Ukrainian Courts OK’d Loans In Laundering Case, Judge Told

By Nate Beck     

Law360 (September 15, 2022, 7:47 PM EDT) — Two men accused of helping launder money stolen from a Ukrainian bank told a Florida federal judge that courts in Ukraine have already found the transactions were aboveboard, even as U.S. prosecutors argue the foreign judgments simply aim to frustrate their civil forfeiture case.

The U.S. Department of Justice says Miami-based businessmen Mordechai Korf and Uriel Laber laundered money stolen from Ukrainian lender PrivatBank into a Dallas office project called Stemmons Towers. The two men helped former PrivatBank owners Ihor Kolomoisky and Gennadiy Boholiubov invest billions they stole from the bank into U.S. properties, according to the government’s suit.

On Wednesday, Korf and Laber argued in a brief in that Ukrainian courts had already found that two loans in question in the forfeiture case were issued properly after weighing evidence.

A magistrate judge in August asked each side to respond after Korf and Laber argued in a May 2021 motion to dismiss that U.S. courts don’t have the authority to hear a dispute that’s been settled by Ukraine’s judicial system.

“Requiring claimants to litigate issues of Ukrainian law applied to Ukrainian conduct — even though those issues have been decided by Ukrainian courts — is contrary to basic principles of international comity, unfair to claimants and an inefficient use of judicial resources,” the two men told the Florida court on Wednesday.

In a filing last week, however, prosecutors argued the Ukrainian rulings came from more than 150 lawsuits that Kolomoisky and Boholiubov initiated in Ukraine in hopes of getting such a ruling — actions filed only after the government launched the civil forfeiture case.

The government further argued the Ukrainian court decisions don’t award damages and only offer declaratory judgments that the loans were “properly performed.”

“The sole apparent purpose of those actions was to obtain judgments that could be raised as a shield in this and related civil forfeiture litigation,” according to the prosecutors’ motion on Sept. 7.

The present case in the Southern District of Florida is one in a series of actions that aim to recover money that prosecutors say was laundered through three projects: the 31-story PNC Plaza in Louisville, Kentucky, a 19.5-acre office park in Dallas, and a 22-story office building in Cleveland.

The U.S. argues Kolomoisky and Boholiubov stole billions from PrivatBank, forcing the Ukrainian government to nationalize it in 2016 with a $5.5 billion bailout.

Prosecutors accuse Korf and Laber of helping the two former bank owners launder their money into U.S. properties starting in 2008.

The businessmen used a series of entities associated with Optima Ventures LLC with a convoluted ownership structure to purchase U.S. buildings and move assets. Optima has argued in court that the U.S. does not have the authority to prosecute violations of Ukrainian law and must resolve the dispute in arbitration under a 1996 treaty between the countries.

Korf and Laber didn’t respond to messages seeking comment on Thursday. The Justice Department declined to comment.

The U.S. is represented by Shai D. Bronshtein, Adrienne Rosen, Mary K. Butler, Michael C. Olmsted, Marx Calderon and Peter Steciuk of the Justice Department’s Criminal Division.

Korf, Laber and the corporate entities are represented by Marc E. Kasowitz of Kasowitz Benson Torres LLP, Howard M. Srebnick, Zaharah R. Markoe and Robert T. Dunlap of Black Srebnick Kornspan & Stumpf PA, and Devin Freedman and Colleen Smeryage of Roche Freedman LLP.

Laber is also represented by Scott A. Srebnick of Scott A. Srebnick PA.

The case is U.S. v. Real Property Located at 7505 and 7171 Forest Lane, Dallas, Texas 75230 et al., case number 1:20-cv-23278, in the U.S. District Court for the Southern District of Florida.

–Additional reporting by Caleb Symons and Humberto J. Rocha. Editing by Covey Son.