The Department of Justice (DOJ) filed a civil forfeiture complaint alleging that commercial property in Ohio was acquired by misappropriated funds from PrivatBank, a Ukrainian bank, as part of a loan scheme.
Three DOJ complaints filed in the U.S. District Court for the Southern District of Florida alleged that PrivatBank’s owners, Ihor Kolomoisky and Gennadiy Boholiubov, “embezzled and defrauded the bank of billions of dollars,” according to a news release from the agency on Wednesday.
The two Ukrainian nationals “obtained fraudulent loans and lines of credit from approximately 2008 through 2016, when the scheme was uncovered, and the bank was nationalized by the National Bank of Ukraine,” the agency wrote.
In that time period, according to the complaints, the two laundered some of their money by using shell companies’ bank accounts, including PrivatBank’s branch in Cyprus. Then, officials alleged, they transferred the laundered money to the United States.
“As alleged in the complaint, the loans were rarely repaid except with more fraudulently obtained loan proceeds,” according to the DOJ.
Other than Ohio, the DOJ said the pair were involved in purchasing properties in Louisville, Kentucky, and Dallas, Texas.
The complaints “alleged that those properties were also acquired using funds misappropriated from PrivatBank in Ukraine,” officials said. “All three properties are alleged to be subject to forfeiture based on violations of federal money laundering statutes.”
Associates of Kolomoisky and Boholiubov identified as Mordechai Korf and Uriel Laber—operating out of offices in Miami—created several entities “usually under some variation of the name ‘Optima,’ to further launder the misappropriated funds and invest them,” officials added.
“They purchased hundreds of millions of dollars in real estate and businesses across the country, including the properties subject to forfeiture: the office tower known as 55 Public Square in Cleveland, Ohio, the Louisville office tower known as PNC Plaza, and the Dallas office park known as the former CompuCom Headquarters. The buildings have a combined value of more than $60 million,” the DOJ said.
Other details about the alleged scheme were not provided by the DOJ.
Earlier this year, PrivatBank filed a lawsuit against Boholiubov and Kolomoisky to seek damages of about $5.5 billion, reported FT. The International Monetary Fund, or IMF, has pushed Ukraine’s government, which nationalized PrivatBank, into recovering the assets from the two former executives and hold them accountable.
“This claim brings the combined amount claimed by PrivatBank against Kolomoisky and Bogolyubov in England, Cyprus, the US, and Israel to a total of over $10 billion,” PrivatBank said in a statement at the time.