Russian opposition activist Alexey Navalny. REUTERS/Sergei

Moscow - Russian investigators said Friday that they had launched a fraud probe against opposition leader Alexei Navalny and his brother, putting new legal pressure on the protest movement's most charismatic figure.

The new probe Ä the second major investigation launched against Navalny Ä also comes as the opposition plans an unsanctioned rally Saturday in Moscow after the City Hall denied to authorise their proposed routes.

Navalny and his brother Oleg “embezzled 55 million rubles ($1.8

million) from a trading company” and transferred some of the money to another firm they owned to launder the funds, the Russian Investigative Committee (SK) said.

Alexei Navalny created a firm several years ago, and his brother “used deception” to convince the trading company to sign an agreement for cargo shipping services with this firm in his capacity as an official for Russian Post, Russia's postal service monopoly.

The shipping services were to be provided “at deliberately inflated prices” according to this agreement, investigators said, and the firm had another company carry out the contract from August 2008 to May 2011.

The brothers then “transferred 19 million rubles ($620,000) from the firm's account using fictional documents” to another account to “launder the funds they acquired in a criminal manner”, the statement said.

Navalny, one of the leaders of Russia's political opposition who became known for campaigning against corruption on his blog, seemed initially caught by surprise but slammed the allegations.

“I don't know anything. My phone is on fire. As I understand, I am not enough for them, so they got their hands on my family?” he wrote in his first reaction on Twitter.

He added later: “I just read the (investigators') statement. Wow, that is complete nonsense. Total, complete gibberish.”

Navalny also tweeted that searches were taking place at his brother's workplace and also at his parents, although this has yet to be officially confirmed.

In a rare intervention, his mother Lyudmila told the Moscow Echo radio that investigators were trying to “blackmail” her son into halting his political activities.

“I want to say that this will not work as the whole family supports Alexei,” she said. “I wish everyone to have children like mine,” she added.

The Investigative Committee, Russia's powerful agency that is the equivalent of the American FBI, already has one financial case open against Navalny, a lawyer by profession.

He is accused of causing a loss of 16 million rubles to the budget of Kirov region when he advised regional officials in a timber deal.

Navalny is also a witness in the probe into the opposition rally on May 6, one day before Vladimir Putin was inaugurated into his third term in the Kremlin, which ended with clashes against police ranks and hundreds of detentions.

His apartment and office has been searched in the probe and he regularly goes in for questioning.

A dozen people have been under arrest for months as part of the May 6 probe, and one man has been convicted of participating in mass riots and sentenced to 4.5 years in jail.

“In my opinion, the Investigative Committee is turning into the political police,” tweeted Alexei Venediktov, editor of popular liberal-leaning radio station Echo of Moscow after news of the probe against the Navalny brothers broke.

Despite warnings by city police issued to opposition leaders Thursday against any protests, Navalny wrote on Friday that “each Russian citizen has the right to show up anywhere they please”, advising people to dress warmly as they “come to stage a symbolic presence at Lubyanka Square” in Saturday's protest.

The brother has not been involved in any of Navalny's public political activities. A man named Oleg Navalny was shown in a 2010

Channel One report as a deputy director of a subsidiary of Russian Post, a company closely affiliated with the government.

A report in pro-Kremlin Izvestia daily last month said Navalny's brother Oleg had been promoted to the post of deputy director of Russian Post's Express Mail Service. - Sapa-AFP