Posted on 03/14/2004 10:25:42 AM PST by nuconvert
Former Ukrainian Leader Accused in U.S. of Money Laundering, Looting
Mar 14, 2004
By David Kravets/ Associated Press Writer
SAN FRANCISCO (AP) - Extortion, fraud, bribery, graft, assassination attempts and illicit overseas bank accounts holding hundreds of millions of dollars. The story of international intrigue unfolds here Monday when Pavlo Lazarenko, the former prime minister of Ukraine, stands trial in federal court on suspicion of laundering at least $114 million of an illegally obtained fortune through banks in the United States.
Lazarenko, the first former head of government to be tried in the United States since Manuel Noriega of Panama was convicted in Miami of drug trafficking, contends he neither siphoned funds from his government nor accepted bribes.
Lazarenko claims he earned the fortune legitimately, in the nearly lawless free-market economy of a country left to fend for itself after the Soviet Union's collapse.
But in a 53-count indictment, American prosecutors said Lazarenko used his political clout to set up an international network of bank accounts to launder profits made through clandestine schemes involving natural gas, agribusiness, housing and other businesses in Ukraine.
A former economic adviser to Ukraine, Anders Aslund, estimated Lazarenko siphoned off as much as $1 billion. Authorities and experts aren't sure where all the money went.
"He was the leader of a culture of pervasive corruption," said Aslund, now a scholar at the Carnegie Endowment in Washington, D.C. "I never encountered anyone who was as crudely corrupt as Lazarenko."
While awaiting his U.S. trial, a Swiss court convicted Lazarenko in 2000 of money laundering in that country and handed him an 18-month suspended sentence.
The U.S. government is trying Lazarenko to make the point that criminals should not consider the United States to be a safe repository for dirty money. "We bring cases where there is sufficient evidence when a crime is committed," Justice Department spokesman Matt Jacobs said.
Ukrainian experts, however, suggest there is a political side to the prosecution.
"Lazarenko represents the type of prime minister that the United States would not want to see in Ukraine," said John Hewko, a former legal adviser to the Ukrainian government and now an international law attorney based in Washington, D.C.
Lazarenko, 51, fled to the United States in 1999 and sought asylum, claiming there had been three failed attempts to assassinate him.
He says he planned to use his millions in a campaign to unseat Ukrainian President Leonid Kuchma, the man who anointed him as prime minister in 1996 and then fired him a year later.
Lazarenko carried a phony Panamanian passport and the Kuchma regime was accusing him of embezzlement. The United States jailed him. The next year, the Kuchma government accused Lazarenko of ordering the assassinations of two prominent politicians.
Lazarenko maintains Kuchma falsely accused him to eliminate a political rival. He was released last year on $86 million bail and placed under 24-hour surveillance.
The charges were brought in San Francisco because some of the millions were allegedly transferred to bank accounts here. In addition, the government says he used ill-gotten funds to purchase a $6.7 million mansion where actor Eddie Murphy once lived in suburban Novato.
If convicted, Lazarenko could face 20 years in prison or more.
The judge has ruled that, in order to prove money laundering in the United States, prosecutors must demonstrate that Lazarenko violated Ukrainian laws and obtained the money illegally.
"We frankly don't think he committed any crimes in the Ukraine," one of Lazarenko's attorneys, Doron Weinberg, said in an interview. "In the post-Soviet confederation, there was a time in which individuals would have the opportunity to amass a significant amount of wealth."
Prosecutors declined to comment, but experts suggest they have an uphill battle.
"The legislation in Ukraine was incomplete, unclear and subject to a lot of interpretation," said Hewko.
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