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Partner, Ario Law Firm
Yevhen has successfully carried out more than thirty projects in the areas of criminal, tax, corporate law. Is well-known for his excellence in protecting the rights of clients during pre-trial investigations. Was a member of the Council for Public Control of the National Anti-Corruption Bureau of Ukraine (NABU) in 2016-2018.
Counsel, Ario Law Firm
Worked for 17 years in bodies of the Prosecutor-General’s Office of Ukraine, where he built up his career from investigator in the district prosecutor’s office to first deputy regional prosecutor and deputy chief of the Central Investigation Department of the Prosecutor-General’s Office of Ukraine. His key areas of expertise include criminal law and criminal proceedings.
Money Likes Calm and Needs
Article 41 of the Constitution of Ukraine proclaims that no-one may be illegally deprived of his or her property rights. Thus, the State has undertaken to ensure the inviolability of the right to own property against any encroachment, and if so, it may only occur in exceptional cases, subject to strict compliance with the relevant procedure, and only on the basis of a judgment.
But is state defense sufficient today, and can it be said that it is perfect, and that the measures applied by the State to offenders or those who infringe on property rights are timely and effective?
From our practice, in complicated cases where the issue is a high value property, the protection offered by the state is not enough. It’s not always the case that a state law-enforcement agency wants to perform its work qualitatively in relation to the establishment of persons who are encroaching on someone else’s property, and such persons are not always adequately liable for their criminal acts. Moreover, the complexity of the situation can be down to the fact that the participants of a crime may have a relationship with, or close ties, to state bodies.
In such cases only the laborious work of a team of lawyers can give a real result in the form of return of the property, which was encroached upon, and bring to justice the perpetrators of the crime.
Something about Disclosure of Criminal Schemes
Fraudulent schemes quite often involve the owner of the property actually helping the perpetrators commit a crime and seize such property.
Also, in criminal schemes, people who were assigned to the functions of administrators of the Registry (for example, real rights to real estate (state registrars) by the State are used. They abuse the rights granted in the interests of criminals, and provide false information in the registers about the property’s owner. The property rights of the property owner then pass to a criminal or a third person. Subsequently, such property is alienated to third parties who are de jure bona fide purchasers, and de facto, buyers of stolen property. Of course, in such schemes, the main tool in committing a crime is the role of forging a document or including false information in it.
We’ve also witnessed other cases when, apart from the loss of property, its owners could go to jail because of the fact that the state apparatus worked in another direction.
Criminal Scheme: to Steal, and then Imprison a Victim of Fraud
So, for example, our client invested several million US dollars in construction. And then the crook decided to put our client in jail, because he had exposed the fraudulent scheme of taking possession of these funds. The money invested by him should have been used to build elite real estate. The so-called “guarantee” of the lawfulness of construction was provided by a high-ranking official. The indicated person was a close relative of the customer of construction, who raised the invested funds. When it became clear that nobody would be building a house, our client (the investor) turned to law-enforcement agencies for protection. But he did not receive protection, but on the contrary — criminal charges were brought against him for extorting money. And only after the lawyer had proved the ungrounded nature of any accusations was the criminal case closed and all the charges dropped.
Criminal Scheme: Wandering Offshore, or How to Steal Hectares of Land and a Profitable Business
Our team also possesses proven mechanisms for protecting property rights. These mechanisms enable consolidation of the efforts of property owners, law-enforcement and controlling bodies, which, together with the rightful choice of legal position, enables the protection in courts of the right to private property to large real estate objects and to actually transfer property under the control to its owner.
A vivid example of the implementation of such mechanisms is the bringing of a case for returning to the control of the owner (more precisely to a state bank which acted as mortgage lender) of a large logistics center near Kyiv: two large land plots with an area of 2 hectares with a complex of warehouses and almost 12 thousand square meters in size.
This object, located in the Kyiv suburbs, was characterized by extraordinary convenience and investment attractiveness, taking into account the small distance from the capital, well-developed infrastructure, the availability of automobile and railroad access roads, considerable autonomy and modern equipment. These factors were taken into account by the organized criminal group, which, by carrying out “fictitious” auctions, forgery of documents, unlawfully entering in the state registers of inaccurate information about the owner of the property, illegally seized it in the middle of 2014 and for several years kept it under its control.
Members of the group took advantage of the fact that the enterprise-owner was bankrupt. Having achieved the appointment of a bankruptcy officer of one of the members of the group, documents were forged to sell the object of the bankrupt in public bidding at a price 50 times lower than its real value. Although in reality, no hryvnia was paid for the lot. The fictitious buyer was one of the Ukrainian companies controlled by them. And another accomplice, a private notary, had registered a newly-acquired right of ownership despite numerous mortgage bans that were registered in the relevant state registers.
Acting in accordance with the scheme they’d developed, the group members fictitiously carried out the division of the land plot and complex of warehouses into two different objects, which, under the guise of sale, were re-issued to two other already registered offshore companies. These enterprises, in turn, drew up one more viable transaction by re-registering the ownership of other offshore enterprises. In fact, all these enterprises did not carry out business activities, but were created and controlled by members of the criminal group in order to create the idea of the alleged integrity of the ultimate owner who received the rights to land and warehouses.
However, we managed to reveal these criminal intentions. By protecting the rights of the real owner, we have proved in the courts the feasibility of the whole chain of fictitious transactions for the re-registration of property rights and received in higher courts instances of court decisions to cancel both the results of primary “fake” bids and the recovery of property from another’s ownership in favor of the owner. Moreover, to protect the rights of the owner we have involved law-enforcement agencies, whom we have provided indisputable evidence of criminal activity. As a result, state registrars, persons who have used fake court decisions, have been brought to criminal liability. The issue of prosecution of other members of the group is currently being resolved. In addition, both in court and in extrajudicial order in state registers all illegal statements about the transfer of ownership to other persons, namely, property — a land plot and a complex of storage facilities, were effectively returned under the control of its legal owner.
Such cases as the appropriation of integral property complexes are not unique in our practice. We have returned an office center in Odessa to its owners, farms in Kherson Region, production facilities in Western Ukraine. Our position in such cases has always been a driving force for the return of property.
Criminal Scheme: Robbery of Bank Safes
There are other cases in our practice, when customers, depositing funds or other values into safety deposit boxes in a bank discover at the end of the storage period that their funds or values are missing. In this case, it is too difficult to establish the fact of third-party access to the deposit box as, for various reasons the client cannot immediately notice the disappearance of the values or their parts. And such cases are not unique.
Our team has found a way to deal with this problem, namely, to promptly collect the highest quality evidence of the fact of third-party intervention in the bank’s safety deposit boxes. This case ended positively for the client.
In recent years, our country has seen reform of the (soviet-style) “militsia” (the new Police Force has been created), the prosecutor’s office has supposedly updated the staff of judges, and the Supreme Court of Ukraine created from scratch (instead of the previous Supreme Court of Ukraine). New state institutions were created too — the National Anti-Corruption Bureau of Ukraine, the Special Anti-Corruption Prosecutor’s Office, the State Investigation Bureau, the Agency for the Investigation and Management of Assets, the National Agency for the Prevention of Corruption, etc. Ukrainian society is putting great hopes on the quality of their functioning and the effective fulfillment of tasks, and the business sector is also expecting qualitative changes. However, despite the expectations of society and business, uncertainty still exists accompanying the processes of reforming the judicial and law-enforcement systems.
Such uncertainty is especially felt by those where the cost of an error is extremely high. And, based on the current realities in our country, it can be argued that the most proven (if not the only) way to securely protect one’s own funds and assets is partnership and strong cooperation with a team of proven lawyers.