WARREN, Ohio – A steel manufacturing company that authorities say factored into an international money-laundering scheme tied to Ukrainian oligarchs is now the subject of a foreclosure complaint filed in Trumbull County.
Optima Acquisitions LLC, based in Miami, filed the foreclosure action in Trumbull County Common Pleas Court June 27 against Warren Steel Holdings LLC, the troubled steel producer that acquired the former Copperweld Steel – then known as CSC Ltd. – out of bankruptcy in 2001.
According to the complaint, Optima tendered a $15 million loan to Warren Steel in August 2014, as the steel company prepared to resume operations. Warren Steel pledged the sprawling plant and more than 360 acres as collateral to obtain the loan, court documents show.
The note remains unpaid, the suit alleges, and Optima Acquisitions has requested that Judge Sarah Thomas Kovoor award it first position on the land and buildings and place the property up for sale.
“That would be a great thing,” said Ed Anthony, trustee for Warren Township, where a large portion of the property is located. “I do know that there’s been one or two entities who have inquired about that property. Any kind of development at all would be great for all of us.”
Optima’s filing requests that the proceeds of any sale be used to pay the company’s claims, court papers say.
Mordechai Korf, Optima’s manager and CEO, signed the loan agreement, court papers say. Korf – listed as president of Warren Steel – signed on behalf of that company as well.
Documents filed with the court show that Optima sent a letter to Warren Steel on May 8 of this year demanding payment on the $15 million loan, plus interest of $16,113,698.63, bringing the total owed to $31,113,698.63.
Incorporation documents filed with the Ohio Secretary of State’s office still lists Warren Steel Holdings as active.
Jeffery Panehal, the attorney of record for Optima, said his client has no comment at this time.
A Conspiracy Unravels
In August 2020, federal authorities raided the Cleveland and Miami offices of Optima Management Group, a collection of companies owned in part by Ihor Kolomoisky, a billionaire businessman in Ukraine who held real estate and business interests across the United States – among them Warren Steel Holdings.
According to a complaint filed Aug. 6, 2020, in U.S. District Court for the Southern District in Miami, the federal government alleged that Kolomoisky and three associates masterminded a complex plot to launder millions of dollars it says was pilfered from PrivatBank, a Ukraine institution that Kolomoisky once controlled. That money – issued through lines of credit intended for legitimate business purposes – “functioned instead as slush funds” that Kolomoisky and business partner Gennadiy Bogolubov used for “whatever purpose they wanted,” court documents say.
Federal prosecutors said funds were misappropriated from PrivatBank and then laundered through a labyrinth of shell companies overseas before being sent to the United States. Some of this money was used to acquire assets in the U.S., including real estate in Cleveland, Texas and Kentucky and businesses such as Warren Steel, authorities say. These assets in turn served as collateral to secure additional loans for the Ukrainian businessmen, prosecutors said.
According to a May 2019 civil suit filed by PrivatBank in the Court of Chancery in Delaware, Kolomoisky and his associates funneled $622.8 million in fraudulently obtained loans into their U.S. interests. Court documents say about $9 million went to Warren Steel between 2010 and 2013.
According to documents filed with the Trumbull County Recorders office, three mortgage documents signed July 20 and 21, 2014, show that Warren Steel used the plant as collateral to obtain $110.7 million in mortgage loans – one of which was the $15 million loan from Optima Acquisitions, which was once controlled in part by Kolomoisky.
Warren Steel at the time was temporarily shut down but had just recently renegotiated a package with the Public Utilities Commission of Ohio to award it reduced energy rates so it could reopen.
While in operation, the steel mill was beset with a host of safety violations. In one case, an explosion at the plant injured several workers.
Meanwhile, authorities in 2020 filed civil forfeiture complaints against three office buildings in Dallas, Texas; Lexington, Ky.; and Cleveland related to Optima Group and Kolomoisky. Warren Steel was not among the assets subject to forfeiture.
Attorneys representing Mordechai Korf have asserted previously that their client knew nothing of Kolomoisky’s actions.
The civil case and criminal investigation is ongoing. Kolomoisky has since been banned from the United States and is in detention in Ukraine.
Warren Steel Holdings shut down operations permanently in 2016, and 150 workers lost their jobs. It also left Trumbull County with a tangled mess of environmental problems, unkempt property, safety issues and delinquent real estate taxes.
Delinquent Taxes
“From our perspective, we were mostly concerned about the delinquent property taxes,” said Rex Fee, a Champion Township trustee. “From what I understand, the treasurer’s office has put them on a payment plan to retire that debt.”
According to the Trumbull County Auditor’s website, Warren Steel has complied with a tax payment plan it agreed to in 2021. Records still show a delinquency on two large contiguous parcels – 220 acres in Warren Township and another 143 acres in Champion Township – for a total of $231,989.80.
The idled plant and property is appraised at $1.6 million for tax purposes, according to the Trumbull County auditor.
The foreclosure suit also names lienholder Sam Lamancusa, Trumbull County treasurer, as a defendant. In its response filed July 2, the treasurer’s office maintains that it should have first position on the property and its lien protected in the case of a sale, asserting that “the entire amount of its liens be paid plus any costs and for any other relief the court deems proper.”
According to the filing, the treasurer’s office consents to the foreclosure “so long as this defendant’s claim is afforded priority after court costs.”
In October 2021, the Trumbull County treasurer filed a foreclosure suit against Warren Steel, according to records. That case was dismissed in March 2022 after the parties reached an agreement on a payment schedule.
Also named as defendants in the recent foreclosure action are the State of Ohio Department of Taxation, Scrap Metal Services LLC, Lincoln Recycling Inc., Motion Industries Inc., CSX Transportation Inc., Songer Steel Services Inc. and TMS International Corp.
The state of Ohio has requested that the court dismiss it as a defendant, since its liens have been satisfied, court records show.
Environmental Issues
The site – just west of state Route 45 – has a long history of manufacturing. The first industrial presence at the property was the American Puddled Iron Co. during the first quarter of the 20th century. In 1939, the Copperweld Steel Co. announced it would build a new steel division at the site and began production the following year. That division was spun off in 1987 as CSC Ltd., which manufactured specialty bar quality steel.
CSC filed for bankruptcy in 1993 and again in 2001, when it was purchased by Warren Steel Holdings. The mill restarted temporarily in 2009, idled, and then reopened in 2014, shutting down two years later.
Decades of steel and iron manufacturing at the site left a legacy of environmental problems.
In 2016, the state of Ohio filed a lawsuit against Warren Steel seeking $1.1 million in civil penalties. That case was settled in 2021, after Warren Steel agreed to pay $1.12 million and clean up the property.
That cleanup is nearly resolved, according to records from the Ohio Environmental Protection Agency. On May 29, 2024, the Ohio EPA notified Warren Steel that it had approved the closure of a hazardous waste removal project at the mill’s dust bag house. A completion report for other contaminants was filed in January of this year with the Ohio EPA.
“They’ve been on that for almost three years now,” Warren Township’s Anthony said, adding that any sale of the property could spur additional economic development in the region.
“Either way, it’s a win-win for us,” he said.