Three verdicts of Ruslan Solvar 

In October 2018, the National Anti-Corruption Bureau of Ukraine started an investigation against former MP Ruslan Solvar who unreasonably received compensation for several months from the Verkhovna Rada for renting a room in the “Kyiv” hotel. The MP did not inform on time the Apparatus of Verkhovna Rada responsible for such payments about the fact that he had inherited an apartment in Kyiv. He did so only after the information was reported in the media and claimed that he immediately reimbursed all the losses to the state. At the time, the amount was UAH 361,500.

However, in December 2019, Ruslan Solvar was served with a suspicion notice of abuse of authority. But, in June 2021, the HACC acquitted the former MP due to the misclassification of his actions by law enforcement officers. According to the judges, it would have been correct to charge Ruslan Solvar with fraud. However, since the latter entails a graver punishment, the first instance could not convict Ruslan Solvar by law. So, the prosecutor filed an appeal against this decision.

The second decision in the case was made by the HACC AC, which in September 2022 found Ruslan Solvar guilty of abuse of office. The judges decided that it was lawful to change the qualification in terms of whether the former MP abused his authority or office.

The former MP was sentenced to 3 years in prison with a fine of UAH 8,500 and a ban on holding certain positions for a year. This time, Ruslan Solvar’s illness prevented the enforcement of the sentence, and the defense claimed that the former MP was in a cardiology hospital with a hypertensive disease and diabetes. This means that he allegedly mustn’t stress himself with anything.

Due to the lack of consistent case law in the application of Article 364 of the Criminal Code of Ukraine (abuse of authority or office), which Ruslan Solvar was charged with, his case went even further—to the Supreme Court. The indictment of the HACC AC was reviewed in cassation by the joint chamber of the Criminal Cassation Court because the highest-level judges needed to clarify the difference between abuse of power and abuse of office. In December 2023, the Criminal Cassation Court decided to reconsider the former MP’s case in the appellate instance because a significant violation of the requirements of the criminal procedural law had been found. Again, it was because the NABU-SAPO charged Ruslan Solvar with abuse of authority, and the wording in the verdict was changed to abuse of office.

Therefore, along with this decision, the Supreme Court formed a legal position on the distinction between the forms of the objective side of Article 364 of the Criminal Code of Ukraine. Prior to that, in similar cases, MPs had been both acquitted and convicted. Therefore, the court explained that if an official abuses the guarantees provided to him or her as a representative of the authorities (in particular, a member of parliament), it is quite logical to call that abuse of authority.

Finally, after re-examining Ruslan Solvar’s case, on August 26, 2024, the HACC AC again issued a guilty verdict, which was 3 years in prison, a fine of UAH 8,500, and a ban on holding positions that entail exercising functions of a representative of the authorities in public authorities for a year. This time, the former MP was convicted of abuse of authority: he failed to inform the Office of the Apparatus of Verkhovna Rada about his apartment in Kyiv, thus abusing his housing guarantees. In addition, the HACC AC noted in the verdict that the first instance had correctly established the factual circumstances of the case but had given them an incorrect legal qualification.

But even before that, a lot of interesting things happened to Ruslan Solvar who did not want to wait for the verdict and joined the army before it was announced.

How Ruslan Solvar became a soldier, and why it does NOT save him from prison

When the appeal proceedings were nearing the end in the summer of 2024, Ruslan Solvar was again hospitalized, and as soon as he left the medical facility, the former MP was called up right in the street. Then, as a reserve lieutenant, he was immediately sent to the front, at least, that’s what Ruslan Solvar’s defense attorney claimed.

In fact, it turned out that the former MP was doing military service voluntarily under a contract, and this was the answer the court received from the head of the territorial center for recruitment and social support. Perhaps, Ruslan Solvar hoped that the proceedings against him would be suspended due to his service in the Armed Forces, and the defense even filed a motion to suspend the proceedings. However, when it was reported that the former MP was not mobilized, but signed a contract for military service, the defense itself asked the court not to consider the motion filed earlier.

The law stipulates that the contract is terminated, and the servicemen are discharged from military service in case of a guilty verdict that imposes a prison sentence. Since the verdict had entered into force, Ruslan Solvar’s contract should have been terminated, and he should have been dismissed from the Armed Forces, but it was unclear for quite some time whether this actually happened.

A recent response we received from the Department for the Execution of Criminal Punishments indicates that the verdict of the HACC AC in terms of the enforcement of imprisonment against convicted Ruslan Solvar was enforced. This means that Ruslan Solvar is currently in prison.

Interestingly, almost immediately after the verdict, Ruslan Solvar’s defense counsel filed a cassation appeal, and on November 4, the Criminal Cassation Court opened cassation proceedings to review the case. At the same time, the former MP’s attorney also asked to suspend the enforcement of the sentence immediately after it was passed, and again explained this by the fact that Ruslan Solvar was doing military service under a contract, but the court refused to grant it.

***

 Ruslan Solvar’s case is indicative and important for several reasons.

Firstly, it ended the confusion over the interpretation of cases where MPs allegedly abuse their housing guarantees. Without planning it, Ruslan Solvar contributed to solving an important problem of criminal law—defining the meaning of the concept of “abuse of authority.” The HACC still has a lot of similar cases pending, and we are sure that not all defendants are satisfied with the way the case law is developing in this area.

Secondly, we see that justice has finally caught up with Solvar, regardless of how long his case has been wandering around the courts and where he is. Joining the army is a brave and noble decision, but it should not be an indulgence for corrupt officials.

That is why we at TI Ukraine continue to follow the cassation appeal. This story has already had so many twists and turns, and who knows what will happen next.

What exactly did the ECHR decide? 

If we consider this decision in more detail, the European Court of Human Rights indicated that the complaints about the illegal detention and the subsequent selection of an interim measure to Alperin were clearly ill-founded. Detectives have the right to detain a person without the decision of the investigating judge, and the HACC, for its part, properly justified the decision to keep Alperin in custody. 

The ECHR found the bail amounting to UAH 77 million justified. The HACC assessed the applicant’s ability to pay the required amount and provided justification for its decision. The applicant did not refute the NABU investigator’s statement regarding his assets and did not prove that he had provided the authorities with the necessary information about his financial situation. What is more, the bail was paid three days after the decision on it had been adopted, and Alperin gave no indication of any excessive difficulties in raising the funds. 

The ECHR did not consider the arguments about the violation of the presumption of innocence by the President of Ukraine in detail because Alperin did not exhaust domestic remedies regarding this complaint. He could have filed a civil suit for defamation or raise the issue within criminal proceedings against him. 

The applicant also believed that the forfeiture of part of the bail as a reaction to his violation of procedural obligations was disproportionate and unlawful. 

The ECHR established that the HACC Appeals Chamber, which adopted such a decision, carefully considered the arguments of the parties and properly justified its decision, limiting the forfeiture to half the amount of the bail for reasons of proportionality. 

In addition, Alperin believed that his rights were limited for a purpose different from that provided by the Convention, namely, to demonstrate the government’s fight against corruption in a populist manner. The court argued that no evidence or further justification was provided that would prove the existence of an ulterior motive on the part of the President or other representatives of the authorities “beyond reasonable doubt.” The very fact that the actions took place in the context of the fight against corruption does not prove the existence of an unlawful purpose. 

Currently, Alperin’s case is undergoing a preliminary trial after the HACC AC overturned its closure due to the “Lozovyi’s amendments.” In July 2024, the first instance rejected the defense’s repeated request to close the case.

What happened at the hearing on August 28? 

This was the first hearing to impose an interim measure on the head of the Antimonopoly Committee of Ukraine, the stream of which was allowed by the court. 

Actually, it was today that the defense counsel finally has begun to give its comments. From the start, the attorney assured that there was no corpus delicti in the actions of Kyrylenko. Allegedly, he did not give his mother-in-law, to whom the property was registered, any orders to purchase it, but bought it for the legitimate savings of his mother-in-law’s family. The defense called the conclusion about the value of the property unjustified. The fact that Kyrylenko’s wife participated in the acquisition of property with registration to her parents is considered by the defense to be a typical practice of “parents helping children.” 

The prosecutor asked to stop the defense counsel because he allegedly stalled the hearing, but the judge sided with the defense. The latter also stated that Kyrylenko could not hide from the investigation because his life was in danger, there was an attempt on his life, and his financial condition reaches only UAH 3 million. 

Then the witness, Oleksandr Matiyenko, the father of Kyrylenko’s wife, was interrogated. According to him, everything was bought with the money earned by him and his wife. Allegedly, he did not want the money earned over the years to just be idle—the trade in raspberry alone brought Matiyenko USD 300,000. So, the money was invested in 4 apartments and 4 parking spaces in Uzhhorod. Subsequently, Kyrylenko’s in-laws also bought an apartment in Kyiv. 

In total, Kyrylenko’s in-laws had about 10 apartments; in addition, the father-in-law was constantly purchasing cars and bought a residential house. He explained the purchase of the apartments in the Obolon Plaza residential complex by the desire to wait for the increase in real estate prices to sell them later.  

Although the prosecutor asked the court to take Kyrylenko into custody with bail of UAH 120 million, the defense counsel believed that the interim measure should, firstly, be mitigated, and secondly, the bail should be reduced to an amount ranging from 20 to 80 subsistence minimums, that is, from UAH 60,000 to 242,000. 

In general, Matiyenko and his wife earned the money on their own, and that’s because “a friend in need is a friend indeed.” In 1991, Matiyenko inherited some property, and he had a business together with his friends—buses and taxis, and besides, he was engaged in trade and had money exchangers; that is, he earned on currency exchange rate increases. In the end, Matiyenko did not want the money to just be idle, so he and his family learned about the new developments in Uzhhorod and bought 4 apartments and 4 parking spaces.  

Matiyenko mentioned Heorhii Shabayev, a journalist of the Skhemy project (Schemes), who wrote about all this real estate; allegedly, he was the one who “started it all,” but did not want to meet them. 

Interestingly, at the beginning of the interrogation, Matiyenko asked to speak Russian. The judge allowed him to switch to another language, but the defense counsel thought it concerned him too, so he asked questions in Russian while the prosecutor conducted the interrogation in Ukrainian. By the way, Matiyenko addressed the prosecutor in Russian and in an inappropriate form, but the judge did not pay attention to this. 

In the end, the prosecutor asked to apply detention against Kyrylenko with bail of 40,000 subsistence minimums, namely UAH 121.12 million.  

Although Kyrylenko did not participate in the purchase of all the property listed during the hearing, his wife dealt with it, which they had covered a lot in their conversations. Moreover, it was Kyrylenko who determined when his wife could use the car, which had been purchased at the expense of the Kyrylenko family.  

Thus, Kyrylenko is charged with acquiring assets worth UAH 62 million (which is 56 million more than allowed by law). The prosecutor mentioned that, following the example of MP Dmytruk, Kyrylenko could also easily leave the territory of Ukraine. The prosecutor is also convinced that the head of the AMCU could influence the witness and mentioned consultations with Judge Bortnytska regarding the destruction of evidence.  

The defense counsel believes that the motion for detention indicates pressure on Kyrylenko so that he can help with the investigation, so he asked to deny it. Kyrylenko himself said that he could not hide in the temporarily occupied territory and recalled that he had no property in Crimea, although he did not mention the likelihood of leaving Ukraine.

How was the case heard?

The NABU and the SAPO served Filonenko with a suspicion notice on October 25, 2022; less than six months later, on February 23, 2023, the SAPO transferred the indictment to the court. 

The prosecutor asked to impose the following sentence on Filonenko: 10 years of imprisonment with deprivation of the right to hold certain positions and confiscation of property. 

The defense insisted on Filonenko’s innocence. According to the defense counsel, there was no corpus delicti in Filonenko’s actions, and the economic relations between Optimumspetsdetal LLC and the Izium Instrument-Making Plant were absolutely legal. In addition, according to the defense counsel, the term of pre-trial investigation in this case expired in April 2022, and the proceedings should have been closed even earlier based on Article 284, part 1, clause 10 of the CPC of Ukraine. 

Moreover, the NABU and the SAPO believe that Filonenko lied in his 2020 declaration. He failed to mention an apartment in Bulgaria owned by his wife, and the cost of this property in 2020 was UAH 1.33 million. However, part of the case regarding false declaration was closed due to the expiration of the statute of limitations. 

Filonenko may file an appeal against the verdict of the HACC within 30 days from the day the verdict was pronounced.

How did the scheme function?

During the investigation, NABU detectives found out that NAAS officials, outside their powers, terminated the right of permanent use by the research farm Chabany (an organization within the structure of the NAAS) of 144 land plots in Hatne, near Kyiv. Of these, 138 land plots had already been transferred to private ownership and another 6 at the time of the launch of the investigation were in the process of re-registration. This scheme entails more than 15 hectares of “especially valuable” land intended for research. These lands eventually became the private property of members of the Presidium of the NAAS, their close relatives, employees of the SSU, the Ministry of Agrarian Policy, and other persons.

The plots in the case were part of 330 hectares of land, which in 2003 were transferred to the permanent use of the research farm Chabany within the Institute of Agriculture of the NAAS. The head of the Kyiv-Sviatoshyn District State Administration made such a transfer by his order with the appropriate intended purpose.

What is important is that, in accordance with the then provisions of the Land Code of Ukraine, the right to permanent use could only be terminated with the consent of the Verkhovna Rada. The same applies to the change in intended purpose. However, the NAAS, according to the investigation, managed to make such a decision without the consent of the parliament. The formal reason for that was that in September 2013, employees of the Chabany RF requested the allocation of such land plots for gardening.

As part of the criminal plan, the NAAS received a letter from the head of the SSU, but without his signature, allegedly, about the need to terminate the right of permanent use of these land plots by the research farm Chabany in order to transfer these lands to the Security Service. Then there was a second letter with similar content, but it was signed by the Deputy Head of the SSU. However, there is no significant difference between the two letters; in any case, such appeals were contrary to the law because only the Cabinet of Ministers can initiate such decisions.

The now-accused director of the research farm then did not object to the allocation of land plots to employees. The other accused, the director of the Institute of Agriculture of the NAAS, did not object to that either.

Subsequently, the SSU letter, along with other materials, was submitted to the presidium of the NAAS for consideration, but they “forgot” to add a certificate of the special value of these lands. As a result of the voting, the NAAS adopted a corresponding resolution in which it agreed to withdraw 15.12 hectares of land from the use of the Chabany RF. Subsequently, the director of the research farm sent a letter on the termination of the right of permanent use to the State Land Agency in the Kyiv region. On its basis, the State Land Agency allocated land plots by separate orders to pre-approved people, including relatives of the Academy Presidium employees, who made decisions on the withdrawal of this land.

In total, 138 people turned out to be new “owners” of these lands, and all of them can be divided into four large groups:

• officials of the NAAS, the Institute of Agriculture and related persons. For example, Yaroslav Gadzalo, still current president of the NAAS; his daughter and her husband; Oleksandr Ishchuk, then director of the SE RF Chabany; his wife; the grandmother of his son’s wife; the in-law of Viktor Kaminskyi, director of the Institute of Agriculture; Anatolii Zaryshniak, vice-president of the NAAS, and his wife—judge of the Kyiv Court of Appeal, as well as their daughter;
• Main Department of Counterintelligence Protection of the State’s Interests in the Sphere of Economic Security of the Security Service of Ukraine. For example, the leadership of this department, their relatives and, overall, persons who were not related to either the Academy or the SSU, but, having received land plots, issued powers of attorney for their disposal to close relatives of the then leadership of this department of the Security Service;
• high-ranking officials, in particular persons associated with the then Deputy Minister of Agrarian Policy and Food, with the Secretariat of the Cabinet of Ministers of Ukraine, etc.;
• local officials, including officials of the Chabany village council; persons associated with the prosecutor of the Kyiv-Sviatoshynskyi district; persons associated with Yurii Bondar, head of the Kyiv-Sviatoshynskyi district state administration; their relatives, etc.

The NABU estimated that the officials caused more than UAH 42 million in damage to the state through their actions.

Removal of NAAS top management from the list of defendants in the case

In January 2020, five senior officials of the Academy were served with a suspicion notice. Namely:

• Yaroslav Hadzalo, president of the National Academy of Sciences of Ukraine (vice president at the time of the crime);
• Ihor Hrynyk, director of the Institute of Horticulture of the NAAS (the first vice-president of the NAAS at the time of the crime);
• Ihor Ibatullin, first vice-rector of the National University of Life and Environmental Sciences of Ukraine (vice-president of the NAAS at the time of the crime).
• Anatolii Zaryshniak, vice president, chief academic secretary of the NAAS (academician-secretary of the NAAS branch at the time of the crime);
• Viacheslav Vlasov, director of the National Scientific Center V.Ye. Tairov Institute of Viticulture and Winemaking.

According to the investigation, these 5 people, as members of the NAAS presidium, voted for the allocation of land plots from among the especially valuable ones, and then re-registered them to their names and to their close relatives. However, in May 2020, the head of the SAPO closed the proceedings against the top NAAS officials because there was a lack of evidence to prove the mercenary motives of the defendants during the voting.

In April 2021, Prosecutor General Iryna Venediktova revoked this resolution of the head of the SAPO because, in her opinion, the SAPO did not do everything possible to verify the involvement of the NAAS leadership in this scheme. In May 2022, the SAPO prosecutor closed the proceedings against the top officials of the NAAS again.

Were these people artificially removed from the case? The CPC does oblige to close the proceedings if there is insufficient evidence to prove guilt and there is no opportunity to obtain it.

When the NABU served new suspicions, the Bureau was sure that the NAAS management had re-registered the land plots to their names and to their close relatives. But then, for unknown reasons, the investigation abandoned the idea that the senior officials of the NAAS had acted for mercenary motives. However, the opinion of law enforcement officers did not change regarding the rest of the defendants, who had previously been charged with the same actions. The HACC has been hearing this case for a long time.

The list of current defendants includes:

• Roman Kucher—former head of the State Land Cadastre Department of the Main Directorate of the State Land Agency in the Kyiv region;
• Stanislav Hubin—ex-deputy head of the Main Directorate of the State Land Agency in the Kyiv region;
• Ivan Shevchenko—ex-head of the department of the NSC Institute of Agriculture of the NAAS;
• Oleksandr Ishchuk—ex-director of SE RF Chabany;
• Viktor Kaminskyi—director of the NSC Institute of Agriculture of the NAAS;
• Anush Balian—vice president of the NAAS;
• Svitlana Kovtun—former chief scientific secretary of the NAAS;
• Vitalii Oborskyi—SSU officer;
• Vasyl Petrychenko—ex-president of the NAAS.

All these people are charged with misappropriation, embezzlement or conversion of property by malversation, and in addition—an unfinished attempt at such actions. The court may sentence the defendants to imprisonment for up to 15 years, with confiscation of property. But the question arises: what is the difference between the actions of these individuals and the five top officials of the Academy? 

When is the finale?

In December 2019, the SAPO sent the indictment to the court. Since then, the Anti-Corruption Court has been holding court hearings to consider this case; currently, the defense is taking part in court debates.

In the future, the accused will be able to use the last word. Given that there are many of them, the process will take some time. At the same time, all the evidence has already been studied, so most of the processual procedures are over.

The land in Hatne is now seized; the arrest was imposed in November 2017 by the Solomianskyi District Court of Kyiv. In April 2018, the Kyiv Court of Appeal upheld this decision. If the guilt of the defendants is recognized by the court, land plots as a subject of the crime may be recovered within special forfeiture.

We at Transparency International Ukraine will continue monitoring this case because the verdict in it is looming on the horizon, and there are still many questions left. And most importantly—will all the perpetrators of this land scheme really be punished? After all, these are the answers that should underlie truly high-quality justice.

What is this case about, and what is happening in court?

According to the prosecution, Hladkovskyi Jr. used the influence of his father, who held the position of First Deputy Secretary of the NSDC of Ukraine and had influence on the activities of defense enterprises participating in the State Concern Ukroboronprom. According to the NABU-SAPO, Ihor Hladkovskyi did all this to obtain an improper advantage.  

Thanks to his father, Hladkovskyi Jr. managed to have Pavlo Bukin appointed to the post of General Director of Ukrspecexport in February 2016. In response to such a “service,” Bukin had to conclude contracts on behalf of this state-owned company with firms controlled by Hladkovskyi Jr. Such agreements were to be concluded on terms that would allow the son of the former first Deputy secretary of the NSDC to get his own benefit.  

Thus, Hladkovskyi Jr. prepared the basis for himself, with the help of which, in August 2016, agreements were signed with the director of Ukrspecexport Pavlo Bukin on the purchase of on-board radio-electronic equipment at inflated prices, which led to almost UAH 13 million in losses for Ukrspecexport. We are talking about the very “altimeters”; Ukrainians learned about them from one of the most high-profile investigations of the Bihus.Info team in March 2019.  

To implement the criminal plan, Ihor Hladkovskyi involved AN Service LLC. In turn, AN Service concluded an agreement on the supply of altimeters with Asia Capital Overseas Limited (registered in the Special Administrative Region of the People’s Republic of China, Hong Kong). Since Hladkovskyi Jr. influenced this allegedly Chinese company, after transferring the payment to its accounts, he received an improper advantage in the amount of USD 170,000.  

The NABU-SAPO served Hladkovskyi with a suspicion notice in October 2023 and sent an indictment to the HACC in June 2024. The first preparatory hearing on the charge against Hladkovskyi Jr. was held on June 14, 2024. Almost immediately, the lawyers filed a motion to close the criminal proceedings due to the expiration of the terms of the pre-trial investigation. The defense counsel referred to Article 284, part 1, clause 1 of the Criminal Procedural Code of Ukraine; that is, they asked to close the criminal proceedings since the terms of the pre-trial investigation expired after the defendant had been served with a suspicion notice.  

In court hearings, the defense counsel referred to the ruling of the investigating judge on November 20, 2023, which refused to grant the motion for the arrest in absentia of Pavlo Bukin. Moreover, the judge then came to the conclusion that in that case, the terms of the pre-trial investigation had indeed expired before Pavlo Bukin and Ihor Hladkovskyi were served with suspicion notices. We can assume that the case was not closed in November because it was not within the competence of the investigating judge to resolve the issue of closing the criminal proceedings due to the expiration of the statute of limitations.

How did the judge motivate her decision?

During the entire existence of the CPC of Ukraine, Article 219, which regulates the terms of the pre-trial investigation, has been amended several times. On March 16, 2018, the so-called “Lozovyi’s amendments” came into force, which introduced a period calculated from the moment of entering information into the Unified Register of Pre-Trial Investigations and before serving the person with a suspicion notice. Such a term is differentiated and depends on the gravity of the criminal offense.  

The final provisions of the law, which introduced Lozovyi’s amendments, provided that these changes did not have a retroactive effect in time and applied to cases in which information about a criminal offense was entered into the Unified Register of Pre-Trial Investigations after the enactment of these rules in 2018.  

The proceedings, within the framework of which Bukin was served with a suspicion notice, were entered into the Unified Register of Pre-Trial Investigations in March 2019, that is, after the entry into force of the “Lozovyi’s amendments.” Therefore, they have already included the term before serving a person with a suspicion notice. In March 2020, the prosecutor merged the proceedings within which Bukin was served with a suspicion notice with other proceedings, the information on which had been entered into the Unified Register of Pre-Trial Investigations before March 16, 2018, that is, before the entry into force of the “Lozovyi’s amendments.”  

So, the prosecutor, by his decision, consolidated pre-trial investigations. In one of them, the period of pre-trial investigation was not calculated from the moment of entering information about a criminal offense into the Unified Register of Pre-Trial Investigations, and in the other, such a period was calculated.  

Analyzing similar situations in other cases, we pointed out: if we make a relationship between the date of entering information about criminal proceedings in the Unified Register of Pre-Trial Investigations and the application of the “Lozovyi’s amendments,” the pre-trial investigation bodies may abuse this. The abuse will consist in the artificial consolidation of “old” criminal proceedings with “new” ones so that the pre-trial investigation in the proceedings with suspects is extended not by the investigating judge but by the head of the prosecutor’s office. 

For example, in the PrivatBank case, we analyzed the facts under pre-trial investigation. We established that the investigation concerned the assets of one bank; and, according to the pre-trial investigation body, the criminal offenses were committed partly by the same defendants and mostly under the same qualification. This made it possible to state that during the consolidation of criminal proceedings, there was no abuse, instead, such a consolidation was carried out to increase the effectiveness of the pre-trial investigation. Therefore, in criminal proceedings 12017040000000531, “Lozovyi’s amendments” were not to be applied. 

Judge Olena Tanasevych applied an identical approach. She analyzed the progress of the criminal proceedings against Hladkovskyi and Bukin, and the facts under which they were carried out: 

“… the documents provided to the court indicate the connection of all the factual circumstances established in the criminal proceedings No. 42016110350000102 in 2015-2023, within the framework of which the investigation of illegal actions of the same individuals and legal entities in the defense sphere of Ukraine took place. According to the investigation, these actions revolved around the implementation of the common intention of these persons to seize budget funds allocated for public procurement conducted by state-owned enterprises that were part of the SC Ukroboronprom—SE Lviv Armored Fighting Vehicle Plant, SE Mykolaiv Armored Factory, Kyiv Armored Plant, SE Zhytomyr Armored Plant, SE Iziumskyi Instrument-Making Plant, SE Ukrspecexport, with the involvement of officials of the Ministry of Defense of Ukraine, the National Security and Defense Council of Ukraine, etc.” 

We agree that this is the right and correct approach to assessing whether the “Lozovyi’s amendments” regarding the period of pre-trial investigation should be extended to serving a person with a suspicion notice.

A controversial point in the court ruling

According to the prosecutor in this case, currently, Article 219 of the Criminal Procedural Code does not provide a deadline for serving a person with a suspicion notice, and therefore the defense counsel’s motion is irrelevant. However, the judge, immediately after the announcement of the ruling, noted that she did not agree with this point.  

In the court decision, Judge Tanasevych drew attention to this. She indicated that the new version of Article 219 of the Criminal Procedural Code of Ukraine d not relieve the court from the duty to investigate whether the term of pre-trial investigation was observed from the moment of entering information about a criminal offense into the Unified Register of Pre-Trial Investigations before the day of serving the person with a suspicion notice by December 31, 2023. 

On December 8, 2023, the parliament amended the CPC of Ukraine, partially abolishing the “Lozovyi’s amendments.” The MPs supplemented the transitional provisions of this law with a new clause: 

“20-8. The provisions of part one of Article 219 of this Code as amended by the Law of Ukraine on Amendments to the Criminal Procedural Code of Ukraine and Other Legislative Acts of Ukraine on Strengthening the Independence of the Specialized Anti-Corruption Prosecutor’s Office shall apply to all criminal proceedings, the pre-trial investigation or trial of which has not been completed before the date of entry into force of the Law of Ukraine on Amendments to the Criminal Procedural Code of Ukraine and Other Legislative Acts of Ukraine on Strengthening the Independence of the Specialized Anti-Corruption Prosecutor’s Office. 

Thus, the legislator provided a retroactive effect to the rules governing the procedure for extending the terms of pre-trial investigation, extending them to cases where:

• the pre-trial investigation has not been completed;
• the trial has not been completed.

In the case of Ihor Hladkovskyi, the pre-trial investigation had not yet been completed as of January 1, 2024. Therefore, the prosecutor’s opinion was correct for these reasons.  

The position of Judge Tanasevych in this part is controversial because the legislator directly indicated that to verify the existence of grounds to close cases under Article 284, part 1, clause 10 of the CPC of Ukraine, it is necessary to consider the new version of Article 219 of the CPC of Ukraine. It does not provide for restrictions on the term of pre-trial investigation in criminal proceedings without suspects.

***

This case shows us two things. 

The approach to assessing whether “Lozovyi’s amendments” should be applied is gradually changing among judges, and that’s a good sign. After all, the key thing in assessing the protection of human rights in the context of a reasonable term of investigation is whether the prosecution did not allow for abuses. 

But, as we can see, there may be problems with clarifying the content of clause 20-8 of the Transitional Provisions to the CPC of Ukraine. Therefore, judges need to properly apply the methods of judicial interpretation to resolve them.

Odarchenko, university, recovery, bitcoins. Where is the logic here?

In October 2021, Andrii Odarchenko, then a People’s Deputy, became the head of the Academic Council at the State Biotechnological University and was later elected rector of the same institution. Since it is not possible to hold both positions simultaneously, his university contract was suspended.

Times changed when Russia launched a full-scale invasion, heavily damaging Kharkiv’s university buildings and necessitating their restoration. According to law enforcement officers, Odarchenko then considered seeking ‘help’ from Mustafa Nayyem, the head of the State Agency for Restoration and Infrastructure Development of Ukraine at the time.

The People’s Deputy offered the official a $50,000 bribe in bitcoins in exchange for securing funds from the Liquidation Fund for the university’s repairs. Mustafa Nayem reported this to NABU and became a whistleblower. Later, Odarchenko transferred 0.39 bitcoins to him — about $10,000 at the then exchange rate. NABU claims this is the first documented bribe in anti-corruption history to be given in the form of cryptocurrency.

A logical question arises: what is the purpose of offering a bribe to allocate funds? The answer became clear during the court session: Odarchenko aimed to divert up to 20% of the funds allocated for reconstruction. The People’s Deputy himself denied any intention to profit from these funds, claiming they were international money. He also claimed that his conversations with Nayem were intended as jokes and that the accusations were based on a “cynical misunderstanding”.

(Translated from Russian) “I don’t believe in Kharkiv, Mustafa.” How the conversations led to Odarchenko’s exposure

During the selection of a measure of restraint, the SAPO prosecutor presented recordings of several notable conversations, some of which were played at the hearing. It turned out that behind Odarchenko’s seemingly good intentions to restore the university were entirely different plans and motives. Here are some of his most prominent quotes:

1. (Translated from Russian) “I don’t believe in Kharkiv, Mustafa. Two nuclear triads — Russia and the United States — control the situation… What we’re talking about is laughable. Iran and China are already supplying weapons, and everything is chaotic at the front,” Odarchenko shared this pessimistic view on Ukraine’s prospects with Nayem. By the way, the People’s Deputy was elected to Parliament from one of Kharkiv’s electoral districts.
2. (Translated from Russian) “I love cryptocurrency. Have you ever used it? I exchange it with a friend, and you can use it anywhere, even in Lviv! I have exchange offices in Kharkiv and Kyiv — That’s on me. I took them there, these are my people. You say: give it to me somewhere, even in Spain! And it all disappears, not even here!” Odarchenko enthusiastically told Nayem about his interest in cryptocurrency. It is not clear which “his people” he was referring to.
3. (Translated from Russian) “F**k it, that Constitution! It was trampled a long time ago, don’t you know?” — these were the words of the People’s Deputy expressing his disdain for Ukraine’s Fundamental Law.
4. (Translated from Russian) “The main thing is to be promoted everywhere. I don’t know if I’ll be a deputy or not, but I’ll rebuild the university myself””— this is how Odarchenko’s concern for the university, or perhaps his own career after his mandate, was expressed. According to him, however, Kharkiv was not expected to withstand the Russian army’s onslaught.

How Odarchenko refused legal representation

In April 2024, SAPO sent the indictment against Odarchenko to the High Anti-Corruption Court. Two lawyers, Oleksandr Koriukin and Ihor Lypiavka, intended to represent the People’s Deputy during the court hearings.

On one occasion, both lawyers failed to attend the preparatory meeting, requesting a postponement because they were busy with other, more important matters.

There were also instances when only one of the defenders, Ihor Lypiavka, attended the court. He then filed a motion to return the indictment, but the court dismissed it as it was identical to a previously rejected motion. Later, Lypiavka requested to close the proceedings but was unable to fully articulate his demands. As a result, the court dismissed the motion and issued several remarks to the lawyer due to disputes with the court.

After that, Lypiavka requested a 10-minute technical break to prepare a statement challenging the panel of judges. However, when the break ended and the lawyer did not return to the courtroom, the court concluded that he had absconded and began discussing potential disciplinary action against him. Later, Lypiavka did return to the courtroom, but it seems Odarchenko was dissatisfied with the defense, as he refused it at the next hearing.

On July 22, 2024, Odarchenko announced that he had terminated the legal aid contracts with all his defenders and requested the court to postpone the hearing by one month. According to the prosecutor, the ex-MP’s actions are an attempt to delay the case proceedings. The court did postpone the hearing, but only for a week. Odarchenko returned with a new defense attorney, so the court did not need to appoint a public defender.

What are the potential consequences for the People’s Deputy?

Odarchenko was released from pretrial detention almost immediately after his arrest, with a UAH 15 million bail posted on his behalf. If the court issues a guilty verdict, the elected official — who has already been expelled from the “Servant of the People” party — faces up to 10 years in prison under Article 369, Part 4 of the Criminal Code of Ukraine. However, Mustafa Nayem will not face criminal liability, as he reported the crime before receiving the first tranche of the bribe and contributed to exposing Odarchenko.

On June 18, 2024, a panel of judges — Viktor Nohachevskyi, Vitalii Kryklyvyi, and Markiian Halabala — assigned Odarchenko’s case for substantive consideration. This means that the court will subsequently investigate all the circumstances of the case and review the evidence. Given the limited volume of evidence, the trial is expected to proceed relatively quickly, barring any unforeseen circumstances.

Why were Firtash-affiliated regional gas companies seized?

The SBI is investigating a case of budget losses of almost UAH 1.5 billion in favor of fugitive oligarch Dmytro Firtash. What about the case? 

According to the legislation, gas distribution network (GDN) operators had to pay funds to the state annually if they used public property in their work. But, as the SBI found out, in May-June 2017, the then officials of the Ministry of Energy and Coal Industry, in collusion with regional, city gas companies, concluded contracts with 37 private operators, including 26 owned by Dmytro Firtash, in which they effectively agreed to the free use of public property. In three years, the state thus suffered losses of UAH 1.488 billion. 

The scheme of Firtash & Co., according to the prosecution, consisted in the fact that an official of the Ministry of Energy and Coal Industry signed separate protocols of disagreements with a part of the GDN operators. Under them, such payment for the use of public property by regional gas companies was provided only if these costs were included in the gas tariff structure. That is, the regional gas companies, in order not to fulfill the legal agreement, concluded agreements with the state and changed the whole principle of these deductions in such a way as not to pay anything to the state at all. It is clear that the tariff was not changed then, and therefore the budget was losing money. Of course, this contradicted the Law of Ukraine on the Natural Gas Market and other documents. 

In May 2022, investigating judges of the Pechersk Court seized the shares of the mentioned 26 regional gas companies affiliated with Firtash due to the fact that they were recognized as material evidence in criminal proceedings and became the subject matter of a criminal offense. But no analysis was carried out at that time to determine whether the investigator recognized such actions as material evidence.  

Then, unfortunately, the court confined itself to general phrases, which led to the HACC decision to lift the arrest on June 25, 2024. The Kyiv Court of Appeal, which reviewed the decisions of the Pechersk Court on this arrest, did not correct the mistakes either. We assume that this happened because making the concept of “material evidence” flexible is a common practice in the work of the Pechersk court, and the case is high-profile, so the decision to arrest must have helped to score reputation-related points for the pre-trial investigation body and greater publicity to the case itself.

What the HACC decided 

Such shortcomings in the work of the prosecutor and the court did not go unnoticed. Therefore, the shareholders of 14 foreign and Ukrainian companies associated with Dmytro Firtash appealed to the Anti-Corruption Court with a motion to lift the arrest, as it had been imposed illegally. The investigating judge of the HACC analyzed the actual circumstances of the investigated criminal offense and indicated that the shares could not be material evidence in it.  

The fact is that a certain object can be material evidence when it:

• was an instrument of a criminal offense;
• has retained the traces of a criminal offense;
• contains other information that can be used as evidence of the fact or circumstances established during criminal proceedings.

Thus, in the case of the Firtash’s regional gas companies, it was not established from the materials of the criminal proceedings that the arrested shares somehow met the specified criteria, and the prosecutor in court did not prove it either. Moreover, the fact that ordinary non-documentary registered shares belong to a certain person can be confirmed without their seizure. 

Therefore, the judge found the prosecutor’s arguments that the crime was committed due to the management of regional gas companies by the shareholders, including the issue of their influence on the signing of the protocols of disagreements, to be invalid. 

After all, 1) the alleged unlawful actions of the shareholders are not the subject matter of this criminal proceeding, 2) the prosecutor did not provide any evidence of the influence of the shareholders on the officials of the regional gas companies regarding the conclusion of protocols of disagreements both at the time of the seizure of property in 2022 and at the time of consideration of these motions. 

Therefore, according to the investigating judge of the HACC, the seizure was unreasonable because the seized objects were not and could not be material evidence in the criminal proceeding.

Why was this case considered by the Anti-Corruption Court?

Everyone was surprised why the HACC heard the case under the SBI’s investigation. But the investigating judge explained in a separate ruling that, based on jurisdiction, judicial control in criminal proceedings should be carried out by the investigating judges of this court.  

All because the case is being investigated due to the alleged commission of a criminal offense under Art. 364 of the Criminal Code of Ukraine (abuse of office), and the amount of damage caused to the state represented by the Ministry of Energy and Coal Industry of Ukraine is UAH 1,488,645,641.22. In addition, officials of the Ministry of Energy and Coal Industry were probably involved in its commission, which is the reason for this case to be heard by the High Anti-Corruption Court.  

This also indicates that it should have been the NABU rather than the SBI investigating the case. The likely consequence of such a “mistake” is that all the evidence collected by the SBI may be declared inadmissible.

What is the problem?

The main issue is the quality of investigators’ work in high-profile cases. Everyone remembers how the SBI and some other law enforcement agencies like to conduct high-profile searches with many photos, but there are no results in the form of indictments or court verdicts. 

In this case too, it was important to seize the shares of the regional gas companies affiliated with Firtash and transfer them to the ARMA, whereas the confiscation of assets is an unattainable task for them. Let me remind you of the notorious fate of the Odesa oil refinery, which at one time was very loudly “confiscated” during the time of Lutsenko’s office as the Prosecutor General. 

Therefore, it is necessary to improve the quality of the investigation and put more effort into the collection of evidence, so that the decisions of the investigating judges are justified and can withstand verification by international courts. When it comes to such “hardened” figures as Dmytro Firtash, even more attention should be paid to the quality of the investigation. 

In addition, in one of the materials, we mentioned that the transfer of only material evidence to the ARMA forces investigators and courts to make the definition of material evidence excessively “flexible” and transfer to the ARMA what is not actually material evidence. 

In this case, the prosecutor said in the HACC hearing that the shares in the regional gas companies could be subject to special forfeiture, but again, he did not prove this at the stage of seizure.  

Therefore, I wonder if the investigators of the State Bureau of Investigation and the Pechersk Court corrected their mistakes when seizing it anew. Because we will again end up reading the news about the high-profile lifting of the arrest by the investigating judges of the HACC at the motions of the owners of the shares in regional gas companies. This may lead to the fact that it will be impossible to apply special forfeiture altogether.

How did it start?

In 2016, the National Commission for State Regulation of Energy and Public Utilities (NCREPU) paid attention to a gas procurement transaction for Novoyavorivska and Novorozdilska CHPPs in Lviv oblast. The NCREPU decided to conduct an unscheduled inspection of the activities of these CHPPs. It turned out that the energy companies that managed the CHPPs used the gas at preferential prices purchased from Naftogaz for other purposes.

The prosecution argued that when purchasing gas for CHPs, these energy companies made it seem as though the raw materials were needed to produce heat for the population of Novoyavorivsk and Novyi Rozdil. To reduce prices for the population, Naftogaz sold gas at preferential prices—sometimes three times cheaper than for other consumers. However, the companies used gas to sell the generated electricity to SE Energorynok, and not to produce heat for the population.

As a result, the profitability of CHPP electricity production exceeded 60% (against 3–5% included in the tariff of the NCREPU).

Gas dealings in details

The investigation began back in December 2016, almost immediately after conducting unscheduled inspections at the CHPPs. According to NABU detectives, gas was stolen at CHPPs during two periods: 2013–2015 and 2016–2017.

The key defendant in the case is one of the brothers, former MP Yaroslav Dubnevych. It was Yaroslav and Bohdan Dubnevych who at the time were the ultimate owners of the enterprises that managed the CHPPs—Energia LLC, Energia-Novyi Rozdil LLC, and Energia-Novoyavorivsk LLC SPE. In 2019–2020, they re-registered the companies to their sons. By the way, another company owned by them appears in the case of illegal sand mining for UAH 21 million.  

Novoyavorivska CHPP. Photo: The Fourth Estate

In 2013–2015, these enterprises concluded a number of contracts for the purchase of natural gas from NJSC Naftogaz to produce thermal energy for the population. The volume of gas supply during these years amounted to more than 300 million cubic meters, worth more than UAH 1.4 billion.

During the second episode in 2016–2017, agreements were concluded with NJSC Naftogaz for more than UAH 700 million to purchase more than 150 million cubic meters of gas to supply heat to cities of the Lviv region.

Instead, the CHPPs generated electricity and sold it to SE Energorynok. As a result of such frauds, Naftogaz suffered a total of about UAH 2.1 billion in losses, and the CHPPs controlled by the Dubnevych brothers, on the contrary, got extremely high profits.

Who is involved, except Dubnevych

According to the prosecution, the management of these companies under the leadership of Yaroslav Dubnevych entered into a criminal conspiracy. The circle of the accused includes:

• Ihor Kuchma, ex-director of Energia LLC,
• Ihor Artymko, head of Energia-Novyi Rozdil LLC,
• his deputy Ihor Ilkiv,
• Oleh Pavlyshyn, Chief Financial Officer of Energia-Novyi Rozdil,
• Oleksandr Oleksiuk, ex-director of Energia-Novoyavorivsk LLC SPE.  

Five defendants in the case were served with suspicion notices regarding the first episode back in 2018, and in 2020 regarding the second one.

Yaroslav Dubnevych was served with a suspicion notice only on October 10, 2023, becoming the sixth defendant. He never appeared to the NABU, so on October 17, he was put on the wanted list, and on November 13, he was arrested in absentia by the High Anti-Corruption Court. Meanwhile, Bohdan Dubnevych does not appear in the case at all; he was not even served with a suspicion notice.

Yaroslav Dubnevych. Photo: Oleg Fedonyuk / Facebook

Officials of the companies and Dubnevych are charged with gas embezzlement amounting to more than UAH 2.1 billion and the legalization of illegally obtained profits from the sale of electricity. According to the prosecution, Yaroslav Dubnevych managed to launder more than UAH 450 million. First, he withdrew these funds offshore, and then the money was transferred back to Ukraine under the guise of foreign investment in green energy.

Interestingly, in October 2018, Nazar Kholodnytskyi, the former SAPO head, claimed that the Dubnevych brothers were not involved in gas fraud at a CHPPs in the Lviv region.

Why are the proceedings so lengthy?

Three years passed between the NCREPU’s inspections and the indictment in court, and the trial has been going on for five years. We at TI Ukraine followed this case from the very beginning when the suspicion notices were served. We remember the frequent non-appearances of the defendants, the refusal to consolidate the episodes, and even the closure of the proceedings due to the “Lozovyi’s amendments.”

The NABU considers the case to be one of the most complex in the field of economics since, in the framework of the pre-trial investigation, it was necessary to appeal to nine countries, including Switzerland, the USA, Cyprus, Latvia, Slovakia, Canada, and the Marshall Islands.

There were still several attempts to take the case away from the HACC, but the Appeals Chamber refused to do so. After the third review of the jurisdiction on the initiative of the judges themselves, the HACC AC concluded that all these attempts boiled down to disagreement with previous refusals. When, in August 2022, the first episode of the case was closed and re-opened, the progress made was lost because the case had to be heard once more.

Consolidating two episodes into one did not speed up the consideration of the case, which was transferred to the HACC in January 2023. Currently, the proceedings have been at the stage of preparatory trial for more than a year, and since 2016, law enforcement officers have collected 300 volumes of materials that the court must examine before delivering a verdict.

What is happening with the CHPPs now?

The Dubnevych brothers’ companies, Novorozdilska CHPP and Novoyavorivska CHPP, worth UAH 800 million, are still under arrest. EUR 2.3 million belonging to associates of former MP Yaroslav Dubnevych were seized.

In June 2018, the SAPO requested to transfer both CHPPs to the management of the ARMA. The investigating judge of the Solomianskyi District Court of Kyiv agreed, and in 4 months, the Agency found a temporary manager, Garant Energo M.

However, after that, Garant Energo M faced sabotage on the part of the CHPP owners: the staff refused to work, the owners dismantled the equipment, destroyed the technical documentation, and constantly tried to regain control over the assets through the court.

Novorozdilska CHPP. Photo: Slovo i Dilo

In September 2019, the asset management agreement with Garant Energo M expired, and a new competition was announced. The tender committee decided not to change the old manager for energy generation and choose a new one for energy distribution (Alternative-T-XXI LLC). To continue managing the CHPPs, Garant Energo M had to fulfill a number of conditions, in particular, to report on preparations for the start of the heating season as well as to pay off wage arrears. However, it failed: the company owed Naftogaz and did not pay off the wage arrears.

Finally, two CHPPs were transferred to the management of Naftogaz Teplo LLC without a competition, allegedly, precisely because of wage arrears. Recently, for the same reason, the arrest was lifted from the funds of Energia-Novyi Rozdil LLC.  

It was this case that became one of the drivers for the introduction of the procedure of “exceptional” management of seized assets, which is defined in Article 21-1 of the Law on the ARMA. This allowed the government to transfer seized critical infrastructure, such as CHPPs, to management to avoid problems with their operation.

What’s next?

The case should soon move to the merits phase. TI Ukraine believes that a fair and impartial hearing of this case is crucial. After all, we are talking about the impact on the welfare of residents of Ukrainian cities, and the case involves a former MP with multimillion-worth intricate schemes.

We shouldn’t expect the verdict soon, since the case materials already include over 300 volumes, unless individual defendants conclude a plea agreement with prosecutors and the HACC approves it. In the case of a guilty verdict, the defendants in the case are in for serious terms: if all the incriminated crimes are aggregated, the punishment can reach up to 15 years in prison.

Yaroslav Dubnevych is in parallel accused of seizing UAH 93 million of Ukrzaliznytsia. Thus, according to the prosecution, a group of Ukrzaliznytsia officials, together with controlled enterprises, organized open bidding to purchase turnouts. Dubnevych allegedly personally lobbied for the allocation of funds to certain enterprises, which led to overpayments. This case is also still at the stage of a preparatory hearing in the HACC.

The results of the trial in this case promise to be interesting, both in terms of collecting evidence and substantive law. This can have a deterrent effect on those who want to profit from the national tariff policy in the same way.