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* First ever posthumous trial in Russia
* Labelled "absurd" by relatives
* Magnitsky's death became symbol of rights abuses
* Case has dented U.S.-Russian relations
By Alissa de Carbonnel
MOSCOW, March 10 (Reuters) - A whistleblowing Russian lawyer whose death in custody became a symbol of rights abuses and strained relations with the United States will go on posthumous trial on Monday in what relatives say is revenge by the Kremlin.
Sergei Magnitsky, who died while in pre-trial custody in 2009, is being prosecuted for defrauding the state in what will be the first time Russia has ever tried a dead person, a development Amnesty International says sets a "dangerous precedent".
Magnitsky had been jailed after accusing police and tax officials of multimillion dollar tax fraud. His employer says the charges against him were a reprisal and he was murdered, and the Kremlin's own human rights council aired suspicions he was beaten to death.
The circumstances of his demise led the United States last year to bar entry to Russians accused of involvement in his case or in other rights abuses.
Critics say the trial - more than three years after he died and despite pleas by relatives to drop the case - is an attempt by President Vladimir Putin's government to hit back at Washington and show the public Magnitsky was a crook not a hero.
"It's inhuman to try a dead man. If I take part in this circus, I become an accomplice to this," Magnitsky's mother Natalya told Reuters. "I won't take part in the hearings."
Russia took the highly unusual step of reopening the investigation against Magnitsky in 2011, as international criticism of Russia over his death mounted.
"First they killed him, now they are dancing on his grave," said a lawyer for Magnitsky's family, Nikolai Gorokhov.
After Magnitsky's lawyers boycotted pre-trial hearings, the court appointed a lawyer to defend him.
Contacted by Reuters, the court-appointed lawyer, Nikolai Guerasimov, declined to comment on the case. Putin's spokesman Dmitry Peskov also declined to comment.
Magnitsky died at the age of 37 after he said he was denied medical care over 358 days in jail.
DEAD MAN IN THE DOCK
Putin said Magnitsky died of heart failure, but his former employer, London-based investment fund Hermitage Capital, says he was killed for testifying against officials he accused of a $230 million theft through fraudulent tax refunds.
Hermitage owner William Browder is being tried in absentia alongside his former employee. He also faces new fraud charges filed last week over dealings a decade ago in shares in state gas firm Gazprom.
Browder has said the charges are an "absurdity" meant as revenge for his campaigning for the U.S. rights legislations named after Magnitsky.
Pro-Kremlin television channel NTV showed a documentary alleging Browder exploited his late employee's death for his own ends. Critics say NTV often airs such programmes to influence public opinion before charges are filed against government foes.
Rights watchdog Amnesty International has called Russia's first posthumous trial a "dangerous precedent."
Authorities say recent legal changes make it possible. But Magnitsky's family lawyers say the law allows such cases only at the request of the deceased's relatives for the purpose of clearing their reputations.
No one has been held accountable for Magnitsky's death. One prison official was tried last year but prosecutors asked the court to clear him.
"Something happened in that prison that no one wants to talk about," Zoya Svetova, an investigator for the independent prison watchdog, the Public Oversight Commission, that probed his death.
"Magnitsky became a symbol of the fight against corruption, and the goal of this trial is to show he is no symbol but just a criminal who didn't pay his taxes," she said.
"It is pure state propaganda because there is no point in trying a dead man."
The case has weighed heavily on U.S.-Russian relations.
Moscow retaliated against the U.S. Magnitsky Act with its own visa ban against Americans suspected of violating the rights of Russians abroad. It also banned U.S. families from adopting Russian children. (Reporting by Alissa de Carbonnel; Editing by Jason Webb)