15.07.2024 Money laundering

Bank fraud worth UAH 100 billion. How Russian oligarchs influence Ukraine’s finance and business

If you think that banks are a 100% guarantee of the safety of assets and valuables, you are absolutely wrong. 

For example, we can now talk about the real return to the arena of ‘zombie banks’ or ‘zombie schemes’. We will explain what these strange words mean and how they can affect you below. 

After a long pause, the Deposit Guarantee Fund has been very active in taking control of the assets of banks that its officials call ‘zombie banks’. In fact, these banks include many financial institutions that were illegally withdrawn from the market in 2014-2015 during the so-called ‘bank run’. The latter was in fact a process of alienation of private business assets in favour of a narrow group of people close to the government.

At the same time, a new stage of raiding among business structures and shareholders began, when people close to the authorities could appropriate the acquired assets in a matter of days.

So, the ‘zombie banks’ are the very shareholders who were not afraid of the pressure and continued to fight for their property in the courts.

Now the next ‘victim’ of the Fund is PJSC ‘CSG BANK’. On 15 May 2024, the Unified Register restored information about PJSC ‘CSG BANK’ as a legal entity in liquidation. And three weeks later, the same register contained a record of the liquidation of PJSC ‘CSG BANK’ by an authorised person of the Fund. 

Liquidation of a bank opens the way for the sale of all of the bank’s assets. Therefore, it is hard to believe in the DGF’s claims that such actions are aimed at protecting depositors.

What is the fate of depositors in case of bank liquidation? In fact, the sale of a bank’s assets for a maximum of 5% of their real value will do nothing for the economy or for depositors. In such a situation, only the debtors, whose loans are automatically cancelled, would benefit.

The case of VAB Bank is also interesting. According to law enforcement officials, on the eve of bankruptcy, the bank sought help from the NBU and received a UAH 1.2 billion stabilisation loan secured by real estate (the total value of which was UAH 72.62 million).  

Within 40 days, the bank was declared insolvent, and UAH 1.2 billion disappeared into the abyss.

Or another case: according to media reports, last year Svitlana Rekrut, director of the Foundation, spent almost 100 days abroad on business trips and allegedly used a car of Megabank, which was under the control of the Foundation in liquidation, for her own needs. Not bad, right?

Fraud of the Fund and a Russian oligarch for UAH 100 billion. Pavel Fuks, a Russian oligarch with the appropriate citizenship, was also careful with the assets of Ukrainian companies. As a result, Fuks managed to illegally seize assets of Ukrainian companies worth more than UAH 100 billion.

How did the scheme work? The businessman’s holding company was looking for enterprises in the energy, machine-building and metallurgical industries of Ukraine that had loans from bankrupt banks.

The suspects then bought the ‘credit obligations’ of these facilities from banking institutions for nothing, which allowed them to interfere in their business activities. The assets of Ukrainian factories and infrastructure facilities were then frozen, their operations blocked or they were forced into bankruptcy.

One of Fuks’s ‘victims’ was the property of Yablunevyi Dar LLC, better known as a producer of fruit juices under the Galicia trademark. At that time, Fuks and the Fund’s officials created an anti-competitive environment during the Fund’s open bidding for the sale of the asset pool of PJSC Delta Bank (the right of claim under loan agreements of which included the property of the manufacturer).

As a result of the open bidding, PJSC Delta Bank and Fuks’ LLC FC INVESTOHILLS VESTA entered into an assignment agreement, under which the latter acquired the right to claim under loan agreements with LLC Yablunevyi Dar and LLC Tank-Trans for more than UAH 328 million.

Fuchs and the Fund carried out similar manipulations with other banks. They were so successful that the final losses are now estimated by law enforcement at UAH 100 billion. 

We told you more about the scheme and where Fuchs is now in the video.

In order to draw attention to the mechanism of the Fuchs scheme and the employees of the Deposit Guarantee Fund, we sent materials to law enforcement agencies, which resulted in the following:

  • The Main Department of the State Bureau of Investigation entered information into the Unified Register of Pre-trial Investigations 62024000000000565 under Part 3 of Article 212 of the Criminal Code of Ukraine
  • The State Bureau of Investigation in Kyiv – 62024100110000076 under Part 3 of Article 212 of the Criminal Code
  • Pecherskyi District Police Department in Kyiv – 12024100060001442 under Part 2 of Article 190 of the Criminal Code of Ukraine

Therefore, we urge you to report any examples of manipulation of property and assets by banking institutions and the Fund, including those carried out by VAB Bank.

Did you witness a crime?

Let us know about it. We will help protect the violated rights!

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