On Heels of Ukraine Election, Money Laundering Probes for Poroshenko’s Allies
22 Apr 2019

Ukraine’s top prosecutor has formally summoned several allies of the nation’s outgoing President Petro Poroshenko over allegations of embezzlement and money laundering, the Kyiv Post reported Monday.

The five suspects include Valeria Gontareva, the former head of the National Bank of Ukraine, and Kostyantyn Stesenko, an executive with the investment bank ICU, who are suspected of embezzling $74 million in coordination with Sehiy Kurchenko, an associate of ousted Ukraine President Viktor Yanukovych, the newspaper said.

Along with Gontareva, Poroshenko’s former Chief of Staff Borys Lozhkin and his Deputy Chief of Staff Oleksiy Filatov are expected to be charged with conspiring to launder over $440 million through the sale of media company UMH in 2013, the Post said. The Prosecutor General’s Office will separately charge ex-Ecology Minister Mykola Zlochevsky with laundering $36 million, according to the news outlet.

The suspects, who have all previously denied any wrongdoing, will likely face criminal charges by Thursday, four days after former television star Volodymyr Zelenskiy won a landslide victory in his presidential election race against Poroshenko, the newspaper said.

Largely viewed as a reaction against Ukrainian corruption, Zelenskiy’s election also raises new questions linked to the financial scandals. One of the president-elect’s biggest backers, oligarch Ihor Kolomoisky, is the subject of a financial crime investigation by the FBI and the US Attorney’s Office of the Northern District of Ohio, according to The Daily Beast and the Kyiv Post.

On Monday, the Organized Crime and Corruption Reporting Project (OCCRP) said Kolomoisky and another oligarch, Hennadiy Boholiubov, used their ownership of Ukraine-based PrivatBank to funnel $5.5 billion in funds stolen from the institution through its Cyprus-based subsidiary.

Ukrainian officials failed to detect the theft because the National Bank of Ukraine treated the Cypriot subsidiary “the same as it would domestic branches,” while regulators in Cyprus “either failed to detect that the various bank transfers totaling $5.5 billion were backed by bogus contracts, or didn’t take the necessary action to stop them,” said the OCCRP, citing a leaked forensic audit of Privatbank by Kroll.

Kolomoisky, who is seeking the return of $2 billion in capital following Privatbank’s nationalization in 2016, has denied the allegations. President-Elect Zelenskiy, whose comedy show aired on a network owned by Kolomoisky, has publicly stated that he would not let his relationship with the oligarch inform any decision on Privatbank.

One of the suspects expected to be charged this week, former National Bank of Ukraine Chairwoman Valeria Gontareva has described the alleged theft from Privatbank as a “large-scale coordinated” fraud that caused the loss of “40 percent of our country’s monetary base,” the OCCRP reported.

A 2017 classified court ruling leaked to Al Jazeera purportedly ties Gontavera to a scheme that allowed Sehiy Kurchenko to move illicit money through ICU when Yanukovych was in office. The investment bank has denied any wrongdoing, according to the OCCRP.

Photo: Адміністрація Президента України [CC BY 4.0], via Wikimedia Commons

Read more:

Comedian headed for landslide victory in Ukraine

Comedian faces scrutiny over oligarch ties in Ukraine presidential race

Ukraine: Central bank says PrivatBank used for shady deals, laundering

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