Sprawl­ing Fir­tash in­ves­ti­ga­tion al­leges new US, Span­ish ties

Kyiv Post - - National - BY JOSH KOVENSKY [email protected]

Dmytro Fir­tash — the ex­iled Ukrainian oli­garch who al­legedly rigged the Rus­sia-Ukraine nat­u­ral gas trade and played king­maker for Pres­i­dent Petro Poroshenko — sought fi­nanc­ing in the United States for a cor­rupt scheme in­volv­ing a mine in In­dia, U.S. fed­eral pros­e­cu­tors say.

The 115-page doc­u­ment, filed in Chicago fed­eral court on July 25, also al­leges for the first time that Fir­tash in­tended to bribe per­sons in the U.S.

The fresh al­le­ga­tions come in a crim­i­nal case that has stranded Fir­tash in Vi­enna as he fights ex­tra­di­tion to Amer­ica on charges that he de­nies and dis­misses as po­lit­i­cally mo­ti­vated.

Dan Webb, an at­tor­ney for Fir­tash in Chicago, said that the new al­le­ga­tions were base­less, and noted that they did not ap­pear in the in­dict­ment against his client.

“As far as the gov­ern­ment’s state­ment in its brief that Fir­tash had some con­nec­tion to Rus­sian or­ga­nized crime, there is ab­so­lutely no ev­i­dence to sup­port that al­le­ga­tion,” Webb wrote. “None what­so­ever!”

The oli­garch is ac­cused of brib­ing In­dian of­fi­cials in a byzan­tine plot to con­trol the sup­ply of a form of ti­ta­nium used to man­u­fac­ture Boe­ing’s 787 jumbo jets.

U.S. pros­e­cu­tors call Fir­tash an “up­per-ech­e­lon” mem­ber of the Rus­sian mafia.

He also faces ex­tra­di­tion on a sep­a­rate money laun­der­ing and or­ga­nized crime case in Spain.

That Span­ish case has tied the saga back to Kyiv, with the son of for­mer Kyiv Mayor Leonid Ch­er­novet­sky spend­ing one month in a Barcelona jail last year. The son — Stepan — de­nied any ties to Fir­tash in an in­ter­view with the Kyiv Post.

“I am not even ac­quainted with Fir­tash,” he de­clared in his of­fice at the top of the DTEK Tower in Kyiv. “I have not seen him once in my life.”

Ori­gins in 2006

The al­leged scheme dates to 2006, a time when Ukrainian oli­garchs were spread­ing their wings and buy­ing up as­sets around the globe.

Pros­e­cu­tors say that Fir­tash be­gan to look at In­dia at the same time that Boe­ing, the U.S. plane pro­ducer, was start­ing to build a sup­ply chain for its 787 jet, and needed ti­ta­nium sponge.

Fir­tash swooped in, us­ing an in­ter­me­di­ary to sign a mem­o­ran­dum of un­der­stand­ing with an In­dian pro­vin­cial gov­ern­ment to mine there.

From there, pros­e­cu­tors al­lege that Fir­tash wired $18.5 mil­lion in bribes through U.S. banks to cor­rupt In­dian of­fi­cials for per­mits, while send­ing a top aide — for­mer Hun­gary Cul­ture Min­is­ter An­dras Knopp — to ne­go­ti­ate with Boe­ing in the U.S.

U.S. ties

In a bid to pre­vent Fir­tash and Knopp from hav­ing the crim­i­nal case against them dis­missed, pros­e­cu­tors hinted at un­re­vealed ev­i­dence.

The feds ar­gue that ev­i­dence pre­sented at trial will show “that mul­ti­ple trans­fers of money into the United States from abroad were de­signed to fi­nance or re­im­burse the ex­penses of a con­spir­a­tor op­er­at­ing within the United States.”

The pros­e­cu­tors sug­gest that some of the al­leged bribes may have been marked for per­sons in the U.S.

“The gov­ern­ment ex­pects the ev­i­dence will show that other trans­fers were des­tined for the ben­e­fit of third par­ties lo­cated within the [U.S.] who were des­ig­nated as third-party ben­e­fi­cia­ries of the bribes paid in or­der to ob­tain ap­provals for the project,” Chicago pros­e­cu­tors write.

As the scheme pro­gressed, Fir­tash brought on an­other client for a sep­a­rate U.S. project: Paul Manafort, then po­lit­i­cal con­sul­tant for the Party of Re­gions, led by de­posed Ukrainian Pres­i­dent Vik­tor Yanukovych.

In 2008, Manafort’s com­pany scouted New York City’s Drake Ho­tel on be­half of Fir­tash for a po­ten­tial $850 mil­lion rede­vel­op­ment project.

A let­ter filed as an ex­hibit in a civil law­suit by ex-Prime Min­is­ter Yu­lia Ty­moshenko de­tails a $25 mil­lion es­crow pay­ment from Fir­tash’s firm to spur the project.

“DF is still to­tally on board and a wire will be forth­com­ing ei­ther the end of this week or next week as a par­tial pay­ment on the 1.5,” Manafort wrote in one email, re­fer­ring ei­ther to Fir­tash or to his com­pany, Group DF, pay­ing an in­cre­ment of $1.5 mil­lion.

This week’s fil­ing says that Knopp, Fir­tash’s Hungarian deputy, re­cently got a gov­ern­ment res­i­dency per­mit to stay in Moscow, where he has lived since Fir­tash’s in­dict­ment.

Span­ish, Rus­sian mob?

Span­ish author­i­ties want to try Fir­tash on money laun­der­ing charges as part of a three-year in­ves­ti­ga­tion into the Rus­sian mafia’s pres­ence in Spain called “Op­er­a­tion Var­i­ola.”

Three months be­fore Fir­tash’s re-ar­rest in Fe­bru­ary, Span­ish po­lice in Barcelona named him as a sus­pect. The de­ci­sion on where Fir­tash gets sent is up to Aus­trian Jus­tice Min­is­ter Wolf­gang Brand­set­ter.

The case has also en­snared Stepan Ch­er­novet­sky, son of for­mer Kyiv Mayor Leonid Ch­er­novet­sky. “They fol­lowed me for three years, they wire­tapped me, they knew ev­ery­thing about me,” the younger Ch­er­novet­sky said, call­ing his July 2016 ar­rest at gun­point a “big shock.”

Pros­e­cu­tors seized a sushi restau­rant that he co-owned with an Ar­me­nian ex­pa­tri­ate and de­tained 11 others, in­clud­ing Mis­bah Al­droubi, a Syr­ian busi­ness­man who served as CEO of Fir­tash as­so­ci­ate Hares Youssef’s Hares Group in the mid-2000s. Ch­er­novet­sky de­nies any ties to Youssef.

A po­lice re­port ac­cuses Ch­er­novet­sky of head­ing “a crim­i­nal or­ga­ni­za­tion in Spain, whose ac­tiv­ity is laun­der­ing money that comes from il­le­gal ac­tiv­i­ties from out­side Spain.” It ties Ch­er­novet­sky to Al­droubi through a com­pany called Cherd In­vest­ment, al­legedly used to laun­der money into the restau­rant.

Ch­er­novet­sky, whose stake in the 2008 sale of Pravex Bank earned him hun­dreds of mil­lions of dol­lars, de­nies any wrong­do­ing. He was re­leased on ap­peal by a three-judge tri­bunal in Septem­ber 2016.

“The tri­bunal has ac­cess to ev­ery­thing,” he said. Once the judges saw the ev­i­dence, he said, “they re­leased me with­out bond and re­turned my pass­port.”

“If there was a con­nec­tion [to Fir­tash], so many months have passed,” Ch­er­novet­sky said. “Let them show it.”

Fir­tash had big in­flu­ence in Ukrainian pol­i­tics. He sum­moned Poroshenko and ex-boxer Vi­tali Kl­itschko to Vi­enna in spring 2014. He claims to have paved the way for Poroshenko’s May 2014 elec­tion by con­vinc­ing Kl­itsckho to run for mayor in­stead. "We got what we wanted," Fir­tash told a court on April 30, 2015.


Dmytro Fir­tash at­tends a court hear­ing on April 30, 2015, in Vi­enna.

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