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Lawyer tied to Ukraine's Yanukovich says he's cooperating with authorities

Source: Thomson Reuters Foundation - Thu, 27 Feb 2014 00:24 GMT
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Ukrainians look at a "Wanted" notice for fugitive Ukrainian President Victor Yanukovich, plastered on the window of a car used as a barricade, near Kiev's Independent Square February 24, 2014 REUTERS/Yannis Behrakis
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(Clarifies activists are from two groups, paragraph 9, and Sergiy Klyuev's role in Yanukovich's party, paragraph 12)

By Mark Hosenball and Stella Dawson

NEW YORK, Feb 26 (Reuters) - Reinhard Proksch, an Austrian lawyer with financial dealings linked to leaders in former Ukrainian President Viktor Yanukovich's government, said on Wednesday he is eager to cooperate with international authorities to freeze their assets.

In a telephone interview with Reuters, Proksch said he is happy to provide information and has already made contact with the U.S. tax authority, the Internal Revenue Service, and with the Financial Intelligence Unit in Liechtenstein, which investigates money laundering and financial crimes.

"I am not a crook," Proksch said in explaining his readiness to cooperate regarding his past work with top officials from the government of Yanukovich, who was ousted from power last weekend.

"I really think that we have done nothing wrong. ... I'm really looking to sort it out," he said.

Authorities are investigating how Yanukovich could have lived a lavish lifestyle, which included a luxury estate outside Kiev, on his state salary.

Ukraine's acting prosecutor general told Reuters on Wednesday that the country will urgently contact international organizations with an official request to help trace bank accounts and assets controlled by Yanukovich and his allies.

On Tuesday, the U.S. Treasury warned banks to be on the look-out for potentially suspicious transfers of financial assets by Yanukovich or members of his inner circle.

Yanukovich is on the run after being toppled following three months of bloody street protests.

Ukrainian activists from the groups PEPWatch and Anticorruption Action Centre say that Proksch, a New York-registered lawyer with company formation and advisory services offices in Vienna, Liechtenstein, London, New York and Miami, was used by Ukraine's former rulers to help set up a complex web of companies to enrich themselves at the state's expense.

Proksch, speaking by phone from Austria, said he personally never met major Ukrainian figures whose deals he is alleged to have handled, including Yanukovich, the former president's son and other family members, or any member of the Klyuev family, who are close allies of Yanukovich.

He told Reuters that he had set up foreign companies for business dealings inside Ukraine, including transactions involving the hunting grounds adjoining the luxury Mezhyhirya estate used by Yanukovich.

He also said he worked on Activ Solar GmbH, a solar energy company led by the son-in-law of Sergiy Klyuev, a senior official in Yanukovich's Party of Regions.

Activ Solar's shares today are fully owned by a company called P&A Corporate Trust. They are held for the management and the investors, according to Activ Solar's spokesman Hans Lang, director of the public relations firm Brunswick in Vienna.

According to information compiled by the activists, P&A Corporate Trust is based at Proksch's Liechtenstein office.

Activ Solar emerged in 2008 from a string of transactions including an investment vehicle and a shell company that trace back to a firm owned by Sergiy Klyuev and his brother Andriy, Yanukovich's chief of staff. Its chief executive is Kaveh Ertefai, a former UBS investment banker and Sergiy Klyuev's son-in-law.

In a statement filed with Austrian authorities on Feb. 18, Activ Solar said that its business decisions are based on "demonstrably economic considerations rather than on family relationships."

Proksch said the company needed foreign corporate entities to make it easier for it to acquire solar technology.

In general, he said, the purpose of using companies outside Ukraine to transact business in the Ukraine or hold assets there was "to simplify things."

Proksch said he is in the running for a top counterterrorism post with the United Nations in Vienna.

He said repeatedly that there is voluminous financial documentation at his Liechtenstein office, which authorities will want to see.

"We have all the communications in Liechtenstein," he said.

The U.S. Treasury declined comment, and Liechtenstein authorities were not immediately available for comment.

(Stella Dawson is a correspondent for Thomson Reuters Foundation; Additional reporting by Stephen Grey in Kiev; Editing by Warren Strobel)

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