On June 26, Magomed-Sultan Magomedov, the State Secretary of the Republic of Dagestan, his relatives, and associates became the focus of a large-scale investigation into illegal privatization and corruption. Searches were conducted at over 50 addresses, and a court ruling ordered the transfer of seized assets back to the Russian Federation.

During the operation, law enforcement officials searched properties linked to Magomedov’s family and the company Dagnefteprodukt. A joint team from the Prosecutor General's Office and the Central Administration of the Federal Security Service had previously compiled a complete inventory of property acquired by Magomedov’s relatives since the privatization period. According to public sources, operational measures extended to the White House, Magomedov’s office, and all his Moscow addresses, including those of his son and daughters. Additionally, inspections targeted departments within Makhachkala City Hall, specifically the Department of Architecture and Urban Planning and the Department of Property and Land Relations, reportedly due to the involvement of individuals close to Magomedov.

As part of the criminal case into illegal privatization, local sources stated that Magomedov and several of his relatives and associates had been detained. Simultaneously, Magomed Kaitov, the former head of OAO Interregional Network Company of the North Caucasus, was charged with embezzling 4.2 billion rubles intended for the modernization of the North Caucasus power grid between 2006 and 2011. The Prosecutor General’s Office reported that Kaitov used the stolen funds to seize control of the largest energy complex in Stavropol Territory, later laundering the illicit proceeds through the Moscow City business district. Kommersant noted that an anti-corruption lawsuit against Kaitov would be reviewed in a Moscow court.

According to the Prosecutor General's Office, Magomedov abused his official authority to illegally privatize the state-owned company Dagnefteprodukt, which controlled oil transshipment at Makhachkala’s seaport and operated an extensive network of land plots, buildings, pipelines, and gas stations. In 2005, exploiting his influence, Magomedov arranged for the Ministry of Property Relations of Dagestan to order the transformation of the enterprise into OAO Dagnefteprodukt, despite the enterprise legally belonging to the federal government. Prior to the planned auction for the sale of the company’s securities, Magomedov established Dagestannefteprodukt LLC and ensured it won the auction. Notably, no proceeds from this privatization were deposited into the state treasury.

Following the acquisition, Magomedov split, restructured, and transferred the company's assets to affiliated entities and associates. Dagestannefteprodukt LLC was later renamed MSB Holding LLC, incorporating Magomedov’s initials in its title. From 2020, the company’s official founders included Magomedov’s children—Magomedov M.M.-S., Magomedov S.M., Alpanayeva H.M., and Ismailova G.M. By 2021, the asset legalization process concluded with OAO Dagnefteprodukt’s transformation into OOO Kaspetrolservis. On the foundation of the former state company, several other businesses were formed, including Dagestan New Technologies LLC, Trans Tek LLC, and Nefteproduktsnab LLC.

To address these acts of corruption, the Prosecutor General’s Office filed a lawsuit demanding the transfer of the defendants’ shares in Kaspetrolservis LLC, MSB Holding LLC, Dagestan New Technologies LLC, Nefteproduktsnab LLC, and related property to the Russian Federation. The suit also sought to hold the individuals civilly liable and reverse the consequences of corruption offenses. The court imposed interim measures, such as property seizures and registration bans, during the proceedings.

At the court hearing, Magomedov M.M.-S., Magomedov M.-S.B., Magomedova M.S., Ismailova G.M., Alpanayeva H.M., Ismailova M.B., along with representatives from MSB Holding LLC and Trans Tek LLC, fully acknowledged the Deputy Prosecutor General’s claims and did not contest the accusations. By a decision of the Soviet District Court of Makhachkala on June 26, the prosecutor's lawsuit was granted in full, though the ruling has not yet entered into legal force, according to the joint press service of the region's courts.