22 May – LAWFUEL – The Law News Network – The United States Attorney’s Office for the Northern District of California announced that, on May 20, 2005, United States District Judge Martin J. Jenkins issued an order affirming the convictions of Pavel Lazarenko, the former Ukrainian Prime Minister, on 14 counts of money laundering, wire fraud and interstate transportation of stolen property. On June 3, 2004, a federal jury convicted the defendant of 29 counts of money laundering, wire fraud and interstate transportation of stolen property. This is the second time that a head of state from another country has been prosecuted in the United States.
Today, Judge Jenkins affirmed the verdicts with respect to all of the money laundering counts, including the money laundering conspiracy, as well as certain counts of wire fraud and interstate transportation of stolen property. The court also dismissed certain counts. Further, the court denied the defendant’s motion for a new trial. The government is seeking forfeiture of the defendant’s ill-gotten gains, including $21,696,000, which may be imposed at sentencing.
U.S. Attorney Kevin V. Ryan stated, “Today’s court ruling validates the jury’s convictions of Pavel Lazarenko in connection with his efforts to conceal and invest ill-gotten gains through American financial institutions. Corrupt public officials, at home and abroad, whose activities violate the laws of the United States, are on notice that they can and will be zealously prosecuted and convicted here for such activities. I want to thank the FBI and IRS for their outstanding investigation of this very significant case.”
At trial, the government alleged that while the defendant was a Ukrainian public official he committed various acts of extortion and fraud, including the extortion of a Ukrainian businessman and the defrauding of Naukovy State Farm, a Ukrainian state-owned enterprise. The government alleged that the defendant concealed the source and his receipt of these funds and falsely understated his income and assets to the people of Ukraine for 1996 and 1997. The government further alleged that the defendant then transferred millions of dollars of ill-gotten gains through coded accounts at banks in Switzerland, Antigua, and ultimately into bank accounts and property in the United States.
The defendant was charged with illegally extorting $30 million from a Ukranian businessman and illegally obtaining $12 million from a farm owned by the state. The evidence at trial showed that Mr. Lazarenko told the businessman that, in order to operate in the Ukraine, Mr. Lazarenko would have to receive 50 percent of the profits from the business and a 50 percent ownership interest in the company. The defendant then laundered the funds through a series of bank accounts, including various banks in the Bay Area such as Commercial Bank, Pacific Bank, Bank of America, WestAmerica Bank and others. The defendant also purchased a house worth more than $6 million in Marin County, California.
Today’s ruling was in response to the defendant’s motions for acquittal and a new trial.
The conviction is the result of a six-year investigation led by agents of the Federal Bureau of Investigation and Internal Revenue Service. The former chief of the U.S. Attorney’s Office Strike Force, Martha Boersch, led the prosecution team, which included the Office’s Organized Crime Drug Enforcement Task Force Chief, Jonathan Howden, Assistant U.S. Attorney Pete Axelrod, and Department of Justice Trial Attorney Hallie Mitchell from Organized Crime and Racketeering Section, with legal assistance from Amelia Lucero-Cordes and Christine Tian.
The maximum statutory penalty for each count of: money laundering, in violation of 18 U.S.C. § 1956, is 20 years in prison and $500,000 fine; wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346, is 5 years in prison and a fine of $250,000; interstate transportation of stolen property, in violation of 18 U.S.C. § 2314, is 10 years in prison and a fine of $250,000. The defendant may also be ordered to pay restitution, if appropriate, and to forfeit assets involved in the offenses. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. 3553. The court set a hearing on June 23, 2005, at 2:00 p.m. to schedule Mr. Lazarenko’s sentencing.
A copy of this press release and related court filings may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can. Related court documents and information may be found on the U.S. District Court website at www.cand.uscourts.gov or on http://pacer.cand.uscourts/gov.
All media inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay3@usdoj.gov.