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Case 1:11-cv-02794-KMW Document 120 Filed 11/13/14 Page 1 of 64
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`11-CV-2794 (KMW)
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`THIRD AMENDED COMPLAINT
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`UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF NEW YORK
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`YULIA TYMOSHENKO, SCOTT SNIZEK,
`CHRISTY GREGORY RULLIS and JOHN DOES 1
`through 50, on behalf of themselves and all of those
`similarly situated,
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`Plaintiffs,
`
`-v-
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`DMYTRO FIRTASH a/k/a DMITRY FIRTASH,
`SEMYON MOGILEVICH, VIKTOR
`YANUKOVYCH, MYKOLA AZAROV, YURIY
`BOYKO, VIKTOR PSHONKA, RENAT
`KUZMIN,ARTHUR G. COHEN, KAREN COHEN;
`BRAD S. ZACKSON, PAUL J. MANAFORT, CMZ
`VENTURES, LLC, KALLISTA INVESTMENTS
`LLC a/k/a CALISTER INVESTMENTS LLC, THE
`DYNAMIC GROUP a/k/a THE DYNAMIC FUND,
`BARBARA ANN HOLDINGS LLC, VULCAN
`PROPERTIES, INC., GROUP DF, GROUP DF
`LIMITED, GROUP DF FINANCE LIMITED,
`GROUP DF REAL ESTATE, and JOHN DOES 1
`through 100,
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`
`
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`Defendants.
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`INTRODUCTION
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`1.
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`This case concerns the unlawful operations of a Racketeering Enterprise
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`formed by the named defendants and their co-conspirators for the purpose of engaging in
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`an unlawful acts of racketeering within the United States.
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`2.
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`Upon the agreement of defendants Dymtro Firtash and Semyon Mogilevich to
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`provide the initial funding for the formation of defendants’ U.S.-based Racketeering Enterprise,
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`the New York and Washington-based defendants Arthur G. Cohen, his wife, Karen Cohen,
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`Brad S. Zackson and Paul J. Manafort, and their various companies - CMZ Ventures, LLC,
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`Kallista Investments LLC a/k/a Calister Investments LLC, The Dynamic Group a/k/a The
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`Dynamic Fund, Barbara Ann Holdings LLC, and Vulcan Properties, Inc.—all of whom
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`were part of the Racketeering Enterprise, conducted a series and pattern of racketeering acts
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`within the U.S., including the acquisition of various U.S. companies and businesses in
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`furtherance of their Racketeering Enterprise, in violation of the Racketeer Influenced and
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`Corrupt Practices Act (“RICO”), 18 U.S.C. § 1961 et seq.
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`3.
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`The initial funds for the operation of defendants’ Racketeering Enterprise came
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`from the unlawful profits that defendant Dmytro Firtash and others “skimmed” from
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`RosUkrEnergo AG (“RUE”) which, from 2004 to early 2009, served as a middleman in natural
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`gas dealings between Naftogaz, a Ukrainian state-owned gas company, and Gazprom, a Russian
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`company. Firtash, who largely controls RUE, was able to secure profits from various corrupt
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`Russia-Ukraine gas deals due to his close relationship with, and payment of illegal kickbacks to,
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`Ukrainian government officials, including then Naftogaz Chairman Yuriy Boyko and Deputy
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`Chairman Ihor Voronin, both of whom were nominated to RUE’s Coordination Committee after
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`securing RUE’s initial brokerage contract.
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`4.
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`Firtash and the U.S.-based defendants and co-conspirators, which together
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`constitute a domestic U.S. racketeering enterprise, used the proceeds from the Russia-Ukraine
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`gas deals to acquire various U.S.-based companies and entities, which were then incorporated
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`into defendants’ racketeering enterprise and used to generate unlawful proceeds by means of a
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`series of racketeering acts spanning over a period of several years and continuing to the present,
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`including but not limited to the laundering of money through various U.S.-based companies and
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`real estate development entities for the purpose of (a) defrauding innocent third party real estate
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`owners, investors and businesses of their valuable time, money and property through sham real
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`estate development and sales proposals that lured said third parties into thinking that defendants
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`were making legitimate investments into various U.S.-based real estate projects and offering
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`legitimate real estate investment opportunities in Ukraine for U.S.-based investors, when in truth
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`and in fact, defendants never intended to actually close on and complete any of the U.S. and
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`Caribbean-based real estate development projects, and, in the case of the Ukrainian based real
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`estate investment “opportunities” for unsuspecting U.S. investors, offering said “investment
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`opportunities” at grossly inflated prices and thus defrauding those investors who paid defendants
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`money for participation in such sham and grossly overpriced projects; (b) funneling a substantial
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`portion of the money that was laundered through New York bank accounts under the guise of
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`supposedly legitimate real estate development projects back through the labyrinth of Firtash and
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`Group DF companies and bank accounts located in Europe, Cyprus, Panama and elsewhere so
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`that virtually untraceable funds could be generated to pay the Ukrainian defendant prosecutors
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`and others in the Yanukovich Administration to “finance” the continued campaign to destroy,
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`neutralize and silence Tymoshenko and her political opposition allies; and (c) using their New
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`York-based “front” companies to defraud the New York based individual plaintiffs and their co-
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`workers of the compensation and benefits to which they were entitled for the extensive time,
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`money and energy that they devoted to defendants’ real estate development projects that they
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`thought were genuine, but which the defendants were merely using to further their money
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`laundering and other racketeering activities in the U.S. but had no intention of actually bringing
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`said projects to fruition.
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`5.
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`Throughout the relevant time period, former Prime Minister Tymoshenko was a
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`vocal critic of RUE’s gas contracts and the government corruption that enabled RUE to secure
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`these contracts. Early in 2008, for example, during Tymoshenko’s second term as Prime
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`Minister, she revoked the authority of a RUE/Naftogaz joint venture to operate in Ukraine.
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`Thereafter, to end the European “gas crisis” in January 2009, Tymoshenko facilitated the
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`negotiation of gas purchase and transit contracts with Gazprom (hereinafter referred to as
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`Ukraine’s “2009 gas contracts”), which eliminated RUE as a middleman, resulting in a
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`significant loss of revenue to RUE, which was the primary source of the initial funding used by
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`defendants to establish their U.S. based Racketeering Enterprise.
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`6.
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`Although defendants Firtash, and his agents and co-conspirators, attempted to
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`sabotage the 2009 gas contracts during Tymoshenko’s term as Prime Minister, they were
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`unsuccessful in doing so at the time. Following the conclusion of the contracts and Naftogaz’s
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`confiscation of RUE’s gas, Firtash and RUE developed a scheme and strategy to eliminate
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`Tymoshenko and other leaders of the political opposition as a threat to their initial funding of
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`the newly formed and U.S.-based racketeering enterprise they were building.
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`7.
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`When Yanukovych took office as the President of Ukraine in February 2011,
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`several of Firtash’s close allies were appointed to senior posts in the Yanukovych
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`Administration and other positions of influence. For example, Yuriy Boyko, a close associate
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`of Firtash who was instrumental in securing RUE’s brokerage contracts in Ukraine’s earlier
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`Naftogaz-Gazprom gas deals, was appointed Minister for Fuel and Energy. Another close
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`Firtash associate also replaced Naftogaz CEO Ihor Didenko, who has since been arrested for
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`signing the 2009 gas contracts on behalf of Naftogaz.
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`8.
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`In order to recoup the monies that Firtash and his co-conspirators had “lost”
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`when RUE was barred from acting as the broker in the natural gas contracts between Russia
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`and Ukraine, the Yanukovych government essentially conceded RUE and Firtash’s bogus
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`claims and failed to defend Ukrainian citizens’ financial interests in the Stockholm Arbitration
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`brought by RUE and Firtash. As a result of this complete reversal of position in the
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`Arbitration proceedings, Firtash and RUE were awarded 12.1 billion cubic meters of gas, equal
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`in value to $3.5 billion and exceeding half of Ukraine’s domestic reserves at the time.1
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`9.
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`To ensure that the natural gas “commission” monies, which were being used as
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`the initial financing of their U.S.-based Racketeering Enterprise, would never again be cut-off,
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`Firtash, RUE and their co-conspirators targeted for elimination former Prime Minister
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`Tymoshenko and other political opposition leaders who were outspoken critics of RUE’s
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`involvement in the Russia-Ukraine gas trade. These sham investigations and “show trials” were
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`part of a widespread and systematic pattern of terror and intimidation carried out by the
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`defendants and their co-conspirators within the Yanukovych Administration, against leaders of
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`the political opposition who posed a threat to the uninterrupted flow of natural gas contract
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`“commissions” being used to finance the start-up of defendants’ U.S.-based Racketeering
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`Enterprise.
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`A.
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`Plaintiff and Plaintiff Class Members
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`PARTIES
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`10.
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`Plaintiff YULIA TYMOSHENKO brings this civil RICO action individually
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`and on behalf of the entire class of persons who have been damaged by defendants’ acts of
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`racketeering in furtherance of their scheme to establish and fund their U.S.-based Racketeering
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`Enterprise. Tymoshenko was the Prime Minister of Ukraine for a period of time in 2005, and
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`again from 2007 to 2010. She has also served as the leader of the largest opposition party in
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`Ukraine. As part of a concerted attempt to protect the flow of gas contract-related
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`“commissions” used to fund the expansion of defendants’ racketeering enterprise based in the
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`U.S., defendants and their co-conspirators have subjected Tymoshenko to a series of politically
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`1 Because Naftogaz is entirely state-owned, this colossal judgment is ultimately being paid by Ukrainian citizens.
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`motivated investigations and sham prosecutions, designed to neutralize and eliminate her
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`outspoken opposition to defendants’ corrupt practices. In the course of these “show trial”
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`prosecutions, Tymoshenko was unjustly incarcerated on August 5, 2011, and despite the fact
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`that she was gravely ill and in urgent need of medical attention, was incarcerated for an
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`inordinately lengthy period of time, completely without justification.2 Defendants intentionally
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`and knowingly “financed” these unlawful investigations and prosecutions of Tymoshenko
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`through unlawful secret payments to defendants Yanukovich, Azarov, Pshonka, Kuzmin and
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`other members of the Ukrainian Prosecutor’s Office and other officials in the Yanukovich
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`Administration with money that had originated from unlawful European natural gas
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`transactions and other racketeering acts engaged in by the defendants, which monies were then
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`wired through various Firtash-controlled European banks and bank accounts to New York-
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`based banks, and then wired back to European bank accounts the Group DF defendants,
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`including but not limited to defendants Group DF Finance Limited and Group DF Real Estate
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`2 Other political opposition leaders who were also jailed and/or prosecuted for criticizing defendants and their co-
`conspirators for their “skimming” of gas contract monies under the guise of “commissions” are: Yuriy Lutsenko,
`an important ally of Tymoshenko during her second term as Prime Minister, who was jailed for “failing to
`cooperate with the prosecution; Valeriy Ivashchenko, another Plaintiff Class Member and former Acting Minister
`of Defense during Tymoshenko’s premiership, was arrested on August 21, 2010 on politically-motivated charges
`of “abuse of power of official position;” Ihor Didenko, Naftogaz’s former CEO who signed the 2009 gas contracts
`on behalf of Naftogaz, was arrested in July 2010 , Yevhen Korniychuk, the former First Deputy Minister of
`Justice in the Tymoshenko administration, was arrested and jailed on December 22, 2010 on politically-motivated
`charges that courts had twice concluded to be without merit; Anatoly Makarenko, the Customs Chief of Ukraine
`in the Tymoshenko administration; Mykola Petrenko, who was a member of Ukraine’s executive administration
`during Tymoshenko’s term as Prime Minister and Director of UkrMedPostach, the Ukrainian state-run enterprise
`through which Ukraine’s Ministry of Health was attempting to improve the health of Ukraine’s rural population;
`Taras Shepitko, who served as Deputy Head of the Department of the Kyiv Regional Customs Office in the
`Tymoshenko administration; Mykola Synkovsky, former Deputy Head of the State Committee of State Material
`Reserves under Tymoshenko; Mykhailo Pozhyvanoy, former Chairman of the State Committee of State Material
`Reserves and Deputy Economy Minister; Bogtdan Danylyshyn, the former Minister of the Economy under
`Tymoshenko; Viktor Bondar, former Minister for Transport and Communications and Deputy Head of the State
`Customs Service; Vitaliy Nikitin, who served as Acting Head of the State Committee of State Material Reserves
`under the Tymoshenko Government; Tetyana Slyuz, former head of the State Treasury of Ukraine; Tetyana
`Grytsun, former First Deputy Head of the State Treasury; Victor Kolbun, former Deputy Pension Fund Board
`Chairman; and Oleksandr Danyevych, former State Treasury Deputy Chief.
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`through various complex and circuitous transfers so that that sources of the money used to pay-
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`off the Ukrainian prosecutors and other officials could not be traced back to the defendants or
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`their Racketeering Enterprise. But for defendants’ complex and intentional money laundering
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`activities, the defendants would not have been able to generate sufficient untraceable cash to
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`pay off the Ukrainian officials spearheading the persecution and prosecution of Tymoshenko,
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`which was one of the primary objectives of defendants’ money laundering conspiracy. The
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`defendants knew that the funds being laundered represented the proceeds of the various
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`unlawful racketeering acts engaged in by the defendants; that the financial transactions
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`constituting the money laundering were designed in whole or in part to conceal or disguise the
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`nature, the location, the source, the ownership and the control of the proceeds of their
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`racketeering activities; and that the defendants conducted their unlawful money laundering
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`financial transaction with the intent to promote the carrying on of specific unlawful activities,
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`including the financing with untraceable funds of the campaign to neutralize and destroy
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`Tymoshenko and other leaders of the political opposition in Ukraine by means of illegal pay-
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`offs to prosecutors and others in the Yanukovich Administration who orchestrated the sham and
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`politically-motivated investigations and prosecutions of both her and her political allies.
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`Moreover, defendants’ money laundering conspiracy was the proximate cause of
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`Tymoshenko’s damages since it provided the necessary funds to make the unlawful payments
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`to the Ukraine prosecutors and other corrupt administration officials who engineered
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`defendants’ unlawful campaign to deprive Tymoshenko and other opposition political leaders
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`of their human rights recognized under international law, including the right to not be subjected
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`to prolonged arbitrary detention, the right to be provided with adequate medical attention while
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`incarcerated, and the right not to be subjected to systematic abuses of the judicial system
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`through sham, politically-motivated “show trials” and other abuses.
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`11.
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`Plaintiff SCOTT SNIZEK, a U.S. citizen and resident of New York, also
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`brings this action individually and on behalf of others similarly situated who were damaged by
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`defendants’ Racketeering Enterprise. Mr. Snizek worked with the U.S.-based defendants from
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`their offices at 1501 Broadway in Manhattan. He, like many others, was duped and deceived by
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`the defendants, through the use of false representations made –at least in part-- in mailings and
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`through the use of interstate and international wires, into believing that defendants were
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`engaged in legitimate business ventures in New York and elsewhere in the U.S., when in truth
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`and in fact, defendants operated their various U.S.-based companies as part of their
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`Racketeering Enterprise for various unlawful purposes, including violations of the U.S. and
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`New York State Labor Laws requiring employers to properly compensate their employees and
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`to keep accurate records of the payment of salaries, commissions and other compensation.
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`Instead, defendants disguised certain payments to Snizek as “reimbursement of expenses,” and
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`completely failed to pay him for most of the services that he rendered. These unlawful practices
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`are currently being investigated by the U.S. and New York State Departments of Labor.
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`12. Plaintiff CHRISTY GREGORY RULLIS, a U.S. citizen, brings this action
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`individually and on behalf of other persons who were damaged by defendants’ racketeering acts
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`in the U.S. Ms. Rullis worked for defendants’ New York based operations at 1501 Broadway,
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`New York, New York, and suffered monetary damages when defendants deceived her through -
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`--at least in part – the use of the mails and interstate/international wire facilities -- and failed to
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`pay her for her services and deceived her into thinking that the defendant companies she was
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`working for were legitimate business enterprises, when in truth and in fact, they were part of
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`defendants’ Racketeering Enterprise engaged in a carefully and secretly planned pattern of
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`racketeering activity.
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`13.
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`Plaintiffs JOHN DOES # 1 through 50 are various individuals, companies
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`and businesses in the United States, including real estate owners and developers, architects
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`and other professionals, some of whom are identified herein, who have been damaged as a
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`result of the acts of racketeering engaged in by defendants and other participants in the
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`Racketeering Enterprise. These plaintiffs, who were the targets and intended victims of
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`defendants’ scheme to defraud investors and/or real estate owners, include U.S. investors who
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`were targeted as the intended victims of defendants’ fraudulent scheme to market Ukrainian
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`property at grossly inflated prices, and real estate owners and businesses in the U.S. to whom
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`defendants falsely represented that they intended to purchase and/or develop their properties,
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`such as the Drake Hotel and St. Johns Terminal sites in Manhattan, and then deprived these
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`owners/businesses of their money and property by, among other things, precipitously
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`withdrawing from these projects at the last minute after defendants had finished laundering
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`funds through the project and siphoning off their victims funds and other property invested in
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`these projects.
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`B.
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`Defendants and their Co-Conspirators
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`14. Defendant DMYTRO FIRTASH a/k/a Dmitry Firtash (“Firtash”) is a
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`Ukrainian billionaire and a close associate and advisor to the former Ukrainian President,
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`defendant Victor Yanukovych. Firtash is one of the principal co-conspirators of defendants’
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`Racketeering Enterprise, exercising complete dominion and control over at least six of the
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`following defendant companies, including a number of American companies, which he
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`acquired and financed with illegally-obtained funds: Centragas Holding AG (“Centragas”);
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`defendant CMZ Ventures, LLC; the Dynamic Fund a/k/a The Dynamic Group; Kallista
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`Investments LLC a/k/a/ Calister Investments LLC, Group DF Limited (a/k/a Group of Dmitry
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`Firtash), and its subsidiaries and affiliates Group DF Finance Limited and Group DF Real
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`Estate.
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`15.
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`Defendants GROUP DF LIMITED (otherwise known as Group of Dmitry
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`Firtash), and its subsidiaries and affiliates GROUP DF FINANCE LIMITED and GROUP
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`DF REAL ESTATE (collectively, “GROUP DF”) operate as Firtash’s alter egos. Group DF
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`is Firtash’s international private holding company and identifies itself on its website as “The
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`Firtash Group of Companies” and “the international private holding company of prominent
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`Ukrainian businessman Dmitry Firtash.” See Exhibit 1. Firtash and his silent partner,
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`defendant Semyon Mogilevich, own a controlling interest in Group DF, with Firtash serving as
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`Group DF’s executive chairman. Firtash has total control and dominion over Group DF, which
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`he has used to (a) purchase and control interests in several U.S.-based companies comprising a
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`significant part of defendants’ Racketeering Enterprise, and (b) launder money obtained through
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`illegal natural gas transactions in Ukraine and elsewhere in Europe through Group DF controlled
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`bank accounts in Europe and elsewhere by transferring said funds to New York based bank
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`accounts of the various New York-based defendant companies, and then transferring a
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`substantial portion of these laundered funds back through Group DF controlled bank accounts in
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`Europe, Cyprus, UAE, Panama and elsewhere for the making of illegal pay-offs to Ukraine
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`prosecutors and other members of the corrupt Yanukovich regime for the purpose of financing
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`the unlawful campaign to neutralize, incarcerate and silence plaintiff Tymoshenko and other
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`members of the political opposition in Ukraine. Such money laundering activities continued
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`unabated up to and including the recent fall of the Yanukovich Administration following the pro-
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`democracy political demonstrations and election of a new government in Ukraine.
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`16.
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`Defendant SEMYON MOGILEVICH, a leader of the most powerful Russian
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`organized crime syndicate, is on the FBI’s “Most Wanted” list and has been described as “the
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`most dangerous mobster in the world.” See Exhibit 2. Mogilevich was the subject of a 45-
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`count racketeering and money laundering indictment in the United States District Court for the
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`Eastern District of Pennsylvania, captioned United States v. Mogilevich, Crim. No. 02-157, in
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`which the U.S. Government alleges Mogilevich organized a sophisticated stock fraud and money
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`laundering scheme in the U.S., using complicated financial transactions made through shell
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`companies located in Europe. See Exhibit 3. Defendant Firtash has admitted that he got his
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`start in the gas trading business with Mogilevich’s assistance. See U.S. Embassy Cables: “Gas
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`Supplies Linked to Russian Mafia.” The Guardian (Dec. 1, 2010), Exhibit 4.
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`17.
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`Defendant VIKTOR YANUKOVYCH is the former President of Ukraine, who
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`recently fled Ukraine after the pro-democracy demonstrations in Kyiv, Ukraine forced both
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`him and other members of his corrupt administration out of office.
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`18.
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`Defendant MYKOLA AZAROV is the former Prime Minister of Ukraine.
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`19.
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`Defendant YURIY BOYKO, a close affiliate of defendant Firtash and the
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`Group DF defendants, is the former Minister of Energy in the Yanukovich Administration and
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`former Chairman of Naftogaz, the natural gas company used by Firtash and the other
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`defendants to obtain huge sums through unlawful natural gas transactions, which they then
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`funneled into the U.S., where it was money laundered through a series of complex financial
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`transactions, and then a substantial portion was the moved back to Ukraine for the purpose of
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`financing the sham politically-motivated prosecutions of plaintiff Tymoshenko and her
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`political allies.
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`20.
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`Defendant VIKTOR PSHONKA is the former Prosecutor General of Ukraine,
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`who orchestrated the sham investigations, incarceration and prosecutions of plaintiff
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`Tymoshenko and many of her political opposition allies. Both he and other members of the
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`Yanukovich Administration received illegal payments from Group DF and other defendants
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`and their co-conspirators as unlawful compensation and “pay-offs” for their relentless and
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`totally unlawful campaign to neutralize, incarcerate and silence Tymoshenko and other
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`opposition political leaders.
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`21.
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`Defendant RENAT KUZMIN in the former Deputy Prosecutor General of
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`Ukraine.
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`22.
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`Defendants CMZ VENTURES, LLC, the DYNAMIC FUND a/k/a The
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`Dynamic Group, and KALLISTA INVESTMENTS LLC a/k/a/ Calister Investments LLC
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`operate out of shared offices at 1501 Broadway, 25
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`th
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`floor, New York, New York 10036. CMZ
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`Ventures and Kallista Investments were incorporated in Delaware and do business in New York.
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`The Dynamic Fund is an international investment fund established by Group DF and Firtash,
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`through CMZ Ventures and Kallista Investments. Although the three companies have different
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`names, they have no meaningful corporate structure, but rather are corporate “fronts” for the
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`racketeering activities engaged in by Firtash and the other defendants in New York and
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`elsewhere in the U.S. Among other things, these corporate defendants act as investment vehicles
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`for Firtash and his co-conspirators to intentionally channel their illegal proceeds from the
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`Naftogaz-Gazprom gas contracts into the U.S. to fund the start-up and continued operations of
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`their racketeering activities in New York and elsewhere in the U.S, and for the further purpose
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`of funneling a substantial portion of the money from these New York corporate accounts back
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`into Ukraine through various Group DF-controlled bank accounts in Europe, Panama, Cyprus
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`and elsewhere for the purpose of making illegal payments to the Ukrainian defendants,
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`including defendants Yanukovich, Azarov, Pshonka, Kuzmin and other Ukrainian prosecutors
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`and officials of the Yanukovich Administration who were orchestrating and participating in the
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`unlawful campaign to investigate, incarcerate and prosecute Tymoshenko and her political
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`opposition allies on trumped-up sham criminal charges. CMZ Ventures has an account at the
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`Metropolitan National Bank in New York (Acct. No. 2000506) that it uses for various money
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`laundering and other racketeering purposes.
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`23.
`
`CMZ Ventures “Preliminary Term Sheet” lists as joint owners the following
`
`three corporations: (1) Defendant BARBARA ANN HOLDINGS, LLC, a corporation
`
`registered in Delaware and 90% owned by Defendant BRAD S. ZACKSON; (2) Defendant
`
`VULCAN PROPERTIES, INC., a corporation run and controlled by Defendant ARTHUR G.
`
`COHEN, although wholly owned by his wife, Defendant KAREN COHEN; and (3) a
`
`corporation described in the formation papers as “XXX LLC”, controlled by defendant PAUL
`
`MANAFORT. See Exhibit 5. Each of these corporations and their owners acted as agents for
`
`Firtash and other participants in the Racketeering Enterprise by covertly investing their money
`
`through CMZ Ventures, Kallista Investments, and the Dynamic Fund for the specific purpose of
`
`carrying out the Enterprise’s racketeering activities, including acquisition of legitimate
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`businesses into their unlawful racketeering enterprise, and the laundering of money through
`
`these New York-based companies of monies initially obtained by defendant Group DF through
`
`unlawful natural gas transactions in Europe and elsewhere, and then, after the monies had been
`
`laundered through the various corporate New York based bank accounts, funneling a substantial
`
`portion of the monies back to Ukraine through Group DF bank accounts in Europe, Cyprus,
`
`Panama and elsewhere for the purpose of financing the payment to defendants Yanukovich,
`
`Azarov, corrupt Ukraine prosecutors such as Pshonka and Kuzmin, and others in the
`
`Yanukovich Administration who were leading the unlawful persecution and prosecution of
`
`
`
`13
`
`

`
`
`
`Case 1:11-cv-02794-KMW Document 120 Filed 11/13/14 Page 14 of 64
`
`
`Tymoshenko and her political opposition allies.
`
`24.
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`Defendant PAUL J. MANAFORT is a well-known Washington D.C. lobbyist
`
`and political consultant. He is the senior partner in the firm Davis, Manafort and Freedman.
`
`Manafort also worked in Ukraine on various political campaigns, including the successful
`
`2010 presidential campaign of Victor Yanukovich, the former President of Ukraine. Manafort
`
`played a key role in the defendants’ conspiracy and racketeering enterprise by assisting Firtash
`
`to become a major “investor” and silent partner in defendants CMZ Ventures (sometimes
`
`referred to as “ZMC Investors”), Group DF and their affiliated companies, through which
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`Firtash and his associates were able to money launder and invest in various U.S-based
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`companies a large portion of the funds that Firtash, Group DF and RUE were skimming from
`
`numerous Gazpron/Naftogaz natural gas transactions, as well as the windfall payments and
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`profits worth approximately $3.5 billion that they received as a result of the corrupt
`
`transactions and breaches of fiduciary duties that resulted in the Stockholm Arbitration award,
`
`as described below in greater detail.
`
`25.
`
`These monies were then intentionally funneled into various New York based
`
`bank accounts and used to finance the money laundering and other racketeering acts engaged in
`
`by defendants from their New York base under the guise of otherwise legitimate real estate deals
`
`and other investment activities in New York and elsewhere in the United States. The contracts,
`
`agreements, meetings, discussions and electronic communications (e.g., computer, email and fax
`
`transmissions) relating to said racketeering activities were primarily conducted through
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`defendants’ offices located at 1501 Broadway, 25
`
`
`th
`
`floor.
`
`26.
`
`Each of the defendants had substantial and purposeful contacts with New
`
`York in that the defendants either were based at the New York offices (“the New York
`
`
`
`14
`
`

`
`
`
`Case 1:11-cv-02794-KMW Document 120 Filed 11/13/14 Page 15 of 64
`
`
`defendants”) or, as to the defendants who were based elsewhere, they had the New York
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`defendants act as their agents with regard to all activities of their racketeering enterprise
`
`that were conducted from the New York offices.
`
`27.
`
`Through the use of numerous wire transfers from various European banks to
`
`New York-based banks, the defendants intentionally engaged in a complex scheme to
`
`money launder funds generated by the European gas transactions in furtherance of
`
`defendants’ Racketeering Enterprise, and a substantial portion of said funds were used to
`
`purchase and/or maintain an interest by defendants in the various defendant companies that
`
`comprised part of the Racketeering Enterprise, which were then used for various unlawful
`
`purposes, including the conversion of defendants’ otherwise legitimate real estate
`
`development businesses based in New York into sham business fronts used solely for the
`
`purpose (a) of laundering money for the Enterprise, (b) defrauding the “John Doe” plaintiffs
`
`and other innocent third party real estate owners and investors of their money and property,
`
`and (c) defrauding the New York-based individually named plaintiffs and other employees
`
`of their salaries, benefits and career opportunities, which were shattered when the defendant
`
`New York-based companies failed to complete even one of the many real estate ventures
`
`that these employees had worked on both long and hard, to their substantial detriment. Said
`
`money laundering activities by defendants, which primarily involved the wire transfer
`
`from Firtash controlled bank accounts in Europe to various New York banks, constituted a
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`pattern of racketeering activity that substantially involved predicate acts or money laundering
`
`and other racketeering acts (such as mail and wire fraud) in New York and elsewhere in the
`
`United States. In addition, a portion of the money-laundered funds were then funneled back
`
`to Ukraine to provide the “financing” for the persecution and political suppression of
`
`
`
`15
`
`

`
`
`
`Case 1:11-cv-02794-KMW Document 120 Filed 11/13/14 Page 16 of 64
`
`

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