28.

It was established that ES-Kontaktstroy was connected with the pulp producer Vyborg Cellulose, based in the Leningrad Region.

According to the newspaper, Sabadash, being the owner of Vyborg Cellulose, is suspected of organizing a fraudulent VAT refund scheme, as a result of which ES-Kontaktstroy, an obscure company that repaired Sabadash’s flat, planned to receive over 1.8 billion rubles ($51 million) of budgetary funds in 2010.

The newspaper writes that the documents for receiving this sum as VAT refund were forwarded to Tax Inspectorate No.28, which was chaired by Olga Stepanova, who is currently on the Magnitsky List. The tax agency refused to pay and turned for help to the Investigative Committee. It turned out that in 2009-2010 Stepanova transferred, without good reason, 4.4 billion rubles ($124 million) as VAT refund to a number of shell companies.

The office of Vyborg Cellulose has been searched and several other suspects detained. Stepanova, who was an active participant in that fraud, cannot be detained because she is undergoing medical treatment abroad.