The United States Attorney's Office for the Northern District of California announced that Pavel Lazarenko, the former Prime Minister of Ukraine, was convicted by a federal jury today of 29 counts of money laundering, wire fraud and interstate transportation of stolen property in violation of 18 U.S.C. §§ 1956(h), 1956(a)(2), 1956(a)(1)(B), 1343, 1346 and 2314. The convictions followed a ten-and-a half-week jury trial before U.S. District Court Judge Martin J. Jenkins in San Francisco federal court.  This is only the second time that a head of state from another country has been prosecuted in the United States.

Mr. Lazarenko, 51, of Dnepropetrovsk, Ukraine, was indicted by a federal grand jury on May 18, 2000.  Mr. Lazarenko, the former Prime Minister of Ukraine, arrived in the United States in February 1999.  Mr. Lazarenko was charged by the grand jury with conspiracy to launder money, money laundering, wire fraud and interstate transportation of stolen property. 

The government alleged that while the defendant was a public official in Ukraine he committed various acts of extortion and fraud, including the extortion of a Ukrainian businessman and the defrauding of Naukovy State Farm, a Ukrainian state-owned enterprise.  The government alleged that the defendant concealed the source and his receipt of these funds and falsely understated his income and assets to the people of Ukraine for 1996 and 1997.  The government further alleged that the defendant then transferred millions of dollars of ill-gotten gains through coded accounts at banks in Switzerland, Antigua and ultimately into bank accounts and property in the United States. 

The defendant was charged with illegally extorting $30 million from a Ukranian businessman and illegally obtaining $12 million from a farm owned by the state.  The evidence at trial was that Mr. Lazarenko told the businessman that in order to operate in the Ukraine, he would have to receive 50 percent of the profits from the business and 50 percent ownership of the company.  The defendant then laundered the funds through a series of bank accounts, including various banks in the Bay Area such as Commercial Bank, Pacific Bank, Bank of America, WestAmerica Bank and others.  The defendant also purchased a house worth more than $6 million in Marin. 

The jury, after deliberating four days, found the defendant guilty on all 29 counts being considered by the jury, including (1) conspiring to launder and laundering money that represented proceeds of foreign extortion, wire fraud and transportation of stolen property; (2) wire fraud; and (3) transportation of stolen property.

United States Attorney Kevin V. Ryan said, "The jury's verdict should serve as a warning to corrupt public officials at home and abroad, that the United States will zealously prosecute them if they seek to conceal and invest their ill-gotten gains through American financial institutions."

The maximum statutory penalty for each count in violation of the money laundering statute, 18 U.S.C. § 1956, is 20 years and a fine of $500,000; the wire fraud statutes, 18 U.S.C. §§1343, 1346, is 5 years and a fine of $250,000; the ITSP statute, 18 U.S.C. § 2314, is10 years and a fine of $250,000.  The defendant may also be ordered to pay restitution, if appropriate, and to forfeit assets involved in the offenses.  However, the actual sentence  will be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and will be imposed in the discretion of he Court.  The sentencing of Mr. Lazarenko will be scheduled after further proceedings before Judge Jenkins in San Francisco. 

The conviction is the result of a six-year investigation led by agents of the Federal Bureau of Investigation and Internal Revenue Service.  The chief of the U.S. Attorney's Office Strike Force, Martha Boersch, led the prosecution team, which included the Office's OCDETF/Narcotics Chief, Jonathan Howden, Assistant U.S. Attorney Pete Axelrod and Department of Justice Trial Attorney Hallie Mitchell from Organized Crime and Racketeering Section, and legal assistance from Amelia Lucero-Cordes and Christine Tian.

ll press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415)436-7181.