COMM SYNCH NOTES

REVOICE 1

In part one – how former Ukrainian president Viktor Yanukovych stole billions.

1.5 billion dollars was frozen.

We have obtained documents that expose a plot in 2015 to steal again $160m of that money.

It’s held in a company called Quickpace Limited.

It involves two oligarchs Pavel Fuks and Alexandr Onishenko- planning to buy Quickpace’s frozen assets at a knockdown price.

DARIA KALENIUK Unbelievable. It sounds like an agreement between criminal bosses. You can sign it with your blood.

REVOICE 2

Now, we reveal where the stolen money is destined.

And the identity of the reclusive third oligarch believed to be selling the frozen assets.

FORMER DRIVER (LEONID) He is unbalanced and unhinged. He’s a vengeful person, unprincipled and ruthless.

The story of our documents takes us back to the heyday of the corruption of Ukraine’s former president Yanukovych.

Deeper into one network of his offshore companies.

It traces the path of hundreds of millions of dollars out of Ukraine from 2011 to his escape in 2014.

…through foreign bank accounts, and into the pockets of Yanukovych and his cronies.

OLIVER BULLOUGH Since Ukraine became independent in 1991, it has been essentially looted by its elites again and again and again, and the tactics they use are essentially always identical. 00:01:51-00:01:55 OLIVER BULLOUGH Writer specialising in corruption

Faceless lawyers, accountants and bankers, helped pass hundreds of millions of dollars around the network. Some as loans referenced “redistribution of means”

Some as payments for building materials

Home electronics

… Some for cars

motorbikes –

even parquet flooring.

BILL BROWDER The philosophy of money launderers is to create a situation where the money has moved through so many different companies and so many different countries, in so many different accounts thereby effectively laundering it because nobody has the resources to figure it out. 00:02:45-00:02:49 BILL BROWDER INVESTMENT FUND MANAGER

REVOICE 3

While he was still in power, the Yanukovych network used Quickpace to launder money… sometimes moving relatively small amounts via complex paths – with the help of Western banks.

One document showed a payment of $4.4 million made by Quickpace from its nominal home as a Cyprus-registered company. The money was held in a Quickpace account in Vienna, with Austria’s Mynel Bank. It was wired to an account in Frankfurt with Commerzbank. Onto Deutsche Bank in New York. It ended up at Baltic International Bank in Latvia, in the account of a shell company, Foxtron Networks Limited,

Foxtron, like Quickpace,is registered in Cyprus.

None of the banks appear to have raised a red flag – what’s called a suspicious activity report.

BILL BROWDER It’s very easy for a bank to fill out a suspicious activity report, they just effectively press a button. The trouble is who’s digesting this suspicious activity reports and the answer is in many cases, nobody.

The documents linking Quickpace to Foxtron Networks – in turn link Quickpace one of world’s highest-profile money laundering scandals.

REVOICE 3.1

It was discovered by Russian accountant Sergei Magnitsky.

He was working for an investment firm based in Moscow and run by Bill Browder.

BILL BROWDER Sergei exposed it, he was then arrested, tortured and killed in prison. 00:04:26-00:04:29 BILL BROWDER INVESTMENT FUND MANAGER

REVOICE 4

The Russian government says Magnitsky died of natural causes – and accuses Browder of the fraud.

Browder claims Russian officials stole $230 million in state funds.

A huge quarter billion dollar Russian government embezzlement scheme…

synonymous with injustice and corruption in Russia.

A frightening reminder of how quickly money can disappear

REVOICE 5

Our documents reveal that Foxtron Networks had been wired money by Quickpace in March 2014 We then discovered that Foxtron was owned by one of the companies at the heart of the Magnitsky affair…. Fynel Limited

BILL BROWDER Fynel Limited is one of the central parts of the apparatus. It’s like the spigot on the pipe.

Fynel is effectively a nominee company that is the director for a number of very crucial points in this money laundering network.

REVOICE 5.0.9

Both Quickpace and the company it wired money to – Foxtron Networks – are registered in Cyprus..

OLIVER BULLOUGH Rich Ukrainians funnel their money offshore to Cyprus and then onwards, beyond, and then bring it back again, so it looks like foreign investment, so you can’t really tell who owns it.

REVOICE 5.1

In the Quickpace deal, another Cyrpus company, Prontoservus Limited, is named as the seller of the 160 million dollars in frozen assets.

But Prontoservus is just a ‘cut out’ – a nominee shareholder. It owns the assets on paper, but the real owner is hiding behind it.

Christina Sarris is the named secretary of Prontoservus.

…a Cyprus-based lawyer and offshore expert.

REVOICE 6

Sarris refused our request for an interview – or to divulge the name of the person behind Prontoservus. But we tracked her down… in a secretly recorded conversation, she confirmed that Quickpace had been sold.

WILL JORDAN I am looking at a company called Quickpace.

CHRISTINA SARRIS It is no longer with us, Quickpace. The client sold it.

I remember it because it was an August closing and it was a nightmare. 06:51:00-06:55:00 CHRISTINA SARRIS LAWYER & OFFSHORE EXPERT

The Cyprus company registry shows Quickpace was transferred to one of Pavel Fuks’s many companies – Evermore Property Holdings.

With the help of his company formation agent Chesterfield.

REVOICE 7

The leaked documents also provide evidence that the Quickpace deal was done, or at least that its first phase begun.

Pavel Fuks apparently made a payment from a London bank.

A transfer – 2 million dollars from Barclays Canary Wharf.

Deutsche Bank in New York was used to move the money

They passed it to an offshore company with an account in Latvia and a mystery owner.

The money went through… no red flags…

BILL BROWDER Western banks have had a hard time making money over the last few years

so, when somebody shows up and says I’d like to set up an account with 100 million dollars, they’re gonna have to look for a pretty good reason not to set up that account.

REVOICE 8.1

Other documents in the leak lead us to a British village north of London.

Under British law, there’s a type of company that allows foreign owners to avoid tax and scrutiny.

It’s called a limited liability partnership.

OLIVER BULLOUGH Companies are brilliant. Some people call them getaway cars, for corrupt money. I have heard them better described as armour plating.

One of the companies is registered here.

This is the official office of a company worth hundreds of millions of dollars…Fincorp Resources LLP.

According to bank statements leaked to us, Fincorp made 328 million dollars in just six months of 2013.

But in public accounts filed with UK authorities Fincorp claimed it made less than seven thousand.

It looks like fraud, so we came to ask about it.

REVOICE 9

The managers at the address of the registered office had refused our request for an interview.

WILL JORDAN Hello there, My name’s Will Jordan, I work for Aljazeera. We’re doing an investigation into Ukraine.

REVOICE 9.1 This Hertfordshire office has registered over 1500 companies, so the people who work here just run a post box service.

With the director, secretary and address all being proxies – finding out who really owns a company can be almost impossible…

OLIVER BULLOUGH If you own something in your own name, then you can just look on the company register, on the property register

and say, oh there you go, it’s Oliver’s house. But if I own, you know, that house in a company, a British company, and if my British company is owned by, let’s say a Cypriot company and if my Cypriot company is owned by, let’s say a Panamanian company, and if my Panamanian company is owned by a Nevis company, then if you want to find out who owns this house, you have to go to every one of those jurisdictions and ask them who owns that company.

WILL JORDAN Hello. I wanted to ask about a couple of companies, Fincorp Resources?

REVOICE 10

Fincorp Resources features in the files.

Its nominee directors were also involved in the Magnitsky scandal.

A Latvian citizen called Yuri Vitman, signs the papers for Fincorp.

He’s just a cut-out for the person who really owns and controls the company.

REVOICE 10.1 Another director is Stan Gorin, again a cut out, whose name is regularly used as a frontman by money launderers.

These named directors may be paid for their nominee role but are likely ignorant of any fraud.

BILL BROWDER The information you’ve presented is what I call the pipe. This is the pipe through which dirty money from Russia, Ukraine and other countries in that part of the world, all flow through.

these are all effectively part of the same criminal operation.

REVOICE 11

The Pipeline leads to Moscow. As well as the links with the Magnitsky affair, the documents feature hundreds of emails from lawyers based here..

They’re so concerned to conceal the name of their client, they write in cryptic language.

Good evening,

February 26, 2015, put the book on the top shelf.

Technical task: Read the book and give a positive review of it. Cancel the decision of 3 floors. To leave in force the decision of 1 and 2 floors.

Sincerely.

Is it agreed with my supervisor?

But who is the supervisor?

We found the answer buried deep in a key document…

REVOICE 12

A loan agreement shows Quickpace was used to put up collateral by a company called Vetek Media Invest, in order to borrow huge funds in October 2013

Vetek belongs to Sergey Kurchenko – known as the “baby-faced gas king” of Ukraine.

By aged 27, he was worth $400m. Former president Yanukovych apparently treated him like a wallet. Kurchenko gave cash to the president whenever he needed it.

OLIVER BULLOUGH He was given control of a chunk of the gas trade, he made a lot of money for himself, and then he cut back most of it then to his political patrons which was, you know, Yanukovych, or Yanukovych’s son.

REVOICE 13

There’s more evidence pointing to Kurchenko as the seller.

A lawyer called Boris Guttsov appears in the emails.

Russian business records show he’s director of United Media Holdings.

United Media used to belong to Sergey Kurchenko.

SERHIY LESHCHENKO Kurchenko was just businessman but I can say a very talented, corrupt guy, because he used very tricky schemes, very unusual schemes to steal money. 13:37:00-13:41:00 SERHIY LESHCHENKO UKRAINIAN MEMBER OF PARLIAMENT

REVOICE 14

Today he is in hiding in Moscow – wanted in Ukraine, sanctioned in the US and Europe.

His office is in a skyscraper complex developed by Pavel Fuks’ companies

Two of his former drivers told us more about him.

FORMER DRIVER (LEONID) Kurchenko is always asking when we will arrive. If you don’t answer immediately, you’ll be fired. It was the worst job I’ve ever had… “LEONID” Former driver for Sergei Kurchenko

FORMER DRIVER (MIKHAIL) He swears. He screams at his employees. He fires two to three people every month. He is very inadequate. “MIKHAIL” Former driver for Sergei Kurchenko

The drivers are worried they’ll be in danger if their former boss finds out they’ve been talking to us.

FORMER DRIVER (LEONID) He is unbalanced and unhinged. He’s a vengeful person, unprincipled and ruthless.

Kurchenko has only given three interviews to journalists – one was Ivan Golunov.

IVAN GOLUNOV It was an unusual interview.

We took an elevator. The door opened.

The first thing I saw was a machine gun pointed at me. 15:06:00-15:11:00 IVAN GOLUNOV JOURNALIST

I didn’t expect the PR person to ask me how much money I wanted.

I took an envelope and they calmed down.

Afterwards, I left it on the table.

No one mentioned it again.

We tracked down Kurchenko using information from his former chauffeurs.

FORMER DRIVER (MIKHAIL) He is guarded by Alpha Group – former counter-terrorism special forces.

FORMER DRIVER (LEONID) They have fought in wars and have state medals. They are armed with rubber bullets.

Just before 7am , the guards receive information that he’s coming.

They get in position.

FORMER DRIVER (MIKHAIL) There are five cars, 18 people in the convoy.

FORMER DRIVER (LEONID) The cars are fitted with signal blockers with a 200-metre range.

REVOICE 15

The convoy includes armed security.

Kurchenko travels in the second bullet-proof vehicle.

There is a mobile ambulance with a medic.

There’s a fourth vehicle blocking the entrance to the complex.

And a fifth sweeper car.

FORMER DRIVER (LEONID) Kurchenko had an argument with some Chechen guys in a restaurant. After that he stepped up his security.

Kurchenko rushes out, glimpsed for a split second – before he is inside the building.

His staff bring his things and the drivers park and wait.

We often drive him to…

the Ministry of Economic Development,

the Ministry of Natural Resources,

the national space agency.

Also the Russian Presidential Administration

State gas firm Gazprom

State oil firm Rosneft

State-funded VTB bank…

IVAN GOLUNOV He already works for the Russian government.

In our interview in 2014, he tried to show that he’s not scared of working in Crimea, that he’s capable of doing business there.

Ukraine’s spy agency reports that he’s helping the Russian side in the conflict in Ukraine.

He’s running some of the biggest coal, oil and gas companies

in annexed Crimea and areas controlled by Russian separatists.

The Russian government used him to supply fuel and power

to Luhansk and Donetsk People’s Republics.

BILL BROWDER In most countries you have the government. You have criminals and you have businessmen. In Russia, all of those distinctions have effectively disappeared.

DARIA KALENIUK It’s the interest of Russia to destroy the Ukraine from inside. It’s against the interest of Kremlin for Ukraine to succeed in anti corruption.

REVOICE 16

Through the Quickpace Deal we have uncovered a plot to profit from the billions stolen by the clan surrounding former Ukrainian president Viktor Yanukovych.

A baby-faced billionaire used dozens of lawyers seemingly to turn frozen assets into clean money.

Our evidence was confirmed by one of the buyers of Quickpace.

ALEXANDER ONYSCHENKO It was one of the businessmen from the ex government yeah.

WILL JORDAN Sergei Kurchenko ?

ALEXANDER ONYSCHENKO Yes, yes, yes.

For Onishenko, buying assets stolen in a grand corruption case is just another day at the office.

ALEXANDER ONYSCHENKO It is alike a kind of business you can buy cheap and try to fix the problem to make the money. 00:19:37-00:19:42

ALEXANDER ONYSCHENKO OLIGARCH

But when I revealed that we had the Quickpace document, Onishenko denied that the deal went ahead.

ALEXANDER ONYSCHENKO It was like normal business but this one has not happened yes? We didn’t buy.

WILL JORDAN You didn’t buy that ?

No. They wanted to sell us assets that were already frozen..they gave us a very good discount but we check it was impossible to unfreeze this activity .

REVOICE 17.1

They may not yet have made money, but our evidence directly contradicts Onishchenko’s account that the deal did not go ahead . Official documents record a change of ownership of Quickpace. A lawyer in Cyprus said the sale had happened.

CHRISTINA SARRIS The client sold it right –I remember it because it was an August closing.

Ukraine’s Anti-Corruption Bureau also confirmed the sale.

ARTEM SYTNYK Onyschenko and Fuchs the Russian businessmen bought them.

WILL JORDAN So it never happened?

ALEXANDER ONYSCHENKO No it never happened.

At the offices of Ukraine’s Anti-Corruption Bureau, a powerful politician – with his entourage – has arrived to complain.

POLITITIAN On a direct line, Anti-Corruption Prosecutor Holodnitsky gets orders

from the President of Ukraine about who to prosecute or exonerate.

The millionaire politician had just learnt that he was under investigation.

POLITITIAN If I were in your chair, I would sign and my hand would not shake. You are blushing, sweating, and going pale.

The argument all streamed live on national television.

This is Ukraine’s corruption fight.

Wealthy politicians versus Nazar Holodnitski, the young, new Anti-Corruption Prosecutor.

NAZAR HOLODNITSKY He gathered around him another ten MPs and organised this farce.

I’m ashamed for Ukraine that you were witness to this circus. 22:05:00-22:09:00 NAZAR HOLODNITSKY ANTI-CORRUPTION PROSECUTOR

DARIA KALENIUK We are witnessing old traditional corrupt system trying to do everything possible to destroy this this new agency.

NAZAR HOLODNITSKY If you were to weigh the pressure, it would be more than a ton.

The Anti-Corruption Bureau is drowning in paperwork.

And its case against Onishenko is falling apart.

WILL JORDAN What chances do you think there are of seeing Mr.Onishchenko behind bars? NAZAR HOLODNITSKY You might as well look at tea leaves.

As law enforcers, we are doing everything to bring him to justice.

WILL JORDAN So what chance do you think there is that you will ever go to prison?

ALEXANDER ONYSCHENKO I don’t know. Like we say in Ukraine nobody can be sure about prison.

Ukraine’s Anti-Corruption chiefs console themselves by saying they’ve seized Onishenko’s private jet.

NAZAR HOLODNITSKY It’s kept at an airport.

I can’t say where but it’s being kept.

Let’s leave it at that.

But even that appears to be an illusion.

We tracked down the jet – sitting at Luton Airport in the UK.

It was sold in March last year for 25 million dollars.

Today it is for charter to the super-rich – costing around 30,000 dollars an hour…

WILL JORDAN Did they seize one of your private jets?

ALEXANDER ONYSCHENKO No this is bullshit, yeah….they seized nothing from me. Nothing zero.

For its people, now the poorest in Europe, the Ukrainian tragedy plays on.

TATIANA SACHEVSKA Ever since the revolution I’ve been sleeping badly.

I think I’m asleep but I have this persistent anxiety. I feel despair and anxiety.

I know everyone wants corrupt individuals tried in a kangaroo court

or hanged in the central square but we cannot do this.

Alexander Onsihenko has now been granted asylum in Spain.

Pavel Fuks is stepping up his investments in Ukraine buying gas companies and possibly a bank.

Sergey Kurchenko has London lawyers working to overturn his sanctions and unfreeze his money.

OLIVER BULLOUGH Everyone gets away with it. If you look at the amount of money that’s stolen in developing countries globally every year, it is estimated at a trillion dollars, with a T. How much is recovered of that? Out of every thousand dollars, 25 cents

TATIANA SACHEVSKA It’s all just a charade. The corruption goes on. It’s greater than under Yanukovych. 24:22:00-24:25:00 TATIANA SACHEVSKA VOICE COACH, KIEV OPERA

In the first revolution in 2004, there was no blood spilt, but now I see no other way out.