UESU damage to state $3.75 m, Tymoshenko evades over UAH 680,000 in taxes, says newspaper
The United Energy Systems of Ukraine (UESU) Corporation, which was managed by Yulia Tymoshenko in the mid-1990s, caused damage to Ukraine worth over UAH 30 million ($3.75 million), and Tymoshenko personally evaded paying more than UAH 681,000 in taxes.
This information is stipulated in the indictment of the case, which consists of 117 pages, and which was made available to the Kommersant Ukraine newspaper.
The main part of the indictment includes the information that was gathered by investigators 11 years ago, when a criminal case on tax evasion was opened against Tymoshenko for the first time. The criminal case was investigated between January 2001 and January 2005, after which it was closed. The period of limitation of the case expired in 2009, while the Prosecutor General's Office (PGO) and the Security Service of Ukraine (SBU) found an opportunity to resume the investigation, explaining that the term of limitation was interrupted by another crime committed by Tymoshenko. The essence of the other crime is abuse of office while signing contracts on natural gas supplies with Russia in 2009 [the so-called gas case]. Tymoshenko has been sentenced to seven years of prison in the gas case.
In July 2011 the investigation into tax evasion was resumed and in January 2012 charges were brought against Tymoshenko under several articles of the Criminal Code of Ukraine (Part 5 of Article 191, Part 3 of Article 212, and Part 2 of Article 366).
The indictment claims that in the course of the investigation it was discovered that while holding the position of UESU president Tymoshenko "planned and organized a criminal financial scheme," which was based on the imitation of monetary payments via Cyprus-based Golden Union Offshore Bank and a bank subordinated to Tymoshenko - Pivdencombank. Two more companies controlled by Tymoshenko - Somolli Enterprises Limited and Corlan Enterprises Limited – were also involved in the scheme to imitate payments, the indictment reads.
Under the alleged scheme, metal products were purchased and, according to the documents, sold to Cyprus-based companies. After receiving the documents on its deals, UESU demanded value-added tax (VAT) repayment from the tax administration. Thanks to this scheme, UESU earned over UAH 14 million via illegal VAT repayments, as well as "attempting to appropriate state funds" of UAH 11.8 million. In addition, the fact that the company consciously evaded VAT of UAH 4.7 million has been proved, the indictment reads.
The accomplices to the crime include the ex-premier's father-in-law Hennadiy Tymoshenko (died in May 2012), who held the position of director general at the UESU, former chief accountant of the company Antonina Boliura, former deputy director general of the company Yevhen Shaho, and former chief accountant, who later was appointed as an accountant of the foreign economic accounts, Lidia Sokolchenko. The indictment reads that criminal actions were carried out by the abovementioned people "to fulfil oral instructions from Tymoshenko."
The second part of the indictment is related to tax evasion in 1997-1999 allegedly by Tymoshenko. In 1997 she officially quit UESU and in March 1998 she was elected as a people's deputy. However, according to the document, in 1996-1998 Russian Incombank issued four plastic cards in her name. These cards contained the assets of the Somolli Enterprises Limited Company, although Tymoshenko officially wasn't its employee. According to the PGO, Tymoshenko used the cards for her personal needs, "paid for hotels, at shops, restaurants, and withdrew cash in amount of $914,796." According to the PGO, in 1997-1999 Tymoshenko evaded payment of UAH 681,000 in tax. During interrogations in 2001, Tymoshenko claimed that she used all payment documents "exclusively for the production and presentations needs of the company" and "did not receive any rewards for her work from the cards."
The investigation managed to restore the expenditures made by Tymoshenko from the cards. In particular, on May 28, 1996 at the Passage boutique in Moscow she bought black-and-white trousers worth $224.10, a black bodysuit worth $242.10, white trousers worth $242.10, and a white sweater worth $314.10. Tymoshenko also made purchases worth $4,904 at Moscow boutiques Passage Nina Ricci and Sovmehkastoria. In particular, on January 18, 1995 she bought a mink coat worth $3,950, on November 23, 1995 two more mink coats worth $5,500 and $4,300, and on February 17, 1997 an arctic fox jacket worth $2,100. The proofs on the case also include hotel bills, according to which in the mid-1990s Tymoshenko preferred to stay at the National and Baltschug Kempinski hotels while visiting Moscow. Sometimes she paid some $30,000 for two days at these hotels, the indictment claims.
The main documents that prove tax evasion by Tymoshenko are her tax returns for 1997 through 2000, which the investigators received from the tax inspectorate in Zhovtnevy district of Dnipropetrovsk. According to the documents, in 1998 Tymoshenko's main income from her main job at the Verkhovna Rada, Ukraine's parliament, amounted to UAH 7,500. No information is indicated in the lines of the returns about additional income from entrepreneurship and abroad. The tax return in 1999 declaring Tymoshenko's main income of over UAH 10,500 also did not include any information about additional incomes.