Russian deputy finance minister is arrestted

Russia`s Deputy Finance Minister Sergei Storchak and two businessmen have been arrested on suspicion of attempted large-scale fraud, a source in the Prosecutor`s Office said Saturday.

Storchak, who was supposed to accompany Russia`s finance minister on a trip to South Africa, and two other suspects were detained late Thursday in Moscow. The Basmanny District Court issued an arrest warrant on Friday.

"Storchak, Sodexim General Director Zakharov, and president of a Moscow bank Volkov have been detained in the course of investigation into an attempt to embezzle state funds," said Vladimir Markin, a spokesman for the Investigative Committee under the Russian Prosecutor`s Office.

"They are suspected of setting up an organized group plotting a large-scale state budget funds fraud," he said.

The suspects have been placed in a detention center pending trial, the official said, although he did not specify whether charges against the suspects had been officially pressed.

The Russian Finance Ministry has also confirmed that Sergei Storchak has been detained in the course of a criminal investigation, but said the detention may be related to a criminal case against third parties who are not ministry`s employees.

"The Finance Ministry is hoping that the investigation will be as impartial as possible," the ministry`s statement said.

Sergei Storchak assumed his current post in November 2005. In 2004, when he was still head of the international finance and foreign debt department in the ministry, his deputy was arrested on graft charges.

Denis Mikhailov, who oversaw contacts with international rating agencies and western investors in the ministry, was accused of passing confidential financial information to two businessmen, and receiving a 87,000-euro car as "remuneration."

He was originally sentenced to 10 years in prison, but Russia`s Supreme Court later reduced the sentence to five years.

sections: Society