American investment guru Calvey handed 5.5-year suspended jail term in Russia for fraud as controversial case concludes

US-born financier Michael Calvey has been handed a 5.5-year suspended prison sentence in Russia for embezzlement, after a judge found he and his colleagues conspired to pocket tens of millions of dollars, in a high-profile ruling.

The investor, who founded one of Russia's largest investment funds, was handed the sentence at a hearing of the Meshchansky Court in Moscow on Friday. Under its terms, he will have to remain in the country and report regularly to the authorities. Failing to comply with the terms could see the businessman put behind bars.

Calvey’s bank accounts are no longer subject to a court freeze order, according to TASS.

All other figures in the case have also been slapped with suspended sentences, including Calvey’s French associate Philippe Delpal, who was handed four and a half years, suspended. The prosecutors had been seeking a six-year suspended sentence for Calvey and a five-year term for Delpal.

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Calvey, who founded Baring Vostok in 1994, was found guilty of the charges by a judge on the previous day. Speaking on the steps of the courthouse on Thursday evening, the financier argued that the prosecutors had failed to prove he had done anything wrong. “But it’s not over yet. I hope tomorrow the judge will address the real facts – hope dies last,” he added.

Authorities say Calvey and his associates overstated the value of an asset as part of a financial transaction, accusing Baring Vostok's leadership of misappropriating funds worth 2.5 billion rubles ($34.2 million). The executives have all maintained their innocence and insist the claims were brought as part of a dispute with a rival Russian company. According to them, the case was brought in order to prevent Baring Vostok from effectively suing Vostochny Bank in a British court, over hundreds of millions of dollars allegedly disappearing from a jointly-owned business.

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The investment fund, one of the country's largest, says it has put more than $2.5 billion into mid-sized firms and startups, as well as major domestic tech firms like Yandex. Moscow business daily Vedomosti previously described the firm as “a symbol of direct investment in Russia” and Calvey was a regular speaker at the influential St. Petersburg International Economic Forum.

He and his team have sought to portray the trial as a test of confidence in Russian business, and Calvey has argued that a favorable court decision would soothe any anxieties about the country among overseas venture capitalists. “It would not be an exaggeration to say that such a positive decision by the court could bring Russia billions of dollars in new investments, adding thousands of jobs,” he said, in a statement made prior to the verdict being made known.

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