You're reading: Firtash indicted for racketeering in US, could face many years in prison if convicted

Ukraine's controversial oligarch Dmytro Firtash could go to prison for decades and lose all of his assets if he is found guilty of racketeering charges detailed in a federal indictment by U.S. prosecutors on April 2.

The criminal case against Firtash could also put more heat on Russian President Vladimir Putin because of state-owned Gazprom’s business ties with companies belonging to Firtash.

Firtash’s representatives deny the accusations.

“There is no truth to the accusations. It is not a coincidence that the U.S. is trying to extradite our chairman at the moment when Mr. Firtash is needed for the economic and political reconstruction of Ukraine. This is an abuse by the U.S. of the Austrian justice system for ulterior political motives,” according to Robert Shetler-Jones, deputy chairman of Firtash’s Group DF.

The indictment charges Firtash, four Indian and one Hungarian national with organizing an international racketeering conspiracy that allegedly bribed state and central government officials in India for permission to mine titanium minerals.

From 2006-2010, the defendants allegedly conspired to pay at least $18.5 million in bribes to secure licenses to mine minerals in an eastern Indian state. The project was expected to generate more than $500 million annually from the sale of titanium products, including sales to Chicago-headquartered Boeing, an aircraft manufacturing company.

Some of the charges against Firtash carry maximum sentences of 20 years for each count. The indictment also includes provisions for forfeiture of assets used in the conspiracy – including all of Firtash’s interests in Group DF.

Firtash was arrested on March 13 by Austrian authorities at the request of the FBI on suspicion of ties with organized crime and bribery. Firtash has been linked through U.S. diplomatic cables to one of the U.S. Federal Bureau of Investigation most wanted fugitives, Semyon Mogilevich, who is believed to be one of the chief bosses of the Russian mafia.

Firtash was released on March 20 after posting $174 million bail and is currently residing in Austria awaiting extradition to the U.S. – a process that could take months. He met with presidential candidate Petro Poroshenko and mayoral candidate Vitali Klitschko in Vienna last week, according to Austrian Foreign Minister Sebastian Kurz.

Because Firtash is being charged with racketeering involving a U.S.-registered company, in this case in Chicago, if convicted he could lose the bulk of his empire pursuant to Title 18, U.S. Code, 1962, a part of the American racketeering and conspiracy laws. This would include all interests in Group DF and its assets: 14 companies registered in Austria, 18 companies in the British Virgin Islands and more than 100 other businesses from Cyprus to Switzerland.

The unsealing of the indictment at this time coincides with U.S. efforts to increase international pressure on Putin, since he appears unwilling to abandon either Russia’s occupation of the Crimean peninsula or his meddling in Ukrainian affairs. A March 24 Bloomberg article argues that Firtash is well-placed to give American authorities information on the murky dealings of Russian gas giant and economic pillar of Putin’s Russia Gazprom.

Firtash was a 45 percent shareholder of the gas trader UkrRosEnergo, the sole Russian gas importer into Ukraine in 2006-2009, whose shareholder on behalf of Gazprom, the FBI alleges, was Semion Mogilevich, who is believed to be an organized crime boss. Also, Firtash has joint investments with Russian businessmen who appear on a U.S. sanctions list, including brothers Arkady and Boris Rotenberg.

Senior fellow at the Heritage Foundation in Washington, D.C. Ariel Cohen told Bloomberg that “the charges seem designed to get Firtash inside the U.S. and persuade him to cut a deal for information about Gazprom and people close to Putin.”

“Firtash was very deeply involved in the fine print of Gazprom’s dealings in Ukraine, in the financial transactions,” said Mikhail Korchemkin of East European Gas Analysis. “If Firtash strikes a deal with the FBI and starts to give testimony it could threaten severe consequences for Gazprom managers and the company itself.”

Firtash and his associates had wanted to get into the titanium sponge business in the U.S. by supplying Boeing with 12 million tons of the valuable material via dubious contracts with a source in India. Titanium is used heavily in the aircraft industry. Allegedly, Firtash used his business reputation, financial resources as well as “threats and intimidation” to orchestrate and conceal a bribery scheme involving Indian officials who needed to approve mining licenses, according to the indictment.

Firtash’s fortune was estimated at $2.4 billion in November, but now it is reportedly around $670 million. He owns chemical, energy, media and titanium assets in Ukraine. He is also a philanthropist, launching educational scholarships for Ukrainian students at Cambridge University and Ukrainian Days in Great Britain, which was seen as an attempt to improve the mogul’s public image amid all the corruption accusations.

Kyiv Post business journalist Evan Ostryzniuk can be reached at [email protected].