Martha Boersch, an ex-U.S. prosecutor, has a unique achievement on her record.
So far, she is the only person who’s managed to successfully convict a high-profile Ukrainian official in a corruption case.
For a country awash with graft and yet utterly failing to prosecute it, Boersch’s case against ex-Prime Minister Pavlo Lazarenko set an important precedent.
Boersch, a former federal prosecutor in San Francisco and now a co-owner of the Boersch Shapiro law firm, explained how she managed to imprison Lazarenko in a lecture during a visit to Kyiv last week.
Some questions about the Lazarenko case remain controversial, however. One of them is why Batkyvshchyna Party leader Yulia Tymoshenko was not prosecuted despite being initially named a co-conspirator.
Commenting on the accusations, Tymoshenko’s spokeswoman Maryna Soroka referred to Boersch’s statement that Tymoshenko was a victim of Lazarenko and to the court verdict against him, in which Tymoshenko was not named.
Jailing Lazarenko
Lazarenko, who was prime minister in 1996 to 1997, was first arrested in Switzerland in 1998 and released on bail.
Subsequently he was arrested in New York in 1999 and charged with extortion, money laundering and fraud in 2000. He was put under house arrest in 2003.
In 2006 a San Francisco court sentenced Lazarenko to nine years in prison and a $10 million fine. He was released in 2012.
According to a United Nations estimate, Lazarenko looted about $200 million from the Ukrainian government 1996 to 1997.
He accused then-President Leonid Kuchma of prosecuting him for political reasons and claimed that Kuchma’s people had tried to kill him.
“Lazarenko maintained that the prosecution was motivated in large part by President Kuchma because Lazarenko and Kuchma had had a personal falling out,” Boersch said.
Lazarenko transferred $97 million from his Swiss bank accounts to Antigua-based European Federal Credit Bank in 1997, which was subject to U.S. jurisdiction because of the currency chosen, she said.
“Because the money was in dollars, it necessarily had to pass through United States banks,” she added. “And when money goes through a U.S. bank, it’s a potential violation of the U.S. law called the Wire Fraud Statute, which provides that it’s a federal criminal offense to conduct a wire transfer of any kind in furtherance of any fraud.”
U.S. authorities also arrested Petro Kyrychenko, a business partner of Lazarenko who took part in his schemes.
He reached a plea agreement with prosecutors, which was “incredibly significant” for the investigation, Borsch said.
“Most large cases and most cases involving conspiracies are done in the United States by virtue of plea agreements that are reached with lower-level people or people at the same level who decided to cooperate,” she said.
One problem was that most evidence in the case came from overseas, Boersch said.
U.S. prosecutors had to send legal assistance requests to 30 countries, she added.
Boersch said that Ukrainian prosecutors’ assistance was “important” and “critical” for the investigation.
They asked a court to authorize the taking of foreign depositions and took testimony in Ukraine, London, Cyprus, Turkey and Switzerland, Boersch said.
Other problems included translation difficulties, cultural differences and differences in legal systems, she added.
Tymoshenko link
One of the most controversial aspects of the Lazarenko case is its alleged connection to Tymoshenko.
She was initially named as a co-conspirator in the U.S. indictment against Lazarenko but the court rejected prosecutors’ definition.
In the mid-1990s Lazarenko gave Tymoshenko’s UESU company an exclusive right to distribute gas in Dnipropetrovsk, Boersch said.
“UESU had a parent company called UEIL in London,” she added. “Based on bank records that we saw, money from the sales of gas would go through UESU to UEIL to a company called Somolli in Cyprus, which was set up by Tymoshenko.”
From Somolli, money went to Lazarenko’s Swiss bank accounts, she said.
“Mr Lazarenko agreed to assist businesses with whatever they needed from the government as long as he was paid 50 percent of the profits of their business,” Borsch added. “If he did not have 50 percent of the profits, this business might have trouble to get some of the things it needed.”
Borsch said U.S. prosecutors had attempted to interview Tymoshenko but she declined.
“I never got Ms Tymoshenko’s side of the story,” she added. “So I can’t tell you what the actual facts are.”
She said that “Ms Tymoshenko was never a target of our investigation.”
Boersch also said that “most U.S. attorneys have enough on their plate – they have enough local criminals that they’re not going to spend their resources on someone who’s not there.”
She argued that she “viewed Miss Tymoshenko as a victim of Mr Lazarenko” similarly to Kyrychenko. Lazarenko extorted money from both of them, Boersch said.
Leshchenko dismissed the theory that Tymoshenko was a victim of extortion and argued that she participated in the corruption scheme.
The theory also contradicts Boersch’s earlier statements on Tymoshenko.
“Tymoshenko and Lazarenko created a scheme to deceive Ukrainians by transferring money that UESU received for gas to Lazarenko’s accounts in Switzerland,” she told Leshchenko in a 2011 interview.
She said in the interview that prosecutors could not prove Tymoshenko’s participation in Lazarenko’s schemes because Russia, from which UESU was buying gas, had refused to cooperate.
Kyiv Post staff writer Oleg Sukhov can be reached at [email protected].
