“Shady real estate schemes and no corruption at all”

Nikolai Ovcharov, ex-Mayor of Kursk, was involved in land fraud

Kursk officials pulled off a fraud scheme with dilapidated housing. The demolition of unsafe buildings and subsequent sale of the lands could significantly contribute to the city budget – but this did not happen. Some local civil servants became suspects in the criminal case – but ultimately walked away with a slap on the wrist under weird circumstances resembling corruption. Just recently, it became known that Kursk Mayor Nikolai Ovcharov has resigned.

Kursk is an old provincial city; it includes plenty of buildings dilapidated beyond repair and having no historical value. These houses must be demolished. This problem is widespread in our country, and the Russian Government is well aware of it. As a result, two documents have been issued by the Cabinet of Ministers: Decree of the Russian Government of January 28, 2006 On Recognition of Apartment Buildings Dilapidated Housing Subject to Demolition and Federal Law № 185 of July 21, 2007 On the Fund for Reformation of the Housing and Public Utility Sector. The both documents include specific socio-economic requirements and permit of no other interpretation: after the resettlement of residents, dilapidated buildings must be demolished, and the vacant land must be used for urban development. No other options aside from the demolition are available.

However, in reality, the strictness of laws is often offset by the non-obligatoriness to obey them.

For instance, Kursk officials managed to pull off a brilliant fraud scheme with dilapidated housing. As of 2012, more than 30 houses built in the end of the 19th — beginning of the 20th century and standing on lucrative lots worth some 10 million rubles ($153.4 thousand) each were recognized unsafe. The demolition of these buildings and subsequent sale of the vacant lots could significantly contribute to the city budget – but this did not happen. Criminal case № 980 was instituted on September 18, 2013; a number of Kursk functionaries became suspects in it – but ultimately, all of them walked away with a slap on the wrist under weird circumstances resembling corruption. 

An official of the Kursk Regional Administration, who was employed with the Kursk Mayor’s Office at that time, shared with The CrimeRussia some exciting details of that story and explained how the corrupt functionaries managed to avoid prison terms. 

— Why was there so much noise and screaming in relation to these unsafe houses? How has that story ended? 

— The reason was simple and, at the same time, complicated. On the one hand, some officials wanted to receive double payment for the same work. On the other hand, the city had no money to demolish the buildings. So, they started looking for other ways.

— Wasn’t it possible to do everything officially? 

— No. The fraud scheme used by them did not provide such an option. Take any large city – for instance, Kursk. Its land is expensive and in deficiency. The number of vacant lots is not sufficient to satisfy everybody willing to build there offices or other administrative facilities. Concurrently, a number of buildings are demolished, thus, vacating significant areas zoned for residential construction. But who will check the type of the new construction? It is a complicated matter. So, some officials of the Kursk Mayor’s Office decided to combine the useful with the pleasant: allocate the lands to people close to them and concurrently make some easy money. To achieve this, a tricky scheme was used. The buildings that had to be demolished were recognized unsafe (that was true) and their residents – resettled. Then the vacant buildings were re-zoned into non-residential ones by the Kursk Committee for Municipal Property Management (CMPM) using forged decisions of various commissions and leased to interested persons. The addresses of some of these properties are of utmost interest. 

— Why? 

— Because their leaseholders represent the chain of companies having close ties with the local authorities. The property at 5 Blinova street, Kursk was leased to Individual Entrepreneur Bashkireva. 28 Dimitrova street, Kursk – to Svoya Kvartira (Own Apartment) Limited Liability Company. 10 Mozhaevskaya street, Kursk – to Selena Limited Liability Company. 19 Belinskogo street, Kursk – to Individual Entrepreneur Vyskrebentsev. 39 Marata street, Kursk – to Svoi Dom(Own Home) Management Company Limited Liability Company. 28 Gaidara street, Kursk – to Individual Entrepreneur O.I. Lifentsov. 34 Shchepkina street – to V.P. Vetrov. 26 and 28 Verkhnyaya Lugovaya street – to Individual Entrepreneur S.I. Koklin, etc. The dilapidated buildings were of no interest to the leaseholders – their goal was to appropriate the lands under them. The areas of some lots were times larger than the size of the buildings standing on them. But something went wrong...

— What exactly? 

— They failed to get the approval of the Administration for the Kursk Region of the Federal Antimonopoly Service (FAS) of the Russian Federation. Why? Various explanations are offered. Some people think that Yuri Alekseevich Komov, Head of the FAS Administration, refused to grant his authorization as a matter of principle. Others believe that he had plans for one of the lots but did not get it. Nobody knows the truth. But the result is known – refusal to approve the long-term lease of the buildings and lands. But the corrupt officials had really needed this. Based on many facts, bribes were paid to ‘right’ persons. There was no way back. So, what to do?

Yuri Komov, Head of the FAS Administration for the Kursk Region

— Did they find a way? They could not return the ‘advance payments’, right? 

— Yes, they found a way – leased portions of the properties to the interested persons. These portions hadn’t exceeded 20 square meters in size, occupied no more than 10% of the total area of each building, and were leased for less than 1 year – i.e. for 364 days. Such leases did not require the authorization of the FAS and judicial authorities. This was done by Aleksander Nikolaevich Bulgakov, Head of the CMPM, and a number of other persons. All of them were charged in the framework of the criminal case, including M.D. Alyab’ev, Head of the Kursk Land Committee; his deputy O.N. Shadrina; V.V. Kaz’min, Chairman of the Architectural Committee; his deputy A.V. Dubashevsky; V.T. Kalinin, ex-Chairman of the Kursk Housing and Public Utility Committee (convicted for bribe-taking); and, of course, their perpetual ‘boss’ – Kursk Mayor Nikolai Ivanovich Ovcharov patronized by the former Governor. This ‘team’ has nearly pulled off the shady real estate scheme. Everything was fine – but an unexpected event occurred.

Aleksander Nikolaevich Bulgakov, ex-Head of the CMPM

— What event? 

— Oleg Ivanovich Okorokov, an officer of the Department for Economic Security and Combating the Corruption of the Administration for the City of Kursk of the Ministry of Internal Affairs (MIA) of the Russian Federation, has interfered. A pretty interesting person. 

— He was mentioned in relation to the inquest into operations of the gang under the leadership of Dmitry Volobuev, right? 

— Yes, he was. Oleg Ivanovich is one of a kind in the city... In the story with the re-zoning of the buildings, the ‘unlucky ones' – i.e. those who hadn't got slices of the ‘pie' – have addressed him. As far as I understand, this primarily refers to the family of Deputies Vasil'ev having a habit of laying hands on municipal lands – this time, they got nothing. Maksim Sergeevich Vasil'ev has gathered a group of ‘people's choices' including himself, V.V. Akin'shin, R.V. Voloshin, A.Yu. Tomanov, and A.N. Motruk. They started ‘bombarding' law enforcement structures with complaints claiming that Aleksander Bulgakov, Head of the Kursk Committee for Municipal Property Management, collects money from businessmen for the allocation of buildings and lands. Concurrently, Vasil'ev made arrangements with Okorokov. I don't know whether it was in exchange for some reward or not – but Okorokov started acting. 

— Was Okorokov able to do anything? Or he can only take money and provide ‘patronage’? 

— This is incorrect. He is a smart, cunning, and far-sighted person. I had seen him questioning people. He does this skillfully. And knows how to ‘dig’. Okorokov puts his own interests and interests of his ‘patrons’ above the service duties – but this applies to a half of the people in our country, including myself. Alas... 

— Okorokov launched a probe and quickly found out that Vasil'ev and his ‘satellites' have told him the truth. Then the situation became more complicated... The ‘old team' of the Kursk municipal and regional administrations had demonstrated strong team spirit, mutual support, and coordination of actions. It was difficult to overcome this system – especially taking that they had infiltrated the Prosecutor's Office and Investigations Directorate in the Kursk Region of the Investigative Committee of the Russian Federation (ICR). It was possible to prosecute an individual official – but not their group bound by common interests. Okorokov encountered strong resistance. It was so strong that he understood – this could ruin his career. What to do? Maksim Vasil'ev suggested him to address Narodny Zhurnalist newspaper that was on fighting terms with the administration. Its relations with Vasil'ev were far from friendly as well – but "the enemy of my enemy...". Oleg Ivanovich had a meeting with Konstantin Suloskin, the factual owner of the newspaper, explained him the situation, and presented real documents. Suloskin published a harsh article. Kursk officials were afraid of that newspaper – it has ruined the careers of many people by publishing unpleasant information about them. 

After the publications, the activity of leaseholders of the dilapidated buildings has sharply slowed down. They were quickly erecting on their lots unfinished buildings in order to legalize those and obtain ownership of the lands under the auspices of Ovcharov, Bulgakov, and other officials – but then stopped the construction works and started waiting. In the meantime, Okorokov has ‘mobilized’ under a specious excuse a few other officers of the Department for Economic Security and Combating the Corruption and, using them without their knowledge, arranged a meeting with Aleksander Valentinovich Ermenchuk, Deputy Prosecutor of the Kursk Region. Ermenchuk used to work in the regional administration and then transferred to the Prosecutor’s Office. He had supervised the investigation and operative services. Ermenchuk has listened to the policemen, asked them questions, and instructed the ICR to institute a criminal case against the municipal officials because all the materials were presented to him. Then ‘miracles’ began.

Aleksander Ermenchuk, Deputy Prosecutor of the Kursk

The main reason for the criminal case institution was that the city hasn’t received tens of millions of rubles from the sales of the lands. The lot at 10 Mozhaevskaya street was estimated at 8.85 million rubles ($135.8 thousand), at 28 Dimitrova street – at 5.7 million rubles ($87.4 thousand), at 5–5a Blinova street – at 10 million rubles ($153.4 thousand), etc. The budget fell short of these sums because a predatory land seizure was in preparation. Therefore, the case was rightfully instituted under part 1 of Article 286 of the Criminal Code of the Russian Federation (exceeding official powers). Nikolai Ovcharov, as the head of a municipal unit, could also be charged under part 2 of Article 286 of the Criminal Code (exceeding official powers committed by a person holding a government post of the Russian Federation or a government post of a subject of the Russian Federation, or by the head of a local self-government body). However, he avoided such charges – elegantly and, likely, with the assistance of his ‘boss’ – Governor Mikhailov. He had a smoothly working ‘technology’ of liaison with the law enforcement structures. 

— What kind of technology? 

— Apparently, Mikhailov and his team have created a scheme guaranteeing the appointment of former law enforcement officers – in exchange for their loyalty – to cushy jobs in the regional system of power after their retirement or termination due to force majeurecircumstances. This applied only to officers who were close to them and really useful for them. The following persons received jobs in various branches of power and budget institutions: Valery Petrushin, ex-Head of the Regional Criminal Police, became the director of a sports and concert complex; Nikolai Minnenkov, ex-Head of the MIA Administration for the City of Kursk, is now in charge of Spetstrest Funeral Home Municipal Unitary Enterprise; Denis Krivko, ex-Head of the Procedural Control Department of the Investigations Directorate in the Kursk Region of the ICR, was appointed the Director of Tsentralnaya (Central) Hotel Municipal Unitary Enterprise; etc. Interestingly, all these people had direct relation to cases involving the administration – and finally ended up there. And, of course, this scheme had ‘nothing to do' with corruption... Although, in some countries, this is considered a crime.

 — How is this tradition related to the case against Ovcharov and Bulgakov? 

— Directly. Apparently, Ermenchuk, who has initiated the criminal case, wanted to resign from the Prosecutor’s Office and was looking for a new job. He didn’t like his workplace. A. Filimonov, a former Regional Prosecutor, reportedly mentioned that Ermenchuk had a drinking problem and started putting pressure on him. Ermenchuk has tried his chance with the Governor’s Administrative Office – but was rebuffed there. Therefore, he has likely ‘bought’ a cushy job for himself by blackmailing the officials. There was a criminal case in place – with facts, suspects, and evidence. Perhaps, he promised them to ruin it in exchange for employment. The dates match each other. Criminal case № 980 was dismissed on April 14, 2014 – and on May 15, 2014, A.V. Ermenchuk became the Chairman of the Administrative and Legal Committee of the Administration of the Kursk Region. A fair exchange – money for clear biography. Furthermore, Ermenchuk found a job in the regional administration for his wife Olga Vail’evna Pikulina who was not happy with her position in the Prosecutor’s Office as well. She had reprimands there and was nicknamed Quasimodo by colleagues for her round back. Her husband arranged the appointment of Pikulina a Deputy Chairperson of the Public Employment Committee of the Administration of the Kursk Region. 

— Is it possible to prove this?

— Yes, the dates confirm this. Look, this is a photo of the title page of the criminal case dismissal. Do you see the date? This is the biography of Ermenchuk. Do the dates match? And this is a document stating that his wife had committed a violation in relation to a corpse. This occurred much later but still... Can you see it?

— Yes, I do. These two people are ‘valuable assets’ indeed. And experienced. So, what happened with the lands? Who got them? 

— Basically, nobody. After that story, only a few lots were sold. For instance, 10 Mozhaevskaya street. That place is really good. But the rest of the lots remain unsold. Nobody wants to deal with the Mayor and his people anymore... 

— So, the losses continue accruing. No profits? 

— What profits are you talking about? It may be of interest for you that one of the lots was leased by Nikolai Volobuev – the brother of the criminal ‘authority’. That lot is located near the 1st City Police Department. Why would he need it?

— Why? 

— I am asking myself the same question. To count the policemen? Isn’t it weird? 

This rhetoric question was the last one in our interview. Now we understand better why some civil servant may do whatever they want and get away with it.

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