Estonian court annuls extradition of crypto businessmen to US

Sergei Potapenko (left) ja Ivan Turõgin (right). Photo: Taavi Sepp / kollaaž

The Tallinn Circuit Court on Wednesday annulled the decisions to extradite Estonian crypto businessmen Ivan Turogin and Sergei Potapenko, who are accused of an electronic scam and entering into criminal agreements in the United States, to the US.

The US Department of Justice submitted a written request to the Republic of Estonia for the extradition of Estonian citizens Ivan Turogin and Sergei Potapenko to the US.

With its Sept. 7 orders, the Estonian government decided to extradite the men to the US based on an extradition agreement between the Estonian and US governments.

With its Wednesday ruling, the circuit court annulled the rulings of the Tallinn Administrative Court made on Oct. 18 and issued new rulings with which it satisfied the appeals. The circuit court annulled the government's orders.

The circuit court found that the government had failed to investigate and consider important circumstances in making the decision, which could have influenced the decision to extradite the men.

The court noted that with regard to the conditions of detention, the respondent has taken the position in the order that these issues should have been raised in the procedure for declaring the extradition legally permissible in the county court, which the appellants did not do, therefore the government did not dwell on this issue. However, according to the circuit court, this position was incorrect.

The government, after it was convinced that the extradition of the appellants was legally permissible, was obliged to consider all relevant circumstances in the case when making a decision and to assess the proportionality of the decision, that is the infringement on the fundamental rights of the individuals. Thus, as part of the proportionality assessment of extradition, the government also had to evaluate the applicants' claims about their possible conditions of detention in the United States.

These were not questions related to the control of legal admissibility concerning criminal law or criminal procedure. The respondent's representative confirmed at the circuit court hearing that no such investigation and consideration was carried out, and the same could be seen from the contested orders.

The circuit court emphasized, relying on the relevant practice of the European Court of Justice and the European Court of Human Rights, that the respondent could not rely solely on the fact that the United States is a country governed by the rule of law and that Estonian citizens have also been extradited there in the past.

According to the circuit court, the government's orders had to be annulled on the grounds that there had been a substantial breach of duty to investigate, and the applicants' claims and submitted evidence regarding the conditions of detention in the United States detention facility the applicants would most likely be placed in after extradition had been left unverified.

It had also not been checked whether the extradition would infringe the basic rights of the appellants to the extent that criminal proceedings in Estonia should be considered instead of extradition.

In summary, the respondent had failed to take into account some important circumstances when assessing the proportionality of the extradition of the appellants. With this, a significant error of judgment was made, which may have led to a fundamentally wrong decision. The referred investigation obligation and consideration of significant circumstances cannot be carried out by the administrative court instead of the administrative authority.

The court explained that while the decision on which country to conduct the criminal proceedings in is made by the prosecutor's office at the beginning of the extradition procedure, this does not exclude the government's competence to assess the violation of fundamental rights arising from such a decision and the proportionality of the extradition.

Since the circuit court annulled the rulings of the administrative court and issued new rulings that satisfied the complaints, the respondent was also ordered to cover the costs of the proceedings. The court ordered the government to pay 46,365.30 euros to cover the first and second instance procedural costs of Ivan Turogin and 50,710 euros to cover the expenses of Sergei Potapenko.

Also, both families were awarded procedural costs of 4,080 euros and 3,000 euros, respectively. In the remaining part, the procedural costs were borne by them.

The court ruling can be contested no later than Dec. 11.

The Estonian government on Sept. 7 approved the extradition of Estonian businessmen Ivan Turogin and Sergei Potapenko, who are accused of an electronic scam and entering into criminal agreements in the United States, to the US.

In late November of last year, the Estonian police and the US Federal Bureau of Investigation apprehended the men in Tallinn on an 18-count indictment for their alleged involvement in a 575-million-dollar cryptocurrency fraud and money laundering conspiracy.

According to court documents, Sergei Potapenko and Ivan Turogin allegedly defrauded hundreds of thousands of victims through a multi-faceted scheme. They induced victims to enter into fraudulent equipment rental contracts with the defendants' cryptocurrency mining service called HashFlare.