24.06.2024 Ecology Fortification

How Bolokhovets and forestries became millionaires during the war. Forestry schemes and illegal logging

Т.в.о. Голови Держлісагентства Віктор Смаль з робочим візитом відвідав Чернігівщину

The forestry industry could bring up to UAH 880 billion a year to Ukraine’s budget. However, in 2022, only UAH 23.3 billion was earned – this is the conclusion of the Temporary Investigation Commission of the Verkhovna Rada. That is, it would be possible to systematically buy 600 F16s a year if illegal logging could be brought out of the shadows.

Who is behind illegal deforestation and the supply of timber for defense installations at a price that is several times too high? And who will be responsible for the waste of the budget, the destruction of the environment and the fragility of the fortifications?

How was the State Enterprise “Lisy Ukrayiny” established?

In September 2022, the government decided to reform the forestry industry. However, as is often the case in Ukraine, the reform turned out to be just a big word. All 158 Ukrainian forestry enterprises, which were independently engaged in economic activities (deforestation and planting of new forests), were merged into a single state specialized enterprise “Lisy Ukrayiny”, registered on October 26, 2022. Instead of 24 regional departments, 9 regional offices of forestry and hunting were created.

Yuriy Bolokhovets, former director of the Nizhyn Forestry, head of the Chernihiv Regional Forestry and Hunting Department, and deputy head of the State Agency of Forest Resources of Ukraine, is the new head of the Forests of Ukraine. By the way, Bolokhovets was dismissed from the agency by the decision of the Temporary Investigation Commission to investigate the actions of the State Forestry Agency of Ukraine on the facts of the forest industry’s under-receipt of hundreds of billions of hryvnias

How Bolokhovets and his family came to own hundreds of hectares of land

A year after Yuriy Bolokhovets became director of Nizhyn Forestry in 2013, his mother, a teacher at Ivangorod Secondary School, suddenly decided to go into business. She founded Ivangorodske Farm together with fellow villager Andrii Reva and Alla Proshukalo, then an employee of the Main Department of the State Geocadastre in Chernihiv Oblast.

Today, the farm owns and leases a land bank of 45 plots with a total area of 475 hectares located in Chernihiv region. Of these, 22 plots are state-owned, located in the Nizhyn district and were obtained by the farm when Bolokhovets was the director of the Nizhyn Forestry State Enterprise.

In 2015, Yuriy Bolokhovets was elected to the Chernihiv Regional Council as a member of the Agrarian Party of Ukraine. In the same year, his wife, Liudmyla, together with the same Andriy Reva, founded Ivangorodske LLC, which currently owns 409 private and communal land plots located in Ichnia and Borznyansky districts of Chernihiv region with a total area of approximately 1420 hectares.

An example of how the company of Bolokhovets’ wife received land is the situation with almost 35 hectares of land on the territory of the Plyskivka village council of the Nizhyn district of Chernihiv region. In 2018, these lands left state ownership and ended up in the hands of Liudmyla Bolokhovets and her business partner Reva. In 2018, the State Geocadastre Department in Chernihiv Oblast transferred a 34.8-hectare plot of land to the Plyskivka Village Council, which is protected by law because it contains archaeological sites, including ancient settlements of the Chernyakhiv culture of the III-V centuries AD, as well as a group of mounds of nomadic tribes of the II-I millennia BC. According to Art. 17 of the Law of Ukraine “On Protection of Cultural Heritage,” archaeological sites and the land on which they are located can only be state-owned.

Despite the above, officials of the State Geocadastre in Chernihiv region transferred the land to the Pliskiv village council of Nizhyn district, Chernihiv region, which in turn divided the land into two and in August 2021 held auctions for the sale of the right to lease it, which were won by Ivanhorodske LLC, which soldered the plots and began to grow grain and corn on them, which it also sold for export.

Is it possible to believe that officials simply violated the law in favor of Yuriy Bolokhovets, a member of the regional council and chief forester of Nizhyn?

Income of Bolokhovets’ wife

In 2020, Liudmyla Bolokhovets received the first dividends in the amount of UAH 330 thousand from the activities of Ivanhorodske LLC, which increased its sales revenue from UAH 17 million to UAH 50 million and showed a net profit of UAH 13 million (in 2019, it was only UAH 988 thousand).

In 2021, Lyudmyla Bolokhovets’s dividends already amounted to UAH 660 thousand, in 2022 – again UAH 330 thousand, and UAH 722 thousand in 2023. In 2021, Liudmyla Bolokhovets, being the wife of the then head of the State Agency of Forest Resources of Ukraine, opened a sole proprietorship with the main activity of freight road transport. After that, Liudmyla Bolokhovets immediately began to receive substantial income from her own business: while in the first year she earned UAH 451,675, in 2022 she already earned UAH 696,000, and in 2023 she earned UAH 1 million 535,000. She receives this income exclusively from the companies of her husband’s business partners, Mykhailo and Andrii Reva, or rather, their companies Garant Energo LLC, M.V. Invest LLC, Energo Smart LLC, Energostream PE and Garant Energy LLC.

Seizure of forest land in Chernihiv region

Bolokhovets is also related to the Hunting and Fishing Enterprise “Yeher” LLC, which he founded together with Mykhailo Reva, the father of the aforementioned Andrii Reva. Currently, according to open sources of data, Bolokhovets is listed as a “deleted beneficial owner” in Yeher.

The hunting and fishing enterprise Yeher LLC owns a land bank of more than 20 thousand hectares in the Ichnianska and Borznyanska communities of Chernihiv Oblast. Thanks to Bolokhovets’s good contacts, including Borys Shyianov, a member of the 6th convocation of the Yulia Tymoshenko Bloc, Yeher once leased the best land from the Chernihiv Regional Council.

“Local residents even protested about it. However, the position of their forestry friends in the state corruption hierarchy worked here as well… They (Bolokhovets and Shiyanov) called the forest theirs and forbade local residents to fish or hunt there. Everyone was afraid to violate these bans, as they could be physically abused by the guards,” the media reports say.

Seizure of forest and construction of a private house there

During the entire period of his public service, Bolokhovets also managed to illegally occupy a land plot of the State Enterprise “Lisy Ukrayiny” and build a house on it, which is not reflected in his declaration.

It should be noted that this land plot borders on another one with cadastral number 7421784800:03:000:2040, which is used by Bolokhovets’ mother, Hanna. The purpose of the land plot is farming. However, the Bolokhovets family arranged an artificial reservoir on the land and installed temporary recreational facilities on its banks. In other words, a recreation center was created, probably completely illegal.

It is noteworthy that one of the articles of the Criminal Code of Ukraine under which the SBI opened criminal proceedings on the facts of Bolokhovets’ abuse of office is Article 209 of the Criminal Code of Ukraine “Legalization (laundering) of the proceeds of crime”. According to the court decisions in this case, the investigation found that Yuriy Bolokhovets was likely to legalize millions through his wife’s foreign accounts opened in the jurisdictions of the United Kingdom of Great Britain and Northern Ireland, to which investigators requested access from the judges.

Wood for fortifications at an inflated price

Through coordinated cooperation with the head of the State Forestry Agency, Viktor Smal, Bolokhovets managed to make a fortune on the construction of defensive structures in the eastern and southern regions of the country.

This was realized as follows. Under the guise of “sanitary” felling, trees are cut down. After that, the illegally obtained wood is fictitiously resold at inflated prices through front companies. This allows the real origin of the wood and its value to be concealed.

Later, the wood with legalized documents is put up for sale for participation in public procurement. As part of these procurements, forest products are sold to the state at a significantly inflated cost for the construction of fortifications. Thus, the illegally extracted resource is not only legalized, but also brings additional profit to the organized criminal group.

The details of the distribution of funds between the companies controlled by Bolokhovets and Smal, as well as participation in local government schemes, were described in a number of articles:

Kharkiv region. Mykolaiv region. Chernihiv region. Donetsk region.

Who is behind Bolokhivets?

The State Enterprise “Lisy Ukrayiny” and the State Agency of Forest Resources are subordinated to the Cabinet of Ministers, in particular, the Ministry of Ecology and Natural Resources. It is interesting to note that Yuriy Bolokhovets joined the State Forestry Agency in July 2020, at the same time that Ruslan Strilets, who is currently the head of the Ministry, was appointed Deputy Minister of Ecology. Ruslan Strilets initiated the creation of the “Forests of Ukraine” and appointed Yuriy Bolokhovets as its head, who was criticized by MPs and accused of keeping the forestry industry in the shadows.

It is Ruslan Strilets who can and should dismiss Bolokhovets, the “forest tycoon,” and launch real reforms in the industry that will result in billions of hryvnias in the budget, so necessary for defense against the occupiers, but which are now lining the pockets of forestry officials. However, Sagittarius demonstrably fails to do so, instead creating the illusion of reforms. It seems that he is interested in something else. We hope that anti-corruption law enforcement agencies will take up this case

We have already submitted the necessary materials to law enforcement and regulatory authorities. We are waiting for their response and launching our own anti-corruption reform.

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