The story of the bankruptcy of one of the most famous and successful farms in Ukraine, “Mriia”, has reached not only Ukraine, but also Europe. Due to illegal money laundering, it has been called one of the biggest scams…although few people know that this story has evolved in a slightly different direction…
“Mriia” goes bankrupt
As a reminder: the company created by Ivan Guta in 2002, twelve years later turned into a major scam, thanks to which international creditors, including companies such as IFC, Alfa Bank, Crédit Agricole, Deutsche Bank DBU, Erste , FUIB allegedly stole $1.3 billion from the Guta family.
Ivan Guta’s son Andriy is said to have played a key role in all of this. In 2008, he was appointed executive director of “Mriia”, taking charge of all of the company’s strategic and operational management. After a while, the company, successful only on paper, entered the international stock exchanges, managing to attract large investors. Money received from investors was withdrawn through eight offshore companies in the British Virgin Islands.
These eight companies, according to the documents, belonged to the Gutas. Through the scheme of buying shares in the farm “Mriia”, Andriy Guta actually transferred funds from one of his “pockets” to another. According to some sources, the total amount was around 220 million dollars. In 2014, “Mriia” declared bankruptcy.
In fact, Andriy Guta left out of pocket the Ukrainian state, thousands of employees of the agricultural holding “Mriia”, international creditors, as well as European banks Credit Suisse and the Bank of Cyprus, through the accounts in which he carried out his alleged scams. But instead of being held accountable before the law, Andriy Guta simply turned to another field of activity.
Real estate fraud
After the bankruptcy of the largest farm in the country, Andriy Guta launched into real estate. He joined the development company “Development Creative Group” (DCG), also known as “NK Group” or under the brand name “Naberezhnyi Kvartal”. NK Group was founded by businessman Khmelnytsky Yuri Suslyak and has been active in the Ukrainian real estate market since 2014.
By 2016, the NK Group had built residential complexes in 19 regions of Ukraine, most of which, namely 55 projects, immediately gain the reputation of “problem”.
Guta, together with Suslyak, then created subsidiaries to which money was transferred from almost fifteen “Naberezhny Kvartal” branded cooperatives. Subsequently, the money received from ordinary Ukrainians, who invested in the construction of the residential complex, was collected.
Ultimately, due to gross and systematic violations, the Regional State Construction Committee terminated the previously issued construction permits, and the construction of many housing complexes was suspended.
Handling with deadlines and communications
Within the NK Group, Andriy Guta was directly responsible for communication in the real estate field, as well as collaboration with entrepreneurs. In fact, he had unlimited access to investors’ funds, the ability to distribute them at his discretion, and to manipulate the construction schedule, the connection of communications, and the commissioning of facilities.
A vivid example is the construction of the housing and construction company “Grandbud”, brand “Naberezhny district”, in Mykolaiyv, at 18 Mistostroiiteliv Street, which was headed by Andriy Guta.
Initially, the first section was to be completed in the first quarter of 2016 and the second section in the fourth quarter of 2016. Guta had the resources and the ability to influence the deadlines, and he took advantage of it. On February 24, 2016, a statement of readiness for the first section was filed with the State Building Architectural Inspectorate, but utilities had not yet been connected to the building. Later it turned out that the second section lacked at least 8 million hryvnias for completion – the construction of the housing estate was delayed.
Already in November 2016, when, according to the contract, the construction of two sections of the housing cooperative “Grandbud” was to be completed, the shareholders of the housing cooperative initiated a meeting to discuss the issue of violations of deadlines building of the apartment complex. The investors demanded the transfer of the funds that Guta had received from them to complete the construction of the first and second sections. Corresponding letters of formal notice were sent to Andriy Guta, the owner of the brand “NK Group” and “Naberezhny Quarter” Yuri Suslyak, as well as to various state and local authorities. There was no adequate response. Moreover, Andriy Guta disappeared with the investors’ money. At the same time, the contractor was replaced by “Mykolaiyv Development”, and the construction site froze.
Similar arrangements have been put in place in other Ukrainian cities:
- Kharkiv: the “NK Group” facility was put into operation, but there were no communications: water, sewage, gas and electricity;
- Rivne: the installation was built without the design documentation;
- Ternopil: part of the apartments of a house built with numerous violations had the status of temporary housing;
- Odessa: Stopping the construction of a residential complex by the State Architecture and Construction Committee
Another puzzle of the “pyramid” construction
People who have purchased apartments in these developments have been disappointed. They encountered the same problems as investors in other properties, which were addressed by Andriy Guta: unsatisfactory quality of construction and materials, difficulties in registering property rights, communications, problems in organizing the land around the residential complex, delays in construction and exceeding deadlines, demanding 100% payment: 50% immediately, 50% within 60 days, although at the time of communication with representatives of the developer, the company did not have relevant building documents and permits.
In total, Guta, Suslyak and their partners withdrew 120.6 million hryvnas from shareholders’ money through the cooperatives of the “Naberezhny Kvartal” brand. And that’s only what has been fully established – in fact, investors may have suffered even greater damage.
After the bankruptcy of the Mriia farm and the real estate scams, Guta moved to Switzerland, where he not only resides, but is also actively involved in new startups.
In 2020, Interpol formed an international request to law enforcement around the world to find and temporarily arrest Andriy Guta, but this document is apparently still pending in Switzerland. Therefore, the country’s authorities have still not approved any extradition request, which so far allows Andriy Guta to escape any responsibility. The main question is: “For how long?”
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