UNITED STATES OF AMERICA vs PAVEL LAZARENKO

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Case 1:04-cv-00798-PLF Document 152-3 Filed 04/08/10 Page 2 of 11









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KEVIN V. RYAN (CSBN 118321) United States Attorney

ROSS W. NADEL (CSBN 87940) Chief, Criminal Division

MARTHA BOERSCH (CSBN 126569) JONATHAN R. HOWDEN (CSBN 97022) PETER AXELROD (CSBN 190843) Assistant United States Attorneys

HALLIE A. MITCHELL (CSBN 210020) Trial Attorney, U.S. Department of Justice

. 450 Golden Gate Avenue, Box 36055 San Francisco, California 94102 Telephone: (415) 436-7200

Attorneys for Plaintiff

/12 UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DNISION 13

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15 UNITED STATES OF AMERICA, ) No. CR 00-0284 MJJ

16 ) Plaintiff, ) SUPPLEMENTAL MOTION IN LIMINE

17 ) TO ADMIT STATEMENTS OF YULIA v. ) TYMOSHENKO AS CO-CONSPIRATOR

18 ) STATEMENTS PAVEL LAZARENKO, )

19 ) Defendant. )

20 )

21 The United States hereby supplements its motion in limine to admit statements made by

22 Yulia Tymoshenko, an un-indicted co-conspirator, during the course of and in the furtherance of

23 the conspiracy and the scheme to defraud.

24 II

25 II

26 II

27 II

28 II

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1 ARGUMENT

2 I. THE STATEMENTS OF YULIA TYMOSHENKO, A NON-TESTIFYING CO-

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CONSPIRATOR. ARE ADMISSIBLE IN EVIDENCE UNDER FED. R. EVID. 801(d)(2)

A. LeGal Authority

Under Fed. R. Evid. 801{d){2){E), "a statement by a coconspirator of a party during the

course of and in furtherance of the conspiracy" is not hearsay. United States v. Crespo de Llano,

838 F. 2d 1006, 1017 (9th Cir. 1987). To admit statements of a coconspirator against a

defendant, the government need only establish by a preponderance of the evidence that (I) the

declarant and the defendant were members of a conspiracy; and (2) the statements were made

during and in furtherance ofthe conspiracy. Bowjaily v. United States, 483 U.S. 171, 175

(1987). Under Fed. R. Evid. 1 04{a) , a court is not '''bound by the rules of evidence' in

determining the existence of preliminary facts to support the admission of evidence." Id. at 178.

Under BouJjaily, the requirements of Rule 801{d){2){E) and the Confrontation Clause of the

Sixth Amendment are identical. Id. at 182-84.

The test for admission of a co-conspirator's statements is ''whether there is sufficient,

substantial evidence apart from [the statements] to establish a prima facie case of conspiracy and 16

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the defendant's slight connection therewith." United States v. Zemek, 634 F.2d 1159, 1170 (9th

Cir. 1980). Circumstantial evidence can supply the necessary quantum of proof. United States v.

Weiner, 578 F.2d 757, 770 (9th Cir. 1978). The requisite evidence need not be uncontroverted. 19

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United States v. Dixon, 562 F.2d 1138, 1141 (9th Cir. 1977). Finally, the court can consider

reasonable inferences that may be drawn from the evidence, and all the circumstances must be

viewed "collectively, not in isolation." Id. at 1142. Once a conspiracy is shown, the prosecution

need only present slight evidence connecting the defendant to the conspiracy. United States v.

Mason, 658 F. 2d 1263, 1269 (9th Cir. 1981).

A conspiracy need not be charged in order to allow the introduction of a co-conspirator's 25

statement under the rule. United States v. Portac. Inc., 869 F. 2d 1288, 1294 (9th Cir. 1989). 26

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Furthermore, "the conspiracy that forms the basis for admitting coconspirators' statements need

not be the same conspiracy for which the defendant is indicted." United States v. Arce, 997 F.2d

UNITED STATES MOTION IN LIMINE TO ADMIT COCONSPIRATOR STATEMENTS [CR 00-0284-MJJ] 2


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1 1123, 1128 (5 th Cir. 1993). Participation as an aider and abettor is sufficient, as a concert of

2 action creates a conspiracy for purposes of the evidentiary rule. rd. See also, United States v.

3 leFever, 798 F. 2d 977,983 (7th Cir. 1986); United States v. Reynolds, 919 F. 2d 435, 439 (7th

4 Cir. 1990); and United States v. Blankenship. 954 F. 2d 1224, 1231 (6th Cir. 1992). Moreover,

5 evidence against one defendant in a conspiracy can properly be considered against another

6 defendant given evidence linking each to the conspiracy. United States v. Nixon, 918 F. 2d

7 895, 906 (11 th Cir. 1990). -

8 A trial court has discretion to vary the order of proof in admitting a co-conspirator's

.9 statement; the statement may be admitted prior to the presentation of independent evidence of the

10 conspiracy. United States v. Loya, 807 F. 2d 1483, 1490 (9th Cir. 1987); United States v.

11 Arbelaez, 719 F. 2d, 1453, 1460 (9th Cir. 1983).

12 B. The Charged Conspiracy and the Scheme to Defraud

13 Count One of the Second Superseding Indictment alleges a conspiracy to launder money

14 among the defendant, Peter Kiritchenko, and others between January 1992 and June 1999. The

15 indictment generally alleges that the defendant and others conspired to launder the proceeds of

16 extortion and fraud through various bank accounts, including accounts in the United States. The

17 indictment alleges that as part of the conspiracy Lazarenko, as a government official in Ukraine,

18 would engage in various acts of extortion and fraud, and would receive funds that had been

1.9 stolen, converted and taken by fraud, and would transfer the proceeds of this activity into bank

20 accounts in Switzerland, Antigua, Poland, the United States, and elsewhere, and that he induced

21 Kiritchenko to assist Lazarenko to open bank accounts in Switzerland, Antigua, Poland, and the

22 United States, and to transfer the proceeds of fraud and extortion into and out of these bank

23 accounts in an effort to conceal and disguise the nature, location, source, ownership, and control

24 of the proceeds of the specified unlawful activity. The conspiracy count incorporates the wire

25 fraud scheme to defraud, which more specifically alleges that the defendant received money and

26 property from individuals and businesses on behalf of whom he was exercising his official

27 authority.

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UNITED STATES MOTION IN LIMINE TO ADMIT COCONSPIRATOR STATEMENTS [CR 00-02S4-MJJ] 3


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1 In particular, with respect to Ms. Tymoshenko, the indictment alleges that in

2 approximately September 1995, Lazarenko, as First Vice Prime Minister of Ukraine, became

3 responsible for the energy section in the Ukrainian government, and that in approximately

4 December 1995, a Ukrainian company called United Energy Systems of Ukraine ("lJESU"),

5 which was created on November 20, 1995 by Yulia Tymoshenko, an associate of Lazarenko's,

6 was designated by the Ukrainian government as one of several companies to supply natural gas to

7 Ukraine. VESU was given the authority to distribute natural gas to the Dnepropetrovsk region of .

8 Ukraine. From approximately December 1995 until sometime in 1997, UESU received

9 deliveries of natural gas from RAO Gazprom pursuant to contracts entered on December 29,

10 1995 and December 31, 1996 between RAO Gazprom, UESU, and others. Beginning in

11 approximately January 1996, UESU fraudulently conveyed title to the imported natural gas to

12 United Energy International, Ltd. ("VEll.,"), an 85% shareholder ofUESU that was created on

13 October 17, 1995, in London, England by a Turkish national named Ercument Aksoy, at the

14 direction ofYulia Tymoshenko, and fraudulently diverted to foreign bank accounts belonging to

15 VEIL the payments from Ukrainian customers for the natural gas delivered by UESU.

16 The indictment further alleges that between April 8, 1996 and December 31, 1996, rather

17 than pay RAO Gazprom for the delivered gas with the money that had been transferred to VEIL,

18 VEIL transferred approximately $140,000,000 to SomolliEnterprises, a Cypriot company that

19 was registered in Cyprus on October 8, 1992, and was controlled by Yulia Tymoshenko and

20 others. Between April 1996 and June 1997, Somolli Enterprises and UESU transferred a total of

21 approximately $97,000,000 into accounts that were controlled by Kiritchenko in Switzerland,

22 Poland, and the United States, including transfers totaling approximately $13,000,000 to bank

23 accounts in the Northern District of California. Between February of 1996 and September of

24 1997, the money from Somolli, along with other funds, totaling more than $120,000,000 was

25 transferr~d from Kiritchenko's accounts into accounts controlled by Lazarenko in Switzerland

26 and Antigua. Thereafter, the indictment alleges, Lazarenko transferred portions of these funds

27 from Switzerland into bank accounts in the Northern District of California, including two

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UNITED STATES MOTION IN LIMINE TO ADMIT COCONSPIRATOR STATEMENTS [CR Oo..0284-MJJ] 4


1 transfers of $ 14,000,000 each on August 1, 1997.

2 Finally, part ofthe conspiracy includes the scheme to defraud alleged in Paragraphs 32 to

3 38 of the indictment. As part of the scheme to defraud, the defendant. while a government

4 official in Ukraine, exercised his official authority and influence in favor of, and to induce the

5 grant of certain government benefits and privileges to Yulia Tymoshenko's businesses, among

6 others, by taking certain official action, and between 1993 and 1997 he received over

7 $200,000,000 from various companies, including Yulia Tymoshenko's businesses Somolli

8 Enterprises ($84,000,000) and UESU ($13,000,000). The indictment alleges that the defendant

9 took official action with respect to "Cube," a company owned and controlled by Yulia

10 Tymoshenko, and that when he was the First Vice Prime Minister in charge of the energy sector,

11 he exercised his official authority to advance the business interests ofUESU so that UESU

12 obtained the right to sell and distribute natural gas to certain commercial and state enterprises in

13 the Dnepropetrovsk region of Ukraine. The indictment alleges that as a result of these actions,

14 the people and government of Ukraine were deprived of money and of the defendant's right to

15 honest services.

16 C. The Evidence of the Conspiracy

17 The evidence discussed below demonstrates that Tymoshenko was a co-conspirator in the

18 scheme to defraud and the conspiracy to launder the proceeds of the wire fraud and the UESU

19 fraud. The evidence, and the reasonable inferences that can be drawn from the evidence,

20 demonstrates that Lazarenko agreed with Tymoshenko to use his official position for the benefit

21 ofUESU in exchange for a portion of the profits of Tymoshenko's businesses. The evidence,

22 and the reasonable inferences that can be drawn from the evidence, shows that Tymoshenko

23 conspired with Kirichenko and Lazarenko to hide the payments to Lazarenko using a number of

24 offshore companies controlled by Tymoshenko, including UEn.., and Somolli Enterprises, and a

25 series of Swiss and other bank accounts controlled by Kirichenko and Lazarenko, including the

26 ORPHIN, WILNORTH, CARPO-53 and NIHPRO accounts, to transfer money from UESU's

27 gas business to Lazarenko. The evidence is summarized below.

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1 1. Peter Kirichenko and the Bank Records

2 In statements provided to the defense over a year ago,' Peter Kirichenko describes

3 Tymoshenko's role in the acts charged in the indictment. Lazarenko and others told Kirichenko

4 that when he was the Governor of Dnepropetrovsk, Lazarenko was receiving 50% of various

5 business doing business in the region, including 50% ofthe profits of a company called Cube

6 owned by Yulia Tymoshenko. FBI 302 (December 21, 1999). Lazarenko told Kirichenko that

7 when he was governor he would control the business that could be conducted with Ukrainian

8 State Enterprises by business controlled by himself, Tymoshenko, Dityatkovsky, and others.

9 Kirichenko Protocol at 22. Beginning in 1993, on Lazarenko's instructions, Kirichenko

10 transferred 50% of his own profits to two ofLazarenko's Swiss bank accounts: an account under

11 the name of LIP Handel, and an account in the name ofKATO-82.

12 In 1994, Lazarenko told Kirichenko that there was a problem with Lazarenko's LIP

13 Handel account, which was the account to which Kirichenko had been sending money to

14 Lazarenko, and that he wanted to open a new account at a bank in Geneva where Kirichenko

15 already had an account. FBI 302 (December 21,1999). In addition, at this time, the bank at

16 which Lazarenko had his KATO-82 account indicated that it no longer wished to have

17 Lazarenko's account because he was a public official. Id. Thereafter, Lazarenko directed

18 Kirtichenko to open and manage bank accounts that were receiving money from several

19 businesses that were paying Lazarenko. FBI 302 (May 17,2000). Kirirchenko agreed, fearing

20 that ifhe did not, he would have to cease all economic activity. Kirichenko Swiss Protocol

21 (February 15,2000). Kirichenko helped Lazarenko open his CARPO-53 and NlliPRO accounts,

22 but Lazarenko wanted the money he was receiving from others, including Tymoshenko, to pass

23 through Kirichenko's accounts, in order to prevent anyone from knowing which were

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25 1 The government has produced a lengthy protocol taken by Ukrainian authorities

26 pursuant to a Mutual Legal Assistance request ("Kirichenko Protocol"); two protocols taken by the Swiss Examining Magistrate in connection with the extradition proceedings against Kirichenko and Lazarenko ("Kirichenko Swiss Protocol"); and a number of FBI 302s ("FBI 27

302"). 28



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1 Lazarenko's personal accounts. Kirichenko Swiss Protocol (February 15,2000).

2 Lazarenko and Kirtichenko thereafter met frequently, sometimes monthly, and during

3 those meetings would discuss the money that was coming into Kirichenko' s accounts and the

4 payments Lazarenko expected to receive. Sometimes Lazarenko called the people from whom he

5 expected money, including Tymoshenko and her partner Oleksandr Gravets, and instruct them to

6 send the money. FBI 302 (May 17, 2000). In addition, Lazarenko would provide Kirichenko

7 with written instructions regarding these funds, and Kirichenko would then contact the banks and -

8 direct them according to Lazarenko's wishes. Kirichenko Swiss Protocol (February 15, 2000).

9 Lazarenko received money from Tymoshenko through Kirichenko's ORPHIN accounts at

10 American Bank in Poland and Credit Suisse as well as through an account in the name of

11 Wilnorth2 at Banque SCS Alliance. Id. Tymoshenko transferred money to these accounts for the

12 benefit of Lazarenko, and neither Kirichenko himself nor any of his companies did business with

13 Yulia Tymoshenko or any of her companies. Kirichenko was present on several occasions when

14 Lazarenko called Tymoshenko and insisted that she send money to him from the profits of her

15 business enterprises. FBI 302 (May 17, 2000). Kirichenko understood from Lazarenko, these

16 phone calls, and from his review of his bank records that the money from Somolli Enterprises

17 was from Tymoshenko. Kirichenko Protocol at 22.

18 On several occasions Kirichenko was present during meetings between Lazarenko,

19 Tymoshenko, and Serif Ercument Aksoy, the nominal director of United Energy International,

20 Ltd. ("UEIL"), a London company created by Tymoshenko and Aksoy. On one occasion, at the

21 end of 1995 or the beginning of 1996, he was present on a private airplane with Aksoy,

22 Tymoshenko, and Lazarenko. FBI 302 (October 18,2000). In 1998, Kirichenko met in London

23 with Aksoy, Tymoshenko,and Lazarenko. According to Lazarenko, Tymoshenko believed she

24 had overpaid Lazarenko (more than his 50% share of her profits) and she wanted some money to

25 be returned to her. Id. Bank records for the UEIL account at National Westminster Bank in

26 London, England show transfers from UEIL to Somolli Enterprises between April 1996 through

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28 2 Wilnorth was a company owned by Kirichenko and Lazarenko.

UNITED STATES MOTION IN LIMINE TO ADMIT COCONSPIRATOR STATEMENTS [CR 00-0284-MI]] 7


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1 December 1997 of approximately $197,495,465.

2 The bank records corroborate Kirichenko's statements. Specifically, admitted records

3 from this same time period demonstrate that between July 1996 and September 1996, the

4 Wilnorth account received approximately $14,099,636 from Tymoshenko's company Somolli

5 Enterprises.3 Bank records show that between April 1996 and August 1996, Kirichenko's

6 ORPHIN account at American Bank in Poland received approximately $49,929,347 from

7 Somolli Enterprises, and his ORPHIN account at Credit Suisse received approximately .

8 $23,049,386 from Somolli Enterprises between April 1996, and December 1996. Finally, bank

9 records demonstrate that in May and June of 1997, Kirichenko's ORPHIN account at European

10 Federal Credit Bank ("Eurofed") received approximately $13,999,970 from Somolli Enterprises.

11 Neither Kirichenko nor his companies did any business with Somolli Enterprises, and all of these

12 funds from Somolli Enterprises and VESU were subsequently transferred to Lazarenko's

13 accounts, and bank records confirm transfers from these accounts to Lazarenko's NIHPRO and

14 CARPO-53 accounts in Switzerland and to his personal account at Eurofed. These transfers,

15 totaling approximately $101,078,339, are approximately 51 % of the total amount that VEIL paid

16 to Somolli Enterprises.

17 As Kirichenko became more involved in managing Lazarenko's accounts, Lazarenko told

18 him that Lazarenko made a $7,000,000 payment to Evghen Marchuk, then the Prime Minister, so

19 that he would allow Tymoshenko to get involved in the natural gas business. FBI 302 (May 17,

20 2000). Kirichenko has stated that part of the assistance Lazarenko provided to Tymoshenko was

21 enabling her to become the creditor with respect to various industrial plants in Ukraine, in

22 exchange for the provision of natural gas, and that he observed Lazarenko meeting with the

23 directors of these enterprises. Id. Lazarenko instructed Kirichenko to transfer money from

24 Kirichenko's and Lazarenko's jointly-controlled Bainfield account at Banque SCS Alliance to a

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26 3 The testimony of Andreas Petrou, Doncho Stoyanovsky, Serif Ercument Aksoy, and

27 Oleksandr Reshetka, as well as the documents admitted from Cyprus (Gov. Ex. 1805, 1816), 28 demonstrate that Tymoshenko controlled Somolli Enterprises.



1 company called Eagle Enterprises and a company called Lucky Star Enterprises, and that these

2 transfers were for the benefit of Rem Viakhirev, who, as evidenced by the testimony of Anatoly

3 Minchenko and Evgeny Dovzhok, was the head of RAO Gazprom at the time. Bank records for

4 Bainfield's account at Banque SCS Alliance show two transfers on June 4, 1996, one of

5 $1,280,032 to Eagle Enterprises, and one of $1,400,032 to Lucky Star Enterprises.

6 2. Serif Ercument Aksoy

7 Serif Ercument Aksoy was the nominal director ofUEIL. He testified that he first met

8 Yulia and Alexander Tymoshenko and Oleksandr Gravets when they had a company called Cube

9 in Dnepropetrovsk, and that they also controlled United Energy International, Ltd., through an

10 offshore trust, BL Trust. Aksoy 13-19. Aksoy testified that UEIL acted on instructions from

11 Somolli Enterprises, particularly for receiving and transferring money, and that Somolli was

12 controlled by Gravets and Yulia and Alexander Tymoshenko. Aksoy 27-28. Aksoy testified that

13 he was familiar with the contract between RAO Gazprom and UESU for the year 1996, and that

14 Lazarenko, who was the First Vice Prime Minister of Ukraine at the time, negotiated the basic

15 terms of the contract with RAO Gazprom, id. at 46, and that he (Aksoy) attended a meeting

16 between Rem Viakhirev, the head ofRAO Gazprom and Lazarenko.

17 After the contract was signed, the gas was distributed in Ukraine byUESU, id. at 56, but

18 UEIL received the money for the gas. Once UEIL received the money for the gas from UESU,

19 UEIL would transfer the money as directed by Somolli Enterprises. Id. at 67-72. See also Gov.

20 Exhibit 872 (Aksoy diagram). Aksoy testified that he never ordered the transfer of any money

21 from UEIL to Moscow, to RAO Gazprom, during 1996. Id. at 82, 83. Instead, at the end of

22 1996, UEIL, UESU, RAO Gaiprom, the Russian Ministry of Defense, and the Russian Ministry

23 of Finance entered a complicated agreement pursuant to which UESU agreed to supply goods to

24 the Russian Ministry of Defense to extinguish its debt to RAO Gazprom.4

25 Aksoy testified that he met Lazarenko when Lazarenko was First Vice Prime Minister

26 and Yulia Tymoshenko invited Aksoy to Lazarenko's office. Aksoy at 97-98. Aksoy met

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28 4 This agreement is the subject of the testimony of Andrei Vavilov, discussed below.

UNITED STATES MOTION IN LIMINE TO ADMIT COCONSPIRATOR STATEMENTS [CR OO..Q284-Mll] 9


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1 Lazarenko again in Canada on an official delegation that included the Tymoshenkos and Gravets.

2 Id. He also testified that he was present at a meeting in London at the Savoy Hotel sometime in

3 1997 or 1998 between Yulia Tymoshenko, Alexander Tymoshenko, and another person whom

4 Aksoycould not recall. Id. at 227-228. Aksoy denied any knowledge of payments by Somolli to

5 Lazarenko. He also confirmed that Lazarenko had no business or contractual relationship with

6 Somolli, VESU or VEIL. Aksoy 101-102.

7 3. Qleksandr Gravets

8 Oleksander Gravets was Tymoshenko's partner in Cube beginning in 1992, and Cube

9 engaged in trade in the Dnepropetrovsk region. According to Gravets, in 1996 or 1997, Cube

10 changed its name to United Energy Systems of Ukraine ("VESU"). Gravets also testified he,

11 Yulia Tymoshenko, and Alexander Tymoshenko owned Somolli Enterprises, which they set up

12 in Cyprus in 1992 or 1993, and that Somolli Enterprises owned Cube and, after the name change,

13 owned VESU. Gravets 41:2-8. Gravets further testified that he and the two Tymoshenkos ran

14 VESU. Gravets 41 :20-22. Documents show that VESU was not even created as a legal entity

15 until 1995, just one month before it was officially designated as a distributor of natural gas in

16 Ukraine. With respect to Somolli Enterprises, Gravets testified that he was signatory on the

17 Somolli Enterprises account at the Bank of Cyprus, Gravets 51: 17, but that he believed that

18 Andreas Petrou or Mr. Papapetrou ran Somolli Enterprises. Gravets 52:21 -22.

19 Gravets testified that he, Yulia Tymoshenko, Alexander Tymoshenko, and Serif Aksoy

20 were present together in London, England when United Energy International, Ltd. ("VEIL") was

21 created, Gravets 62:8 - 63:24, and that VEIL was owned by a company controlled by Aksoyand

22 an entity controlled by Gravets and the Tymoshenkos. Gravets testified that VEIL and VESU

23 were both engaged in the distribution of natural gas in Ukraine and that Aksoy and Yulia

24 Tymoshenko frequently traveled to Moscow in connection with this business during 1996 and

25 1997. Gravets testified that VEIL worked with VESU, and Somolli Enterprises. Gravets 60:9-

26 62:8.

27 Gravets testified that after he left Ukraine, he met with Yulia Tymoshenko in Israel and

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1 asked her about reports in the .newspapers that Somolli Enterprises made payments to Lazarenko,

2 payments about which Gravets testified he had no prior knowledge. Gravets 91. Gravets had

3 previously indicated that he told Tymoshenko: "if you have that much free money, then why

4 don't you hand some - fork some over? We had been partners. If this is a gain, then I should

5 have my part." Tymoshenko told Gravets that the money to Lazarenko regarded "purchasing

6 transactions." Gravets 91 :24.5 Gravets added that he had never had any financial dealings with

7 Lazarenko. Gravets 79:20-23.

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3. Andreas Petrou

Andreas Petrou was a nominal director of Somolli Enterprises, and it was through Petrou

10 that Tymoshenko, Gravets, and Oleksandr Tymoshenko set up Somolli Enterprises in Cyprus.

11 Petrou testified that in 1992, Tymoshenko and two other men came to see him in Nicosia,

12 Cyprus, looking for a lawyer to help them set up a company. Petrou directed them to a lawyer

13 and then Petrou subsequently became a "temporary" director of Somolli. He testified, however,

14 that he played no role in the actual operation of the business and signed only one or two

15 documents related to Somolli. In particular, he testified that he did not sign the agency

16 agreement between Somolli and UEIL, pursuant to which UEIL paid Somolli the money

17 discussed above.

18 Records from Cyprus show that the owners ofSomolli Enterprises were Yulia

19 Tymoshenko, Alexander Tymoshenko, and Oleksandr Gravets, and bank records from Cyprus

20 demonstrate that they controlled Somolli's Bank of Cyprus account.6

21 4. Doncho Stoyanovsky

22 Doncho Stoyanovsky was supposedly the director of Somolli Enterprises. Stoyanovsky

23 said Somolli Enterprises was created after he received a call from Alexander Tymoshenko, who

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5 Kirichenko states that his companies ORPHIN and Wilnorth, which initially received the money from Somolli Enterprises, never did any business with Somolli.

6 Although Andreas Petrou is listed on Gov. Ex. 1805 as a director of the company, he 27 testified that he had no control nor knowledge of any of the financial activity of Somolli 28 Enterprises.

UNITED STATES MOTION IN LIMINE TO ADMIT COCONSPIRATOR STATEMENTS [CR OO·0284-MJJ] 11


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1 asked him ifhe would agree to form an offshore company. Stoyanovsky agreed, but from that

2 time until 1997, he had little contact with Tymoshenko. Stoyanovsky has stated that he had

3 nothing to do with the business of Somolli Enterprises between 1992, when it was formed, and

4 1997. He did not participate in its founding, he signed no documents when it was founded, he

5 received no income or compensation from Somolli Enterprises during this time, and he had no

6 knowledge of the business that Somolli Enterprises conducted during this period. He stated that

7 he would occasionally receive and sign documents relating to Somolli Enterprises, but he had no

8 knowledge of the underlying transactions. In particular, with respect to a number of wire transfer

9 orders that were sent to UEIL from Somolli (these are part of Gov. Ex. 709, the bank records

10 from National Westminster Bank), he stated that he first saw these documents in 1998 at a

11 meeting in London with Alexander Tymoshenko, Aksoy, and others, and that he signed some of

12 them in blank and some of the as completed forms. He had no control, however, over any of the

13 Somolli bank accounts or any of the funds ofSomolli.

14 5. Yulia Tymoshenko/ Alexander Tymoshenko

15 Both ofthese witnesses were summons to appear for their depositions in Ukraine. Yulia

16 Tymoshenko appeared and refused to testify. Alexander Tymoshenko never appeared.

17 6. Statements of Andrei Vavilov

18 Andrei Vavilov was the Russian Deputy Minister of Finance in 1996 and he was a

19 signatory on a contract between the Russian Ministry of Finance, the Russian Ministry of

20 Defense, RAO Gazprom, UESU, and VEIL, pursuant to which UESU agreed to deliver goods to

21 the Russian Ministry of Defense to extinguish its debt to RAO Gazprom for prior deliveries of

22 gas to Ukraine. This is the same agreement discussed by Aksoy, above. Vavilov met with

23 Tymoshenko in Moscow, and during that meeting she explained the debt to Vavilov and the

24 reasons why they wanted to execute the agreement.

25 6. Kleshnya and Shostak

26 Anatoliy Kleshnya and Anatoly Shostak worked at the State Committee for Material

27 Resources of Ukraine. Each testified that the defendant instructed them to enter a contract with

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1 UESU for UESU to sell material goods to the government of Ukraine for its reserves. Each will

2 testify about conversations they had with Yulia Tymoshenko regarding the pricing of the goods

3 and the attempts to negotiate a contract. Ultimately no contract was entered because they

4 believed that UESU was overcharging the government for the goods.7

5 Specifically, Shostak testified that in early 1996, when he was head of the Committee,

6 then Prime Minister Lazarenko approached him at an out-of-town Cabinet of Ministers meeting

7 and told Shostak to return to his office to meet with Yulia Tymoshenko. Shostak 35-36. At that

8 time, Shostak did not know Yulia Tymoshenko and had no relations with her company, UESU.

9 At that meeting, Tymoshenko proposed to Shostak to purchase from and sell to the Committee

10 reserves. Thereafter, Shostak met with Tymoshenko 3-5 times. Shostak rejected the prices

11 proposed by UESU as too high and advised Lazarenko accordingly. Lazarenko nonetheless told

12 him to approve the prices, and Lazarenko summonsed Shostak to his office on several occasions.

13 Shostak 54:7-14,58:21-59:19.

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Kleshnya testified that shortly after he took over as head of the Committee (from

Shostak), Lazarenko (who was Prime Minister at the time) urged him to enter into a contract with

UESU. Kleshnya 21: 1 0-16. Kleshnya informed Lazarenko that the prices proposed by UESU

were not acceptable. Id. at 29: 16-19. Lazarenko told him to "do everything possible" to enter

into an agreement, and Lazarenko instructed him to meet with Yulia Tymoshenko. Id. at 31 :6,

7 The government is filing a separate motion to admit this evidence as evidence that is "inextricably intertwined" with the charged conspiracy, or, alternatively, that the evidence is admissible "other acts" showing the defendant's plan, scheme and intent under Fed. R. Evid. 404(b). The Ninth Circuit has held that "other act" evidence is inextricably intertwined" with a charged conspiracy if it 1) constitutes a part of the transaction that serves as a basis for the criminal charge, which includes evidence that may be relevant to the conspiracy to show the background and development ofthe conspiracy, or 2) it was necessary to permit the prosecutor to offer a coherent and comprehensible story regarding the commission of the crime. United States v. Serang. 156 F.3d 910, 915 (9th Cir 1998). Furthermore, "[t]he government is not prohibited from introducing such evidence simply because the defendant is indicted for less than all of his actions." Id. (internal quotations omitted). Here, the evidence is admissible under either category, because it shows the defendant using his official position to benefit the interests of UESU, and because it shows the background and development of the conspiracy and allows the jury to hear a "coherent and comprehensible story" about the commission of the crime.



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35:23-36:8. After a brief meeting in which Kleshnya informed Tymoshenko that he could not

accept her prices, Kleshnya advised Lazarenko that he could not enter into an agreement with

UESU, and Lazarenko sharply reprimanded him .. Id. at 36: 13-28:22.

D. Summcuy of the Evidence of a Conspiracy

The foregoing evidence is clearly sufficient to demonstrate, by a preponderance of

evidence, that a conspiracy existed between Lazarenko and Tymoshenko to commit fraud and to

launder the proceeds of that fraud. Bourjaily, 483 U.S. at 175. The evidence set forth above, and .

the reasonable inferences that it suggests, show that the defendant and Tymoshenko had an

agreement pursuant to which Lazarenko would and did use his official authority to benefit

Tymoshenko.and her companies, and in exchange, the defendant received a portion of the profits

of her business. Tymoshenko set up a scheme of offshore companies that she used to funnel

money to Lazarenko that she received from the natural gas business. The use of nominal

directors who actually played no role in the business and knew nothing about the business was

designed to conceal the fact that Tymoshenko was the driving force behind these companies, and

that she controlled UESU, Somolli and UEIL. The network of offshore companies was designed

and used, at least in part, to take money earned from the sale of natural gas in Ukraine, pursuant

to contracts and official documents negotiated and signed by the defendant, and siphon that

money from UESU out of Ukraine to UEIL, then to Somolli, then to accounts controlled by

Kirichenko, and then on to Lazarenko. during the year and a half that UESU was engaged in the

natural gas business. The defendant took official action ensuring that UESU received the right to

distribute the natural gas by signing official documents and he participated, in his official

capacity, in negotiations between RAO Gazprom and UESU that resulted in UESU getting a

contract with RAO Gazprom to distribute natural gas just one month after UESU was created.

The defendant and Tymoshenko would thereafter meet to discuss the money the defendant was

receiving from Tymoshenko and to take other action to ensure that the defendant remained in his

official position, so that Tymoshenko and the defendant could continue to benefit from the

27 defendant's largesse while a public official.

28



------------..

1 CONCLUSION

2 For the foregoing reasons and based on the record herein~ the United States respectfully

3 moves to admit statements ofYulia Tymoshenko made in furtherance of the conspiracy and

4 scheme to defraud.

5

6 . DATED: March 30, 2004

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UNITED STATES MOTION IN LIMINE TO ADMIT COCONSPIRATOR STATEMENTS

itted,

HALLIE MITCHELL Trial Attorney, U.S. Department of Justice

[CR 00-0284-MJJ] 15


EXHIBIT C

. ' ', ' . .

1 KEVINV. RYAN (CSBN 118321) United States Attorney

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CHARLES B. BURCH (CSBN 79002) Chief, Criminal Division

MARTHA BOERSCH (CSBN 126569) JONATHAN R. HOWDEN (CSBN 97022) PETER AXELROD (CSBN 190843) Assistant United States Attorneys

HALLIE A. MITCHELL (CSBN 210020) Trial Attorney, U.S. Department of Justice

8 450 Golden Gate Avenue, Box 36055 San Francisco, California 94102

9 Telephone: (415) 436-7200

10 omeys for Plaintiff

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

15 UNITED STATES OF AMERICA, l 16 Plaintiff,

17 v.

18 PAVEL LAZARENKO,

Defendant, 19

20 ____________________ l

No. CR 00-0284 MJJ

REPLY RE: SUPPLEMENTAL MOTION IN LIMINE TO ADMIT STATEMENTS OF YULIA TYMOSHENKO AS COCONSPIRATOR STATEMENTS

21 The United States hereby replies to the defense opposition to its supplemental motion in

22 limine to admit statements made by Yulia Tymoshenko as co-conspirator statements under

23 Federal Rule of Evidence 801 (d)(2)(E). This reply addresses two issues: (I) the scope and nature

24 afthe conspiracy involving the defendant, Yulia Tymoshenko and others and (2) the fact that the

25 government need not allege, much less prove, that Yulia Tymosbenko knew that specific funds

26 were to be transferred into or out of the United States.

27 II

28

UNITED STATES' REPLY RE: YULIA TYMOSHENKO STATEMENTS [eR 00-0284 MJ1]

-

, . ' ', ' .. u

1 KEVIN V. RYAN (CSBN 118321) United States Attorney

2 CHARLES B. BURCH (CSBN 79002)

J::-,l.. 3 Chief, Criminal Division

4 MARTHA BOERSCH (CSBN 126569) IIp,?S ~O JONATHAN R. HOWDEN (CSBN 97022) 5 PETER AXELROD (CSBN 190843) ~'c la

"ONf,lt/i("'~O 'O( f Assistant United States Attorneys HtN · 11. I¥ 6 I'i Disr.DI$fll.l¥/~Jr

HALLIE A. MITCHELL (CSBN 210020) liler a~c" Co IIyG "c-1/ ill?/-

7 Trial Attorney, U.S. Department of Justice ''0'"'' 8 450 Golden Gate Avenue, Box 36055

San Francisco, California 94102 9 Telephone: (415) 436-7200

omeys for Plaintiff

1

12

13

14

UNITED STATES DISTRJCT COURT

NORTIfERN DlSTRJCT OF CALIFORNIA

SAN FRANCISCO DIVISION

15 UNITED STATES OF AMERJCA,

16 Plaintiff,

17 v.

18 PAVEL LAZARENKO,

19

20

Defendant,

) No. CR 00-0284 MJJ

REPLY RE: SUPPLEMENTAL MOTION IN LIMINE TO ADMIT STATEMENTS OF YULIA TYMOSHENKO AS COCONSPIRATOR STATEMENTS

21 The United States hereby replies to the defense opposition to its supplemental motion in

22 limine to admit statement's made by YuIia Tymoshenko as co-conspirator statements under

23 Federal Rule of Evidence 801 (d)(2)(E). This reply addresses two issues: (I) the scope and nature

24 of the conspiracy involving the defendant, Yulia Tymoshenko and others and (2) the fact that the

25 government need not allege, much less prove, that YuJia Tymoshenko knew that specific funds

26 were to be transferred into or out of the United States.

27 II

28

UNITED STATES' REPLY RE, YULIA TYMOSHENKO STATEMENTS [eR 00-0284 Mll]


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THE DEFENDANT AND YUUA TYMOSHENKO CONSPIRED TO COMMIT FRAUD AND TO LAUNDER THE PROCEEDS OF THAT FRAUD

As set forth more fully in the government's opening brief in support of this supplemental

motion, the defendant, Yulia Tymoshenko and others conspired to commit fraud and to launder

the proceeds of that fraud . Specifically. the evidence, and the reasonable inferences that it

suggests, demonstrates that the defendant and Yulia Tymoshenko had an agreement whereby the

defendant took official action to the benefit of Yulia Tymoshenko's companies, UESU in

particular, in exchange for payments from Yulia Tymoshenko, and they also conspired to conceal

the laundering of those funds through Tymoshenko's use of a web of offshore companies. For

example, the defendant took the following actions which benefitted UESU:

•

•

•

•

The defendant signed official documents which ensured that UESU had the right to distribute natural gas [Gov. Ex. 1022 and 1024];

The defendant participated in his official capacity in negotiations between RAO Gazprom and UESU - just one month after UESU's creation - whereby RAO Gazprom agreed to provide USEU with natural gas to distribute in Ukraine;

The defendant in his official capacity authorized the execution of a guarantee on behalf of the Ukrainian government in favor of RAO Gazprom so that RAO Gazprom would continue to provide gas to Ukrainian gas distributors, including UESU;

The defendant lobbied UESU's interests with other government officials, such as Mr. Kleshnya and Shostak,

18 In exchange for these benefits and during this time period, Yulia Tymoshenko paid the defendant

19 enonnous sums of money through a series of offshore shell corporations, including Somolli and

20 UEll...1 Specifically, companies controlled by Yulia Tymoshenko paid the defendant as follows:

21

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•

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Between July 1996 and September 1996, the Wilnorth account received approximately $14,099,636 from Tymoshenko's company Somolli Enterprises;

Between April 1996 and August 1996, Kirichenko's ORPHIN account at American Bank in Poland received approximately $49,929,347 from Somolli Enterprises;

Between April 1996, and December 1996, Kirichenko's ORPHIN account at Credit Suisse received approximately $23,049,386 from Somolli Enterprises;

27 1 The exchange of these funds (payoffs) for the defendant's official actions constitutes

28 bribery under Ukrainian law.

UNITED STATES' REPLY RE: YULIA TYMOSHENKO STATEMENTS [CR 00-0284 MJJ] 2

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L THE DEFENDANT AND YULLA TYMOSHENKO CONSPIRED TO COMMIT FRAUD AND TO LAUNDER THE PROCEEDS OF THAT FRAUD

As set fonh more fully in the government's opening brief in support of this supplemental

motion. the defendant, Yulia Tymoshenko and others conspired to commit fraud and to launder

the proceeds of that fraud. Specifically. the evidence, and the reasonable inferences that it

suggests, demonstrates that the defendant and Yulia Tymoshenko had an agreement whereby the

defendant took official action to the benefit of Yulia Tymoshenko's companies, UESU in

particular, in exchange for payments from YuJia Tymoshenko, and they also conspired to conceal

the laundering of those funds through Tymoshenko's use of a web of offshore companies. For

example, the defendant took the following actions which benefitted UESU:

•

•

•

•

The defendant signed official documents which ensured that UESU had the right to distribute natural gas [Gov. Ex. 1022 and 1024];

The defendant participated in his official capacity in negotiations between RAO Gazprom and UESU - just one month after UESU's creation - whereby RAO Gazprom agreed to provide USEU with natural gas to distribute in Ukraine;

The defendant in his official capacity authorized the execution of a guarantee on behalf of the Ukrainian government in favor of RAO Gazprom so that RAO Gazprom would continue to provide gas to Ukrainian gas distributors, including UESU;

The defendant lobbied UESU's interests with other government officials, such as Mr. Klesbnya and Shostak.

18 In exchange for these benefits and during this time period. Yulia Tymoshenko paid the defendant

19 enonnous sums of money through a series of offshore shell corporations, including Somolli and

20 UEll...1 Specifically, companies controlled by Yulia Tymoshenko paid the defendant as follows :

21

22

23

24

25

26

•

•

•

Between July 1996 and September 1996, the Wilnorth account received approximately $14,099.636 from Tymoshenko's company Somolli Enterprises;

Between April 1996 and August 1996, Kirichenko's ORPHIN account at American Bank in Poland received approximately $49,929,347 from Somolli Enterprises;

Between April 1996, and December 1996, Kirichenko's ORPHIN account at Credit Suisse received approximately $23,049,386 from Somolli Enterprises;

27 I The exchange of these funds (payoffs) for the defendant's official actions constitutes

28 bribery under Ukrainian law.

UNITED STATES' REPLY RE: YULlA 1YMOSHENKO STATEMENTS [CR 00-0284 MJJ] 2

[


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In May and June of 1997, Kirichenko's ORPHIN account at European Federal Credit Bank ("Eurofed'1 received approximately $13,999,970 from Somolli Enterprises.

All of these funds from Semelli Enterprises and UESU were subsequently transferred to Lazarenko's NIHPRO and CARPO-53 accounts in Switzerland and to his personal account at Eurofed.

Through the use of several entities outside of Ukraine, and by depositing funds in various bank

accounts in Switzerland and elsewhere, Tymoshenko conspired with the defendant to ensure that

these payment were concealed in a way that would not make them readily identifiable as

belonging to the defendant.

This conspiracy encompassed the time period of 1995 to the end of 1997. and it is

subsumed within, and a necessary part of, both the conspiracy alleged in Count One of the

indictment and the wire fraud scheme alleged in Counts 9 through 3 1. The initial transfer of

these funds into Lazarenko's Swiss accounts is part of the trail of money that forms the basis for

the money laundering conspiracy alleged in Count One. The wire fraud counts and the scheme

to defraud are specifically alleged as specified unlawful activity underlying the money laundering

counts. The fraud involving UESU, Somolli, and UEIL is specifically alleged as one of the three

"money" frauds in the conspiracy to launder money. Before the money is moved into the United

States, the defendant had to get the money out of Ukraine, and he did so with Ms. Tymoshenko's

complicity. While Tymoshenko was not directly involved in setting up the defendant's Swiss

accounts or with transferring the funds out of Switzerland and into the United States/ her actions

were a necessary step in that process.

ll. THE GOVERNMENT NEED NOT ALLEGE NOR ESTABLISH THAT YULIA 22 TYMOSHENKO KNEW THE FUNDS SHE CONSPIRED TO CONCEAL WERE

DESTINED FOR THE UNITED STATES 23

24

2S

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In its opposition, the defense alleges that in order to be a co-conspirator, the goverrunent

must show that Tymoshenko knew that the funds were being moved into the United States. This

2 The government notes, however, that approximately $13 ,000,000 of the funds from Somolli did not pass through the defendant's Swiss accounts, but rather were sent directly to the a correspondent account of Eurofed in San Francisco. See Counts 9 through 19.

UNITED STATES' REPLY RE: YULIA TYMOSHENKO STATEMENTS [CR 00-0284 MlJ] 3

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In May and June of 1997, Kirichenko's ORPHIN account at European Federal Credit Bank (UEurofed'') received approximately $13,999,970 from Somolli Enterprises.

All of these funds from Somalli Enterprises and UESU were subsequently transferred to Lazarenko's NIHPRO and CARPO-53 accounts in Switzerland and to his personal account at Eurofed.

Through the use of several entities outside of Ukraine, and by depositing funds in various bank

accounts in Switzerland and elsewhere, Tymoshenko conspired with the defendant to ensure that

these payment were concealed in a way that would not make them readily identifiable as

belonging to the defendant.

This conspiracy encompassed the time period of 1995 to the end of 1997, and it is

subsumed within, and a necessary part of, both the conspiracy alleged in Count One of the

indictment and the wire fraud scheme alleged in Counts 9 through 31 . The initial transfer of

these funds into Lazarenko's Swiss accounts is part of the trail of money that forms the basis for

the money laundering conspiracy alleged in Count One. The wire fraud counts and the scheme

to defraud are specifically alleged as specified unlawful activity underlying the money laundering

counts. The fraud involving UESU, Somolli, and UE[L is specifically alleged as one of the three

"money" frauds in the conspiracy to launder money. Before the money is moved into the United

States, the defendant had to get the money out of Ukraine. and he did so with Ms. Tymoshenko's

complicity. While Tymoshenko was not directly involved in setting up the defendant's Swiss

accounts or with transferring the funds out of Switzerland and into the United States.2 her actions

were a necessary step in that process.

D. THE GOVERNMENT NEED NOT ALLEGE NOR ESTABLISH THAT YULIA 22 TYMOSHENKO KNEW THE FUNDS SHE CONSPIRED TO CONCEAL WERE

DESTINED FOR THE UNITED STATES 23

24

25

26

27

28

In its opposition, the defense alleges that in order to be a co-conspirator, the goverrunent

must show that Tymoshenko knew that the funds were being moved into the United States. This

2 The government notes, however, that approximately $13 ,000,000 of the funds from Somolli did not pass through the defendant's Swiss accounts, but rather were sent directly to the a correspondent account of Eurofed in San Francisco. See Counts 9 through 19.

UNITED STATES' REPLY RE: YULlA TYMOSHENKO STATEMENTS [CR 00-0284 MlJ] 3


· .

1 contention is wrong as a matter of law. The government is not required to prove that the

2 unindicted co-conspirator. here Tymoshenko, knew the exact route that the funds would take to

3 be laundered, including that the funds would be sent through the United States. As pointed out

4 by the defense, to prove that an individual was a co-conspirator to an offence only requires that

5 the individual have the same knowledge that is required to be convicted of the substantive

6 offense. See Opp. at 4, citing United States v. Feola, 420 U.S. 671, 695 (1975) ("the knowledge

7 of the parties is relevant to the same issues and to the same extent as it may be for conviction of

8 the substantive offense") . In~. the Supreme Court held that one could be convicted of

9 conspiracy to assault federal officers even if the government did not prove that the defendants

10 knew the victims were federal officers; that the victims were federal officers simply established

11 federal jurisdiction. lll. The Court held that "where knowledge of the facts giving rise to federal

12 jurisdiction is not necessary for conviction of a substantive offense embodying a mens rea

13 requirement, such knowledge is equally irrelevant to questions of responsibility for conspiracy to

14 commit that offense." Jd. at 695.

15 In the present case, the mens rea required to convict an individual of money laundering

16 does not require that the government prove that the individual know the route that the money

17 would take to be concealed; rather the government must prove that the defendant, knowing funds

18 were unlawfully obtained, conducts a financial transaction which in fact involves the proceeds of

19 specified unlawful activity with the intent to conceal the funds. Notably, the defense does not,

20 nor cannot, cite a single case for the proposition that the government must prove that the

21 defendant acted with the intent to conceal the funds by having the funds travel in a specific route

22 though the United States. Numerous cases discuss the requisite knowledge that must be proved

23 to convict an individual of money laundering and not one case requires that the government

24 prove that the defendant know the route that the funds would travel to conceal the unlawful

25 nature of the funds. ~,y., United States v. Maber, 108 F.3d 1513, 1525-27 (2d Cir. 1997)

26 (extensive discussion of knowledge required to convict of money laundering); S. REp. No.

27 99-433, at 9 (1986) (stating that there are two "knowing" requirements to the money laundering

28

UNITED STATES' REPLY RE: YULIA TYMOSHENKO STATEMENTS [eR 00-0284 MJJ] 4

. . . .. u

1 contention is wrong as a matter of law. The government is not required to prove that the

2 unindicted co-conspirator, here Tymoshenko, knew the exact route that the funds would take to

3 be laundered, including that the funds would be sent through the United States. As pointed out

4 by the defense, to prove that an individual was a co·conspirator to an offence only requires that

5 the individual have the same knowledge that is required to be convicted of the substantive

6 offense. See Opp. at 4, citing United States v. Feola, 420 U.S. 671, 695 (1975) ("the knowledge

7 of the parties is relevant to the same issues and to the same extent as it may be for conviction of

8 the substantive offense") . In~, the Supreme Court held that one could be convicted of

9 conspiracy to assault federal officers even if the government did not prove that the defendants

10 knew the victims were federal officers; that the victims were federal officers simply established

11 federal jurisdiction. Id . The Court held that "where knowledge of the facts giving rise to federal

12 jurisdiction is not necessary for conviction of a substantive offense embodying a mens rea

13 requirement. such knowledge is equally irrelevant to questions of responsibility for conspiracy to

14 commit that offense." rd. at 695.

15 In the present case. the mens rea required to convict an individual of money laundering

16 does not require that the government prove that the individual know the route that the money

17 would take to be concealed; rather the government must prove that the defendant, knowing funds

18 were unlawfully obtained. conducts a financial transaction which in fact involves the proceeds of

19 specified unlawful activity with the intent to conceal the funds. Notably. the defense does not,

20 nor cannot. cite a single case for the proposition that the government must prove that the

21 defendant acted with the intent to conceal the funds by having the funds travel in a specific route

22 though the United States. Numerous cases discuss the requisite knowledge that must be proved

23 to convict an individual of money laundering and not one case requires that the govemment

24 prove that the defendant know the route that the funds would travel to conceal the unlawful

25 nature of the funds. ~,y. , United States v, Maber, 108 F.3d 1513, 1525-27 (2d Cir. 1997)

26 (extensive discussion of knowledge required to convict of money laundering); S. REp. No.

27 99-433, at 9 (1986) (stating that there are two "knowing" requirements to the money laundering

28

lJI\IJTED STATES' REPLY RE: YULlA TYMOSHENKO STATEMENTS [CR 00-0284 MJJ] 4


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statute; "[i]n order to prove a violation of the offense [sic]. the Government must show not only

that the defendant knew the property involved in a transaction was the proceeds of crime, but

also that the defendant either intended to facilitate a crime or knew that the transaction was

designed to conceal the proceeds of a crime"). Moreover, cases discussing the elements

necessary to convict a defendant of conspiracy to convict money laundering do not require the

defendant's knowledge that the money would travel in interstate commerce in the United States.

See United Slates v. Sadighi, 1999 WL 980661 (9th Cir. Oct. 26, 1999), "I fnl

[UNPUBLISHED OPINION], United States v. Messer, 197 F.3d 330 (9th Cir. 1999)(discussing

knowledge requirement to convict ofrnoney laundering conspiracy under 18 U.S.C. § 1957).

One case specifically discusses the defendant's requisite mens rea of where the funds

travel in a money laundering conspiracy. See United States v. Wright, 206 F. Supp. 609 (0. Del.

2002). In Wright the court found that because money laundering does not require a that

defendant know the interstate nexus, the defendant could be convicted of money laundering

conspiracy even if the government did not prove that the defendant knew the check would travel

in interstate commerce. Id. at 619. The court stated, "[a]s [the defendant] admitted that he knew

that he had taken the money without authorization, his lack of knowledge as to its subsequent

interstate travel does not merit a judgment of acquittal. Accordingly, the court will deny [the

defendant's] motion for judgment of acquittal as to the conspiracy and money laundering

charges." M. Not surprisingly, the Wright Court based its holding on the Supreme Court's

analysis in United States v. Feota, 420 U.S. 671 (1975).

Similarly, that the money was ultimately wired to the United States in furtherance of the

scheme to defraud is ajurisdictional element of the wire fraud counts, and it is not necessary to

show that the defendant or coconspirators had the intent to use the wires of the United States.

Rather, all that is necessary is that the use of the wires was reasonably foreseeable, and here,

where all the money sent from Tymoshenko to the defendant was in dollars and approximately

$13,000,000 was sent directly to a correspondent account in the United States, the use of the

wires of the United States is clearly foreseeable. See Pereira v, United States, 347 U.S, 1,8-9

UNITED STATES' REPLY RE: YULlA TYMOSHENKO STATEMENTS [CR 00-0284 Mll] 5

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I

(; ' . .. statute; "[iJn order to prove a violation of the offense [sic J. the Government must show not only

that the defendant knew the property involved in a transaction was the proceeds of crime, but

also that the defendant either intended to facilitate a crime or knew that the transaction was

designed to conceal the proceeds of a crime"). Moreover, cases discussing the elements

necessary to convict a defendant of conspiracy to convict money laundering do not require the

defendant's knowledge that the money would travel in interstate commerce in the United States.

~ United States v. Sadighi, 1999 WL 980661 (9th Cir. Oct. 26, 1999), 'I fn I

[UNPUBUSHED OPINION], United States y, Messer, 197 F.3d 330 (9th Cir. 1999)(discussing

knowledge requirement to convict ofrnoney laundering conspiracy under 18 U,S.C. § 1957).

One case specifically discusses the defendant's requisite mens rea of where the funds

travel in a money laundering conspiracy. See United States v. Wright, 206 F. Supp. 609 (D. Del.

2(02). In Wright the court found that because money laundering does not require a that

defendant know the interstate nexus, the defendant could be convicted of money laundering

conspiracy even if the government d id not prove that the defendant knew the check would travel

in interstate commerce. rd. at 619. The court stated , urals [the defendant] admitted that he knew

that he had taken the money without authorization, his lack of knowledge as to its subsequent

interstate travel does not merit a judgment of acquittal. Accordingly, the court will deny [the

defendant's] motion for judgment of acquittal as to the conspiracy and money laundering

charges." lit. Not surprisingly, the Wright Court based its holding on the Supreme Court's

analysis in United Slates Y, Feola, 420 U.S. 671 (1975),

Similarly, that the money was ultimately wired to the United States in furtherance of the

scheme to defraud is ajurisdictional element of the wire fraud counts, and it is not necessary to

show that the defendant or coconspirators had the intent to use the wires of the United States.

Rather, all that is necessary is that the use of the wires was reasonably foreseeable, and here,

where all the money sent from Tymoshenko to the defendant was in dollars and approximately

$13,000,000 was sent directly to a correspondent account in the United States, the use of the

wires of the United States is clearly foreseeable. See Pereira v. United States, 347 U.S. 1,8-9

UNITED STATES' REPLY RE, YULlA TYMOSHENKO STATEMENTS [CR 00-1>284 Mll] 5


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(1954); United States v, Hasson, 333 F.3d 1264, 1272 (II" Cir. 2003).

Additionally. numerous courts have determined that to obtain a conviction for Interstate

Transportation of Stolen Property. under 18 U.S.C. §2314, the government need not prove the

defendant knew that the property traveled in interstate commerce. See. e.g., United States v.

Franklin, 586 F.2d 560, (5th Cir. 1978) (discussing absence of a requirement that a defendant

have specific knowledge ofthe interstate nexus to violate 18 U.S,C, §§ 2314,1952, and 21 13(c)),

United Slates v, Powers, 437 F.2d 1160 (9th Cir. 1971)(knowledge of the jurisdictional element,

the interstate transportation of stolen goods, is irrelevant to both the substantive statute ofITSP

as conspiracy to commit ITSP, "[t]bere is no requirement under 18 U.S.C. § 2314 that the

accused know, foresee, or intend that instrumentalities of interstate commerce will be used"),

United Stales v, Roselli, 432 F.2d 879, 890-92 (9th Cir 1970), cert. denied, 401 U.S. 924 (1971)

("[t]he words of sections 1952 and 2314 do not suggest that Congress intended to condition

liability upon knowing use of interstate facilities . .. [w]e think it sufficient that the agreement

contemplates the commission of a crime and that the crime contemplated is in fact and law a

15 federal offense").

16 Here, the government need only demonstrate by a preponderance of evidence that (1) a

17 conspiracy existed involving Tymoshenko and the defendant to engage in a fraudulent scheme

18 whereby the proceeds of that scheme (funds to Lazarenko) would be concealed to disguise their

19 nature and (2) that the statements Tymonshenko made were made in furtherance of that

20 conspiracy. See Bourjaily y. United States. 483 U.S. 171 (I 987) (discussing requirements to

21 admit statements under Federal Rule of Evidence 801 (d)(2)(E)), That is precisely what the

2 2 government has done. Because the substantive offence of money laundering does not require the

2 3 that defendant know where the money would travel to be laundered, Tymoshenko need not know

24 that the money would travel to the United States to be laundered. Where the money travels may

25 be important to establish jurisdiction, but there is no requirement that the government prove the

26 defendant's knowledge of exactly where the money travels. Moreover, a co-conspirator need not

27 know all the details of the conspiracy to be a part of the conspiracy. "A person may become a

28

UN1TEDSTATES' REPLYRE: YULlA TYMOSHENKO STATEMENTS [CR 00-0284 Mil] 6

, ,

"

' ,

1

2

' 3

4

5

6

7

8

9

10

11

1 2

13

14

(1954); United States v, Hasson, 333 F.3d 1264, 1272 (II" Cir. 2003).

Additionally. numerous courts have determined that to obtain a conviction for Interstate

Transportation of Stolen Property. under 18 U.S.c. §2314. the government need not prove the

defendant knew that the property traveled in interstate commerce. See. e.g., United States v.

Franklin, 586 F.2d 560, (5th Cir. 1978) (discussing absence of a requirement that a defendant

have specific knowledge of the interstate nexus to violate 18 U.S,C , §§ 2314, 1952, and 2113(c)),

United States v, Powers, 437 F.2d 1160 (9th Cir. 1971)(knowledge of the jurisdictional element,

the interstate transportation of stolen goods, is irrelevant to both the substantive statute of ITSP

as conspiracy to commit ITSP, "[t]bere is no requirement under 18 U.S.C. § 2314 that the

accused know, foresee, or intend that instrumentalities of interstate commerce will be used").

United States v, Rosell i, 432 F.2d 879, 890-92 (9th Cir 1970), cert, denied, 401 U.S, 924 (1971)

("[t]he words of sections 1952 and 2314 do not suggest that Congress intended to condition

liability upon knowing use of interstate facilities .. . [w]e think it sufficient that the agreement

contemplates the commission of a crime and that the crime contemplated is in fact and law a

lS federal offense").

16 Here, the government need only demonstrate by a preponderance of evidence that (1) a

17 conspiracy existed involving Tymoshenko and the defendant to engage in a fraudulent scheme

1 8 whereby the proceeds of that scheme (funds to Lazarenko) wou ld be concealed to disguise their

1 9 nature and (2) that the statements Tymonshenko made were made in furtherance of that

2 0 conspiracy. See Bourjaily v. United States, 483 U.S. 171 (1987) (discussing requirements to

2 1 admit statements under Federal Rule of Evidence 801 (d)(2)(E)). That is precisely what the

2 2 government has done. Because the substantive offence of money laundering does not require the

2 3 that defendant know where the money would travel to be laundered, Tymoshenko need not know

24 that the money would travel to the United States to be laundered. Where the money travels may

2 S be important to establish jurisdiction, but there is no requirement that the government prove the

26 defendant's knowledge of exactly where the money travels. Moreover, a co-conspirator need not

27 know all the details of the conspiracy to be a part of the conspiracy. "A person may become a

2 8

UNITED STATES' REPLYRE: YUUA TYMOSHENKO STATEMENTS [CR 00-0284 Mil] 6


, . .., • ' . #

1 member of a conspiracy without full knowledge of all of the details of the unlawful scheme or

2 the names and identities of all of the other alleged conspirators," Annotation, PATTERN JURY

3 INSTRUCTIONS FOR THE ELEVENTH CIRCUIT, Money Laundering Conspiracy 18 USC § 1956(h),

4 70.5 (2003).

5 The statements ofYulia Tymosbenko should be admitted under Federal Rule of Evidence

6 802(d)(2)(E) because the government has shown. by a preponderance of evidence. that these

7 statements were made in furtherance of the conspiracy to commit money laundering and the


Respectfully submitted,

......... N tomey

ER H JON THAN HOWDEN PETER AXELROD Assistant United States Attorney

HALLIE A. MITCHELL Trial Attorney, U.S. Department of Justice

7

, . , .

1 member of a conspiracy without full knowledge of all of the details of the unlawful scheme or

2 the names and identities of all of the other alleged conspirators," Annotation, PATTERN JURY

3 INSTRUCTIONS FOR THE ELEVENTH CIRCUIT, Money Laundering Conspiracy 18 USC § 1956(h),

4 70.5 (2003).

5 The statements ofYulia Tymosbenko should be admitted under Federal Rule of Evidence

6 802(d)(2)(E) because the government has shown, by a preponderance of evidence, that these

7 statements were made in furtherance of the conspiracy to commit money laundering and the


Respectfully submitted,

,,"""'N torney

E H JON THAN HOWDEN PETER AXELROD Assistant United States Attorney

HALLIE A. MITCHELL Trial Attorney, U.S. Department of Justice

7


EXHIBIT D