Olympic Stadium figure admits guilt in $3 million embezzlement

The general contractor of Kyiv’s $585 million Olympic Stadium confessed in court on June 6 to embezzling Hr 24 million ($3 million) of public money. During questioning in the Shevchenko District Kyiv City Court, Volodymyr Artiukh who heads AK Engineering, said he “effectively helped commit a crime” when he allegedly helped funnel money from a bank that was under state administration to renovate its head office near St. Sophia Square following the global financial crisis. Authorities allege the renovation was never done and that the money disappeared. “If possible, don’t put me in prison. I’m more useful on the outside,” an Ukrainska Pravda courtroom reporter quoted him on June 11. Artiukh testified that he was offered 3 percent of the Hr 24 million, or Hr 740,000, for initiating a money transfer that led to the money’s disappearance via a chain of companies. When Infrastructure Minister Borys Kolesnikov handpicked Artiukh’s AK Engineering as the Olympic Stadium’s general contractor in June 2010, Artiukh was already under investigation for the alleged financial fraud. Investigators allege Artiukh took the money from Rodovid Bank in 2009, then being bailed out by the government, without doing the renovation work and instead sent the money down a chain of subcontractors, the last of which investigators say was a fictitious company headed by a homeless person. Artiukh subsequently spent three days in a pre-trial detention center because he reportedly wasn’t cooperating with investigators. He signed a pledge to not leave Ukraine when he was released and which is currently still in force. Artiukh’s AK Engineering has also been probed in two investigations concerning the Olympic Stadium, one of which is still ongoing. Investigators allege that AK Engineering funneled Hr 119 million through a chain of companies to purchase and import a German-manufactured vacuum plumbing system for the stadium. At the end of the money trail, investigators allege, part of the money was used to purchase the equipment by individuals whose signatures were allegedly faked on the customs documents, while the rest of the money was converted into cash. Investigators furthermore probed how AK Engineering procured Australian-made stadium seats. They had alleged that Hr 3.8 million wasn’t paid into state coffers because a beneficiary company along the money trail had allegedly inflated the VAT credit amount. The company Vailis, according to past court rulings is “a fictitious enterprise that is used to minimize tax obligations.” A court in Cherkassy closed the case into the stadium seats. Since June 2010, AK Engineering has received more than Hr 2 billion in government orders for reconstructing the Olympic Stadium. It also received Hr 80 million in public money under a no-bid tender to refurbish the Palace of Sports near the stadium where the Union of European Football Associations, the Euro 2012 organizer, is housing the media and accreditation center for the three-week football tournament. Media reports have linked AK Engineering to Kolesnikov whose lawyer had been a co-founder of the company along with Artiukh. Kolesnikov has categorically denied benefiting from AK Engineering’s government orders and denies any association with the company. Additionally, Artiukh has denied having relations with Kolesnikov. “You don’t have to in principle tie me with Kolesnikov because we aren’t friends. Kolesnikov is a top politician and businessman. I’m a tiny builder that can’t do anything else,” he told Ukrainska Pravda in an November 2011 interview. Nevertheless, media reports uncovered old times between Artiukh and Kolesnikov as well as billionaire Rinat Akhmetov, Ukraine's richest person. Artiukh was the co-founder of Ukrinterstroi together with the late Zhyhan Taktashev, who was the ex-vice president of Donetsk’s Shakhtar football club. He was reportedly a partner of Kolesnikov in the Yug company. Ukrinterstroi was once the founder of Ukraine’s largest transportation and logistics company – Lemtrans. The latter company is controlled by President Viktor Yanukoych’s family and Akhmetov. Artiukh is scheduled to appear in court next on June 21.