A Major Ukrainian Bank Sued in New York

NEW YORK, NY -- A major Ukrainian bank has been sued in Federal Court in New York, under the Racketeer Influenced and Corrupt Organization Act of 1970 ("RICO"), for allegedly operating a gigantic Ponzi scheme in Ukraine and allegedly transferring the money to two New York banks, Citibank, N.A. and The Bank of New York Mellon.

Petr Baron, CEO VAB Bank

Both Citibank and The Bank of New York Mellon are also named as defendants in the action.

The lawsuit which was commenced in the United States District Court, Southern District of New York, accuses All-Ukrainian Joint Stock Bank a/k/a/ Vseukrainsky Aksionerny Bank ("VAB") of using fraud and deception to induce the plaintiff and others, to deposit money with the bank pursuant to a so-called deposit agreement in which VAB promised depositors a high rate of interest on money deposited with the bank and the right to terminate the agreement early and to receive their money back on short notice.

The complaint alleges that the representations by VAB contained in the deposit agreement were allegedly false and fraudulent in that the promised high interest rate and the right of early termination of the agreement were merely devices to induce the plaintiff, and others, to in the aggregate, deposit millions, if not billions of dollars, with VAB and that various portions of the money which were deposited with VAB have allegedly been transferred to accounts maintained by VAB at Citibank and The Bank of New York Mellon; were allegedly used to pay earlier depositors, as part of the Ponzi scheme, and were otherwise allegedly misappropriated.

Citibank and The Bank of New York Mellon are alleged to have aided and abetted VAB's fraudulent scheme and to have violated, as correspondent banks to VAB, their obligations under the Patriot Act.

The lawsuit seeks to recover, among other things, compensatory and punitive damages from VAB, Citibank and The Bank of New York Mellon. The plaintiff in the action is being represented by New York attorney Anna Val.

Source: Press Release 365


Bogdan said…
According to a anonymous source at VAB bank, the lawsuit is frivolous. Of course, this is coming from the Defendant in the case. Nonetheless, the Plaintiff is apparently a disgruntled man from Brooklyn who was denied a premature withdrawal from a certificate of deposit.