The $30m Embezzlement Scandal Behind Ukraine’s Winter Olympics Hopes

Plans to build a new ski resort in Ukraine’s protected Carpathian Mountains lead back to an alleged corruption scheme tied to oligarch Serhiy Lovochkin.

Key Findings

• Between 2012 and 2014, the head of a newly created state agency, Vladyslav Kaskiv, allegedly worked with accomplices to steal $30 million from the Ukrainian state and embezzled it through a network of offshore companies
• Part of the money was used to buy land in the Carpathian mountains, where Kaskiv knew the government planned to build a winter sports venue.
• The company that owned the land was secretly controlled by powerful Ukrainian politicians Serhiy Lovochkin and his sister, Yulia, until at least 2016.
• It was later quietly transferred to Austrian Gernot Leitner, who now plans to build a new ski resort on the same land.
• Environmentalists warn the resort will destroy the mountains’ ancient beeches, harm endangered species, and drive illegal logging and flooding.

In March 2021, Ukrainian Prime Minister Denys Shmyhal promised a ski resort that is being built in the Carpathian Mountains for a potential bid to host the 2030 Winter Olympics would be developed “in a legal, transparent way.”

“There have been appeals from MEPs [Members of the European Parliament] … because a large area of land will be affected, including the Carpathian forests,” Shmyhal told the media at a press conference, defending the government’s plans.

“On the other hand, the whole world uses its mountains and its forests to develop tourism potential. We also want to use them, I will repeat, in a clear, transparent way!”

That is not entirely true.

An investigation by OCCRP, Radio Svoboda, and the Investigative Centre of Jan Kuciak found Ukraine’s latest Olympic hopes are little more than a reheated version of a decade-old corruption scheme. Behind the new proposal are companies and allegedly stolen money that can be traced back to scandal-plagued politician Serhiy Lovochkin and his allies.

The same people were involved in a similar plan to build a potential Winter Olympics venue in the Carpathians, a range of mountains covered in ancient forests that arc through the country’s western edge. But it was scrapped after a criminal investigation found that the project was part of a scheme to embezzle $30 million in state funds.

Now, the Ukrainian government has picked a fresh face to build a ski resort on the site: Austrian sports venue designer Gernot Leitner. But reporters found he has close ties to the same group of Lovochkin allies who orchestrated the previous corruption scheme.

Chief among them is Vladyslav Kaskiv, who fled the country after coming under investigation for embezzling the state funds. Now, he’s back in Ukraine — and working with Leitner while allegedly using his position as a local politician to block new environmental protections in Borzhava.

The links don’t stop there. OCCRP found that another one of Leitner’s advisers on the project, Yury Chyzmar, secretly received funding from Lovockhin’s business partner while running for parliament as an independent candidate in 2012. Chyzmar’s wife now works in the justice department of Ukraine’s current president.

Approached by reporters, Leitner denied that he was part of any corrupt schemes, saying he had bought land in Borzhava as a “private investor” on “favorable terms” after being involved in Ukraine’s previous aborted bid to host the 2022 Winter Olympics. He said he had asked Kaskiv to be an advisor after working with him on that bid and denied he knew Serhiy Lovochkin — though he admitted he had been in business with his sister, Yulia, for several years.

“We will face these, obviously politically motivated, accusations [of corruption] properly and prove that this is the first mountain resort project in Ukraine that is being developed in a proper manner,” he told Radio Svoboda.

Plans to build ski resorts in the Carpathians have long faced opposition from environmentalists, who warn they will drive illegal logging in protected areas, increase flooding, and harm endangered species. Two mountain ranges in the Ukrainian Carpathians, Borzhava and Svydovets, are protected under the Emerald Network of environmentally important conservation areas established by the Council of Europe.

“It is wrong to develop any huge tourist facilities in high mountains” such as Borzhava, said Oksana Stankiewicz-Volosianchuk, an associate professor at Uzhgorod National University. “Such a project will bulldoze a unique, invaluable territory, and this, I think, could be a crime.”

Despite concerns about damage to the mountain’s ancient forests and an ongoing investigation by Ukraine’s National Anti Corruption Bureau, Leitner says work is moving forward. The resort, once finished, will include new ski facilities, slopes, and a three-star hotel.

The Lovochkin siblings did not respond to requests for comment. Serhiy Lovochkin’s office has previously told Ukrainska Pravda that reports of their involvement in embezzling Olympic funds were “a lie.”

Attempts to contact Kaskiv were unsuccessful, though he told Radio Svoboda that the Borzhava development was a “beautiful idea” that never came to fruition because of Ukraine’s 2014 revolution. The Office of the President did not respond to requests for comment.

A Trail of Ownership Leading to Cyprus

Leitner owns land in Borzhava through nearly a dozen Ukrainian companies, which he has controlled since 2019 through a company registered in Slovakia, Carpathian Mountain Resort. Before that, he owned them via an Austrian firm, Teleferic Holdings GmbH.

But Teleferic Holdings — and the valuable mountain land it owned — didn’t always belong to Leitner.

Leaked emails obtained by OCCRP show that from approximately 2014 to 2016, Teleferic Holdings was controlled by Lovochkin and his sister through a company in Cyprus. Ukrainian records show Leitner took control of the land in Borzhava via the Cyprus firm in 2016.

It’s unclear how exactly Leitner acquired the land. Asked by reporters, he said Carpathian Mountain Resort took it over from Teleferic in 2019 to optimize “management processes,” but didn’t give more details.

“This is a private investment and not linked to money laundering,” he told Radio Svoboda, dismissing claims that the land was bought with embezzled funds. When OCCRP tried to press for more information, he blocked the reporter’s phone number.

But this isn’t Lovochkin’s only tie to the Borzhava land. In 2010, his ally, Kaskiv, was installed as head of the newly created body charged with building the ski resort, the State Agency for Investment and National Projects. A former leader of a major pro-Western youth organization, Kaskiv rose to prominence during the Orange Revolution of 2004 before being elected to parliament three years later.

The emails — part of a cache of thousands covering more than a decade of Lovochkin’s correspondence — show Kaskiv reporting back to Lovochkin and asking for support in accessing state funds.

In one message from late 2010, Kaskiv wrote to Lovochkin urging him to ensure the agency would be allocated money from the national budget. “If the documents are not confirmed tomorrow, there will be no more opportunities this year […] and [this] will not allow us to use the allocated funds,” he said. “Maybe it would be possible [for you] to emphasize the necessity of my attendance at the government sitting.”

A criminal investigation, launched after Yanukovych was ousted in a popular revolution in 2014, found that the State Investment Agency, which was controlled by Kaskiv’s State Agency for Investment and National Projects, loaned two private companies around $30 million. Of that, two-thirds was earmarked to build a winter sports venue in Borzhava.

But Kaskiv and a handful of accomplices, including his brother and cousin, allegedly embezzled around $14.5 million of this money via offshore firms. Some of it went to Teleferic, which became the owner of the land in Borzhava.

Other funds from the alleged scheme went to offshore companies that had accounts at the now-defunct Trasta Komercbanka, a Latvian bank with ties to the Lovochkins which was later closed amid allegations of massive money laundering. Reporters discovered these companies were also linked to the Lovockin family.

Investigators confirmed to OCCRP that they are looking into the Lovochkins and other unnamed foreigners “for possible involvement in the commission of criminal offenses,” but declined to provide further information.

Today, Lovochkin is a member of the Ukrainian parliament and a leader of its largest opposition party. He also owns one of Ukraine’s biggest TV networks with oligarch Dmytro Firtash, who is currently fighting extradition to the U.S. from Austria. (Firtash is being sought for bribery charges and was sanctioned by Kyiv in 2021 as part of a crackdown on oligarchs with ties to Moscow.)

Kaskiv Returns to Ukraine — and Borzhava

Kaskiv fled Ukraine after the revolution, when the government that took over after Yanukovych’s fall started investigating the alleged embezzlement. He was extradited from Panama back to his homeland three years later, though under the terms of the agreement he only faced a single charge: embezzling 7.5 million Ukrainian hryvnias (close to US$1 million) in state funds.

With the case still making its way through Ukrainian courts, OCCRP and Radio Svoboda found Kaskiv now appears to be working to advance the new Borzhava development.

Following local elections in October 2020, he was elected to the local assembly of the Zakarpattia region, which includes the Borzhava mountain range, on the ticket of the Opposition Platform – For Life party co-headed by Lovochkin. Stankiewicz-Volosianchuk, of Uzhgorod National University, said he has used his position to block proposed new protections for the mountains’ virgin forests.

“It is the regional assembly that has the final say, but already three or four times it has failed to do so without providing any grounds,” Stankiewicz-Volosianchuk said. “The initiative behind this came from the Opposition Platform lawmakers, one of which is Vladyslav Kaskiv.”

Vitaliy Gregor, a local environmental activist, said several lawmakers, including Kaskiv, opposed new environmental protections in order to promote private interests.

At the same time, journalists found that Kaskiv has business ties to Leitner’s company Carpathian Mountain Resort, which took control of the land bought with the embezzled funds from Teleferic in 2019. And he has taken pains to hide them.

Carpathian Mountain Resort is registered at the same address in Bratislava, Slovakia, as a company owned by Kaskiv’s sister-in-law, Tetiana. Slovak lawyer Daniel Grigel told Radio Svoboda and the Investigative Centre of Jan Kuciak he incorporated both Tetiana Kaskiv’s company and Carpathian Mountain Resort. The latter was done at the behest of Yury Zalutsky, a Ukrainian lawyer who also attended a 2020 meeting on the new project at President Zelensky’s office, alongside Leitner.

According to Zalutsky’s emails, which were leaked to the Investigative Centre of Jan Kuciak in Slovakia and Radio Svoboda, there was a plan to transfer Carpathian Mountain Resort to Kaskiv at a later date.

“The idea is to introduce VK [Vladyslav Kaskiv] into the existing corporate structure of Borzhava Project. He, as [an] individual, will provide services to the Cypriot company,” read one email Zalutsky sent to Grigel.

“…The remuneration for the discussed services will be the corporate rights of Slovak company (CMR) … VK will become the owner of [the] Slovak company.”

The plan appears to have come to fruition in 2020, when Kaskiv became an adviser to Carpathian Mountain Resort with a mandate to manage, develop, and promote the Borzhava project in Ukraine, according to another document obtained by Radio Svoboda.

OCCRP also found that another of Leitner’s advisers on the current Borzhava development also has ties to Lovochkin stretching back years.

Yury Chyzmar, whose wife, Kateryna, is the deputy head of the justice department in the office of Ukraine President Volodymyr Zelensky, is a legal adviser to Borzhava Asset, one of Leitner’s companies which is also involved in the resort project.

The leaked emails obtained by OCCRP show Yury Chyzmar may have received funding from Lovochkin’s business partner in 2012, when he ran for a seat in Ukraine’s parliament as an independent candidate.

“As a result of a meeting with Dmytro Firtash [Lovochkin’s partner] we agreed funding of $1.5mn and a program of voter loyalty of $0.7mn,” Chyzmar wrote to a consultant with Lovochkin’s family office that year.

Andrii Ianitskyi, director of the Centre for Journalism at the Kyiv School of Economics, said “voter loyalty” means “most likely vote-buying, although it could be made to look legal as, for instance, payments to street canvassers.”

Kateryna Chyzmar is also the business partner of another Lovochkin ally, Ihor Tynnyi, with whom she co-founded two firms that manage hydroelectric and solar power plants in Zakarpattia Oblast the Carpathians.

“My soul is in the Carpathians,” Kateryna Chyzmar said in an interview shortly before she was appointed to Zelensky’s office in September 2020.

Yury and Kateryna Chyzmar were contacted personally and via the Office of the President, but did not respond to requests for comment.

Wilderness Under Threat

Nestled amid Ukraine’s slice of the Carpathians, the peaks of Borzhava are an untouched wilderness of ancient and primeval beech trees that spread across the European continent after the end of the last Ice Age 11,000 years ago.

The European Parliament called on Ukrainian authorities to “prevent future [ski] projects from harming the environment” in a report published in February 2021, labelling plans for another potential Olympic ski resort in the Carpathians as illegal.

The Other Olympic Ski Resort

In July 2016, the then-governor of Zakarpattya region announced that the existing Bukovel ski resort, which used to be controlled by companies linked to controversial oligarch Ihor Kolomoisky and his business partners, would expand to include the Svydovets mountain range in the Carpathians.

Like neighboring Borzhava, Svydovets is a high-mountain landscape supporting pristine old-growth forests and home to dozens of threatened species. The plans for Svydovets envisaged building a resort fit for 28,000 guests, complete with 230 kilometers of pistes.

Shocked scientists argued the massive planned development would lead to “deforestation, pollution and extraction of water and the loss of biodiversity, and increased risk of floods.” Local villagers have also brought a legal case alleging that consultations with communities affected by the ski resort broke the law.

The European Parliament has agreed, describing the plans to build a winter sports venue in the Svydovets area as “unlawful.”

Months later, more than 50 NGOs and experts wrote to the International Olympic Committee (IOC) in protest after its chairman held talks with Zelensky about developing Borzhava. In its response, the IOC said its sustainability rules meant “no permanent construction can take place in protected areas” and any new infrastructure needs to have long-term benefits.

The Council of Europe, which designated Borzhava an Emerald Site in 2016, also called for enhanced protection of the area in December, in part due to the plans to build a potential Winter Olympics venue there.

Borzhava’s peaks are a habitat for 14 species of protected birds, as well as a vital waystation for dozens more migratory species. Its rivers are filled with protected fish, such as brown trout and sturgeon. Ecologists say these will be under threat from the planned ski resort, although very few details on the plans have been made public, making it difficult to know exactly what the development will include.

“If they change the geography here, the migratory birds will stop coming,” said Petro Semenyuk, a forest ranger in Bereznyaky, a village in the mountains. “There will be major alterations to the landscape and there is a major threat to the river.”

A key concern is that deforestation for the new development — as well as associated illegal deforestation, which is already rampant in the Carpathians — will cause increased flooding.

In 2020, rivers burst their banks across the mountains, inundating towns, washing away roads, forcing hundreds from their homes, and killing three people. Officials acknowledge deforestation contributed to the floods, and ecologists fear the development of Borzhava will aggravate the problem.

Environmentalists say climate change means the facilities could also be obsolete within a few decades.

“It is quite probable that there will be no snow in the Carpathians from between 2030 and 2050,” said Stankiewicz-Volosianchuk, the ecologist from Uzhgorod National University.

Nonetheless, the government has backed the planned ski resort, hoping it will draw investment and tourists. Leitner told Radio Svoboda that over 40 million euros would be spent on developing Borzhava by the end of 2023, with hundreds of millions more of investment foreseen in the region in the coming years.

The Austrian insisted his group is “following international environmental standards,” adding that “uncontrolled mass tourism, no waste management, [and] hundreds of heavy vehicles on the mountain roads every day” were doing more damage than the development would.

“In recent years, since we operate the lifts, many jobs were created in the Volovets/Borzhava area and slowly an eco-friendly tourism destination is growing,” he told OCCRP.

Article Credit: https://www.occrp.org/en/investigations/the-30-million-embezzlement-scandal-behind-ukraines-winter-olympics-hopes