How Illinois factory got caught in Ukrainian money laundering investigation

Then, in 2008 – as the country began to slide completely into the Great Recession – a twenty-something Miami investor named Chaim Schochet showed up. Working for a company called Optima International, Schochet offered $ 16.75 million for the empty building. Far from Motorola’s investment, but more than the locals could have hoped for. They gladly accepted. Glimmers of potential reappeared. “Hope burns forever,” Roger Lehmann, a member of the Harvard Economic Development Corporation, said after the purchase.

At the time, there was no reason to believe that Schochet and his colleagues were anything but shrewd businessmen, taking over properties in the Midwest. Optima International was the parent company of a constellation of related companies (including one called “Optima Harvard Facility LLC”). Prosecutors would later call it the “Optima family,” with its US operations overseen by two Americans named Mordechai Korf (Schochet’s brother-in-law) and Uri Laber. As the Department of Justice has alleged in a series of civil forfeiture cases, this “Optima family” has invested hundreds of millions of dollars in state-to-state investments: commercial real estate in Cleveland, Dallas and Louisville, factories. steelworks in West Virginia, Kentucky and Ohio. , production plants in Michigan, New York and Indiana. Time and time again, these investors have stormed in, promising jobs, revitalization and a lifeline for cities as they watch their economic strengths dry up.

In just a few short years, the “Optima family” has brought together more than a dozen mills, factories and other facilities across the heart of the United States. All had been victims of the American manufacturing slump that had lasted for years, as part of the broader deindustrialization that began in the 1970s. All were hungry for any injection of funding they could get and any promise of one. better future. And, according to prosecutors, those purchases were all directly linked to a powerful steel and banking mogul in Ukraine who was buying American properties to hide stolen money.

Shortly after the Ukrainian revolution of 2014, investigators across the country claimed that Ihor Kolomoisky was secretly overseeing one of the biggest Ponzi schemes the world has ever seen, totaling at least $ 5.5 billion. Legal documents filed by U.S. prosecutors last year detailed how Kolomoisky allegedly used his control over Ukraine’s largest retail bank, PrivatBank, to loot huge sums from Ukrainian depositors, then used a series of shell companies. and offshore accounts to get money out of the country and into the United States

The idea seems to have been to buy distressed assets that US sellers were eager to get rid of. Even if the buyers ended up suffering a loss, the assets were still beyond the reach of Ukrainian investigators and could still serve as vehicles through which to channel money. Perhaps more importantly, properties could be purchased without much investigation into the source of the money: For two decades, US real estate professionals have enjoyed a “temporary” exemption from anti-money laundering laws. , allowing them to avoid due diligence. on the customer making the purchase.

In subsequent efforts to seize the assets of the operation, US prosecutors advanced a theory that much of Kolomoisky’s operation was overseen by Laber and Korf, who “created a network of entities, generally under a variant of the name “Optima”, to further launder embezzled funds and invest them “in several states. According to the DOJ, the funds withdrawn from PrivatBank passed through a number of shell companies and offshore accounts, before being injected into the Optima network, and from there into assets in the US Midwest. And it all happened while Kolomoisky – now sanctioned by the United States for what the State Department calls “significant corruption” and “continued efforts to undermine Ukraine’s democratic processes” – increased its power and wealth in Ukraine itself, creating a gargantuan private militia and manipulating the elected along the way.

Details gathered by US and Ukrainian investigators and presented in DOJ files and court cases around the world, from Delaware to the UK to Israel, include what one analyst called “the biggest case. money laundering history ”.

Kolomoisky says he bought the American properties with his own money, denying the Justice Department’s allegations of ill-gotten money laundering. Neither he nor his American associates (who also deny wrongdoing) have not been named in any criminal complaints. Contacted for comment prior to the publication of this article, a lawyer for Korf and Laber replied: “Mr. Korf and Mr. Laber have never engaged in money laundering activities of any kind, and they do not ‘Do not know of anyone else who has done so. All the allegations against Mr. Korf and Mr. Laber stem from Ukrainian political disputes with which they have nothing to do. Miami investor Kolomoisky and Schochet did not respond to a request for comment.

Schochet was not specifically targeted in government documents, and the government did not suggest that he was personally the target of their investigations. But the DOJ complaint notes that the purchase of the Harvard plant was part of the broader Optima laundering program (including the fraudulent loans used to buy the plant in the first place). Investigators describe how, using investments in steel mills, skyscrapers, and industrial plants across the Midwest and the Rust Belt, Kolomoisky could take full advantage of America’s permissive climate for money laundering – All, apparently, to help clean up the proceeds of his huge Ukrainian Ponzi scheme. .

After Schochet finalized the purchase from Harvard, locals say they have seen it little. “Chaim wasn’t around much,” Charlie Eldredge, director of the Harvard Economic Development Corporation, told me. “I saw him once a year, once every two years…. Obviously, that was not the center of their interest. He added that it quickly became clear that the Optima network “didn’t really have any real plans. [about] what to do with the installation.

More than five years after the purchase, no jobs had returned and no other investments emerged. Unpaid property taxes continued to pile up, starving the local government out of hundreds of thousands of dollars. In 2016, Optima sold the building at a loss of $ 7 million to a Chinese-Canadian businessman. Years of neglect on the part of various owners began to take their toll: Soon the plant completely died out. With a half-million dollar note on unpaid electricity bills, the juice was cut, forcing local officials to surrender with flashlights. “It’s heartbreaking to see this beautiful place vacant,” McHenry County Treasurer said in 2018.

Along the way, the massive building itself – its factory and fitness center, babysitting rooms and 500-seat auditorium, even its pair of helipads – continued its slow march towards the city. ‘implosion. Mold began to crawl along the walls and roof, in the pipes, in the corners of the building. The plant’s entire fire suppression system, including more than 20,000 sprinkler heads, began to collapse. ” The mecanic [equipment] everything needs to be replaced, ”said Mayor Michael Kelly. “The roof is leaking. Nobody really cares about it. “

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