Kings of the Ukrainian Forest

This story began with a chance meeting. On the eve of Catholic Christmas, I was walking in the snow-covered city of Lviv, a strong wind was blowing. I was liting a cigarette on the run, when I ran into a man.

He returned, and I recognized an officer of the Security Service of Ukraine. We got acquainted many years ago. I and the editor had a meeting with the head of the anti-corruption and organized crime unit of the Security Service of Ukraine. And this officer was also inthe meeting.

- Why are you not watchful, you are knocking people down. What do you do?

- Well, I look for a topic, international. It must included several countries.

-There is nothing to look for - to do the forest. As in the guise of firewood is taken to Europe.

- Where to start?

- Take the name of the company and the name of the person. There are hundreds of millions. You will find the rest yourself.

Part One. Offshore Estonia and Criminal Albion

Cultural official

At first it looked like a bad joke. Because, officer said the name Andrei Voronovskiy. This man is known in the city. In 2010, at twenty-six, Voronovsky headed the Department of Culture and Tourism of the Lviv City Council. He was not spotted in the scandals.

After two years he applied for release.

- I want to move forward. I want to earn more, live more quietly, - commented his step to the journalists.

And then he disappeared from the public plane.

Where is the forest and where is the former cultural official, I thought. But I started to check.

I analyzed the countries in which the state forestry of five border regions sold the forest. And began to search in the registers for the name of the former head of culture. Found. Much to our surprise, it wasn't Romania, Austria or Germany - where the big woodworking giants are.

Estonians would probably be surprised to learn that their companies are buying large-scale timber.

In Tallinn in 2013, A. Voronovskiy became a member of the Board of Bioenergy solutions OÜ (LLC). Together with the Ukrainian Nazar Lysiy (pictured right).

Their partners are Estonians Triin Nagel and Katrin Taho.

It gets more interesting. Everything points to a dummy firm and nominal executives.

White collars

The registration address is Jõe 5. This is where companies affiliated with Estonian Ukrainian partners appear systematically.

Taho and Nagel are nominee directors-secretaries-members of the board. In the Estonian registers Nagel - mentioned in 24 companies. But - a real businesswoman here - Taho. She distinguish oneself in 575 companies.

Firms associated with Taho were under the watchful eye of law enforcement. This is a scandalous case in Estonia, the case of the group of companies "Divec - Dreiv Grupp". In their offices at Jõe 3 - 5 seized more than 5,000 various firms documents. Investigators of economic crime units claimed that most of these companies were used for fraud.

More than 500 offshore firms were discovered.

- Tax cuts. Because of ordering non-existent services from offshore companies, - said tax lawyer Maret Ambur.

After losing all the courts, the firms were liquidated, returning more than € 7 million to the budget. Almost 9 million euros of illegally refunded taxes, the control authorities failed to recover - the statute of limitations has expired.

Analyzing the activities of Taho and Nagel, registered in different periods on Jõe 5, you see - the schemes have not disappeared.

Larisberg Development OÜ has been the subject of research by Estonian investigators.

FB Eastland OÜ - has been spotted by ICIJ at Paradise Papers - in offshore schemes in Malta.

Searching for data on the activities of several dozen organizations in both Estonian business ladies did not yield any results. They don't even have internet resources.

And when the list was over one hundred - I caught the success. Simple internet site. Which everything “laid out on the shelves”. InCorpora OÜ - with board member Triin Nagel.

InCorpora will set up a company for you in Estonia. Will be in charge of administration and submission of financial statements. Will create a legal address, provide secretarial services for answering mail and answering calls.

Sleeping octopus

- Estonia is one of the most developed countries in the world. You can sign your documents online and manage your business from anywhere, - intrigues InCorpora.

InCorpora not only help you create a company, you are offered turnkey companies.

One of them is probably Vitison OÜ, with Jõe 5 - operated by Nagel (formerly Taho). According to the Estonian Register, the company, since its founding in 2016, "continues to sleep" and has not started operations.

The scale of demand for "white" offshore is striking.

- Today, there are 150,033 such sleeping octopuses in Estonia (35.1% of all companies registered in the register), - estimated economic experts of "Inforegistriga".

Therefore, this is the picture: Taho and Nagel register Bioenergy solutions OÜ - commissioned by Ukrainians A. Voronovskiy and N. Lysiy. Are engaged in reporting, administration, secretarial and representation services in the Estonian authorities. The internet site is not created - no publicity.

The business started immediately - I found information that Bioenergy solutions started to contract for the purchase of Ukrainian forest within a few months.

The cooperation with Taho was going well - she soon registered for N. Lysiy and A. Voronovskiy the next company - Timber Technologies OÜ. Probably saved every penny - and for the secretaries. Because the Estonian company even had a phone number in Ukrainian.

The third company - which includes Voronovskiy - Legatrans OÜ.

But finding the financial statements, I realized - these are not the only firms in the scheme. The turnover is significant - but not hundreds and hundreds of millions.

Hiding in plain sight

Do you want to hide traces of dishonest money? This can be done in the UK.

Transparency Intrernational UK experts in the “How UK Companies Are Used to Launder CORRUPT Wealth” study cite simply incredible facts.

- According to conservative estimates by the National Crime Agency, the scale of money laundering in the UK ranges from 41 to 102 billion euros annually - the study said.

Not surprisingly, a company which - as it turned out - exported thousands of wagons Ukrainian wood a month and whose name, I was told by a special officer (together with the name of Voronovsky), was based in London.

Biofuel Trading LLP was registered in the summer of 2012 - when Voronovsky resigned from the Lviv City Council.

Address is a classic of the genre. The room, in this tiny house, on London's short street.

(5 Percy Street, London, W1T 1DG)

If you do not see the photo, you think - it is about the whole business quarter on Wall Street.

According to Companies House, 21,283 companies have settled here.

According to sample estimates, as of today, over 16,000 organizations remain active.

A cozy place to export Ukrainian wood to the European Union. A cheap site made using free tools. No contact representatives, no phone number.

But this does not fit into the financial statement. In the last 4 months of 2016 alone, the company's turnover amounted to about 17.4 million euros. It is the cost of 7.5 thousand cars of the forest!

Biofuel Trading is hiding behind two managing firms.

One of them is Bolero Partnership LTD. It is part of a network of offshore companies affiliated with joint owners and a Seychelles address. In an old two-story house - known as the cover for the Russian mafia - in scams with dirty money in football machination.

The network - in tandem - in hundreds of UK companies.

Why in tandem? UK law provides that at least two organizations / individuals must be the founder of an LLP.

And of course, dirty money goes to accounts outside the country. Investigators from the UK have argued that in the UK banking system, it would immediately fall into the eyes of crime fighters. Therefore, the vast majority of non-transparent companies have accounts in Latvia and Estonia.

About offices. I found the address of this dilapidated house in Riga. Here one of the English companies of our Seychelles friends conducts business. In addition, 203 companies have settled.

(Jersikas iela 29—2, Riga)

Under the wings of business angels: terrorism and child porn

The Seychelles offshore group hides numerous international criminal structures.

They create more and more financial pyramids, fooling people. For example the machination of Richmond Berks Europe - where they raised money, promising 1.5% of revenue per day (547% per year).

Or the Generic Community - in which Rimvydas Giedra lured the trusted to invest money, telling tales of non-existent business angels who intended to help humanity, decide to give his project 2.29 billion euros.

Seychelles-based companies are featured in various money laundering and fraudulent networks.

But this is a trifle compared to open criminal proceedings for terrorist financing and the support of separatists.

Or the spread of child porn and child prostitution online.

And probably, given the above, it is not even worth dwelling on schemes where the directors of Ukrainian strategic enterprises are suspected of abusing power and embezzling millions, stories of tax cuts and customs payments for Ukrainian importers.

And the legalization of bribes. For example, through Blessington trade LLP. According to the National Anti-Corruption Bureau of Ukraine, it was one of the English companies through which money laundered by the companies of the People's Deputy of Ukraine Mykola Martynenko, as bribes from the Czech Škoda JS, could be laundered when selling equipment at Energoatom.

Smuggler

There is a funny character in this story. Director of Na Consulting LTD - the second company - founder - exporter of Ukrainian forest Biofuel Trading.

This is Roy Ervin Conrad Delcy. He is such a "successful" businessman that he even transported smuggling personally from Europe to Russia.

A man with a British Virgin Islands passport is closely associated with our Seychelles public. And his Na Consulting - Integra Global Trade LP - brings us to a house in Scotland. If you will be in Edinburgh, you shoud take a foto here. 277,909 companies were registered here.

It was Roy Ervin who helped me out on the trail.

Among the hundreds of organizations, founders, directors, which were explored - only Na Consulting LTD - met in only two firms. I picked it up.

Investigator of the prosecutor's office in Volyn

- So what do you do on the registers of those countries? Moldova, Belarus, Russia, Kazakhstan, Romania, Lithuania, Estonia. The forest was exported from Ukraine. Did you look at ours ?, - laughed my wife, in the second week of my unsuccessful search.

And although success lay on the palm of his hand - did not reach it myself. And here a few minutes and the Unified State Register of Judgments finds Na Consulting.

And next - Integra Global Trade (it turns out that is also in the scheme), and Biofuel Trading, and Bioenergy solutions, and Timber Technologies.

All - in one court order. The bonus is A. Voronovskiy and N. Lysiy.

The appearance of this criminal proceeding is a coincidence of incredible circumstances.

After the overthrow of the Yanukovych regime, the new government began investigating numerous corruption crimes of its predecessors. Among them is the export of timber abroad, curated by Viktor Sivets, the head of the State Forest Agency of Ukraine. One of Yanukovych's closest associates, according to law enforcement, was the beneficiary of two firms in the UK. And no company could export timber from Ukraine without paying bribes (in the form of consulting services).

The Prosecutor General's Office of Ukraine has set up an investigation team. The best investigators were selected. And as Volyn is one of the five leading logging areas, a local investigator in the most important cases of Sergiy Bozhko was involved in the group.

Surely, Sergei Bozhko saw that despite Viktor Sivets escape to Russia and the liquidation of both companies, the business of "Chief Forester Yanukovych" continues to thrive. Only other companies - gaskets - have come to replace, and the money on the accounts is no longer for consulting, but intermediary service.

It was not difficult for Bozhko to establish that Adalare Enterprises Limited, registered at the address of Victor Sivets firmes, had entered the forest market. And Bozhko saw the parallels between the directors of the liquidated companies and new one - the New Zealanders Ian Taylor and Abigail Kalopong. They are partners in countless international crime projects and defendants - from bank fraud in Somerset County and the theft of $ 26 million from the construction of a St. Petersburg plant to the conduct of pro-Russian disinformation campaigns in Europe - in relation to the war with Ukraine.

And, finding Abigail Kalopong and comparing it to another newly established exporter, he traced its connection to Timber Group LLP, which captured the forest market in Chernihiv.

Investigators have developed various firms.

And somewhere, at this stage, the case from the Prosecutor General's Office was transferred to NABU.

And the material that could not be tied to Viktor Sivets remained.

Deforestation and dollar snowfall

Investigator Bozhko registers criminal proceedings in the summer of 2017. He queries law enforcement and financial intelligence in many European countries. And it gets all the beauty of the picture: firms - who bought, sold, laundered. Transactions and movement of funds on accounts. And most importantly, information about the beneficiaries of the companies.

In Ukraine, the forest industry is like a pyramid. Above is the State Forestry Agency, below it - regional offices, and even lower - state-owned enterprises (forestry).

From the picture "painted" by Sergiy Bozhko, it is clear that the management of all these steps of the forest pyramid contributed to the companies of A. Voronovskiy and N. Lysiy in export of the forest. After all, the investigator received numerous documents confirming that these individuals were the beneficiaries of Bioenergy solutions, Biofuel Trading and another dozen other companies that allegedly laundered the money.

What is the crime: Forestry sells 'goods' at a lower cost (I have contracts with a difference of up to 56 - 65%). The arguments are different - from “changing” humidity to quality indicators.

Ukrainian companies have resold timber already at the market price. The price difference - seems to have been laundered through a dozen or so related companies. This was confirmed by Financial Intelligence Unit.

And cash - was distributed among participants and went to bribe management of the forest pyramid.

* (Later, the criminal proceedings were closed. As it happened - it will be described in the fourth part) *

And all the beauty of the game was that it was "easy" money.

Bioenergy solutions and Biofuel Trading did not incur significant costs. Thousands of wagons, with their accompanying documents and invoices, went directly from the state-owned enterprises to the Egger and Schweighofer plants in Romania.

Instead, Bioenergy solutions and Biofuel Trading have signed contracts with state-owned companies to sign DAP terms - that is, all costs for entry into Romania - even customs payments - have been paid by forestry.

Further, Bioenergy solutions and Biofuel Trading have signed similar contracts with Egger and Schweighofer, where the latter, as buyers, bear all the costs within their own country.

They are only performers

Everything was concrete with evidence in criminal proceedings, but the investigator Bozhko closed the case in an "emergency" manner.

After all - it is even clear to the child that two ordinary Lviv young entrepreneurs could not be the brains in this scheme. They are ordinary performers.

The organizers will not register the money laundering companies directly, nor will they become bank signers in the firms that export the wood. They will not make any money transfers. Especially when it comes to hundreds and hundreds of millions and thousands of forest cars.

Who were the kings who held the keys to the corruption scheme and extinguished the fire of the prosecutor's office?

We will describe this in part two. Soon - "Criminal Authority".

* Letters requesting comments were sent to persons involved. At the time of publication, no response was provided. If, however, the questions are answered, they will be published in the following sections *

Taras Zozulinskyy, 27.08.2019

This material was supported by the "OPEN Media Hub", and funded by the European Union

The investigation used a "YouControl" analytical system