Pechersk District Court of Kyiv has lifted the arrest of accounts of companies that authorities believe were used to launder money for Oleksandr Yanukovych, the eldest son of fugitive Ukraine’s President Viktor Yanukovych, who in 2014 fled to Russia with his father after the EuroMaidan Revolution.
The court made the ruling in late February but it only made headlines when the Economichna Pravda news website reported it on April 17.
The unfreezing of assets comes as a yet another manifestation of Ukraine’s authorities’ failure to prosecute Yanukovych and his cronies, or to recover the estimated $40 billion they stole during the ex-president’s four years in power.
The unfrozen accounts belong to nine companies that Ukrainian authorities consider affiliated with Yanukovych, who was reportedly his father’s right hand in business issues. The accounts were opened in Yanukovych’s own bank, the Ukrainian Development Bank (Vseukrainsky Bank Rozvytku) that has been in process of liquidation since 2015.
The companies were allegedly used in a money laundering scheme that saw hundreds of millions of hryvnia stolen from the National Bank of Ukraine and state companies.
How the scheme worked
Yanukovych’s bank allegedly gave loans that totaled Hr 2.5 billion to several branches of Ukrzaliznytsya state railway company in 2012-2014, when its owner’s father was president. The loans, investigation says, were illegal – the state companies’ management violated the procedures when taking them. Also, the interest rates were inflated.
To provide the loan, the bank itself borrowed money from the National Bank of Ukraine, but instead of using this money as a loan for Ukrzaliznytsya, transferred all or part of it into the accounts of 33 employees of the bank and 12 companies belonging to the employees.
At one point, Hr 113 million was stored in the account belonging to the unnamed head of securities department, while an office manager held over $4 million, according to one of the dozens of court rulings related to the case.
Prosecutor General’s Office of Ukraine considers Oleksandr Yanukovych himself to be the mastermind benefiting from his employees’ fraud. The fugitive businessman repeatedly denied any connection through his spokesperson.
No progress
The investigation of the scheme saw little to no success since it started in 2014.
No arrests were made, and companies and individuals allegedly involved in the scheme have been winning case after case to lift the arrests of their accounts.
Back in October 2015, the same court, Kyiv Pechersk Court, lifted arrest of accounts of three former employees of the bank that investigation thought were involved in the money laundering scheme. The accounts stored some $15 million.
The three individuals demanded the lift of the arrest of their funds because they were not suspects in the case that the arrest came in relation to, and won.
But one detail in the case suggested its connection to the Yanukovych family.
One of the three plaintiffs, a former office manager of the bank Valeria Yesaulkova, offered the court an explanation for the origin of more than $4 million in her account: She claimed she borrowed the money from a man named Yashar Khodzhayev.
Khodzhayev is a familiar name: This low-key citizen of Yenakieve, hometown of the Yanukovych family in Ukraine’s Donetsk Oblast, became famous in 2015 when he bought Tantalit, a company that legally owns ex-president’s scandalous estate Mezhyhirya near Kyiv. De facto, Mezhyhirya has been controlled by volunteers since Yanukovych’s escape in 2014.
Then came February, and the unfreezing of accounts belonging to nine out of 12 companies implicated in the money laundering scheme. The accounts stood arrested since 2015.
The court lifted the arrest on the companies’ demand because the investigators failed to prove that the money in the accounts has a criminal origin.
There is no information regarding how much money the accounts stored but back in 2013-2014 more than Hr 1 billion passed through them, according to the court records.
The nine firms are Ukrainian-registered limited liability companies Aranit K, Kvardis N, Tilikon A, Vektor-Perspektyva, Asset Management Company VBR-Invest, Di Sous, Melon 8, Benefit-Consult, and Lightroom.
Good to be Yanukovych
Life has treated Yanukovych’s elder son well lately.
While Ukraine’s authorities have been declaring their firm resolution to prosecute Yanukovych and his circle, his son wasn’t even made a suspect in the money laundering case that involved his bank, the state behemoth of Ukrzaliznytsya and the National Bank.
In fact, in Ukraine, he was a suspect only in one investigation: an alleged tax evasion by Artemivsk Vinery, a large wine producer that he owned in Donetsk Oblast. But even that investigation was terminated in November due to the absence of the main suspected, according to Nashi Groshi corruption watchdog.
And before that, in May 2017, Interpol removed both of the Yanukovychs, father and son, from the international wanted list because Ukrainian authorities hadn’t provided grounds for keeping them on it.
But the former “first son” has his eye on some bigger legal battles to win.
Back in 2015, Oleksandr Yanukovych filed a suit to the European Court of the Human Rights to annul the liquidation of his bank that the National Bank ordered following his escape in 2014. He also demands the lift of the European Union sanctions that have had his assets in EU frozen since 2014.
The EU has assets of Yanukovych, his father and 11 of his cronies frozen for misappropriation of Ukrainian state funds and abuse of office.
Yanukovych’s son also sought Hr 1.6 billion in compensation from Ukraine for the liquidation of his bank. He filed the suit in Ukraine in 2017 but a Kyiv court rejected it.
What’s in it for Poroshenko?
President Petro Poroshenko’s name popped up in Yanukovych’s bank’s money laundering scheme.
It happened in January 2017, when three former employees of Yanukovych’s bank transferred Hr 312 million from their personal accounts in the bank – the International Investment Bank, where Poroshenko is the main shareholder.
The bank issued a statement saying it hadn’t known about the upcoming transaction and informed the State Financial Monitoring service when it happened.
Soon after the transaction, Kyiv Pechersk District Court arrested the money upon demand from the Prosecutor’s General Office of Ukraine, which claimed the Hr 300 million belonged to Oleksandr Yanukovych.
Two months later the same court lifted the arrest on the grounds of lack of evidence. But days later, the prosecution reestablished the arrest, solidifying the Hr 300 million in Poroshenko’s bank.
