throbber
Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 1 of 28
`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 1 of 28
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`A0 440 (Rev. 12.109) Summons in a Civil Action
`
`UNITED STATES DISTRICT CoUR1;lUD§E 33mm
`
`for the
`
`Southern District of New York
`
`YULIA TYMOSHENKO, and JOHN DOES 1 through
`10. on behalf of themselves and all those similany
`
`iltttacttl 279 4
`
`DMYTRO FIRTASH, ROSUKRENERGO AG("RUE")
`and JOHN DOES 1 through 100, et al.
`Defendant
`
`)
`)
`
`SUMMONS IN A CIVIL ACTION
`
`To: (Defendant's name andaddress) DMYTRO FIRTASH. ROSUKRENERGO AG(“RUE") and JOHN DOES 1 through
`100. et al,
`
`A lawsuit has been filed against you.
`
`Within 21 days after service of this summons on you (not counting the day you received it) — or 60 days if you
`are the United States or a United States agency, or an officer or employee of the United States described in Fed. R. Civ.
`P. 12 (a)(2) or (3) — you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of
`the Federal Rules of Civil Procedure. The answer or motion must be served on the plaintiff or plaintiffs attorney,
`whose name and address are: McCALLION 8. ASSOCIATES LLP
`100 Park Ave. 16th floor
`New York, NY 1001?
`
`If you fail to respond, judgment by default will be entered against you for the reliefdemanded in the complaint.
`You also must file your answer or motion with the court.
`
`Date:
`
`04;'26!‘2C|I1 1
`
`

`
`Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 2 of 28
`Case 1:11—cv—O2794—KMW DOCU d 04/26/11 Page 2 of 28
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`UNITED snares DISTRICT COURT
`
`SOUTHERN DISTRICT OF NEW YORK
`
`- QUDGE SULLIVPQE
`
`YULIA TYMOSHENKO, and JOHN DOES 1
`through 10, on behalf of themseives and
`
`allthose sirnifarlysituated,
`
`Plaintiffs,
`
`_\,-5-
`
`'"de’‘ NC’:
`
`1
`
`2 I7 9 %
`
`CIASS ACT1ON COMPLAINT
`
`
`
`DMYTRO FIRTASH, ROSUKRENERGD
`
`AG("RUE") and 3OHN DOES 1 through 100,
`
`et ai,
`
`Defendants.
`
`Plaintiffs Yulia Tymoshenko and John Does No. 1 through 10 (collectively
`
`referred to as “the Plaintiffs"), by their undersigned attorneys, bring this Complaint on
`
`behalf of themselves and all other simiiariy situated in Ukraine who have had their
`
`iundamentai human and political rights violated by defendants and others against the
`
`named defendants and their co-conspirators who have, through various schemes and
`
`concerted efforts, deprived plaintiffs and their fellow citizens of Ukraine of various
`
`fundamentat human and poiiticai rights recognized under international law.
`
`Piaintiffs bring this action pursuant to the Alien Torts Statute FATS”) and the
`
`Yorture Victims Protection Act {"WPA”}, codified as part of the United States Code, 28
`
`U.S.C.§1350, as well as under the Racketeering Influenced and Corrupt Practices Act
`
`

`
`Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 3 of 28
`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 3 of 28
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`(“RICO”), 18 United States Code, § 1964(c), to recover monetary damages and other
`
`relief arising out of the defendants’ concerted efforts to defraud the Ukrainian people of
`
`their valuable natural resources, as well as their poiiticai and human rights.
`
`PARTIES
`
`Plaintiffs
`
`1.
`
`Plaintiff, YULIA TYMOSHENKO, the Ukrainian Prime Minister for the
`
`period from 2007 to 2010, has been subjected by the defendants to politically-
`
`motivated investigations and prosecutions by the administration of the current
`
`Ukrainian government , which is led by President Victor Yanukovych ("the Yanukovych
`
`administration”), as part of a concerted attempt to discredit her, deny her basic political
`
`and human rights, and to intimidate her associates and opposition-party members from
`
`exercising their fundamental politicai and human rights.
`
`2.
`
`Plaintiffs JOHN DOES ii 1 through 10 are former members of the previous
`
`executive administration of Ukraine during the time period when Plaintiff Tymoshenko
`
`served as Prime Minister. They have all been subjected to po|itica||y—motivated
`
`investigations and selective prosecutions by the current Ukrainian administration under
`
`the leadership of President Victor Yanukovych. The reason why their names are not
`
`specifically listed as plaintiffs in this matter is that, in some cases, they are incarcerated
`
`under conditions that severely restrict their ability to communicate freely, and both
`
`those who are incarcerated and those that are not, but are under intense investigation,
`
`

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`would likely be subjected to further intimidation and persecution if their names were
`
`listed as plaintiffs in this action.
`
`The Defendants
`
`3.
`
`Defendant DMYTRO FIRTASH ("Firtash”) owns 45% of RUE, and a partner
`
`owns 5%. The other 50% of RUE is owned by Gazpron, the Russian natural gas
`
`monopoly. Firtash has admitted that he got his start in the gas trading business with the
`
`assistance of Semion Mogilevich, the Russian organized crime boss. Firtash is also a
`
`close associate and advisor to the current Ukrainian President, Victor Yanukovych.
`
`4.
`
`Defendant RosUkrEnergo AG (“RUE”) is headquartered in the Swiss
`
`canton of Zug. Firtash controls his shares in RUE through a company called Centragas
`
`Holding, which has offices in Vienna, Austria and is affiliated with the DF Group, which
`
`is also located in Austria.
`
`5.
`
`Defendants JOHN DOES it 1 through 100 are other individuals and
`
`companies, some of whose identities are presently unknown, who conspired with
`
`and/or aided and abetted the named defendants as part of a conspiracy and
`
`racketeering enterprise designed to deprive plaintiffs and other class members of
`
`fundamental political and human rights, and to divert natural gas and other natural
`
`resources of Ukrainian natural resources of Ukraine for the benefit of themselves and
`
`others associated with their racketeering enterprise.
`
`

`
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`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 5 of 28
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`RI
`
`ICTION
`
`6.
`
`This Court has subject matterjurisdiction over this matter pursuant to
`
`the Alien Tort Statute and the Torture Victims Protection Act, 28 U.S.C. §1350 with
`
`regard to the Plaintiffs, who are Ukrainian citizens living in Ukraine and elsewhere, as
`
`well as non—Ukrainian citizen who have been victimized and suffered damages as a
`
`result of the defendants’ racketeering enterprise, in that the claims of the plaintiffs
`
`involve violations of international law, including the deprivation of fundamental political
`
`and human rights, as well as the systematic diversion of natural gas and other valuable
`
`natural resources of Ukraine for the benefit of the defendants and their associates.
`
`7.
`
`This Court also has jurisdiction over this matter pursuant to the
`
`Racketeering Influenced and Corrupt Practices Act ("RICO"), 18 U.S.C. Section 1961 et
`
`seq. in that the defendants conducted their multiple acts of fraud and racketeering
`
`through a racketeering enterprise that had a continuity of structure and purpose over
`
`an extended period of time.
`
`8.
`
`This Court has subject matter jurisdiction over this matter with regards to
`
`members of the Plaintiff class who may be United States Citizens, pursuant to the
`
`Torture Victims Protection Act, Pub. L. No. 102-256, § 2(a), 106 Stat. at 73, 28
`
`U.S.C.§1350, and pursuant to23 USC §1331 that the claims of the plaintiffs and other
`
`class members involve federal questions and international law questions which are
`
`incorporated into federal common law-
`
`

`
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`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 6 of 28
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`FACTUAI. BACKGROQN D
`
`9.
`
`For many years, RUE bought cheap gas from Russia and Turkmenistan
`
`and had Gasprom deliver it to the Ukrainian border, where most of the natural gas was
`
`sold at a favorable price to the state-owned Ukrainian company, Naftogaz, and the rest
`
`to European customers at global market prices. The rest of Ukraine's demand for gas
`
`was supplied by Gazprom from Russian sources, also using RUE as the intennediary.
`
`10.
`
`In early 2009, defendants Firtash and RUE owed Gazprom, the Russian
`
`gas monopoly, $1.7 billion for gas that Gazprom had already delivered but which Firtash
`
`and RUE were storing in Ukraine, with the intention of exporting it to Poland and
`
`Rumania.
`
`11.
`
`On January 19, 2009, following negotiations in Moscow, plaintiff
`
`Tymoshenko, who was then the Ukrainian Prime Minister, and Prime Minister Putin of
`
`Russia reached an agreement that eliminated RUE as the middleman in the natural gas
`
`transactions between Russia and Ukraine. It was agreed that Gazprom would transfer
`
`RUE’s debts to Naftogaz, which would then pay Russia the $1.7 million that was owed by
`
`RUE and Firtash. In return, Naftogaz would receive access to the 11 billion cubic meters
`
`of gas that Firtash and RUE was storing in Ukrainian government storage tanks. Under
`
`the agreement, the governments of Russia and Ukraine would conduct their gas
`
`dealings directly with each other in the future.
`
`

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`12.
`
`Pursuant to the January 19"‘ agreement, Naftogaz paid Gazprom $1.7
`
`million for 11 billion cubic meters of gas and complied with all other provisions of the
`
`agreement.
`
`13.
`
`Naftogaz Deputy Chairman Ihor Didenko signed the agreement on behalf
`
`of Ukraine at the express instructions of then-Prime MinisterTymoshenko. However,
`
`while he was in Moscow and about to sign the agreement, he received threatening
`
`phone calls from Kiev warning him that he would "do time” if he signed the agreement.
`
`14.
`
`The January 19, 2009 agreement, which basically eliminated RUE as a
`
`costly middleman in the natural gas transactions between the two countries, was
`
`celebrated by the Western European countries who were the major recipients and users
`
`of the natural gas. Even the U.S. Embassy, which had described Firtash as a
`
`"questionable character” in cables to Washington, expressed the view that the
`
`elimination of RUE could introduce "transparency and accountability” into the gas trade.
`
`15.
`
`Firtash was understandably outraged by the January 19"‘ agreement,
`
`which basically eliminated one of the most lucrative aspects of RUE’s business. He
`
`complained to the U.S. Ambassador to Kiev that the agreement was “criminal” and that
`
`if anyone other than Tymoshenko had made the agreement, "he would have already
`
`been hanging from the street lights." One Firtash aliy, Yury Boyko, energy minister in the
`
`opposition’s shadow cabinet and a former member of the coordinating council of RUE,
`
`called the agreement a "betrayal of national interests."
`
`

`
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`16.
`
`Firtash and his associates filed an arbitration claim with the Arbitration
`
`institute of the Stockholm Chamber of Commerce. Firtash claimed the agreement
`
`between Russian and Ukraine was illegal. However, the Ukraine Government, appearing
`
`confident that it would win the arbitration, arguing that Naftogaz, not RUE, had actually
`
`paid for the gas, so there was no monetary consideration for RUE’s claim to the
`
`ownership of the gas.
`
`17.
`
`While the arbitration proceedings in Stockholm were still ongoing, the
`
`Ukraine government changed hands. In February 2010, Tymoshenko's rival, Victor
`
`Yanukovych, became president. Since Firtash was one of the key fina nciai backers of the
`
`new president, he was immediately included in Yanukovych's inner circle.
`
`18.
`
`Many of Firtash’s associates were appointed to government posts in the
`
`new Yanukovych administration. Two of his close friends and associates, Yury Boyko and
`
`Serhiy Lyovochkin, became energy minister and the president's chief of staff,
`
`respectively. In addition, Firtash's confident, Valeriy Khoroshkovsky, owner of the Inter
`
`media empire, in which Firtash owned a purchase option at the time, was named the
`
`chief of the SBU, the Ukrainian state security system and successor to the KGB.
`
`19.
`
`The entire management team of the state-owned Naftogaz were
`
`replaced with managers loyal to Yanukovych, Firtash and the rest of their associates and
`
`inner circle. One of the managers that was removed was Igor Didenko, who had signed
`
`the January 19, 2009 agreement and was the subject of a politically-motivated
`
`investigation that led to his arrest and imprisonment.
`
`

`
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`20.
`
`Since the entire management team at Naftogaz now reported to the
`
`Yanukovych administration, the two parties that were facing each other in the
`
`Stockholm arbitration were now friends and allies. Indeed, there was now really only
`
`one side. Firtash was negotiating in the interest of RUE and himself, while the Ukrainian
`
`government, which was supposed to be on the other side of the table, was represented
`
`by Energy Minister Boyko, who was a longstanding friend and ally of Firtash.
`
`21.
`
`Not surprisingly, once the Ukrainian government changed hands in
`
`February-March of 2010, it also its position in the Stockholm arbitration proceedings
`
`180 degrees, now “admitting” that the gas in dispute had always been owned by RUE.
`
`As the Supreme Court of Ukraine later noted in its November 2010 written opinion on
`
`the matter, “Naftogaz of Ukraine admitted completely that there were no legal reasons
`
`[for it] to acquire [the] disputed quantity of natural gas, thus [admitting] the illegality of
`
`[the] seizure of [the] natural gas from RosUkrEnergo...."
`
`22.
`
`Upon information and belief, Naftogaz’s "change of position” was due to
`
`the fundamental conflict of interests, collusion and corrupt agreement between
`
`defendants Firtash/RUE and the Yanukovych administration.
`
`23.
`
`Since the Ukraine government and Naftogaz had basically defaulted by
`
`withdrawing their opposition to RUE’s claim to ownership of the gas, the Stockholm
`
`Arbitration Tribunal (“the Tribunal”) was left with no alternative to granting RUE’s claim.
`
`In June 2010, the Tribunal ruled that Naftogaz owed its former gas supply intermediary,
`
`RUE, 11 billion cubic meters of natural gas, which RUE claimed was illegally confiscated
`
`

`
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`in January 2009 and which the Yanukovych administration and the new management of
`
`Naftogaz did not contest. In addition, the Tribunal fined Naftogaz 1.1 billion cubic
`
`meters, for a total award of 12.1 billion cubic meters of gas.
`
`24.
`
`The Stockholm arbitration ruling in favor of Firtash’s company (RUE) has
`
`been widely perceived as a means of generating huge sums of cash with which Firtash
`
`and his associates could continue to illegally fund the pervasive system of corruption
`
`that encompasses every level of government, while at the same time suppressing
`
`political dissent through intimidation, racketeering and other violations of fundamental
`
`human and political rights.
`
`25. When RUE moved to affirm the Tribunal award in the Ukrainian courts,
`
`Naftogaz and the current Ukraine administration again essentially defaulted and failed
`
`to provide the courts with any facts or proof that the recognition and enforcement of
`
`the Tribunal award was contrary to the public policy of the state and would result in
`
`untold hardship and suffering to the Ukrainian people. As the Ukrainian Supreme Court
`
`noted in its November 24, 2010 decision, Naftogaz failed to furnish any proof of even
`
`the most basic facts that should not have been in dispute, namely, that the transfer of
`
`the natural gas to RUE "exceeds 50% of the total volume of natural gas extracted in the
`
`country annually from [the] country's own resources, and 50% of [the] annual needs of
`
`natural gas by the population.” Accordingly, since Naftogaz and the administration failed
`
`to provide the courts with any facts or proof that would have provided a basis for the
`
`courts to reject the Tribunal award as contrary to the public policy and welfare of the
`
`

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`country, the Supreme Court of Ukraine was left with no alternative but to recognize and
`
`confirm the Tribunal award.
`
`26.
`
`Another reason why the Ukrainian courts had to confirm the Tribunal
`
`award was that the Yanukovych administration had succeeded in stripping away all
`
`remaining vestiges of an independent judiciary and the Rule of Law. The administration,
`
`in collusion with its allies in the Parliament, including the members affiliated with the
`
`Party of Regions (POR), declared that the 2004 Constitution, which had been established
`
`after the pro-democratic "Orange Revolution” had swept away the corrupt
`
`administration in power, was procedurally “defective,” and should be replaced by the
`
`prior constitution from 1996, which gave much greater power to the President and the
`
`executive branch of government.
`
`27.
`
`The POR, with the full support of the administration, petitioned the
`
`Ukraine Constitutional Court to set aside the 2004 Constitution in favor of the prior one.
`
`While the matter was under consideration of the Constitutional Court, four of the
`
`eighteen judges on the Court resigned on the same day, and two of the four admitted
`
`that they had been pressured to resign. After these four judges were replaced with
`
`more “reliable” judges, the Constitutional Court voted unanimously during the summer
`
`of 2010 to set aside the 2004 Constitution and to replace it with the prior one, giving the
`
`President the power of appointment over the Chief Prosecutor’5 Office and virtually
`
`every other important office and branch of government.
`
`10
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`

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`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 12 of 28
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`28.
`
`In July 2010, under the guise of “Judicial Reform,” the administration also
`
`granted the Supreme Council ofludges certain powers not specifically enumerated or
`
`even mentioned in the constitution, including the power to appoint the head judges of
`
`all the courts, to control the assignment of cases and the allocation of offices,
`
`computers and other resources, and to remove judges within one month's period
`
`without hearing, the right to defend against the charges, or other indicia of due process.
`
`Since the Yanukovych administration has the allegiance of at least 16 of the 20 members
`
`on the Supreme Council of Judges, through the increase powers granted to the Supreme
`
`Council, the administration has virtual complete control over the hiring and firing of
`
`judges, thus precluding the possibility of any independent judiciary.
`
`29.
`
`The administration has also consolidated its control over the judiciary by
`
`establishing new courts, such as the High Special Court, which can hear both civil and
`
`criminal cases, and is headed up by the President’s hand-picked appointee, a former
`
`POR member of the Parliament.
`
`30.
`
`Perhaps the most powerful assault on any residual independence on the
`
`part of the judiciary came when government prosecutors initiated a criminal case
`
`against the younger daughter of the Chairman of the Supreme Court, Vasyl Onopenko,
`
`and arrested 0nopenko’s son-in-law, Yevhen Korniychuk, an attorney and former
`
`Deputy Justice Minister. On December 22, 2010, Korniychuk was summoned to the
`
`Prosecutor's office from the hospital, where his wife had just delivered their newborn
`
`child. At the time of Korniychu|<’s pre-trial detention and arrest in December, 2010,
`
`11
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`

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`Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 13 of 28
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`Onopenko was the last Ukrainian in a high position of power not politically aligned with
`
`the Yanukovych regime.
`
`31.
`
`Korniychuk was accused of rigging the government procurement process
`
`in 2009 in favor of his old law firm, Magisters, as attorneys for Naftogaz, a charge that
`
`both he and his former law firm vigorously denied. These changes had been previously
`
`reviewed twice by the courts and found to be meritiess. Korniychuk was eventually
`
`released after 55 days in jail, after a clear “message” had been sent to Supreme Court
`
`Judge Onopenko.
`
`32.
`
`At about the same time, after the Prosecutor's office bought an obviously
`
`po|itica||y—motivated criminal case against 0nopenko’s younger daughter, designed to
`
`either intimidate Onopenko and/or force him to resign. Rather than discussing the
`
`matter with the Prosecutor’s office that was investigating and prosecuting the case,
`
`Onopenko decided to go directly to the Prosecutor’s boss, President Yanukovich. The
`
`charges against 0nopenko’s daughter were dismissed the day after Onopenko and
`
`Yanukovich had their meeting.
`
`33.
`
`Another scheme hatched by the current administration to solidify control
`
`over the Supreme Court was to reduce the number of Supreme Court judges from 49 to
`
`20, and to hold what has been referred to as "casting calls" for all of the judges to
`
`determine which ones will stay on the Court and which ones will be dismissed.
`
`34.
`
`The loss of an independent judiciary and resulting transfer of huge
`
`amounts of natural gas from Naftogaz to RUE after the confirmation by the Ukrainian
`
`12
`
`

`
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`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 14 of 28
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`courts of the Tribunal award had a dramatic and immediate impact on the Ukrainian
`
`economy and the social well-being of its citizens.
`
`35.
`
`Although the Tribunal award was technically against Naftogaz, since that
`
`company is state owned, the payments we re made with natural gas that was, in
`
`essence, owned by Ukraine and its citizens. This represented a colossal disaster. Not
`
`only had the gas that was now transferred to RUE already been paid for through a
`
`transfer of $1.7 from Naftogaz to Gasprom, but the Ukrainian economy and its citizens
`
`were now being deprived of a huge amount of the gas that was needed domestically
`
`within Ukraine to heat homes, hospitals, schools and other facilities critical to the well-
`
`being of Ukrainian people. In order to fill this shortfall in supply of gas for domestic
`
`consumption, Naftogaz had to go purchase gas from foreign sources; however, the price
`
`of the 12.1 billion cubic meters of gas had increased dramatically since the pricing at the
`
`time of the original transaction, which averaged out to $1.7 billion, and was now worth
`
`at least $3.5 billion.
`
`36.
`
`in order to understand the enormity of the transaction, it should be
`
`noted that the 12.1 billion cubic meters of gas that Naftogaz transferred to RUE
`
`following the Tribunal award represented approximately 50% of the 25 billion cubic
`
`meters of gas produced in Ukraine annually, and approximately one-sixth of Naftogaz’s
`
`total annual "gas balance” of 75 billion cubic meters, which includes the gas shipped by
`
`pipeline into Ukraine from Russia and Turkmanistan.
`
`37.
`
`Prior to the transfer of the 12.1 billion cubic meters of gas from Naftogaz
`
`to RUE, the gas prices used for domestic consumption within Ukraine each year were
`
`13
`
`

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`Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 15 of 28
`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 15 of 28
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`maintained significantly below the market price of the natural gas that was exported
`
`from Ukraine to Western Europe. These domestic charges were stabilized at below-
`
`market prices in recognition of the inability of individual citizens, pensioners,
`
`homeowners, small businesses, hospitals and schools to pay for gas at any price other
`
`than substantially below the market price.
`
`38.
`
`This all changed when the Yanukovych administration took control in
`
`February and March of 2010. Domestic gas prices were increased by 50%, which most
`
`homeowners, pensioners, hospitals and schools could not afford to pay. As a result, the
`
`gas pressure to homes, hospitals, schools and other facilities was reduced to the point
`
`where the inside temperature of many of these facilities was barely above the freezing
`
`level during the winter of 2010-2011. This not only resulted in widespread pain and
`
`suffering among the Ukrainian populace, but also dramatically added to the already
`
`serious health care crisis in the country, particularly in the public hospitals.
`
`39.
`
`Since Firtash and RUE did not pay either the $1.7 billion original price or
`
`the $3.5 billion that the 12.1 billion cubic meters of gas was worth at the time that it
`
`was recently transferred from Naftogaz to RUE/Firtash, the defendants reaped a
`
`windfail profit of at least 53.5 billion when they sold the gas (for which they had paid
`
`nothing) on the open market.
`
`40.
`
`Upon information and belief, Firtash and his associates have used part of
`
`those funds to purchase at least three petrochemical plants in Ukraine, thus creating a
`
`virtual monopoly on the production of fertilizer in the country, which is critical to the
`
`14
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`

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`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 16 of 28
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`entire agricultural sector of the Ukrainian economy. Moreover, Firtash is well positioned
`
`to acquire a huge portion of the agricultural farm land that the current administration
`
`plans to sell off through privatization plans.
`
`41.
`
`Also, upon information and belief, Firtash has used $600 million of the
`
`huge financial windfall from the Tribunal award to exercise his option to buy a
`
`percentage interest in the Inter media empire from his co-owner and close associate
`
`Valeriy Khoroshkovsky, who is also the chief of the SBU, the Ukrainian state security
`
`system.
`
`42.
`
`The corrupt agreement with the current administration that permitted
`
`Firtash/RUE to make a windfall profit of at least $3.5 billion also has permitted those
`
`defendants to extend their control over the natural gas distribution sector in Ukraine
`
`since, upon information and belief, Firtash and his associates owns and controls
`
`approximately 75% of the regional gas distribution companies in Ukraine, which are
`
`commercial, privately owned companies.
`
`43.
`
`The failure of the current Ukrainian government to mount a credible
`
`opposition during the Stockholm arbitration proceedings, due to fundamental conflicts
`
`of interest, self-dealing, political manipulation and corruption, and the subsequent
`
`rubber-stamping of the Tribunal award by the Ukrainian courts, is but one aspect of the
`
`alarming deterioration of the rule of law in Ukraine. Another major aspect is the
`
`selective and politically motivated investigation and prosecution of virtually every
`
`significant executive in the administration of former Prime Minister Tymoshenko.
`
`15
`
`

`
`Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 17 of 28
`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 17 of 28
`
`Indeed, the situation has become so alarming that a senior official of the European
`
`Union, Stefan Fuele, warned the Ukraine government in January 2011 not to use
`
`criminal law for political ends, a clear reference to the prosecution of Plaintiff
`
`Tymoshenko and other opposition leaders by the Yanukovych administration.
`
`Unfortunately, the protestations and warnings by the EU and international human rights
`
`organizations have fallen on deaf ears.
`
`44.
`
`Since taking power, the Yanukovich administration, aided and abetted by
`
`the defendants and other co-conspirators, have launched a wave of arrests and
`
`investigations aimed at Plaintiff Tymoshenko and her political allies in what most
`
`objective observers consider to be a concerted campaign to intimidate, suppress and
`
`ultimately eliminate any and all political opposition in Ukraine.
`
`45.
`
`In addition to the investigations and prosecutions of Plaintiff
`
`Tymoshenko, Yevhen Kornychuk, and the younger daughter of Chief Justice Vasyl
`
`Onopenko, as described above , YURIY LUTSENKO, the former Interior Minister of
`
`Ukraine, was arrested on criminal charges brought be the Prosecutor's General Office
`
`on November 5, 2010, and remains jailed at the Lukyanivska prison in Kiev on politically
`
`motivated and trumped-up charges of "overpaying" his former official driver and other
`
`alleged "misappropriation" of state funds.
`
`46.
`
`In addition, ANATOLY MAKARENKO, the former Customs Chief of
`
`Ukraine, was jailed in July 2010 and charged on August 30, 2010 on politically
`
`motivated charges, as part of the defendants’ concerted effort to intimidate all political
`
`15
`
`

`
`Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 18 of 28
`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 18 of 28
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`opponents and to suppress political and human rights. Specifically, Mr. Maka renko was
`
`charged with "suspicion of the abuse of official position” relating to the customs
`
`clearance of 11 billion cubic meters of gas, which ownership was challenged by
`
`defendant RosUkrEnergo ("U|(E”) in 2009.
`
`47.
`
`Similarly, IHOR DIDENKO, the former First Deputy Head of the National
`
`Joint Stock Company “Naftogaz of Ukraine” (“ Nafogaz”] and political ally of plaintiff
`
`Tymoshenko, was arrested and jailed on July 9, 2010 by officers of the Ukraine Security
`
`Service (SUB) on false and politically motivated charges as a “person involved in a care
`
`regarding infliction of damages on the State of Ukraine” relating to the claim to 11
`
`billion cubic meters of gas that were submitted by RUE for arbitration in Stockholm. Mr.
`
`Didenko, like Lutscenko and other political prisoners who were targeted for selective
`
`prosecution, was incarcerated at the notorious Lukyanivska prison in Kiev, which was
`
`designed to house 2800 prisoners, but is now overfilled with 4000 men, including other
`
`political prisoners.
`
`48.
`
`TARAS SHEPITKO, the former Deputy Head of the Department of the Kyiv
`
`Regional Customs Office, was arrested on July 21, 2010 and selectively prosecuted on
`
`charges of “misappropriation of property” relating to the transfer of the natural gas
`
`claimed by RUE from Naftogaz.
`
`49.
`
`TETYANA SLYUZ, the former head of the State Treasury of Ukraine, and
`
`TETYANA GRYTSUN, the fonner First Deputy Head of the State Treasury, were also
`
`17
`
`

`
`Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 19 of 28
`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 19 of 28
`
`selectively prosecuted on political-motivated criminal charges allegedly involving his
`
`“abuse of official position.”
`
`50.
`
`On August 5, 2010, criminal proceedings were initiated against BOGTDAN
`
`DANYLYSHYN, the former Minister of the Economy, on charges of abuse of his official
`
`position relating to procurement procedures. He was granted asylum by the Czech
`
`Republic, where he remains.
`
`51.
`
`On August 21, 2010, VALERIY IVASHCHENKO, the former Acting Minister
`
`of Defense, was arrested on charges of "abuse of power of official position."
`
`52.
`
`This systematic suppression of the political opposition in Ukraine by
`
`means of poiiticaliy-motivated investigations and criminal prosecutions, forcing a
`
`number of opposition leaders into exile or imprisonment, violates fundamental human
`
`and political rights recognized by various international conventions and covenants, and
`
`itself could provide the factual basis for a civil action in U.S. courts against the
`
`government and various individuals for violations of international law.
`
`C
`
`A
`
`N ALLEGATIONS
`
`53.
`
`Plaintiffs bring this action as a class action on behalf of a class of all
`
`Ukrainian people that who have had their fundamental political and human rights
`
`violated either through politically-motivated investigations, prosecutions and}or
`
`incarceration, or who suffered damages as a result of the Tribunal award that has
`
`18
`
`

`
`Case 1:11-cv-02794-KMW Document 1 Filed 04/26/11 Page 20 of 28
`Case 1:11—cv—O2794—KMW Document 1 Filed 04/26/11 Page 20 of 28
`
`severely depleted the national treasury and resulting in the looting and theft of valua ble
`
`national resources.
`
`54.
`
`The members of the Class are so numerous that joinder of all members is
`
`impracticable. While the exact number of Class members is unknown to Plaintiffs at this
`
`time and can only be learned through appropriate discovery, Plaintiffs’ claims are typical
`
`of the claims of the members of the Class as all members of each Class are similarly
`
`affected by Defendants’ wrongful conduct in violation of the federal, state and
`
`international law complained of herein.
`
`55.
`
`Plaintiffs will fairly and adequately protect the interests of the members
`
`of the Class and have retained counsel competent and experienced in class action and
`
`complex

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