PrivatBank on May 21 filed a new lawsuit against its former owner Ihor Kolomoisky in the Delaware Chancery Court in the U.S.
According to a copy of the complaint obtained by the Kyiv Post, PrivatBank is suing Kolomoisky, oligarch Gennadiy Bogolyubov and multiple business associates for stealing money from the bank – Ukraine’s largest lender – before laundering and parking the money in U.S. commercial real estate. When the bank was nationalized by the Ukrainian government in 2016, it had a $5.5 billion hole in its ledger.
“[Kolomoisky and Boholyubov] used PrivatBank as their own personal piggy bank—ultimately stealing billions of dollars from PrivatBank and using United States entities to launder hundreds of millions of dollars’ worth of PrivatBank’s misappropriated loan proceeds into the United States to enrich themselves and their co-conspirators,” the complaint said.
Besides the two defendants, the complaint also names Mordechai Korf, Chaim Schochet and Uriel Tzvi Laber, who had previously been linked to Kolomoisky by Ukrainian investigative journalists.
Korf owns a series of metallurgical companies in the U.S., along with Laber, who was also once a director of Ukrnafta, of which Kolomoisky holds a significant stake. Schochet is allegedly Korf’s brother-in-law and a major commercial real estate landlord in the state of Ohio.
Also among the defendants are 20 U.S. companies, many registered in the state of Delaware and allegedly owned by the oligarchs and their business partners. Delaware is widely known as a corporate tax haven, with hundreds of thousands of companies registered there.
The causes of action include: unjust enrichment, fraudulent transfers, violations of Ohio’s Corrupt Practices Act and civil conspiracy. PrivatBank requested that the court declare the Delaware companies to be Kolomoisky and Bogolyubov’s alter egos and to pierce the corporate veil that protects these enterprises.
The bank requested statutory, punitive and treble damages and asked the court to create a trust for the assets to be claimed from the defendants for their alleged misconduct.
Kolomoisky and Bogolyubov’s counsel, Michael Sullivan of The Ashcroft Law Firm was not immediately available to comment and neither were other lawyers that were previously retained by Kolomoisky. However, legal publication Law360 quoted Sullivan as saying that the defendants denied all wrongdoing.
Michael A. Barlow of the U.S. law firm Abrams & Bayliss LLP, who is representing PrivatBank, declined to comment on the lawsuit to the Kyiv Post.
The case comes at a time when Kolomoisky is allegedly being investigated for financial crimes and money laundering by the Federal Bureau of Investigations, or FBI, according to the complaint and April media reports.
PrivatBank and Ukrainian authorities fought Kolomoisky on multiple fronts since the bank’s nationalization.
The May 21 lawsuit is similar to another one filed by PrivatBank against Kolomoisky and Bogolyubov in the United Kingdom, in which the bank alleged $1.9 billion in losses through bogus transactions using shell companies and money laundering. The U.K. courts had ruled in December that they do not have jurisdiction in that lawsuit.
And last week, the National Bank of Ukraine and PrivatBank won lawsuits against companies affiliated with Kolomoisky, according to the National Bank of Ukraine. The companies, including Nikopol Ferroalloy Plant and the Cyprus-based Trovelko Holdings Limited tried to shed their refinancing obligations to the tune of Hr 2.6 billion and Hr 143 million, respectively. The Supreme Court of Ukraine ruled against the companies.
The recent complaint alleges that PrivatBank under Kolomoisky raised funds by issuing public debts and attracting new deposits at above market interest rates. However, most of the bank’s corporate loans were fraudulently made to companies ultimately controlled by the oligarchs, according to the lawsuit.
Many of the U.S. companies involved were ones with the word Optima in their name, including Optima Group and Optima Ventures. They also included companies like Warren Steel Holdings, Steel Rollings Holdings, Georgian American Alloys and others. All of these have previously been linked to Kolomoisky.
The complaint said that hundreds of millions of dollars of that money was laundered through such companies then found its way into commercial real estate and other assets across twelve U.S. states including Ohio, Texas, Florida and Kentucky.
Meanwhile, the oligarch has been taking steps to reclaim PrivatBank at home. The Sixth Appellate Administrative Court of Kyiv recently rejected the National Bank of Ukraine’s appeal of a lower court decision that ruled that the 2016 nationalization of PrivatBank was illegal.
Experts told the Kyiv Post that if Kolomoisky wins back the bank, it could have a devastating effect on the Ukrainian banking system and destroy its ability to receive assistance from international bodies like the International Monetary Fund.
Kolomoisky recently returned to Ukraine, following the inauguration of President Volodymyr Zelenskiy.
The new president is accused of having improper ties with the oligarch. Though he denied these allegations, he fueled new suspicion by appointing Kolomoisky’s former lawyer Andriy Bohdan to chief of staff this week.
