9/2/2014 8:18:00 AM,
MANHATTAN (CN) - Ousted Ukrainian President Viktor Yanukovich and his cronies destroyed a profitable auto and development business in Kiev, the owners say in a $1.5 billion lawsuit in Federal Court. The European Union froze Yanukovich's assets in March.
Mykola and Larysa Ivanenko, husband and wife, claim that Yanukovich seized and destroyed their Luxexpress-II business, an auto importer, and destroyed a hotel project in which (nonparty) Marriott had expressed an interest.
The Ivanenkos claim Yanukovich et al. did this by declaring their property necessary for a railroad bridge, and seizing it without compensation, in a scheme that actually was a way to siphon public money into their own pockets.
The Ivanenkos say they fled Ukraine in fear for their lives on Oct. 17, 2012, and applied for political asylum in the United States.
They sued Yanukovich and 27 other heavy-hitting former Ukrainian officials and businessmen, including Yanukovich's two sons, a former prime minister, defense secretary, minister of internal affairs, and a fistful of prosecutors and members of Parliament.
Yanukovich was prime minister of Ukraine from 2002-2004, and again from 2006-2007. He was president of Ukraine from February 2010 until February this year, when he was ousted after street protests. Yanukovich favored closer relations with Russia and rejected ties with the European Union. With the country on the brink of civil war in February this year, he fled Ukraine, and was removed from office by Parliament the next day.
With Ukraine and Russia on the brink of war today, the timing of the Ivanenkos' Aug. 27 lawsuit will surely raise political questions.
In it, they claim they founded Luxexpress-II in 1993 as an auto importer from the United States, and built it into one of Ukraine's most successful businesses.
From 2004 to 2006, they claim, Yanukovich and his powerful allies in government and business schemed to take control of their land, allegedly for a highway and railroad bridge. Seizure of the land alone cost their company more than $36 million (U.S.) in lost business, the Ivanenkos say. They also claim that the railroad company, whose officers are among the defendants, spent government money meant for the bridge on other things.
In a 5-year project that began in 2007, the Ivanenkos say, they began developing a hotel complex in which "Marriott expressed great interest." But when Marriott officials arrived to look at the site in July 2012, "they were shocked to see that the business and buildings of the company had been totally demolished," according to the complaint.
The building was worth $68.3 million, the Ivanenkos say. They claim that dozens of the defendants cooked up phony reasons for the government to seize their businesses, and that "this scheme to defraud plaintiffs was part of a larger scheme by the defendants to cover up their embezzlement and misuse of public fund(s) in connection with the construction of the road/rail bridge being constructed adjacent to plaintiffs' property."
After falsely being accused of racketeering conspiracy, by the defendant federal prosecutors, the Ivanenkos say, they received death threats and fled with their two children to the United States.
They claim that in March this year they received an "expert evaluation of their property and business losses resulting from defendants' racketeering conspiracy," which pegged their losses at $1.458 billion.
They want that much, plus treble damages, for RICO violations, fraud and abuse of process.
They are represented by Kenneth McCallion with McCallion & Associates.
The 18-page lawsuit includes 198 pages of attachments, many of them business contracts, many of them in Russian or Ukrainian.
In March this year, the European Union froze the assets of Yanukovich and some of his co-defendants, including his sons and former Prime Minister Mykola Azarov and his son. Yanukovich's successors accused him and his team of embezzling $3 billion.
Yanukovich sued the European Court of Justice in July, contesting the sanctions against him and his sons.