A Russian tycoon who bought former Rangers owner Craig Whyte’s Highland castle has been charged with carrying out a multi-million pound fraud to fund his lavish lifestyle.
Sergey Fedotov, who purchased Castle Grant in Moray for £1 million, was arrested in Moscow and is being held in custody accused of a massive embezzlement.
He has denied claims that he used stolen money to buy the 16-century A-listed pile in 2014 after it was repossessed from Whyte when he failed to keep up with mortgage payments.
Businessman Fedotov, 39, is head of the Russian Authors’ Society (RAO), which collects royalty payments on behalf of writers.
He has been accused of carrying out a £6m fraud by embezzling royalty payments to buy and sell a number of commercial properties. Prosecutors have alleged that Fedotov profited from the scam by selling the properties to fake firms and claim he misled members of the RAO board.
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Fedotov was arrested in Moscow at the end of June and during a hearing at the Tagansky Court in the city this week a judge ordered that he should be held in custody for another month while further investigations are carried out into the case.
During the hearing, 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.”
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Russian police started investigating Fedotov last year after concerns were raised about where he got the funds to buy the castle and properties in the south of England.
He has been denied bail over fears he might flee 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.
A spokesman for the body denied any wrongdoing on the part of Fedotov.
He said: “RAO’s General Director Sergei Fedotov and the organisation’s other employees are fully cooperating with the investigation, helping it to find out the truth.
“We are sure that a qualified investigation will lead to establishing no wrongdoing in Sergey Fedotov’s action.”