Ukrainian oligarch Ihor Kolomoisky once was quoted as telling one of his opponents, “Look, life is a supermarket. Take what you want, but remember, there is a cash register ahead of you.” That’s what he wanted to warn his rivals, but the prophecy is now working against the author of the line.
On Aug. 6, the U. S. Justice Department de facto accused the Ukrainian oligarch of stealing billions of dollars from the country’s largest bank, PrivatBank, using a vast array of companies to launder that money to the United States and all over the world.
We don’t know if Kolomoisky is facing a criminal indictment. The grand jury, empaneled by federal prosecutors, makes such decisions that don’t immediately become public.
The decision can remain secret until a suspect enters a jurisdiction that allows the U.S. to take him into custody. This can take months or years. Or it may be like the case of Russian organized crime boss Semyon Mogilevich, who hasn’t left Russia for 20 years and has spent all this time on the FBI’s most wanted list of fugitives.
What we can say for sure is that the U.S. has filed two civil forfeiture complaints, seeking to seize commercial properties of Kolomoisky in Louisville, Kentucky and Dallas, Texas. The investigation believes that, to buy these properties through his ferroalloy business, Kolomoisky used money illegally taken from PrivatBank.
By signing the appeals to the court, the U. S. attorney for the Southern District of Florida not only certified that everyone is equal before the law, but also stated that Kolomoisky’s actions in the U.S. had violated the law. Given that Ariana Fajardo Orshan was appointed by President Donald J. Trump, this largely debunks myths suggesting that Kolomoisky’s attempts to attack the Democrats would be useful to the current administration.
My sources also say that the FBI was satisfied with the results of searches carried out in the offices of the Optima holding in Miami and Cleveland, which is affiliated with Kolomoisky. The FBI seized many documents and computer servers. If the grand jury has brought or will bring formal charges against Kolomoisky for federal crimes, he will be put on a wanted list and his assets will be frozen worldwide.
We can already say that the Kolomoisky case has become an example of how U.S. justice cleans up corruption in Ukraine. Ukrainians, meanwhile, pay taxes to finance a dozen law enforcement agencies, many of which are unreformed, and Kolomoisky has his people inside those agencies, which allows him to go unpunished.
For example, in 2005, Kolomoisky was almost charged in Ukraine with the attempted murder of lawyer Serhiy Karpenko, whom the oligarch threatened in the presence of witnesses and then attacked. However, at the last moment, prosecutors withdrew the warrant for his arrest from the court, which allegedly cost Kolomoisky $50 million, according to London court materials. Years later, the investigator who handled the case died in Russia’s war in the Donbas under mysterious circumstances.
I cannot say that Ukraine doesn’t fight corruption. Over the past five years, the country has created the National Anti-Corruption Bureau (NABU), the Specialized Anti-Corruption Prosecutor’s Office and a separate High Anti-Corruption Court. The agencies have handed notices of suspicion to lawmakers who robbed railroads and amber fields and tycoons Mykola Zlochevsky, Oleg Bakhmatyuk, Oleksandr Onyshchenko and Mykola Martynenko; corruption has been revealed in the energy market, defense procurement and inside the courts. Such an active battle against corruption is unprecedented in Ukraine. We couldn’t even imagine it would be this way six years ago.
And yet most of the law enforcement agencies are determined to keep covering each other’s backs and create obstacles for anti-corruption fighters, rather than help them expose corrupt individuals.
Under these conditions, U.S. justice becomes an ally of Ukrainian corruption fighters: journalists, civil activists and law enforcement agencies. This is the third time in Ukrainian history when top oligarchs have lost ground thanks to investigation in the U. S. Corrupt ex-Prime Minister Pavlo Lazarenko and oligarch Dmytro Firtash, for example, were exposed by the U.S. too, and they — like Kolomoisky — made millions of Ukrainians shiver in fear.
In summer 2011, I spent three weeks at the District Court for the Northern District of California studying the case of Lazarenko, who was eventually sentenced to eight years in prison. Therefore, I can imagine how exactly the investigation works in the U.S.
Initially, federal prosecutors charged Lazarenko with more than 50 counts, but in the end, he was charged with only eight, including extortion of money and money laundering. To punish Lazarenko, the U.S. government proved that his closest associate, advisor and businessman Petro Kirichenko gave half of his income to Lazarenko against his own will — under pressure. Meanwhile, ex-Prime Minister Yulia Tymoshenko, who paid $100 million in kickbacks to Lazarenko, didn’t want to cooperate with the investigation and was afraid of flying to the U.S. for many years.
In the Firtash case, the essence of the crime was to give an $18.5-million bribe to Indian authorities in Andhra Pradesh to ensure his firm would receive a license to extract ilmenite, from which he expected to gain over $500 million in profit. In this situation, the most challenging part was to prove U.S. jurisdiction because while he is accused of bribing Indian officials to get titanium for Boeing, in the end the titanium was never supplied to the American company. In the end, the U.S. could solve the case because Firtash and his accomplices discussed bribes by phone and they used the services of U.S. mobile carrier AT&T in Illinois.
Now it’s the Kolomoisky case in the spotlight. Among Kolomoisky’s and his partner Hennadiy Boholiubov’s purchases were over 5 million square feet of commercial real estate in Ohio; steel plants there and in Kentucky, West Virginia and Michigan; a cellphone manufacturing plant in Illinois; commercial real estate in Texas; an office park in Dallas and the PNC Plaza building in Louisville, the Justice Department alleged. For this purpose, they used sham companies that withdrew money from PrivatBank and sent it to the U.S.
After Kolomoisky’s name hit the headlines again, some people yet again suggested that the U.S. should investigate all our homegrown corrupt officials. But the U.S. only takes on those who have broken U.S. laws. And unlike Ukraine, the U.S. goes through combined prosecution, when both criminal charges and civil suits are used. In the Kolomoisky case, while conducting investigations in Cleveland and Miami, the U. S. Department of Justice additionally filed a civil suit with the District Court for the Southern District of Florida.
Lazarenko was charged with eight specific cases of laundering $22 million. The U. S. government later initiated a claim based on collected evidence seeking the forfeiture of $250 million. The sought funds have been held in various bank accounts throughout Antigua and Barbuda, Guernsey, Liechtenstein, Lithuania and Switzerland. This case, which is being heard in Washington, D.C., has been pending for 15 years.
Another distinguishing feature of the U.S. judicial system is that the U.S. is looking for a weak link around the main suspect. In the case of Lazarenko, it was Petro Kirichenko, who was arrested in the U.S. and placed with Lazarenko in one cell for six months. He then agreed to cooperate with the prosecutors. In Firtash’s case, the weak link was Gajendra Lal, who lived in the U.S. and was involved in bribes on behalf of Firtash. He was the main source in the case and took part in it actively until fleeing to Russia and disappearing.
In the Kolomoisky case, the weak link was his U.S. partners who ran the business to launder money withdrawn from PrivatBank. First and foremost, we are talking about Mordechai Korf, one of the managers of the Optima Management Group. It was Korf’s three days and nine hours of testimony in a Florida court that became the starting point for Kolomoisky’s current troubles.
Kolomoisky’s habit of cheating his partners came back to bite him. One of those who decided not to him get away with it was Vadim Shulman, who comes from Kryvyi Rih, has an Israeli passport and lives in the U.S. and Monaco.
To bring Kolomoisky to justice, Ukrainian businessman Vadim Shulman spent almost five years trying to get Korf to testify in court. He failed in the British Virgin Islands and tried to drag him under oath in four states. Eventually, the suit was accepted for trial in Miami, where Optima’s headquarters is located. Facing the judge, raising his right hand and swearing to tell the truth, the whole truth and nothing but the truth, Korf turned Kolomoisky in. He revealed the oligarch’s entire structure of connected persons, thus handing over to Shulman a deadly weapon, which then ended up in the hands of the FBI and formed the basis for the current investigation.
Now, Kolomoisky can expect to have his property seized, spend plenty of money on lawyers and distance himself from many friends. He should recognize that his fate is sealed.
U.S. justice will punish one more corrupt man and do the job of the Ukrainian authorities.
