The mighty have fallen: Ukrainian oligarch Ihor Kolomoyskyi’s path from kingpin to cellmate

“Chase away the bulls, and take back what you own!” — yelled Lyapis Trubetskoy vocalist Siarhei Mikhalok, whose new band, Brutto, closed out a rally dedicated to Kolomoyskyi’s departure from the Dnipropetrovsk Regional Administration. [Bulls, or byki, as in the song, is a slang term used to refer to bullies or imposing bodyguards in the post-Soviet criminal world — translator’s note].

People in Kolomoyskyi's entourage, gathered in the VIP area, exchanged uneasy glances, seemingly unsure if the musician's words were directed at them. With their buzz-cuts and heavy-set builds, they had likely been called “byki” at some point in their lives.

Kolomoyskyi didn't attend the rally or even visit Dnipro at that time. In fact, he rarely visited the region he was entrusted with, let alone other parts of Ukraine. According to an employee from the press service of the Dnipropetrovsk Regional Administration, Kolomoyskyi preferred to hold meetings via Skype from Switzerland, received reports on his orders via email, and only made the journey to Dnipro when it was absolutely necessary (such as applying for his resignation as governor or reporting on his work to then-President Petro Poroshenko). In total, he spent less than a year in the region during his tenure as governor, with only two weeks on-site.

On this recording, Kolomoyskyi complains that he didn't have enough time to fix the economic issues in the region. Nevertheless, he and his team claimed credit for eliminating separatist sentiment in the area and averting the expansion of hostilities from the nearby Donetsk Region to Dnipropetrovsk.

In fact, Kolomoyskyi secured his appointment as the regional head by pledging to address separatist threats and prevent the emergence of a “Dnipropetrovsk People's Republic.” He personally proposed this role to Ukraine’s acting president Oleksandr Turchynov, who promptly agreed. Turchynov's decision was understandable, given the dire situation Ukraine faced following Viktor Yanukovych's ouster and the crumbling of state institutions.

When Turchynov assumed leadership, Russia had already occupied Crimea, and there were concerns about Moscow's potential invasion into other Ukrainian regions. He could not count on the assistance of the previous authorities, who had discredited themselves with their ties to the aggressor or had fled the country alongside Yanukovych.

The risk of pro-Russian forces, guided by ex-FSB officers from Moscow infiltrating not only Donetsk and Luhansk but also Zaporizhzhia, Kharkiv, and Dnipropetrovsk, was very real. Kolomoyskyi pledged to put his wealth to good use and squash sympathies for the so-called “Russian world” in his native Dnipropetrovsk and neighboring areas. By 2014, he had long been on the list of Ukraine's richest people, with assets estimated at no less than a billion dollars.

Units sponsored by Ihor Kolomoyskyi and armed at his expense are believed to have begun operating in the Dnipropetrovsk Region even before Ukraine officially launched the Antiterrorist Operation (ATO) on April 13, 2014. These detachments manned roadblocks along highways and raided facilities associated with pro-Russian organizations. Critics suggested that Kolomoyskyi’s investment in these units was rooted in self-interest. The potential occupation of Dnipropetrovsk by Russian forces would have imperiled his control over valuable assets. Kolomoyskyi had prior experience dealing with the “Russian world” when the occupiers in Crimea took away all his properties and looted the cash stored in the vaults of Crimean branches of his companies and banks.

Shortly after the start of the ATO, Kolomoyskyi announced the creation of a special purpose battalion to counter Russia's attempts to break apart Dnipropetrovsk from Ukraine. The battalion, called Dnipro-1, was manned by volunteers and financed by a special regional fund sponsored by Kolomoyskyi.

These volunteer fighters played a significant role in the recapture of Mariupol, a city that had fallen under Russian control during the summer of 2014. They were also actively involved in the battles for Ilovaisk and provided security at polling stations during Ukraine's presidential election on May 25, 2014, in both the Dnipropetrovsk and Donetsk regions. The election saw Petro Poroshenko winning the presidency — ironically, he later accepted Kolomoyskyi's resignation from his post as regional governor.

Kolomoyskyi the official vs. Kolomoyskyi the businessman

The reason for the dismissal was a clear discrepancy between the interests of Kolomoyskyi the official and Kolomoyskyi the businessman. While the former actively advocated for the strengthening of the Ukrainian state, the latter tried to subjugate the state to serve his commercial interests. His dismissal was preceded by a rather confusing story with the appointment of senior management at Ukrnafta, Ukraine's largest oil producer.

Ukrnafta's primary shareholder is the Ukrainian government, holding a majority stake of 50% plus one share. Between 2014 and 2015, Ihor Kolomoyskyi’s entities owned roughly 42% of the company's stock. Despite his minority ownership, Kolomoyskyi managed to fill Ukrnafta's board with loyal appointees, who had the objective of securing contracts for companies linked to the oligarch, and channeling funds into his accounts at the expense of the state budget. This controversy led to a major scandal, ultimately resulting in the overhaul of the company's senior management — and the end of Kolomoyskyi’s career as a public official.

Following his dismissal, he again fully devoted himself to making money — his main pursuit since high school. In one of his interviews, he mentioned his first earnings, which he made recycling empty bottles in Dnipropetrovsk's parks and squares during the 1970s. It was during this period that he acquired the nickname “Benya” — a moniker that stayed with him throughout his life. According to one account, the nickname came around due to his resemblance to the central character of the Soviet-era cartoon Boniface's Vacation (Kanikuly Bonifatsiya), with the voluminous hairstyle of his youth evoking comparisons to a lion's mane.

In 1985, Benya graduated with honors as an engineer from the Dnipropetrovsk Metallurgical Institute. However, his career as an engineer only lasted a couple of years — by 1989, he had switched to commerce, transporting office equipment and clothes from Moscow to Ukraine. His business dealings led him to meet other businessmen in Dnipropetrovsk, such as Gennady Bogolyubov, Oleksiy Martynov and Leonid Miloslavsky. In 1992, the group would found PrivatBank, a financial institution that would play a pivotal role in shaping modern Ukrainian history.

PrivatBank: The rise and fall of Ukraine's largest private bank

In 2013, PrivatBank reached a financial peak, closing the year with a net profit of nearly two billion hryvnias, with the exchange rate hovering just above 8 hryvnias per U.S. dollar. The bank's humble beginnings traced back to a few rooms in a Dnipropetrovsk hostel, where a group of young entrepreneurs set up their first office. An anecdote recounted in the book “A Private History: The Rise and Fall of Ukraine's Largest Private Bank,” published in Kyiv in 2018, sheds light on the bank's early days: PrivatBank lacked its own telephone line, so the entrepreneurs used the phone of a local shoemaker whose workshop was located in the hostel's basement. One of the partners also asked his parents for a refrigerator as a bribe to “grease” the right people in Ukraine’s National Bank — a practice that held sway in resolving issues during that era.

PrivatBank's history, up to its nationalization in 2016, was marked by unconventional strategies and murky schemes. For instance, the partners collaborated with Ukrposhta, the state postal operator, to accept deposits from citizens at post offices — a move that provided them with the capital needed to establish their branch network. PrivatBank was the first in Ukraine to establish an account management system via text messages, and was also the first in Eastern Europe to develop its own iPhone app.

PrivatBank's client-focused approach and variety of services quickly made it popular — and their founders very rich. So rich, in fact, that they soon found themselves at the top of Ukraine’s banking sector practically alone. Kolomoyskyi then began investing in chemical and manufacturing companies, airlines and construction firms, media holdings, security companies and recruitment agencies. He also acquired Israeli and Cypriot citizenship — a factor that would later impact his relationship with the Ukrainian state.

Despite diversifying his business interests, PrivatBank remained at the center of Kolomoyskyi's attention for many years. Funds gathered by the bank from Ukrainian citizens and businesses were funneled into financing Kolomoyskyi’s other ventures. Billions of dollars in loans were transferred from Kolomoyskyi's bank to his various holdings — however, these credit obligations were not always met, putting PrivatBank at the risk of bankruptcy.

A group of investigative journalists has raised suspicions that PrivatBank may have been deliberately steered towards financial ruin. The alleged plan involved distributing loans to numerous shell companies associated with the bank's co-owners, intentionally bankrupting these companies, declaring an inability to fulfil depositors' obligations, and subsequently liquidating the bank. If the scheme was successful, the money dispersed among these shell companies would ultimately end up in the schemers' pockets.

State investigators, who have been examining the bank's financial operations for several years, are now working to determine whether PrivatBank's insolvency was indeed a deliberate move. By 2016, however, the situation at the bank had grown so dire that the state was forced to intervene.

At that point, PrivatBank had evolved into one of Ukraine's main financial institutions, serving most of the country's citizens. It provided services to multiple enterprises — including those in strategic industries — and was one of the largest employers in the country, directly employing around 25,000 individuals, with tens of thousands more working in affiliated entities and partner companies. Over half of all active bank cards in Ukraine were issued by PrivatBank alone.

The growing number of non-performing loans threatened PrivatBank with insolvency, which could have led to the financial ruin of its depositors and the crippling of various sectors of Ukraine’s economy. In December 2016, the government decided to nationalize the bank outright. The former co-owners, including Ihor Kolomoyskyi, received nothing, and their legal attempts to contest the nationalization also led nowhere. PrivatBank’s state-appointed managers sued the former owners in London, seeking the return of funds — billions of dollars — transferred to shell companies' accounts before nationalization.

Following PrivatBank’s takeover by the state, Kolomoyskyi remained absent from Ukraine for more than two years, only returning to the country after the election of President Volodymyr Zelensky in 2019. But more on that later.

Businessman to oligarch: Kolomoyskyi's influence on politics

By the time he lost control of PrivatBank, Ihor Kolomoyskyi was the owner of a huge business empire and a true oligarch in the original sense of the word — a wealthy individual exercising influence over political decision-making. Kolomoyskyi had a broad range of tools for that very purpose — he notably fostered close relationships with numerous politicians and officials in Ukraine, including Arsen Avakov, the long-serving head of the Interior Ministry. Anton Gerashchenko, an advisor to Avakov, even participated in the Dnipro rally in 2015 as a prominent member of Kolomoyskyi's team.

Persistent rumors suggested that as early as the early 2010s, several members of the Verkhovna Rada were affiliated with the so-called “Kolomoyskyi group” — an informal coalition of lawmakers sponsored by the oligarch that were acting in his interests. In 2021, the publication Nashi Groshi (“Our Money”) analyzed voting patterns on bills closely tied to the oligarch's business interests and identified at least 70 MPs (out of a total of 450 in the Verkhovna Rada) as part of this group. While the number may have been somewhat lower in previous years, the influence of individuals beholden to the oligarch remained significant.

One of Kolomoyskyi's main tools of influence was his extensive media holdings, which included one of Ukraine's most popular television channels, 1+1. Notably, the channel aired projects by Volodymyr Zelensky's Kvartal 95 Studio, including the hit series “Servant of the People,” which played a pivotal role in propelling Zelensky into the political arena. Zelensky consistently claimed that Kolomoyskyi had no influence over his decisions and that he independently chose to run for the presidency, bearing no obligations to the oligarch. Nonetheless, Zelensky's opponents contended that his entire presidential narrative was a Kolomoyskyi-backed project, with Zelensky cast as a mere “puppet” of the businessman, who financed the creation and promotion of the TV series in which Zelensky appears as the savior of Ukraine.

The former head of Ukraine's Presidential Office, Andriy Bohdan, has asserted that decisions at the highest levels of government are influenced by Kolomoyskyi interests.

Interestingly, before his foray into civil service, Bohdan himself worked as Ihor Kolomoyskyi’s lawyer.

Indirectly, Bohdan's statements regarding the close ties between the president and the oligarch find some support in a photograph accidentally leaked to the press in the fall of 2019, showing Zelensky and Kolomoyskyi together in the president's office. However, Zelensky’s office maintains that the photo was taken during one of his regular meetings with business leaders to discuss economic matters. The president’s supporters argue that the photo clearly depicts a working environment, with several other officials present, including Andriy Bohdan and then-Prime Minister Oleksiy Honcharuk.

The distancing of the president's inner circle from the oligarch became evident about a year after the controversial photo's publication. In September 2020, the United States imposed sanctions on two Ukrainian Verkhovna Rada deputies — Andriy Derkach (currently evading investigation, accused of aiding Russia in planning the February 2022 invasion of Ukraine, with his security structures allegedly serving as a “fifth column” for the Russians in Kyiv) and Oleksandr Dubinsky. These American sanctions were related to the MPs' alleged interference in the U.S. election, as they had released recorded phone conversations resembling the voices of Petro Poroshenko and current U.S. President Joe Biden.

In the recording, purportedly made during Joe Biden's tenure as Vice President of the United States, the two voices discuss various topics, including the nationalization of PrivatBank, the necessity of raising taxes in Ukraine, and favors for Burisma, a company where Joe Biden's son, Hunter Biden, held a senior management position. Additionally, a speaker resembling Joe Biden's voice demands the dismissal of Prosecutor General Viktor Shokin. The release of these recordings was denounced in Washington as interference in U.S. internal affairs, with a belief that Ukrainian MPs' actions were orchestrated by Russian intelligence services.

Notably, Oleksandr Dubinsky, who had a long career at the 1+1 channel, served as the leader of Kolomoyskyi’s informal support group in the Verkhovna Rada. Journalists suggest that he received direct instructions from the oligarch and coordinated the actions of other group members, guiding their voting decisions on various issues. Officially, Dubinsky headed the Kyiv regional organization of the presidential party, Servant of the People, through which he secured his election to the Rada.

The Office of the President of Ukraine endorsed the U.S. sanctions. President Zelensky personally made two unsuccessful attempts to persuade Dubinsky to voluntarily leave the presidential faction, leading to his eventual expulsion by fellow party members. Following his expulsion, Dubinsky immediately turned from an avid supporter of Volodymyr Zelensky to his equally ardent critic. The remaining group members convened for an informal meeting with the president, during which he presented them with an ultimatum: cease acting in the oligarch's interests or forfeit their faction membership and the president's support.

How the U.S. awakened Kolomoyskyi's love for his homeland

Ihor Kolomoyskyi was unlikely to have closely monitored the activities of his protégés during that eventful year, as he had numerous other concerns. It was in 2020 that the U.S. Department of Justice initiated an investigation into Kolomoyskyi and his business partner, Gennady Bogolyubov. American investigators suspected the pair of purchasing industrial assets and real estate using funds illicitly withdrawn from PrivatBank.

Simultaneously, FBI agents searched the offices of several American companies affiliated with Kolomoyskyi. The bureau officially announced that these searches pertained to money laundering and presented evidence linking the Ukrainian oligarch to the alleged offense. The searches and charges were soon followed by sanctions imposed against Kolomoyskyi and his family.

This heightened scrutiny by U.S. authorities kindled an unprecedented sense of patriotism in Kolomoyskyi, leading him to refrain from foreign travel — seemingly out of fear of potential arrest and extradition. However, seeking protection from extradition within Ukraine is not a guaranteed shield for the oligarch. Ukrainian law prohibits its citizens from holding citizenship in other countries. According to the legislation, the voluntary acquisition of another country's passport could be interpreted as a renunciation of Ukrainian citizenship.

In theory, Ihor Kolomoyskyi, who obtained both Israeli and Cypriot citizenship, could be stripped of his Ukrainian passport. In fact, it is possible that he has already lost it. Last summer, just a few months after the onset of Russia's full-scale invasion of Ukraine, several Ukrainian media outlets published a copy of President Zelensky's decree revoking Kolomoyskyi’s Ukrainian citizenship, as he had become a citizen in two other countries.

Sources within the Office of the President of Ukraine provided insight into the rationale behind the decision, highlighting the oligarch's shifting political stance. While in 2014, Ihor Kolomoyskyi vehemently condemned Vladimir Putin and openly labeled Russia as an aggressor, his rhetoric in the subsequent years notably softened, with him referring to the war in Donbas as a “civil conflict.”

Following the start of Russia's full-scale invasion in February 2022, he maintained a low profile for several weeks, and did not respond to appeals from the authorities for big businesses to support the Ukrainian army. These factors, the sources explained, contributed to the decision to revoke his citizenship. However, it's important to note that the official decree formalizing Kolomoyskyi’s removal from the list of Ukrainian citizens has not been published. During a court hearing on September 2, where he faced accusations of fraud and money laundering, the judge referred to him as a Ukrainian citizen.

Oligarch on trial

Turning to the legal proceedings, it appears that Kolomoyskyi’s confusing citizenship status may not help him evade justice. The authorities have had their eye on Kolomoyskyi for a while, dating back to the investigation into the “schemes” used by PrivatBank’s former owners since 2016. The businessman was notably questioned about his oil assets — investigators believe that Kolomoyskyi’s companies linked to Ukrnafta and Ukrtatnafta evaded customs duties for years and engaged in unathorized fuel trading.

This investigation has already led to numerous searches and detentions. Earlier this year, agents from the SBU and the Economic Security Bureau carried out a search at one of Ihor Kolomoyskyi’s residences, which sparked controversy. During the search, Kolomoyskyi displayed arrogance, insisting that armed SBU officers remove their shoes to avoid damaging his expensive carpets.

Now, the situation seems markedly different. Kolomoyskyi appears weary and disoriented. The investigation alleges that he illicitly transferred over $13 million abroad through PrivatBank structures under his control until 2016. Ukrainian authorities are are essentially accusing him of the same wrongdoing as the U.S. authorities, involving the embezzlement of funds from PrivatBank clients and the acquisition of overseas real estate using those funds. However, the sums involved in the U.S. case are much larger, reaching at least $40 million.

It's worth noting that Kolomoyskyi opted not to post bail and instead chose pre-trial detention for the duration of the investigation. It is unlikely that he lacked the requested court amount of 509 million hryvnias (close to $13 million) — the same sum he is accused of fraudulently possessing. After being subjected to U.S. sanctions and following the invasion, Kolomoyskyi saw a substantial portion of his assets frozen in foreign accounts, damaged by shelling, or occupied by Russia. Despite these setbacks, Kolomoyskyi still ranks among Ukraine's wealthiest individuals, with Forbes estimating his current wealth at $850 million — a billion dollars less than two years ago. The trajectory of the businessman's wealth mirrors Kolomoyskyi's entire career — from bottle collector to influential oligarch, now awaiting trial.