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Asset Recovery Workers On The Case Of Ukrainian Kleptocrats


It's MORNING EDITION from NPR News. Good morning, I'm David Greene.


And I'm Linda Wertheimer.

The European Union announced yesterday that it is freezing assets held by ousted Ukrainian President Viktor Yanukovych, along with the assets of more than a dozen other people believed to have embezzled state funds. Ukraine's new prime minister says $37 billion vanished from government coffers while Yanukovych was president.

GREENE: Others being held responsible are some of Yanukovych's closest aides, including a former interior minister, justice minister and the prosecutor general. To find out just how this could have all happened, we called up Stuart Gilman, former deputy director of the Stolen Asset Recovery Initiative, a joint program run by the United Nations and the World Bank.

WERTHEIMER: Mr. Gilman, thank you very much for doing this.

STUART GILMAN: My pleasure, Linda.

WERTHEIMER: Now, we're hearing tens of billions of dollars are missing. How do you disappear that much money?

GILMAN: Well, it's actually fairly easy, and Mr. Yanukovych managed to do this in an incredibly elegant manner. It's absolutely fascinating to give you details on this story. But it involves bank accounts; it involves shell companies; it involves illicit traders in Austria and Switzerland and England, and other places in the world.

WERTHEIMER: So he was planning this for a very long time, deliberately moving money out of the country? This was not - he didn't like, get on a plane with suitcases full of bearer bonds or something?

GILMAN: Well, he could have done some of that. But unfortunately with electronic commerce now, it's much easier to do by transfers. I'll give you one very interesting example, in terms of his apartment, which he sold in downtown Kiev when he became president. The value of it was less than 100,000 euros. He sold it for 17 million euros to an individual who headed his own political party, who had a connection with a bank owned by Yanukovych's son. And suddenly, the state has paid $17 million for a $100,000 apartment, and the funds disappear into a shell company in Austria.

WERTHEIMER: So what do you do? If this is your assignment to recover this money, could you just give us an idea of where you'd start?

GILMAN: Well, you begin, basically, with the financial institutions in the Ukraine and see if you can find direct transfers out for outrageous funds. I mean, the mansion that Yanukovych got is through a series - that he lived in...

WERTHEIMER: The one with a private zoo.

GILMAN: With a private zoo and the golf course and the bowling alley, and all of the other stuff that went along with it. All of that basically was paid for by state funds. But a lot of those state funds didn't go directly to the property. A lot of it was basically skimmed off. Outrageous prices for chandeliers; name plates - 10,000 U.S. dollars for name plates for the animals in the zoo.

All of that was skimmed off in terms of this holding company, Tantalite, which is in turn owned jointly by a U.K. and Austrian firm, which is in turn basically part of the bank holding by Yanukovych's son.

So you basically have a lot of those electronic records. You find out where those properties, those funds, landed. And the state basically then asked that the assets be frozen, that correspondent banking transactions, which are how moneys flow electronically around the world, are frozen, in order to prevent Yanukovych and all of his associates from moving the money and hiding it in a more difficult place.

WERTHEIMER: So with this much money flowing out of the country in a fairly complicated way - not into bank accounts but as sort of clouded as investments and companies - what do you think the chances are of getting very much of it back?

GILMAN: Well, I think that they're good to get 20 or 25 percent back, which is tragic. I mean it's tragic. I mean Ukrainians really need those funds. And the tragedy is basically the funds that the U.S. and U.K. are promising to funnel into the Ukraine are generally owed to Russian banks, which of course were part of the corruption in the Yanukovych regime because they were taking cuts off of the top - charging exorbitant funds, giving kickbacks and all of this.

And all of this is fairly well documented, by the way. I'm not doing this off the top of my head. And that's why the tragedy of asset recovery is, yes, you'll get some money back but you'll never get the whole thing. It's incredibly sad because many of these countries that are milked, the citizens are living, if not in poverty, they certainly could use better schools, better hospitals, better infrastructure, and they're all being stolen by these kleptrocrats.

WERTHEIMER: Stuart Gilman is the former deputy director of the UN World Bank Stolen Asset Recovery Initiative. Mr. Gilman, thank you so much.

GILMAN: You're very welcome, Linda. Thank you. Transcript provided by NPR, Copyright NPR.