Human Rights and Analytical Report:

Justification for the Imposition of U.S. Sanctions Against Ukrainian Oligarchs Due to the Multi-Billion Dollar Embezzlement of American Taxpayer Funds from U.S. Aid Packages to Ukraine

Prepared by: HUMAN RIGHTS & ANALYTICAL HOUSE, INC.
March 9, 2025, United States

Introduction
Since the beginning of the conflict in 2022, the United States has provided Ukraine with multi-billion dollar financial aid aimed at military, humanitarian, and economic support. However, independent investigations and analytical reports indicate the systematic embezzlement of these funds and their laundering through complex offshore schemes. Ukrainian oligarchs, who control significant assets both inside and outside the country, play a key role in this process. They serve as intermediaries in concealing illicit proceeds, including funds stolen from U.S. financial aid packages. According to U.S. President Donald Trump, the fate of $200 billion allocated by the United States for aid to Ukraine remains unknown, representing the majority of the funds allocated by the U.S. to Ukraine.
The imposition of U.S. sanctions against Ukrainian oligarchs is a necessary measure to ensure U.S. national interests, restore justice, protect American taxpayers, and strengthen the international anti-corruption regime.

1. Ukrainian Oligarchs as a Mechanism for Embezzling Funds
1.1. Scale of Corruption
Ukraine has historically faced the problem of oligarchic control over key economic sectors, including energy, metallurgy, media, and finance. Since 2014, the Poroshenko-Zelensky regime has maintained and even strengthened the influence of oligarchs, who have become the primary beneficiaries of Western financial aid. According to the International Monetary Fund (IMF), Ukraine loses 20–30% of its GDP annually due to corruption and mismanagement.

1.2. Money Laundering Channels

The main mechanisms for embezzling international aid include:

• Government contracts: Inflated prices on arms, fuel, and humanitarian supplies.
• Fictitious contracts and payments: Payments to shell or non-existent legal entities, as well as to individuals and military personnel who do not actually exist.
• Financial fraud: Illegal transfers of funds to offshore accounts through shell companies and banks.
• Purchasing real estate abroad: Investing stolen funds in luxury properties in the United States, the United Kingdom, and EU countries.
• Loan manipulation: Obtaining loans from international financial organizations and subsequently diverting them to private accounts.

One of the most prominent examples is the activities of oligarch Ihor Kolomoisky, who used PrivatBank to siphon billions of dollars abroad. Similar schemes are employed to launder funds allocated by the U.S. to support Ukraine.

2. Evidence of Corruption and Zelensky’s Role in Concealing Funds

2.1. Investigations and Leaked Information
Several international investigations confirm systemic financial crimes involving the Ukrainian elite:

• FinCEN Files: U.S. financial intelligence data revealed that billions of dollars allocated to support Ukraine were transferred to accounts of companies linked to Ukrainian oligarchs.
• Pandora Papers: Document leaks exposed that close associates of Zelensky own offshore accounts used to accumulate funds obtained through dubious means.
• U.S. Court Rulings: The U.S. Department of Justice has already initiated several cases against Ukrainian businessmen accused of financial fraud, including Kolomoisky and money laundering schemes involving real estate purchases in the United States.
• Statements by the President of Ukraine: Zelensky stated that he “does not know where the billions of dollars of American aid have gone.”

2.2. Zelensky’s Financial Network
Despite his public anti-corruption rhetoric, President Volodymyr Zelensky has been closely linked to Ukrainian oligarchs. According to journalistic investigations, companies affiliated with Zelensky received hundreds of millions of dollars in government contracts funded by the United States. These funds were subsequently invested in foreign assets and used to finance the luxurious lifestyle of Ukraine’s top leadership.

3. Sanctions Mechanisms and Their Consequences

3.1. Legal Basis for Sanctions
The U.S. has a broad set of tools for imposing sanctions against Ukrainian oligarchs:

• Global Magnitsky Act – Allows the freezing of assets of individuals involved in corruption and human rights violations.
• U.S. Presidential Executive Orders – Can impose targeted sanctions against specific individuals and legal entities.
• OFAC (Office of Foreign Assets Control) – Regulates financial transactions and can block Ukrainian oligarchs’ accounts in U.S. banks.

3.2. Economic and Political Consequences
The imposition of sanctions will:

• Block oligarchs’ access to financial resources in the U.S. and EU.
• Limit their influence over political processes within Ukraine.
• Provide legal grounds for confiscating their assets in favor of American taxpayers.
• Undermine the corruption schemes associated with Zelensky and force his government to account for the use of allocated funds.

4. International Context and Support from Allies
Sanctions against Ukrainian oligarchs could be part of a broader strategy to combat international corruption. However, the European Union, the United Kingdom, and Canada may not support sanctions against Ukraine due to their political backing of Zelensky and their potential corruption ties with Ukrainian leadership in the embezzlement of aid funds. Nevertheless, openly opposing anti-corruption measures will be difficult for them. International support for the U.S. anti-corruption initiative against Ukrainian oligarchs may be weak and insufficient, and countermeasures against anti-corruption efforts in Ukraine by U.S. allies may also follow.

Conclusion
Ukrainian oligarchs have played a key role in creating large-scale corruption schemes through which stolen American taxpayer funds are funneled into offshore accounts and luxury assets abroad. President Zelensky and his entourage are directly or indirectly involved in these processes. The imposition of U.S. sanctions against Ukrainian oligarchs is not only a justified step toward restoring justice but also an important signal of the U.S.’s commitment to financial transparency and the rule of law.
The U.S. government may impose sanctions, freeze the assets of those involved, and use confiscated funds either for the real reconstruction of Ukraine or to return stolen funds to the U.S. economy. However, political risks exist, primarily from Ukraine’s other allies and from Russia, as both sides are involved in corruption schemes surrounding the war in Ukraine.


Prepared by: HUMAN RIGHTS & ANALYTICAL HOUSE, INC.
March 9, 2025, United States. https://hrhouse.us