Сriminal organization inside SPFU: investigation completed

NABU and SAPO have completed the investigation into the criminal organization run by the former head of the State Property Fund of Ukraine. Its activities led to over UAH 700 million in damages to the state, while the exposure became one of the most significant cases in the history of Ukraine's anti-corruption agencies. The organization's participants are also suspected of laundering more than UAH 10 billion in illegally obtained property.

The investigation's results were achieved thanks to effective international cooperation with the Stolen Asset Recovery Initiative, the Organization for Economic Co-operation and Development, the United States Department of Justice, the Homeland Security Investigations which is the primary investigative arm of the U.S. Department of Homeland Security, the Federal Bureau of Investigation, as well as through the work within the joint investigative team with several European countries and with the support of the European Union Agency for Criminal Justice Cooperation.

As reported, on March 22, 2023, NABU and SAPO exposed two episodes of the group's criminal activity.

The first one involves corruption at the state-owned Odesa Port Plant. At the beginning of 2020, the SPFU head secured the election of loyal members of the plant's supervisory board, who later approved the appointment of a group's participant as the director of the enterprise. During May 2020 - October 2021, the then SPFU head, his associate, two acting directors of the plant, and two owners of an LLC secured the prolongation of additional agreements with the LLC on the processing of gas into urea and ammonia at low cost. Subsequently, the members of the group realized that the constant, groundless extension of the contract between Odesa Port Plant and the controlled LLC might raise questions. Therefore, they conducted a competitive selection of a new raw materials' supplier, assuming that the proper company would win. When things turned out differently, they illegally canceled the results and signed a contract with a predetermined LLC. The investigation gathered enough evidence that the competition was deliberately disrupted. This is confirmed by the correspondence among group members.

As a result, from May 2020 to October 2021, Odesa Port Plant lost more than UAH 600 million.

The second episode concerns the state-owned United Mining and Chemical Company. NABU and SAPO established that in October 2020, the SPFU head, as a crime boss, succeeded in appointing a loyal acting director of the company. Following the instructions from above, during 2020-2021, he deliberately concluded four contracts for the sale of titanium-containing raw materials (ilmenite concentrate) at discounted prices with a Czech company controlled by the adviser to the SPFU head. The concentrate was then resold at market prices, including to russian enterprises and those in the temporarily occupied Crimea.

This resulted in losses to the state worth over UAH 111 million.

The suspects are (positions at the time of the crime):

• the head of the State Property Fund of Ukraine (crime boss);
• a close associate to the head of the SPFU (co-organizer);
• the first deputy head of SPFU in 2021
• an adviser to the head of the SPFU;
• two acting directors of Odesa Port Plant (in different periods);
• the acting head of United Mining and Chemical Company;
• two owners of the LLC that won the auction at Odesa Port Plant;
• an accomplice in the crime.

NABU and SAPO are taking efforts to locate suspects who are evading justice, while also investigating additional episodes of the criminal organization's activities and identifying other potential participants involved.