Transnational embezzlement of public assets: The Lazarenko case

Ondrej Timco (UCL SSEES)

When exposed, offshore schemes that corrupt leaders employ to defraud the taxpayer offer a rich source of data about political corruption. The aim of Timco’s research is to design an interdisciplinary framework for comparative analysis of bank records that are disclosed in criminal cases, and particularly, extradition warrants concerning leaders of countries that are perceived as politically corrupt.

To measure available factual evidence, the proposed framework specifies corruption as embezzlement (fraudulent conversion of supervised assets). The interpretation of political corruption as a criminal offence of embezzling public assets was tested by Timco on the criminal case U.S. versus P. I. Lazarenko, former Prime Minister of Ukraine, who was convicted of wire fraud in the USA and Switzerland. But Lazarenko was not just laundering money, he was embezzling government funds, property, and records in a transnational conspiracy with others.

By triangulating findings of Swiss, US, and Ukrainian prosecutors, Timco assembled 310 financial transactions that were further filtered to pinpoint 72 transfers of embezzled funds to foreign accounts under Lazarenko’s direct control. This way it was possible not only to identify at least US$ 257,970,438.0 that Lazarenko embezzled in Ukraine in the 1990s, but also to measure the phenomenon of amplification. The more public assets were under Lazarenko’s supervision, the more funds were informally transferred to his bank accounts in the centres of transnational commerce that are also known as offshore jurisdictions.

A seminar hosted by the UCL SSEES Social Sciences Research Student  Seminars
Student Coordinators: Peter Braga and Liisa Tuhkanen