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Yo_Mama_Been_Loggin

(107,106 posts)
Sun Oct 17, 2021, 03:12 PM Oct 2021

A Ukrainian Oligarch Bought a Midwestern Factory and Let it Rot. What Was Really Going On?

In recent weeks, the world has learned incredible new details about corruption, illicit financing and money laundering by the super-rich, thanks to the Pandora Papers. The papers are a tranche of nearly 12 million documents, revealed by an international group of journalists, that describe how global elites — from the king of Jordan to Pakistani Prime Minister Imran Khan’s inner circle to an alleged mistress of Vladimir Putin — use shell companies, trusts, real estate, artwork and other financial secrecy tools to squirrel away enormous amounts of money. And much of it is perfectly legal.

Many of the stories in the Pandora Papers follow a playbook that is depressingly familiar at this point: Global heads of state and business elites hide their wealth in pursuits that are emblematic of the super-rich: coveted beachside properties in Malibu, as in the case of the Jordanian monarch, or the Czech prime minister’s $22 million chateau in the south of France, or dozens of pieces of high-value artwork, moved secretly through shell companies by one of Sri Lanka’s most powerful families.

But this kind of transnational money laundering, which we’ve come to expect, is only part of the picture. Recently, wealthy elites have begun looking for other places to park their funds, places they think authorities won’t look. Places that offer all the financial secrecy these elites need, but that few would associate with lives of luxury. As a result, shadowy and sometimes ill-gotten wealth has started pouring not just into yachts and vacation homes, but also into blue-collar towns in the U.S. whose economic struggles make them eager to accept the cash.

One of these small towns appears to have been Harvard, Ill., a depressed factory community that allegedly became part of a sprawling network used by Ukrainian banking tycoon Ihor Kolomoisky to launder hundreds of millions of dollars earned from a Ponzi scheme. Kolomoisky, who was recently hit with U.S. sanctions for “significant corruption” in Ukraine, is separately accused by the Justice Department and Ukrainian investigators of using a constellation of shell companies and offshore bank accounts to move millions in misappropriated funds out of Ukraine and into a series of real-estate investments in the American Midwest. (Kolomoisky denies wrongdoing, claiming he made the investments with his own money.)

https://www.yahoo.com/news/illinois-factory-became-ensnared-ukrainian-060037351.html

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A Ukrainian Oligarch Bought a Midwestern Factory and Let it Rot. What Was Really Going On? (Original Post) Yo_Mama_Been_Loggin Oct 2021 OP
How does that make you money, though, OAITW r.2.0 Oct 2021 #1
it's not a matter of making money. onethatcares Oct 2021 #3
Which laws? Igel Oct 2021 #4
the Money Laundering Control Act of 1986 onethatcares Oct 2021 #5
Remember the Magnitsky Sanctions Act that was passed in 2012? FakeNoose Oct 2021 #2
Thanks for the info LymphocyteLover Oct 2021 #7
Beware of Super-Rich Foreigners Bearing Gifts dalton99a Oct 2021 #6

OAITW r.2.0

(23,834 posts)
1. How does that make you money, though,
Sun Oct 17, 2021, 05:47 PM
Oct 2021

Dump bucks in a manufacturing plant, but let it rot. Is it about the tax breaks they get investing in this?

onethatcares

(16,133 posts)
3. it's not a matter of making money.
Sun Oct 17, 2021, 06:30 PM
Oct 2021

it's hiding it from taxes. Screw the tax breaks they get for promising jobs or business, the transaction shows that money was spent, a loss taken, and Richie Rich gets to keep a piece of land that can only increase in value. Any improvements, any maintenance is chalked off or chalked up to hide the real money spent.

not that anyone would do such a thing of course. There are laws against it.

FakeNoose

(32,351 posts)
2. Remember the Magnitsky Sanctions Act that was passed in 2012?
Sun Oct 17, 2021, 06:25 PM
Oct 2021

That's the law that prevents Russian oligarchs from investing their stolen money in American properties and businesses. Most of the European countries have passed their own version of the Magnitsky Act. So these incredibly rich oligarchs have nowhere to go (in the first world) to invest their money. The story is explained in Bill Browder's book Red Notice.

(link) https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information/the-magnitsky-sanctions

Some of the oligarchs hide their money in Delaware companies with innocuous American-sounding (fake) names. The Chump Organization and others taught them how to do this for the last 25+ years. Once their money is safely tucked away in an American-sounding holding company, the oligarchs (Russian and some Ukrainian) can start buying up properties anonymously. The money gets shuffled around from offshore accounts and banks can't always trace the original source.

The banks aren't supposed to allow it to happen, but they aren't looking hard enough and the IRS and the Dept. of Treasury have been underfunded for years. Nobody has the manpower to do the background investigations on these guys. The oligarchs aren't buying American business and property because they want to save jobs and make profits. They just want to bury their stolen cash and get it laundered. In a few years they'll sell the properties and get real, un-laundered money, and by then their kids and grandkids will all be American citizens.

Chump was probably one of the first American businessmen to make it possible for oligarchs to buy his condos and properties. He started almost immediately after the Communist regime went down in 1992. It took a few years for the oligarchs to steal enough money to make it interesting, and by then Putin was clearly in charge. I learned these details in Bill Browder's book.



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