NABU, SAPO expose EUR 21 million laundering scheme in record bribe case

NABU and SAPO have uncovered a scheme to launder part of the undue advantage received in 2015-2016 by the head of the State Fiscal Service of Ukraine and his associates for VAT refunds to agricultural holding companies.

The suspects are:

• a close associate of the former head of the State Fiscal Service of Ukraine (Part 5 Art. 27, Part 4 Art. 368, Part 3 Art. 209 of the Criminal Code of Ukraine);
• an advisor of the former head of the State Fiscal Service of Ukraine (Part 3 of Art. 209 of the Criminal Code of Ukraine).

According to the investigation, from December 2015 to March 2016, a close associate of the head of the State Fiscal Service facilitated him in receiving part of the undue advantage totaling over EUR 13 million into the accounts of a controlled non-resident company (British Virgin Islands).

Between May 2017 and April 2018, the associate, who owned of a group of building companies, laundered the entire amount of the bribe and spent it on an unfinished residential and office complex with a parking lot in downtown Kyiv. The construction of the complex went further, generating additional income, particularly in 2022-2023.

At the end of 2023, NABU and SAPO secured the seizure of 81 real estate objects and over UAH 30 million, which the associate had acquired using the laundered funds.

The other part of the undue advantage amounting to EUR 7.9 million, held in the accounts of another controlled non-resident company (British Virgin Islands), was laundered by the top official's advisor. He legalized USD 5.5 million through an agency agreement in January 2017, and from April to August 2018, an additional EUR 2.8 million was laundered as payments under purchase agreements.

Efforts are under way to determine the circumstances surrounding the laundering of the remaining USD 5.5 million in undue advantage and to identify the individuals involved.

As a reminder, on Oct. 17, 2022, NABU and SAPO exposed the former head of the State Fiscal Service, who received a record bribe of USD 5.5 million and more than EUR 21 million from the owner of an agricultural holding.

On Feb. 2, 2023, the investigation into the former head of the State Fiscal Service and his advisor was completed, and on May 24, the case was sent to court.

The investigation into the owner of the agricultural holding was completed in April 2023. In February 2024, the indictment against him was sent to court.