The story of how the former mayor of Mykolaiv swindled the head of the ruling Korean faction out of $2,5 million and then used the "300th Anniversary of the Russian Navy" medal as cover. The answer to the question of why "high-ranking politician" in Ukraine is not an honor, but an accusation (based on criminal case materials).
This text is simply a description of the criminal case, which anyone can read in the Register of Court Decisions. We decided to publish it for two reasons.
Firstly, the story turned out to be too colorful. It turns out that while our officials come up with complex schemes to rob the Ukrainian budget, a simple two-step scheme is all it takes to rip off a visiting investor. And it works—and it works just fine.
The second reason for writing this text is a desire to correct the Ukrainian prosecutor's office, which in early February eagerly reported that former Mykolaiv mayor Oleksandr Berdnikov had been sentenced to eight years. In reality, the prosecutor's office merely secured a harsher sentence (for which they deserve kudos, of course), but the actual investigative actions were carried out by their predecessors. Therefore,
The Nikolaev Trap for Visitors
Choi Yong Gyu
The story begins back in 2008. Choi Yong-gyu, then head of the ruling faction in the South Korean parliament and a frequent visitor to Ukraine, met Oleksandr Berdnikov, then advisor to the Minister of Agrarian Policy and former mayor of Mykolaiv, during his latest visit.
The two respected individuals quickly reached a business agreement: to establish a joint agricultural venture in the Mykolaiv region. The Korean agreed to invest money, and Berdnikov would contribute "his intangible assets in the form of knowledge, skills, and professional experience in agriculture."
In human language: one gives money, the other “solves problems.”
The business began with the creation of E-Krym Nikolaev LLC, which was to purchase 2400 hectares of leased land, real estate, agricultural machinery, and unharvested sunflowers, soybeans, and wheat from the existing Niva-Service LLC for $3 million. The Korean and his experts were politely shown everything, and he agreed to invest.
It all began, as usual, with the Ukrainians asking for cash for promotion. Perhaps to "resolve issues," or perhaps for production needs. In each case, Choi Yong Gyu transferred $210, or 961,8 hryvnias (at the exchange rate of 4,58 hryvnias to the dollar at the time), to the accounts of two of Berdnikov's subordinates from his private enterprise, Baya, who then passed the money on to their boss.
After this, the Korean parliamentarian's Ukrainian partners signaled that they could proceed, and another $2,29 million was deposited into the account of the newly created E-Crimea Nikolaev LLC. Incidentally, the Korean had borrowed the money, but he was confident of success, as his closest partner, Berdnikov, had become the director of E-Crimea Nikolaev.
Further communication between Berdnikov and Choi Yong Gyu took place primarily via email. Berdnikov informed the Korean that their business was unprofitable, citing drought, the global crisis, falling agricultural prices, and other unpleasant circumstances.
If Berdinkov's partner had been Ukrainian, he would have long ago suspected something was wrong. However, Koreans are like children. For example, Choi Yong-gyu testified in court that he hadn't checked or studied any documents he signed between 2008 and 2010 because he completely trusted Berdinkov "due to the fact that he was a high-ranking official and politician in Ukraine." He simply didn't know that in Ukraine, "high-ranking politician" isn't a virtue, but an accusation.
Still, a child will always be a child, but after a few years, Choi finally saw the light. Especially since the loan was due for repayment, so the Korean decided to conduct an audit. The audit found that "the actions of authorized persons of E-Crimea Mykolaiv LLC were not aimed at developing business activities and generating profit." This vague phrase conceals the shorter and more succinct word "carve-up."
Alexander Berdnikov
It was all so simple it's almost uninteresting. The director simply entered into fictitious contracts with the "right" companies for a total of 9,45 million hryvnias.
As early as September 2008, E-Krym Mykolaiv LLC allegedly purchased 4,89 million hryvnias worth of reinforced concrete products from Alliance Group LLC. This money was then transferred to the accounts of Global Capital Holding Company LLC and Dakh-Bud Ukraine LLC, where it was converted into cash that same day. Interestingly, the director of Alliance Group LLC testified in court that he established the company in early 2008 at the request of a friend, to whom he had given all the registration documents. He had never heard of or knew anything about the LLC's activities. Furthermore, his signature on the transactions with E-Krym Mykolaiv LLC was forged.
During 2008-2010, fictitious contracts for the purchase and sale of wheat, barley, and sunflower seeds for a total of 4,56 million UAH were also concluded with Baya LLC, whose founder and director was Berdnikov.
In this unassuming manner, the money was converted into cash and disappeared into thin air. We don't know if the Korean would have been so lucky if he hadn't been a prominent politician, but this time, the law enforcement system worked, and Berdnikov was arrested in 2012. Incidentally, by that time, he was a member of the Mykolaiv City Council executive committee.
But it is clear that in Ukraine you can’t just go and jail an official, even a former one.
In the summer of 2013, the Central District Court of Nikolaev found Alexander Berdnikov guilty of official forgery, fraud, embezzlement, and money laundering.
However, Judge D. Tishko devised a more than humane punishment. The court fined Berdnikov 8500 hryvnias and ordered him to pay the Korean 954,000 hryvnias in material damages and 950,000 hryvnias in moral compensation. The court also ordered Berdnikov to pay 9,45 million hryvnias in damages to E-Crimea Mykolaiv LLC. Berdnikov was released from the main sentence (five years' imprisonment) due to mitigating factors: no prior convictions, advanced age (62 at the time), having dependent young children, and the possession of state and foreign awards.
The former mayor's medals turned out to be quite unusual. In addition to the "For Merit" 3rd degree from President Yanukovych, the honorary "St. Nicholas the Wonderworker" badge from the chairman of the Mykolaiv Regional State Administration since 2006, and the "Order of St. Vladimir the Great, Equal-to-the-Apostles" 3rd degree, Berdnikov was also awarded the "300th Anniversary of the Russian Navy" medal by decree of the Russian president in 1996.
In October 2013, the Mykolaiv Regional Court of Appeal (chaired by V. Guliy) reduced the fine for Berdnikov to 850 UAH, leaving the rest of the sentence unchanged.
And after the Maidan in September 2014, the High Specialized Court for Criminal Cases, having considered the prosecutor's appeal, sent the case back for a new trial.
The Supreme Specialized Court noted that the appellate court failed to refute the prosecutor's arguments. Furthermore, it incorrectly recognized as mitigating circumstances the presence of such awards as the honorary badges "St. Nicholas the Wonderworker" and "For Services to the City of Nikolaev," as well as the jubilee medal "300 Years of the Russian Navy."
The appellate court also failed to review the trial court's findings that the former mayor could reform without punishment only because he suffered from certain illnesses, was married, and had a permanent residence where he had a positive character reference. Furthermore, the previous courts erroneously failed to impose the confiscation of property as a punishment.
Finally, on February 5, 2015, the Mykolaiv Regional Court of Appeal reviewed the case.
The sentence became much harsher: eight years of imprisonment, confiscation of property worth 5,7 million hryvnias (incidentally, the former mayor only had 45 hryvnias left in his bank accounts). And the return of 1,9 million hryvnias to the Korean citizen and 9,5 million hryvnias to the company "E-Crimea Mykolaiv."
The final verdict is due to be rendered by the Supreme Special Court. Until then, the former mayor has been released on bail. Without a bracelet.
Whether he'll be able to return all the money to his Korean partner remains to be seen. There are some doubts about that. But what's certain is that the Korean won't be coming to Ukraine to invest again. However, experience comes at a price. Especially if the lessons are taught by highly paid Ukrainian "officials and politicians."
Irina Sharpinskaya, published in the publication Our money
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