Ukraine charges Lazarenko with contract killings (06/11/00)

Ukraine charges Lazarenko with contract killings

PARSIPPANY, N.J. - Ukraine's Deputy Procurator General Mykola Obykhod announced on June 2 that the Procurator General's Office has opened a criminal case against former Prime Minister Pavlo Lazarenko on charges of arranging three contract killings, reported RFE/RL Newsline.

The charges in Ukraine came on the heels of Mr. Lazarenko's indictment on June 1 in the United States on one count of conspiracy to commit money laundering, seven counts of money laundering and 23 counts of transportation of stolen property.

Mr. Obykhod said Mr. Lazarenko ordered the killing of prominent lawmaker Yevhen Scherban, who was gunned down along with his wife in Donetsk in 1996. Mr. Obykhod added that the former prime minister had wanted to get rid of a competitor and that people close to him allegedly transferred money to the killers. According to the Procurator General's Office, Mr. Lazarenko had also plotted the assassinations of two high-ranking government officials, but both plots failed.

Citing the Procurator General's Office, Interfax-Ukraine noted that 10 persons are alleged to have been involved in the assassination of Mr. Scherban and that the Lazarenko case now encompasses eight episodes of premeditated group murders in which 20 men were killed.

The UNIAN news service reported that Mr. Lazarenko's lawyer Maryna Dovhopola stated such statements are made in an attempt to blame unsolved crimes on a person who is not able to protect himself from accusations.

Justice Department releases information

A press release issued by the U.S. Department of Justice provided the following information.

According to the indictment, Mr. Lazarenko was the Prime Minister of Ukraine between May 1996 and July 1997, and he occupied other political positions in Ukraine between 1992 and 1996. The indictment alleges that as a government official in Ukraine, Mr. Lazarenko demanded and received payments from individuals and entities as a condition of doing business in Ukraine. The indictment further alleges that Mr. Lazarenko failed to disclose to the people or the government of Ukraine that he was receiving such payments.

The indictment alleges that, with the assistance of Peter Nikolayevich Kiritchenko, one of the individuals from whom Mr. Lazarenko demanded payment, Mr. Lazarenko set up bank accounts in Switzerland and other countries into which he deposited money that he had corruptly and fraudulently received, and that he used these accounts to conceal and disguise the location, source, and ownership, of the money. These accounts included accounts at Banque SCS Alliance, Banque Populaire Suisse, Credit Lyonnais, and Credit Suisse in Switzerland, as well as an account at American Bank in Poland and accounts at European Federal Credit Bank in Antigua.

According to the charges, between 1994 and 1999 Mr. Lazarenko transferred approximately $114 million that he had corruptly and fraudulently received into bank and brokerage accounts in the United States. These bank and brokerage accounts included accounts at Commercial Bank of San Francisco, Pacific Bank, Merrill, Lynch, Fenner & Smith, WestAmerica Bank, Bank of America, Fleet Boston Robertson & Stephens, and Hambrecht & Quist.

The indictment further alleges that Mr. Lazarenko laundered over $20 million through bank accounts in the United States. Finally, the indictment also alleges that Mr. Lazarenko should forfeit to the United States all property involved in the money laundering offenses, including a residence at 100 Obertz Lane in Novato, Calif.

The maximum statutory penalty for each of the money laundering counts is 20 years in federal prison and a $500,000 fine or twice the value of the funds involved. The maximum statutory penalty for each of the transportation of stolen property charges is 10 years in federal prison and a $250,000 fine, plus restitution. However, any sentence following conviction would be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed at the discretion of the court.

Alleged to have profited while in office

Reuters reported that authorities in Ukraine say Mr. Lazarenko profited by buying and selling natural gas contracts when he was Ukraine's energy minister, and bilked millions of dollars from state programs while he was prime minister in 1996-1997. His wealth eventually caused a rift with President Leonid Kuchma, who dismissed him.

Mr. Lazarenko mounted a brief campaign as an opposition candidate for president, then fled the country - only to wind up arrested first in Switzerland and then in the United States. He was indicted in Geneva on charges of money laundering, was released on bail of 4 million Swiss francs ($2.59 million U.S.) and subsequently rearrested in New York in February 1999 for visa irregularities.

Mr. Lazarenko has denied the money laundering charges and asked for political asylum in the United States, saying he is the subject of a vendetta by his political enemies. "Clearly he is not friendly to that (Ukraine) government. Any information that comes from them is highly suspect," said Joe Russoniello, Mr. Lazarenko's San Francisco attorney, was quoted by Reuters as stating.

He added that his client would "vigorously deny" any extortion charges, and would likely challenge U.S. jurisdiction over questions relating to the money laundering claims.

Lazarenko ready to name names

In related news, the June 6 issue of the Financial Times reported that Mr. Lazarenko is ready to provide proof that a "named senior Ukrainian politician" was among the beneficiaries of his financial operations. The daily added that the U.S. indictment mentions current Vice Prime Minister Yulia Tymoshenko as "a key figure in [Lazarenko's] money-laundering conspiracy." A company controlled by Ms. Tymoshenko reportedly transferred $72 million to Mr. Lazarenko "specifically at a point in time when he was prime minister."

Mr. Lazarenko is already being held in federal custody without bail on a complaint for extradition filed on behalf of Switzerland, which also has charged him with money laundering. The next date in the extradition hearing is July 24.

Eastern Economist reported that Kyiv has again sent an extradition request to the U.S. government to have the ex-premier and current national deputy of the Verkhovna Rada returned to face charges in Ukraine of money laundering, abuse of position, theft of $2 million (U.S.) in state funds and criminal charges in Ukraine. The United States and Ukraine do not have an extradition treaty, however.

According to an ITAR-TASS story, the ex-prime minister is to be brought to court in San Francisco on June 13 for arraignment. The wire service also reported that Mr. Lazarenko's lawyer Michael Handwerker circulated a written statement in New York on June 5 noting that his client will enter a not guilty plea.

Mr. Handwerker also asserted that Mr. Lazarenko's commercial activity had been conducted with President Leonid Kuchma's complete approval and participation.

A two-year investigation

The U.S. prosecution is the result of a two-year investigation by agents of the Federal Bureau of Investigation and the Criminal Investigation Division of the Internal Revenue Service. Assistant U.S. Attorneys Marta Boersch and Jonathan Howden are prosecuting the case.

Bloomberg News quoted Jonathan Winer, a former deputy assistant U.S. secretary of state for international law enforcement, as saying, "This is a very unusual indictment." It's the first of its kind that targets acts of corruption committed overseas, he explained.

"He used the government as an extortion racket and then engaged in money laundering activities to hide the proceeds," alleged Mr. Winer, now an attorney at law firm Alston & Bird. "Ukraine, like Russia, has had a number of officials that provided favors in return for kickbacks and then moved the kickbacks offshore," he said.

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