Documents reveal Kurchenko’s alleged tax evasion schemes
The young Ukrainian ex-billionaire Serhiy Kurchenko, now widely suspected of being a front man for overthrown President Viktor Yanukovych’s family, clearly liked offshore destinations.
His companies registered in offshore zones are now accused of trading in oil products using a tax evasion scheme that cost Ukraine’s government an estimated $1 billion lost revenue.
But offshore companies were also used to buy expensive Italian suits, according to documents obtained by journalists of the Washington-based Organized Crime and Corruption Reporting Project, a Kyiv Post partner.
Fuel trade schemes
Interior Minister Arsen Avakov on March 11 said that investigators in Odesa seized some 60,000 tons of fuel that belonged to one of Kurchenko’s companies.
“The confiscated fuel we will pass on to the Defense Ministry for safekeeping,” Avakov said. Police have started 11 criminal cases to investigate the schemes used by Kurchenko’s holding VETEK. Moreover, the general prosecutor’s office is also investigating Kurchenko’s activities and questioned several investigative journalists this week who had previously researched his activities.
According to Lb.ua, news website, Kurchenko, 28, like former President Viktor Yanukovych, is currently hiding from investigation in Russia.
In the meantime, former workers of Kurchenko’s companies have shared documents showing the movement of cash between VETEK and offshore companies in Belize, Panama, Cyprus and other destinations that can shed light on how his business empire functioned.
Kurchenko shot to prominence in 2012, when first reports about his business activity – particularly in energy trade- started surfacing. Last year, his own magazine estimated his fortune to be $2.4 billion.
Billionaire’s VETEK is a conglomerate which holds assets in energy, banking, media and sports. Odesa Oil Refinery, Kherson Oil Transshipment Complex, Brokbiznesbank, Real Bank, Ukrainian Media Holding and Metalist football club are its main holdings. However, Yanukovych’s older son Oleksandr is seen as the final beneficiary of these assets, while Kurchenko only manages them.
Some of the leaked papers document the activity of Belize offshore company Zevidon Trading Limited, a very active business entity affiliated with Kurchenko.
In February 2013 Zevidon Trading Limited paid $2.99 million to Simferopol-based TOV Zovnitransgaz. According to the customs declaration, the Ukrainian company sold to the Belize offshore some 3,000 tons of diesel that originated from Russia. The documents stated that a tanker with that load was to leave Ismail port in Odesa region for Belize.
Both of these companies featured in an inquiry sent last year by Svoboda deputy Yuriy Syrotiuk to the general prosecutor’s office and the State Security Service as businesses who allegedly used fictitious export schemes.
“It seems that three companies of (Kurchenko’s) Gaz Ukraina 2009 group work as exporters. They are PP Armada-Plus, TOV Zovnitransgaz and daughter company Petrol. All of them, according to the documents, transport gasoline (which origin is unclear) by auto cisterns to tankers that take the fuel to Zevidon Trading Ltd in Belize,” Syrotiuk wrote in his inquiry.
Interestingly, fuel trader Zovnitransgaz is registered in Simferopol, at 16 Rostovska Street. However, this turned out to be the address of school #18 in Crimea’s capital.
Kurchenko’s documents indicate that this company was used to take money out of Ukraine to Belize through fictitious export schemes, but the volume of these operations is yet to be determined after all documents are analyzed.
However, according to the State Statistics Service, in Jan.-May of 2013 alone the value of export of oil products from Ukraine to Belize was close to $800 million.
But after the publication of several investigations into these figures by the Ukrainian media, the State Statistics Service was ordered by the Ministry for Taxes and Duties to hide the Belize trade statistics. As a result, at the end of the year the Statistics Service said that full-year oil products trade with Belize stood at $170 million.
Suits for a worthy man
Belize’s Zevidon Trading Limited also features in a payment order in Italian. In Feb. 2013 Italian company Borrelli sent a payment order to this company for 30,000 euros.
The document shows that the money was to be paid for four bespoke suits “for Mister Katsuba.” Each of the suits cost 15,000 euros and the advance payment of half of the total sum of 60,000 euros had already been made.
According to its website, Borelli is a company with Neapolitan roots that specializes in ready-made and custom-made men’s suits and coats.
The document uncovers some of Kurchenko’s connections that had previously not been proven. Mister Katsuba is one of two Katsuba brothers from Kharkiv, Oleksandr and Serhiy.
The younger brother, Oleksandr, in Dec. 2012 became deputy head of the national gas trader Naftogaz Ukraine, at the age of 26. Until then, the same office was held by his elder brother Serhiy.
The appointment of younger Katsuba, who is the same age as Kurchenko and comes from the same city, coincides with the swift rise in the energy business of Kurchenko himself. In an interview to Forbes Ukraine, Serhiy Katsuba denied any connection with Kurchenko and his Gaz Ukraine 2009, but the document from the Belize offshore proved that there had indeed been a connection.
The mass of leaked document shows that Kurchenko’s companies conducted regular business with 14 offshore companies. They are still being investigated by OCCRP journalists.
Credit: Kyiv Post