DOJ Shouldn’t Get To Pick Filter Review Team, 11th Circ. Told

By Carolina Bolado

Law360, Miami (July 1, 2021, 3:27 PM EDT) — An attorney for a group of companies allegedly connected to a multibillion-dollar Ukrainian money laundering scheme told the Eleventh Circuit Thursday that the government should not be able to appoint a filter team of prosecutors to review privileged attorney-client communications seized during a search of their offices.

Howard Srebnick, who argued on behalf of Optima Ventures LLC and related companies, told an Eleventh Circuit panel that the tens of thousands of pages of communications between his clients and their attorneys should not be viewed by any prosecutors, even if they are not on the case prosecution team.

He said the government would never approve of him appointing his law partner Roy Black to review documents and simply accept a promise that they would have no communication with each other over the documents.

“It is unseemly to think that someone in the government will look at my client’s records,” Srebnick told the panel, assembled in person in Miami for the first time since the start of the COVID-19 pandemic.

He said no one should be looking at the communications between his clients and their attorneys, but if the court determines someone must look through them, it should be done by an impartial party divorced from the proceedings, like a special master or a magistrate judge.

“That person cannot be part of the engine looking to take my client’s property away, put him in prison and disrupt the rest of his life,” Srebnick said.

Prosecutor Shai Bronshtein pushed back on this, arguing that Srebnick’s position essentially calls for doing away with all filter reviews by prosecutors entirely.

“No court has ever gone that far,” Bronshtein said.

He said a filter team is a one-way street; prosecutors on the case can tell the filter team what they are looking for, but the filter team cannot reveal information about the documents to the case prosecutors. He also said that having a special master or a magistrate judge review the potentially privileged documents — which number around 60,000 in this case — would be an expensive, lengthy affair, and pointed to case where a review cost $1 million and another where it took two years to complete.

The documents at issue were seized during a search on Aug. 4, 2020 at Optima Ventures’ Miami and Cleveland offices, which included offices of both in-house counsel and a law firm of outside counsel.

The company is under investigation by a federal grand jury in Ohio over an alleged money laundering scheme that stole billions of dollars from Ukraine’s largest bank, PrivatBank, and is fighting asset forfeiture actions as well as a civil suit filed by PrivatBank in Delaware.

Federal prosecutors have moved to seize Optima’s properties in Ohio, Texas and Kentucky amid a criminal investigation into Ukrainian billionaires Ihor Kolomoisky and Gennadiy Boholiubov, who are majority shareholders in Optima and former owners of PrivatBank, and Miami-based duo Mordechai Korf and Uriel Laber, who own minority shares in Optima. Prosecutors say they orchestrated the international scheme involving some $5 billion stolen from PrivatBank through sham loans between 2008 and 2016.

The Ukrainian government was forced to nationalize the bank with a $5.5 billion bailout to stave off an economic crisis in the country.

Kolomoisky and Boholiubov allegedly pulled off the scheme by requesting and receiving money from PrivatBank and rarely paying it back, except through new loans. The DOJ claims they did this using a constellation of companies they owned or controlled to apply for loans.

Kolomoisky and Boholiubov, meanwhile, claim the loans were entirely legitimate and consistent with Ukrainian law, and that the nationalization of PrivatBank was the result of a political feud between Kolomoisky and the former Ukrainian President Petro Poroshenko.

U.S. Circuit Judges Robin S. Rosenbaum, Beverly B. Martin and Robert J. Luck sat for the Eleventh Circuit.

Korf is represented by Howard Srebnick and Benjamin S. Waxman of Black Srebnick Kornspan & Stumpf PA.

The government is represented by Nicholas L. McQuaid, Kevin Driscoll and Shai D. Bronshtein of the U.S. Department of Justice.

The case is U.S. v. Korf et al., case number 20-14223, in the U.S. Court of Appeals for the Eleventh Circuit.

–Additional reporting by Caroline Simson and Victoria McKenzie. Editing by Amy Rowe.