Latvia has confiscated $30 million allegedly belonging to Ukrainian fugitive oligarch Yuriy Ivanushchenko, according to Ukraine’s Prosecutor General’s Office.
The money had been frozen in an account in a Latvian bank for over five years.
Latvian authorities arrested the money, belonging to an offshore company, in 2014, on a suspicion that it was part of an interstate money laundering scheme. The company that owned the account sued to get the money back and lost.
Ukraine believes that the money belongs to Ivanushchenko, who is charged with money laundering and racketeering in Ukraine. However, the case against Ivanushchenko has been stalled for years, and Ukraine hasn’t tried to claim the frozen $30 million.
Latvia confiscated the money in April, but it was only reported on Feb. 18, by Ukrainian news outlet Ukrainska Pravda, which cited a response it got from the Prosecutor General’s Office in Ukraine.
Yanukovych’s wallet
Ivanushchenko was among the most influential supporters of President Viktor Yanukovych, who was ousted by the 2014 EuroMaidan Revolution.
In Ukrainian media, he is often referred to as “Yura Yenakiyevsky” – by his nickname that references his hometown of Yenakieve in Donetsk Oblast. It is also Yanukovych’s hometown.
According to Ukrainian Focus magazine, Ivanushchenko’s net worth was $756 million in 2012.
Ivanushchenko was an active sponsor of Yanukovych’s governing Party of Regions. He represented the party in parliament between 2007 and 2014, though he rarely attended parliament sessions.
Ukrainian media have tied Ivanushchenko to crime, racketeering and money laundering long before prosecutors officially charged him with such.
Ivanushchenko was said to be the owner of Azovmash, one of the country’s largest metallurgical enterprises, as well as Odesa’s Seventh-Kilometer open-air market and several banks. Ivanushchenko’s possessions included agricultural, metallurgical and financial corporations.
Ivanushchenko was part of Yanukovych’s inner circle and reportedly made money from state-funded projects.
Soon after the EuroMaidan Revolution ousted Yanukovych, Ivanushchenko’s business empire began to crumble.
In December 2014, Interior Minister Arsen Avakov stated that Ivanushchenko sponsored thugs that have attacked and killed pro-European protesters during the revolution. A month later, the prosecution charged Ivanushchenko with racketeering and money laundering.
By that time, the ex-lawmaker fled Ukraine. According to investigations by Ukrainian media, he resides in Monaco.
Investigations of Ivanushchenko’s activities in Ukraine, although unsuccessful, offer a look into how Yanukovych’s circle stole money from the state.
One of the investigated schemes had Ivanushchenko receive 25% of Odesa’s huge Seventh-Kilometer market as a gift. Another allowed him to allegedly steal state money allocated to repair schools.
According to the prosecution, a firm connected to Ivanushchenko received Hr 1.7 billion ($200 million) from the state to refurbish public schools. The money came from the so-called Kyoto Protocol allocations, which Ukraine received from other countries for its quota on greenhouse gas emissions.
The money disappeared and the schools were never fixed.
Lack of prosecution
Six years after charging Ivanushchenko, Ukraine hasn’t manage to bring the case against him to court.
In the same time, the Latvian prosecution was able to move through six separate courts and finally win the case against a company linked to the fugitive oligarch, confiscating his Latvian possessions.
In 2015, when the Ukrainian prosecution charged Ivanushchenko, it became clear that he had moved his assets out of Ukraine using the Latvian Regional Investment Bank.
The Regional Investment Bank is owned by the Pivdenyi banking group of Ukrainian businessman Yuriy Rodin. According to Ukrainian news outlets, Pivdenyi is linked to Ivanushchenko and was used by fugitive Ukrainian oligarchs to legitimize their funds in Europe.
Ukraine filed a motion to freeze Ivanushchenko’s assets in Latvia. Simultaneously, Latvian prosecution began investigating the funds, suspecting that they were laundered.
Then, the Ukrainian prosecution stumbled.
In a span of five years, Ukraine opened and closed several cases against Ivanushchenko. In 2016, the “Kyoto Money” case was closed. In 2019, the Seventh-Kilometer case was also closed by an Odesa court.
After public outcry, the cases were reopened but soon closed again.
In late 2019, the remaining cases against Ivanushchenko were transferred to the National Anti-Corruption Bureau of Ukraine (NABU). No charges were brought forward yet.
Latvian prosecution was more successful in investigating the money laundering operations of the former Ukrainian lawmaker.
In November 2016, a Latvian court ruled to confiscate 29 million euros linked to Ivanushchenko. In March 2017, the court of appeals confirmed the decision. However, the ruling was soon overturned by the Latvian Supreme Court.
Finally, in October 2019, Latvian prosecution was once again able to prove that the money linked to Ivanushchenko was part of a money-laundering scheme. The court has greenlighted the confiscation of the funds frozen in the Regional Investment Bank.
According to the information provided by Ukraine’s Prosecutor General’s Office to Ukrainska Pravda, the Latvian prosecution has informed Ukraine in February 2020 that if Ukraine won’t rule on the confiscation of the money frozen in Latvian banks by April 6, 2020, Latvia will unfreeze the money and seize it for its national budget.
Ukraine didn’t provide the required ruling and the money was confiscated by the Latvian government.
At the same time, 72 million Swiss francs ($80 million) belonging to Ivanushchenko’s wife remain frozen in Switzerland due to sanctions against the ex-lawmaker.
Editor’s Note: This report is part of the Investigative Hub project, within which the Kyiv Post monitors investigative reports in the Ukrainian media and brings them to the English-speaking audience, as well as produces original investigative stories. The project is supported by the National Endowment for Democracy.
