Ukrainian oligarch Igor Kolomoisky, has rejected allegations by the US justice department that he and his partners acquired property in America as part of a “conspiracy to launder money embezzled and fraudulently obtained” from PrivatBank, Ukraine’s top commercial lender.
Mr Kolomoisky told the Financial Times that “all investments in the USA were made from personal funds received in 2007-2008” from the sale of Ukraine-based steel industry assets and “from the income of other businesses” with accounts at PrivatBank.
“Everything else is categorically rejected,” he added.
His comments came after US prosecutors on Thursday filed two lawsuits against him and his associates seeking to confiscate $70m worth of US-based commercial property.
Filed in the southern district of Florida, the court claims mark the first action taken by the US against the controversial oligarch who backed Volodymyr Zelensky’s successful campaign to become president of Ukraine last year.
The move by US prosecutors — which comes days after the FBI raided properties in Cleveland and Miami that are linked to Mr Kolomoisky and his associates — represents a major blow for the oligarch.
“This is a civil action in rem to forfeit assets that facilitated, were involved in, and are traceable to an international conspiracy to launder money embezzled and fraudulently obtained from PrivatBank,” one of the legal suits reads.
Founded in the 1990s by Mr Kolomoisky with partner Gennady Bogolyubov, PrivatBank was nationalised in 2016 after Ukrainian authorities identified a $5.5bn hole in its balance sheet.
The US lawsuit, which also implicated two US based accomplices, said both Ukrainian oligarchs had “spent prolifically”.
“They purchased more than 5m square feet of commercial real estate in Ohio, steel plants in Kentucky, West Virginia, and Michigan, a cell-phone manufacturing plant in Illinois, and commercial real estate in Texas, among others,” the claims read.
PrivatBank, now state-owned, has in past years filed lawsuits in the UK, US and other jurisdictions imposing a freeze on both oligarchs’ assets and seeking reimbursement for losses.
Mr Kolomoisky and his partners have repeatedly denied wrongdoing. They have fought back with counter lawsuits in Ukraine, seeking to regain ownership of PrivatBank or obtain compensation.
Proper handling of the PrivatBank case and other oligarch-linked banks nationalised or liquidated as part of a broad Ukrainian banking sector clean-up are key conditions for multi-billion-dollar financing from the IMF and western backers that have propped up Kyiv ever since Russia annexed the Crimean Peninsula and fomented a proxy separatist war in the country’s eastern regions.
Conditionality for a fresh $5bn IMF programme, which was secured in June to help Kyiv grapple with the coronavirus pandemic, obliges Ukraine to preserve the bank sector clean-up and hold previous bank owners accountable.
Mr Kolomoisky has this and last year urged Ukraine’s president to back away from the IMF programme.
Distancing himself from Mr Kolomoisky’s interests, Mr Zelensky submitted legislation which aims to prevent Mr Kolomoisky and other owners of banks liquidated or nationalised as part of the banking sector reforms from regaining ownership of them or obtaining compensation. After months of debate, lawmakers adopted the IMF-required legislation.