A large-scale real estate fraud scheme has been uncovered in a new residential building in Kyiv’s Pechersk district, in which apartments that already had owners were sold, Prosecutor General Ruslan Kravchenko has said.
The prosecutor general said on Telegram on Friday that, according to the investigation, the fraud scheme was organized by a former Dnipro City Council deputy.
"He acquired corporate rights to a group of companies that owned several unfinished properties in the center of the capital, including a residential complex in Pechersk," Kravchenko said.
He said the same apartments were sold twice. "They changed the technical specifications of the premises, used forged documents and re-registered property rights to new buyers," he said.
According to the prosecutor general, most apartments in the building had already been sold to investors, and property rights to another 50 apartments belonged, by court decision, to one of Ukraine’s state banks, leaving only a portion of the premises actually free.
"However, the scheme’s participants disposed of the entire building as if the previous owners didn’t exist. To sell the apartments whose rights belonged to the state bank, they changed the technical specifications of the properties and used forged documents. In this way, 50 apartments were alienated in favor of third parties," he said.
As a result, the prosecutor general said, the state bank’s losses exceeded UAH 164 million.
"Eight more apartments, whose property rights already belonged to individuals, were resold using the same scheme. People paid for housing, but those same square meters were later registered to other buyers," Kravchenko added.
The prosecutor general noted that, to make it harder for defrauded investors to establish their rights, the scheme’s participants changed the residential complex’s legal address, and the building, originally designed as 27 stories, became 32 stories after completion.
"The total established losses exceed UAH 175 million," the prosecutor general said.
According to the investigation, the illegally obtained funds were cashed out, run through controlled companies, and invested in property acquisitions and other construction projects.
Kravchenko added that nine people have so far been notified of suspicion: the organizer and eight accomplices. Depending on each person’s role, their actions have been classified as fraud, legalization of criminally obtained property, and use of forged documents. A decision on preventive measures is pending.
"And this may not be the full scale of the scheme. We are checking information about other possible double sales, and establishing the full number of victims and the movement of illegally obtained funds," he said.
