Fraud and money laundering charges filed in Dagestan’s biggest oil theft scandal

An investigation has confirmed the involvement of former Dagestan State Secretary Magomed-Sultan Magomedov in the theft of the state-owned enterprise Dagnefteprodukt, valued at approximately $1.2 billion. This asset has since been returned to state ownership.

According to the Russian press, the Federal Security Service (FSB) reported that assets worth around $36 million have been seized from Magomedov and other individuals connected to the case.

“The Federal Security Service, together with the Prosecutor General’s Office and the Ministry of Internal Affairs, uncovered a fraudulent scheme targeting the largest federal oil transhipment complex in the North Caucasus — the Dagestan state enterprise Dagnefteprodukt,” the FSB stated.

They confirmed Magomed-Sultan Magomedov’s involvement, noting that during his tenure as State Secretary of Dagestan, he used his administrative influence to facilitate decisions that, between 2001 and 2005, illegally transferred the enterprise from federal to republican ownership. The company was then sold at an undervalued price to entities under his control.

Following a lawsuit by the Prosecutor General’s Office, the Soviet District Court of Makhachkala ruled that both the stolen Dagnefteprodukt complex and the newly constructed Dagnotekh oil refinery—together worth over $1.2 billion—be returned to state ownership. The FSB added that property valued at over $36 million, obtained through fraudulent means, has been confiscated from the defendants.

The Russian Ministry of Internal Affairs has initiated a criminal case under Part 4 of Article 159 (fraud) and Part 4 of Article 174.1 (money laundering) of the Russian Criminal Code. Authorities conducted 70 searches across Dagestan and Moscow, seizing documents, luxury goods acquired illicitly, and large cash sums linked to the investigation.

The FSB reminded that Magomedov was dismissed from his position by the Dagestan head due to a loss of trust. Investigative and procedural actions remain ongoing.

By Tamilla Hasanova