DOJ Seeks Forfeiture of Cleveland Building as Part of Ukrainian Fraud Case
YOUNGSTOWN, Ohio – Federal authorities are seeking the forfeiture of a downtown Cleveland office tower that they say was part of an “international conspiracy to launder money” that also involved a shuttered steel mill in Warren.
On Dec. 30, the U.S. Department of Justice filed a civil forfeiture complaint in the U.S. District Court for the Southern District of Florida that alleges a 22-story office building at 55 Public Square in Cleveland was purchased with funds misappropriated from PrivatBank, a Ukrainian lender once controlled by two oligarchs.
The government alleges that Ukrainian billionaires Ihor Kolomoisky and Gennadiy Boholiubov, as the majority owners of PrivatBank, masterminded a complex money-laundering scheme between 2008 and 2016 that illegally funneled billions of dollars from the bank and used part of that money to acquire assets in the United States.
These assets include 55 Public Square in Cleveland, PNC Plaza in Louisville, Ky., and an office park in Dallas known as CompuCom Headquarters, the Justice Department said. The government has filed forfeiture actions on all three properties.
The government alleges that millions of these dollars were also used to acquire and finance the former CSC Ltd. steel mill, now renamed Warren Steel Holdings LLC, in Warren. The operation was propped up through bogus loans obtained through other entities controlled by Kolomoisky, Boholiubov and business associates in Miami, according to court papers.
The transactions allowed Kolomoisky and his associates “to launder the money, to promote the continued misappropriation of funds from PrivatBank, and to disguise the ownership, nature, and source of funds,” the complaint said.
A forfeiture complaint has not been filed regarding Warren Steel.
Warren Steel opened in 2009, but closed in 2016, leaving a legacy of environmental problems at the site just off state Route 45 in Champion Township.
In 2016, the state of Ohio sued Warren Steel Holdings and has fined it $1.1 million. The case is pending in Trumbull County Common Pleas Court. A trial date is set for June 7.
Ukraine authorities nationalized PrivatBank once the theft – reported to be in excess of $5 billion – was uncovered in 2016, according to the complaint.
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Pictured: 55 Public Square in downtown Cleveland, one of the properties the Department of Justice says was purchased by misappropriated funds from Ukraining bank PrivatBank. Image via EurekaLott – Own work, CC BY-SA 3.0.
Copyright 2021 The Business Journal, Youngstown, Ohio.