Apartment in Pechersk for UAH 1000: How Kniazev Owed the State Over UAH 900,000

Recently, the property and accounts of Vsevolod Kniazev, the former chair of the Supreme Court, were seized. This seizure was not part of NABU’s sensational $3 million bribery case – that is an entirely different story.

Kniazev’s property was seized because, in another case, the court failed to confiscate UAH 906,000 that the judge underpaid for renting an apartment in the capital’s Pechersk district. This is a special apartment because, according to the contract, Kniazev paid only UAH 1,000(!) per month for it.

Where did Kniazev find such an apartment, which properties were seized from him, and how is this connected to the $2.7 million bribery case? Let’s figure it out.

How did Kniazev get busted with the rental of the four-room apartment in Lypky?

In May 2023, detectives visited Kniazev’s home and uncovered large-scale corruption in the Supreme Court. According to NABU and SAPO, Kniazev received $2.7 million in bribes for favorable court decisions benefiting oligarch Kostiantyn Zhevaho.

During the search, they found not only piles of cash but also a rental contract for an apartment, which immediately interested law enforcement officers. Since 2017, Vsevolod Kniazev has been renting a 4-room apartment with an area of 133 square meters in Lypky, not far from the government quarter, and has been paying a symbolic thousand hryvnias for it.

Based on the existence of this contract, the NACP drafted a report, which was then reviewed by the Pechersk District Court of Kyiv. The same court determined that Kniazev had thereby violated restrictions on receiving gifts. In fact, this is related to corruption, for which the former chair of the Supreme Court was fined UAH 2,550 and the gift was confiscated.

The court classified as a gift the difference between the minimum market value of the apartment, which could range from UAH 51,000 to 57,000 per month, and the actual rent paid during the time that the former chair of the Supreme Court lived there. Accordingly, Kniazev saved UAH 906,600, that is, he received these funds as a gift from the lessor.

“The apartment is not new, and the contract pertains to a different property,” Kniazev argued

Kniazev emphasized in court that the rent was not UAH 1,000 but rather USD 1,100. According to the ex-chair of the Supreme Court, this was outlined in a separate contract, which NABU detectives did not find. He stated that such a price corresponded to the market rate according to his research, as “the apartment was not new; it was part of the old housing stock, with no renovations done for 30 years.” Kniazev, on the other hand, “worked all the time, so it was not fundamentally important to him.”

And the contract found is purportedly related to the lease of a parking space. Why was an apartment included in the contract for a thousand hryvnias? Kniazev’s lawyer explained that the owner did not have documents for the parking space.

The court took a critical view of these arguments because the ex-chairman of the Supreme Court never once indicated in the declaration and during the search neither another contract nor a parking space as the object of the lease. The apartment owner actually only had ownership rights to the garage at another address, which was registered by a private notary – revealed to be Kniazev’s wife. When NACP asked why the rental contract was concluded at the price of UAH 1,000, Kniazev replied that it was agreed upon on terms acceptable to both parties.

Moreover, the defense attorney claimed that Kniazev’s individual renting of housing did not create corruption risks in the performance of his work functions. However, neither these nor other arguments of the defense party convinced the judge, and on December 26, 2023, the court made the aforementioned decision to confiscate the gift of UAH 906,000.

Unsuccessful confiscation – where did the money go?

The defense filed an appeal and received a response in March 2024. The Kyiv Court of Appeal upheld the decision of the first instance because even receiving a minor gift with violations is sufficient to classify it as an administrative offense. If we discuss the potential influence on Kniazev’s actions as the former chairman of the Supreme Court, then this could lead to criminal charges.

In parallel with the court proceedings regarding the lease, in January 2024, Kniazev was released on bail in the bribery case, and the former chair of the Supreme Court was released from the pretrial detention center.

But he claimed to have no money to fulfill the appellate decision. It is worth noting that before making the bail deposit, Kniazev waited for more than half a year until its amount was reduced from the initial UAH 107 million to UAH 18 million. We cannot definitively state whether the judge has UAH 900,000 remaining after paying the bail.

What property was seized?

However, the State Penitentiary Service of the Ministry of Justice (SPS) did not wait for Kniazev to transfer funds to fulfill the court decision and seized his property and bank accounts. Deputy Minister for Penitentiary Service Andrii Haichenko noted that if there is no money in the accounts of the former chair of the Supreme Court, the SPS will seize any property found on him.

The SPS reports 4 real estate properties in Mykolaiv and Mykolaiv region registered to the former chair of the Supreme Court but it appears that not all of this property is solely owned by Kniazev. On April 26, the court divided the property between Kniazev and his ex-wife Yulia, who filed for divorce after the bribery scheme was exposed in the Supreme Court. The ex-wife retained ownership of the apartment building, $52,000 in cash, and funds in numerous bank accounts.

Why is this Kniazev’s case also important?

Most often, illegal gifts did not cause many problems for those who received them. The standard fine for violating legal restrictions on receiving gifts, regardless of their value and without considering confiscation, is only UAH 3,400 tops. And the payment of such funds was hardly a problem for other officials for whom relevant decisions were made.

TI Ukraine previously discussed the format and total value of gifts permitted by law, which was UAH 10,736 in 2023. If the limit is exceeded, then the official will be subject to the aforementioned fine.

At the same time, a unique situation unfolded with Kniazev. The significant confiscation of a gift amounting to UAH 906,000, as ordered by the court, is one of the largest confiscations to become public knowledge. And in general, such a decision is an important precedent.

The publicity of this case may lead unscrupulous officials to reconsider whether it is better to refuse a valuable gift to avoid facing such a substantial confiscation. And this, in turn, will contribute to the real prevention of corruption-related violations.

The fact that we learned about such a violation during the investigation of another, larger case, and it resulted in real punishment, refutes the thesis about the total ineffectiveness of anti-corruption bodies. Because if there wasn’t one, there wouldn’t be another either. And I think we will see similar stories again.