PrivatBank and How Ukranian Oligarchs Buy Up Most of Cleveland and Launder $470B in the Process

How Ukrainian Oligarchs Secretly Became the Largest Real Estate Owners in Downtown Cleveland

Posted By  on Tue, Jun 11, 2019 at 1:22 pm

Three of the Optima Ventures current and former properties: Crowne Plaza Hotel, AECOM Building, One Cleveland Center

  • Three of the Optima Ventures current and former properties: Crowne Plaza Hotel, AECOM Building, One Cleveland Center

“IMG_2485”by jeffpyle is CC BY-NC-ND 2.0

In an explosive legal complaint filed last month in Delaware, attorneys for a major Ukrainian bank alleged that two oligarchs who founded the bank and controlled it from 2006 to 2016 laundered hundreds of millions of dollars in fraudulent corporate loans to purchase assets in the United States and unjustly enrich themselves and their associates.

Dubbed the “Optima Schemes” in the 104-page document, these “brazen fraudulent schemes” were successful, among other things, in making the oligarchs and their co-defendants the largest commercial real estate holders in Cleveland.

(You can read the full complaint here.)

With money siphoned from public bonds and 20 million private Ukrainian citizens who’d opened accounts with PrivatBank, the oligarchs Igor Kolomoisky and Gennadiy Bogolyubov doled out corporate loans to shell companies that they controlled. They used PrivatBank “as their own personal piggy bank,” in the words of the complaint.

Those loans were then laundered in multiple digital transactions, sent through dozens of other shell companies that had been created exclusively for the purpose of laundering. These accounts were managed by co-conspirators at PrivatBank’s branch in Cyprus.

The true origin of the money thus concealed, funds were then shipped to LLCs in Delaware (hence the legal filing there). Those LLCs — “One Cleveland Center, LLC,” to take just one example — were used to acquire properties and metalworking facilities in the U.S. Kolomoisky and Bogolyubov are mineral magnates and own mining factories and metalworking plants in Ukraine.

The men on the ground in the United States, according to the complaint, were a Miami-based trio: Mordechai “Motti” Korf, his brother-in-law Chaim Schochet, and Uriel Laber. These three men managed the “Optima” companies: Optima International, Optima Ventures and Optima Acquisitions, all of which were created and ultimately controlled by Kolomoisky and Bogolyubov.

“Optima Ventures” should be a familiar local name. It was the company, launched in 2007, used to acquire properties in the U.S. for Kolomoisky and Bogolyubov. The majority of these properties were in Cleveland.

Chaim Schochet was Optima’s “front man” in Northeast Ohio. He told the Plain Dealer in 2012that his local goals were twofold: “making money for investors betting on the upside of a Midwestern city, and contributing to the betterment of a downtown that more high-profile buyers ha[d] passed by.”

But his investors’ funds were ill-gotten, according to the complaint, proceeds from “massive, systematic and fraudulent loan misappropriation and recycling schemes. (In the 2012 PD piece referenced above, Schochet was reportedly “circumspect about discussing how [Optima Ventures] is structured or who the major investors are.”)

The loan recycling schemes were functionally identical to a ponzi scheme, except instead of paying purported profits to early investors with funds from more recent investors, the Ukrainian oligarchs and their cronies within PrivatBank paid off early fraudulent corporate loans with money from new fraudulent corporate loans.

“On paper, this appeared to be a repayment,” the complaint explains. “But in reality, it was a sham and fraud, as PrivatBank was repaying itself and increasing its outstanding liabilities in the process. This process was carried out over and over again, over a period of many years.”

In December 2016, the Ukrainian state was forced to nationalize PrivatBank as a result of the oligarchs’ conduct. The state injected more than $5.5 billion into the bank to prevent its collapse, and “preserve the stability of the [Ukrainian] financial system.” In 2018, the bank reverted to private ownership.

The complaint alleges that Korf, Schochet and Laber were in on the racket, aware of the systematic corruption because they were under direct supervision from Kolomoisky and Bogolyubov (or their trusted lieutenant inside PrivatBank, Timur Novikov), and because they were enriched in the process. Korf, Schochet and Laber received “substantial financial remuneration,” according to the complaint, which they used to acquire millions of dollars worth of property in Florida.

Using the laundered loan proceeds, Optima acquired the following Cleveland buildings:

  • One Cleveland Center: 1375 E. 9th St. Acquired for $86.3 million in May, 2008
  • 55 Public Square. Acquired for $34 million in July, 2008.
  • Huntington Building: 925 Euclid Ave. Acquired for $18.5 million in June, 2010.
  • AECOM/Penton Media Building: 1300 E. 9th St. Acquired for $46.5 million in August, 2010
  • Crowne Plaza Building: 777 St. Clair Ave. Acquired in a joint venture with Denver-based Sage Hospitality Group.

Here’s an example of exactly how the properties were acquired, via the complaint:

On April 29 and 30, 2008 … two Ukrainian [metal plants] owned or controlled by [Kolomoisky and Bogolyubov] drew down $2.7 million and $4.3 million in loan proceeds from PrivatBank Ukraine. The purpose of the loans was “financing of current business activities of the entity.” On April 30, 2008, Bocatoro Enterprises Ltd. (“Bocatoro Enterprises”), a Cypriot entity owned or controlled by [Kolomoisky and Bogolyubov] drew down $40 million in loan proceeds from PrivatBank Cyprus for “replenishment of floating assets for payments according to contracts, including purchase of shares.”

However, the loan proceeds were not used for their stated purposes. Instead, the loan proceeds were combined with funds from other sources linked to [Kolomoisky and Bogolyubov] and laundered in forty-two transactions through fifteen Laundering Accounts, including the accounts of Defendant Kolomoisky’s Divot Enterprises, Ralkon Commercial, and Pavanti Enterpirses, as well as Defendant Bogolyubov’s Bonique, and [K&B’s] Blisont Capital and Brotstone accounts.

On information and belief, [K&B] and their co-conspirators used Pavanti Enterprises to misappropriate and transfer a combined $36.1 million into the U.S. to the Multi-State Title Agency Ltd. to fund the acquisition of One Cleveland [Center] through Optima One Cleveland Center LLC for Optima Ventures.

At its height, Optima Ventures controlled 2.8 million square feet of downtown Cleveland commercial real estate. This was a larger footprint than even Forest City Enterprises at the time.

To continue reading click here.
ADDITIONAL READING:

Roman Abramovich and a Record Donation for the Fight Against Antisemitism Worldwide

Roman Abramovich,  the Russian billionaire businessman and owner of the soccer team Chelsea FC.

ROMAN ABRAMOVICH GIVES $5M. TO JEWISH AGENCY FOR FIGHT AGAINST ANTISEMITISM

Russian oligarch and philanthropist Roman Abramovich has given $5m. to the Jewish Agency for Israel to assist in its efforts to combat antisemitism around the world.

Abramovich, who also has Israeli citizenship, gave his donation due to rising antisemitism in Europe, the US, and beyond and will be used by JAFI’s “International Unit,” which engages in various operations and activities to combat antisemitism.

Antisemitic incidents have been on the rise in the UK, France, the rest of  Europe and in the US in recent years, including increasing numbers of violent attacks, which has heightened the need for better monitoring, intelligence and security measures for Jewish communities across the globe.

Abramovich himself has not commented on his gift, but JAFI chairman Isaac Herzog praised him for his financial assistance.

“Jewish communities around the world are coping with record numbers of dangerous, antisemitic attacks. I applaud Roman Abramovich for taking strong initiative to combat antisemitism and am grateful for his contribution to the Jewish Agency’s efforts to ensure Jews are safe in their communities around the world” said Herzog.

To continue reading click here.

 

 

READ ALSO: https://www.thejc.com/news/israel/roman-abramovich-donates-millions-to-the-jewish-agency-in-order-to-combat-antisemitism-worldwide-1.485337

As Brooklyn Rabbi’s House Burns and a Potential Arsonist May Also Be a Victim

To the Community Looking for the Alleged Arson Suspect

We are asking, imploring upon you the readers and the law enforcement community, to please treat the suspect with care, kindness and compassion. If, with emphasis added, he was the victim of some wrongdoing, and that drove him to a breaking point, he has lived a lifetime of trauma.

There is little justification for committing crimes, but there may be mitigating circumstances.

There would be no justice for anyone if he is not given the opportunity to defend any actions he may or may not have taken in the fire as suspected.

LM

Brooklyn Rabbi’s House Burns Down in Suspected Arson, 13 Injured

Photo from Wikimedia Commons.

 

The home of a Brooklyn rabbi erupted in fire early Friday in what investigators suspect was an arson attack by a man who accused the rabbi of being a pedophile.

Thirteen people, including a 6-week-old baby, were injured. None of the injuries were life-threatening, although 12 people were sent to the hospital, including nine civilians, two firefighters and an EMS medic.

The blaze erupted in a car outside a home in the Midwood neighborhood and spread to three others, including that of Rabbi Jonathan Max, the New York Daily News reported. 

Investigators are looking into Menachem Karelefsky as a suspect, according to the Daily News. The Pittsburgh resident, who also goes by Matthew, on his LinkedIn profile accused Max, a teacher at the Chaim Berlin Yeshiva, of being a pedophile.

A phone number listed on Karelefsky’s LinkedIn profile leads to a voicemail message in Hebrew that says “May the name and memory of Rabbi Max be erased, simply, really, forever.”

To continue reading click here.

Credit Card Swiping Schemes – The Trade for Points, Is this Points Laundering?

Collecting Points for Charges Without Providing any Services or Items for those Charges

NATURE OF ACTION (Directly From the Complaint)

1. This action arises from certain of the defendants (hereinafter the “Merchant
Defendants”) fraudulent charging of the American Express, Visa, MasterCard and Discover branded credit and charge cards previously issued to the Plaintiffs (hereinafter the “Cards”) by American Express, Chase and certain other defendants (the “Card Issuer Defendants”), which  fraudulent payment card transactions (the “Card Transactions”) were electronically processed by other defendants (the “Card Processor Defendants”). The Merchant Defendants provided no goods, services or anything of value to the Plaintiffs with respect to the Card Transactions. Instead, the  Merchant Defendants fraudulently induced the Plaintiffs to allow the Merchant Defendants to utilize the Plaintiffs’ Cards to ostensibly purchase goods that the Merchant Defendants were planning to re-sell, with the promise that the Merchant Defendants were then going to use the proceeds from the sale of the goods to pay the full amount of the balances due to the Card Issuer Defendants for those Card Transactions prior to the payment due date.

2. The Plaintiffs understood the Card Transactions to be a proper use of their Cards
for the purchase of cash or cash equivalents from the Merchant Defendants, consistent with the  manner that the Merchant Defendants had been utilizing other cardholders’ cards for many years  (which prior transactions had significantly benefited the Card Issuer Defendants and the Card  Processor Defendants, who received substantial revenue in the form of processing fees for the prior
transactions). Indeed, virtually all of the Plaintiffs had previously engaged in virtually identical payment card transactions with the Merchant Defendants, for which previous card transactions the  Merchant Defendants had in fact paid cash or cash equivalents to the Plaintiffs themselves or on  behalf of the Plaintiffs to the Card Issuer Defendants.

3. Despite due demand therefor, the Merchant Defendants have failed and refused to provide the Plaintiffs with cash or cash equivalents for the Card Transactions. The Merchant  Defendants have also failed and refused to provide the Plaintiffs with the goods ostensibly bought for resale by the Merchant Defendants via the Card Transactions. Many of the Plaintiffs were assured by the Merchant Defendants that the use of their Cards for the Card Transactions by the Merchant Defendants were secured by those goods, which would be the property of the Plaintiffs
until resale and could be claimed (and resold for more than the amount of the Transactions) by the  Plaintiffs in the event that the Merchant Defendants failed to timely provide to Plaintiffs the cash or cash equivalents for the Card Transactions.

4. Accordingly, having not received anything of value from the Merchant Defendants  in connection with the Card Transactions, the Plaintiffs attempted to utilize the protections afforded them by and through the payment card networks and to dispute the charges for the Card  Transactions with the Card Issuer Defendants, protections extended to the Plaintiffs through their
agreements with the Card Issuer Defendants. The Plaintiffs expected that this chargeback process  would result in the Merchant Defendants – and/or those who aided or abetted the Merchant defendants’ fraud and/or guaranteed the Merchant Defendants’ compliance with the Visa, MasterCard, American Express and Discover rules, being held responsible for the Card  Transactions. The Merchant Defendants have instead resisted the Plaintiffs’ attempts to dispute the charges, at times misrepresenting to the payment card networks the nature of the relationship
between the Plaintiffs and the Merchant Defendants and at other times misrepresenting the nature of the Card Transactions. Even when accurate information regarding the Plaintiffs and the Card Transactions have been conveyed to the Card Issuer Defendants, the chargebacks have usually been reversed, and the charges to the Plaintiffs for the Card Transactions have been reinstated on
the Plaintiffs’ account statements for the Cards.

To continue reading the court documents click here.

The Abuse and Neglect of the Elderly in Nursing Facilities – Failure to Report and Failure of Oversight

Health Workers Still Aren’t Alerting Police About Likely Elder Abuse, Reports Find

Posted  by Ina Jaffe

NPR [Excertps reprinted from the original to see the original click here.]

Two reports from the federal government have determined that many cases of abuse or neglect of elderly patients that are severe enough to require medical attention are not being reported to enforcement agencies by nursing homes or health workers — even though such reporting is required by law.

Mary Smyth Getty Images

Two reports from the federal government have determined that many cases of abuse or neglect of elderly patients that are severe enough to require medical attention are not being reported to enforcement agencies by nursing homes or health workers — even though such reporting is required by law.

 

It can be hard to quantify the problem of elder abuse. Experts believe that many cases go unreported. And Wednesday morning, their belief was confirmed by two new government studies.

The research, conducted and published by the Office of Inspector General of the U.S. Department of Health and Human Services, finds that in many cases of abuse or neglect severe enough to require medical attention, the incidents have not been reported to enforcement agencies, though that’s required by law.

One of the studies focuses solely on the possible abuse of nursing home residents who end up in emergency rooms. The report looks at claims sent to Medicare in 2016for treatment of head injuries, body bruises, bed sores and other diagnoses that might indicate physical abuse, sexual abuse or severe neglect.

Gloria Jarmon, deputy inspector general for audit services, says her team found that nursing homes failed to report nearly 1 in 5 of these potential cases to the state inspection agencies charged with investigating them.

“Some of the cases we saw, a person is treated in an emergency room [and] they’re sent back to the same facility where they were potentially abused and neglected,” Jarmon says.

But the failure to record and follow up onpossible cases of elder abuse is not just the fault of the nursing homes. Jarmon says that in five states where nursing home inspectors did investigate and substantiate cases of abuse, “97% of those had not been reported to local law enforcement as required.”

State inspectors of nursinghomes who participated in the study appeared to be confused about when they were required to refer cases to law enforcement, Jarmon notes. One state agency said that it contacted the police only for what it called “the most seriousabuse cases.”

Elder abuse occurs in many settings — not just nursing homes. The second study looked at Medicare claims for the treatment of potential abuse or neglect of older adults, regardless of where it took place. The data were collected on incidents occurring between January of 2015 and June of 2017.

The federal auditors projected that, of more than 30,000 potential cases, health care providers failed to report nearly a third of the incidents to law enforcement or Adult Protective Services, even though the law requires them to make such reports.

“It’s very important that the first person who notices this potential abuse and neglect reports it, because then they can begin the investigative process to determine if abuse or neglect occurred,” says Jarmon. “And if it’s not reported, it can’t be tracked.”

The HHSreport says that Medicare could do a better job of analyzing the data it has on hand. It recommends that the Centers for Medicare and Medicaid Services, which oversees the health care program for older Americans, should periodically examine claims for treatment, looking for diagnoses that suggest possible abuse or neglect, as well as where and when those cases occur.

“You have to be able to get the data to see how bad the problem is,” says Jarmon, “so that “everybody who can take action has it.”

However, the Centers for Medicare and Medicaid Services, which pays for much of the health care for seniors and provides guidance on the reporting required ofhealth care workers and health care facilities, has rejected most of the reports’ recommendations.

To view the article and continue reading click here.

Yeshiva an Mesifta Chaim Berlin – RFI Posted on Tues., 1.30.18 – comments re: Fire in Midwood

The Midwood Fire

[6.13.19]

The following  is being reprinted with the permission of its author.

The intent in reposting  is related to comments made under the Request for Information below and a possible connection to this morning’s fire in Midwood.

We have no way to know if the allegations in the comments section are correct and have therefore done our best to redact unverified allegations or responses to them. We are not posting with intent to harm, defame, injure, slander, hurt, abuse or otherwise; but rather to assist law enforcement in ascertaining what happened. 

If the allegations are correct, we sincerely hope that the victim is handled with extreme care. It is our belief that the Yeshiva community he attended would have reason for him to be permanently unable to tell his story. If he is actually an arsonist, he still may have a story to tell.

If the allegations are deemed incorrect, we will gladly post an apology, correction, redaction or whatever is required and will do so publicly. We do not take matters of this sort lightly.

Tuesday, January 30, 2018

Yeshiva & Mesifta Chaim Berlin

If there is anyone that would care to share their stories with me dating back some 30-35 years to the present time, please contact me:a_unorthodoxjew@yahoo.com

Your confidentiality is guaranteed!

 

Anonymous said…
What type of stories ?

Fred E. said…
The joint sure looks different from when I was there! Check your E-mail…

sambo said…
samuel boland is who you are looking for. preys on mostly high school boys and beth medrash. been doing it for years. he is not a member of the hanhala. he was kicked out of the dormitory, kicked out of the gym, kicked out of camp morris, but for some reason they honor him with blowing shofar the month of elul. please uoj, put an end to his honor and make his name known to stay away from. he invites boys to his house neaer the yeshiva and offers them to watch ball games, offers them a “shower”. please get rid of him.

Anonymous said…
I was sexually molested by rabbi [REDACTED] the rebbi and dorm counsler

sdff said…
that is bullshit about [REDACTED]. i’ve been in cb for over 40 years, and while sambo is an open secret, there is no way in the world that fruchthandler would keep a [REDACTED] as a dorm supervisor. [REDACTED] never laid a finger on me or any of my pals, but sambo was notorious for shaking hands for uncomfortably long times and not letting go. cb also has a way of ridding themselves of problem rebeim, but [REDACTED] is not one of them. someone obviously has a gripe about how he treated them.

mendel said…
This comment has been removed by the author.
Matthew Karelefsky said…
I was in an Ohel group home years ago ( I was in foster care too)…..Ohel put me in Yeshiva Chaim Berlin … I became frum in Chaim Berlin and stayed frum for 20 years…I just want to let all frum jews know….The reason why I left Yiddishkite and converted to Christianity is because for years I was sexually molested by [REDACTED] YEMACH SHMO FOREVER in the Yeshhiva Chaim Berlin dormitory …The pain was just too much to handle… Now I am healing in church almost every Sunday….Real sad story…Keep minor children away from [REDACTED]!!
יִמַח שׁמוֹ וְזִכְרוֹ שֶׁל [REDACTED] מַמָשׁ לְעוֹלָם וָעד

Matthew (Menachem) said…
if you want to know more of my story, just CALL me [REDACTED] I do NOT live in silence anymore!!

Anonymous said…
I question your story Menachem… On Facebook, a while back you left a rambling post (which I think you since deleted), about blaming [REDACTED] for messing up your marriage. If I recall in your message you said you liked him till then (not really consistent with him being your molester). I don’t recall the exact gist of the message you posted (several years ago), but I recall something about you saying you will f… your wife up the a… I am sure you remember this gem of a message even if you did actually delete it. It makes me wonder that you are spreading this story and it is not true. If anyone does not believe me about this, please post on the OTD FB group to see if anyone else recalls this message… It was a real gem.

I myself went to Chaim Berlin and while not in the dorm had [REDACTED] as a Rebbi. I would classify myself as atheist so not trying to save the faith here. While in CB while we heard stories such as what went on in Torah Temimah, there was never any indication ever from anyone that this took place in CB. Further, I actually remember you quite well from back in CB and was in Camp Morris same time as you. If I said my name you would know exactly who I am. In any case, while I don’t claim to know the signs of molestation, I would think that as a teen if you were molested by a Rebbi in CB you would have exhibited some sign that something was off. Rather, as far as I can tell, this tirade of yours against [REDACTED] started when your marriage went South… If you recall when you posted on FB, people told you to get some mental health counseling based on what you wrote.

Look, not saying that this did not happen, but based on what I know I am hesitant to believe your story now.

Anonymous said…
Uh, oh… I think police are looking for Karelefsky in connection with the fire this morning in Midwood by [REDACTED] house… Really hope he did not do it… I just tried posting a prior comment… In light of the seriousness of what is going on I would ask that this and that prior comment both do not get posted. At this point the police will be going through his backstory and there is no need to add my speculation to this.

Anonymous said…
I also heard he is connected to that fire. Wishing all those affected a speedy recovery/refuah shleima BezH. This sicko has a tattoo on his arm saying kill [REDACTED]. Very very sad.

Lesmond Peak Nursing and Rehabilitation – 28 Pages Detailing Abuse and Neglect, Ogden, Utah

LesmondPeakNursing

Inspection report details infractions at Ogden nursing home

OGDEN (ABC4 News) – Incidents of elder abuse and neglect are coming to light after two U.S. senators recently released a previously secret list of the 400 worst nursing homes in the United States and one of those facilities is located in Ogden.

Of the 103 nursing homes in the state of Utah, Lomond Peak Nursing and Rehabilitation is the only one to be classified as a Special Focus Facility meaning that inspectors found so many violations here they’re at risk of losing their Medicare certification.

A 28-page report detailing a November 2018 inspection of Lomond Peak details numerous incidents of abuse & neglect. Inspectors found 33 cases of urinary tract infections in female patients and residents fighting over cigarettes.

FULL REPORT: UNCOVERING POOR CARE IN AMERICA’S NURSING HOMES

Utah’s Long Term Care Ombudsman Daniel Musto says his team investigates these types of complaints every day and things can change drastically when facilities have new ownership or management.

“You can have a facility that’s running great a new owner will come along and it goes downhill,” Musto said.

Musto says before you put your loved one into a nursing or assisted living facility, check out the comparisons on https://www.medicare.gov/nursinghomecompare/search.html.

He also recommends visiting the prospective facility at different times of the day, including meal times and meeting with the Resident Council President, who will be aware of all incidents and concerns. He adds that you can’t judge a facility by its appearance.

To continue reading click here.