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One of Russia's Richest Men Arrested on Fraud, Tax Charges

One of Russia's richest men and head of the country's largest oil company, Mikhail Khodorkovsky, has been arrested on charges of tax evasion and fraud. The businessman was detained in Siberia by Russian special forces, and taken to a court in Moscow, which ordered he be held in custody.

Russian special forces in black uniforms arrested oil magnate Mikhail Khodorkovsky in the Siberian city of Novosibirsk, shortly after his plane landed at the airport. He was then forced to return to Moscow.

According to Russian prosecutors, the businessman is facing charges of tax evasion and fraud involving some $1 billion, as well as forgery, embezzlement and failure to abide by a court decision.

Mikhail Khodorkovsky is believed to be the wealthiest man in Russia. The 40-year-old businessman is one of Russia's so-called oligarchs, who made huge fortunes by acquiring state property at low prices shortly after the collapse of the Soviet Union in the early 1990s, and who now control most of the country's natural resources and industries.

Mr. Khodorkovsky's oil company, Yukos, recently merged with another Russian oil firm, Sibneft, to create one of the world's largest producers of petroleum.

The Russian general prosecutor's office has been investigating Yukos and searching the homes and offices of its employees and shareholders for months.

The process began in July, when a top shareholder in the company, Platon Lebedev, was arrested and charged with theft of state property during a privatization deal of a fertilizer plant in 1994.

Then last week, a top Yukos manager, Vassili Shakhnovsky, who is responsible for the company's customer relations and auditing, was charged with tax evasion.

The investigation into Yukos's activities continued, despite concerns expressed by a number of top Russian businessmen and politicians, who have said it was damaging the Russian economy by scaring away foreign investors.

However, observers in Moscow say the investigation into Russia's largest oil company is important for the Kremlin ahead of the parliamentary elections in December and the presidential elections in March.

That is, in part, because the oligarchs are unpopular among the majority of the Russians, who gained nothing from the privatization of state property in the early 1990s. Mr. Khodorkovsky is also reported to have been funding two liberal parties, rivals to Russian President Vladimir Putin and the Kremlin's allies as the elections approach.