From the bankruptcy of "Mriya" to real estate fraud: Why Interpol became interested in Ukrainian fraudster Andriy Guta

The bankruptcy story of one of the most famous and successful agricultural holding enterprises in Ukraine, "Mriia", has touched not only Ukraine, but Europe as well. Because of illegal money laundering it has been referred to as one of “the biggest scams.” Though, few people know that this story had its continuation in a slightly different plane - writes Gary Cartwright.

"Mriia" going bankrupt

Mriia, the company set up by Ivan Guta in 2002, twelve years later evolved into a major scam, thanks to which international creditors, including such companies as IFC, Alfa Bank, Crédit Agricole, Deutsche Bank DBU, Erste, FUIB were robbed for $1.3 billion by the Guta family. 

Ivan Guta's son, Andriy, played a key role in it. In 2008, he was appointed executive director of "Mriia", taking over the entire strategic and operational management of the company. After a while, the company, being successful only on paper, entered international exchanges, managing to attract major investors. The money received from investors was withdrawn through eight offshore companies in the British Virgin Islands. 

These 8 companies, according to the documents, belonged to the Gutas. Through the scheme of buying shares in the agricultural holding "Mriia", Andriy Guta actually transferred funds from one of his "pockets" to another. According to some sources, the total amount was about 220 million dollars. In 2014, "Mriia" declared bankruptcy.

In fact, Andriy Guta left "out of business" the Ukrainian state, thousands of employees of "Mriia" Agricultural Holding, international creditors, as well as European banks Credit Suisse and the Bank of Cyprus, through the accounts in which he conducted his scams. But instead of being held accountable to the law, Andriy Guta simply changed his field of activity.

Real estate fraud

After the bankruptcy of the country's largest agricultural holding, Andriy Guta got into the real estate. He joined the development company "Development Creative Group" (DCG), also known as "NK Group" or as the brand "Naberezhnyi Kvartal". NK Group was founded by Khmelnytsky businessman Yuri Suslyak and has been active in the Ukrainian real estate market since 2014.

By 2016, NK Group had built residential complexes in 19 regions of Ukraine, most of which, namely 55 objects, actually immediately acquire the reputation of "problematic". Guta, together with Suslyak, set up subsidiaries to which money was transferred from nearly fifteen "Naberezhny Kvartal" brand cooperatives. Subsequently, the money received from ordinary Ukrainians, who invested in the construction of the residential complex, was cashed out. 

Ultimately, due to gross and systematic violations, the regional State Construction Committee terminated construction permits issued earlier, and the construction of many housing complexes was suspended.

Manipulations with deadlines and communications 

In the NK Group, Andriy Guta was directly responsible for carrying out communications in the housing estate, as well as for working with contractors. In fact, he had unlimited access to investors' funds, the ability to distribute them at his discretion and to manipulate with the timing of construction, connection of communications and commissioning of facilities.

A striking example is the construction of Housing and Construction Corporation "Grandbud", brand "Naberezhny quarter", in Mykolaiyv, at 18 Mistostroiiteliv Street, which was managed by Andriy Guta.

Initially, the first section was scheduled to be completed in Q1 of 2016 and the second section in Q4 of 2016. Guta had the resources and ability to influence the deadlines, and he took advantage of it. On February 24, 2016, a declaration of readiness for the first section was filed with the State Construction Architectural Inspectorate, but the 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 "Grandbud" housing cooperative was to be completed, the shareholders of the housing cooperative initiated a meeting to address the issue of violations of the deadlines for the construction of the apartment complex. The investors demanded to transfer the funds that Guta received from them to complete the construction of the first and second sections. Corresponding demand letters were sent to Andriy Guta, the owner of "NK Group" and "Naberezhny Quarter" brand Yuri Suslyak, as well as to various state and local authorities. There was no adequate response. Moreover, Andriy Guta disappeared along with investors' money. At the same time, the contractor was changed to "Mykolaiyv Development", and the construction site froze.

Similar schemes have been implemented in other Ukrainian cities:

• Kharkiv: "NK Group" facility was commissioned, but there were no communications: water, sewerage, gas and electricity;

• Rivne: the facility was built without the design documentation;

• Ternopil: part of the apartments of a house built with numerous violations had the status of temporary housing;

• Odesa: Construction of Residential Complex Stopped by State Architecture and Construction Committee 

Another puzzle of the construction "pyramid"

People who have decided to buy apartments in these housing estates have been disappointed. They faced the same problems as the investors of other properties, which were dealt with by Andriy Guta: unfair quality of construction and materials, difficulties with registration of property rights, communications, problems with the organization of the territory around the Residential Complex, delays in construction and exceeding the deadlines, demanding a 100% payment: 50% immediately, 50% within 60 days, although at the time of communication with representatives of the developer, the company did not have the relevant documents and permits for construction.

In total, Guta, Suslyak and their partners withdrew 120.6 million hryvnas of shareholders through the cooperatives of the brand "Naberezhny Kvartal". And this is only what we were able to establish - in reality, it is possible that investors were inflicted much more damage.

After the bankruptcy of the Mriia agricultural holding and real estate scams, Guta moved to Switzerland, where he not only resides, but is also actively involved in startups. In 2020, Interpol formed an international request to law enforcement agencies around the world to find and temporarily arrest Andriy Guta, but this document is still pending in Switzerland. Consequently, the authorities of the country still have not approved the extradition request, which so far allows Andriy Guta to avoid responsibility. The main question is: For how long?  

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