Payment abdication: the ex-owner of the ABC of Taste was given eight years in a penal colony

On April 9, the Presnensky District Court of Moscow announced the verdict of Kirill Yakubovsky, the former co-owner of the ABC of Taste and Coffee House retail chains. The court found him guilty of fraud with investors' funds in the amount of $126 million and sentenced him to eight years in prison in a penal colony. According to investigators, in 2011-2015, Yakubovsky's company took this money from several owners of offshore companies at high interest rates, allegedly for business development and did not return it. After sentencing, Yakubovsky and two other defendants in the case were charged with organizing a criminal community and embezzlement, the lawyers of the victims said.

What was Kirill Yakubovsky convicted for?

Kirill Yakubovsky, the former owner of the ABC of Taste and Coffee House retail chains, will spend the next eight years in a penal colony. On April 9, the businessman was sentenced to this term by the Presnensky District Court of Moscow. He was found guilty of embezzlement of investors' funds in the amount of $126 million.

Yakubovsky was arrested in April 2023 on charges of fraud on an especially large scale (Part 4 of Article 159 of the Criminal Code). According to investigators, in 2012-2015, he and his accomplices received large loans from a number of entrepreneurs to finance the activities of the Cyprus investment company V.M.H.Y. Holdings Limited. 25% of the shares of this company belonged to Yakubovsky. Previously, she owned the bankrupt PJSC M2M Privet Bank, LLC Financial and Trading Company, the sanitized PJSC Asia-Pacific Bank, the Golden Gate office and hotel center, and a number of other assets.

According to the case file, the money was provided to Yakubovsky on behalf of five offshore companies. In the fall of 2016, interest payments on loans stopped, and the businessman was unable to repay the body of the debt. In 2017, investors contacted the police and demanded that Yakubovsky and other co-owners of V.M.H.Y. Holdings Limited be held criminally liable. In total, six lawsuits were filed for a total of $126 million.

The company, which was headed by Yakubovsky, was in an insolvent state and did not have a real loan repayment model, the lawyers of the Bartolius law firm, who represented the interests of the victims in court, explained in their Telegram channel.

"The company initially did not intend to return money to investors, but created nothing more than a pyramid scheme," the lawyers noted. — Subsequently, Kirill Yakubovsky formally resigned from the ultimate owners of the company in order to withdraw assets that could have secured earlier loans, having received the Golden Gate office and hotel center and more than $40 million at his disposal."

After the arrest, the court seized Kirill Yakubovsky's property worth more than 4 billion rubles. These are about 400 commercial real estate objects, as well as a network of hostels in Moscow and St. Petersburg.

Besides Kirill Yakubovsky, there are other defendants in the case: former co-founder of V.M.H.Y. Holdings Limited, ex-head of a large Petropavlovsk gold mining company and former senator from the Amur region Pavel Maslovsky, as well as former CEO of PPFIN Holding Svetlana Bezrukova.

Another defendant, the former co-owner of the Asia-Pacific Bank and the ABC of Taste, Andrei Vdovin, escaped from the investigation abroad and is wanted.

In addition to Cyprus offshore companies, individuals were also recognized as victims in the case. Among them is Mikhail Vishnyakov, ex—adviser to the chairman of the Board of Expobank (died before the trial), who invested more than $40 million in Yakubovsky's holding. In the mid-1990s, Yakubovsky was also a co-owner of Expobank.

Was there any intent

Yakubovsky became a co—owner of the Coffee House coffee chain in 2007, and the Azbuka Vkusa chain of stores in 2008. The entrepreneur owned these assets until 2014: he transferred his share in the ABC of Taste to business partners, and the assets of the Coffee House to the owner of the Chocolate Factory, Alexander Kolobov. At that time, there were 226 coffee shops operating in Russia.

In 2017, Yakubovsky founded the Netizen budget hybrid hotel chain and attracted €150 million in investments.

Svetlana Bezrukova was arrested at the same time as Yakubovsky. Pavel Maslovsky was arrested in December 2023. By that time, he had already been sentenced to five and a half years by the Basmanny Court in another case.

Kirill Yakubovsky pleaded not guilty. According to his defender Victoria Burkovskaya, there was no intent to steal funds from her principal, and the reason for non-payments to V.M.H.Y. Holdings customers was the currency crisis of 2014, when the dollar rose in price against the ruble.

— This story is about people who have contributed their money to the company at 10% per annum in foreign currency, — said the lawyer. — That's a lot of money. In 2011, no bank gave such a percentage.

According to Victoria Burkovskaya, the loan agreements concluded with her client's company were repeatedly extended, and the money was paid to the victims with huge interest rates until 2016. At the same time, Yakubovsky resigned from the founders of V.M.H.Y. Holdings back in 2014.

The lawyer also noted that until 2022, none of the victims, whose companies are registered in an unfriendly jurisdiction — in the Virgin Islands (Great Britain) — pointed to Yakubovsky as a possible culprit of the crime.

The prosecutor's office requested nine and a half years in a penal colony and a fine of 1 billion rubles for Yakubovsky. The court announced eight years.

The court sentenced gold miner and ex-senator Pavel Maslovsky to the same term (they will be added to the 5.5 years to which he was sentenced earlier in another case). Svetlana Bezrukova received five years of general regime, she was taken into custody in the courtroom.

The court also settled two civil lawsuits for a total of $53 million (4.2 billion rubles) jointly and severally from all the defendants. The court upheld the seizure of the defendants' real estate (the Golden Gate office and hotel center in Moscow and the Nitizen SPb building in St. Petersburg) to secure civil claims by the injured investors.

Dispute or fraud

Criminal cases on non-repaid loans are initiated quite often and an extensive practice has already been formed on them, Vitaly Bogomolov, a lawyer at MK Klishin and Partners, told Izvestia.

— I believe that this will only develop a high degree of responsibility for other people's money for those who are going to attract third—party investments, - said the lawyer. — And this will have a positive impact on the investment climate in general in terms of return on investment and attractiveness of the market.

Such criminal cases, as a rule, affect the interests of large businesses, Fyodor Trusov, managing partner of Sokolov, Trusov and Partners, a Moscow Law firm, said in an interview with Izvestia. But there are far fewer such cases compared to the number of complaints filed with the police from affected investors.

— Solving any major commercial dispute related to the return of investments by criminal prosecution is a tradition of the 2000s, — said the lawyer. — In the 90s, a person could be abducted and killed for non-repayment of a debt. Now everything is resolved in the criminal process, although it should be in the arbitration court.

According to Vitaly Bogomolov, it is easy to distinguish a dispute between business entities and fraud.: As a rule, investments are targeted.

"If a person spends the borrowed funds on his personal needs — palaces, airplanes, steamships and does not return what he took, then this is fraud," he noted. — Or the person attracted funds, but at the same time understood in advance that he would not be able to return them. As an example: he took 60 million for a year, and he earns at most a million a year.

According to Fyodor Trusov, if at the time of attracting investments an entrepreneur "embellished" the investment attractiveness of his business project and allowed distortions, then the investigation will be able to interpret this as deception of the investor and charge him under such a serious article as fraud. For this, Article 159 of the Criminal Code of the Russian Federation is often called "rubber" in the legal community on the sidelines, the lawyer shared.

— In this case, it is not clear who and how Yakubovsky deceived, if for many years investments were returned with interest rates much higher than market ones, — he said. — The sentence is strict, even too much, but in the "fork" of recent years.

The main criticism of such cases is that, according to Fyodor Trusov, they are initiated "extremely selectively." And this happens in cases related to gaining control over the financial flows of large businesses, the lawyer believes.

Sergey Grevtsov, head of the criminal practice at the Bartolius Bureau, called the court's decision a "restoration of justice." He noted that "there are still many steps ahead that should lead to the return of the stolen funds."

But it didn't end with deadlines. Immediately after the verdict was announced, Bartolius' lawyers announced that a new criminal case had been opened against all three defendants and that they were charged with organizing a criminal community (Article 210 of the Criminal Code of the Russian Federation) and five counts of embezzlement (Article 160 of the Criminal Code of the Russian Federation). However, Pavel Maslovsky's lawyer Anna Medvedeva denied this information in a conversation with Izvestia.