The U.S. Justice Department was ordered Tuesday to provide more specific information about the government's effort to seize more than $250 million allegedly derived from the criminal exploits of a former Ukranian politician.
Federal prosecutors in Washington contend the money, scattered in banks in Guernsey, Antigua & Barbuda, Switzerland, Lithuania and Liechtenstein, is rooted in the crimes Pavlo Lazarenko and associates committed in the 1990s.
Several claimants, including the Russian gas giant OAO Gazprom and the liquidators of the defunct European Credit Bank in Antigua, filed claims in Washington federal district court to try to block the government’s seizure of the disputed funds. (Represented by Winston & Strawn, OAO Gazprom was cut from the case and is now fighting, in the U.S. Court of Appeals for the D.C. Circuit, to get back into the litigation.)
Lawyers for the claimants, including McDermott Will & Emery partners Jason Levine in Washington and Gordon Greenberg in Los Angeles, who represent the EuroFed bank liquidators, contend the Justice Department has failed to sufficiently explain how the targeted funds are tied to Lazarenko’s alleged crimes.
DOJ has fought for years in different courts to restrain the funds in dispute. The action in Washington federal district court was filed in May 2004.
Among other things, EuroFed’s attorneys want information about the specific criminal conduct to which the accounts can allegedly be traced.
Lazarenko, former prime minister of the Ukraine, was convicted in California federal district court for his role in a money laundering conspiracy. The bulk of the criminal charges, however, did not withstand trial and appellate court rulings. Lazarenko was sentenced in 2009 to more than eight years in prison.
Magistrate Judge Deborah Robinson of U.S. District Court for the District of Columbia said Tuesday in a ruling (.pdf) that the Justice Department, in responses to the bank’s demand for more information about specific criminal conduct, has made “vague and imprecise” references to “an extensive web of transactions to launder and commingle the proceeds.”
The government’s reference to the voluminous trial record in the criminal prosecution of Lazarenko, Robinson said, is “insufficient” to justify withholding more detailed answers to questions the claimants have posed.
Robinson also ordered the government to provide more detailed information the Justice Department obtained from foreign governments regarding certain bank accounts.
The judge, however, ruled in part for DOJ when she said the government does not have to explain why certain bank accounts were not included in a superseding indictment against Lazarenko. Disclosing such information, Robinson said, would intrude on grand jury secrecy rules.
Robinson today set a status conference for Sept. 28.