FinCEN Files: Leak of banks’ secret documents exposes Ukrainians in dirty money moves

Notorious Ukrainian oligarchs and politicians appear at the center of yet another international money laundering scandal, this time worth $2 trillion. The FinCEN Files leak reveals that they were among the global rich who moved dirty money abroad, aided by international banks.

The FinCEN Files are a leak of strictly confidential suspicious activity reports (SARs) filed by banks to the U.S. Treasury Department’s intelligence unit, the Financial Crimes Enforcement Network, known as FinCEN.   

Read also: FinCEN Files show that global banks flagged Poroshenko’s activities as suspicious

BuzzFeed News obtained over 2,100 such reports and teamed up with the International Consortium of Investigative Journalists (ICIJ) to analyze them. 

Ukrainian names that appeared in the investigation include some of the country’s wealthiest people: fugitive former Ukrainian President Viktor Yanukovych; a businessman known as his “wallet,” Serhiy Kurchenko, businessman and politician Andriy Klyuyev; oligarchs Rinat Akhmetov, Ihor Kolomoisky, and Dmytro Firtash; ex-President Petro Poroshenko and Yulia Tymoshenko, a former prime minister, and current lawmaker. 

According to the FinCEN Files, between 1999 and 2017, global banks moved more than $2 trillion in payments they believed were suspicious and flagged bank clients in more than 170 countries, identifying them as potentially being involved in illicit transactions. 

The ICIJ investigation details 200,000 transactions the banks deemed as suspicious in their reports. At least 489 transfers were made to and from Ukraine. 

The FinCEN unit was involved in searching for and retrieving money stolen from the country by Yanukovych, the corrupt Ukrainian president who was ousted by the EuroMaidan Revolution in 2014. The vast majority of FinCEN’s findings were handed over to Ukrainian law enforcement. Some concern Paul Manafort, an American political consultant who worked for Yanukovych and who led Donald Trump’s election campaign in 2016. 

After receiving FinCEN’s report on Manafort, the U.S. Department of Justice later indicted him. In 2018, he was convicted on eight charges of tax fraud, bank fraud, and failure to disclose foreign bank accounts.

Over 400 journalists across the globe have been analyzing the FinCEN Files for over a year. The Kyiv Post also contributed to the investigation.

On Sept. 20, the reporters started revealing portions of their findings. In this story, we offer a round-up of ICIJ and its partners’ findings.

Some expose Viktor Yanukovych.

Viktor Yanukovych

Yanukovych’s betrayal of Ukraine’s European aspirations and his unprecedented corruption drove thousands of Ukrainians to take to the streets in protest in November 2013. Demonstrations would continue for three months.

In February 2014, after a savage crackdown on the protesters, Yanukovych fled Ukraine for Russia. 

That same year, Ukrainian prosecutors estimated that Yanukovych and his associates had embezzled $100 billion from the country since 2010. The European Union immediately put him on its sanctions list.

What FinCEN Files revealed: Some of that embezzled money had passed through Latvia. 

“Viktor Yanukovych ran the Ukrainian government like a criminal organization, enabling grand corruption and profiting from diverse schemes,” a 2016 FinCEN internal report on Ukrainian kleptocracy stated, according to Re:Baltica, a Latvian investigative journalism outlet.

FinCEN mapped out the Ukrainian officials and Yanukovych associates involved in embezzling state funds and the companies linked to them. 

Mako Holding was one such company. It was controlled by Yanukovych’s son Oleksandr, whom the U.S. Treasury put on a sanctions list in 2015 for allegedly stealing Ukrainian state assets. The holding operated in energy and property development and had subsidiaries in Ukraine, the Netherlands, and Switzerland.

Its Swiss branch sent and received several payments to and from what appears to be shell entities with accounts in Latvia, Re:Baltica reported.

In December 2012, Mako Trading sent $800,000 to an account at Aizkraukles Banka (now known as ABLV Bank) for the benefit of Industrial Commodities Trade S.A. Then, between August 2013 and February 2014, it received $1.8 million from Elberg Invest LLP’s account at Baltikums Bank (renamed to BlueOrange Bank).

Industrial Commodities Trade S.A. and Elberg Invest LLP are both registered in offshore jurisdictions in Panama and London, respectively. Their directors were other Panama- and Belize-registered companies and their sales didn’t exceed a few hundred thousand pounds in the best years of their operations, according to Re:Baltica.

Both ABLV Bank and BlueOrange Bank told the media outlet that they cannot publicly comment.

Another company closely tied to ex-President Yanukovych was Fineroad Business LLP.

In 2013, it sent several wires totaling $2.3 million “for investment in Ukraine” from its account at Baltic International Bank to its own account at a bank in Ukraine, Re:Baltica found in the FinCEN Files. Aver Lex law firm, which represents Yanukovych family members, declined to comment when contacted by Re:Baltica. Baltic International Bank also did not comment. 

Serhiy Kurchenko

A close ally of Yanukovych, fugitive Serhiy Kurchenko is a Ukrainian entrepreneur and billionaire whom Ukrainian law enforcement accuses of financial crimes, including stealing state funds. In 2014, the European Union added him to its sanctions list. 

What FinCEN Files revealed: Kurchenko used to keep money in Latvian ABLV Bank. In 2015, his funds worth $80 million were arrested. 

ABLV started servicing companies linked to Kurchenko in 2012 and soon came into FinCEN’s sights. In 2018, it named the bank a primary money laundering concern. “Through 2014… Kurchenko funneled billions of dollars through his ABLV shell company accounts,” the bank’s notice says. 

The Ukrainian businessman had been placed on the U.S. sanctions list in 2015. However, ABLV maintained at least nine shell company accounts linked to him, Re:Publica reported.  

One of Kurchenko’s companies banking with ABLV Bank was Panamanian Prosperity Developments S.A. It received as much as $5 billion from eight Kurchenko-owned Ukrainian entities in payments described as “for fuel” in Latvian, Cypriot and Russian bank accounts from 2013 to 2014. The payments were connected to a gasoline import scheme, according to leaked FinCEN Files.

Re:Baltica was unable to contact Kurchenko to confirm if he was the beneficial owner of Prosperity Developments S.A. The bank itself, however, acknowledged to its U.S. correspondent bank that he was.

Andriy Klyuyev

Some of the leaked documents concern Andriy Klyuyev, a wealthy businessman and ex-chief of staff for Yanukovych.

Klyuyev was sanctioned by the European Union in 2014 for the alleged embezzlement of state funds and by the U.S. the next year for aiding Yanukovych in subverting democracy in Ukraine. In March 2019, the sanctions were dropped. 

He was investigated by Ukrainian prosecutors for alleged involvement in human rights abuses against protesters by Yanukovych’s security forces. The investigation was later dropped, too.

Among Klyuyev’s most prominent ventures was his family’s solar energy group, Activ Solar, which received hundreds of millions of dollars in loans from Ukrainian state banks that it never repaid. 

What FinCEN Files revealed: According to ICIJ, in 2017, JPMorgan Chase Bank flagged $230 million moved by Andriy Klyuyev’s U.K.-based company, NoviRex Sales LLP, over five years from 2010 to 2015. 

NoviRex funneled secret payments for political consulting to Manafort, who consulted Yanukovych, the bank’s report notes. Some of the transfers to Manafort-related shell companies appeared to be disguised as payments for computer hardware, according to the bank. 

The transfers also included more than $40 million paid in 2011 to NoviRex by TH Veles, a company suspected of funneling corrupt payments to Yanukovych that was liquidated in 2013. The TH Veles transfers included payments for Yanukovych’s book, which was never published.

The FinCEN Files also contain a report from Ukrainian law enforcement officials that examines the Klyuyev family’s alleged corruption schemes. The report details a web of offshore companies and transactions associated with Klyuyev business operations that were under criminal investigation for suspected money laundering and embezzlement.

The transactions include the Klyuyev family’s purchase of a company, Tantalit Ltd., that had bought the opulent Ukrainian presidential estate, Mezhyhirya, where Yanukovych lived.

Attorneys for Klyuyev did not respond to ICIJ’s request for comment.

Yuriy Ivanyushchenko

The ICIJ investigation also mentions Yuriy Ivanyushchenko, another close ally of Yanukovych. He also fled Ukraine in 2014 following the EuroMaidan Revolution protests.

Ivanyushchenko, a lawmaker and a businessman, was accused of illegal enrichment and stealing state funds. Tens of millions of dollars in assets believed to belong to Ivanyushchenko were arrested both in Latvia and in Switzerland. 

However, the Ukrainian lawmakers stalled the investigation. It was closed in 2019, and reportedly quickly renewed after public outcry. The E.U. lifted sanctions on Ivanyushchenko in 2017. He was often put on and taken off Interpol’s international wanted list. He is currently on Ukraine’s national wanted list. 

What FinCEN Files revealed: The businessman allegedly was behind an obscure Cyprus company called Tornatore Holdings LTD, that appears in the FinCEN Files. 

Tornatore was the vehicle for controlling Gazenergolizing, which had a monopoly to supply the country’s mines with equipment, investigative journalists from Nashi Groshi revealed in 2011. 

Among the coal mines to which the company was responsible for providing new equipment was the state-owned Bazhanov coal mine based not far from Donetsk in eastern Ukraine. 

In July 2011, a tower collapsed onto the building where employees sorted coal from rock. Eleven people were killed. An official commission identified aging equipment as a possible factor in the Bazhanov tower collapse. Employees grumbled that it hadn’t been replaced in 50 years.

“Mom kept complaining that everything was falling apart,” Olga Prykhodko told the Kyiv Post, a partner of ICIJ. Her mother, Nadezhda Kulinich, was killed in the accident. 

According to Nashi Groshi, a procurement watchdog, the state-owned mine had bought replacement gear from Gazenergolizing before the collapse, but they couldn’t determine if it had been delivered or even if the order was legitimate.

Soon after the tower collapse, Deutsche Bank noticed warning signs after processing two large payments on Tornatore’s behalf.

In December 2011, Tornatore received $5.5 million from a Ukrainian mine equipment subsidiary called Gazenergolizing, LLC. The next day, Tornatore sent $999,994 to a large Russian leasing company partially owned by the Kremlin, according to the investigation. 

The high-value payments, some rounded almost to the nearest thousand or million in what experts consider a “fingerprint” of fraud, capped off a year of Deutsche Bank concerns about Tornatore, ICIJ reported. The company had made suspicious payments and had no obvious home or “line of business,” bankers wrote in reports beginning in March 2011, a few months before the accident at the Bazhanov mine that summer.

Ukraine’s state auditing agency published a report in 2011 that painted a bleak picture of the mine’s operations. It found $21 million worth of damaged equipment at the Bazhanov mine’s headquarters, miles from the accident, and identified $205 million in “shortcomings in accounting, gross violations of financial and budgetary discipline.”

Through Swiss lawyer Vincent Solari, Ivanyushchenko denied owning or holding shares in Tornatore or Gazenergolizing. “The alleged ‘information’ to which you seem to refer is wrong,” Solari said to ICIJ.

Yulia Tymoshenko

According to Re:Baltica’s analysis of leaked FinCEN documents, former Ukrainian Prime Minister Yulia Tymoshenko may have moved money out of Ukraine through Latvia.

Tymoshenko is a veteran politician with over 25 years of experience. She has a solid, supportive electorate, but has also faced fierce criticism. She was the focus of criminal investigations and, after Yanukovych came to power, she served nearly three years in prison for signing a gas contract with Russia.

What FinCEN Files revealed: In 2016, one bank reported to FinCEN about several companies with a possible connection to Tymoshenko, Re:Baltica writes. The bank researched the case and concluded that her money might have been moved to Canada through shell companies. 

Two of the companies identified by the bank — Ringatta Project Ltd. and Woodmark Sales, Inc. — each had an account in Latvia’s branch of PrivatBank. Almost $16.5 million went through them between March and December 2014, shortly after Tymoshenko was released from prison. 

There is almost no information on these companies, Re:Baltica writes. Both were registered in the Belize registry, but currently are inactive. 

The media outlet was unable to confirm Tymoshenko’s connections to the two companies, as calls and emails to the press office of Tymoshenko’s party, Batkivshchyna, went unanswered.

Rinat Akhmetov

Ukraine’s richest man Rinat Akhmetov, whose net worth amounts to $3 billion, according to Forbes, is also a subject of the ICIJ investigation.

Akhmetov holds a stake in major parts of the Ukrainian economy through his holding company System Capital Management (SCM). He was among the allies and backers of Yanukovych, but after the EuroMaidan Revolution toppled him, the oligarch distanced himself from the former president.

Soon in 2014, Russia unleashed the war in eastern Ukraine, where Akhmetov’s mining empire is based. He lost control over it and significantly lost in net worth which stood at $15.5 billion in March 2013.

What FinCEN Files revealed: ICIJ found that in October 2014, London’s Barclays bank filed a suspicious activity report to FinCEN documenting money movements to and from Akhmetov’s companies over the previous five years. 

In the report, Barclays said that in September 1999 a Ukrainian Ministry of Internal Affairs report had identified Akhmetov as a leader of an organized crime syndicate. ICIJ has reviewed a 2005 Internal Affairs report that makes the same allegation.

Barclays also noted that a 2006 U.S. diplomatic cable referred to the Party of Regions, a political force of Yanukovych, financed by Akhmetov, as “a haven for mobsters and oligarchs.” The bank moved the money despite the concerns.

SCM said to ICIJ that the report was “fraud and a forgery.” The company also stressed that the former U.S. Ambassador to Ukraine William Taylor said in 2010 that there were no problems found with Akmetov’s business. 

In the October 2014 SAR, Barclays’ Swiss affiliate had placed a “block” on the accounts of System Capital and System Family Management (SFM), a related company. 

The report said the bank was terminating its relationships with both entities, meaning that the compliance officers had to sign off transactions. 

In February 2015, Barclays New York reported that it “maintains concerns” that the funds transferred by Akhmetov’s companies “could possibly contain illicit proceeds.” 

SCM told ICIJ that neither Akmetov nor the company itself had ever been charged or convicted of a crime. 

In summer 2015, the Barclays Switzerland account of SFM sent or received nearly $9 million in wire transfers. Then the bank’s New York office decided to break relations entirely. 

Akhmetov and some of his companies – SCM, SFM, and mining company Metinvest International SA – were put under what Barclays called its “Payment Rejection Filter,” ICIJ reported citing a SAR filed that September. 

The oligarch’s companies engaged in money movements of nearly $2 billion between 2009 and 2016 through Barclays, according to suspicious activity reports. 

Ihor Kolomoisky

Ihor Kolomoisky, a powerful Ukrainian oligarch and former business partner of the country’s President Volodymyr Zelensky, has been under the scrutiny of Ukrainian and American law enforcement for the past several years. 

Detectives started going after Kolomoisky when, in 2016, it emerged that he had allegedly embezzled $5.5 billion in depositors’ money from PrivatBank, Ukraine’s largest lender, which he owned at the time. When the fraud was uncovered, the state nationalized the bank. 

Some of the missing money ended up in the U.S.

Kolomoisky and his partners allegedly directed hundreds of millions stolen from PrivatBank into the U.S., where they bought at least 22 properties, including a 31-story office tower in Cleveland and a steel mill in the surrounding state of Ohio, U.S. authorities say. 

In August, the Justice Department filed two civil forfeiture complaints that could allow it to seize $70 million worth of Kolomoisky’s real estate. 

What FinCEN Files revealed: Deutsche Bank, which was previously caught providing its clients with services to evade sanctions, was moving Kolomoisky’s money. 

The leaked records analyzed by ICIJ show that Deutsche Bank moved $240 million from December 2015 to May 2016 for a shell company registered in the British Virgin Islands that, U.S. court filings claim, was controlled by Kolomoisky and his business partner. 

Kolomoisky did not respond to questions from ICIJ. Kolomoisky has publicly denied the allegations of money laundering at Privatbank and filed a multitude of lawsuits in Ukrainian courts to reclaim the bank while he is also dealing with international court cases filed against him by the bank’s current administration.  

Deutsche Bank declined to answer ICIJ’s questions about the bank’s dealings with Kolomoisky, saying it was legally restricted from commenting on clients or transactions. 

Dmytro Firtash

A fugitive Ukrainian oligarch Dmytro Firtash embezzled more than $190 million of state loans his bank received in the wake of the global financial crisis, part of which he ploughed into a deal to privatize a titanium manufacturing company, according to leaked documents analyzed by ICIJ and Organised Crime and Corruption Reporting Project (OCCRP).

Firtash made his fortune by importing natural gas to Ukraine from Russia at an artificially low price. In 2013, he was indicted on U.S. charges that he bribed Indian officials for a lucrative titanium mining deal. Released on bail, the oligarch has since fought extradition to the U.S. from his home in Vienna.

What FinCEN Files revealed: Firtash and the companies he controls pushed billions of dollars through the global financial system via major U.S. and UK banks. Banks raised suspicions about Firtash transactions dating back to at least 2003.

In August 2008, a Firtash entity, Bothli Trade AG, sent $78,101 to Standard Chartered Bank accounts of Periyasamy Sunderalingam. Sunderalingam helped facilitate Firtash bribes to Indian officials, the U.S. government alleges in its indictment. 

The documents also allege that Firtash stole a hefty part of the $1.5 billion that Ukraine’s National Bank gave the oligarch’s bank, Nadra, to stabilize it, in 2010-2014. Most of the allegedly stolen money, $110 million, was transferred to Nadra as the final installment of the state bailout, in early 2014.

Firtash’s holding company denied all of the allegations.