Maksym Bahryeyev and the Kyiv group "Cratia" are forging certificates for dangerous medical devices: investigation

The National Police (NPU) and the SSU are conducting searches in about ten companies as part of an investigation into the supply of low-quality and dangerous medical products to Ukraine at the state’s expense. At the center of the scandal are two key companies: "Cratia" and its satellite – the conformity assessment body "Uni-Sert" (which received these powers under a law that has already expired).

It turned out that these companies are possibly affiliated with each other, indicating a violation of Ukrainian legislation and European standards. If the investigators are not motivated and they prove the guilt, then the possible punishment of the beneficiaries of these companies – Maksym Bahryeyev and Mykola Romanyok – will be revolutionary for the market development. There is hope that this will finally stir the corrupt swamp into which officials have driven this industry, distorting the idea of harmonizing Ukrainian standards with modern European legislation.

Is it possible to publicly punish the "revolutionaries" on this market and for what? Further in the journalistic investigation.

12 years for forgery

According to court materials, several companies, directly or indirectly owned by Maksym Bahryeyev and Mykola Romanyok, are involved in the criminal case №12017000000001548. The case was opened "for the misappropriation of budget funds allocated to health care institutions for the purchase of medical devices by forging certificates of conformity for these medical devices and selling low-quality and unguaranteed service and maintenance medical devices for budget funds." That is, the products that should be absolutely safe for the health of citizens did not actually undergo the certification procedure according to European standards.

The case was opened under part 5 of article 191 of the Criminal Code: appropriation, embezzlement of property, or taking possession of it through abuse of office. Therefore, the schemers face up to 12 years of imprisonment.

In March-April 2019, at the request of the NPU investigator, the Pechersk District Court of Kyiv granted rulings to access financial and economic documents of about a dozen companies.

The same legal entities are mentioned in all court rulings, created in the form of LLCs: "Ukrainian Scientific Institute of Certification" ("Uni-Sert"), "Cratia LTD", "Cratia Medtekhnika", "Healskea Regulatory Services", "Archimedes Service", "Bureau Cratia", "Healskea", "Landmark Legal", "Professional Regulatory Services". The ruling also lists about twenty individual entrepreneurs (though their full data is not publicly available). By the way, the firm "Cratia" has already been at the center of a journalistic investigation by the "24 channel" regarding fraud in the drug market.

Why a certificate?

Since 2013, Ukraine has been moving towards changing the technical access rules for medical devices to the consumer market after the European model. At that time, the government adopted resolutions on the gradual transition to conformity assessment procedures for medical devices to the requirements of technical regulations. It was determined that from the summer of 2017, medical products can be supplied only after certain companies conduct an assessment of their compliance with technical regulations and issue a certificate of conformity.

In 2014, the Ministry of Economic Development hastily issued permits (appointments) for this activity to a number of private and state-owned firms. This was done almost arbitrarily, as the rules of the game according to European standards had not yet been developed. In the same way, the license to be a conformity assessment body (CAB) was granted to "Uni-Sert."

Many similar firms have been grazing near state bodies for years, providing so-called consulting services. In fact, these were intermediary "services" that allowed medical device suppliers (manufacturers, importers) to obtain certificates of medical device registration from the State Service for Medicines under the already abolished procedure. By the way, "Cratia " was also one of those organizations practicing consulting near state bodies. But in 2014, it did not receive the status of a certification body. Probably because it could not meet even the minimum requirements for its activities.

But here’s the trouble. Members of parliament decided to harmonize the legislation with EU directives and WTO rules. At the beginning of 2015, a new law "On Technical Regulations and Conformity Assessment" was adopted. At that time, CABs in various sectors were appointed without any restrictions on their scope. There were no clear markers of what requirements these bodies should fulfill for state accreditation. It must be understood that the issuance of a certificate of conformity to technical regulations by such CABs is full legalization of products on the market with the sole responsibility of this body. State bodies conduct only market surveillance of products already implemented.

To stop the mess, new legislation introduced high requirements for the activities of certification bodies. One of the key requirements was the so-called principles of impartiality: a ban on certification by related parties through consulting services (to prevent corruption, "Uni-Sert" has no right to cooperate with "Cratia" in this field if they are related).

Since 2016, the Ministry of Economic Development has been appointing bodies according to the new requirements. And what about those appointed in 2014? They were actually given the opportunity (a transition period) to undergo new accreditation by 2019.

Our heroes seem to have decided to take advantage of the free vacations. The criminal case defendant "Uni-Sert" still holds the old appointment under the nonexistent legislation. And without a second thought, it harvests the crop from the market. Such a harvester, shoemaker, and bagpiper. But the free ride sooner or later ends, fortune intervenes in the form of inquisitive investigators. It seems that the heroes of the publication drew a lucky "wolf ticket" in the lottery.

The Octopus of Bahryeyev-Romanyok

The court materials mentioned the mutual role in the scheme of "Uni-Sert" and the consulting company "Kratia" have sparse information. It is known that "in the course of the pre-trial investigation, it was found that officials of the authorized certification bodies" (evidently, "Uni-Sert") during the assessment of medical devices, equipment, and production sites imported... violate the requirements of the Technical Regulations..., approved by the Resolutions of the Cabinet of Ministers of Ukraine №№ 753, 754, 755 dated October 2, 2013, as well as implementation of budget funds’ medical devices not confirmed by safety and efficiency indicators and without warranty service".

It was also established during the investigation that "Cratia LTD" was "a counterparty with the medical device certification body and carries out certification and issues certificates of conformity on medical products with possible violations of the requirements of the Technical Regulations..."

In connection with this wording, a search is conducted in the aforementioned companies. As we researched, these firms are interrelated by common owners. According to an analysis of the state register’s open data, the scheme’s beneficiaries are Maksym Bahryeyev and Mykola Romanyok. According to some information, these partners have been in conflict since last year and are possibly suing over control of "Uni-Sert."

We will not list all the connections between companies operating under the "Cratia" brand. Tracking them is very easy through open state registers. We will only provide key information. The leadership and owners of these firms have been rhythmically shuffling among themselves as if in a swing. The main activities of the firms are services: consultancy, translation, information, etc. Some of them are registered at one address: Kyiv, Bahovutivska St., 17-21 (6th floor).

Currently, formally, the beneficiary of most of these firms is Halyna Bahryeyeva through LLC "Professional Regulatory Services" (also subject to investigation). According to journalists of "24 Channel,", she is presumably the mother of Maksym Bahryeyev. Maksym himself was or is a director/owner of several listed firms. In "Cratia LTD" itself, he is not formally listed as a director or manager. The beneficiary of the firm is again Halyna Bahryeyeva. Furthermore, on the "Kratiya" website (cratia.ua), it is mentioned that this is the business of LLC "Cratia" (without the words "LTD"). Meanwhile, on his Facebook page, Maksym Bahryeyev calls himself the managing partner of Cratia.

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Indeed, there is a company simply named "Cratia" in the state register. Interestingly, it is not mentioned in court rulings on certificate fraud - only "Cratia LTD." It is also owned by Halyna. Until March 2019, the firm was in a state of termination presumably because its tax debt was 9,500 UAH. The firm’s accounts were under arrest. Its director (also until March) was Maksym Bahryeyev. Since March, the company is no longer being liquidated. And Dmytro Lytvynchuk is now registered as the manager of "Cratia" (most likely just a stand-in). On the "Cratia" website, Maksym Bahryeyev is now listed as a firm adviser, and the executive director is indicated as Iryna Burtseva (Lytvynchuk is not mentioned at all). In turn, Iryna Burtseva is officially the director of "Cratia LTD" and "Cratia Medtekhnika," which are involved in the criminal proceedings.

In private life, Maksym Bahryeyev also likes to play "mafia":

As we mentioned earlier, "Cratia" (both versions of it) has already been the subject of journalistic investigations. In particular, the "24 channel" concluded back in 2018 that [drug] suppliers incur a range of unjustified costs when registering medicines on the Ukrainian market. This is about unofficial parts of artificial collections "through intermediary firms supposedly providing consulting services".

According to investigators, "a noticeable player in this sphere is the company Cratia" of Maksym Bahryeyev. The investigation also mentioned part of the firms currently being scrutinized. Interestingly, the journalists tracked another one of his companies registered in a foreign jurisdiction: Cratia LTD (Register. № 08022026, Address: Suite 23031 8 Shepherd Market Mayfair W1J 7JY London). More than 23,000 firms may be hiding at this address. The publication suggested that "this is where the money of Ukrainian patients might be settling".

Therefore, probably the activities of "Cratia" are due for interest not only from the National Police but also from the State Fiscal Service with the involvement of international institutions. Let us remind you that another twenty individual entrepreneurs feature in the investigation related to certificate forgery. Does this not remind you of the notorious stories of money laundering using a range of consulting informative firms, firms, registered in foreign jurisdictions, and a network of small entrepreneurs (one-day firms)?

Bahryeyev VS Romanyok?

Another hero of the publication – Mykola Romanyok – at a certain period was listed as the commercial director on the "Cratia" website and also mentioned in several publications as a "partner of ’Cratia’" along with Bahryeyev.

Romaniok also featured in the companies currently going through the criminal proceedings led by the National Police. He was the head of LLC "Landmark Legal". He was a leader and founder (along with "Cratia LTD" and Bahryeyev) in LLC "Healskea". He owns LLC "Archimedes Service".

According to some information, he allegedly fell out with Maksym Bahryeyev. What or who possibly drove a wedge in the strong alliance of the sweet couple is not known. But currently, the "Cratia" website no longer contains data about his role in the company’s life. Gone from sight, gone from heart. Also, there is probably a remote legal dispute between them in court for the possibly affiliated asset "Uni-Sert."

This connection and the data from the court ruling on contractual relations between "Cratia LTD" and "Uni-Sert," indirectly point out that the CAB appointed under the old legislation "Uni-Sert" violates one of the fundamental operating principles – impartiality.

Of course, it would be naive to think that Bahryeyev or Romanyok openly appear among the founders of "Uni-Sert." As we can see, they can juggle corporate rights quite skillfully.

So. Until November 2018, the owners of "Uni-Sert" were Volodymyr Bilichenko and Andriy Sozanskyi.

We failed to find interesting information about Bilichenko; from the state register, it is only known that he lives in one of the villages in Chernihiv region!!! (let us remind: the firm is Kyiv jurisdiction, issuing permits for selling medical devices).

But Kyiv citizen Andriy Sozanskyi is the very figure that indirectly pointed to the controllability of "Uni-Sert" to the former partners of "Cratia" (Romanyok and Bahryeyev). According to his personal information on FB, Sozanskyi works in one of the commercial firms. Judging by everything, he is a close friend of Mykola Romanyok, they are friends on Facebook and they celebrated the New Year together with zeal.

In the photo above: far left Mykola Romanyok, far right Andriy Sozanskyi

Sozansky is also friends with Maksym Bahreyev on FB:

At the same time, Andriy Sozanskyi did not appear in any way as an expert on the pharmaceutical and medical market topic.

It is clear that these are only indirect signs of the firms’ affiliation through common owners. But the rumors that there is an active struggle between the real beneficiaries of "Uni-Sert" for this asset is indicated by a series of court cases in economic courts.

As of April 2019, 100% of "Uni-Sert" shares were concentrated by Murat Prokopov. A person with such initials is also listed as Bahryeyev’s friend on FB. According to his FB page, Murat Prokopov is the operating director of the consulting company the8790.

And judging by the caption to this photo, Bahryeyev and Prokopov are friends not only in virtual social networks:

The change of ownership of "Uni-Sert" is accompanied by numerous court cases in the Economic Court of Kyiv, the Cassation Economic Court, and the Northern Appellation Economic Court. In particular, Andriy Sozanskyi (probable friend of Romaniok) is trying to challenge the transactions related to the change of ownership and cancel the registration records. Murat Prokopov (possibly a friend of Bahreyev) and LLC "Uni-Sert" are also parties to this case. Below is an example of one of the court reviews:

We will not analyze in detail why and for what the lawsuits were filed. But it is obvious that there is a struggle for corporate rights to the firm – a certification body with permitting powers. And coincidentally, this struggle is being fought between probable friends of Bahryeyev and Romanyok.

Of course, by this sign, we cannot definitively establish the affiliation of the "Cratia" and "Uni-Sert" firms. But we hope that the law enforcement agencies will consider our information about the court battle between the friends of Bahryeyev and Romanyok. And they will properly, taking into account the norms of the Criminal Code with a twelve-year punishment, evaluate all the chess moves of the hapless grandmasters. At the same time, the public and the Ministry of Health will begin to demand from the Ministry of Economic Development to fulfill Ukraine’s obligations to the EU. And force all the temporary "bahryeyevs" from 2014 to finally work according to market rules, taking care of the health of Ukrainians.

To be continued...