Corruption schemes within the Ministry of Justice and the reason behind NABU placing Andriy Dovbenko on the wanted list.
On New Year’s Eve, NABU (National Anti-Corruption Bureau of Ukraine) released several reports exposing corrupt officials within the Ministry of Justice during the tenure of Petro Poroshenko and Pavel Petrenko. Currently, there are no specific accusations against these influential figures; rather, suspicions have been announced against middle-level participants. However, some high-ranking officials, such as former leaders of ARMA and SETS, are involved. This large-scale crackdown on corrupt officials is a rare occurrence in Ukraine’s history of law enforcement. This article provides an overview of the situation as of the beginning of 2023, according to Our Money.
During Poroshenko’s time, Ukraine had its version of the “Seven Boyars,” where leaders of various power clans would gather to consolidate control over various channels. Essentially, it functioned as a competition commission to determine appointments to top positions in Ukraine. It often happened that no single force had a complete monopoly over certain industries. For instance, groups associated with Kononenko (BPP), Martynenko (People’s Front), and Kolomoisky were simultaneously involved in the Odessa Port Plant’s operations.
The justice system also had a complex management structure. Pavel Petrenko, representing the “Bukovina” clan of the “Popular Front,” was appointed as the Minister of Justice (note the positions obtained by Petrenko’s classmates and colleagues from Chernivtsi after the Maidan revolution). The power dynamics were somewhat balanced by Alexander Granovsky, the right-hand man of Igor Kononenko, who, in turn, was the right-hand man of Poroshenko. Tensions between these groups were common, and from time to time, law enforcement agencies and the media received information about their activities and questionable decisions.
One example that became public knowledge was a statement by private bailiffs who claimed that they were pressured into paying a 30% kickback from their earnings. The individuals named in this scheme were Petr Pinkas from the Bukovinian clan and Andriy Dovbenko, referred to as “watchers.”
Andriy Dovbenko used to work at Ernst & Young but later became the owner of several law firms, including N&D, “eocleous and Dovbenko,” and “Eurys.” Prior to the Maidan revolution, he served in Sergei Kurchenko’s corporation and was married to Daria Zarovna, a prominent figure in the glamorous party scene.
In the mid-2000s, Daria graduated from the Faculty of Law at KNU Shevchenko University. Two of her fellow students also became involved with the Ministry of Justice following the Maidan revolution. Ulyana married Viktor Vishnev, who headed the state enterprise “SETAM,” while Vladislav Vlasyuk became the director for human rights at the Ministry of Justice. We will revisit these fellow students later. Now, let’s delve into the NABU data concerning an organized criminal group. The names of all individuals associated with this group have already been published by various media outlets.
A corruption scheme involving the sale of seized property at a reduced price has been uncovered within the Ministry of Justice.
According to NABU’s report, Andriy Dovbenko, the alleged organizer of the group (as mentioned in the media), proposed a corruption scheme to the head of ARMA (State Assets Recovery Agency) between 2017 and 2018. Given his indirect influence over the Ministry of Justice, ARMA, and SETS (Specialized Enforcement Service), Dovbenko possessed in-depth knowledge of this specific area of the Agency’s operations. He devised a plan that aimed to gain control over every stage of the process, starting from the transfer of physical evidence to ARMA, up until the sale of the properties at a discounted price on a manipulated trading platform to affiliated companies.
Anton Yanchuk, the Chairman of ARMA (State Assets Recovery Agency) and a name mentioned in the media, accepted Andriy Dovbenko’s proposal. Yanchuk facilitated the adoption of necessary regulations, creating a veneer of legality for manipulating seized property in favor of criminals. One of the measures involved organizing a competition for selecting a trading platform, with only one entity, SE “SETAM,” being allowed to win. The group also enlisted the participation of Viktor Vishnev, the director of this state-owned enterprise, whose name has also been mentioned in the media. Vishnev ensured the execution of electronic auctions, creating conditions that favored predetermined entities and facilitated the sale of material evidence at reduced prices.
Throughout 2019, the group successfully implemented the corruption scheme, selling seized property at significantly reduced costs on at least four occasions. These instances included the sale of three land plots in the Odessa region, originally intended for Auchan network shopping centers, at an 18-fold discount compared to market value. Additionally, 2.6 thousand tons of medium and fine river sand in the Kyiv region were sold at a cost more than six times below market value. The sale of over 4.5 thousand tons of carbamide occurred at nearly five times below market prices, and grain, cereals, and oilseeds were sold at a price four times cheaper than their market value.
The total damage inflicted by these four episodes amounted to UAH 485 million.
According to NABU, the corruption schemes involved an SBU investigator and a deputy of the Kyiv Regional Council named Sergei Skuratovsky, as mentioned in the media. In 2012, Skuratovsky initiated the construction of an apartment complex near Kyiv, securing a loan of over UAH 200 million using the future residential complex and the associated land plots as collateral. Skuratovsky later became a member of Lyashko’s Radical Party, and the bank that issued the loan was declared insolvent by the National Bank.
To avoid repaying the debt and gain the opportunity to sell the constructed apartments, Skuratovsky organized a scheme between late 2018 and mid-2019. The scheme involved collaboration with the head of the investigative department of the Main Investigation Department of the SBU, the head of the asset management department of ARMA, and officials from SE “SETAM.”
The scheme operated as follows: The right to claim the loan was seized with the assistance of the SBU investigator and transferred to the ARMA department. Subsequently, this right was put up for electronic trading by SE “SETAM.” Through an auction at a reduced price, the company controlled by the People’s Deputy emerged as the winner. As the new owner of the rights of claim, the company canceled all mortgages and encumbrances on the real estate, including surety agreements. Later on, this company resold the rights to another LLC controlled by the People’s Deputy, thereby preventing the bank’s successors from enforcing future encumbrances.
The People’s Deputy involved an SBU employee who deliberately initiated a criminal proceeding and ensured the seizure and transfer of the rights of claim for the loan to ARMA. Simultaneously, the head of the asset management department of ARMA and officials from “SETAM” ensured the victory of the company controlled by the People’s Deputy in electronic auctions, resulting in a reduction of UAH 112 million in the price. Consequently, the right to claim for UAH 128 million was sold for only UAH 16 million.
According to information obtained from another criminal proceeding, a scheme involving bribes for fixers has come to light.
Banks and companies seeking favorable decisions regarding debt collection from the State Executive Service under the Ministry of Justice allegedly paid hundreds of millions of hryvnia to the law firm Neocleous and Dovbenko, as well as other firms connected to Dovbenko, under the guise of legal services. The investigation reveals that these funds were later converted into cash and transferred to officials within the Ministry of Justice and the Department of State Executive Service, either as payment for carrying out enforcement actions or for refraining from such actions.
Transactions between Dovbenko’s law firms and the officials involved various channels. Some of the money passed through conversion centers, while another portion was directed to individual entrepreneurs (FLPs) linked to SETAM. Additionally, funds were channeled to Pinkas companies and Anna Ogrenchuk’s LCF law firm.
Now let’s turn our attention from the criminal proceedings to the life trajectories of the individuals involved in this case.
By the time of the change in power in Ukraine in 2019, Dovbenko had divorced and married Anna Ogrenchuk, his former business associate from the years of the organized criminal group. Their “office romance” culminated in a high-profile wedding in Saint-Tropez, which was broadcast almost live on Bigus.info.
The wedding was attended by numerous high-ranking guests. Andriy Bogdan, the head of the Office of the President at the time, skipped the official celebration of Independence Day with Volodymyr Zelensky to attend Dovbenko’s party. He was accompanied by Andriy Vavrish, who was then involved in overseeing construction and Ukravtodor, as well as Yuriy Gorov, who served as a “watcher” for GASI (State Architectural and Construction Inspectorate). People’s deputies from the Servant of the People party, Nikolai Solsky and Oleg Seminsky, were also present. Notable attendees included businessmen Vladimir Galanternik from Odessa and Pavel Fuks from Kharkov, as well as judges Victoria Dzharty and Elena Chinchin from the Kyiv Economic Court, known for handling cases involving clients of bribe-takers, and several bankers.
Bogdan’s association with the group of “watchers” became one of the factors that led to his resignation, as the damage caused by his activities outweighed his merits in the eyes of President Zelensky. Soon after, Andriy Yermak replaced Bogdan as the head of the Office of the President. He appointed Daria Zarovna, who was previously married to Dovbenko, as his press secretary, and Vladislav Vlasyuk, brother of Vladislav Vlasyuk, as his adviser. Vitaliy Vlasyuk, the brother of Vladislav, is currently being nominated for the position of director of NABU (National Anti-Corruption Bureau of Ukraine).
Following Bogdan’s resignation, Vavrish left his position in the back office of Ukravtodor. GASI was disbanded, and DIAM (Directorate for Infrastructure Asset Management) was established. Both structures now fall under the jurisdiction of Oleksandr Kubrakov, Deputy Prime Minister for the Restoration of Ukraine.
Andriy Dovbenko himself is currently on the wanted list due to his involvement in corruption schemes. Viktor Vishnev, the Deputy Chairman of the State Service of Maritime and Inland Water Transport and Shipping of Ukraine, has been placed under suspicion.
Oleksandr Granovsky, who was previously involved in the corruption case related to the theft at the Odessa Port Plant, has disappeared from Ukraine and has been suspected in absentia. It is unclear where he is currently located.
As for Pavel Petrenko and Petr Pinkas, they have seemingly retreated from the public eye or chosen to keep a low profile.
It is hoped that both the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAP) will continue their efforts and work diligently to bring all the defendants involved in various cases to justice. The aim is to ensure that accountability is upheld and that the rule of law prevails.