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Stefan Korshak   Kyiv Post   24-Jun-1999   FBI nabs Lazarenko aide
While Kyrychenko lived in opulence in California, Lazarenko's digs were even grander.  The Lazarenko palace boasts five swimming pools, sprawls over a dozen acres, and lists at nearly $7 million.  Lazarenko reportedly paid for the mansion in cash.
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FBI nabs Lazarenko aide

By STEFAN KORSHAK
Post Staff Writer

24 June 1999

A close associate of Pavlo Lazarenko has been arrested in California and faces charges of helping the former Ukrainian prime minister steal tens of millions of dollars from the nation's taxpayers.

The arrest of Lazarenko's reputed money man, Petro Kyrychenko, is the first of what may be many arrests to come in the most extensive embezzlement case � so far � in Ukraine's history.  Ukrainian government officials confirmed that other associates of Lazarenko, who fled the country in disgrace last December, still are being sought by law-enforcement authorities.

The FBI caught up to Kyrychenko, 47, at his ocean-side home in Marin County's ritzy Tiburon suburb on June 19.  He, like Lazarenko, could be extradited to Switzerland to face money-laundering charges.  The Donetsk native had been living only a few miles from a $7 million mansion that Lazarenko purchased in cash, authorities say.

Both remain held in an American jail awaiting court dates on the Swiss extradition requests.

While Kyrychenko allegedly helped Lazarenko illegally take $72 million out of the country, he is also charged by American prosecutors with lying on a visa application to the United States.  He made a June 20 preliminary appearance in a California federal court.  His visa hearing is June 25, according to FBI documents, while the extradition hearing takes place July 14.

George Niespolo, Kyrychenko's U.S.-based lawyer, did not respond to a Post request for comment.

Swiss and U.S. documents obtained by the Post detailing Kyrychenko's crooked financial dealings provide the strongest evidence yet supporting Ukrainian and Swiss charges that Lazarenko embezzled millions of dollars from the Ukrainian government and laundered it through Swiss banks while still prime minister.

According to FBI documents, Kyrychenko allegedly acted as Lazarenko's key money man from 1993 to 1997.  Through a maze of offshore accounts, the two men allegedly funneled tens of millions of dollars out of Ukraine through illegal business deals, U.S., Swiss and Ukrainian authorities charge.  The siphoning schemes allegedly involved Lazarenko use of his position as prime minister to authorize sales of goods to the government at grossly inflated prices.

Kyrychenko first ran afoul of the law on Feb. 1, 1995, in Poland, when a police search of the Warsaw-based Dopp Awto company turned up a .38 caliber "Astra" pistol in his possession, an FBI affidavit said.  Warsaw cops had been hunting for the weapon since October 1994, when they say an unknown killer used it in a contract hit after setting their victim on fire.  Dopp Awto is an automotive importer-exporter.

Kyrychenko was charged by Polish police with illegally owning a firearm, Swiss and U.S. police documents say.  But he was released after Kyrychenko's nephew, Ukrainian diplomat Andrey Novakovsky, claimed ownership of the weapon to Polish authorities.  Diplomats are generally immune from weapons-possession charges.

Vasily Koval, Ukraine's consul general, and then-Prime Minister Lazarenko made official requests through diplomatic channels for Kyrychenko's release on Feb. 10.

Polish authorities released Kyrychenko on a 1.3 million zloty [$370,000] bail on March 2.  One condition was that Kyrychenko would return to his Dnipropetrovsk residence and remain in contact with Polish prosecutors.

Kyrychenko chose to lead a rich California lifestyle instead.

U.S. lawyer James Mayock filed an I-140, an immigrant petition for alien workers, on behalf of Kyrychenko and a San Francisco-based company called ABS Trading Inc. on March 3, 1995, the FBI affidavit says.  When contacted by the Post, Mayock declined to comment.

Kyrychenko arrived in San Francisco on March 12, 1995, according to an FBI affidavit signed by agent Bryan Earl.  Earl alleges that Kyrychenko lied on a July 17, 1995, I-485 immigration form by denying his 1995 arrest in Poland, according to the U.S. District Court complaint against Kyrychenko.  Visa fraud in the U.S. carries a maximum penalty of 10 years' imprisonment and a $250,000 fine.

The Poles issued a national warrant for Kyrychenko's arrest on March 26, 1995, after Kyrychenko had already fled to California.

For the last four years, Kyrychenko has resided at 185 Gilmartin Drive in San Francisco's Tiburon neighborhood � one of the world's most expensive real-estate markets, FBI and San Francisco media reports say.

Built ground-up at the tip of the Tiburon peninsula, Kyrychenko's Mediterranean-style mansion is worth several million dollars, according to a June 19 San Francisco Chronicle report.  Neighbor Peter Mathews described Kyrychenko as a quiet neighbor, only drawing attention when he tried to install a shooting range in his basement, the Chronicle article said.

An April 28, 1999, international arrest warrant � signed by a Geneva judge � is also in effect against him, according to Swiss court documents.  Having skipped out on Polish bail, U.S. authorities denied bond for Kyrychenko.  U.S. Attorney Robert S. Mueller III said, "There is a serious risk of destruction of evidence and a very substantial risk of flight [by Kyrychenko]."

While Kyrychenko lived in opulence in California, Lazarenko's digs were even grander.  The Lazarenko palace boasts five swimming pools, sprawls over a dozen acres, and lists at nearly $7 million.  Lazarenko reportedly paid for the mansion in cash.

Detained by immigration authorities when he landed in New York last March, Lazarenko has repeatedly stated his foreign earnings were legal and that he is a subject of a political witch-hunt.

He has applied for political refugee status in the United States.  The latest hearing is scheduled in San Francisco on July 8, Lazarenko lawyer Mayock confirmed.

Back home in Ukraine, Lazarenko camp members dismissed the money-laundering allegations as cooked-up, the tales of Bay Area mansions as exaggerated, and a spreading international detective investigation as national presidential election politics at their worst.

"The only reasons these stories are coming out is that [President] Leonid Kuchma is trying to create an image as a corruption fighter, and that by attacking Lazarenko, he undermines our party's chances in the election," said Yury Filin, Hromada party deputy.

Lazarenko, still Hromada chairman, bowed out of the Oct. 31 election campaign in mid-June.  Hromada will put up another candidate, Filin said.

Between now and Halloween a great many other names and companies may wind up in the public eye.

Ukrainian prosecutors and their foreign colleagues continue to search for Lazarenko business associates, including Myhola Agafonov, Ihor Polozhentsev and a Dnipropetrovsk commodities boss identified as Dyatkovsky.  All are believed out of the country, a spokesman from the Ukrainian General Prosecutor's Office said.

The prosecutor general's charges list the following Ukrainian companies as suspected of involvement in Lazarenko's alleged overseas dealings: the Naukovoy Collective Farm, the Lucky Joint Stock Company, Assco, Dnipronafta, Enerhia, Stara Bashta, Agriprogess Ukraina and Dniproagroprodukt.

Alleged overseas partners listed by the prosecutor general include: the Brainfield Company (Tortuga), GHP Corporation (Panama), Somalli Enterprises (Cyprus), LIP Handel (Switzerland), Van Der Ploeg en Terpstra B.V. (Netherlands), Jurimex Commerz Transit (Switzerland), IAH International Automobil Handel GMBH (Germany), Adam Opel AG (Germany), Kres GMBH (Germany), KMP Corporation (Panama), Orphin Company (Bahamas), Progressia Fiducare (Switzerland), ABS Enterprises (USA) and Pacific Modern Homes (USA).

Transfers allegedly went through banks in Ukraine, Poland, Hungary, Switzerland, Cyprus, Germany, Panama, the Bahamas, the United States and the Virgin Islands.

In a possible coincidence, the prosecutor identifies a Robert Novakovsky as director of the Swiss company Jurimex Kommerz Transit, a key dummy company in the alleged Lazarenko empire.

The Post was unable to determine whether Andrey Novakovsky the diplomat was related to Robert Novakovsky the alleged Jurimex director, or whether Kyrychenko has more than one nephew.

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