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Russian prosecutors suspect fraud in hi-tech hub

October 30, 2013

MOSCOW (AP) — Russian prosecutors suspect executives of a state-sponsored innovation center of mismanaging hundreds of million dollars in government funding, though no charges have been filed, the Prosecutor General’s Office said Wednesday.

A four-page statement from the Prosecutor General’s Office detailed what it considered to be “uncontrolled spending” at Skolkovo, which was set up in 2010 as an attempt to create a Russian version of Silicon Valley and has received 50 billion rubles ($1.6 billion) in government money since then.

Departing from the usual practice of the prosecutor’s office, the statement did not announce the opening of an investigation nor did it say that it is considering filing charges.

Skolkovo made no immediate response to the development.

The Prosecutor General’s Office said it suspects managers of investing 22 billion rubles ($687 million) into low-yield bonds and in low-interest bank deposits which benefited one commercial bank.

Prosecutors said in the statement that Skolkovo managers did not exercise enough control over the implementation of the project which “contributed to an uncontrolled and extravagant spending which was harming government interests.”

The statement made no accusations against Viktor Vekselberg, a Russian billionaire who wound up most of his business activities to run Skolkovo

Russian investigators earlier this year opened a probe against a Skolkovo executive suspected of embezzling $750,000. Analysts have viewed recent attacks on Skolkovo, a brainchild of former President Dmitry Medvedev, as pressure on the team of Medvedev who now serves as prime minister.

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