Law enforcement officers consider the Dubnevich brothers’ case of gas theft at a thermal power plant to be one of the most difficult in the economic sphere.
Energy has always been a tasty morsel for potential corruption schemes. Onishchenko’s “gas case”, the “Rotterdam+” case, the “Centrenergo” case - all these stories, in the opinion of NABU and SAP, caused enormous damage to the country.
Such cases look especially shameful, given Ukraine’s current problems in this area: instead of developing the industry, for years it has become a source of corruption abuses.
Law enforcement officers consider the Dubnevich brothers’ case of gas theft from a thermal power plant to be one of the most complex in the economic sphere. And it is not surprising, since we are talking about 2 billion UAH of allegedly stolen public funds, the involvement of a former people’s deputy and constant attempts to delay the consideration of the case.
What is the essence of this scheme and how such history can be reflected in our present - we will discuss further.
Where did it all start?
In 2016, the National Commission (NKREKU) drew attention to gas purchases for Novoyavorovskaya and Novorozdolskaya CHPPs in the Lviv region. NEURC decided to conduct an unscheduled inspection of the activities of these thermal power plants - it turned out that the energy companies that managed the thermal power plants used the preferential gas purchased from Naftogaz for other purposes.
The prosecution argued that when purchasing gas for thermal power plants, these energy companies created the appearance that the raw materials were needed to produce heat for the population of Novoyavorovsk and Novy Rozdol. After all, in order to reduce prices in payment bills for the population, Naftogaz sold gas at preferential prices - sometimes three times cheaper than for other consumers. But the companies used gas to sell the generated electricity to the Energorynok state enterprise, and not to produce heat for the population.
As a result, the profitability of electricity production from thermal power plants exceeded 60% (against 3-5% included in the National Energy and Energy Regulatory Commission tariff).
The investigation began in December 2016, almost immediately after unscheduled inspections were carried out at the thermal power plant. According to NABU detectives, gas was stolen from the thermal power plant over two periods - in 2013-2015 and 2016-2017.
The main person involved in the case is one of the brothers and former people's deputy Yaroslav Dubnevich. It was Yaroslav and Bogdan Dubnevich at that time who were the ultimate owners of the enterprises that managed the thermal power plant - LLC Energia, LLC Energia-Novy Razdel and LLC NPP Energia-Novoyavorovsk. In 2019-2020, they transferred the companies to their sons. By the way, another company they own is involved in the case of illegal sand mining worth UAH 21 million.
During 2013-2015, these enterprises entered into a number of agreements on the purchase of natural gas from NJSC Naftogaz for the production of thermal energy for the population. The volume of gas supplies during these years amounted to more than 300 million cubic meters. m worth more than UAH 1.4 billion.
During the second episode in 2016-2017, agreements were also concluded with NJSC Naftogaz for more than UAH 700 million for the purchase of more than 150 million cubic meters. m of gas to supply heat to the cities of the Lviv region.
Instead, thermal power plants generated electricity and sold it to the Energorynok State Enterprise. As a result of such fraud, Naftogaz received a total of about UAH 2.1 billion in losses, while the thermal power plants controlled by the Dubnevichs, on the contrary, received excess profits.
Who is involved besides Dubnevich
According to the prosecution, the management of these companies under the leadership of Yaroslav Dubnevich entered into a criminal conspiracy. The accused include: ex-director of Energia LLC Igor Kuchma, head of Energia-New Division LLC Igor Artimko, his deputy Igor Ilkiv, financial director of Energy-New Division Oleg Pavlishin, ex-director of Energy-New Division LLC Novoyavorovsk” Alexander Oleksyuk.
Five people involved in the case were informed of suspicion for the first episode back in 2018, and for the second in 2020.
Yaroslav Dubnevich himself received suspicion only on October 10, 2023, becoming the sixth person involved. He never appeared at NABU, so on October 17 he was put on the wanted list, and on November 13 he was arrested in absentia by the Supreme Anti-corruption Court. Meanwhile, Bogdan Dubnevich does not appear in the case at all - he was not even informed of the suspicion.
Company officials and Dubnevich are accused of misappropriating gas worth more than UAH 2.1 billion and laundering illegally obtained profits from the sale of electricity. According to the prosecution, Yaroslav Dubnevich managed to “launder” more than 450 million UAH. First, he transferred these funds to offshore companies, and then the money was disguised and transferred back to Ukraine - as if foreign investment in green energy.
Interestingly, in October 2018, the former head of the SAP Nazar Kholodnytsky claimed that the Dubnevich brothers were not involved in gas fraud at a thermal power plant in the Lviv region.
The case is already more than eight years old. Why so long?
Three years have passed from the inspections of the National Regulatory Commission to the indictment in court, and the trial has been going on for five years. TI Ukraine tracked this case from the very presentation of suspicions: we note the frequent absences of participants in the case, refusals to combine episodes, and even the closure of proceedings due to the “Lozovoy amendment”.
NABU considers the case one of the most difficult in the economic sphere, since as part of the pre-trial investigation it was necessary to contact nine countries, including Switzerland, the USA, Cyprus, Latvia, Slovakia, Canada and the Marshall Islands.
There were also several attempts to take the case away from HACS, but the Appeals Chamber refused to do so. After the third review of jurisdiction on the initiative of the judges of the Appeals Chamber themselves, the HACS concluded that all these attempts amounted to disagreement with previous refusals. And when the first episode of the case was closed in August 2022 and reopened again, the progress made was lost because the case had to be heard again.
The consolidation of two episodes into one, which was transferred to VAKS in January 2023, did not speed up the consideration of the case. Now the proceedings have been at the preparatory trial stage for more than a year, and since 2016, law enforcement officers have collected 300 volumes of materials that the court must examine before making a decision.
What is happening with the thermal power plant now?
The Dubnevichs’ companies “Novorozdolskaya CHPP” and “Novoyavorovskaya CHPP” worth UAH 800 million are still under arrest. Also arrested were €2.3 million belonging to the close circle of ex-People's Deputy Yaroslav Dubnevich.
In June 2018, SAPO requested that both thermal power plants be transferred to the management of ARMA. Then the investigating judge of the Solomensky District Court of Kyiv agreed - and within four months the Agency found a temporary manager for Garant Energo M.
However, after this, the manager of Garant Energo M was faced with sabotage by the owners of the thermal power plant: the staff refused to go to work, the owners dismantled the equipment, destroyed technical documentation and constantly tried to regain control of the assets through the courts.
In September 2019, the asset management agreement with the manager “Garant Energo M” expired, so a new competition was announced. The tender committee decided to leave the old manager for energy generation and select a new one for energy distribution (Altenativa-T-XXI LLC). In order to continue managing the thermal power plant, Garant Energo M had to fulfill a number of conditions, in particular, report on preparations for the start of the heating season, as well as pay off wage arrears. However, this was not possible: the company owed money to Naftogaz and did not pay back wages.
In the end, two thermal power plants were transferred to the management of Naftogaz Teplo LLC without a competition, allegedly precisely because of arrears in wages. Recently, for the same reason, the seizure of funds from Energy-New Division LLC was lifted.
It was this case that became one of the drivers for the introduction of the procedure for “exclusive” management of seized assets, which is defined in Art. 21-1 of the ARMA Law. This allowed the government to transfer seized critical infrastructure facilities, such as thermal power plants, into management in order to avoid problems with their functioning.
What's next?
The case should soon move to the stage of consideration on the merits. TI Ukraine believes that a fair and impartial review of this case is extremely important. After all, we are talking about the impact on the well-being of residents of Ukrainian cities, and the case involves a former people’s deputy with multimillion-dollar intricate schemes.
The decision should not be expected too quickly, since the case materials have already stretched to more than 300 volumes. Unless individual defendants enter into an agreement with prosecutors, and HACS approves it. In the event of a guilty verdict, the defendants in the case will face serious sentences - based on the totality of all the crimes charged, the punishment can reach up to 15 years in prison.
Yaroslav Dubnevich is simultaneously accused of misappropriating UAH 93 million from Ukrzaliznytsia. Thus, according to the prosecution, a group of Ukrzaliznytsia officials, together with controlled enterprises, organized an open tender for the purchase of turnouts.
Dubnevich allegedly personally lobbied for the allocation of funds to certain enterprises, which led to overpayments. This case is also still at the stage of the preparatory meeting at the HACC.
The results of the judicial review of this case promise to be interesting both in terms of the process of collecting evidence and from the point of view of substantive law. And this may have a chilling effect on those who also want to profit from government tariff policies.
