Serhiy Kurchenko and His Billion-Dollar Schemes: How the Oligarch Drained Money from Ukraine

Serhiy Kurchenko and His Billion-Dollar Schemes: How the Oligarch Drained Money from Ukraine

Serhiy Kurchenko built a large business empire in a few years that law enforcement links to the theft of state resources and the siphoning off of funds. According to investigators’ estimates, in the years 2010–2014 the amount of funds misappropriated and laundered exceeded 12 billion UAH.

This is reported in a piece by Argumentua.

10 years of an in absentia investigation, hundreds of volumes of case files, and the looted “Agrarian Fund.” Kurchenko proved that to create a “parallel economy” you don’t need technology — you just need a hand-picked auction committee and a plane to Moscow.

The history of the Ukrainian oligarchy knows many examples of rapid enrichment, but Serhiy Kurchenko’s rise during Viktor Yanukovych’s presidency even on that background looks like a breathtaking detective story. A young businessman from Kharkiv, who virtually appeared from nowhere in the big game, within a few years became one of the most influential players in the domestic fuel and energy market, a media magnate and the owner of the football club Metalist. Behind the polished facade of the SEPEK (VETEK) group of companies hid a large criminal scheme centered on the systemic extraction of resources from state enterprises and the financial sector.

Investigators untangled these knots for many years to reconstruct the full picture of what happened from 2010 to 2014. According to law enforcement agencies’ estimates, the amount of misappropriated and subsequently laundered funds reaches over 12 billion hryvnias.

High-ranking officials from the relevant ministries, heads of state companies, regulatory bodies, and a number of fictitious entities created solely to move capital were involved in this giant “resource pyramid.” Essentially, it was about creating a parallel economy where state resources were turned into private wealth for the inner circle of the then head of state.

A key element of the group’s financial success was a scheme with liquefied gas that belonged to PJSC Ukrnafta and PJSC Ukrgazvydobuvannya. Through hand-controlled auction committees and with the direct assistance of officials from the Ministry of Energy, the Ministry of Economy, the State Concern “Gas of Ukraine” and several regional state administrations, liquefied gas intended for household needs at subsidized prices was effectively bought for next to nothing. Later this same resource was sold on a commercial basis at market prices through companies under their control, generating excessive profits for the scheme’s organizers.

However, the agricultural and fuel sectors were only part of this vast construction. The shadow empire actively extended tentacles into Ukraine’s financial system, creating a whole network of controlled banks used to accumulate and then siphon funds abroad. Such large-scale frauds were made possible because state institutions lost control over their own resources and regulatory bodies proved defenseless against political pressure.

Multidirectional plunder

The arsenal of methods used by the criminal organization is striking in its variety and audacity. Besides the fuel market, an important target was Naftogaz of Ukraine. Investigators recorded attempts to siphon funds from this state company using forged documents, including efforts to appropriate a staggering sum of 5,1 billion hryvnias. Each such step required a high level of coordination among top officials who turned a blind eye to obvious legal violations and signed the necessary papers.

Equally destructive were the schemes in the banking sector. PJSC Real Bank and PJSC Brokbiznesbank came under the group’s control and quickly became instruments for extracting taxpayers’ money. Stabilization loans from the National Bank of Ukraine, intended to support liquidity and financial stability, were almost immediately transferred to shell companies and taken out of the country. As a result of manipulations with loans and artificial transactions in bonds between Real Bank, Brokbiznesbank and PJSC AB Ukrgasbank, hundreds of millions of hryvnias fell out of the orbit of state control.

A separate high-profile episode concerned frauds involving PJSC Agrarian Fund. Through schemes of buying and selling government bonds and fictitious transactions with the fund’s resources, the fund lost colossal sums that were supposed to support the domestic agricultural sector and ensure food security. The list of enterprises that suffered losses from the oligarch’s and his associates’ actions covers virtually all strategic sectors of the Ukrainian economy of that period.

Law enforcement qualified these actions under a number of articles of the Criminal Code of Ukraine. The indictment included charges related to the creation of a criminal organization (part 1 of art. 255), embezzlement and misappropriation of property through abuse of office (part 5 of art. 191), fictitious entrepreneurship (part 2 of art. 205), legalization of proceeds obtained by criminal means (part 3 of art. 209), tax evasion (part 3 of art. 212), as well as official forgery and use of forged documents (part 1 of art. 366, part 3 of art. 358 of the Criminal Code of Ukraine).

Years of flight and a legal marathon distance

Punishment for the large-scale schemes was delayed for many years due to the main suspect’s flight. On 14 February 2014, when the country’s fate was being decided in central Kyiv, Serhiy Kurchenko left Ukraine on his own plane and flew to Russia, where he remains in hiding. In March 2014 he was declared internationally wanted, but that only marked the beginning of a long legal process that stretched over a decade.

Ukrainian courts went through a long chain of procedural stages to allow the investigation to proceed in absentia. At the beginning of 2016 the High Anti-Corruption Court (HACC) imposed pretrial detention on Kurchenko in absentia, and in March 2018 the Pechersky District Court of Kyiv authorized a special pretrial investigation. Gathering evidence required processing thousands of volumes of materials, conducting numerous examinations and witness interviews, since this involved a network of hundreds of related companies.

A turning point in the case was the transfer of the indictment to the High Anti-Corruption Court at the end of 2022. The trial officially began on 9 December 2022, and already at the beginning of 2023 the HACC completed the preparatory stage and scheduled the substantive hearings. At the prosecutors’ request, the court approved holding a special trial (in absentia), which makes it possible to administer justice even in the absence of the accused from the defendant’s bench.

For the anti-corruption bodies — NABU and SAP, which took over the proceedings from the Prosecutor General’s Office, this case became a test of their ability to bring investigations into top figures of the former regime to a logical conclusion. Issuing a verdict in such a case has not only moral but also important legal significance for the future confiscation of frozen assets and holding all involved persons accountable.

The sanctions noose and the American trace

Hiding in Moscow, Serhiy Kurchenko did not cease his destructive activity. The U.S. government accuses the oligarch of years-long schemes aimed at evading sanctions imposed by the United States against the Russian fuel and energy sector and affiliated leaders in occupied territories. Using complex schemes and offshore jurisdictions, he tried to build new “gray” trade chains benefiting the aggressor country.

In response to threats to national security, in the spring of 2021 the National Security and Defense Council of Ukraine imposed personal sanctions on a number of former officials, among them Kurchenko. By the NSDC decision, enacted by presidential decree, his assets on Ukrainian territory were frozen for 10 years. The grounds for this were not only past economic damage but also directly confirmed involvement in actions that threaten Ukraine’s sovereignty and in aiding terrorist activities, in particular after the start of the full-scale invasion by the Russian Federation.

Notably, the fugitive tried to mount a legal challenge and appealed the sanctions in Ukrainian courts, calling the freezing of his accounts and property “illegal.” However, the state’s position proved legally unshakable. In early March 2025 the Ministry of Justice of Ukraine reported that a court finally confirmed the lawfulness and reasonableness of the sanctions applied to Kurchenko. That decision opened the way for further seizure of his property in favor of the state through the HACC.

The case of Serhiy Kurchenko is not simply a trial of an individual businessman but a verdict on the entire system of “oligarchic capitalism” that for years undermined Ukrainian statehood from within. The final completion of the trial in the High Anti-Corruption Court and the issuance of a sentence should become an important precedent proving that even after years on the run and attempts to hide abroad, legal responsibility for the embezzlement of national wealth is inevitable.