Ukrainian police investigators accused representatives of a bank owned by an Austrian Jew of defrauding Ukraine out of more than $750 million and laundering that money for further use.
The alleged fraud took place between 2011 and 2015 with help from “a criminal group of unidentified persons who represented Meinl Bank together with beneficiary owners of a number of Ukrainian banks,” according to a statement made by the Ukrainian police’s fraud squad to a Kiev district court last month. The news site Glavcom published an expose on the probe last week.
Meinl Bank is run by Julius Meinl, 56, who in 2014 was elected president of the Euro-Asian Jewish Congress — one of five regional affiliates of the World Jewish Congress.
Queried by JTA for a reaction on the allegations, Meinl Bank spokesperson Thomas Huemer on Thursday wrote in an email that his bank “does not comment on rumors. The bank reiterates that all its activities are undertaken within the framework of all relevant laws and regulations.” The bank “strongly rejects any allegation of wrongdoing,” he added.
But Ukrainian police investigators who have probed the bank since February this year told the court that actions by “unidentified persons led to the non-payment of taxes to the budget of Ukraine on a large scale, bringing banks to insolvency, bankruptcy and shifting the obligation to compensate commercial banks from the Deposit Guarantee Fund.”
Glavcom describes a system through which Meinl Bank allegedly gave Ukrainian entities back-to-back loans, with collateral offered by third parties that were registered outside Ukraine, but still had ties to the lending entities. The lending companies then transferred tens of millions of dollars out of Ukraine to offshore accounts with Meinl Bank’s help, according to the fraud squad. Next, the lending firms declared insolvency, allowing Meinl Bank to cash in on the collateral.
The purpose of this alleged circular deal was to get money out of Ukraine and launder it for use in the European Union and beyond, according to the investigation, which is ongoing.