No Sanctions for Botched Deposition in Lazarenko Case

Pavlo Lazarenko, former prime minister of Ukraine

WASHINGTON (CN)— Neither the U.S. government or former Ukrainian Prime Minister Pavlo Lazarenko is entitled to sanctions related to a botched disposition in Austria, a federal judge ruled.

Lazarenko was prime minister of Ukraine from 1996 to 1997 but has been embroiled in litigation with the United States since 2004. Based on allegations that he pocketed more than $300 million from kickbacks, multimillion-dollar natural gas import contracts and other deals from 1992 to 1998, a federal jury convicted Lazarenko in California of a international money-laundering scheme.

The ensuing forfeiture action by the united states has been underway for over a decade, and attorneys for the U.S. government sought last year to get testimony related to the case from Rafic Daou, a Lebanese national described as a critical third-party witness.

Though court rules require litigants to give two weeks’ notice for depositions that will occur more than 50 miles outside Washington, D.C., a federal judge agreed in August 2016 that eight days was sufficient notice for Lazarenko of Daou’s pending deposition at the U.S. Consulate in Vienna, Austria.

The court agreed that it might make Uncle Sam reimburse Lazarenko and his attorneys if a failure by the government caused the deposition not to go forward.

Though the Austrian deposition did not in fact go forward, U.S. District Judge G. Michael Harvey refused Wednesday to let Lazarenko recover nearly $40,000 in attorneys’ fees.

“Indeed, if anything, it was the actions of [Lazarenko’s] … counsel that prevented the deposition from going forward,” the opinion states.

Harvey noted that Daou’s deposition in Vienna was just about to get underway last year when counsel for Lazarenko asserted that the proceeding was illegal under Austrian law.

Though the government insisted that it had ensured that authorization was not necessary for the deposition, Daou was spooked and left the consulate without giving any meaningful testimony.

His deposition later occurred in Washington, covering the expense of the trip himself.

Though the United States accused Lazarenko’s attorneys of trying to intimidate the witness, Judge Harvey likewise refused to grant its request for more than $7,000 in costs related to the deposition.

“While, in retrospect, [Lazarenko] claimant’s counsel sought information about the propriety of the deposition from the wrong authority, claimant cannot be faulted for attempting to gather information from an ostensibly credible source regarding the laws surrounding a hastily scheduled deposition and placing his objections, however misguided, on the record,” the opinion states. “In other words, while based on incorrect information, claimant’s counsel’s conduct does not support [the United States’]plaintiff’s allegation that he was seeking to ‘thwart discovery of relevant evidence’ by intimidating a deponent with wholly fabricated allegations.”

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