VIENNA, Austria — Spanish authorities allege Hares Youssef links his close friend, exiled Ukrainian oligarch Dmytro Firtash, to an organized crime network involved in money laundering. These charges come in addition to the U.S. extradition request from Austria for bribery charges which Firtash has been fighting for three years.
The two men were arrested in Vienna at the request of the Spanish authorities in late February.
The Spanish request to Austria to extradite Firtash describes Youssef as Firtash’s trusted associate and part of a network of individuals alleged to have laundered tens of millions of euros.
Both men deny the charges against them.
While Firtash looks set to fight the extradition attempt, Youssef’s lawyer told the Kyiv Post that he wants to face trial in Spain to clear his name.
When the Kyiv Post met with Youssef on Feb. 20, days before his arrest, he discussed at length the charges levied against him by the Spanish authorities.
Who is Hares Youssef?
The Syrian-Ukrainian businessman was an adviser to ex-Ukrainian President Viktor Yushchenko, who served from 2005 to 2010, and takes credit for convincing Yushchenko to allow Firtash to be the sole natural gas supplier to Ukraine.
But Youssef denied having any shared business interests with Firtash and insisted that they are just close friends. He has consistently stood by the oligarch, defending him publicly for his controversial gas deals and most recently against bribery charges levied by U.S. law enforcement.
How he formed his businesses and connections in Ukraine is unclear and has long been a subject of speculation in the Ukrainian press.
Youssef first moved to Kyiv in 1982 to enroll in Kyiv’s military academy. But he did not finish his studies and he later returned to Ukraine and went into business trading consumer goods.
Ihor Smeshko, the former head of Ukraine’s Military Intelligence and Security Services of Ukraine, told the Kyiv Post that Youssef must have had permission to come to Ukraine from the Soviet and Syrian intelligence services.
“He has connections everywhere,” said Smeshko. “He has been a matter of interest for all serious Western intelligence services.”
His holding company Hares Group once had a turnover of $420 million, made, according to Youssef, through metals and property. But the 2009 crash hit his businesses hard, and he is in the process of declaring bankruptcy, his lawyer Oleksandr Gorovyi said at Hares Group’s office in Kyiv.
Despite this, Youssef has maintained a luxurious lifestyle. Until his arrest on Feb. 23, he lived next door to Firtash on Vienna’s elite Elisabethstrasse. The apartment is owned, according to the Austrian property registry, by Siegfried Wolf, the Austrian CEO of Russian oligarch Oleg Deripaska’s car company. His other neighbor was Deripaska’s holding company, Basic Element, which occupies the top floor of the building.
Youssef is also the owner and publisher of The Odessa Review, a monthly English-language magazine covering culture, entertainment, business and current affairs. The chief editor, Vladislav Davidzon, could not be immediately reached for reaction to how Youssef’s legal and financial challenges will affect the publication.
Before the arrest
On Feb. 20, the eve of Firtash’s U.S. appeal hearing and his subsequent arrest, Youssef met with the Kyiv Post in the restaurant of the Le Meridien Hotel, near his Vienna apartment. Unbeknownst to him and Firtash, the Spanish authorities had sent their Austrian counterparts additional information two days before, and the Austrian police were preparing their arrest.
Over tea, Youssef denied any wrongdoing in Spain. He argued that the Spanish case is yet another attempt by the U.S, authorities to extradite Firtash, and he has simply been caught in the political crossfire. Firtash’s lawyers also said they believe that the Spanish case originates from the U.S. authorities, whose aim, they say, is to ensure the oligarch’s continued exile from Ukraine.
Youssef told the Kyiv Post that the Spanish extradition request for him focuses on a property purchased by his son Maksym in Marbella from Spanish lawyer Antonio de Fortuny. According to him, they purchased a company that owned the property in 2006 for 5 million euros, and sold it in 2009 at a loss, for 2 million euros. He said they did so because they needed the money after the 2009 global crash.
The Spanish authorities accuse Youssef of laundering money through the company, which they say is linked to a series of Panamanian offshores.
“It was the owner who was money laundering. I sent the money to him,” Youssef told the Kyiv Post. “I paid for the house with my account in Paris. It was clean money.”
The former owner of the Marbella property, De Fortuny, together with his son, who is also a lawyer, were arrested in Spain on Nov. 24 along with three other people as part of the second phase of Operation Variola, which targeted an alleged organized crime group in Spain. Phase one of Operation Variola saw 11 people arrested in July, including Stepan Chernovetskiy, the son of the former mayor of Kyiv, Leonid Chernovetskiy, and the former CEO of Youssef’s Hares Group, Misbah Al Droubi.
“When they arrested Chernovetskiy they thought that Firtash’s money was there. There are no connections. Then they connected Maksym to me and did a triangle,” said Youssef. “They arrested them because they are all Ukrainian and the chances of finding something on Firtash is high. It is a manhunt.”
De Fortuny was also arrested in 2009 as part of the Spanish police’s Operation Troika against the Russian Tambovskaya organized crime group.
As he was being arrested, de Fortuny swallowed a piece of paper which the police later restored and used to launch the second phase of Operation Variola, according to Spain’s El Confidencial newspaper. Investigators said the piece of paper establishes links with the Troika operation.
The second phase of Operation Variola included Youssef’s and Firtash’s arrest warrants issued on Nov. 25 to the Austrian authorities, Deutsche Welle reported.
According to Youssef’s Ukrainian lawyer, Oleksandr Gorovyi, when the Spanish authorities searched de Fortuny’s office in 2016, they confiscated documents and saw that he had sold his house to Hares in 2006.
“The main reason (for the case) is that in 2016 he (has) good relations with Firtash. So they just took (Hares) and stuck this to him in order to get to Firtash,” said Gorovyi.
Gorovyi presented the Kyiv Post with Youssef’s individual tax declarations for 2005 and 2006. According to these, he declared between $5 and $8 million in income in these years.
“This is just his individual income, doesn’t include his companies. He was a millionaire in his own right. Not dependent on Firtash or anyone else,” Gorovyi said as proof that Youssef was not laundering money for Firtash when the Youssefs’ purchased the Marbella property.
The Kyiv Post was unable to independently verify the tax declarations.
A return to Ukraine?
Youssef has mostly lived between Vienna and Paris since the end of Yushchenko’s presidency.
Maksym Youssef has not been arrested because Ukraine has no extradition treaties with other countries, said Gorovyi. When asked why then Hares did not return to Ukraine to avoid extradition, Gorovyi said it is because he is certain of his innocence.
Youssef’s connections at the top in Ukraine, like that of Firtash, appear to have weakened since current administration of Ukrainian President Petro Poroshenko came to power.
In an August interview with the Kyiv Post, Youssef said that just like every president before him, Poroshenko had reassigned property upon taking office.
“If Poroshenko had been president in 2004, you would have had the situation we see now in 2017. He is too selfish,” Youssef said in the Vienna restaurant days before his arrest.
Gorovyi said it is very likely that Youssef will face extradition to Spain because of the nature of internal European Union extradition agreements. Youssef will not attempt to fight the request and wants to face trial as soon as possible, said Gorovyi.
As of March 8, Youssef remains in court custody, according to his lawyer. A judge has until March 25 to decide on his extradition to Spain.
