Already the dragnet had snared some big players. The Ministry of Regional Development, for instance, is said to have skimmed millions from accounts
designated to host APEC's annual summit in Vladivostok last year. The state satellite navigation system saw around $200 million disappear from its budget.
And recently another high-ranking official has fallen under suspicion: Yelena Skrynnik, the former Minister of Agriculture and chairwoman of RosAgroLizing,
who was implicated in an embezzlement scheme in a recent state television broadcast.
Yet Serdyukov is the gift that keeps on giving, with more and more pilfered money turning up with each news cycle. $3 million was allegedly stolen from
Russia's Strategic Missile Forces (RVSN), "with high-level Defense Ministry officials and commercial executives suspected of involvement," as RIA Novosti reported Friday. Yesterday, it was disclosed that a dacha belonging to Serdyukov's
brother-in-law had extensive renovations projects paid for by the Ministry;
to the Moscow Times, an "entire battalion" of army conscripts was apparently tasked with constructing a road, two bridges and seeing to the attendant
landscaping, to the cool sum of $3.3 million. All so the boss had a nice place to visit with his sister on the Volga delta.
Serdyukov's problem wasn't really that he oversaw massive graft. Rather, it was that he is married to Yulia Pokhlebenina, the daughter of one of Putin's
closest friends, Viktor Zubkov, today the 71 year-old chairman of state gas giant Gazprom but formerly the head of the St. Petersburg Tax Office from 1999
to 2001. In 2000, the same year that Serdyukov, hitherto a furniture salesman, married Pokhlebenina, Zubkov named his son-in-law his deputy. (Zubkov is now
treated as an Iago-like figure by Russian analysts; it was his hatred of Skrynnik and the fact of her retirement from public service, they insist, that
drove the RosAgroLizing scrutiny.)
Serdykuov's career advanced quickly from there. In July 2004, he was appointed Minister of the Russian Federal Tax Services and brought along with him all
of his underlings from the St. Petersburg office. These included Mikhail Mokretsov and Tatiana Shevtsova, both of whom became Serdyukov's deputies;
Nadezhda Sinikova, who became the head of the Moscow City Tax Service, and Olga Stepanova, whom Sinikova duly appointed the head of that city's Tax Office
28. Other officials under Serdyukov's protection were Olga Tsymai, the head of Audit Department #1 of Tax Office 28, Ekaterina Frolova, head of
Bookkeeping, Reporting and Planning in that office, and Olga Shargorodskaya, the manager of that office.
The former furniture peddler's tenure as head of Russia's IRS entered suspicion in 2006 when the Federal Tax Office authorized a $107 million refund to
subsidiaries belonging to RenGaz, a fund created by Renaissance Capital, Russia's largest investment firm, for the express purpose of enabling foreign
investors to buy shares in Gazprom. The refund, said to be owed to the subsidiaries based on fabricated civil judgments they claimed reduced their declared
annual profits, was just $1 million less than the exact amount these subsidiaries paid in taxes for 2006. In a manner that would later be replicated in the
Hermitage Capital fraud, the scam was facilitated by the re-registering of two corporate subsidiaries of RenGaz -- Selen Securities and Financial
Investments -- from an old tax jurisdiction (Smolensk) to Moscow, where they then fell under the remits of Tax Offices 25 and 28. It was these offices that
processed the refund.