Former MP accused of masterminding £1.2m 'Golden Mandarin' scheme that manipulated European Court

Ukrainian prosecutors have completed their investigation into an elaborate corruption scheme that allegedly diverted more than £1.2 million from the state budget through manipulation of the European Court of Human Rights. The case, dubbed 'Golden Mandarin,' centres on a former member of parliament accused of orchestrating the embezzlement of UAH 54.179 million through a sophisticated legal deception that exploited international mechanisms meant to protect human rights.

The Specialized Anti-Corruption Prosecutor's Office (SAPO) announced that detectives from the National Anti-Corruption Bureau of Ukraine (NABU) have now opened case materials to defence lawyers, moving the complex case closer to trial despite the alleged ringleader fleeing the country shortly before his parliamentary immunity was terminated. The scheme allegedly involved fabricating a dispute between two private entities and presenting it to the European Court of Human Rights as a matter requiring state compensation.

Background and Context

The alleged offences occurred between 2013 and 2016, during a period when Ukraine was establishing its anti-corruption framework following the 2014 Revolution of Dignity. The NABU and SAPO were created as independent institutions specifically to combat high-level corruption that had plagued the country for decades. This case represents one of the more complex schemes uncovered by these agencies, involving not just the misappropriation of public funds but the manipulation of international judicial processes.

The 'Golden Mandarin' operation allegedly exploited weaknesses in how international legal mechanisms interact with domestic judicial systems, demonstrating how sophisticated corruption networks can operate across borders. The timing of the alleged scheme is particularly noteworthy, coming as Ukraine was seeking to strengthen its rule of law credentials as part of broader European integration efforts.

Key Figures and Entities

Prosecutors have named former MP Heorhiy Lohvinskyi as the alleged organiser of the scheme, who reportedly benefited from parliamentary immunity due to his familial relationship with a judge serving on the European Court of Human Rights. This connection allegedly provided protection from investigation until July 2023, when his immunity was finally terminated—by which time he had already left Ukrainian territory.

The scheme involved LLC 'Zolotoy Mandarin Oil,' a company that served as the vehicle for receiving the illicit funds. According to SAPO, representatives of this company filed applications with the ECHR under Lohvinskyi's direction. The Ministry of Justice of Ukraine also features in the investigation, with officials allegedly agreeing to prepare a 'friendly settlement' declaration that effectively recognised state responsibility in what was essentially a private commercial dispute.

Legal and Financial Mechanisms

The alleged deception centred on a claim that the state had failed to execute a court decision regarding debts owed by PJSC 'Kyivenergo'—despite Kyivenergo being 75% privately owned at the time. Rather than pursuing domestic enforcement channels, the scheme allegedly took the matter directly to the ECHR, misrepresenting it as a state responsibility issue. The 'friendly settlement' declaration prepared by the Government Agent before the ECHR then paved the way for the transfer of UAH 54.179 million from the Ukrainian state budget to Zolotoy Mandarin Oil.

Once received, these funds were allegedly laundered through conversion centres, making them difficult to trace. To further protect the illicit proceeds, accomplices allegedly forged documents to renew the appeal period for the original court decision—five years after its adoption—preventing state bank JSC 'Rodovid Bank' from collecting the funds to settle Zolotoy Mandarin Oil's existing debts exceeding UAH 70 million.

International Implications and Policy Response

The case highlights vulnerabilities in international legal mechanisms that can be exploited by sophisticated corruption networks. By manipulating the ECHR system—designed to protect human rights against state abuse—the alleged scheme diverted resources meant for public services to private hands. This abuse of international judicial processes raises questions about oversight mechanisms and the need for greater scrutiny of cases brought before supranational courts.

Ukrainian authorities have increasingly prioritised cooperation with international partners to combat corruption schemes with cross-border dimensions. The Lohvinskyi case underscores challenges in prosecuting high-level officials who exploit diplomatic connections and international legal protections. For Ukraine's anti-corruption reforms to succeed, ensuring accountability regardless of political connections or international relationships remains crucial.

Sources

This report draws on statements from the Specialized Anti-Corruption Prosecutor's Office of Ukraine, reporting by UNN news agency, and public information from the National Anti-Corruption Bureau of Ukraine. Legal provisions referenced include the Constitution of Ukraine and relevant articles of the Criminal Code of Ukraine.