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US SANCTIONS KOLOMOISKY ‘FOR SIGNIFICANT CORRUPTION’

U.S. Secretary of State Antony Blinken called out billionaire Ukrainian oligarch Ihor Kolomoisky on March 5, accusing him of “involvement in significant corruption.” Blinken made the public designation as the U.S. imposed a ban making Kolomoisky and his immediate family ineligible to travel in the United States. Kolomoisky faces a U.S. criminal investigation into laundering money from the $5.5 billion he allegedly stole while owning Ukraine’s largest bank, PrivatBank, which had to be nationalized in December 2016 and receive a taxpayer bailout. He also faces numerous civil lawsuits in jurisdictions, including…

By Brian Bonner.

March 5, 2021

Kyiv Post

 

U.S. Secretary of State Antony Blinken called out billionaire Ukrainian oligarch Ihor Kolomoisky on March 5, accusing him of “involvement in significant corruption.”

Blinken made the public designation as the U.S. imposed a ban making Kolomoisky and his immediate family ineligible to travel in the United States.

Kolomoisky faces a U.S. criminal investigation into laundering money from the $5.5 billion he allegedly stole while owning Ukraine’s largest bank, PrivatBank, which had to be nationalized in December 2016 and receive a taxpayer bailout. He also faces numerous civil lawsuits in jurisdictions, including the U.S., for alleged money laundering in real estate purchases from PrivatBank money.

 

Blinken also accused Kolomoisky of corruption while he served as governor of Ukraine’s Dnipropetrovsk Oblast in 2014-2015, during the earlier stages of Russia’s war against Ukraine.

In a March 5 statement, Blinken wrote: “Today, I am announcing the public designation of oligarch and former Ukrainian public official Ihor Kolomoisky due to his involvement in significant corruption. In his official capacity as the governor of Ukraine’s Dnipropetrovsk Oblast from 2014 to 2015, Kolomoisky was involved in corrupt acts that undermined rule of law and the Ukrainian public’s faith in their government’s democratic institutions and public processes, including using his political influence and official power for his personal benefit.

While this designation is based on acts during his time in office, I also want to express concern about Kolomoisky’s current and ongoing efforts to undermine Ukraine’s democratic processes and institutions, which pose a serious threat to its future.”

Kolomoisky and his family have been designated under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2020, which bans U.S. entry for “officials of foreign governments (that) have been involved in a gross violation of human rights or significant corruption.”

In addition to Ihor Kolomoisky, Blinken publicly designated the oligarch’s wife Iryna Kolomoiska, his daughter, Angelika Kolomoyska, and his son, Israel Zvi Kolomoisky.

“This designation reaffirms the U.S. commitment to supporting political, economic, and justice sector reforms that are key to Ukraine’s Euro-Atlantic path,” the secretary of state said. “The United States continues to stand with all Ukrainians whose work drives reforms forward. The department will continue to use authorities like this to promote accountability for corrupt actors in this region and globally.”

The designation will, at the least, encourage Ukraine’s ongoing efforts to recover for taxpayers as much of the $5.5 billion allegedly stolen from PrivatBank during Kolomoisky’s ownership of the financial institution as possible. Despite the large-scale bank fraud, prosecutors have not filed any criminal case against him.

Following the designation, President Volodymyr Zelensky’s administration released a statement thanking the U.S. for helping deoligarchization in Ukraine. It didn’t mention Kolomoisky by name.

“To achieve economic prosperity and Euro-Atlantic integration, Ukraine has to overcome the system where oligarchs dominate,” the statement reads. “Ukraine is thankful to every partner for the support on this path. Fighting oligarchs isn’t only about criminal responsibility. It is also about creating a transparent, competitive environment for business, where big financial groups can’t dominate the market, influence media and politics.”

Timothy Ash, a London-based emerging-markets strategist, said: “Zelensky realized the threat imposed by Kolomoisky, albeit late; Kolomoisky backed his election campaign but struggled to take him on until quite recently as he was unsure about his support at home and abroad. The U.S. backing for Zelensky in this battle is now clear with the U.S. actions. It will, I think, give Zelensky strength to go after other oligarchs at home and push on with the reform agenda.”

Olena Shcherban, a lawyer with the Anti-Corruption Action Center, told the Kyiv Post that Kolomoisky may have seen the sanctions coming.

“His son was also in the states, studied there, and is now in Ukraine,” Shcherban said. “This indicates that he still takes certain security measures regarding his family and his assets in one way or another.”

According to state-owned PrivatBank, about $747 million of the $5.5 billion allegedly stolen from PrivatBank was invested in real estate, metallurgical plants and other property in the U.S. According to the U.S. Department of Justice, these businesses “often failed to turn a profit.”

Kolomoisky told Ukrainian media that he invested in the U.S. using money he acquired legitimately from selling his Evraz metallurgical business in Ukraine.

In August 2020, the Department of Justice filed two civil forfeiture complaints against the oligarch’s properties in Louisville and Dallas, days after federal agents raided his offices in Cleveland and Miami.

 

While criminal charges against Kolomoisky have not been publicly announced in the U.S., legal experts believe that it’s only a matter of time until they are.

 

 

Kyiv Post staff writer Anna Myroniuk contributed reporting.