A RUSSIAN who bought former Rangers’ owner Craig Whyte’s Highland castle has been jailed for 18 months for carrying out a £4 million fraud to fund his lavish lifestyle.
Sergey Fedotov, who purchased Castle Grant near Granton-on-Spey in Moray for £1m, has admitted to embezzlement while he was head of the Russian Authors’ Society(RAO), which collects royalty payments on behalf of writers.
The 40-year-old businessman was arrested in Moscow last year and held in custody. He bought the 16th-century property in 2014 after it was repossessed.
He admitted carrying out the fraud during a hearing at a court in Moscow.
Prosecutors told the court that Fedotov deliberately misled the RAO board, encouraging them to transfer property to a private company.
The company then sold the property to third parties, leaving the RAO out of pocket for the equivalent of £4m.
Russian police started investigating Fedotov in 2015 after concerns were raised about where he got the funds to buy the castle and other properties in the south of England.
During a preliminary hearing in the case, Fedotov insisted that Castle Grant was bought lawfully and said the purchase was modest as the castle was only worth the price of a small apartment in Moscow.
He said: “That castle in Scotland I have, I acknowledge.
“But this property is irrelevant.
“At the time of purchase it cost 50 million rubles. The cost corresponds to the cost of a two–bedroom apartment in the centre of Moscow.”
Following his sentencing, Fedotov told Russian media that he had already repaid some of the damages, and was considering an appeal against his sentence.
He said: “I’ve repaid 160 million rubles out of more than 300 million rubles.
“But in order to make these payments, I need to work: something I haven’t recently been able to do.”
Fedotov was denied bail over fears he might have fled to the UK despite his legal team’s claims that he suffers from hypertension and diabetes.
His office and Moscow home were searched by police before he was brought in for questioning.
The RAO is a non-governmental organization created in 1993 for collective management of author’s rights and has more than 25,000 members.
Fedotov bought Castle Grant, on the outskirts of Grantown-on-Spey, in September, 2014, after it was repossessed by the Bank of Scotland. He told estate agents that he had grand refurbishment plans for the property after it fell into disrepair during Whyte’s ownership.
In 2015 he allowed the castle’s grounds to be used for a massive banquet and concert to mark the 250th anniversary celebrations of the town of Grantown.
Whyte bought it for £720,000 in 2006 but fell into arrears with the £7,000-a-month mortgage. The Bank of Scotland took legal action to recover it after his Ibrox reign ended.
He has been made bankrupt and earlier this month was cleared of charges related to his takeover of the club.
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