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Department of Justice files to seize office building off Public Square as part of money laundering scheme

Posted at 9:00 AM, Jan 02, 2021
and last updated 2021-01-02 09:00:25-05

CLEVELAND — The Department of Justice (DOJ) filed a civil forfeiture complaint in the Southern District of Florida related to a fraud and embezzlement case involving the building’s owner.

The DOJ says Ihor Kolomoisky, Gennadiy Boholiubov and their associates, “purchased hundreds of millions of dollars in real estate and businesses across the country, including the properties subject to forfeiture: the office tower known as 55 Public Square in Cleveland, Ohio.”

The complaints say the group “created a web of entities, usually under some variation of the name ‘Optima,” according to the DOJ press release.

55 Public Square.jpg
The DOJ stepped in while 55 Public Square was being sold because it was tied to Ukrainians who were under investigation.

Cuyahoga County records show 55 Public Square was purchased by “OPTIMA 55 PUBLIC SQUARE LLC,” in 2008 for $34,000,000.

But, Dottore Companies’ Mark Dottore says no matter what happens with the court case, this means development at 55 Public Square might now be years away. He says the building was on the verge of being sold when DOJ filed the paperwork to seize the property, and that process can take a very long time.

Part of Dottore’s business is as a court-appointed receiver, stepping in to take over real estate that can’t meet its debt obligations and helping to make it profitable again.

"It'll definitely stall development on that corner," said Dottore referring to 55 Public Square's new legal issues.

“No one’s going to stick their foot in that quagmire until they can figure out if they can get clear title of it,” said Dottore.

That uncertainty comes at a time when the property would have increased in value because of the Sherwin-Williams plans just across the street. In February 2020, the company announced it was finalizing plans to build a new global headquarters in downtown Cleveland just west of Public Square between St. Clair and Superior avenues. A few weeks later, after COVID-19 started sweeping across the United States, Sherwin-WIlliams announced it was pumping the brakes on those plans.

Still, the promise of a few thousand workers having desks just across the street would have made 55 Public Square prime for redevelopment.

IMG_5349 2.JPG
Three parking lots on the top-right of the picture are slated to be turned into Sherwin-Williams' new headquarters. 55 Public Square is the reflective building they surround.

“If you have the Sherwin-Williams building on that corner, you could put housing right next door to it,” said Dottore. “It stalls the deal [involving 55 Public Square].”

55 Public Square isn’t the only building DOJ is going after.

“In August 2020, two other civil forfeiture complaints were filed in the Southern District of Florida involving properties in Louisville, Kentucky and Dallas, Texas, in which it was alleged that those properties were also acquired using funds misappropriated from PrivatBank in Ukraine,” according to the DOJ release.

Dottore says the large office building would have been perfectly placed to be renovated into apartments across the street from Sherwin-Williams' new HQ.

All together, DOJ says those properties are worth about $60 million, but there could be additional filings to seize other Cleveland Properties.

Optima also owns One Cleveland Center in Downtown Cleveland, through “OPTIMA 1375 II LLC,” and The Weston Cleveland Downtown through “OPTIMA 777, LLC.” In an August 2020 raid, FBI agents emerged from the Cleveland Optima office after several hours with more than a dozen boxes and several computers and servers.

Optima also owns The Weston in Downtown Cleveland, just a block away from One Cleveland Center, which it also owns.

See how Kolomoisky is connected to President Trump’s impeachment in this Politico article.

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