Agriculture minister denies $250,000 theft from partner

Editor’s Note: After the publication of this story, Kurt Groszhans withdrew the second case against Roman Leshchenko. Leshchenko says it proves that the lawsuit against him was unsubstantiated, while Groszhans says he withdrew the lawsuit to resubmit it with additional evidence.

A U.S. farmer has accused Ukraine’s next agriculture minister, Roman Leshchenko, of an alleged $250,000 theft.

Leshchenko, who will begin his role on March 1, denied the accusation. He said that the American, Kurt Groszhans, has committed a much worse crime and he will see him jailed for it.

The former business partners worked together in 2018. Groszhans came to Ukraine to grow crops and hired Leshchenko to direct his business.

It took six months for their relationship to sour. Now, Groszhans is accusing Leshchenko of large-scale theft, while the newly appointed minister accuses Groszhans of making him work for a company that evaded taxes and smuggled illegal genetically modified seeds from the U.S. to Ukraine to grow here.

Evidence obtained by the Kyiv Post from both sides shows that both Leshchenko and Groszhans are gearing up for a long legal battle in the United States.

This battle is taking place during a crucial moment for Ukraine’s newly-restored agriculture ministry. The land market reform will come into effect on July 1, opening the free trade of Ukraine’s farmland for Ukrainian citizens. It will replace the decades-old system under which people couldn’t sell their land and had to lease it.

If Leshchenko can prove in court that he’s innocent and Groszhans committed crimes, it will clear his reputation. But if Groszhans proves he’s right, this may tarnish not just Leshchenko’s name but also Ukraine’s international image.

“I am calm,” Leshchenko told the Kyiv Post on Jan. 27. “The truth is on my side. My lawyers and I have dedicated three years to documenting all the facts, prepare. Under oath or lie detectors, I am ready to testify that Groszhans is a person who’s engaged in dishonest business practices.”

Read more: New agriculture minister faces lawsuits for alleged Hr 6.6 million theft

The big quarrel

Leshchenko worked for Groszhans from March to September 2018. Then he left.

Groszhans claims that Leshchenko stopped giving him “proper information” about his company and showed “improper performance” and he replaced him. When Groszhans looked into his company, he said he found that Leshchenko over six months transferred money to Progress LLC, a company that today belongs to his wife.

Bit by bit, Leshchenko appropriated $250,000, according to Groszhans, who said he knew nothing about the transfers and demanded his money back.

Groszhans said he ended up with no working capital, with barely enough money to live on. Groszhans couldn’t invest in growing crops, lost two years of yields and now lacks the capital to keep farming.

Leshchenko dismissed all Groszhans’s claims. He said he resigned when he found out that Groszhans was allegedly smuggling illegal seeds and fertilizers to Ukraine from the United States, and growing genetically modified soybeans in Ukraine against the law.

Leshchenko said he didn’t want to be involved in this kind of business and stepped down. The future minister showed the Kyiv Post his voluntary resignation letter dated September 2018.

Firing an employee by allowing them to resign voluntarily is common in Ukraine. It’s done this way because it’s legally easier and helps avoid damaging employees’ reputation.

“He fooled me,” Leshchenko said, adding that he didn’t know that seeds were genetically modified or smuggled because Groszhans insisted he would sow and work the fields himself, something Groszhans denies.

What happened to the money?

Leschenko said the partners agreed in advance to use Leshchenko’s company, Progress LLC, to run Groszhans’s business in Ukraine. This company would pay salaries and buy fuel. The minister said Groszhans would get a notification every time Leshchenko transferred funds.

According to Leschenko, Groszhans took offense to his departure and accusations and decided to harm him by demanding money. He said the American started legal action and threatened him with publicity only after he became a state official. Before that, “threats” were only sent to him unofficially via emails, messengers and personal meetings.

The money transfers from Groszhans’ company to Progress LLC did take place. According to Ukraine’s Civil Code, an executive cannot transfer funds from a company he does not own to himself or his own company.

WhatsApp crossfire

Leshchenko and Groszhans seemed to use messenger app WhatsApp for most of their communication from April 2018 to the end of February 2019, until their lawyers took over.
The texts reveal what looked like genuine surprise on Groszhans’ part when he found that Leshchenko was transferring money to his own company. While discussing other issues after Leshchenko left the company, Groszhans suddenly texted “You also took money out of my account for your company without my knowledge.”

Leshchenko replied that he was doing his best to manage the business and that he made all of Groszhans’s transactions official by using his own Ukrainian company. But then, he seemed to agree to return the money: “Everything will return back officially,” he wrote in a message.

A month later, after Groszhans insisted on seeing his money, Leshchenko wrote “I will transfer everything, don’t worry about (it).”

The conversation lasted for several more months, with Leshchenko saying he couldn’t return all the money because he was “bankrupt.” Eventually, he paid nearly Hr 1 million, about $35,000 today.

When Groszhans kept asking Leshchenko to send more money, the future minister replied “If we are talking about stealing, we need to start from you stealing royal property of soybeans of (U.S. seeds producer) Pioneer from the USA and (smuggling) them to Ukraine. Or manipulating tax reports to the state body (about the) profit that you got in Ukraine.”

“If you continue to terrorize (me), I will put all information to the legal body and you will go to jail,” Leschenko wrote.

Groszhans replied: “Yes, and you were the director for all of these things and your fingerprints are on everything. Go for it.”

Leshchenko claims his lawyers asked him to deliberately say he was bankrupt and send only $35,000. This and further payments were supposed to serve as evidence that Groszhans threatened Leshchenko, demanded money and was ready to accept it in a future U.S. court case.

Leshchenko approached Groszhans through his lawyers after two years of disputes and paid back Hr 5.5 billion (about $195,000) one week before he was appointed minister on Dec. 17.

Leshchenko paid back in hryvnias. Exchange rate fluctuations explain the discrepancy between the $250,000 that Leschenko’s company received and the total of $230,000 that he paid back.

Groszhans filed two lawsuits against Leschenko in Ukraine in May and October. He now wants Leshchenko to pay damages of $485,000.

Leshchenko won one case — the decision was published on Jan. 27 — but Groszhans’s lawyers claim that the court case was “fixed.”

Leshchenko’s rise

Since concluding the WhatsApp conversation, Leshchenko’s political career has soared — he went from farmer to the next agriculture minister. Now Groszhans fears Leshchenko’s new position will make him powerful enough to escape justice.

Around the time that Leshchenko told Groszhans that he was bankrupt, his dying father decided to donate over $60,000 to President Volodymyr Zelensky’s presidential campaign. It was one of the campaign’s biggest donations.

“When Zelensky said he’d run for president, we decided we would support him,” Leshchenko said, tearing up as he spoke about his father, who died at the end of 2020. “We saw Zelensky — and still do — as the only person who wants to change Ukraine, bring structural reforms.”

In October 2019, Leshchenko became a non-staff adviser to Zelensky on issues related to land reform. Leshchenko piqued Zelensky’s interest by writing him a letter laying out his vision for reforming Ukraine’s land market and later speaking about it during a meeting between farmers, associations and state officials.

“There are many people like me in power today — they had never met the president in the past,” Leshchenko said. “Zelensky just opened the door (for us), people who had never been in politics came to power.”

In June–December 2020, Leshchenko headed the State Service for Geodesy, Cartography, and Cadastre (StateGeoCadastre).

In December 2020, 242 lawmakers voted for him to become the next agriculture minister. He will take office on March 1.

Leshchenko said he never wanted to become a public official and he only became minister because he managed to convince Zelensky he’s worthy and because Zelensky convinced him later to take the role.

In his October interview with four Ukrainian TV channels, Zelensky said he hadn’t known about Leshchenko before.

“That chap Leshchenko, I didn’t know him until I started my political activity,” Zelensky said. “It was difficult even to just appoint him head of the StateGeoCadastre — every day there were threats, cars around, some bandits, some calls.”

Leshchenko, who came to his interview at the Kyiv Post’s office with two state bodyguards, confirmed that threats against him continue to this day.

He added that Groszhans threatened to sue him only after he began his political activity and became “more vulnerable” to such claims.

Although Leshchenko has repeated several times that he didn’t want to become an official and it happened by accident, he had written to Groszhans in 2018 that he “will be in public administration.”

Kyiv Post staff writer Alex Query has contributed to the story.