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Crime A made-in-Miami money laundering saga develops even deeper Ukraine roots

13:05  12 april  2021
13:05  12 april  2021 Source:   miamiherald.com

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A made - in - Miami money - laundering saga develops even deeper Ukraine roots . By Shirsho Dasgupta and. Olena Loginova. Take a couple of Ukrainian oligarchs sanctioned for alleged money laundering . Add a mix of Florida-based businessmen who employed the husband of a prominent Democratic politician. Throw in some political connections tracing back to Rudy Giuliani, former Ukrainian presidents and even the Kremlin.

A made - in - Miami money - laundering saga develops even deeper Ukraine roots . Take a couple of Ukrainian oligarchs sanctioned for alleged money laundering . Add a mix of Florida-based businessmen who employed the husband of a prominent Democratic politician. Throw in some political connections tracing back to Rudy Giuliani, former Ukrainian presidents and even the Kremlin. What you get is a tangled story…

WASHINGTON — Take a couple of Ukrainian oligarchs sanctioned for alleged money laundering. Add a mix of Florida-based businessmen who employed the husband of a prominent Democratic politician. Throw in some political connections tracing back to Rudy Giuliani, former Ukrainian presidents and even the Kremlin.

Ihor Kolomoyskyi wearing a suit and tie: Igor Kolomoisky in a file image from 2014.. © Konstantin Sazonchik/ITAR-TASS/TNS Igor Kolomoisky in a file image from 2014..

What you get is a tangled story about money and power, one that demonstrates the magnetic pull of Miami when money laundering is alleged.

A lawsuit, Oleg Zhukovskiy v. National Bank of Ukraine, adds an extra layer onto an already complicated saga about alleged dirty money flowing through South Florida.

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The money , formally called the Homeowners Assistance Fund, will be distributed to states based on a formula that takes into account unemployed residents as well as late mortgage payments and foreclosures, says the National Council of State Housing Agencies. A made - in - Miami money - laundering saga develops even deeper Ukraine roots .

There has been a recent spike in violence in Ukraine 's eastern Donbass region where Kyiv's troops have battled Russian-backed separatist forces in a conflict it estimates has killed 14,000 people since 2014. "We are in contact with the Americans, this is happening at a high level," Russia's Deputy Foreign Minister Sergei Ryabkov was quoted as saying by Interfax news agency. A made - in - Miami money - laundering saga develops even deeper Ukraine roots .

But first, a recap.

Last year, the FBI raided the properties of a scandal-plagued Ukrainian oligarch, Ihor Kolomoisky, and his Miami-based associates, Mordechai Korf and Uriel Laber, in connection with a money laundering investigation. Nobody was charged but the Justice Department filed forfeiture requests for properties in Texas, Kentucky and Ohio, which were owned or controlled by the three.

Kolomoisky had been in the news in Florida as far back as 2018: Robert Powell, the husband of Miami Democrat Debbie Mucarsel-Powell, had, for a decade, served as general counsel to firms owned or controlled at least in part by Kolomoisky before leaving in 2017. Her husband’s link to the firms became a political headache for Mucarsel-Powell, who served a stint in the U.S. House before losing a close race this past November.

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A made - in - Miami money - laundering saga develops even deeper Ukraine roots . Add a mix of Florida-based businessmen who employed the husband of a prominent Democratic politician. Throw in some political connections tracing back to Rudy Giuliani, former Ukrainian presidents and even the Kremlin.

A made - in - Miami money - laundering saga develops even deeper Ukraine roots . For over 50 years, the facts reported by 60 Minutes have often stirred debate and prompted strong reactions. Our story Sunday night speaks for itself.”Read more at The Daily Beast.Get our top stories in your inbox every day. Sign up now!Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you.

In a 2019 statement issued well before the raid, Powell said he has never “worked for, represented, answered to, or received any payment from Mr. Kolomoisky.” Politifact found “no indication” he was involved.

Some of the Kolomoisky-linked firms ⁠— Optima Acquisitions, Felman Trading and Felman Productions and the Miami-based Georgian-American Alloys ⁠— are at the center of the FBI’s money laundering charges, a forfeiture request by the Department of Justice states.

The State Department sanctioned the oligarch, a one-time provincial governor in Ukraine, and designated his wife and two children as ineligible for entry into the United States this past March 5. Kolomoisky has been accused of siphoning off billions from PrivatBank, a Ukrainian bank.

Kolomoisky had a tangential role in the scandal that led to Donald Trump being impeached for the first time in 2019.

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A made - in - Miami money - laundering saga develops even deeper Ukraine roots . For over 50 years, the facts reported by 60 Minutes have often stirred debate and prompted strong reactions. Our story Sunday night speaks for itself.”Read more at The Daily Beast.Get our top stories in your inbox every day. Sign up now!Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you.

MIAMI (AP) — Federal prosecutors in Miami are seeking a stiff prison sentence against a U.S.-based money manager they claim is hindering their efforts to seize a .7 million home and other assets he agreed to forfeit when he pleaded guilty to laundering bribe payments for a corrupt Venezuelan official. “Based on his record, the defendant is not an individual who shows respect for the law and is someone who is not easily deterred from committing the same offense more than once,” prosecutors wrote. “He should be made to understand that the crime of money laundering is a serious federal

The new civil lawsuit filed in the Southern District court of Florida in January alleges that Serhiy Kurchenko, a second Ukrainian oligarch, illegally acquired Brokbusiness Bank, another Ukrainian financial institution, siphoned off its clients’ money and laundered it through Kolomoisky’s Miami network.

The Treasury Department placed Kurchenko on its sanctions list in 2015 to “target the misappropriation of state assets” in Ukraine.

The disputed money — $393 million — belongs to two companies, ZUKK Trading and Intertransgroup, and two individuals, Vitaly Didylivsky and Nikolay Kovzel, according to the civil complaint and attached documents. They are not the plaintiffs themselves but their interests are being represented by Washington state-based businessman Oleg Zhukovskiy. Zhukovskiy, according to his attorneys, has been Nikolay Kovzel’s business associate for many years. Kovzel, a former member of Ukraine’s parliament, headed Intertransgroup till a couple of years before their investments in Brok Bank, according to the recent lawsuit.

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The lawsuit was filed against the National Bank of Ukraine, the country’s central bank, claiming bank officials looked the other way while Kurchenko illegally took control of Brok Bank.

The complaint also alleges that the national bank managed to re-acquire some of the disputed funds in 2014, but instead of returning them to Brok Bank’s clients it declared Brok Bank insolvent and used that money to settle Ukrainian government debt.

The lawsuit cites the Miami raid from last year and alleges that Miami men Uriel Laber and Mordechai Korf helped both Kolomoisky and Kurchenko launder money through their “Optima” group of companies. Marc Kasowitz, their lawyer, denied that his clients had any involvement with any of the parties in the new lawsuit and added that they are contesting the prior DOJ allegations as well.

He said the lawsuit “appears to be an attempt to capitalize on the well-publicized dispute between Mr. Korf and Mr. Laber and ... PrivatBank.”

———

Ihor Kolomoisky was born in 1963 in Dnipropetrovsk, an industrial province in eastern Soviet Ukraine. He graduated in 1985 from Dnipropetrovsk Metallurgical Institute with a degree in engineering. After the fall of the Soviet bloc, Kolomoisky started trading in consumer goods from Singapore and in 1991 founded the oil supplier Sentosa Ltd. with Oleskiy Martinov and Gennadiy Boholiubov. The next year, the three established PrivatBank Group.

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Amid the drive to privatize previously nationalized state assets ⁠— real estate, infrastructure, raw materials ⁠— Kolomoisky and his two partners assembled a sizable portfolio.

The trio developed a reputation for aggressive takeovers of companies, most notably the now-legendary raid on the Kremenchuk steel plant in 2006. Under orders allegedly given by Kolomoisky, an army of hired thugs wielding guns, baseball bats, iron bars and chainsaws forcibly took over the plant, according to Forbes.

Kolomoisky and his partners fashioned a business empire worth hundreds of millions. They control thousands of companies across the world and are involved in industries as wide-ranging as oil and energy, minerals, airlines, banking, soccer and real estate.

Their crown jewel was Ukrnafta — the largest oil and gas company in Ukraine.

In 2014, with Crimea just annexed by Russia and the nearby Donbass region in eastern Ukraine under attack from Kremlin-backed separatists, Kolomoisky accepted the governorship of Dnipro province ⁠— the front line ⁠— and poured millions into pro-government militias that held out until Ukrainian soldiers arrived.

In addition to his other holdings, Kolomoisky owns media outlets in Ukraine that are influential and courted by Ukrainian politicians. He is thought to be the main backer of current Ukrainian president Volodymyr Zelensky.

His power is apparent even outside the country: When Rudy Guiliani, Donald Trump’s personal lawyer, sought to dig up dirt on Joe Biden’s son ⁠— an effort that would later lead to Trump’s first impeachment ⁠— he had his associates, Florida men Lev Parnas and Igor Fruman, meet Kolomoisky in Israel to try and arrange a meeting with President Zelensky. Kolomoisky declined.

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PrivatBank, owned by Kolomoisky and Boholiubov, accounted for a quarter of the Ukrainian banking sector from 2003 to 2016 and held deposits in excess of $6 billion, including a third of individual deposit accounts in the country, according to the FBI’s forfeiture request.

In the midst of the conflict with Russia and with Ukraine at the brink of civil war in 2014, then-President Viktor Yanukovych fled to Russia. BuzzFeed News reported that Yanukovych and his associates were suspected of spiriting a total of $40 billion from the country. The United States sanctioned him and a Ukrainian court found him guilty of treason.

Under the new president, Petro Poroshenko, also an oligarch, the country’s central bank, National Bank of Ukraine, started auditing PrivatBank. It uncovered a scheme by Kolomoisky and his partner Boholiubov “to steal over $5 billion from the bank via the issuance of fraudulent loans,” the forfeiture petition states.

The mechanics, according to the DOJ document, were simple: Through a series of shell companies, Kolomoisky and Boholiubov took out loans from PrivatBank and rarely paid them back. Documents were sometimes forged and the applications rubber-stamped by a “special committee” they had installed. The money was then moved through companies all over the world. Millions of dollars were funneled into Miami and companies controlled by their Miami-based associates, Uriel Laber and Mordechai “Motti” Korf, the DOJ forfeiture peitition said.

The same money was used to invest in the United States.

“They purchased more than five million square feet of commercial real estate in Ohio, steel plants in Kentucky, West Virginia and Michigan, a cell phone manufacturing plant in Illinois, and commercial real estate in Texas,” the DOJ alleged in its forfeiture petition. “The magnitude of the fraud and theft was so great that NBU [National Bank of Ukraine] was forced to bail out the bank [PrivatBank] by providing $5.5 billion in order to stave off economic crisis for the whole country [Ukraine].”

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While Kolomoisky made millions, hundreds suffered, an investigation by the International Consortium of Investigative Journalists reported last year.

In the United States, his companies left a trail of boarded-up buildings, hazardous working conditions in factories, unpaid taxes and at least four steel plants that went bankrupt. Hundreds of steelworkers in New York state, Ohio, Kentucky and Illinois were left unemployed and in one case, without insurance coverage and access, at least temporarily, to retirement funds, ICIJ reported.

The national bank nationalized PrivatBank in 2016 but Kolomoisky is fighting to recover $2 billion in compensation for alleged losses.

———

Founded in 1991, Brokbusiness Bank or simply Brok Bank was among Ukraine’s respected banks and in 2014 held assets worth roughly $3.5 billion. Under Ukrainian law, the sale of more than 10% or more in securities of Brok Bank required approval by the National Bank of Ukraine.

But in 2013, Serhiy Kurchenko acquired around 80% of Brok Bank’s shares by creating a series of shell companies that he indirectly controlled ⁠— each of which purchased 9.98% of the bank’s ownership, the lawsuit in Florida states.

At 29, Kurchenko became a billionaire trading in gas, thanks to ties to an oligarch close to Russian President Vladimir Putin’s inner circle, Dmytro Firtash, according to Reuters. Kurchenko was also close to Viktor Yanukovych, the Kremlin-leaning Ukrainian president at the time, and was later accused by the succeeding Ukrainian government of systematically evading millions in taxes with the collusion of officials in Yanukovych’s administration. Like Yanukovych, Kurchenko currently lives in exile in Russia.

Kurchenko laundered the funds “siphoned from Brok Bank through PrivatBank and a complex array of companies and individuals, based in Miami, Florida, to completely disguise the nature, source, ownership, and control of the funds,” the civil complaint alleges, naming Kolomoisky, Laber and Korf’s network.

A partnership between a once anti-Kremlin oligarch and another who benefited from people in Putin’s inner circle may seem strange but it highlights how alliances between oligarchs and politicians frequently shift and change in a post-Soviet Ukraine rocked by a series of corruption scandals, protests that led to the ouster of a president and even war.

“Mr. Kurchenko stole our client’s funds and Mr. Kolomoisky stole part of those funds from Mr. Kurchenko,” said Zhukovsky’s attorneys, Harold E. Patricoff Jr. and Aleksey Shtivelman, referring to the allegations laid out in the civil suit.

“In addition, Mr. Kurchenko and Mr. Kolomoisky worked together as partners, and the Plaintiff’s Funds were laundered through their joint network of companies. We intend to reach out to the FBI and DOJ.”

The complaint goes on to allege that during the tenure of Viktor Yanukovych, senior officials of the National Bank of Ukraine colluded in the theft of funds from Ukraine.

The complaint also asserts that after the Yanukovych administration fell, Valeria Gontareva, the head of the national bank under the succeeding administration, did nothing to return the pilfered funds. It alleges that the plaintiffs were led to believe that they would receive the proceeds of Brok Bank’s liquidation by the national bank.

“Instead of returning the assets to the depositors of Brok Bank, NBU then used those Funds … for its own benefit. For example... NBU used those funds to repay interest on Ukrainian government bonds in the United States,” the complaint, filed in January, says.

Gontareva said she had not heard of the lawsuit when contacted by the Herald’s reporting partner, the Organized Crime and Corruption Reporting Project.

Gontareva herself is currently under investigation by Ukrainian authorities on suspicion of embezzlement and had previously been investigated on suspicions of helping Kurchenko launder illicit money. She has not been criminally charged. Recently she claimed to have been the victim of several attacks, including one in London where a car nearly ran her over and another incident of arson at her family home in Ukraine. She told the British daily the Guardian that the attacks were from Kolomoisky in revenge for spearheading the nationalization of PrivatBank.

“The NBU will take the adequate actions to protect its rights and interests,” the national bank said in a statement to the Miami Herald when asked about the Florida lawsuit.

———

(Monika Leal of the Miami Herald contributed to this report, as did the Europe-based investigative news outlet Organized Crime and Corruption Reporting Project.)

EXPLAINER: What's behind the conflict in eastern Ukraine? .
MOSCOW (AP) — Tensions are rising over the conflict in eastern Ukraine, with growing violations of a cease-fire and a massive Russian military buildup near its border with the region. Ukraine and the West have become worried about the Russian troops' concentration and have urged Moscow to pull them back. Russia has argued that it's free to deploy its forces on its territory and sternly warned the government in Kyiv against using force to reclaim control of the rebel-held territory east where more than 14,000 people have died in seven years of fighting. © Provided by Associated Press FILE - In this Dec.

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