Recently, President of Ukraine Volodymyr Zelenskyy appealed to the Austrian government with a request to facilitate the extradition of Ukrainian oligarchs and corrupt individuals hiding from justice in the comfortable surroundings of a European country.
One of the first who should be returned is the former owner of the bankrupt “Delta Bank”, Mykola Lagun, who has been residing in Vienna for the past three years.
His case serves as a clear example of how Austria’s overly lenient bureaucratic attitude towards suspicious sources of wealth and murky reputations has turned the once-imperial capital into a transit hub for dubious figures from the former Soviet bloc — and why this must change.
Still Waters
On 16 June, during his visit to Vienna, President Volodymyr Zelenskyy stated that he expected Austria’s support on a sensitive issue for Ukraine — the matter of former Ukrainian officials and oligarchs hiding from Ukrainian justice and using Austria and Europe as safe havens for assets stolen from their home country. The appeal, voiced at the highest level, is not without cause: of the 27 extradition requests officially sent by Kyiv to Vienna in recent years, only one has received an appropriate response. Dozens of large and mid-level oligarchs — former bankers, industrialists, agricultural magnates, MPs — have found actual refuge in Austria. In Ukraine, they face prosecution for tax evasion, financial fraud, misappropriation of state funds, and corruption schemes.
Why is Austria attractive to Ukrainian, Russian and other post-Soviet businessmen and officials with questionable reputations? It is well known that Austria upholds banking and financial secrecy almost absolutely, which allows assets to be concealed, complex corporate structures to be formed, and tax and criminal oversight to be avoided in their countries of origin. Vienna has long offered a favourable regulatory environment for setting up companies, foundations, trusts, and accounts with private banks. This has made it a comfortable base for capital outflow. Oligarchs often purchase real estate in central Vienna, acquire residence permits, and later obtain Austrian, Maltese or Cypriot citizenship through investment programmes.
Austria has traditionally been a part of the network for laundering Russian and Ukrainian funds. Politically, Vienna tries to maintain a status of neutrality and a “platform for dialogue” — even with regimes that are openly criticised by other EU member states. The presence of OSCE, OPEC, and UN offices (UNODC, UNIDO) reinforces this atmosphere of neutrality and mutual understanding. Unlike, for example, Switzerland or France, Austria rarely sees strong public campaigns against offering shelter to oligarchs. Local media tend to remain silent or report such matters with caution. This enables oligarchs to live “in the shadows” — renting expensive flats or villas — without becoming the centre of public scandals.
Among the well-known Ukrainian oligarchs currently in Vienna, and who could fall under the category of “fast-track extradition”, Ukrainian media name the former banker Mykola Lagun, who is accused in Ukraine of causing more than €1 billion in losses by transferring funds from the now-defunct Delta Bank into offshore accounts; agricultural oligarch Oleh Bakhmatyuk, who also had issues with the National Bank due to his failed financial institutions; the chemical plant owner Dmytro Firtash, who has been in Austria for 10 years as his extradition to the United States remains unresolved; and former PrivatBank co-owner Hennadiy Boholiubov, who fled the country amid criminal proceedings related to losses at Ukraine’s largest financial institution, which was later nationalised. Also recently joining them was Denys Komarnytskyi, a well-known corrupt official from Kyiv, suspected of involvement in a large-scale property misappropriation scheme in the capital.
While each of them has a different path into Austria, they are united by one factor: the “hospitable” Austrian state shows no urgency in assisting Ukrainian justice and returning them to their homeland. Moreover, in some cases, citing the ongoing war in Ukraine and certain political tensions within the Ukrainian establishment, individual oligarchs may even attempt to obtain political asylum from the Austrian authorities.
A Fugitive from Justice
The biography of one of these Austrian “guests” — former banker Mykola Lagun — shows what the hidden risks of this short-sighted “open arms” policy might be. For the average European reader, the details of his career may be unfamiliar, so it is worth sketching it in broad strokes.
In Ukraine, Mykola Lagun is primarily known for his banking activities. In the mid-2000s, he founded a financial institution that would later become one of the most successful in the retail lending market — Delta Bank. The problem is that he likely established it with Russian money. Ukrainian media have repeatedly reported that the seed capital for Delta may have come from Kirill Dmitriev — a key figure in Russia’s dialogue with the US on restoring business relations, a close associate of Vladimir Putin, and head of the Russian Direct Investment Fund. Dmitriev and Lagun also had joint ventures in the real estate sector.
However, instead of developing a proper retail banking business, Lagun began gradually diverting funds raised from depositors and operations with government securities into offshore jurisdictions. Financial investigations would later reveal that his associates created numerous shell companies, which acted as fake borrowers from Western banks. These loans were backed by Delta’s real funds, and reports submitted to the National Bank of Ukraine were falsified. One such shell company, for example, was called “Bonnie and Clyde” — after the infamous Depression-era American bank robbers. When the loans were not repaid, the funds were simply written off Delta Bank’s books.
One of the most prominent cases involved Delta Bank’s role in schemes with the scandal-ridden Austrian Meinl Bank. At least $87 million was transferred out through this channel. In total, using “back-to-back” schemes, $437.2 million was withdrawn from Delta’s correspondent accounts at Meinl Bank AG, Bank Frick & Co.AG, East-West United S.A., and Bank Winter & Co.AG.
This approach to business was one of the reasons why, by the end of 2014, Delta was effectively bankrupt, and was removed from the market in early 2015. Some of the offshore-bound funds came from state-owned banks and stabilisation loans issued by the National Bank during the 2014 crisis, under personal guarantees from Lagun. The total loss, including unpaid loans and the funds paid out to defrauded depositors by the Deposit Guarantee Fund, exceeds 50 billion UAH — around €1.1 billion.
Since then, numerous criminal proceedings have been opened in Ukraine against Lagun and his associates, including Delta Bank executives. Notably, it was only at the end of 2023 that Lagun was placed on an international wanted list.
An attentive reader will have guessed that Lagun fled Ukraine well before the risk of real imprisonment — approximately in mid-2022. News of his presence in Vienna first emerged from his lawyers, and was later confirmed when he appeared via video link at a court hearing in Ukraine.
What is Lagun actually living on in Vienna? According to local media, citing official Ukrainian registries, the former banker controls several major assets in Ukraine through close associates. These include large plots earmarked for residential development in a Carpathian resort town and near Kyiv, as well as influence over municipal utility companies and tourism businesses in occupied Crimea. Although these activities violate Ukrainian law, Lagun has never been sanctioned. Nor has any court to date ordered confiscation of these assets as compensation to the state.
A recent Ukrainian media investigation revealed that Lagun has held a Russian passport since at least 2014. His former partner and the mother of his younger children, Olena Popova — also Delta Bank’s former chair — has held Russian citizenship since at least 2021. Experts suggest these passports may be used to avoid extradition and facilitate access to business operations in occupied Crimea and Russia. Ukrainian media also suggest Lagun may still have working — if not friendly — ties with Kirill Dmitriev.
Reputational Risks
Vienna has effectively allowed Lagun to live the quiet life of a “retired oligarch”: hiring lawyers, funding media campaigns, and pursuing active investment — all with money of dubious origin that no one in Austria seems inclined to question. But what reputational risks does this pose to Austria? Who can guarantee that individuals like Lagun are not, under the guise of Ukrainian asylum seekers, collaborating with Russian state structures or financing, for instance, far-right or pro-Russian political forces — as a means of laundering money and protecting their Russian citizenship? It is that citizenship — not Austrian residence — which is likely to offer them the greatest protection from extradition.
President Zelenskyy’s call to facilitate the extradition of those convicted or suspected of economic crimes is a signal to the Austrian authorities that traditional legal cooperation mechanisms are failing. And that there is, therefore, no real partnership in tackling organised crime and cross-border corruption — much of which flows through Austria’s “smart” financial channels.
Ukrainian media note that extraditing Lagun could be relatively straightforward. He has no political background or asylum claim; courts and investigators have documented specific financial losses — most of which have been borne by the state — and there are multiple proven cases of fraud worth tens of millions of dollars. His assets are identifiable and can be seized. Lists of Lagun’s proxy owners and managers have been published repeatedly in Ukrainian press. “Lagun is not integrated into the Western establishment, has no patrons, and the allegations against him are significant and well documented. His extradition could be a quick test case demonstrating the effectiveness of joint efforts,” wrote one outlet.
It is hard to disagree. Moreover, the launch of a “simplified” extradition process for individuals such as Lagun from Austria could serve as a signal to other European countries to review their own policies of shielding individuals with active criminal proceedings in Ukraine. It would be a meaningful gesture of support for Ukraine’s leadership — and its people — as they resist Russian aggression and seek every possible avenue to replenish the state budget, including by repatriating illicit funds hidden in “quiet” European havens such as Austria.
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