[HN Gopher] Accused money launderers left a path of bankrupt fac...
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Accused money launderers left a path of bankrupt factories
 
Author : valkrieco
Score  : 204 points
Date   : 2021-04-24 11:45 UTC (11 hours ago)
 
web link (newsinteractive.post-gazette.com)
w3m dump (newsinteractive.post-gazette.com)
 
| type0 wrote:
| > After the evidence surfaced, lawyers for Mr. Kolomoisky pushed
| to seal the information, which included 3,103 transactions by
| Deutsche Bank ...
| 
| Somehow it wasn't surprising to see Deutsche being involved.
 
| raincom wrote:
| The scheme Ihor Kolomoisky perpetrated is very popular in the
| third world countries. In India, for instance, many politicians
| and industrialists take loans worth hundreds of millions of
| dollars from the public banks for their supposed projects, then
| funnel the loan funds to their personal coffers. Years down the
| line, these public banks add these unpaid loans as "non
| performing assets". The same public banks are very reluctant to
| lend money to the average guy.
 
  | marcinzm wrote:
  | Those probably aren't loans, they're semi-hidden bribes.
 
    | skybrian wrote:
    | It sounds more like a scheme to defraud banks.
    | 
    | An actual business with a factory is going to look like
    | pretty good collateral to a bank making a loan, but the bank
    | loses money on the loan when the company goes bankrupt. It's
    | not in the bank's interest to do this. But bank employees
    | could've been bribed, sure.
    | 
    | So this sounds like a form of "long firm fraud" or maybe
    | "control fraud." For more about it, I recommend reading
    | _Lying for Money: How Legendary Frauds Reveal the Workings of
    | Our World_.
    | 
    | (Not that I'm an expert; I just read a book.)
 
      | WesolyKubeczek wrote:
      | In case of Kolomoyski, he owned the bank he defrauded.
 
      | gruez wrote:
      | I think gp's saying that the banks are in on it. ie. they
      | knew in advance that the loan was going to go bad, but that
      | was fine to them because they saw as a price of gaining
      | favor (bribe).
 
        | skybrian wrote:
        | If the money comes from the bank, it's hard to see how
        | the bank (as a company) benefits from it. Maybe by
        | selling the loan?
 
        | gruez wrote:
        | It could be some sort of scheme where the politicians
        | does some sort of favor for the bank, eg. expediting
        | their paperwork, awarding them contracts. However, as the
        | sibling commenter mentioned, it could also be that the
        | bank executives are abusing their position and taking all
        | the gains.
 
        | raincom wrote:
        | Banks don't benefit from these schemes. Nor do they sell
        | these loans to third parties either in bulk or in
        | tranches. In India, major banks are partly owned by the
        | government, even though these banks are listed on their
        | stock exchanges.
        | 
        | So, it is a form of collusion between bank executives and
        | powerful loanees. Who holds the bag? Usually the
        | government in the Indian case: for instance, Indian govt
        | has 61.23% ownership in State Bank of India, a large bank
        | in India. In India, many politicians are also businessmen
        | --real or fake; these people with dual masks (politician
        | and businessman) are so good at scamming the govt, banks,
        | public works contracts.
 
    | failwhaleshark wrote:
    | It's essentially embezzlement with complicity.
 
| pupdogg wrote:
| Great read! Aside from software development, I run a metal
| fabrication shop where we purchase and process approx. 20k lbs of
| steel and aluminum (monthly). Having been in the industry for the
| past 10 years, I've always referred to all metal suppliers as
| folks that deal with "funny money". There's no transparency in
| pricing whatsoever. You can't easily lookup or guesstimate metals
| prices without having core subject matter expertise that come
| with experience. It might as well be called an undercover hedge
| fund market with killer profits!
 
  | robk wrote:
  | Metalshub is working on this
 
  | selimthegrim wrote:
  | Matt Levine's jokes about the aluminum merry-go-round suddenly
  | acquire another dimension.
 
  | 55555 wrote:
  | Isn't the markup for a certain product basically it's weight
  | times the spot market price of the metal with an added constant
  | markup depending on how much more complex it is than a lump of
  | ore? I have no idea what I'm talking about but am interested..
  | Please elaborate!
 
  | hellbannedguy wrote:
  | Could you elaborate a bit more? I've always been interested in
  | the buying/selling of metal.
 
  | zafka wrote:
  | Are you getting better prices on feedstock as automobile
  | production slows?
 
| crusty wrote:
| I wish there were more details on the kind of money they were
| able to pull out of this scheme. All of the dollar values in the
| article refer to the amounts stolen in Ukraine, moved through
| she'll companies, and used to purchase properties and businesses.
| 
| Traditionally, we hear about money laundering involving low-
| overhead, cash-oriented businesses where money can be injected
| and extracted by falsifying volume.
| 
| But these were large capital purchases into an industry in
| destress with numerous facets of regulatory exposure, from the
| industry's risk to the environment and the high potential safety
| risks for workers to the special status of the industry to
| national security - it invites scrutiny of lots of alphabet
| agencies, especially if your scheme involves ignoring all of
| their requirements to juice profits.
| 
| This leads me to believe the "masterminds" only ever saw it as a
| short-term play, so back to my original bewilderment, how much
| were they able to extract in just several years compared to the
| large upfront costs? And were they skimming so much from neglect
| that it wouldn't have been worth it just to run these as
| legitimate, sustainable businesses?
| 
| I wonder if the had just maintained these steel facilities and
| avoided the safety and environmental problems, and made it into
| Trump's presidency intact, would they have just been able to sell
| them off high on the back of Trump's protectionist, domestic
| steel revival rhetoric and made a killing and be sitting pretty
| today, given that all the legal pressure on them for this is from
| the US and they seem to have already been given a pass for
| stealing $5.5 billion in Ukraine from Ukraine.
 
  | crusty wrote:
  | Other comments point to the scheme using the asset purchased
  | with stolen money as collateral for a loan that the bank is
  | left with in a much depreciated state. That would make the
  | ongoing extraction of profits is irrelevant. My alternate set
  | of questions about this loan fraud scheme are in a different
  | comment. Ha.
  | 
  | And I don't really get how that "launders" the money trail. The
  | only point at which the transfers of funds seem murky is when
  | they go through the she'll companies in the BVI.
  | 
  | This feels like the makings of a great article that some editor
  | said, "write up what you have, we're just going to publish it
  | and move you onto something else." There are just so many
  | things unexplained or unexplored.
 
| alfl wrote:
| Canada has a huge money laundering problem (source: my company
| makes anti money laundering tech).
| 
| Interesting how the article shows how this translates to
| destruction of capital assets and, eventually, people. That's not
| necessarily clear otherwise.
 
  | motohagiography wrote:
  | The missing simple description in the article is:
  | 
  | Launderers with tainted money buy struggling businesses that
  | have large assets as collateral for loans, and then walk away
  | with the loan. It leaves the bank holding the asset to be sold
  | off.
  | 
  | From the launderer's value at risk perspective, $10m in dirty
  | money is worth probably $5m or less clean, because if you taxed
  | that $10m and did all the fees, and then there is the risk of
  | being caught for the crime that generated it, 50% free and
  | clear seems pretty good.
  | 
  | The more I learn about the investment business, the more I
  | think it's like crime without the violence. The money
  | laundering problem in Canada is most obvious by the oversupply
  | of certain retail businesses, but there are other scams I see
  | on investment prospectuses more often than seems normal. The
  | two problems I think is a lot of the launderers are politically
  | connected, so there is no scrutiny, and even if leadership did
  | something, it would only be to put even more of a burden on law
  | abiding businesses.
  | 
  | Imo, complex laws and regulations only affect the people who
  | follow them, and they reward corruption.
 
  | hellbannedguy wrote:
  | I don't know about Canadian laws, but in the United States we
  | let foreigners buy real estate with a phone call, or email.
  | 
  | So basically we let foreigners buy our land.
  | 
  | They can't live in the house/building, but they control the
  | people whom do.
  | 
  | We make it difficult for hard working Americans to buy a home,
  | but let foreigners scoop it up with funny money?
  | 
  | This has bothered me for years. Especially when it's not easy
  | for Americans to buy foreign land.
  | 
  | (Supposedly the government asks about the origin of the wealth
  | before the sale now, but in my county (Marin County) it looks
  | fishy. I have neighbors who don't speak a lick of english, but
  | are living in mansions. My gripe isn't cultural. I just have
  | doubts on the origin of the cash they buy houses/land/buildings
  | with.)
 
    | lotsofpulp wrote:
    | If you're buying land in the US with a phone call or email,
    | you are probably dealing with sufficient money to acquire an
    | EB-5 Visa, so they can live in the US.
    | 
    | Although, they did just increase investment amounts to $1.8M
    | (and $900k for economically disadvantaged areas) from
    | $1M/$500k, so the bar did get higher.
    | 
    | https://www.uscis.gov/working-in-the-united-
    | states/permanent...
 
    | hippich wrote:
    | Isn't there like 30% immediate tax that is required to be
    | withheld by the agent and then later buyer is responsible to
    | file a return to attempt to get that money back? I am sure
    | some do, but for the rest - it looks like it is a price paid
    | to the USA for the privilege of owning real estate there.
 
  | spurdoman77 wrote:
  | Probably all wealthy countries are big destinations for dirty
  | money. Wouldnt make sense to bring dirty money to poor country
  | because there it would attract more attention.
 
| bluetomcat wrote:
| This is not an isolated case in the post-soviet space. The
| general pattern is - squeeze lots of money domestically via your
| privileged position of operating whole key sectors of the
| national economy and spend them comfortably abroad. Everything
| from banks through insurance companies through delivery companies
| to media groups is owned by people formerly involved with state
| security. It's an exclusive social network in which political
| decisions and private economic interests are tightly coordinated.
| 
| The worrying thing is that the West gave international legitimacy
| to these wealthy elites, while only pointing fingers at the
| endemic corruption in their countries.
 
  | nradov wrote:
  | That's not so different from how the European noble families
  | established their privileged positions centuries ago. It's just
  | that they were military leaders rather than state security
  | officers.
 
  | dv_dt wrote:
  | The West gave legitimacy to this because it's own elites do the
  | same thing with monopoly enterprises. Microsoft did it with
  | OSs, Google with search, Telecoms expanding from wired phones,
  | to wireless, now to entertainment media ownership, etc...
  | Though perhaps the private equity companies come closest to the
  | methods of operation described in the article.
 
  | jollybean wrote:
  | It's not just 'post Soviet' it's also 'current Rest of World'.
  | 
  | Business outside of 'established rich places' may often include
  | huge sums for bribery and that money comes back in many ways,
  | including 'very expensive real estate in NY / London' etc. and
  | Dubai is becoming a major centre of such activity. [1]
  | 
  | The question is, how long can Dubai balance it's claims to
  | legitimacy and integrity, while at the same time looking the
  | other way? Will nascent powers like India and China even care?
  | It's going to be an interesting next 50 years.
  | 
  | [1] https://www.transparency.org/en/news/the-united-arab-
  | emirate...
 
  | baybal2 wrote:
  | > The worrying thing is that the West gave international
  | legitimacy to these wealthy elites, while only pointing fingers
  | at the endemic corruption in their countries.
  | 
  | The whole Western commitment to anticorruption is on display on
  | Mayfair street in London.
 
    | ttul wrote:
    | Oh, you mean the part of town where an apartment is so
    | expensive that it is out of reach even to London bankers?
 
      | nick_kline wrote:
      | Can give some more context about this situation? A web
      | search didn't find the obvious answer, other than it was an
      | expensive area.
 
        | baybal2 wrote:
        | It's like a half of Russian mafia owns mansions there,
        | right in the open, laughing in the face of UK courts, and
        | its money laundering laws.
 
        | [deleted]
 
  | pinkybanana wrote:
  | > The worrying thing is that the West gave international
  | legitimacy to these wealthy elites, while only pointing fingers
  | at the endemic corruption in their countries.
  | 
  | Wouldn't it be quite difficult to prevent foreign money being
  | laundered in some other country? I would guess verifying
  | whether the money is legit coming from some weird foreign
  | jurisdictions is probably quite difficult. The only way to work
  | around that would probably reject all customers who are sending
  | money from there.
 
    | bluetomcat wrote:
    | Those oligarchs are a tiny minority of the country population
    | and their international financial endeavours are almost
    | always tracked by Western intelligence agencies, but the
    | pragmatic interest of the West is to welcome that money. They
    | buy the most expensive real estate in London without even
    | negotiating, send their kids to elite schools, buy their
    | wifes jewellery at outrageous prices.
 
  | kjrose wrote:
  | This. And the problem I've found is whenever anyone gets to a
  | position that could legitimately deal with this issue, they
  | become either compromised or they become involved themselves in
  | the situation.
  | 
  | Basically there's another very rich black market that won't be
  | stopped easily.
 
    | hourislate wrote:
    | >And the problem I've found is whenever anyone gets to a
    | position that could legitimately deal with this issue, they
    | become either compromised or they become involved themselves
    | 
    | In Post Soviet Countries challenging the Oligarchs is like
    | asking for a death sentence. What is required is a Western
    | effort to go after these Crooks helping the elected
    | Government to implement a system that can be trusted.
 
      | LudwigNagasena wrote:
      | No western country would do anything that helps solving the
      | problem because they benefit from the situation.
 
      | imagica wrote:
      | All what it takes is to digitize the whole infrastructure
      | and make transparent all the public spending with details
      | of details of the details all the way down to where the
      | money currently is, all that is including large loans.
      | Public spending? No privacy whatsoever, no hidden
      | transactions nor business trading behind curtains.
      | Oligarchs buy popular support as well, they own televisions
      | themselves to manipulate local politics, but with detailed
      | accounting all that could potentially be stopped. Of course
      | the efforts to implement these would be gargantuan because
      | they would fight back.
 
        | seer wrote:
        | As a software dev in one of the Ex soviet block
        | countries, I've heard several tales of accounting
        | software projects being canceled because they would
        | reveal inconvenient truths.
        | 
        | A good friend of mine once worked for a small software
        | shop that was building some accounting software for power
        | plants. When the project was almost done, the mafia guys
        | in charge were reviewing it. The realized that if it was
        | actually used, it would be waaay to revealing. The
        | project got canceled immediately. With a clause to "stay
        | quiet or else"...
        | 
        | And a couple of years back the government was trying to
        | "crack down" on the gray economy. They released an app,
        | that you could scan a receipt (from grocery shops,
        | restaurants, everywhere really) and verify that the
        | establishment has indeed paid its tax and has registered
        | the transaction with the tax office.
        | 
        | However people "in the know" got access to a special api.
        | When the verification is taking place there is actually a
        | web hook being sent, which you can register for. And pay
        | your tax "on demand" only when someone actually wants to
        | verify it.
        | 
        | As far as I am aware this system is still in place
        | today... Though its too esoteric to explain to the public
        | so nobody really cares it seams. The public is like "sure
        | government is crooked, like what else is new" :(
 
        | jonhohle wrote:
        | > digitize the whole infrastructure and make transparent
        | all the public spending with details of details of the
        | details all the way down to where the money currently is,
        | all that is including large loans.
        | 
        | This is a use case for Bitcoin/crypto I hadn't previously
        | thought of. The public auditability is exactly the reason
        | I don't think it's good for citizen use cases, but it
        | seems perfect for government use cases. There's an issue
        | of how revenues get accurately added to the ledger, but
        | tying a transaction to say an ID generated when a return
        | is submitted would make it possible to track one's own
        | payment.
 
        | jszymborski wrote:
        | I don't think the problem is that people don't know _who_
        | the problem is.
 
        | vkou wrote:
        | People know who the problem is.
        | 
        | The thing is, if you want to do something about them,
        | you're going to need to use a lot of violence - because
        | those people will happily use violence against you.
        | 
        | Most people aren't interested in a starting a war, and
        | would rather keep their heads down, and mind their own
        | business.
 
        | tartoran wrote:
        | You'd be surprised how much manipulation is taking place
        | through local television and even social media. Local
        | support is needed for elections, different politicians
        | threat their existence..
 
  | murkt wrote:
  | > Everything from banks through insurance companies through
  | delivery companies to media groups is owned by people formerly
  | involved with state security.
  | 
  | Not the case with Kolomoisky, who was not involved with state
  | security. Generally, Ukrainian oligarchs do not come from state
  | security background.
 
    | bluetomcat wrote:
    | From a Bulgarian perspective what I've said holds true. The
    | oligarchs themselves were often picked from prominent
    | nomenklatura families and in spite of not having a background
    | as state security officers, were largely kept responsible for
    | their actions by them. The state security officers had all
    | the information about trade routes, information about all
    | state enterprises and their financial status, etc.
 
      | mobilio wrote:
      | or having relatives to BKP
 
    | bitL wrote:
    | Wasn't Kolomoisky one of the oligarchs that backed the
    | overthrow of the previous pro-Russian government as well as
    | financed the current president of Ukraine? I am wondering
    | what went wrong for him with the US, was it just Trump in
    | power instead of a more friendly politician?
 
      | crusty wrote:
      | It seems like this scheme was unraveling before Trump came
      | into office. If it hadn't been, Trump may have proved to be
      | good for him, in driving renewed optimism for domestic
      | steel production and simultaneously stripping regulatory
      | bodies like the EPA of oversight and enforcement capacity.
      | 
      | That this scheme was even considered seems like a more
      | general enddictment of the history of US corporate and
      | industrial regulatory oversight... Just put it on the wall
      | next to the SEC and Wall Street, with highlights on Bernie
      | Madoff and the subprime mortgage crisis.
 
    | helge9210 wrote:
    | > Generally, Ukrainian oligarchs do not come from state
    | security background.
    | 
    | Kolomoyskyi is just a smart shark without security or
    | criminal background, Akhmetov has criminal background
    | (Donetsk region), Pinchuk is related to former President
    | Kuchma (indirect Communist party background), Poroshenko has
    | Communist party background, Firtash is a frontman for
    | criminal organization (mastermind fled from Hungary to
    | Moscow).
 
    | kgeist wrote:
    | Russian oligarchs generally don't come from state security
    | background either. I don't where the OP got that from.
 
      | avrionov wrote:
      | It seems that he was referring to the Bulgarian oligarchs.
      | Some of the early ones were part of the security services
      | or were married to a family members who were involved in
      | security.
      | 
      | [1] https://en.wikipedia.org/wiki/Ilia_Pavlov
 
| bullen wrote:
| Is it only me or is Cyprus and Ukraine in the wrong spot on the
| map about a quarter down? Nitpicking but Cyprus is not in China
| and Ukraine is not Mongolia.
 
  | atdrummond wrote:
  | Can you share a picture? The map is fine on mine.
 
    | bullen wrote:
    | Ok, that explains it... I'm on 5:4 screen... they made it for
    | widescreen! :D
 
  | rory wrote:
  | I see an animation where they start in the right place, but
  | then the focus countries zoom in, while the world map remains
  | the same, putting them in Asia. The should probably have faded
  | out the world map when zooming in.
 
| exogeny wrote:
| This is somewhat unrelated to the story, but I am happy and proud
| of the Post-Gazette for digging into this. The PG is my hometown
| newspaper -- although I haven't lived in Pittsburgh for fifteen
| years, it's still home -- and they like most newspapers have been
| absolutely gutted by layoffs and piss-poor management. You might
| recall a controversy a few years ago about their firing of the
| political cartoonist because he refused to be pro-Trump as the
| owners wished.
| 
| Local news is critical for reasons I hope I don't need to explain
| here, as are investigative departments that dig in deep and
| uncover things like this. The PG (IIRC) got a Pulitzer for their
| work on the Penn State/Jerry Sandusky scandal some years back and
| it makes me proud to see them still doings like this, the Block
| family be damned.
 
  | jtsuken wrote:
  | This specific article is terribly written, however. I've spend
  | over 5min trying to get the gist of the story. Which seems to
  | be: A business owner with a background in oil and metals asked
  | the bank he owned to fund levereged-buy-outs of rundown US
  | steel factories, some of which had accidents, some of which
  | later shut down. DOJ and the prosecutors in Ukraine investigate
  | if the schemes used in the process of take-over could be
  | fraudulent.
 
    | selimthegrim wrote:
    | This story has been covered many times, the unique bit is
    | interviewing the steelworkers.
 
      | jtsuken wrote:
      | Which is exactly my point, the article and the clickbaity
      | headline sound like a detailed report about a newly
      | uncovered scheme, but there is actually very little
      | information about what happened.
 
| cs702 wrote:
| Greatly informative piece about shady characters laundering money
| in the US at a pretty large scale by investing in, or outright
| buying, struggling US businesses such as steel mills.
| 
| Managers and employees think they're getting a lifeline. In
| reality they're getting a new owner who cares very little about
| the long-term health of the operation and the safety and well-
| being of its employees.
| 
| The new owner will use financial engineering to extract as much
| cash as possible while cutting capital expenditures as much as
| possible. Eventually, the business will have no choice but to
| file for bankruptcy. Along the way, all cash paid out of the
| business will have been legitimized.
| 
| Employees and towns suffer the consequences. Ugly and sad.
 
  | toast0 wrote:
  | So, if they're from a former soviet republic, we call they
  | shady characters and the process money laundering; if they're
  | from the US, we call them private capital and the process
  | leveraged buyout.
 
    | vmception wrote:
    | That's why they set up the British Virgin Islands private
    | equity fund
    | 
    | Because it is indistinguishable
    | 
    | UK territories (or whatever you want to call them) don't have
    | the geopolitical baggage that larger economic unions do, so
    | they are good intermediaries with laws that are more relevant
    | for business in the 21st century
 
    | tehodler wrote:
    | Hostile takeover > leveraged buyout > private equity. They
    | keep changing the name once people catch on to what a dirty
    | business it is.
 
    | TaylorAlexander wrote:
    | Yes and Russian billionaires are "oligarchs" while American
    | billionaires are "businessmen".
    | 
    | https://fair.org/home/russia-has-oligarchs-the-us-has-
    | busine...
 
  | pinkybanana wrote:
  | I would guess that if you are laundering money, launderer would
  | happily spend extra money on safety and other issues to prevent
  | getting too much attention. Here the case sounds like if the
  | laundering oligarch hadn't been stingy on those things he
  | wouldn't have gotten caught.
 
    | dazc wrote:
    | Maybe this is happening already and we don't know because
    | some other oligarch is not being stingy?
    | 
    | Welcome to London.
 
      | vmception wrote:
      | of course it is happening
      | 
      | people think "money laundering" is hard or impossible and
      | will point to articles like this one as "see they got
      | caught"
      | 
      | it is completely unfalsifiable when the reality is that
      | money is fungible and it is a complete waste of resources
      | to try to enforce a whitelist
      | 
      | it isn't necessary to have no evidence of the money, but
      | that is also possible too but wasnt necessary here or in
      | most areas of reintegration
      | 
      | the whole economy has practically no separation from licit
      | and illicit sources and they routinely traverse back and
      | forth
 
        | intricatedetail wrote:
        | That's why central banks start working on crypto and
        | China even plans to introduce money with expiry date.
 
    | extropy wrote:
    | Or the money was spent in buying the factory and what happens
    | after is just extraction.
    | 
    | Speculation being that investments in economy are perceived
    | as a very good thing and the origin of the money is not
    | checked that tightly.
 
| seibelj wrote:
| This is another reason why I like cryptocurrency, specifically
| bitcoin. These shenanigans are enabled at the core through the
| ability to print money via a central bank. The central bank is
| corrupt, they give money effectively straight to those connected,
| who use the new money to buy foreign assets as well as extremely
| complex schemes to loot their country. With a universal money
| unit that cannot be corrupted, you eliminate a lot of this
| nonsense.
 
  | yowlingcat wrote:
  | I don't think BTC doesn't make the messy people problems any
  | easier. That doesn't mean it's without value -- I do think
  | there is some incompressible utility to having a globally
  | decentralized "universal money unit" as you say. But that's no
  | shortcut to curing socioeconomic corruption.
 
| throwaway98797 wrote:
| This is hard to follow.
| 
| Were the factories profitable? If not seems like the money
| benifited the employees. Looks like the front line employees got
| hurt and the community but every other employee made off with
| dirty money.
 
  | skybrian wrote:
  | The factories (and businesses) are used as collateral to get
  | loans from banks. The banks are getting defrauded when the
  | company goes bankrupt and the loan isn't repaid. The injured
  | workers are collateral damage.
  | 
  | If they got away with it then it would just look like a normal
  | bankruptcy. Extracting the money already happened with more or
  | less legitimate-looking business expenses.
 
    | crusty wrote:
    | I would love to see dollar values or ratios and the timing on
    | this type of scheme.
    | 
    | If they pay $80 million in "cash" for a steel plant and then
    | turn around and ask a legitimate bank for a loan with the
    | plant as collateral, how much can they realistically get for
    | the loan? Any amount is going to be a lot and the lender is
    | assuming that risk, so one would think that due diligence
    | would consider the unique depreciation that could occur in an
    | asset that requires massive maintenance inputs to maintain
    | sustainable operability and hold it's capital value, and that
    | they would build in some contractual mechanism to monitor the
    | value of the asset and enforce it's upkeep.
    | 
    | Even a car dealerships does this with leased vehicles to
    | ensure that the value of the car they get back at the end of
    | the lease matches their projections closely enough that they
    | can sell it off again.
 
      | skybrian wrote:
      | When laundering money, "clean" money is worth more to them
      | than "dirty" money, so substantial losses would be part of
      | the plan.
      | 
      | And yes, banks try not to be defrauded. "Due diligence" is
      | about catching problems like this or at least reducing them
      | to manageable levels.
      | 
      | But I don't know the details; I just read a book about
      | fraud.
 
    | thaumasiotes wrote:
    | > The factories (and businesses) are used as collateral to
    | get loans from banks. The banks are getting defrauded when
    | the company goes bankrupt and the loan isn't repaid.
    | 
    | Defrauded? This is the entire concept of collateral.
 
      | selimthegrim wrote:
      | Not when the book value of the collateral bears as much
      | resemblance to reality as that Spanish old lady's shoddy
      | restoration job of that Jesus fresco.
 
        | lotsofpulp wrote:
        | It's the bank's job to do proper due diligence and
        | perform a good appraisal.
 
        | skybrian wrote:
        | Yes, and preventing fraud is why they do that, and
        | sometimes, the due diligence isn't good enough.
        | 
        | In this case, though, apparently the bank was in on it.
 
| ed25519FUUU wrote:
| So is Ukraine basically the playground where all of the worlds
| corrupt elite steal millions?
| 
| I recall a certain person being hesitant to send US tax dollars
| there because of corruption concerns.
 
  | crusty wrote:
  | > "I recall a certain person being hesitant to send US tax
  | dollars there because of corruption concerns."
  | 
  | I think you meant IIRC, but the C is the problem. That certain
  | person had no problem with corruption in Ukraine, it was just
  | that he needed some of it's corruption to act in his favor
  | first.
  | 
  | And the jump from the article to "So is Ukraine basically the
  | playground where all of the worlds corrupt elite steal
  | millions?" Is a little (not a little) broad. It's a former
  | Soviet bloc state and this is pretty much table-stakes
  | corruption for those.
 
  | bumbada wrote:
  | I had a girlfriend that was from Ukraine and visited the
  | country in summer.
  | 
  | Ukraine has probably the most fertile soil in the world. Like
  | Egypt it has fed Europe and then Russia for a long time.
  | 
  | It is also one of the most corrupt countries in the world, like
  | Russia and China.
  | 
  | Most Westerners just can not imagine what corruption is at
  | those levels. For decades the grain was put into trains and
  | half the grain had "disappeared" in destiny. This happens at
  | all levels.
  | 
  | Nobody goes there to help the country. Like lots of countries
  | in Africa the big guys (Russia or EU, or USA) go there to
  | plunder the country. It is too rich and too strategic.
  | 
  | It is also the playground for big countries to fight. Instead
  | of fighting WWIII and fucking the entire world with radioactive
  | waste, the big guys play on playgrounds like Ukraine their
  | power games.
  | 
  | The US does not want Europe to dismantle NATO after it is not
  | necessary anymore where Europe can arm itself. It also does not
  | want Europe and Asia to integrate further because that means
  | the end of USA hegemony in the world.
  | 
  | Also the military industrial complex in the US needs a reason
  | to exist. If threats do not exist, they will create them in
  | order to survive or "their money" will be redirected to things
  | like social welfare. Americans need to feel unsafe all the time
  | so they agree to pay for new weapons in new taxes.
  | 
  | UE wants to expand to get the wealth of Ukraine resources and
  | Russia does not want to lose them.
  | 
  | That is very bad for Ukraine. The people that can, like my ex
  | girlfriend, just leave the country.
 
| neonate wrote:
| https://archive.is/Iq3zy
 
| [deleted]
 
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