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. Last Updated: 07/27/2016

Lazarenko Admits to Laundering $9M




The former prime minister of Ukraine, Pavlo Lazarenko, admitted through his lawyer Monday that he laundered $9 million in stolen money through Switzerland, but authorities said they had given up hope of prosecuting him for a much larger sum.


Investigators told the Geneva police court that Lazarenko is believed to have stolen a total of $880 million from Ukraine between 1994 and 1997. The money passed through more than 80 banks, and some $170 million went through Switzerland, they said.


"This hearing is the result of negotiations with the defense to find a way out of a tangled case that seemed to be heading toward a dead end," State Prosecutor Bernard Bertossa told the court.


He asked the court to impose an 18-month suspended prison sentence on Lazarenko, 47, who is being held in San Francisco on suspicion of further money-laundering offenses in the United States. The court will issue its ruling at a later date.


Bertossa said the money that came through Switzerland was divided between 25 banks, and via "a veritable network of front companies."


The two transactions that were the subject of Monday's charge came from commissions paid on the export of manganese through a Ukrainian company.


Bertossa said he had been unable to bring charges relating to other offenses for lack of resources and because the cases were close to the statute of limitations.


But, he said, it was important to "make it clear that Switzerland is not a safe haven for criminal money."


He asked for $8.5 million, frozen in Geneva bank accounts, to be confiscated and returned to Ukraine.


Lazarenko's lawyer, Paul Gully-Hart, told the court that "he is not a corrupt official."


"This case comes from the confusion of public function with private interests, in a country where privatization happened in a disorderly manner and where it seemed normal that a politician should also be a businessman."


Lazarenko was arrested in Basel in December 1998 but was released after paying 4 million Swiss francs (then $3 million) bail.


He was detained in San Francisco in April 1999 after a Swiss judge issued an international arrest warrant for him and asked U.S. authorities to extradite him.


Lazarenko has fought against extradition, claiming he would not get a fair trial in Ukraine.


Earlier this month he pleaded innocent in San Francisco to federal charges that he conspired to launder $114 million he allegedly demanded as the price of doing business in his country.


Lazarenko, named prime minister in 1996 by Ukrainian President Leonid Kuchma, served 13 months before losing a power struggle.