WARREN, Ohio – The Ohio Environmental Protection Agency has filed a motion in Trumbull County Common Pleas Court requesting that the agency intervene in a foreclosure matter against Warren Steel Holdings LLC, a shuttered steel mill at 4000 Mahoning Ave.

The OEPA said it wants to ensure that all environmental cleanup at the property is completed and that a consent order and covenant signed in 2022 is enforced, according to documents filed with the court.

“Any disposition of this case without the state’s involvement would substantially impair or impede with the environmental protections and cleanup measures in place,” the OEPA said in its filing. “The property is also subject to outstanding injunctive relief” per the consent order and civil penalties, according to court documents.

Warren Steel, located in both Warren and Champion townships, was formed in 2001 to purchase the bankrupt assets of CSC Ltd., formerly the Copperweld Steel Co. It opened in 2009 but shut its doors in 2016 and left behind what local officials say is a legacy of environmental problems and unpaid property taxes.

That same year, the state of Ohio sued Warren Steel over these environmental issues and won a $1.1 million judgment. A settlement was eventually reached between Warren Steel and the state.

Under the settlement, Warren Steel was to pay a total of $1,122,852.57 in civil penalties. Of that amount, $472,852 would be paid to the state’s Environmental Protection Remediation Fund, while $150,000.57 is to be paid to Ohio’s Water Pollution Control Administration Fund. 

The balance of the penalty – $500,000 – was to be paid to an interest-bearing Supplemental Environmental Project fund, administered by the Eastgate Regional Council of Governments. 

The ruling stipulated that those funds would be used “solely for the purpose of improving public health and wellness in and around the Warren, Ohio, community.”

An International Scheme

Matters in the case became more complicated when it was revealed that Warren Steel was named in a complex money-laundering scheme that originated from Ukrainian oligarchs who held ownership interest in the company.

Federal prosecutors said Igor Kolomoisky – a former owner and director of Ukraine-based PrivatBank – and his associates misappropriated funds from the institution and then laundered them through shell companies overseas before sending them 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. 

Foreclosure Action

In June, Optima Acquisitions LLC, based in Miami, filed a foreclosure complaint against Warren Steel, claiming it failed to pay back a $15 million loan the company tendered more than 10 years earlier.

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.

Mordechai Korf, Optima’s manager and CEO, signed the loan agreement, according to court documents. Korf – also 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 demanding payment on the $15 million loan, plus interest of $16,113,698.63, bringing the total owed to $31,113,698.63.

Environmental Issues

According to court papers, Warren Steel prepared closure plans for locations within the complex where hazardous waste had been stored or disposed of. Among these are a melt shop water-treatment area, wastewater plant acid tanks, an electric arc furnace dust bag house and a contaminated waste pile, the order says.

Exhibits filed with the court and the OEPA show that the cleanup was estimated to cost $878,918. The majority of these costs – $844,135 – would be used to remediate the dust bag house, according to documents.

The cleanup must also be approved by the OEPA.

According to OEPA records, the agency determined in May 2024 that the company had adequately cleaned the dust bag house and complied with closure obligations. However, this “does not discharge WSH’s obligation to investigate and possibly clean up contamination from releases of hazardous waste or hazardous constituents at the facility.”

Also, the OEPA said in its most recent court filing that the property is subject to a perpetual environmental covenant that places restrictions on how that land is used. 

“The covenant is a matter of public record,” OEPA said in its filing, “thus the Ohio EPA should have been named as a party of interest in this case.”