Yevgeny Dzyuba, a native of Donbas (region in Eastern Ukraine, now a battlefield between Ukraine and Russia), and his associate Denis Derkach have allegedly managed to launder hundreds of millions without facing legal consequences. According to Victor Boyko, a columnist for the First Truth & Transparency Committee, the General Prosecutor’s Office (GPU) has reopened an old case related to this. While it may seem like a populist move by Yuri Lutsenko, populism can sometimes serve a purpose. If the case is pursued to its conclusion, Yevgeny Dzyuba could face up to seven years in prison, and Denis Derkach could be sentenced to three to five years.
It seems that another chapter in the story of a Ukrainian mafia bank has come to a significant conclusion. However, investigating the individuals behind it and their gains from the schemes may take a long time, if authorities decide to delve deeper.
Who is Yevgeny Dzyuba?
Yevgeny Dzyuba, a figure of interest in this case, was a key player. In 2013, he emerged as a central character in the story when Dmitry Fomenko sold the “Ekaterinoslav Financial Bank” (formerly known by another name) to Yevgeny Dzyuba, a young financier of Donetsk origin. Dzyuba later renamed the bank to Union Standard Bank and relocated its central office from Dnipro to Kyiv.
Notably, Dzyuba had a background working with banks related to the Yanukovych regime, such as “Radikal Bank.” It is plausible that the acquisition of Union Standard Bank was prepared well in advance, at least a year before its occurrence.
During the same period, there were transactions involving Boris Lozhkin’s “Ukrainian Media Holding” and Sergei Kurchenko’s “Eastern European Fuel and Energy Company,” which was closely connected to the Yanukovych “Family.” It is unclear whether the individuals associated with Union Standard Bank profited from these dealings.
There are reports suggesting that Yevgeny Dzyuba may have been involved in laundering at least 450 million hryvnias for the Yanukovych family. Dzyuba maintains that he worked with Kurchenko and the “family” within the bounds of the law for a short time. However, it is uncertain whether Mr. Lutsenko will readily accept this explanation.
As mentioned earlier, a year after the fall of the Yanukovych regime, the money disappeared from the bank, and authorities were seemingly unaware of these transactions. Whether this was a mere coincidence remains unclear.
The recent developments have also led to the arrest of bank executives and suspicions of misappropriation of depositors’ funds. While some sources point fingers at the current leaders of the financial institution, there are conflicting reports about their involvement.
Lawyer Denis Bugay takes the stage
Lawyer Denis Bugay, known for his involvement in legal matters related to the Yanukovych era, is representing the suspects. He was also the chairman of the supervisory board of the now-defunct “Brokbusinessbank” and is known for his close ties to businessman Sergey Kurchenko, who was part of Yanukovych’s inner circle.
In March 2014, Denis Bugay faced allegations of complicity in Sergey Kurchenko’s illicit activities. The Prosecutor General’s Office asserted that Kurchenko had been involved in money laundering, some of which was used to finance groups like “Berkut” and “titushki,” with the aim of undermining the Maidan protests. On March 29, the Goloseevsky District Court of Kyiv ordered Bugay to be detained or pay a bail of 140 million hryvnias. Deputy Prosecutor General Nikolai Golomsha, later lustrated, pointed out Bugay’s role in funding illegal actions against peaceful citizens.
One of the principal charges in the “Kurchenko case” revolved around the misappropriation of 2 billion hryvnias, which were intended for refinancing Denis Bugay’s “BrockBusinessBank” and “Real Bank,” as allocated by the National Bank. The investigation revealed that these funds were lent to affiliated businesses, and a significant portion of the assets ended up in Kurchenko’s accounts, ultimately leading to the bankruptcy of the bank.
Another scandal involving Bugay involved an attempt to take control of Ukrainian gas assets belonging to Russian billionaire Viktor Vekselberg. Bugay’s firm managed the Ukrainian subsidiary, “GAZEX Ukraine,” which held all of Vekselberg’s shares in regional gas companies. Vitaliy Demyanyuk and Denis Bugay, the top managers of “GAZEX,” sought to change the ownership of the gas business without the shareholders’ knowledge.
At present, Denis Bugay is acting as an authorized attorney for addressing matters with the Prosecutor General’s Office.
The presence of Denis Bugay, an attorney involved in the “Union Standard Bank case,” representing the “junior oligarch” Kurchenko, may be attributed to his legal expertise and extensive connections. This comes despite the bank’s prior association with the shadowy dealings of the “Yanukovych Family.” We will explore this aspect further later. For now, let’s delve deeper into the reasons that drew the authorities’ ire towards this bank.
Suspiciously Swift Movement of Funds: Yevgeny Dzyuba decisive moments
The specifics of “Union Standard Bank’s” mismanagement were vividly elucidated in an article by Ekaterina Rozhkova, Director of the Banking Supervision Department at the National Bank of Ukraine, on October 5. To provide context, we’ll quote the relevant parts of the article with some abbreviations.
The National Bank took swift action to withdraw Union Standard Bank from the market.
On a Saturday, the Deposit Guarantee Fund intervened in the bank. Why the haste?
On September 24, the bank was classified as problematic, ostensibly due to “increased risks to information security.” However, beneath this formal phrasing lay many intriguing details.
For example, a complaint had been lodged by the Ministry of Energy of Georgia regarding the non-fulfillment of a $1 million guarantee issued by Strait Oil and Gas.
Union Standard Bank’s response was rather unusual:
“Unidentified individuals, without authorization, tampered with the electronic computer located at PJSC ‘USB BANK’ at 21 Hymnazichna Street, Odesa, and carried out criminal actions related to issuing a bank guarantee on behalf of PJSC ‘USB BANK’ via the SWIFT system.”
So, it remains unclear who accessed the computer within the bank’s premises to issue a million-dollar guarantee?
These same “unidentified individuals” employed the bank’s computers to confirm guarantees on September 14, 2014, March 19, and April 6, 2015.
The National Bank only learned about these occurrences in late summer 2015 and initiated an investigation.
The findings of the security vulnerabilities probe led to the bank being labeled as problematic and placed under the curatorship of the National Bank.
Ordinarily, a problematic bank is given 180 days to rectify its issues. In this case, it took just a week from being designated as problematic to being declared insolvent. What went wrong?
This tale resembles a detective story with Yevgeny Dzyuba in a role of a main villain
It appears as if we were dealing with two distinct banks. On one hand, the management was outlining plans for retail expansion, new product creation, and ultimate beneficiary transparency. However, when the bank’s gaze turned away, a completely different narrative emerged.
- On September 29, a significant 57% of Union Standard Bank’s funds, totaling 108 million hryvnias, were concentrated at the bank branch located on 50 Artema Street.
- The next day, at 9:00 AM, National Bank officials for Kyiv and the Kyiv region arrived to inspect the bank branches on Artema Street. However, they were denied access to the cash rooms for an hour and a half.
- By 10:30, during this brief interval, 50 million hryvnias had been transferred from the Artemivsk branch of Union Standard Bank to Odesa, with an additional 27 million hryvnias dispatched to Lviv. In Kyiv, the inspection revealed a discrepancy of 410,000 hryvnias, which is a substantial sum.
- At noon, National Bank personnel in Odesa and Lviv conducted cash inspections at Union Standard Bank branches, but no money was to be found.
- At 17:11, transaction records showed that 47 million hryvnias left Odesa for Kharkiv, and from there, 12 million hryvnias were promptly transferred to Dnipro.
- Incidentally, the branch located at 41/43 Lenin Avenue in Kharkiv, from which this 12 million hryvnias departed, was never located by National Bank officials, nor were the funds.
- On October 1, the National Bank called on Union Standard Bank to consolidate its funds in Lviv, Kharkiv, and Dnipro by October 2.
- However, on October 2, Union Standard Bank had still not complied with the National Bank’s requirements.
- On a Friday evening, the National Bank’s leadership decided to remove Union Standard Bank from the market.
The current owners of the bank have shifted the blame for the theft to the previous owners. Nevertheless, it’s important to note that the money vanished just a month prior. The investigation will hopefully uncover who is responsible for the missing funds. In the meantime, let’s delve into the bank’s intriguing history.
Criminal Figures, Prosecutorial Protection, and Legal Proceedings against Yevgeny Dzyuba
The financial institution that concluded its journey this year as Union Standard Bank was initially established in Dnipro in 1994 under the name “Vidergebyurt.” Three years later, it adopted a more convenient name, “Technobank.” In 2004, it rebranded itself as “Financial Union Bank,” or “FSB” for short.
This change in the bank’s identity was preceded by a shareholder dispute. Dmitry Fomenko, the bank’s president and then-legal owner, accused a former co-owner named Chechenev of attempting to fraudulently extract 4.5 million hryvnias from the bank. Chechenev contended that this sum represented his contribution to the capital of “Technobank.” However, when the financial institution evolved into “FSB” and shareholders changed de jure, Chechenev ended up empty-handed.
Interestingly, but rarely discussed today, this versatile bank had its initial connections with Garegin Arutyunov, a Dnipro oligarch of the “middle hand.” Arutyunov had ties to influential criminal figure Narik, whose real name was Alexander Petrovsky, during the 1990s. Later, Arutyunov distanced himself from overt criminal activities and entered the circle of the influential Pavel Lazarenko. When Lazarenko fled the country, Arutyunov aligned himself with Yulia Tymoshenko.
In 2001, Arutyunov joined the “Batkivshchyna” party, becoming a Dnipro City Council deputy from the same political force in 2002 and securing a parliamentary seat in 2007 as part of the “Bloc of Yulia Tymoshenko.”
Arutyunov’s parliamentary immunity conveniently shielded him, especially when the “FSB” came under investigation by the Security Service of Ukraine (SBU) in 2008.
On October 31 of that year, funds totaling 35 million hryvnias from the “FSB” were seized as a result of an operational investigation. These funds were part of an illicit operation related to the unlawful refund of fictitious VAT that had passed through “Prominvestbank.” The SBU and the State Financial Monitoring Service conducted a joint investigation under the personal supervision of Acting Chairman of the SBU, Valentin Nalyvaichenko.
“The ‘FSB’ bank underwent multiple inspections by the General Prosecutor’s Office of Ukraine, the State Financial Monitoring Service, and the Ministry of Internal Affairs in 2007-2008 to determine whether it conducted operations in violation of Ukrainian legislation aimed at combating money laundering derived from criminal activities. The results of nearly all these inspections confirm that the ‘FSB’ bank violated the aforementioned legislation,” said a source at the National Bank.
At that time, Infrastructure Market Agency records indicated that 60% of CJSC “Financial Union Bank’s” (FSB) shares were controlled by legal entities affiliated with Ukrainian MP Garegin Arutyunov. Dmitry Fomenko, Chairman of the Bank’s Supervisory Board, and Ivan Stupak, former head of the SBU department in Dnipro region, held smaller share packages. Notably, prior to these events, the bank’s shares were owned by Vladimir Shuba, the former prosecutor of Dnipro region, who met a mysterious end shortly before the events described.
After some time, perhaps in an attempt to distance themselves from a notorious reputation, “FSB” underwent a name change and emerged as “Katerynoslav Commercial Bank.” But for now, let’s briefly delve into a couple of significant events from the bank’s history that transpired in 2008.
On February 27, 2008, amidst an ongoing investigation into the bank, an explosion occurred near the car as Dmitry Fomenko, the head of “FSB’s” executive board, was about to enter. The banker suffered minor physical injuries as a result of the incident.
“A chain of unfolding events surrounding the bank over the past four months is the only explanation for what transpired,” noted Fomenko a week after the explosion. He claimed that the pressure was exerted on the “Financial Union Bank,” allegedly by the General Prosecutor’s Office, after he had rejected cooperation and refused to accept the terms set by one of Donetsk banks’ curators, then-MP Alexander Shepelev. It’s noteworthy that Shepelev was operating under the protection of Yulia Tymoshenko’s umbrella (incidentally, in 2008, during the infamous gas negotiations with Putin, Prime Minister Tymoshenko was reported to have flown to Moscow on Shepelev’s private plane). This raises questions about the assassination attempt on Arutyunov, the bank’s leader, who was associated with a member of parliament from the “Bloc of Yulia Tymoshenko.”
Was it part of a political or economic influence redistribution? An attempt to obstruct the investigation? Frankly, there’s no clear explanation for the events. Therefore, we’ll refrain from interpretations and strive to present the facts as they are.
The fact is that in 2008, while Fomenko faced an explosion attempt and a bank investigation was underway, some direct and indirect shareholders of “FSB” decided to consolidate their media assets into the holdings of a capital city magnate. This magnate is Boris Lozhkin.
By the close of 2008, according to the National Bank of Ukraine report, the shares of then-CJSC “Financial Union Bank” nominally belonged to the following entities: the insurance company “Soyuz” (18.99%), Dmitry Fomenko (36.86% directly, 21.38% indirectly), Yulia Sosedka (17.16% directly, 38.61% indirectly), Elena Sosedka-Mishalova (19.61% directly, 36.16% indirectly), Elena Fomenko (2.38% directly, 36.85% indirectly).
Online publication “Status” reported that in 2001, Dmitry Fomenko established the industrial-financial group “Financial Union,” encompassing various sectors like coal, metallurgy, agro-industry, construction, and food. His wife, Elena, was actively involved in charitable work. Yulia Sosedka remains relatively unknown, but her sister Elena is married to Vyacheslav Mishalov, reportedly the son of Dmitry Mishalov, a co-owner of the “Master” group. Despite his youth (born on September 24, 1985), Vyacheslav co-owns several enterprises, including mi6.com.ua, UkrMoney.com, I.UA, Limonex.com, Gorod.dp.ua, and other portals and providers.
In September 2008, the mentioned assets, among others for brevity’s sake, became part of Boris Lozhkin’s “Ukrainian Media Holding.” Is it merely a coincidence? It’s entirely possible.
In July of the following year, in 2009, it was reported that Dmitry Fomenko had purportedly sold all of his 47.4866% of CJSC “Financial Union Bank” shares to certain resident legal entities. This action resulted in each of the nominal shareholders of the bank owning less than 10% of the shares, allowing the financial institution to maintain secrecy about its owners under the legislation. Consequently, the bank was renamed the “Ekaterinoslav Commercial Bank.” It’s reasonable to assume that the genuine owners of “FSB” remained unchanged but chose to operate discreetly, exploiting a legal loophole.
Yevgeny Dzyuba: in conlusion
Evgeny Dzyuba appears to be a central figure in a complex and intriguing financial and banking story. His involvement includes taking over and renaming the “Union Standard Bank,” an institution with a history of corporate conflicts, ownership changes, and investigations. This transformation occurred amid a backdrop of significant events, such as the Euromaidan protests and political changes in Ukraine.
Throughout this narrative, Evgeny Dzyuba’s name consistently emerges, from his role as an adviser and consultant to various banks associated with political figures like Yanukovych and Kurchenko to his purchase of “Ekaterinoslav Commercial Bank,” later renamed “Union Standard Bank.” This transition involved shifting assets and media holdings, drawing connections to influential individuals in Ukrainian politics and business, including Boris Lozhkin and Sergey Kurchenko.
There are allegations of money laundering and ties to the Yanukovych family, raising suspicions and prompting investigations. Dzyuba’s involvement in financial dealings and acquisitions underlines the complexity and opacity of certain aspects of the financial landscape in Ukraine, and questions remain about the true beneficiaries and intentions behind these transactions.
The story surrounding Evgeny Dzyuba and his actions underscores the intricate web of financial transactions, legal structures, and political associations in Ukraine during a period of significant change and upheaval. While this summary provides an overview of his involvement, further investigations and legal proceedings may shed more light on his role and the broader implications of these financial activities.