Property Held Hostage: How the Ihor Kushnaryov Case Turned into a Prosecutorial Cycle

Seizing assets for years, failure to enforce court rulings, and delays in investigations create conditions for pressure on business, and attempts to resolve matters for money cast doubt on the legality of some officials’ actions. How seized assets become a bargaining chip and why such cases need proper oversight by anti-corruption bodies — in our report. Key points: The seized assets of Ihor Kushnaryov’s companies have remained under restrictions for many years. In 2019 the court lifted the seizure of real estate belonging to one of the funds, but eight days later it was reapplied. In a report to NABU the businessman reported possible extortion of 240 thousand dollars and funds in cryptocurrency in exchange for resolving issues with the property. The story raises questions about enforcement of court decisions, preservation of seized assets, and control over law enforcement actions. High-profile exposures like Mindichgate and Carthage revealed a general degradation of the security bloc, but the most dangerous corruption sore lies within the system itself: powers to uphold the law have turned into the ability to keep others’ property under seizure for years and to trade its release. Despite billions in taxpayer spending, it appears the system only simulates activity. Proceedings are still opened at politicians’ direction for political PR, and businessmen are pressured as sources of extorted money. A clear example is the story of Ihor Kushnaryov, a Ukrainian businessman and philanthropist who has for years tried to prove the baselessness of the accusations, ensure the inclusion of documents unfavorable to the investigation, and remove encumbrances from his companies’ property. According to the prosecutor’s office, the businessman’s structures allegedly only formally purchased the real estate while actual control remained with the previous owner. This concerns two properties bought in 2012–2013 from the family of former interior minister Vitaliy Zakharchenko — from his ex-wife. The transactions were formally executed, payments were made through banks, and, in the businessman’s view, the legality is confirmed by documents submitted to prosecutors for verification. Nevertheless, the property has remained under seizure for years. At the same time, more than three dozen other real estate objects owned by Kushnaryov and unrelated to Zakharchenko or his family members were seized. How a real estate case turned into years-long persecution In 2014, amid political purges, the prosecutor’s office effectively received a carte blanche to pursue anyone even remotely connected to the former regime. Kushnaryov served as an adviser in the Ministry of Internal Affairs both before and after Zakharchenko headed the agency; notably, he also worked as an adviser during Arsen Avakov’s tenure. However, his work prior to 2014 likely became the pretext investigators used to link him to the former interior minister. The property purchase agreements became one of the grounds to associate the well-known businessman with the case. Such linkages later became a systematic tool to pressure big business and financially extract from it. The prosecutor’s “signature” approach shows in the details. Under pressure from leadership demanding any results to move the case, prosecutors decided to pressure the director of the companies’ Dutch office. He received an unofficial call warning of sanctions and a threat of 50 years in prison, demanding immediate notification of local authorities. The scheme was crude: intimidation instead of official international procedure, presumably because they knew they would lose through lawful channels. But the director believed the threats and approached regulators without checking the facts. Dutch authorities froze the assets but, at the court’s request, conducted their own investigation. On 5 February 2016 the Dutch Ministry of Finance officially concluded there was insufficient evidence linking the funds to sanctioned individuals and no grounds to continue the freeze. Ukrainian investigators should have taken this conclusion into account, especially given how sanction-related information reached Dutch authorities. The former head of the Dutch company has already testified in court about threats and being misled by Ukrainian law enforcement. Those statements could form the basis for legal assessment of the prosecutors’ actions. The Dutch Ministry of Finance reported insufficient evidence of control of the fund by a sanctioned person and no grounds to support the freezing (screenshot) Despite this, the sanction narrative continued to be used in Ukraine. Finally, on 30 January 2019 the Pechersky District Court of Kyiv lifted the seizure on real estate of one of Kushnaryov’s Dutch funds (LVV), taking into account bank transfers and the Dutch ministry’s position. But that justice did not last long. On 7 February, literally eight days later, at a new request from investigators the assets were seized again—relying on the same sanction-based argument. The case returned to the same cycle. On 30 January 2019 the court lifted the freeze on LVV’s assets. On 7 February it re-imposed a seizure on the fund’s assets. Eight days separated the rulings (screenshot) Seized without an indictment: why the case hasn’t reached trial in years There is another contradiction. For years the prosecutor’s office has linked the businessman to these assets, yet according to an Office of the Prosecutor General reply dated 9 December 2025 he has not been served a suspicion and his procedural status remains witness. The same letter refused the lawyer copies of procedural documents on the grounds that he represents a witness, not a defense party. This creates a closed loop: a person must for years refute allegations of hidden ownership yet cannot obtain case materials for a full defense precisely because of their witness status. Kushnaryov repeatedly requested to be questioned and to have evidence admitted, but after interviews and filings the investigation responds with the standard line: arguments will be checked during the investigation. For a proceeding registered back in November 2014 this formula looks like plain stalling. Or is it simply professional incompetence by prosecutors who for years have been unable to sort out the case? According to Kushnaryov, it even reached a demand for 240 thousand dollars conveyed via an intermediary to resolve the asset seizures. In November 2025 the businessman filed a criminal complaint with the National Anti-Corruption Bureau of Ukraine. But getting the investigation started proved a separate “quest”: for NABU to enter the information into the register the entrepreneur had to go to the High Anti-Corruption Court. By a ruling of 5 December 2025 the HACC obliged NABU to enter the information into the Unified Register of Pre-Trial Investigations on that complaint. In other words, the aggrieved party had to sue an anti-corruption body just to get the start of an investigation into a bribery complaint… The house ARMA did not receive: new questions for law enforcement Another high-profile episode concerns the Kyiv house of the Global Investment fund linked to Kushnaryov. The property became the center of a public scandal because former energy minister Herman Halushchenko lived there. But behind the famous names lies a series of official crimes and manipulations with seized property. According to ARMA’s reply dated 6 October 2026 the court ruling to transfer the house into the agency’s management was sent by the prosecutor’s office as early as 2021. The real estate had been recognized as material evidence in a criminal proceeding. However, the court’s decision was never executed: the actual transfer of the house was not performed and no acceptance-transfer act was drawn up. Thus the ruling remained unenforced for years: the property was not transferred to ARMA and the agency did not take it into management. In a reply dated 6 October 2026 ARMA confirmed: the house the court ordered to transfer to the agency in 2021 was in fact not taken into management. Moreover, back in 2021 the investigator was supposed to inventory and appraise the property recognized as material evidence and ensure its proper preservation. A seizure does not absolve the state of responsibility for the property’s condition: it must not be allowed to deteriorate, be damaged, or lose value through neglect. Yet the property remained without adequate maintenance for years and gradually decayed. This is not only procedural negligence but also the responsibility of officials who were to ensure its preservation. Incidentally, Kushnaryov’s lawyers are currently preparing multi-million lawsuits on behalf of the companies owning the property against the state, represented by the Office of the Prosecutor General and the State Bureau of Investigations. They will seek compensation for damage caused by improper preservation of seized real estate over these years. Thus the property remained in limbo for years. Tenants who lawfully reside in the house lived and live there, but this fact is constantly questioned by security agencies: according to Kushnaryov’s side, tenants are blackmailed, pressured, and their residences are subject to repeated searches. Clearly only a court can determine the legality of the tenants’ presence, but when all case materials are submitted there will be evidence that people lived there until 2021 and are not owners but only tenants, and their occupancy is lawful. However, it appears prosecutors are not interested in a court hearing that could clarify circumstances and challenge the grounds that launched the case. Later a new twist appeared: Herman Halushchenko moved in promising to guarantee calm and act as a kind of protector of the property while residing there. But after Halushchenko’s arrest, investigators and prosecutors faced the same problems as early on: the property lacked an expert appraisal and was not transferred to ARMA. To justify negligence and illegalities, the SBI initiated a criminal case against the tenants, alleging they obstructed the transfer to ARMA. In the fall of 2026 the story took another turn: a money-for-resolution proposal resurfaced. During a search of the Kyiv house where Halushchenko lived, an ARMA representative approached Kushnaryov’s lawyer and asked them to pass a message to the businessman to contact him. In the businessman’s complaint to NABU, a copy of which the editorial office has, the ARMA representative allegedly demanded cryptocurrency for resolving the property issue during a later conversation. On 8 October 2026 NABU confirmed the complaint was attached to a criminal proceeding opened back on 23 January 2026. They will verify reports of possible corrupt actions by officials of ARMA, the SBI, and the Office of the Prosecutor General. So many questions remain for the prosecutor’s office. Who was responsible all this time for preserving the seized property? Why was the court decision to transfer the assets to ARMA left only on paper? And how did seized real estate end up at the center of alleged corrupt arrangements? In the end, it appears seized property has become a kind of shadow marketplace for law enforcement, where inaction, ignoring violations, and possible protection come at a price. Who will be accountable for seized property and possible abuses Now the story must become the subject of an investigation into the actions of law enforcement themselves. NABU and SAP must verify the extortion reports, establish each official’s role, and determine whether years-long seizures were used as a way to profit from others’ property. Merely attaching another complaint to case materials is insufficient. If the facts are confirmed by evidence, the next steps should be notices of suspicion, indictments, and trials. A separate issue is effective judicial oversight of enforcement of court rulings and investigations that remain open for years without charges but with active restrictions on property. Prosecutors must justify to the court why seizures remain necessary, what has been done to verify evidence, and why the investigation’s duration is justified. Saying the investigation continues cannot indefinitely justify blocking property. If no legal grounds for restrictions remain, they must be lifted. For proven extortion, unlawful pressure, official abuse, and caused damages, personal liability must follow, up to criminal responsibility. Society pays billions of hryvnias in taxes not for law enforcement to simulate busywork for years, keep entrepreneurs in limbo, and undermine trust in the Ukrainian justice system. When seizure of property becomes a multi-year tool to pressure business without an indictment or conviction, it erodes trust in the state and requires urgent systemic reform and accountability of the guilty.