Calls for oligarch investigation
The former head of one of the Ukraine’s biggest banks is currently in the High Court accused of defrauding the bank through a “complex string of financial transactions”. Gennadiy Bogolyubov is also at the centre of a row over how and why he was given a “golden” visa to live in the UK and buy a home in London worth £62.5 million.
Mr Bogolyubov and another Ukrainian oligarch, Igor Kolomoisky, are accused of scamming Privatbank, which both men helped to found in 1992, by setting up a series of deals in which loans were issued and used to make advance payments for “impossibly large” quantities of commodities that were never delivered. These have been described by the court as constituting a “fraud of byzantine complexity,” involving “fiendishly complicated money movements”. Three English businesses were among the hundreds caught up in the alleged fraud.
The allegations have led to the assets of both men being frozen by the English courts, which they are both appealing, claiming that legal action against them should not be conducted in England because the case concerns a Ukrainian bank and because neither is resident in the UK.
However, the bank brought the case after it was nationalised in December 2016 and subsequently employed a security risk consultancy, which found staff destroying documents when it visited the HQ in a search for evidence. The firm concluded that the losses discovered at that time, totalling around $5.5 billion, were the result of a “large-scale and co-ordinated fraud.”
Roger Isaacs, Partner at Milsted Langdon, said: “Destroying documentation is one of the main ways criminals try to cover their tracks, as any forensic investigation will typically look for supporting evidence, from emails to statements.
“Electronic records can often be more difficult for criminals to cover up and, in this case, the fact that the men set up thousands of transfers but failed to provide any commercial rationale for their activities appears very suspicious indeed.”
Author: Roger Isaacs 20 September 2018