US jury indicts former Ukraine premier for money laundering

Agence France Presse  by Gregory Sokoloff © 2000

WASHINGTON, June 2 (AFP) - Former Ukrainian Prime Minister Pavlo Lazarenko, wanted in two European countries for suspected corruption and embezzlement, has been indicted in the United States on 31 criminal charges, according to court documents.

A federal grand jury in San Francisco, California, charged Lazarenko, 47, with one count of conspiracy, seven counts of money laundering and 23 counts of transportation of stolen property on May 18, said the documents provided to AFP by court officials.

The indictment was kept under seal until Thursday. Lazarenko's attorney Joseph Russoniello told AFP his client would plead not guilty.

The charges mark a dramatic denouement of the meteoric career of a once promising reformer, who rose to power on the nation building wave in newly independent Ukraine.

If convicted on all counts, Lazarenko, whose family lives in a sprawling 6.7-million-dollar northern California estate once home to famous Hollywood comedian Eddie Murphy, could be sentenced to a maximum 370 years in jail.

A former close associate of Ukrainian President Leonid Kuchma, Lazarenko landed the influential post of energy minister in 1995 and was promoted to prime minister less that one year later.

But Ukrainian officials say he used his government position to extort bribes and other favors from businesses that wanted to set up shop in Ukraine.

According to the US indictment, between 1994 and 1999, Lazarenko and his partners allegedly transferred out of Ukraine some 114 million dollars, which was deposited in US bank and brokerage accounts controlled by the former prime minister.

The indictment, which documents Lazarenko's allegedly illegal transactions in meticulous detail, says he siphoned off in 1997 another 70 million dollars to numbered accounts at European Federal Credit Bank, in St. John's, Antigua.

Just five weeks after his dismissal as prime minister, in July 1997, Lazarenko purchased a share of that bank "in order to facilitate the transfers of money and to further conceal and disguise the nature, origin, location, source, ownership and control of the money," said the indictment. His life after his departure from the Ukrainian government was filled with the suspense of a detective novel.

As Ukrainian investigators closed in on him, he fled the country and turned up in Switzerland with a Panamanian passport.

The Swiss, who conducted their own investigation into Lazarenko's money laundering, arrested him in December 1998 but released him on a 2.5-million-dollar bond.

He fled again, turning up in early 1999 at New York's International John F. Kennedy Airport and asking for political asylum in the United States.

But a Swiss extradition request caught up with Lazarenko in April of that same year. He was arrested in northern California and has been kept at a local prison ever since.

Lazarenko's trial date has not been set, and whether it will be is an open question because of the Swiss extradition request, said an official at the US Attorney's Office for the Northern District of California, who asked not to be identified.

It is possible the former Ukrainian prime minister could be sent to Switzerland to stand trial on money laundering charges, according to the official.

Meanwhile, Russoniello promised to mount a strong defense if the case ever reached trial in the United States.

"There is a real legal question whether or not American criminal law applies to this case," he said.

"Authorities may also be relying on evidence provided to them by the Ukrainian government," added Russoniello. "There is the question how reliable that evidence is."