Ex-Ukraine Leader Gets 8 Years for Money Laundering (Update2)

Nov. 18 (Bloomberg) -- Former Ukrainian Prime Minister Pavlo Lazarenko was resentenced to eight years and one month in prison and ordered to pay about $32 million for money laundering and conspiracy in connection with business deals he oversaw while in office.

U.S. District Judge Charles Breyer issued the sentence at a hearing today in San Francisco, saying Lazarenko, 56, attempted to use U.S. banks as a safe haven for money laundering. The ex- prime minister could end up serving less than half of his sentence if the U.S. Bureau of Prisons gives him credit for more than four years he has spent in federal prison, Dennis Riordan, Lazarenko’s attorney, said in an interview after the hearing.

“In every way personally that I could punish myself I have punished myself,” Lazarenko said through an interpreter at today’s hearing.

Lazarenko was indicted in 2000 on charges that he extorted $30 million from a Ukrainian businessman and obtained $12 million from a state-owned farm through fraud.

Prosecutors said he laundered hundreds of millions of dollars funneled to him from a Ukrainian energy company through banks in Poland, Switzerland, Antigua and the U.S., including some in San Francisco.

A business partner who set up some of the bank accounts later testified against Lazarenko, a Ukrainian government official from 1992 to 1998 and prime minister in 1996 and 1997.

Some Convictions Overturned

Lazarenko was found guilty of 29 counts of money laundering and other charges in 2004. A federal judge later threw out 15 convictions and upheld those for money laundering, wire fraud and transportation of stolen goods

Lazarenko in 2006 was sentenced to nine years in prison, fined $10 million and ordered to forfeit $22.8 million. An appeals court last year overturned Lazarenko’s conviction on six counts of wire fraud and interstate transportation of stolen property, upheld guilty verdicts on eight conspiracy and money- laundering counts and sent the case back to district court for a new sentence.

The ex-prime minister was detained in 1999 by immigration authorities and remained in federal prison in California until 2003. He was in home confinement until May 2008 and has been imprisoned since then in Dublin, California, according to court filings.

Conduct ‘Not a Violation’

“We continue to believe that the conduct was not a violation of American law at the time it occurred,” Riordan said. “We appreciate that the judge reduced the sentence by about a year.”

He said he was considering whether any terms of the sentence could be appealed.

Lazarenko was ordered to pay a $9 million fine and forfeit more than $22.8 million. He will probably face deportation after serving his sentence, Breyer said.

Lazarenko, who has six children, said that after his release he would return to Ukraine “and work hard and work honestly in order to clear my name.”

U.S. prosecutors sought the same terms as the 2006 sentence.

“The crime here was a master case of money laundering,” Assistant U.S. Attorney Peter Axelrod said.

Breyer said that in reaching the appropriate sentence, the seriousness of Lazarenko’s crimes was balanced with the ex-prime minister’s statements at sentencing, the reversal of some convictions and the length of the case, which began in 200.

The case is U.S. v. Lazarenko, 00-284, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net.