"The results of an independent investigation conducted by Kroll have confirmed that PJSC PrivatBank was the object of large-scale and coordinated fraudulent actions over at least ten years before nationalization, which caused losses of at least $5.5 billion to the bank," reads the report.
The key findings of the investigation indicate that there are clear signs that credit funds were used to acquire assets and finance business in Ukraine and abroad in favor of ex-shareholders and groups of persons affiliated with them. Also, the mechanisms used to mask the sources and the real purpose of loans have the characteristics of a coordinated money laundering scheme.
The volume of transactions and the speed of their conduct (within a few minutes between operations), the absence of an established economic link between the borrower and the original lender, as well as widespread use of offshore special purpose vehicle (SPV) companies, are a sign of attempts to conceal the true use of funds from regulators and other stakeholders.
In addition, a shadow banking structure within PJSC PrivatBank was a central element of fraud with a loan portfolio and withdrawal of funds. This secret structure processed payments and facilitated the movement of funds under loans agreements for hundreds of billions of dollars for the benefit of individuals associated with former shareholders and groups of persons affiliated with them.
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