April 2, 2014 / 4:20 PM / 5 years ago

Ukraine businessman, Indian official charged in U.S. corruption case

WASHINGTON (Reuters) - Ukrainian industrialist Dmitry Firtash, a member of India’s parliament and four others were indicted by a U.S. grand jury for their suspected role in an international corruption scheme, the U.S. Justice Department said on Wednesday.

Dmytro Firtash, one of Ukraine's richest men, is seen in Kiev May 18, 2010. REUTERS/Maks Levin

The indictment, which was returned under seal in June 2013, was made public on Wednesday, a few weeks after prosecutors said they planned to ask Austria to extradite Firtash.

Firtash, who is one of Ukraine’s most influential oligarchs, Indian lawmaker K.V.P. Ramachandra Rao, and the other defendants participated in a scheme to bribe Indian government officials in order to gain access to minerals used to make titanium-based products, prosecutors said.

The scheme allegedly involved $18 million in bribes to secure licenses in the south Indian state of Andhra Pradesh, for a project expected to generate $500 million in annual sales, the U.S. government said.

U.S. prosecutors said they have jurisdiction over the case because the defendants used U.S. financial institutions to transfer the bribes and because the defendants had planned to sell the titanium products to an unnamed American company based in Chicago.

Some of the defendants were also charged with violating the U.S. Foreign Corrupt Practices Act, which bars bribes to officials of foreign governments in exchange for business.

“Fighting global corruption is part of the fabric of the Department of Justice,” the acting head of the Justice Department’s criminal division, David O’Neil, said in a statement.

Firtash, whose first name is also spelled “Dmytro,” was arrested in Vienna last month and was released from custody after posting 125 million euros ($172.10 million) bail.

In a statement, an official of Firtash’s Group DF company said there is no truth to the accusations.

“It is not a coincidence that the U.S. is trying to extradite our chairman at the moment when Mr. Firtash is needed for the economic and political reconstruction of Ukraine,” Group DF deputy chairman Robert Shetler-Jones said.

The detention of Firtash, whose business concerns in gas trading and chemicals thrived under Ukraine’s ousted president Viktor Yanukovich, has coincided with a sharp escalation in the country’s political crisis that pits the West against Russia.

The allegations at the heart of the Justice Department’s case date back to 2006, when a Group DF unit set up a joint venture with the state government of Andhra Pradesh to mine several minerals, according to the indictment.

Firtash allegedly met with Indian officials including the then chief minister of the state, Y.S. Rajasekhara Reddy, and his advisor Rao, the Indian official who is charged in the case, in order to discuss the project and authorized the bribes.

According to prosecutors, Firtash then directed his employees to create documents to cover up the money trail.

Rao solicited bribes for himself and others in return for approving licenses for the project, prosecutors said.

A representative of the Indian embassy in Washington did not immediately respond to a request for comment.

The Justice Department said it is seeking Firtash to forfeit his interests in Group DF Limited and its assets.

Reporting by Aruna Viswanatha in Washington; Additional reporting by Michael Shields in Vienna; Editing by Leslie Adler and Andrea Ricci

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