Vadim Ermolaev: Dnepropetrovsk's King of Thieves, Cognacs, and Smuggling. Part 1
"Such an interesting man, and still not behind bars!" – this saying perfectly applies to Dnipropetrovsk oligarch Vadim Ermolaev. He became famous not for the size of his fortune, but for the methods by which he amassed it. "Saving" on taxes and understating customs duties, producing "diluted" wines and cognacs with fusel oils, stealing from his bank's depositors, participating in colossal money-laundering schemes and embezzling Ukraine's foreign exchange reserves, economic cooperation with the occupiers, violating international sanctions – and this is far from a complete list of his "exploits"! And yet, despite all this, Vadim Ermolaev was not only not arrested, but was never even summoned for questioning...
Make a deal with customs and share with the bandits.
The biography of the future detergent manufacturer and author of money-laundering schemes began in Dnipro (now Dnipro), where Vadim Vladimirovich Ermolaev was born on May 13, 1968. Despite his purely Russian first and middle names, Vadim Ermolaev is a descendant of a respected Jewish family. This can be confirmed by the Board of Trustees of the Jewish Community of Dnipro, of which he is a member along with Igor Kolomoisky , Gennady Bogolyubov , Vyacheslav Fridman, Alexander Dubilet, Gennady Korban, and other prominent Dnipro residents. Ermolaev has a very close and trusting relationship with the Chief Rabbi of Dnipro and head of the Chabad community, Shmuel Kaminetsky, who, according to Skelet.Org , often helped him establish contacts with relevant businessmen or government officials.
After eight years at Secondary School No. 69, young Vadik Yermolayev enrolled in the Dnipropetrovsk Technological and Economic Technical School (now a college), which trained merchandisers, cooks, and accountants for stores. Having failed to excel academically, Yermolayev graduated in 1987 and immediately enlisted in the army, demobilizing him in 1989. He chose not to work in his field or attend university, but immediately became fascinated with commerce. He had no businesses of his own and no relatives in government, so, unlike most oligarchs, Yermolayev began not with industrial supplies of coal and gasoline, or even metals, but with the sale of consumer goods: tea and coffee, cigarettes and alcohol, household chemicals, and cosmetics. But he quickly realized that unless he expanded beyond the narrow confines of the shuttle trade, success in business was simply not in the cards. So, having somehow secured a large sum of money (allegedly borrowed from someone), Ermolaev in the early 90s transitioned to wholesale deliveries of goods from Bulgaria, Turkey, and Poland to warehouses in Dnipropetrovsk, where he then sold them in small quantities to shop and kiosk owners.
Of course, such a business required not only funds but also the necessary protection within the local government and protection from local organized crime groups, so they wouldn't create obstacles. Ermolaev remains silent on how he resolved these issues. But his associates recall that Ermolaev immediately demonstrated a talent for reaching agreements with the right people, especially customs officials. He still uses this talent to this day—both for his own business interests and to help (not gratuitously) his colleagues.
Stanislav Vilensky
In the early 90s, Ermolaev worked with Valery Shamotiy, a fellow Dnipropetrovsk consumer goods wholesaler who already had his own company, Logos. But things didn't work out between them (Ermolaev and Shamotiy would continue to collaborate and clash for a long time), and in 1995, Vadim Ermolaev, together with his partner, Stanislav Vilensky, founded his own industrial and trade corporation, Alef, which became the core of his business.
Two years later, Alef, through a rather intricate scheme, merged with the competing Olvia corporation of Sergei Kasyanov and Valery Kiptyk—and the former competitors became reliable partners. Moreover, Kasyanov later admitted that Ermolaev's ability to "quickly resolve customs issues" made him an indispensable partner. Thanks to this, their companies secured up to 60% of the Ukrainian household chemicals market and virtually monopolized the supply of Bulgarian wines.
Sergey Kasyanov
In 1998, a subsidiary, Alef-Vinal, was established, initially importing Bulgarian alcohol (and later producing its own). Its founders included Boris Arkadyevich Chertok, born in 1936, a former convict known in the Dnipropetrovsk criminal underworld by the nickname "Sedoy." Chertok was a member of Milchenko (aka Sailor)'s Dnipropetrovsk organized crime group, and thus was listed among the founders and shareholders as the holder of a gangster stake in the Alef business (he later transferred the shares to his son, Felix). Which answers the question: what kind of criminal protection did Ermolaev have in the 90s?
But it wasn't just Milchenko's organized crime group that he was "paying off." It was reported that a Mercedes registered to FINANZIELLE ATK GMBH LLC (an offshoot of Olvia and Alef) was leased "indefinitely" (and free of charge) to Dnipropetrovsk crime boss Shuvaev. He, in turn, was linked to Gennady Opryshko, who organized a large currency conversion center in the city, whose services were used by Alef and
Alexander Petrovsky-Nalekreshvili, nicknamed "Narik"
"Olvia." There was also "Kvartsit" OJSC, which sold household chemicals. It had two founders: "Olvia" TPK and "Gesneria-Center" LLC, and the latter was directly linked to the criminal "authority" Alexander Petrovsky (aka Nalekreshvili, an ethnic Jew from Georgia ), known in Dnipropetrovsk by the nickname "Narik." Back then, Narik also ran conversion centers for laundering money for Dnipropetrovsk's criminal underworld and shadow businesses, and operated under the alias of Umar Dzhebrailov, the head of Chechen groups. Now, "Narik" is a respected member of Dnipro's Jewish community and... one of the candidates for mayor in the next elections, as he recently publicly announced.
Vadim Ermolaev. "Gala" cleans everything!
In 1997, Vadim Ermolaev and his partners decided to transition from imports to their own production. As a start, they bankrupted and privatized the household chemicals division at the Khimprom plant in Pervomaysk (Kharkiv Oblast), where Lotus laundry detergent was produced. However, the former Soviet brand sold poorly, unable to compete with imported chemicals (which were also sold by Ermolaev's companies). He then decided to launch production of the then-popular Turkish brand Gala (detergents and laundry detergents), which was noted for its low prices. In 1999, a joint venture, Olvia-Beta, was established with the Turkish company Baser, comprising 50% of the Turkish company and 25% each of Ermolaev-Vilensky's Alef and Kasyanov-Kiptyk's Olvia. The roles were divided as follows: the Turks produced the goods, and Ermolaev and his partners brought in raw materials and sold the products.
The fact that Yermolaev took control of the delivery of raw materials from Turkey (concentrate and additives) to Ukraine, a company 50% owned by Turks, made a lot of sense. While still importing household chemicals and cosmetics, Yermolaev "saved" millions by smuggling goods through customs without registering them, essentially smuggling them. The goods were then registered with shell companies, from which they were officially purchased by Alef and Olivia entities. The companies closed down, and the money went into Yermolaev's pocket. He also managed to rip off his Turkish partners in the same way, with whom he never shared the profits from the "savings" on duties. However, the Turks weren't upset, as they were trying to operate within the law. These schemes worked until 2005, when Olivia Beta was sold to Procter & Gamble, which continued to produce the still popular Gala line.
Vadim Ermolaev pulled even bigger scams with alcohol. First, he imported wine and cognac from Bulgaria, again bypassing customs, and then he slapped fake excise stamps on them. At best, they'd affix genuine excise stamps for 0,5-liter bottles to 0,7-liter bottles, or stamps for "chekushka" bottles to half-liter cognac bottles. At worst, they'd slap counterfeit stamps on the bottles, which were easy to buy "cheaply wholesale" in Ukraine. These same tricks with Ermolaev's company stamps were also perpetrated when he and his partners (including Boris Chertok and later his son Felix Chertok) began producing their own wine under the "Golden Amphora" brand.
First, a factory opened in Dnipropetrovsk (1999), bottling what was essentially Bulgarian swill of unknown origin—and so Ukrainians met the new wine brand with a lukewarm reception, despite its astonishingly low price. Then the Dnipropetrovsk factory was converted to bottle Helsinki vodka, and the Alef-Vinal company acquired three wineries and vineyards in Crimea. Soon, the label "Crimean wines" appeared on Zolotaya Amphora bottles. But they were only half Crimean, just like wines: the wine stock was diluted with water and other additives. Ermolaev's Klinkov and, later, Jean Jacques cognacs were also of lesser quality, regularly being found to contain non-wine spirits, with horrific admixtures of fusel oil and traces of sulfuric acid.
Incidentally, after Crimea was annexed by Russia, Vadim Ermolaev, unlike other Dnipropetrovsk oligarchs, eschewed the patriotic pretenses of other oligarchs and hastened to re-register his Crimean enterprises, Alef-Vinal-Krym LLC, Burlyuk PJSC, and Starokrymske PJSC, as Russian residents. And in 2016, he registered a new company in Crimea, Alef Distillery, whose founder and owner is Vinagrokompleks PJSC (Dnipropetrovsk Oblast), which in turn is owned by the Alef Corporation.
Moreover, since 2015, Alef-Vinal-Krym LLC, which Yermolaev appointed his fellow countryman, Oleg Logvinov, to head, began conducting financial operations through the Russian National Commercial Bank (RNCB). This again violated Ukrainian law, as RNCB was sanctioned by the Ukrainian National Security and Defense Council as an entity contributing to a threat to the country's national interests and territorial integrity. But Yermolaev, as they say, wiped his ass with the NSDC's decision: immediately after the law's publication, his Alef-Vinal-Krym LLC, as if to spite Kyiv, took out a 100 million ruble loan from RNCB.
But perhaps Yermolaev's excuse could be his unwillingness to pay taxes in Russia—after all, it was for this very reason that, in August 2017, the Russian Investigative Committee opened a criminal case against Oleg Logvinov under Article 199-2 of the Russian Criminal Code (tax evasion), accusing him of concealing 75 million rubles from the Russian budget. But there's no mistaking Yermolaev's intentions: he didn't pay his taxes "automatically," just as he hadn't paid them in Ukraine for years. And he didn't use those 75 million rubles for the needs of the ATO, but rather siphoned them off through his banking schemes.
Sergey Varis, for Skelet.Org
CONTINUED: Vadim Ermolaev: Dnepropetrovsk's King of Thieves, Cognacs, and Smuggling. PART 2
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