Igor Yakubovich
While Ukraine is experiencing some of the most tragic moments in its history, largely caused by the flight of former President Viktor Yanukovych to Russia, his former accomplices continue to destroy the state from within.
Since 2010, the Family's corruption schemes have permeated every sector of the economy where any money was involved – from metallurgical giants in the east of the country to illegal small architectural forms in the capital. However, the owners of both regularly paid the designated percentage to the "overseers." During Yanukovych's reign, a "food mafia" developed in the agro-industrial complex, which, unlike other, more profitable sectors such as energy or banking, enjoyed relative independence. Minister of Agriculture Mykola Prysyazhnyuk is known to have "worked" exclusively with banks affiliated with Oleksandr Yanukovych – Unikombank and the All-Ukrainian Development Bank – conducting financial transactions through them for key tenders and also charging 15 to 30% of turnover for "consulting services." But many of the schemes developed by his friend and subordinate/executor Igor Yakubovich, who, by the way, currently still heads the State Food and Grain Corporation of Ukraine (SFGCU), were carried out independently by the Ministry of Agriculture.
Yakubovich never operated subtly, typically creating clumsy two-step schemes like "writing off high-quality grain as expired and then selling it" or "creating an LLC for a tender and buying/selling it to him at an inflated/undervalued price." For example, in 2013, the State Food and Grain Corporation entered into a forward contract with a certain agricultural enterprise, Koziyevskoye, to purchase grain from the upcoming harvest and transferred it an advance payment of 17.8 million hryvnias. However, the State Food and Grain Corporation never received any grain from Koziyevskoye, not least because the "agricultural enterprise" with which the state corporation entered into the deal existed only on paper. And as soon as the money was transferred, Koziyevskoye declared bankruptcy.
In 2013 alone, the State Food and Grain Company of Ukraine (GFKU) signed 41 such "contracts" (including various "Blagoveshchenskoye," "Burovskoye," and a host of others). All of them went bankrupt, having previously received advances of 1-5 million U.S. dollars. In special cases, according to documentation, the GFKU received wheat, but it was soon written off as "spoiled," and Yakubovich's team evaded criminal prosecution.
Let's reiterate, Yakubovich's schemes were simple, but what made him valuable within the Family, and especially his boss, Prisyazhnyuk, was his willingness to make money on literally anything. For example, in 2013, the State Food and Grain Company, under the leadership of that same Yakubovich, signed an insurance contract with Garant-Prestige for a gigantic sum for the state: 177,78 million hryvnias. At first glance, the subject of the insurance seemed natural – it insured grain against fire risks and natural disasters such as hurricanes and floods. Moreover, in the event of an insured event, Garant-Prestige's warranty obligations amounted to an astronomical 3 billion 832 million hryvnias. But upon closer examination of this insurance, many questions arose:
According to their official report, Garant-Prestige's assets for 2013 amounted to UAH 257,041 million. This means that if an insured event occurred, the company would barely have enough funds to reimburse the amount of insurance sold by the State Food and Agriculture Organization of Ukraine, let alone pay out almost UAH 4 billion.
Garant-Prestige's main financial investments in 2013 alone were in securities of entities (Donetsk Ore Mining Plant, Ukrgazotrade, etc.) that do not conduct independent financial or economic activities, meaning their shares were worthless on the stock market. Interestingly, the activities of these LLCs are conducted through Unikombank, which is directly affiliated with Oleksandr Yanukovych.
The "insurance events" under this contract are particularly interesting. For example, according to Hydrometeorological Center data for the past 10 years, floods in Ukraine occur only in the western part of the country in the spring, yet the insurance contract was valid from May 25 to December 31 and only for the warehouses indicated on the attached map (almost all warehouses are located in central and eastern Ukraine). Even more interesting is the insurance event specified in the contract: grain damage caused by a hurricane or tornado. The contract stipulates that Garant-Prestige will pay for damage if—note: if—"the wind speed does not exceed 55 km/h." This is nonsense, if only because on the Beaufort scale, wind speeds of up to 55 km/h are considered "strong winds," characterized by "thick tree branches swaying and telegraph wires humming." A hurricane, however, actually starts at 75 km/h.
Thus, we see a miraculous picture: the insurance contract was written in such a way that the insured event would not even theoretically occur. As a result, Oleksandr Yanukovych's companies received 178 million hryvnias from the state, and the "face of the state" in this case was Ihor Yakubovich.
New Times
Yanukovych's flight upset many, including Yakubovich. Three criminal cases were opened against him under the new government, including one related to the illustrious insurance deal with Garant-Prestige. But surprisingly, the criminal cases against Yakubovich vanished into thin air in the corridors of the Prosecutor General's Office, while the defendant himself continues to head the state corporation whose activities are the subject of the criminal cases.
The reason for the unsinkability of one of the country's leading agricultural corrupt officials is his well-established connections within law enforcement. The criminal cases against Yakubovich are being directly hampered by Dmitry Paliy, an investigator for particularly important cases at the Prosecutor General's Office. Tellingly, Paliy also has a rather interesting background. His rise to prominence is linked to the fugitive Prosecutor General Viktor Pshonka, as well as his friendly relationship with another notorious prosecutor, Renat Kuzmin.Read more about it in the article Renat Kuzmin: The Family Business of Outlaw Prosecutors). Paliy was involved in only one political scandal, when he was accused of illegally wiretapping the telephone conversations of opposition politicians and judges at various levels. Since 2010, Paliy has been listed as a "case closure appraiser" in the Prosecutor General's Office, quoting compensation amounts for defendants.
Since the current leadership of the Prosecutor General's Office also underwent Paliy's "assessments," not only has he been retained in his position, but the possibility of appointing him as Vitaliy Yarema's first deputy is periodically considered. The appointment itself is periodically postponed due to the potential political scandal that could arise from Paliy's nomination. This is primarily because virtually every major businessman or politician who has faced the issue of closing a criminal case has, in one way or another, come into contact with a Prosecutor General's Office "assessor."
Nevertheless, Paliy's powers remain virtually unlimited, as demonstrated by the complete stalling of criminal cases based on Yakubovich's schemes. One subtle nuance particularly highlights the system's unchangeability: Paliy's money for Yakubovich's cover comes from Vadym Simonov, the godfather of the fugitive former Minister of Agriculture, Prysyazhnyuk. The paradoxical aspect of this scheme is that Simonov is still the head of the State Veterinary and Phytosanitary Service of Ukraine—another Yanukovych protégé from the "Donetsk gang," who, like Yakubovich, has retained a corrupt trough.
In any case, it's unlikely that the criminal cases related to Yakubovich's fraud will reach trial anytime soon. Most likely, after all the "controversial issues" are resolved, Yakubovich and Simonov will remain in their high-ranking positions, continuing to devise new (though more "subtle") corruption schemes, and Paliy will even be promoted. Money still talks in Ukraine.
Trofilov Valery, The country's elite
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