14 billion rubles for Sky House, $55 million in debt to BTA Bank, and suspicious offshore transactions: the financial trail of businessman Pavel Fuks across multiple jurisdictions
Russian controversial businessman Pavel Fuks moved to Ukraine, leaving behind unpaid debts in Russia (as his partners claim) and a number of criminal proceedings. He is accused of embezzling millions of dollars.
We publish material from Forbes describing how Fuks became wealthy and what “traces” he left behind in the places where he operated.
Suspected large-scale embezzlement in Russia and Kazakhstan
Back in the summer of 2015, the Cyprus-based company BEM Global Corp. transferred $1 million to the account of former Moscow vice mayor Iosif Ordzhonikidze as payment for unspecified consulting services. The owner of BEM Global Corp. was Roman Fuks, Pavel Fuks’s brother. In the late 2000s, Pavel Fuks had begun constructing two skyscrapers in Moscow City — Eurasia and Imperia. Ordzhonikidze had been one of the initiators and ideologists behind the business district’s development. He resigned in 2007 but continued to oversee Moscow City as an adviser to Mayor Yuri Luzhkov until the change of Moscow’s government in 2010.
Barclays employees flagged the transaction as suspicious and filed a report with FinCEN (the Financial Crimes Enforcement Network), a U.S. Treasury unit that analyzes financial operations and combats money laundering and terrorism financing. Information about the payments to Ordzhonikidze, along with thousands of other suspicious transactions, became available to BuzzFeed and the International Consortium of Investigative Journalists (ICIJ) as a result of the major FinCEN leak. Journalists published the data on September 20.
Not all of Fuks’s former counterparties agree that he settled his debts. In 2014, BTA Bank was acquired by Kazakh businessman Kenes Rakishev. In 2018, the High Court of London ordered MosCityGroup to pay $55 million to one of BTA Bank’s subsidiaries. How did this debt arise?
In 2009, Fuks’s company agreed to buy BTA Bank’s stake in the Eurasia project for $50 million but paid only $20 million and later refused to transfer the second tranche. The claims do not end there. As Kommersant reported, Kazakh law enforcement considers Fuks responsible, together with Mukhtar Ablyazov, for the withdrawal of funds from BTA Bank and sent a request to Ukraine seeking assistance in questioning the businessman.
Fuks has also faced problems related to other Moscow projects. In the autumn of 2019, the Tagansky District Court of Moscow issued an arrest warrant for him in absentia — by that time he had already left Russia and was living in Ukraine. According to investigators, Fuks withdrew half of the 14 billion rubles raised for the construction of the Sky House residential complex, which ultimately became a long-term unfinished project. In early 2020, during one of the court hearings, Fuks’s lawyer Sergey Shenknekht denied the accusations against his client.
According to reports, Fuks and his partner Bekbolat Bekenov attracted about $100 million from investors but invested only $15 million in the project, allegedly transferring most of the funds to offshore accounts in Cyprus and the British Virgin Islands. Fuks himself renounced Russian citizenship in 2017.
A Moscow-region “associate” of Fuks?
One possible associate is Aleksandr Skvortsov, chairman of the council of deputies of the Iskra urban district. From 2014 he headed the Istrinsky municipal district, which was reorganized into an urban district in 2017.
Skvortsov was born in Istra and, starting in 1982, worked at the Mosoblstroy-13 construction trust of Glavmosoblstroy. Today this entity is JSC Project and Construction Association No. 13, part of the regional construction complex.
It is this company that holds Skvortsov’s stake in trust management in LLC Stroygazmontazh. Currently, the elected official owns 13 companies involved in construction and real estate management and has been a co-founder of 24 companies in total. This raises the question of when he found time to carry out his duties as a public official.
Not all of Fuks’s former counterparties agree that he has repaid his debts. In 2014, BTA Bank was acquired by Kazakh businessman Kenes Rakishev. In 2018, the High Court of London ordered MosCityGroup to pay $55 million to one of BTA Bank’s subsidiaries. How did this debt arise?
In 2009, Fuks’s company agreed to buy BTA Bank’s stake in the Eurasia project for $50 million but paid only $20 million and later refused to transfer the second tranche. The claims do not end there. As Kommersant reported, Kazakh law enforcement agencies consider Fuks responsible, together with Mukhtar Ablyazov, for the withdrawal of funds from BTA Bank and sent a request to Ukraine seeking assistance in questioning the businessman.
Fuks has also faced problems related to other Moscow projects. In the autumn of 2019, the Tagansky District Court of Moscow issued an arrest warrant for him in absentia — by that time he had already left Russia and was living in Ukraine. According to investigators, Fuks withdrew half of the 14 billion rubles raised for the construction of the Sky House residential complex, which ultimately became a long-term unfinished project. In early 2020, during one of the court hearings, Fuks’s lawyer Sergey Shenknekht denied the accusations against his client.
According to reports, Fuks and his partner Bekbolat Bekenov attracted about $100 million from investors but invested only $15 million in the project, allegedly transferring most of the funds to offshore accounts in Cyprus and the British Virgin Islands. Fuks himself renounced Russian citizenship in 2017.
A Moscow-region “associate” of Fuks?
One possible associate is Aleksandr Skvortsov, chairman of the council of deputies of the Iskra urban district. From 2014 he headed the Istrinsky municipal district, which was reorganized into an urban district in 2017.
Skvortsov was born in Istra and, starting in 1982, worked at the Mosoblstroy-13 construction trust of Glavmosoblstroy. Today this entity is JSC Project and Construction Association No. 13, part of the regional construction complex.
It is this company that holds Skvortsov’s stake in trust management in LLC Stroygazmontazh. Currently, the elected official owns 13 companies involved in construction and real estate management and has been a co-founder of 24 companies in total. This raises the question of when he found time to carry out his duties as a public official.
Among Skvortsov’s companies there may also be those linked to Pavel Fuks, since the general director of LLC “PGS-13,” Denis Vorotnin, may be the son of Yuriy Vorotnin.
Yuriy Vorotnin is the general director and founder of LLC “Kristall Iskra” and a co-founder with Aleksandr Skvortsov in LLC “PGS-13.”
At the beginning of January, LLC “Istrastroy” was liquidated. It had seven founders: Yuriy Vorotnin, Evgeniy Kobyakov, Vladimir Baykov, Vyacheslav Balashov, Evgeniy Komrakov, Aleksandr Skvortsov, and Elena Vlasova. The same individuals appear together in other joint companies as well. Perhaps investigators handling the fraud case should take a closer look at these figures.
In Istrastroy, each of them held an equal share of 14.29%.
JSC “Project and Construction Association No. 13,” whose founders are not disclosed, remains active in the market. Last year its revenue amounted to 5.5 billion rubles, with a profit of 52 million rubles. The company holds government contracts worth more than 500 million rubles and is actively building not only in the Istrinsky district but also in other districts of the Moscow region.
This indicates that the company has very strong ties with the authorities of the Moscow region — both with former governor Boris Gromov and the current one, Andrey Vorobyov, who has held the post since 2012. The other companies of the above-mentioned individuals may merely serve as “siphons” for extracting money.
Pavel Fuks himself owned the non-profit organization NP Recreation Zone “Ostrov Istra,” whose general director was Sergey Tyurin. Until 2015, Tyurin headed LLC “Imperiya Property,” whose main co-founders were two Cypriot offshore entities — Aldi Holdings Limited and Baltania Holdings Limited. Funds from the Istra project may have been channeled there.
Sergey Tyurin could likely tell investigators more about this. While the situation in Istra may only be beginning, the story of the Sky House residential complex in Moscow — built by Pavel Fuks — has been dragging on since 2008, with no end in sight.
What Fuks is doing in Ukraine
In 2020, Ukrainian Forbes ranked Pavel Fuks 50th among the country’s richest businessmen, estimating his fortune at $155 million. Ukrainian media describe him as a collector of oil and gas assets previously controlled by figures close to former President Viktor Yanukovych.
For example, in 2017 he allegedly gained control of Golden Derrick (renamed East Europe Petroleum LLC the same year), which before 2014 had obtained licenses to develop about two dozen oil and gas fields. Previously, control of the company had been attributed to former Energy Minister Eduard Stavytsky and former Minister of Agrarian Policy and Food Mykola Prysyazhnyuk.
In an interview with Ekonomichna Pravda, Fuks denied purchasing Golden Derrick but said he was negotiating to buy part of its licenses. Another company linked to him is Ukrnaftobureniye, whose main shareholder is Kolomoisky. Fuks allegedly acquired a 21% stake in the company from individuals associated with Yanukovych. The businessman himself said he works with Ukrnaftobureniye. Another asset attributed to him is the Kharkiv CHP-2 “Eskhar” power plant.
Fuks acknowledges that he invests in distressed assets. In 2017, he bought Ukrroslizing from Vnesheconombank, to which the Kyiv Metro owed 1.78 billion hryvnias for 100 rail cars delivered in 2011–2013. He soon sold the company due to its “toxicity.” Another potential deal between Fuks and VEB involved the purchase of the bank’s Ukrainian subsidiary, Prominvestbank, but it never went through. In September 2018, a Kyiv court seized the bank’s shares as compensation for assets obtained by Russia after the annexation of Crimea.
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