Kyiv Arrests Ex-Motor Sich Chief’s Son in $650M Fraud Case

Ukraine’s Security Service (SBU), working with the Prosecutor General’s Office and law enforcement agencies in France and Monaco, has detained the son of the former president of the the leading Ukrainian aircraft engine manufacturer, Motor Sich.

Oleksandr Bohuslayev, the son of former Motor Sich president Vyacheslav Bohuslayev, was detained on suspicion of embezzling company assets worth hundreds of millions of dollars.

“The Security Service of Ukraine and the Prosecutor General’s Office have uncovered a large-scale scheme involving the misappropriation of Motor Sich’s assets,” the SBU press service said in a statement posted Friday, May 2 on Telegram.

According to the investigation, the Bohuslayevs are among a group of suspects that illegally seized a controlling stake in the state-owned enterprise and sold it to third parties for $650 million.

Investigators allege that Oleksandr Bohuslayev assisted his father in misappropriating the shares of Motor Sich before Russia’s full-scale invasion began, and then helped sell them.

To carry out the scheme, the then-president of Motor Sich organized a reevaluation of the company’s assets that deliberately undervalued its shares. He subsequently acquired 65% of the company’s stock at a reduced price and transferred the majority of it to six offshore firms controlled by his son, the SBU alleges.

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To launder the stolen assets, the suspects sold them to foreign companies and used the proceeds to purchase luxury real estate in the European Union, the press release says.

“As part of the international investigation, simultaneous searches were conducted at the suspect’s seaside villa in Monaco and at residences of affiliated individuals in Zaporizhzhia,” the SBU said.

The SBU has officially charged Oleksandr Bohuslayev with money laundering committed by an organized group on a large scale. If convicted, he faces up to 12 years in prison and asset confiscation.

Meanwhile, a new criminal charge has also been filed against Vyacheslav Bohuslayev – who is already in custody on accusations of collaborating with Russia.

Additional charges have been brought under several articles of Ukraine’s Criminal Code.

Other scandals

Motor Sich sold aircraft engines to Iranian companies for years, ignoring international sanctions imposed on Iran, as recently by the Radio Liberty news outlet reported via its journalistic investigative project “Schemes.”  

The Iranian clients o included companies involved in the manufacture of the Shahed-171 and Shahed-136 drones – which are now being used by Russia to attack Ukrainian cities.

Also, in April 2022, Motor Sich,  received an order from the Defense Intelligence Department of the Ministry of Defense of Ukraine for the supply of an MI-2 helicopter.

A joint SBU and Defense Intelligence investigation found that Vyacheslav Bohuslaev, had ordered his subordinates to dismantle the helicopter and hide its operating documentation – thereby sabotaging timely delivery of the helicopter.

The SBU accused Bohuslaev of obstructing the legitimate activity of the Armed Forces of Ukraine.

In October 2022, Bohuslaev and the Head of the Foreign Economic Activity Department of Motor Sich were arrested by SBU on charges of collaboration with and aiding and abetting Russia.

The SBU reported that it had evidence that the company kept supplying engines and spare parts to Russia for its attack helicopters, even after the Kremlin’s full-scale invasion of Ukraine.