Friday, November 22, 2019
PrivatBank #Court case filed May 2019
1. IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE JOINT STOCK COMPANY COMMERCIAL BANK PRIVATBANK Plaintiff, v. IGOR VALERYEVICH KOLOMOISKY; GENNADIY BORISOVICH BOGOLYUBOV; MORDECHAI KORF; CHAIM SCHOCHET; URIEL TZVI LABER; CHEMSTAR PRODUCTS LLC; GEORGIAN AMERICAN ALLOYS, INC.; OPTIMA ACQUISITIONS, LLC; STEEL ROLLING HOLDINGS, INC.; OPTIMA GROUP LLC; OPTIMA VENTURES LLC; OPTIMA 55 PUBLIC SQUARE, LLC; OPTIMA ONE CLEVELAND CENTER, LLC; OPTIMA 1375, LLC; OPTIMA 1375 II, LLC; OPTIMA 1300, LLC; OPTIMA 777, LLC; OPTIMA STEMMONS, LLC; OPTIMA 7171, LLC; OPTIMA 500, LLC; OPTIMA 925, LLC; WARREN STEEL HOLDINGS, LLC; OPTIMA INTERNATIONAL OF MIAMI, INC.; FELMAN TRADING, INC.; VERONI ALLOYS, LLC Defendants. C.A. No. __________ VERIFIED COMPLAINT EFiled: May 21 2019 04:57PM EDT Transaction ID 63283684 Case No. 2019-0377-
2. 2 Plaintiff Joint Stock Company Commercial Bank PrivatBank (“PrivatBank”), by and through its undersigned attorneys, brings this action against Defendants Igor Valeryevich Kolomoisky, Gennadiy Borisovich Bogolyubov, Mordechai Korf, Chaim Schochet, Uriel Tzvi Laber, Chemstar Products, LLC, Georgian American Alloys, Inc., Optima Acquisitions, LLC, Steel Rolling Holdings, Inc., Optima Group, LLC, Optima Ventures, LLC, Optima 55 Public Square, LLC, Optima One Cleveland Center, LLC, Optima 1375, LLC, Optima 1375 II, LLC, Optima 1300, LLC, Optima 777, LLC, Optima Stemmons, LLC, Optima 7171, LLC, Optima 500, LLC, Optima 925, LLC, Warren Steel Holdings, LLC, Optima International of Miami, Inc., Felman Trading, Inc., and Veroni Alloys LLC (collectively, “Defendants”) for hundreds of millions of dollars of damages arising in connection with claims for alter ego liability and piercing the corporate veil, for unjust enrichment, for fraudulent transfer under state laws (including Delaware and Ohio), for violations of Ohio’s RICO statute, and for civil conspiracy. NATURE OF ACTION 1. This case arises out of a series of brazen fraudulent schemes orchestrated by Ukrainian oligarchs and Defendants Igor Valeryevich Kolomoisky and Gennadiy Borisovich Bogolyubov (together, the Ultimate Beneficial Owners or the “UBOs”) and their agents in the United States and abroad, to acquire hundreds of millions of dollars-worth of U.S. assets through the laundering and
3. 3 misappropriation of corporate loan proceeds issued by PrivatBank (the “Optima Schemes”). As reported as recently as April 7, 2019, the FBI is investigating Defendant Kolomoisky regarding financial crimes, including money laundering into the United States.1 2. From at least 2006 through December 2016, the UBOs were the majority and controlling stockholders of PrivatBank, one of Ukraine’s largest privately-held commercial banks. During that time period, the UBOs used PrivatBank as their own personal piggy bank—ultimately stealing billions of dollars from PrivatBank and using United States entities to launder hundreds of millions of dollars’ worth of PrivatBank’s misappropriated loan proceeds into the United States to enrich themselves and their co-conspirators. 3. Through the Optima Schemes, the UBOs exploited their positions of power and trust at PrivatBank to cause PrivatBank to issue hundreds of millions of dollars’ worth of illegitimate, inadequately-secured loans to corporate entities also owned and/or controlled by the UBOs and/or their affiliates (the “Optima Scheme Loans”).2 To facilitate and fraudulently conceal the Optima Schemes from 1 See https://www.thedailybeast.com/billionaire-ukrainian-oligarch-ihor- kolomoisky-under-investigation-by-fbi (last accessed April 11, 2019). 2 This action seeks to redress harm from the loans utilized in the Optima Schemes, which funded the acquisition of the US assets as alleged herein. These claims are different from the fraudulent loans which are the subject of other proceedings brought by the Claimant in England (Claim No. BL-2017-000665)(the 4
discovery), the UBOs created and utilized a secretive business unit within PrivatBank’s operations (the “Shadow Bank”) to fund the fraudulent loans and launder those loan proceeds through a sophisticated money laundering process.
4. The stated purpose for each loan involved in the Optima Schemes was typically for financing the activities of the ostensible corporate borrower. The Optima Scheme Loans, however, were sham arrangements and the proceeds were not in fact used for that purpose. Instead, sometimes within minutes of being disbursed, the loan proceeds were cycled through dozens of UBO-controlled or affiliated bank accounts at PrivatBank’s Cyprus branch (“PrivatBank Cyprus”) before being disbursed to one of multiple Delaware limited liability companies or corporations (or other United States-based entities), all of which were also owned and/or controlled by the UBOs. The misappropriated loan proceeds laundered into the United States were ultimately used to acquire and support various United States businesses and commercial real estate in Cleveland, Ohio, Dallas, Texas, and elsewhere—all for the benefit and under the control of the UBOs. 5. While the UBOs pilfered the funds for the Optima Schemes from PrivatBank, they also directly oversaw and controlled the money laundering efforts English Proceedings”). There is accordingly no duplication between the claims advanced in this Complaint and those pursued in the English Proceedings. PrivatBank is pursuing different claims in different jurisdictions in respect of different frauds and losses it has suffered.
Defendant Optima 777, LLC (“Optima 777”) is a limited liability company organized under the laws of Delaware on June 3, 2011 to participate in the Optima Schemes, including to launder money. The UBOs used Optima 777 to acquire an ownership stake in the Crowne Plaza Hotel (now known as the Westin Hotel) in Cleveland, Ohio. 35. Defendant Optima Stemmons, LLC (“Optima Stemmons”) is a limited liability company organized under the laws of Delaware on May 14, 2008 to
18. 18 participate in the Optima Schemes, including to launder money.