NEW CRIMINAL ORGANIZATION IN ODESA
In December 2022, a year after NABU and SAPO stopped the activity of a criminal organization that controlled almost the entire economic life of Odesa a new one was exposed. It took over the functions of a "one-stop shop" for business, dealing with a vast scope of issues: from allocating land and procurement to operations with communal property. To this end, local officials were involved, while each "service" had its own price.
Detectives discovered that the acting deputy mayor of Odesa - the chief of staff of the executive committee of the Odesa City Council and a member of the land commission - received a monthly "salary" of over USD 15,000 from the organizers. He had to ensure the adoption of necessary decisions by the land commission or to influence the deputies to vote in the interests of the criminal organization. From November 2021 to August 2022, the official received more than UAH 2.4 million in undue benefits.
Other accomplices - the first deputy and deputy mayor of Odesa - received from March to July 2022 UAH 900,000 and UAH 300,000, respectively. The first deputy mayor was in charge of the development sphere and voted as part of the executive committee for decisions on waste management tariffs, changes to the budget, and other issues in the interests of the criminal organization. The deputy mayor of Odesa informed the organizers about the allocated budget funds, which allowed them to calculate kickbacks from future contractors.
The members of the criminal organization resorted to various conspiracy measures: used noise-absorbing devices and special rooms for negotiations and had their own "security service" consisting of former law enforcement officers.
So far, six persons are suspected of participation in the criminal organization: two organizers, their trusted person, and three deputy mayors. The investigation is ongoing.
UAH 2.4 mln illegally received by an Odesa deputy mayor
"PRIVATBANK" CASE: A NEW EPISODE
The PrivatBank case is a multi-episode and one of the largest investigations in the history of NABU and SAPO. It involves a significant number of investigative actions: more than 100 interrogations and 25 forensic examinations (economic, computer-technical, handwriting, and physicochemical). All this data is kept in a case file of 223 volumes. The investigation of three episodes has been completed so far. The total amount of losses exceeds UAH 8.5 billion, while the laundering of more than UAH 103 million has been proven. The revealed facts of corruption are not exhaustive, the investigation continues in a number of other episodes that involve schemes to withdraw over UAH 130 billion from the bank, which became one of the reasons for its nationalization.
During this half-year, detectives discovered new facts in the case. According to the investigation, the former PrivatBank chair, his first deputy, and the head of a bank’s department spent UAH 85.2 million for the benefit of a related company. In July 2022, they were notified of suspicion, and in October of the same year, the investigation was completed.
As established, in December 2016, the day before PrivatBank was declared insolvent, the suspects, using false documents, transferred UAH 85.2 million and UAH 136.8 million to the companies controlled by PrivatBank. The losses in the two episodes alone make about UAH 223 million.
NABU and SAPO's international partners also joined the investigation. They contributed to high-quality and timely investigative actions abroad. In particular, these are law enforcement officers of the Republic of Latvia, the Republic of Singapore, the Swiss Confederation, the Republic of Serbia, and the Republic of Cyprus, who selflessly approached the work and immersed themselves in the case.
UAH 8.5 bn lost by PrivatBank
MP'S STATE TREASON AND ILLEGAL ENRICHMENT
During 2019-2022, an MP of the III-IX convocations received USD 567,000 from law enforcement and intelligence agencies of the russian federation for subversive activities against Ukraine. He carried out various tasks and instructions aimed at discrediting Ukraine's international image and worsening diplomatic relations with the United States and complicating Ukraine's integration into the European Union and NATO. At one time, he even tried to discredit NABU by publishing "documents" of dubious origin about the alleged influence of the US Embassy on the activities of the National Bureau.
However, this did not save him from prosecution: in September 2022, the MP was notified of suspicion of treason and illegal enrichment. As his whereabouts were unknown, NABU declared him internationally wanted. Detectives began collecting data and forwarded three requests for international legal assistance to the United States, Israel, and Great Britain.
The investigation of the case is carried out by NABU and SAPO under the support of the SSU counterintelligence. During one of the searches, law enforcement officers detained the head of the MP's personal security service. He kept several hand grenades and cartridges for rifled firearms without a corresponding permit. The stuff was confiscated.
During a series of searches in the premises of the MP, detectives discovered materials that testified to his long-term subversive activities and constant connections with representatives of the aggressor state and collaborators. UAH 200,000, EUR 49,000, and USD 11,500 was found and seized as well.
After the lawmaker was exposed, his powers were prematurely terminated, while the President of Ukraine stripped him of Ukrainian citizenship. This will not affect the proceedings: detectives will complete the investigation, and SAPO will make an appropriate procedural decision.
USD 567,000 illegally received by an MP
CORRUPTION AT ODESA PORT PLANT
In March 2020, NABU and SAPO exposed a corruption scheme that caused UAH 93.3 million losses to JSC "Odesa Port Plant" (99.57% of the shares belong to the state) during March-December 2015.
The investigation considers an MP of the VIII convocation to be the organizer of the scheme. It presupposed the sale of the plant's mineral fertilizers to a predetermined company at prices lower than the market average. The company then resold the goods to foreign consumers at competitive prices. However, the physical supply of mineral fertilizers to these companies was carried out by Odesa Port Plant.
At that moment, detectives served charges on four accomplices of the crime: a lawmaker's confidant, the OPP's deputy director, the head of an OPP's unit, and the owner of the company involved in the scheme. The officials were detained, while the owner of the company and the MP's confidant were declared wanted.
In October 2022, the organizer of the scheme was notified of suspicion. Since he left the country in 2019, he was served with charges in absentia. In 2021, in order to prevent himself from being served with charges, the MP had his housing registration annulled, while all the relatives who lived with him left Ukraine.
On Dec. 7, 2022, the court arrested the organizer of the scheme in absentia. As of the end of the year, the defense's appeal was pending. The suspect's lawyers resort to a variety of tricks to delay the proceedings in court: from failure to appear at the hearing to systematic objections to investigating judges.
The case in question concerns not only Ukraine. In order to recreate all aspects of the corruption scheme, the National Bureau sent about 10 requests for international legal assistance to competent authorities in Europe, Asia, and North America.
UAH 93.3 mln lost by Odesa Port Plant
EMBEZZLEMENT OF UKRGASBANK FUNDS
Over five years, the state-owned Ukrgasbank lost more than UAH 200 million through the actions of a criminal group, consisting of its board chair and his subordinates. They involved a pool of companies, entrepreneurs, self-employed persons, and legal entities, who systematically received payments from the bank for alleged customer engagement services. In fact, no services were provided, while clients placed funds in deposit and current accounts on their own initiative or in accordance with the government procedure introduced for the public sector.
This mechanism of attracting funds existed in no other state bank in Ukraine. After a while, it was discontinued at Ukrgasbank itself. Detectives discovered the bank made more than a thousand transfers to 52 pseudo-intermediaries, who were a strange medley of persons: a seller of beer, a primary school teacher from Zhytomyr, a pensioner born in 1937. While the "intermediaries" played just a nominal role, all transactions, including administrative and cashing operations, were carried out by bank employees.
In order for the scheme to work, its organizer changed the bank's internal documents, abused his powers, approved terms of cooperation with “intermediaries”, and controlled payments.
The members of the criminal group were notified of suspicion in early October. Three of them, including the ex-board chair, were charged in absentia because their whereabouts were unknown. The ex-board chair left Ukraine for a business trip just before the notification. Since then, the suspects have ignored all summons from NABU and got on the wanted list. The scheme organizer was soon spotted in Vienna together with another suspect in NABU and SAPO's case.
UAH 206 mln withdrawn from Ukrgasbank
VAT REFUND BRIBERY CASE
The ex-head of the State Fiscal Service of Ukraine has repeatedly become a protagonist of NABU and SAPO's cases. In October 2022, he and his accomplice were charged with accepting USD 5.5 million and more than EUR 21 million for ensuring VAT refunds to agricultural holding companies. Then, at the NBU rate, the amount exceeded UAH 722 million. The pretrial investigation of the case is ongoing. Gathering the evidence base required intensive communication with the competent authorities of other countries, which NABU detectives continue.
The participants of the scheme took conspiracy measures. In order to receive funds to the accounts of three non-resident companies under the control of the SFS head and his accomplice, five other companies were involved, whose nominal directors had nothing to do with their actual operation.
The SFS official received an undue benefit and in exchange secured a VAT refund worth more than half a billion hryvnias to agro-holding companies. His "fee for services" made on average about 20 percent of the amount of refunded VAT.
Detectives conducted a considerable number of investigative actions, including the examination of VAT refund database and information containing bank secrecy on more than 30 Ukrainian companies. After analyzing the movement of funds received from the State Budget of Ukraine as VAT refunds, 12 requests for international assistance were sent alternately, 10 of which have been accomplished and two more are in progress.
UAH 722 mln of improper adnvantage
"UKRNAFTA" CASE
In 2015, a number of LLCs were recognized as winners at oil auctions. PJSC "Ukrnafta" concluded sales contracts with them and supplied raw materials worth UAH 10.7 billion. This was illegal because the company could not carry out any supplies without full payment. The same year, Ukrnafta concluded 52 more contracts for the purchase of oil products with another LLC and paid in advance their entire cost of more than UAH 2.57 billion. Alas, Ukrnafta never received the purchased oil products, while the funds it paid were transferred abroad to the accounts of several offshore companies. The total amount of property and funds embezzled in two episodes exceeds UAH 13.3 billion.
Those involved in the crime could have been served with charges three years ago, but it happened only after SAPO got its new head last summer.
The "Ukrnafta" case is one of NABU's largest (over 500 volumes) and most complex investigations. In order to bring eight perpetrators to justice, it was necessary to conduct more than 100 searches, interrogate almost 500 people, and examine the accounts of more than 200 companies. There was opposition from expert institutions, courts, and even the Constitutional Court of Ukraine. The suspects left Ukraine after learning that NABU and SAPO were delving into the matter. Staying abroad, they continued to impede the investigation: repeatedly submitted complaints to other law enforcement agencies, charging the detectives with "offenses" (in the end, all such proceedings were closed). Following a motion by Ukrnafta lawyers, the Solomianskyi District Court of Kyiv removed two detectives from the investigation. Later, the Supreme Council of Justice dismissed one of the judges who made the decision for committing a significant disciplinary offense in another NABU and SAPO’s case.
However, NABU not only brought the culprits to justice but also helped return part of the embezzled funds to Ukrnafta: 60 contracts worth almost UAH 3 billion were annulled by the court's decision. More than UAH 3.5 billion was reimbursed in the form of the funds received as debt repayment.
UAH 13.3 bn embezzled from Ukrnafta
CORRUPTION AT ARMA
In July 2022, NABU and SAPO discovered the facts of corruption at the Asset Recovery and Management Agency (ARMA) and served charges on five persons. At the end of the year, the investigation found that an organized criminal group was behind the scheme involving the sale of seized assets. The circle of participants in the crime expanded to 11 persons, and its organizer was identified. The actions of the criminal group caused UAH 485 million losses to the state.
The scheme was active throughout 2019 and involved the sale of seized assets to predetermined companies at reduced prices. The sale was carried out through the relevant public enterprise "SETAM", which came under ARMA’s control in 2019. In order for everything to work smoothly, the head of ARMA lobbied for the adoption of a necessary government resolution. He also refused to have a single deputy, so that no one interfered with the scheme.
The investigation established that the group managed to implement the scheme four times. On one occasion, three land plots in the Odesa region were sold almost for nothing. They were categorized as perishable property in order to announce the auction as soon as possible. Another example involves 2.6 thousand tons of sand and more than 4.5 thousand tons of urea, which were sold up to six times cheaper than the market average. The same concerned grain, cereals, and oil crops, which were sold up to four times cheaper than the market average.
The group members used jargon to hide their criminal activity. For instance, "shashlik" stood for a lot put for sale at an undervalued price. What's more, the suspected SETAM officer was called "shashlik cooker", since he was the one who placed the lots.
The group organizer changed his mobile number and concealed his connection with other members so that NABU and SAPO could not track him down. However, this did not help, and detectives obtained sufficient evidence to prosecute him. The investigation is ongoing, NABU and SAPO are identifying other possible participants in the crime.
UAH 485 mln lost over a seized property scheme
