Ukranian Oligarchs, Money Laundering, Impeachment Hearings, Real Estate Moguls and US President Trump?

The Ukranian Oligarchs, the Ties to the US Government, Power and Money 

Dear Reader, 

LM began investigating the story of the Ukranian Oligarchs deeply embedded in US political affairs in 2019 as part of the investigation into the arrest of other Ukranian nationals tied to the government.  Actually, the investigation started earlier when LM began looking into the Dan Gertler stories in 2016.

More recently, our inquiries have  included Rudolph Giuliani’s pursuit of business in the Ukraine. The Magnitsky Act sanctions against Gertler which were toppled by executive order (more on that in a later story) and now a recent investigation into Ukranian oligarchs heavily leveraged in a number of US states who allegedly laundered and stole billions of dollars.

The story about these men and their somewhat intricate ties to high level US Government officials included a number of significant news articles about Arsen Avakov, Ukraine’s Interior Minister and Marie Yovanovitch (who, if you will recall was ousted from her position as the US ambassador to the Ukraine). We posit that Yovanovitch knew what was going on, wanted to put an end to the wholesale purchase of parts of the US to powers that be in the Ukraine and got tossed aside for that reason. Her testimony during the impeachment hearings likely missed far too much about what she knew than it brought to light. 

The information we uncovered along the way, we believe, should have been part of the US impeachment inquiry, which itself was unsuccessful; but only because of the political climate. The mistakes of that inquiry were far more about what was ignored during hearings than anything else, namely that likely all the President’s men were playing both sides of the Ukranian double-edged sword to establish relationships and with Ukranian power-brokers thereby yielding themselves significant political power and financial benefits. No politician worth his weight in corrupt political salt would have been immune to the money and power these connections could help wield.

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Ukranian Oligarchs, The Congressional Record, Optima, Privatbank, Purchase of Vast Swaths of Real Estate and PPP Loans

FBI Raids U.S. Company With Ties to Ukrainian Oligarch

A U.S. company affiliated with the Ukrainian billionaire Igor Kolomoisky that has been accused of participating in an international fraud scheme was raided by the FBI in two locations on Tuesday.
Agents conducted “law enforcement activity” in Cleveland and Miami at addresses that correspond with the offices of Optima Management Group, according to FBI Special Agent Vicki Anderson.
No arrests were made, she said. Photographs published by the Cleveland Plain Dealer show agents taking boxes from the Cleveland location.
Optima was part of an international scheme in which billions of dollars were siphoned from a Ukrainian bank by Kolomoisky to buy U.S. real estate, according to a civil lawsuit filed last year in Delaware. A grand jury in Cleveland is investigating Kolomoisky’s suspected role in the scheme, BuzzFeed News reported.
Optima is controlled by three Floridians accused in the suit of serving as Kolomoisky’s business representatives in the U.S., acquiring assets in their own name with money allegedly diverted from Privatbank, which Kolomoisky co-founded.

 

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The Allegedly Problematic Benefactors and Lubavitch Educational Center, Florida, Kiev, Crown Heights, Russia…

Chabad’s Strange Bedfellows and the Web of Interrelated Connections and People – A Gem of a Way to Coin Money…

The following are two interrelated and interconnected articles; and a link to a 2007 Wall Street Journal article which planted the seeds for the latest news. Suffice it to say, Chabad’s ties to money, power and a litany of high-powered donors is frightening in its scope. It shows the broadness of their reach.

The dots are easy to connect and are inextricably linked to the news earlier this year of ties to Chabad, the Ukraine, Guiliani and his associates. This is not to say that Guiliani has done anything wrong. That is not a statement which is being made or implied. We leave any assessments of that to far higher powers than the fingers behind this keyboard.

There are a few notable points, however, that we bring to your attention and that The Forward missed. They are important as follows:

  1. Rabbi Berel Lazar (of Putin’s Soviet Chabad “mishpacha” [family]) is the brother of Mindy Zalmanov – mentioned in The Forward article below. Mindy is said to be Lazar’s liaison in the United States. 
  2. The Link to Kiev and the Ukraine and Chabad came out months ago on numerous media sources; but the inextricable connections were published as early as 2007 by The Wall Street Journal in an article entitled: In Russia, a Top Rabbi Uses Kremlin Ties to Gain Power [https://www.wsj.com/articles/SB117858672536595256]:

MOSCOW — Of all the strange relationships that define today’s Russia, few are stranger than the alliance between President Vladimir Putin and an ultra-Orthodox rabbi named Berel Lazar.

Rabbi Lazar is a follower of Chabad-Lubavitch, a Hasidic sect based in Crown Heights, Brooklyn, that is on the fringes of mainstream Judaism. Its devotees are known for their love of the Rebbe, their late spiritual leader. Some even think he’s the Messiah.

3. Rabbi Lezar is industrious, not thing else, and he has strong ties to other notable figures including, but not limited to Diamond Magnate Lev Leviev, who also has ties to the US government through a variety  of diamond business. His alleged arch enemy, Dan Gertler seems to have ties to Guiliani who has registered to lobby on his behalf to have the Magnitsky Sanctions lifted. It is conceivable, albeit unusual, that Leviev and Gertler might have ties cloaked in long-standing business animosity.  

4. Don’t overlook the importance of Cleveland, the prominent families there, the Chabad connections or the efforts and crusade of one man to uncover financial improprieties in Cleveland. He has been largely bullied and harrassed for his scrutiny of financial records of major Jewish organizations in Cleveland, Ohio. But, his claims should not be understated. They are not being mentioned specifically here, but can be made available for law enforcement, that so far will not touch the Cleveland story.

4. There are no coincidences. 

Law enforcement really should be taking a look…

PrivatBank-kyiv

The Not-Uncommon Tale of a Benefactor Becoming a Problem

February 21, 2020; Forward

When a nonprofit’s financial status turns a glowing red, its board is faced with an existential moment. Should the nonprofit cut its losses, wind down operations, and go out of business as gracefully as possible? Or should it continue to search for sources of funding large enough to wipe out the debts and find a way to sustainability? Turns out that even if supporters do step forward, the worries may not be over. That’s the story of the Lubavitch Educational Center (LEC) in Florida.

Forward’s Molly Boigon writes that in 2013 the LEC was seriously past due on an $8 million loan and facing multiple foreclosures. The organization’s leadership, not ready to give up on its commitment to its students and close its schools, successfully found new philanthropic support to cover its operating losses. A generous group of benefactors banded together and purchased the LEC’s property at a foreclosure sale. They then provided the organization with an affordable long-term lease and sufficient funds to satisfy other debts so the LEC could continue serving its students.

Seven years later, that generosity seems ready to bite them. The Center is facing a problem that plagues nonprofit organizations of all sizes: what to do when a source of critical funding turns out to be tainted.

Two of the donors who saved the LEC, Mordechai Korf and Uriel Tzvi Laber, have been implicated as participants in a major international money-laundering scandal. The current owners of the Ukraine-based PrivatBank are suing the bank’s former owners, alleging they absconded with $470 billion—yes, with a “b”—through a complex set of fraudulent transactions. Korf and Laber, who were part of that ownership group, have been accused of illegally profiting from those financial manipulations. According to Forward

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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.

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