Arsen Avakov: The criminal past of the Minister of Internal Affairs

Arsen Avakov: The criminal past of the Minister of Internal Affairs

In Ukraine, previously convicted presidents and prosecutors general have long been commonplace. And if Ukrainian law enforcement weren't so corrupt and didn't close criminal cases for bribes or on orders from above, we might now have a formerly imprisoned Minister of Internal Affairs. Moreover, Arsen Avakov's biography contains enough criminal episodes to warrant more than one prison term! It's simply astonishing that a man who has had such a complicated relationship with the law his entire life has been its enforcer for three years now, earning a reputation as the government's most "irreplaceable" minister!

Arsen Avakov. How did a Soviet engineer become a banker?

How, indeed? A quarter of a century ago, at the turn of political and economic eras, citizens of the crumbling USSR sincerely believed that with the fall of the "dictatorship of the Communist Party" and the transition to a "market economy," everyone would have a chance to become a millionaire—all they had to do was wash and sell those proverbial apples more diligently, wash and sell. But it turned out that millionaires (not in coupons, of course) aren't those who wash apples, but those who transport them wholesale, or privatize and then lease out entire orchards. What helped a simple Soviet engineer, Arsen Avakov, take his first step into big business, and subsequently become one of the hundred richest people in Ukraine, becoming one of the oligarch ministers of the "post-Maidan" governments—one with most of his business located abroad? This article will explore this. Skelet.Org.

Arsen Borisovich Avakov was born on January 2, 1964, in the village of Kirov (now Binagadi), located on the outskirts of Baku, Azerbaijan, to Boris Surenovich Avakov (1936-1995), a military pilot. His father was ethnically Armenian and was born with the surname Avakyan, but "Russified" it while still in flight school. His mother, Tatyana Matveyevna Avakova, also "Russified": in 2014, information surfaced from people allegedly in her community that her maiden name was Tanya Gabaraeva, from the village of Tilian in the Znaur district of South Ossetia. People say that this perhaps explains the overly aggressive hostility that Arsen Avakov harbors toward the former Georgian president: during the August 2008 war, the Znaur district suffered greatly at the hands of Mikheil Saakashvili's soldiers.

However, this is just an assumption: as is well known, Avakov has never been known for good manners and restraint – which is not at all surprising, given his past.

Cube from Skelet.Org, for the mood:

The pilot's family moved frequently (throughout the Soviet Union and Czechoslovakia), finally ending their nomadic lifestyle in the 70s, settling permanently in Kharkiv. Arsen graduated from high school there, and his parents arranged for him to work as a preparator at the Kharkiv Polytechnic Institute (now the National Technical University) in the Automated Control Systems Department, where he subsequently studied. Further confusion can be observed in Avakov's biography: there is no information about his military service, it is stated that in 1987 he began working as an engineer at the Water Protection Research Institute, while at the same time it is stated that he only received a diploma in systems engineering in 1988. But an engineer without a diploma was unthinkable in Soviet times, unlike today's uncertified ministers!

And here's the most interesting part! In all the versions of Avakov's biography that I was able to find Skelet.OrgHis business career began in 1990 with the establishment of JSC Investor, his first and most important enterprise (then Investor acted as a founder and shareholder of other enterprises, turning into a holding company).

By 1992, Avakov had earned so much money that he needed his own bank—and so he (or rather, JSC Investor) founded JSCB Basis. In just two years, he went from an engineer earning 250 rubles to a banker! In the West, films and books are made about such geniuses, but for some reason, our hero stubbornly remained silent about the golden apples he used to make his fortune.

The secret came to light years later, although information about Avakov's activities in the early 1990s is quite sketchy—he was one of Kharkiv's most secretive oligarchs. So, in 90, Arsen Avakov, together with Gennady Gayev (born 1963) and the previously convicted Oleksandr Konovalov (born 1949), created the joint-stock company "Investor"—in which Konovalov, not Avakov, played the leading role. Their first business wasn't apples, but non-ferrous metal, which Avakov and Gayev "mined" somewhere, and which Konovalov sold for foreign currency or barter. However, in addition to the proceeds from the metal, "Investor" had substantial funds of unknown origin, the commercial exploitation of which was the reason for creating "Investor" JSC (there weren't many joint-stock companies in the country at the time). Rumor has it that this money may have come from one of Kharkiv's organized crime groups.

In 1992, Investor, through Basis Bank, began investing in numerous promising projects. And then the following events occurred: law enforcement arrested a certain Valshonok, the director of the Potok company, associated with Investor JSC, accusing him of large-scale embezzlement. Alexander Konovalov contacted Gennady Kernes (Read more about it in the article Gennady Kernes: Dark pages of the Kharkiv mayor's past), who was then having an affair with Oksana Gaysinskaya (his future wife), the daughter of Deputy Prosecutor General Yuri Gaysinsky. Through Kernes and Oksana, he gave Gaysinsky several gifts, including paying for his vacation at a sanatorium at the expense of Investor JSC. This was a reckless move: investigators from the Ministry of Internal Affairs appeared and began to frame Konovalov himself for bribery. Investor itself was also at risk of collapse, with its accounts potentially frozen.

Gennady Gaevoy

And then, unexpectedly, everything turned out perfectly for Arsen Avakov. In late 1992, Alexander Konovalov was killed by two point-blank shots. According to the official version, which Avakov himself adheres to, Konovalov was killed by his own bodyguard, who intended to rob his boss and flee with his wallet and watch to Donetsk. The bodyguard was found dead a few months later, so the murder was pinned on him. However, Leonid Roytman (aka "Lyonya Dlinny"), a former member of the Ukrainian and American mafia of the 90s, claimed in one of his "confessions" that Avakov had allegedly ordered Konovalov's assassination, and that the assassination was carried out by men of crime boss Alexander Milchenko (aka "Matros"). Whether this is true or not, after Alexander Konovalov's death, Investor JSC remained entirely under the control of Arsen Avakov, who became the company's main shareholder and owner, and his loyal companion, Gennady Gayev.

Load the condensate in barrels!

Not all Ukrainians know that the Ahmad brand of tea sold in Ukraine, considered one of the best in the country, came to Ukraine thanks to Avakov: in 1994, Investor began importing this tea, and in 1999, he opened the "Ukrainian Ahmad Tea Factory" in Kharkiv, which began processing imported loose tea. Interestingly, tea connoisseurs consider Kharkiv's Ahmad to be downright inferior, and there are also rumors that Avakov contributed to the import problems of Ahmad's main competitor, Dilmah tea (packaged in Sri Lanka directly by the manufacturer), which has almost disappeared from Ukrainian store shelves since 2015.

However, it wasn't tea that made Arsen Avakov one of Ukraine's richest oligarchs, but gas condensate extracted from fields in the Kharkiv and later Poltava regions. Avakov entered this business in the mid-90s, and only he knows how and through whom. It is only known that until 1996, this business was under the control of a Kharkiv group headed by then-chairman of the regional council, Oleksandr Maselsky. There is information that they were closely acquainted (possibly through Maselsky's son-in-law, Oleksandr Yaroslavsky). Read more about it in the article Alexander Yaroslavsky: The Three Marriages of the Kharkiv "King"), moreover, Maselsky favored Avakov and provided him with some support.

Alexander Maselsky (center)

Avakov greatly abused this support, as evidenced by the criminal case opened in the 90s for the theft of gas condensate from the Balakleya field of the Shebelinkagazdobycha gas processing enterprise, in which he was dragged along by the prosecutor's office. Full details of the case remain unknown (it was closed and "lost" even before the first Maidan), but sources involved reported a scheme in place whereby official condensate production was understated, with the difference going to Avakov's enterprises, Investor-Neftegaz LLC and Investor-Atika CJSC, as well as their associated companies, Kharkiv District Enterprise Processing Plant CJSC and Fuel Additives Factory CJSC.

Since 1996, Avakov’s gas business has expanded: Investor established Energy-95 LLC, whose shareholders also included Ashot Amiryan (vice president of Investor) and Igor Kotvitsky (Avakov’s former secretary, who was promoted by him to his closest assistant). Information about it: Igor Kotvitsky, a wealthy MP or Arsen Avakov's "wallet"). Then came Nadra LLC, owned by Alexander Dymenko and Alexander Kariman, also Avakov's trusted associates, Investor-Poisk, Solo LTD, and other enterprises. Over the course of several years, they successfully "milked" several deposits: Denisovskoye, Ogultsovskoye, Narizhnyanskoye, Maryinskoye, and Sakhalinskoye. In 2004, a criminal case was opened against Kotvitsky and Kariman, but it was closed immediately after the Maidan.

Extracted gas was supplied through Investor-Neftegaz LLC to CHPP-3 CJSC and Teploset CHPP-4 CJSC—these two companies were specifically created by Avakov to lease Kharkiv's CHPP-3 and CHPP-4. Privatizing the heating plants was impossible, so parasitic intermediaries were placed on their necks. Another interesting point: CHPP-3 supplies electricity and heat to the industrial giant Turboatom, and in the early 2000s, Avakov hatched a plan to privatize it by putting CHPP-3 into debt (a typical scheme of the time). But, apparently doubting his own capabilities, Avakov proposed implementing this scheme "for both of them" to Konstantin Grigorishin (Read more about it in the article Konstantin Grigorishin, Distinguished Oligarch of Ukraine and Russia), and even planned to sell him 50% of the shares of JSC TEC-3.

However, Grigorishin's privatization of Turboatom fell through before it even began, despite the full support of Avakov, who served as Kharkiv governor from February 2005 to February 2010. And after 2010, Turboatom director Viktor Subbotin reached an agreement with the new Kharkiv leadership (Kernes and Dobkin, more details Mikhail Dobkin: Dopa is on Gepa's hook) on the termination of the lease agreement for CHPP-3 by the company JSC CHPP-3, with the return of the heating plant to the ownership of the city.

Avakov, whose business was then under massive attack on all fronts, didn't cling too closely to CHPP-3, and it soon became clear why: CHPP-3 CJSC had accumulated a 340 million hryvnia debt to Naftogaz. But how and why, if Avakov's companies were supplying CHPP-3 with their gas through cunning schemes? Clearly, this was the result of yet another scheme by which Avakov's companies managed to swindle the state once again.

What did Arsen Avakov flee from?

On October 31, 2012, Alexander Motylevsky, chairman of the board of Investor JSC, who had worked for the company since the mid-90s, committed suicide in Kharkiv. His death was resonant not only because at that very moment, the main defendants in Investor's latest criminal case (Avakov, Amiryan, Kotvitsky, and Gaevoy) were on the run in sunny Italy, where they had managed to transfer a significant portion of their capital. This is how Avakov's Italian business, which continues to operate there today, emerged.Read more about this in the article Dolce vita ARSEN AVAKOVA: ITALIAN BUSINESS AND OFFSHORE). So, while Avakov and his closest associates and aides were enjoying the Mediterranean breeze, Motylevsky was left to bear the brunt in Ukraine, having been summoned to appear before investigators. In his farewell note, Motylevsky accused Avakov of setting up his employees, and even called Amiryan a nasty name. Consequently, the Ministry of Internal Affairs opened another criminal case (incitement to suicide), promising to interrogate Avakov as a suspect. In response, Avakov immediately countered from Italy that Motylevsky had been tortured with interrogations and threats by investigators from the Ministry of Internal Affairs and the Prosecutor's Office, carrying out orders from the "regime."

Amidst this squabble, information from Ministry of Internal Affairs officials slipped almost unnoticed into the media, claiming that several suicide notes, as well as a knife with traces of blood, were found in the apartment of Motylevsky, who allegedly jumped from the window. But these newly disclosed facts had no impact on the investigation, and two months later, Avakov, elected to the Verkhovna Rada on the BYuT list, returned to Kyiv, where he was protected by parliamentary immunity and his status as an opposition politician. And yet, the question is not why he returned, but why he fled.

Arsen Avakov has been in constant trouble with the law since the very beginning of his business. While other aspiring oligarchs were devising ingenious legal schemes for virtually legal tax evasion or profiting from various services, Avakov was simply stealing gas or scamming gullible citizens. For example, in 1998, his bank, Basis, launched a lottery called "Building the Metro Together," promising to use all proceeds to complete new Kharkiv metro stations. However, the whereabouts of the more than 10 million hryvnias (almost $6 million at the then exchange rate) remains unknown; the question was never even raised: the lottery was run with the "blessing" of the city government, which was likely in on the scheme. Also in on the scheme was Askharbek Yeloyev, a Basis shareholder and founder of 50 shell companies and the Kharkiv trust, "Fast Money." In 1994, this financial pyramid scammed Kharkiv residents out of $2,83 million, part of which went to accounts at Basis.

In 2004, in addition to criminal cases for gas and revenue theft, tax evasion cases were opened against several of Avakov's companies—but these, too, were closed immediately after the Maidan. Moreover, after becoming governor of Kharkiv, Arsen Avakov began to build a "roof" for his businesses and his entourage, while not hesitating to set conditions for Interior Minister Lutsenko.information about it: Yuriy Lutsenko. The "Terminator" of Ukrainian Politics).

Arsen Avakov: The criminal past of the Minister of Internal Affairs

Governor Avakov also immediately transferred all subordinate state and budgetary agencies to his own bank, Basis, for servicing, and hundreds of millions of hryvnias of public funds began flowing through their accounts. In November 2006, Prime Minister Yanukovych accused Avakov of shortfalls and misappropriation of 120 million hryvnias of state funds. The most high-profile case in Avakov's biography, however, was the criminal case under Article 365 (abuse of power for personal gain), opened against him in January 2012 – so to speak, following the belated results of his tenure as governor (the illegal seizure and privatization of 55 hectares of land in the summer of 2009). In reality, this case was incomplete: between 2007 and 2009, Avakov and his associates "squeezed" over 30,000 plots of land, totaling 700 hectares, from nine gardening associations (some belonging to organizations of disabled people and "children of war")—which were then transferred to the ownership of employees of Avakov's companies. This was a very belated move, as Avakov and his company had already been in Italy since the fall of 2011—meaning they hadn't fled there because of him! Moreover, their escape had been planned in advance, with the sale of a significant portion of Avakov's businesses, of which he had many. In addition to all the aforementioned, Avakov, prior to his flight, had wholly or partially owned the following enterprises:

· TV and Radio Company "TV+", Radio and Television Broadcasting Company "Tonis-Center", LLC "Radio "New Wave", LLC "Radio Company "Radio +", LLC TRK "Radio-artel"

· LLC "Investor-press-agency", LLC "Publishing house "Investor"

· JSC "Bread Factory No. 11", CJSC "Bread Factory "Saltovsky"

· DP Investor Elite Stroy, OJSC MZhK Internationalist, ASK Spline, LLC SP Interbusiness, ASP Olkhovatka, LLC OSK Piramida

· LLC TD "Saltovsky", LLC "Department Store "Ukraine", OJSC "Kharkiv Central Department Store"

· LLC "Poultry farm "Prosyanoe", LLC "Staroverovsky poultry complex"

· Joint Venture "Pamir Herbs"

· DP "Investor Security Service"

JSC Forum, LLC Lotika, LLC Investor-N, LLC Finger, LLC Veter

It's worth noting that Arsen Avakov co-founded Tonis-Center and Forum LLC with Gennady Kernes and his wife, Yulia Gaysinskaya—but that was back in the 90s, before these two Kharkiv oligarchs fell out.

Arsen Avakov and Gennady Kernes

So what forced him to flee, and what prompted Motylevsky's mysterious suicide? Perhaps it was an attack by the "Donetsk gang"—after all, between 2010 and 2011, Avakov sold off part of his gas business (specifically, Energy-95 LLC) to D-teсh Gaz Energy Limited (Cyprus), Energy Ditek Limited (British Virgin Islands), and Boston Industrial Corporation LP—all companies associated with Rinat Akhmetov and his close associate, Ravil Safiulin (Minister of Sports). Incidentally, after the second Maidan, in 2014, Avakov regained most of his former gas companies, using a unique method: through the courts, which invalidated their sale.

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Let's not forget the scam perpetrated by Avakov's son, Oleksandr Avakov, involving backpacks for the ATO. Read more about this in the article. Avakov's son may be involved in corrupt procurement for the Ministry of Internal Affairs (Video)Naturally, this matter was hushed up.

Incidentally, it is claimed that Alexander Avakov is a "gambling addict." Some facts about this are in the article. Avakov's son loses large sums of money at cards and smokes weed. .

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And yet, according to Avakov, the most likely reason for his flight is Skelet.Org, should be considered the executed scam involving Basis Bank. It was carried out using a scheme of issuing foreign currency loans (with the money being transferred abroad) secured by their own companies, a scheme used by most Ukrainian oligarch-bankers (including Kolomoisky and his PrivatBank). This scheme essentially steals depositors' money and refinancing funds allocated by the National Bank under the guise of loans that are not repaid but transferred to the accounts of other oligarch-banker-oligarch companies. In the case of Basis Bank, ordinary depositors alone lost over 600 million hryvnias! In other words, Avakov fled abroad not because of political persecution, not because the "Donetsk gang" forced him to sell part of his business, and not even because of past criminal activity. He fled because he stole the money of his bank's depositors—leaving the employees of his companies and Alexander Motylevsky personally to answer for it.

Why did you do this to Sashka Muzychko?

On February 28, 2014, the notorious UNA-UNSO veteran Oleksandr Muzychko (aka Sashko Bily), who in the first days after Euromaidan walked around with a machine gun in his hands to "harass" local authorities and prosecutors in Rivne, gave another speech, simultaneously promising to "hang like a dog" the new Minister of Internal Affairs, Arsen Avakov.

Avakov's reaction was not long in coming. A month later, on the night of March 24-25, 2014, Oleksandr Muzychko was killed during a Ministry of Internal Affairs special operation, which, according to the official report, was intended to neutralize an unspecified organized crime group. Muzychko's death caused a major outcry among members of far-right organizations, especially the Right Sector. Some even threatened revenge against Avakov, believing that Muzychko had been killed on his orders. In response, Avakov gave an interview in which he called the Right Sector bandits and declared that "true patriots are now defending Ukraine's borders." This conflict marked the first rift between the Maidan victors.

By now, this episode in Ukraine's recent history has been almost forgotten, yet it could almost be called iconic, and a certain pattern could be discerned in Arsen Avakov's actions. Why did Avakov attack the Right Sector? Was it solely because of Oleksandr Muzychko? And it had consequences: having gained immense notoriety and popularity during the Maidan protests, the Right Sector stumbled on Avakov's footing, and its growth as a political force ceased. It was soon supplanted by another far-right force – Azov, which emerged from the Kharkiv-based Patriot of Ukraine with the broad support of Arsen Avakov. In April-May 2014, it was only a small company that "distinguished itself" during the liberation of Mariupol (by firing on a crowd of local "separatist" supporters near a beer bar). In the summer, it grew to a battalion, and then an entire regiment of special forces of the Ministry of Internal Affairs. At the same time, with the active participation of Roman Zvarych (Read more about it in Roman Zvarych. Without a diploma and conscience.) the creation of the so-called Civil Corps "Azov" was underway, which already represented a social movement and the beginnings of a political party.

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Let's not forget the "epic" showdown in Knyazhychi, where Avakov's subordinates from various agencies—KORD, police, and the State Security Service—engaged in a shootout. Journalist Konstantin Stogniy claims it was a "cleansing operation." Footage of a police car shot up also confirms this.

Knzhichi, the police Prius shot at

At the time of the shootout, Avakov flew to Canada (it's claimed he was still in Ukraine at the time of the tragedy and could not have been unaware of it) and didn't return to Ukraine for a suspiciously long time. The case was then hushed up. So, it seems we won't know the truth anytime soon.

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It's worth noting that the Azov Group rarely participates in anti-government protests (preferring "patriotic marches"), nor does it support many of the actions of its "like-minded" members from other nationalist-radical organizations in Ukraine. The easily recognizable Azov banners, featuring the controversial rune (the Azov members themselves claim it's some kind of Slavic symbol), are rarely seen even at protests by their "brothers" from other volunteer battalions. It appears, then, that Arsen Avakov has created his own "pocket" security and public structure (two in one), which is still somewhat distinct from other right-wing radicals. If only we knew for what purposes!

Sergey Varis, for Skelet.Org

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