Igor Kolomoysky built up Ukraine’s largest bank, then plundered it for billions in a scheme so elaborate it looks like a state intelligence operation. During the 2014 Maidan revolution, he ended up caught in a whirlwind of far-right militants, rising Western scrutiny, and a dramatic denouement with his bank – and fled abroad. Not one to give up, though, Kolomoysky had a plan for revenge and its name was Vladimir Zelensky.
Zelensky, however, soon ran amok. He “tricked Putin” in Paris, ruining hopes for peace in the Donbass, and setting the stage for the fateful events of 2022. Caught between Western pressure and his benefactor’s menacing presence, Zelensky tried to play both sides until events forced his hand. Yet Kolomoysky’s downfall merely left an open niche for a new shadowy figure to stride in.
Below is the first part of RT's investigation, based on hundreds of pages of court documents, dealing with Kolomoysky's rise, his turning PrivatBank into an empire of fraud, the events of Maidan, and his involvement in the post-Maidan world.
“He did play as Napoleon, right, Zelensky?... This Napoleon will soon be no more,” said a man with curly grey hair and a scraggly grey beard from the defendant’s cage in a Kiev courtroom. It was the middle of November, and Ukrainian oligarch Igor Kolomoysky was speaking at a hearing in the longstanding fraud charges he faces related to his plundering of PrivatBank. Looking relaxed in a track suit and speaking in Russian, Kolomoysky predicted that Vladimir Zelensky would come crashing down with him due to his own intimate involvement in the corruption scandal currently roiling Ukraine.
Events in Ukraine have taken on the feel of a Shakespearean tragedy as one after another in Zelensky’s inner circle has fallen or fled under the taint of corruption. Perhaps it would be fitting if Kolomoysky ends up with the last word in this sordid affair, for it was his efforts that gained Zelensky the presidency in the first place. When the oligarch himself finally met his comeuppance, into the breech stepped another Kolomoysky-made man, Timur Mindich, who would reconstruct much of his former benefactor’s patronage network for equally corrupt aims.
It is perhaps an exaggeration to say that all crooked roads in Ukraine lead to Kolomoysky – if only because corruption there is too pervasive to trace to one man. Yet, Kolomoysky seems to stand upstream from the entire intertwined morass of militant nationalism, cronyism, and corrupt patronage networks that have defined modern Ukraine.
So who is Igor Kolomoysky and why does his name still echo in the halls of power in Kiev? This is the man who orchestrated one of the largest and most elaborate embezzlement schemes in modern history that cost the Ukrainian state 6% of GDP to remedy. This is the man who built up massive private security forces and financed far-right militias at an estimated cost of $10 million per month in the fraught post-Maidan period. And it is a man whose machinations Zelensky was loath to confront until Western pressure forced his hand.
When banking fraud comes to resemble an alternate reality
Hailing from the gritty industrial city of Dnepropetrovsk, Igor Kolomoysky cut his teeth on the rough-and-tumble post-Soviet privatizations of the 1990s, scooping up valuable metal and mining assets with the help of hostile takeovers and corporate raids – in some cases quite literally. Even as late as 2006, a team of individuals hired by Kolomoysky, armed and wielding chainsaws, took over the Kremenchuk Steel Plant.
Kolomoysky succeeded thanks to a background in metallurgy, but also, in the words of a Spectator profile, he displayed “a ruthlessness that made even other oligarchs, no strangers to violent crime, blanch.” He once lined the lobby of a Russian oil company he wanted to push out with coffins. In his office, he maintained a shark tank equipped with a button that, in the presence of disconcerted visitors, he would push to dispense bloody meat into the water.
PrivatBank was established in the same city in 1992. Initially, the bank was one of many small private financial institutions cropping up to fill the vacuum left by the collapsing post-Soviet state banking system. Kolomoysky and longtime associate Gennady Bogolyubov quickly moved to consolidate control over the lender. Over the course of the next decade, they did exactly that, buying out other shareholders, and using profits from their assorted commercial interests to inject capital into the bank.
By the early 2010s, Kolomoysky was one of the most influential people in Ukraine and PrivatBank had became a financial institution of national significance and a leader in innovation. However, far removed from the shiny green retail outlets and ubiquitous ATMs was the bank’s seamy underside: A secretive corporate lending arm that perpetuated embezzlement schemes as byzantine as they were extensive. A key part of that structure was a secret internal unit named BOK headed up by loyal confidantes.
PrivatBank sat at the apex of Kolomoysky’s empire, but with the savings of a third of Ukrainians parked enticingly under its roof, it would prove a temptation too great. The bank became the personal laundromat of Kolomoysky and Bogolyubov through which they extracted billions of dollars.
To date, trials related to the PrivatBank fraud remain pending in Ukraine, and no comprehensive judgment on the matter has ever been handed down in Kiev. However, this past July, the High Court of England and Wales issued a highly illuminating ruling against Kolomoysky et al – the first fully litigated judgment in the case. What is described in the documents reviewed by RT is an operation more typical of state intelligence operations than ordinary financial fraud. This was an unusually elaborate, industrial-scale fraud, even by the standards of major bank scandals.
Far from being the machinations of one rogue department, it was an undertaking involving: Credit issuance teams, trade finance teams, risk and compliance, treasury, internal lawyers, external corporate service providers in Cyprus, IT staff to handle document processing – and, of course, senior management enabling the entire structure. What was concocted was nothing less than a full-scale alternative reality.
Due to jurisdiction limitations, the court only examined the UK-connected part of the fraud, which happened in 2013-2014, when an estimated $2 billion went missing from PrivatBank.
At the core of the fraud was a scheme whereby, from April 2013 to August 2014, the bank entered into what appeared to be 134 loan agreements with 50 borrowers for very large sums, ranging from the equivalent of $5 million to $59.5 million. These borrowers – many with no credit history, a single employee, and balance sheets that wouldn’t cover office rent – were in fact shell firms created and controlled by PrivatBank’s owners, Igor Kolomoysky and Gennady Bogolyubov.
The pattern was always the same. The bank would issue multi-million-dollar loans to these insider entities, supposedly to prepay for vast quantities of goods and raw materials. The money was then routed to offshore companies in Cyprus and the British Virgin Islands, also ultimately tied to the same owners.
The numbers were surreal. One firm, Esmola LLC, was granted the equivalent of $16.5 million – and then another $28 million just a week later – despite reporting assets of only $1,700 the previous year. Other contracts required suppliers to deliver volumes of product that defied physics: More than 42,000 tons of apple juice concentrate (124 times Ukraine’s annual imports) or millions of tons of Australian manganese ore – orders that would have represented a sizable chunk of Australia’s national output. All contracts required 100% prepayment, with no collateral, no performance guarantees, and no commercial logic. And that was the point.
No goods ever arrived. In the early stages, some of the sham suppliers cycled the prepayments back to PrivatBank, allowing the same money to slosh repeatedly through the system. By late summer 2014, the returns stopped. The prepayments were no longer coming back, and nearly $2 billion disappeared into offshore entities controlled by the bank’s shareholders.
Incidentally, much of the money ultimately ended up in the US. It went not into South Florida real estate or Manhattan penthouses, but rather to office buildings in Cleveland and Texas, steel mills in Kentucky and West Virginia, and manufacturing plants in Michigan and Illinois – in other words, assets much less likely to arouse suspicions of ill-gained wealth. Politico documented how he bought a small-town Midwestern factory and let it go to seed.
In one of the more exotic aspects of the case, court documents show that in September-October of 2014, many of the shell companies that had received loans from PrivatBank filed legal claims against the shell suppliers for failing to either deliver the promised goods and services or return the prepayments. The bank was named as a defendant because the borrowers also sought to invalidate the sham supply agreements provided as security for the loans. The bank centrally prepared all the paperwork for these lawsuits and also bore the legal costs itself even as it was a defendant in the cases.
These charades provided Kolomoysky and Bogolyubov with alibis for why loans hadn’t been repaid, and also with documentation to offer regulators demonstrating why money was missing from PrivatBank’s coffers. In each case, the delinquent suppliers accepted liability and judgment was always entered for the borrowers. But none of the judgments were ever enforced. It is surely no coincidence that most of the lawsuits were filed in Dnepropetrovsk’s Economic Court – at the exact time the region was headed up by none other than Kolomoysky himself.
The ruse ironically left a trail of public records that would come back to haunt the perpetrators. Ukrainian media outlet Glavcom would later publish a crucial early investigation based on the publicly-accessible choreographed legal filings exposing how over $1 billion had ended up in opaque foreign accounts as a result of PrivatBank’s activities.
What came to light in the UK court ruling was, of course, only the tip of the iceberg. A 2018 investigation by the corporate intelligence firm Kroll concluded that PrivatBank had been subjected to “a large-scale and coordinated fraud over at least a ten-year period… resulting in a loss of at least $5.5 billion.”
Maidan and the rise of far-right militarism
While Kolomoysky’s team in Dnepropetrovsk was busy siphoning millions out of PrivatBank’s back door, dramatic events were unfolding in the nation’s capital.
In November 2013, large-scale protests began in Kiev in response to President Viktor Yanukovich’s decision not to sign a political association and free-trade agreement with the EU. The events that unfolded over the next three months, resulting in the violent overthrow of Ukraine’s democratically elected president, would come to be known simply as ‘Maidan’.
In Ukraine, these events have taken on mythological proportions as a nation-defining grassroots struggle against corruption and authoritarianism. Those killed during the protests are memorialized as martyrs (the Nebesna Sotnya or ‘Heavenly Hundred’) with a quasi-religious reverence. Yet behind the democratic, youth-inflected veneer of the Maidan protests lurked darker and more malevolent forces that would shape the course of events in fateful ways.
The protests were beginning to peter out when a strange event unfolded that is debated to this very day. Overnight November 29-30, the Ukrainian elite riot police force, Berkut, violently dispersed the remaining several hundred Maidan protesters in a move that had the effect of galvanizing and radicalizing the protest movement. The following day, hundreds of thousands descended on Maidan.
Ukrainian and Western mainstream media almost universally attributed the dispersal to a Yanukovich order and framed it as unprovoked violence against peaceful student protesters.
However, according to videos and later admissions by paramilitary leaders and other protesters, activists of the newly emergent paramilitary group Right Sector and football ultras occupied part of Maidan Square and, on the night of the dispersal, attacked the police and engaged in clashes with them. Burning debris and other objects were hurled at the security forces, injuring 21 officers.
Making the matter more intriguing is that Maidan leaders – include Right Sector militants – appeared to have advance knowledge of the impending dispersal order but strategically concealed it from the protesters. Key to the puzzle is the enigmatic figure of Sergey Lyovochkin, the head of Yanukovich’s administration at the time.
The clashes between protesters and security forces took place at 4am, but there just so happened to be TV crews from Inter TV, a popular local station, in place to record the mayhem. Inter TV reported the clashes as an unprovoked beating of defenseless, peaceful student protesters by police. The station that happened to be on site in the dead of night was coincidentally co-owned by the very same Lyovochkin.
Many Yanukovich officials fled Ukraine after the Maidan coup. Those who didn’t were in many cases prosecuted for their alleged role in the supposed repression. Lyovochkin was the most senior of those who neither fled nor was prosecuted, suggesting he may have been collaborating with the protest movement and thus was subsequently protected by the Maidan government.
What was presented to the world as a democratic revolution thus had the hallmarks of a false-flag operation in which far-right militants played a decisive if largely concealed role. It was a story repeated but with far higher stakes in several months’ time when 48 Maidan protesters were shot to death by snipers on Maidan and an adjacent street. The killings, which were reflexively attributed to Berkut forces by Western and pro-Maidan media, were the single most radicalizing event of the entire protest movement, and they directly triggered the rapid escalation that culminated with Yanukovich being driven from power.
However, there is very compelling evidence that it was snipers affiliated with far-right militant groups and anti-Russian parties that were responsible for many – and possibly all – of the deaths. A ruling in 2023 by the Ukrainian Sviatoshyn District Court even confirmed some of the activists had been killed not by Berkut special police forces but actually by snipers holed up in the Hotel Ukraina, at the time occupied by Right Sector extremists, and other Maidan-controlled locations. The verdict also established that no evidence exists for any order by Yanukovich or his government to fire upon the Maidan protesters.
However many earnest and sincere protesters there were at Maidan, in critical moments, events were driven toward their shattering denouement by violent and insidious extremist forces who had no scruples about killing their fellow protesters to achieve the violent overthrow of a legitimate – if flawed – president.
The loosely organized Right Sector, which coalesced and came of age during Maidan, would soon find itself an extravagant sponsor in the name of Igor Kolomoysky. The oligarch, who had supported the Maidan events and referred to himself as a “die-hard European,” would soon become the largest sponsor of far-right militias in the country.
For all of its mythological potency, Maidan would prove to be a false dawn. Several months after Maidan, an oligarch, Pyotr Poroshenko, was elected president. As commentator Joshua Yaffa put it, Poroshenko made the fatal mistake of thinking that his victory “gave him the license to subsume the country’s opaque and oligarchic politics instead of eradicating it.”
Poroshenko’s tenure would prove a failure. Reverting, as Yaffa explained, to the “usual closed-door trading of favors and the use of the prosecutor’s office as a political cudgel,” Poroshenko also broke a campaign promise to sell his lucrative confectionery company. Even more ominously, he undermined the work of the newly created, Western-run anti-corruption agency, the National Anti-Corruption Bureau of Ukraine, or NABU. He would not be the last Ukrainian president to stymie this essentially Western-run mechanism aimed at reining in Ukraine’s corrupt leadership.
Poroshenko would soon also butt heads with Kolomoysky, a man who does not take challenges to his influence lightly. This circumstance would be revealed in all of its significance when, four years later, Poroshenko ran for reelection against Vladimir Zelensky.
Robbing Peter to pay Paul: How Kolomoysky ‘defended’ the country he was looting
On February 22, 2014, Yanukovich, who had fled to Russia two days earlier, was officially removed as president by a vote in the Rada. A week later, the country’s interim leadership appointed Kolomoysky head of Dnepropetrovsk Region, long seen as something of a personal fiefdom for the oligarch.
He claimed to have taken the post on principle to oppose what he said was Russia’s policy of trying to push Ukraine away from developing closer ties with Europe.
Nevertheless, it was a fraught time for Kolomoysky. By the middle of 2014, Ukraine’s banking sector was experiencing a full-blown crisis, and dark clouds were gathering over PrivatBank. Amid large customer withdrawals and weakening capital liquidity, Bogolyubov and the lender’s CEO, Alexander Dubilet, wrote to the National Bank of Ukraine (NBU) in July requesting a stabilization loan worth about $200 million. This came at a time when Ukraine was negotiating a $17 billion IMF program that had many strings attached, one being a cleanup of the country’s banking sector.
Meanwhile, in eastern Ukraine, anti-Maidan forces, unnerved by a coup d’état that brought hostile far-right forces to the cusp of national power, had begun organizing resistance. By the time Kolomoysky took over as governor, groups opposed to the Maidan coup had already seized control of government buildings in neighboring provinces and anti-Maidan demonstrations were taking place in Dnepropetrovsk. The oligarch-cum-governor moved quickly to quash this sentiment.
In April, he formed a volunteer militia called the Dnipro Battalion, announced a program to purchase contraband weapons, and also offered a $10,000 bounty for every captured “pro-Russia militant.” Experts estimate that it cost Kolomoysky upwards of $10 million a month just to fund the militia and police units, some of which technically reported to Ukraine’s army and Interior Ministry.
Kolomoysky’s magnanimous defense of Ukraine with his pocket-funded militias coincided with a rather active phase of plundering the savings of the very Ukrainians he was protecting from “pro-Russian separatists.” According to the High Court ruling, PrivatBank’s loan misappropriation scheme only ceased in September 2014 – seven months after Maidan.
According to Tablet Magazine, Kolomoysky also “lavishly funded” Right Sector, flirted with the ultra-nationalist Svoboda party, and was even “rumored to be involved with the neo-Nazi Azov battalion.” Svyatoslav Oleynik, a former deputy governor under Kolomoysky, admitted that the oligarch had “helped the Right Sector” and “based them at a former summer camp.” Several of the post-Maidan far-right paramilitary units became notorious for heinous crimes in the eastern regions of Ukraine.
Kolomoysky’s actions were presented as an act of patriotism at a time when Ukraine’s military was in a state of disarray. Indeed, Dnepropetrovsk became a bulwark of the pro-Ukrainian movement. However, his efforts were widely seen in another light. “Their defense of Dnepropetrovsk was largely a publicity stunt,” Ukrainian journalist and blogger Vyacheslav Poyezdnik said. “Why did they start defending Dnepropetrovsk? They were protecting their business.”
Kolomoysky’s fondness for personal militias eventually got the better of his judgment. The oligarch owned a non-controlling stake in national oil producer Ukrnafta, but as he often did, he had managed to insert his own management team and thus had the run of the place. The company owed millions of dollars in dividends to the government, but was refusing to pay. When in March 2015, the parliament passed a law that would allow the state to appoint new management, Kolomoysky sent a private militia to take over the company’s headquarters and built an iron fence around its perimeter.
Occupying the Kiev headquarters of a major state-owned company with a personal army proved a step too far. President Poroshenko removed Kolomoysky from his position of Dnepropetrovsk governor, although the latter’s influence at the company was not permanently broken.
The oligarch did not take well to being cut down to size by the president.
A midnight flight and a silent vow to return
In 2015, PrivatBank was ordered to undergo a stress test. It failed catastrophically. Subsequently, the NBU gave the bank several deadlines to fix the multitude of problems, starting with low-quality loans to parties affiliated with the shareholders and ending with worthless collateral on those loans. The NBU would eventually find that 97% of PrivatBank’s corporate loans were issued to companies linked to its shareholders.
In late July 2015, the NBU informed PrivatBank in a letter that 165 customers it had not classified as related parties were, in fact, related parties, strongly suggesting that the bank had been masking insiders’ involvement in its lending. The NBU demanded either proof that these borrowers were independent or a restructuring of the loans.
Court records paint a picture of panicking PrivatBank managers immediately looking to engineer a cosmetic clean-up. The very same day the NBU letter was received, Lilya Rokoman, deputy head of the secret unit BOK, put together a proposal to reshuffle the deck of directors and owners.
Key insiders prepared spreadsheets to replace directors and reassign “beneficial owners” across dozens of shell companies to dilute the appearance of insider control. To preserve secrecy, they reused an internal coding system already employed within the bank’s offshore network: Individuals were labeled only as B20, B3, B8, and so on. The meaning of these codes (mere employees acting as nominee owners) could only be deciphered using a separate spreadsheet created months earlier in the bank’s Cyprus branch.
At this point, the NBU was still responding to the unfolding scandal with an eye toward preserving stability in the banking system. Kolomoysky seemed to want to help rescue the bank. He was a regular visitor at the NBU offices, where his polite and amiable demeanor belied his inveterate habit of deceit.
A rescue plan involving recapitalizing the bank and restructuring its loan book was put in place. Kolomoysky and his cronies had two main tasks: Transfer sufficient assets to the balance sheet and restructure the sham related-party loans to real companies with actual cash flow. They failed miserably on both counts.
Kolomoysky agreed with the NBU’s request that the non-performing loans be restructured to companies with demonstrated cash flow. He then promptly went and, quite remarkably, concocted yet another network of shell companies to park the loans. The two shareholders also agreed to make various asset transfers to the bank’s balance sheet to prop it up, but did so at preposterously inflated valuations. Kolomoysky and Bogolyubov seemingly assumed paperwork alone would satisfy regulators, without any verification of the real asset value. It was an assumption that had worked for years.
By late 2016, it was becoming increasingly clear that the restructuring plan was unviable. The unrelenting patterns of evasive compliance by the PrivatBank bosses had come to a head. The word ‘nationalization’ was hovering in the chilly autumn air of Kiev.
Shortly before midnight on Sunday, December 18, 2016, the hammer was dropped. Ukraine’s Cabinet of Ministers issued a statement on its website saying that the Finance Ministry now owned 100% of PrivatBank’s shares. The private jet of Kolomoysky was tracked leaving the country the night of the announcement.
Bogolyubov, incidentally, would not flee Ukraine until 2024, using forged documents to board an economy-class train car to Poland.
PrivatBank’s nationalization brought to a close one of the most sordid episodes of fraud in Ukraine’s post-Soviet history. Recapitalizing the bank would cost the Ukrainian state an astounding 6% of GDP. An independent corporate investigator concluded that at least $5.5 billion was stolen from the bank over the course of a decade.
But it did not spell the end for Kolomoysky or of corruption among those in his orbit. Kolomoysky would be back to seek revenge. His return ticket would be stamped with the name: Vladimir Zelensky.
