Lazarenko was subsequently convicted of one count of conspiracy to commit money laundering and seven counts of money laundering.363 He was sentenced to 97 months’ imprisonment and fined US$9 million for his role in laundering $30 million in proceeds from extortion.364 The U.S. conviction had been preceded by a 2000 conviction in absentia in Switzerland on charges of diverting US$72 million from a Ukrainian government contract, depositing US$43 million of it in Swiss accounts and then transferring them to accounts in Antigua and the Bahamas.365 The Swiss court sentenced Lazarenko to an 18-month suspended prison term, and confiscated US$6.6 million from his Swiss accounts. In a civil asset forfeiture claim filed in 2005, the U.S. alleged that Lazarenko misused his public office in amassing more than US$326 million in criminal proceeds that he laundered through a web of corporate vehicles and bank accounts all around the world.366 Two notable aspects of Lazarenko’s money laundering scheme were the misuse of corporate vehicles (CVs) to shield his illicit assets and money laundering activities as well as the purchase and use of an offshore bank through which he further sought to conceal his assets. As described below, however, neither provided the bullet-proof protection from prosecution that Lazarenko may have sought. Corporate Vehicle Misuse—Not a Bullet-Proof Shield Although Lazarenko was convicted in the United States on only the eight counts related to the first scheme of extortion of Kiritchenko, his case still serves as proof that CVs are not a bullet-proof shield against prosecution.
363. Ibid. 364. Ibid. See also Press Release, U.S. Department of Justice, “Former Ukrainian Prime Minister Sentenced to 97 Months in Prison/Fined $9m for Role in Laundering $30m of Extortion Proceeds” (November 19, 2009). 365. The Swiss Federal Tribunal case decisions were 125 II 356 and 125 II 238. See also, David Chaikin & J. C. Sharman, Corruption and Money Laundering: A Symbiotic Relationship 138 (Palgrave Macmillan, 2009), pp. 137-39. 366. First Amended Verified Complaint for Forfeiture at 21-22, United States v. All Assets Held at Bank Julius Baer & Co., Ltd., No. 1:04-cv-00798-PLF (D.D.C. June 30, 2005). The amounts and entities listed in the civil asset forfeiture claim are (a) in 1996, at least US$84 million from Somolli Enterprises; (b) in 1996, at least US$65 million from United Energy International Limited; (c) between 1996 and 1997, at least US$42 million from L.I.T.A.T. Offshore, Limited; (d) between 1994 and 1998, at least US$30 million from businesses established by Kiritchenko, such as Agrosnasbnyt/ASS and GHP Corporation; (e) between 1996 and 1997, at least US$30 million from DAV Riga; (f) in 1996, at least US$25 million from ITERA Corporation and its affiliates; (g) in 1997, at least US$15 million from SB Corp.; (h) between 1993 and 1994, at least US$14 million from Naukovy State Farm; (i) in 1997, at least US$13 million from United Energy Systems of Ukraine; (j) between 1993 and 1996, at least US$5,886,000 from Ditiakovsky and Dneproneft; (k) between 1995 and 1997, at least US$2 million from Internova Trading Corp., and (l) in 1994, at least US$375,000 from Nakosta Metal Products, a business owned by Alex Kurkaev. Lazarenko officially reported his income as US$6,000 per year for 1996 and 1997. Ibid.
Grand Corruption: 10 Case Studies
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