Case description
On 4 July 2019, the Malynivskyi District Court of Odesa acquitted Odesa Mayor Hennadii Trukhanov and seven other defendants in the case concerning the Kraian plant, which involved the alleged misappropriation of over UAH 92 million in public funds. However, the HACC overturned this verdict, and the case is still being considered on the merits.
The events that led to the opening of criminal proceedings against Trukhanov and a number of others took place in 2016. The investigation believes that in early 2016, Trukhanov agreed with several companies to seize funds from the Odesa budget. Specifically, Trukhanov planned to buy one of the buildings of the former Krayan plant at twice the price: the seller purchased the entire complex of buildings for UAH 11.5 million, and the Odesa City Council purchased a part of the buildings for UAH 185 million.
In order to pull off the scheme, they even engaged a third-party appraiser, who determined the significantly inflated price of the Krayan building. The NABU also reported that the head of this appraiser company had already been prosecuted for unreliable property valuations.
Development Elite LLC, which received the funds from the Odesa City Council, in turn, tried to withdraw them to the accounts of the allegedly fictitious A Motors Plus company by concluding contracts for the alleged supply of combine harvesters.
How were council members convinced to vote for this idea?
According to the detectives, Trukhanov and his deputy, Vuhelman, misled members of the city council. They claimed that the vote to purchase the Krayan building was a priority, that the price was justified, and described the building in terms that did not reflect its actual condition. Trukhanov also informed the council members that the project would be jointly funded by the local and state budgets.
As a result, the following officials are accused in this case:
- Hennadii Trukhanov, Mayor of Odesa.
His role was to ensure that the Odesa City Council members approved the decision to purchase the premises from Development Elite LLC at a knowingly inflated price, followed by the conclusion of the corresponding sale and purchase agreement. He was responsible for creating conditions to cover up the criminal activity by securing a collective decision of the city council members.
- Pavlo Vuhelman, Deputy Mayor of Odesa.
The investigation believes that he involved officials of the Odesa City Council in the scheme and ensured the prompt consideration of Development Elite LLC’s proposal to purchase the building. He gave verbal instructions to prepare a favourable opinion on the economic feasibility of the proposal and initiated, through the acting mayor, an order to prepare a draft decision for consideration by the relevant city council committee.
- Vasyl Shkriabai, head of the Standing Committee on Municipal Property of the Odesa City Council.
The investigation believes that it was he who provided a positive assessment and submitted the draft decision on the purchase to the extraordinary session. His role was to facilitate the adoption, by the standing committee he chaired, of a decision to support the city council’s draft resolution on purchasing the premises. He verbally informed the council members of the advisability of supporting the draft but neither requested nor ensured that commission members were provided with the documents justifying the financial expenditures.
- Petro Zahodirenko, Director of Development Elite.
In carrying out his role in the criminal scheme, he established Development Elite LLC without the intention of engaging in actual financial or economic activity, using it to conceal illegal actions and launder funds. Together with Kravchenko, he created conditions to inflate the property's actual market value. He prepared and sent a letter to Trukhanov proposing the purchase of the premises, being confident that it would be supported.
- Oleksii Spektor, former director of the Department of Municipal Property of Odesa City Council.
His role was to ensure that his subordinate staff prepared a draft positive decision approving the purchase of the premises, while disregarding an examination of the key terms of the transaction (price and condition of the property). He also, together with Vuhelman, facilitated the unimpeded approval of this draft decision by the standing committee on municipal property. He initiated a request to Development Elite LLC for information on the terms and value of the premises only after the legal department had refused to endorse the draft decision.
- Volodymyr Radionov, Deputy Director of the Department of Municipal Property of Odesa City Council.
His role, like that of Spektor, was to prepare the documents and ensure the adoption of the decision to purchase the property.
- Ihor Kravchenko, lawyer
He acted on behalf of Valton Group LP, including by signing two sham sale and purchase agreements for half of a non-residential building from UAB Naster at an undervalued price, without any intention of creating actual legal consequences, but rather to conceal criminal activity. Together with Zahodirenko, he created conditions for inflating the actual market value of the property and ensured that Valton Group LP became a founding member of Development Elite LLC by contributing the acquired premises to its share capital at an inflated value.
- Halyna Bohdanova, a certified property appraiser and director of Brocbusinessconsult PE.
She was involved in the crime by Zahodirenko and Kravchenko to prepare a knowingly false valuation report on the market value of the property. Her role was to include deliberately false information in the official valuation report, stating the building's value as UAH 185 million. She was aware that the valuation was intended to justify the purchase of the premises by the Odesa City Council at an inflated price, which would result in the unlawful misappropriation of funds.
The case against Halyna Bohdanova, the appraiser of the Krayan building, was closed due to the defendant’s death. However, the court ruled to continue proceedings against the late defendant Oleksii Spektor.
The Malynovskyi District Court of Odesa, which was the first to hear the case, found no conspiracy between the defendants to buy the plant. Therefore, all of them were acquitted: the actions of the majority were qualified under Article 191(5) of the Criminal Code of Ukraine.
However, the HACC Appeals Chambers overturned the acquittal and ordered a new trial in the HACC for all but Halyna Bohdanova in 2021. Since the fall of 2021, the HACC could not hold a single preparatory hearing in this case, as there have been constant illnesses, vacations, absences of participants, and judges' recusals.
Finally, in April 2023, everyone attended the hearing, and Trukhanov was ordered to pay more than UAH 30 million in bail. He failed to do so and was taken into custody with the alternative of bail, although Kyiv Mayor Klitschko and MP Anton Kisse were ready to bail Trukhanov out. The next day, Dmytro Tantsiura, member of the pro-mayor faction, posted bail for Trukhanov, and the mayor was then forced to wear an electronic bracelet.
In July 2023, the term of Trukhanov's duties expired because the judges did not have time to consider the SAPO's motion to extend these duties due to summer leaves. The case is currently being considered on the merits.
