Ilmenite from India

Ukrainian billionaire Dmytro Firtash and five other foreign nationals are charged with a Federal Prosecutor in Chicago (USA) in the organization of an international conspiracy. They allegedly paid $18.5 million in bribes to Indian officials to obtain licenses to development of mineral deposits of ilmenite.

According to U.S. prosecutors, the story begins in April 2006 when the Swiss-registered Bothli Trade AG (controlled by the Hungarian firm GEMM, a holding company of Group DF, founded by Firtash) signed a memorandum of understanding with the government of the Indian state of Andhra Pradesh.

The parties agreed to establish a joint venture which to extract various minerals, including ilmenite, the ore used to produce titanium and its derivatives.

In February 2007, Company A (read: Boeing) of Chicago signed a memorandum of understanding with a firm from Firtash’s Ostchem Holding. The contract provided that Bothli Trade would annually supply Company A with from 2,250 to 5,400 tons of titanium sponge obtained from the “Indian project.” This deal was designed to make Firtash about $500 million annually.

Bribe Indian officials

In order to begin mining ilmenite in India, Firtash’s companies had to obtain licenses from the state of Andhra Pradesh and the Central government of India. U.S. prosecutors accuse Firtash of paying the Indian officials at least $18.5 million in bribes to implement the project.

The indictment names Firtash, Ukrainian Suren Gevorgyan and four citizens of Hungary and India. The head of this organization was Firtash, who “supervised and controlled the illegal activities of the enterprise.”

Firtash personally held meetings with Indian officials and ordered to prepare fake documents disguising money spent on bribes as legitimate business transfers. Gevorgyan visited the U.S. for negotiations with “Company A” on the supply of titanium sponge, as well as signed documents disguising bribes to Indian officials.

Other participants in the conspiracy include:

• former Minister of culture of Hungary and the General Director of Eural Trans Gas Andras Knopp. Met with the Indians and the representatives of Company A gave “advice” about the bribes to the Indians;
• Indian Gajendra Lal, who had a right to reside in the U.S. and lived in North Carolina. Gave advice on paying the bribes, and the forgery of documents, flew to India to meet with associates;
• Indian Ramachandra RAO, ex adviser to the chief Minister of the state of Rajasekhara Reddy (Reddy himself was killed in 2009 in a plane crash). RAO demanded a bribe from the company Firtash;
• Indian Periasamy Sunderalingam. Met with RAO and oversaw the transfer of bribes.

Illicit payments

The process of transferring the bribes included more than 50 money transfers, according to transactions listed in the indictment. The accounts of fake companies were used. Firtash and his associates managed to transfer to the Indian side about $10.5 million. The investigation includes recorded trips and meetings that were held between the parties to the agreement in India and the U.S.

U.S. prosecutors want to confiscate not only the $10.5 million transferred in the form of bribes, but also all the shares of the Limited Group DF owned by Firtash, as well as the assets of all companies included in the Group DF Limited holding company. A list of these companies is listed in the Annex to the indictment.

The list consists of 159 companies, most of which (89) were registered in Cyprus. These include offshore accounts, and a large company owned by Firtash: media holding Group DF, Centragas Holding, Ostchem, Ukrinvest and others.

If extradited the U.S. and convicted, Firtash and his accomplices could be jailed for up to 20 years. Assets of about 150 companies associated with Firtash could also be seized.

Firtash and Boeing

Boeing Corporation isone of the largest world producers of aviation and space technology. The company spends billions of dollars on Titanium ore.

Boeing in March 2014 confirmed had indeed signed a memorandum of understanding with Bothli Trade AG. The company said it did not sign any binding documents and did not pledge to conduct any transactions other than the signing of the memorandum.

U.S. prosecutors say Company A executives are not suspected of wrongdoing.

Business development

Details of the U.S. criminal case against Firtash became known in the spring of 2014, although the investigation began years earlier. The indictment was prepared in 2012 for the Grand Jury, and in June 2013, the Grand Jury approved it.

Firtash was detained in Vienna on request of the Federal Bureau of investigation of the U.S. on March 12, 2014. He was released on €125 million bail, which was paid by a Russian businessman. Vasily Anisimov, the billionaire who heads the Russian Judo Federation, the governing body in Russia of Putin’s beloved sport, posted Firtash’s bail. .

The Higher Regional Court of Vienna in February 2017 approved the extradition of Firtash to the U.S., but Firtash was detained at the request of Spain on suspicion of laundering large sums of money of unknown origin.

On February 23, 2017 the Vienna regional court considered the request of Spain on the extradition of Firtash and decided to release the businessman, pending trial. Firash surrendered his passport and was released.

Lawyers for the Ukrainian businessman said that in the near future Firtash will not be extradited to either the U.S. or in Spain. His lawyers will appeal against the Spanish request to the court of first instance and the court of appeals decision to the Supreme Court of Austria. During these proceedings, Firtash’s movements in Austria will be limited.