Fraudulent bankruptcy schemes: how scammers destroy businesses

In the midst of the war in Ukraine, fraudulent schemes have intensified, using fictitious goods supplies to orchestrate the bankruptcy of successful enterprises. The Kyiv-based company "A.T. Smart Trading" is involved in several such cases, artificially creating debts and seeking the liquidation of businesses through the courts.

How does the scheme work?

The corporate bankruptcy scheme is built on several key stages:

Contract conclusion — scammers offer the supply of petroleum products, building materials, or equipment on favourable terms. A shell company is created to fictitiously confirm the transaction, allegedly accepting the goods for storage.

Court proceedings — after the contract is signed, the fraudsters file a lawsuit, accusing the company of non-payment for goods that never actually existed.

Business blockage — bribed judges initiate bankruptcy proceedings, appointing an "interim manager" who blocks the company's accounts and operations in the interests of the scammers.

Asset seizure — through court decisions and enforcement services, the company's property is sold for the benefit of the scheme's organisers.

Victims of the scammers

Among the enterprises targeted by "A.T. Smart Trading" are:

"BMbud" (Ternopil) — a company engaged in the construction of bomb shelters. Due to a fictitious lawsuit for UAH 1.6 million, its operations, valued at UAH 500 million, were blocked.

"Cargo Systems of Ukraine", "Danko", "Tierra", "Autoaperolium" — logistics companies and building material suppliers that lost control over their assets.

Court hearings

Several proceedings for the recovery of debts totalling UAH 7 million have been opened against "A.T. Smart Trading". The company's owner, Sergiy Teshlya, was previously sentenced to seven years for large-scale fraud and was serving his sentence in a pre-trial detention centre.

The need for reforms

The increase in such schemes requires strengthened legislative control. Experts propose:

 Amending the bankruptcy procedure to protect businesses from fictitious debts.
 Introducing mandatory audits of court decisions in such cases.
 Tightening criminal liability for judges and officials who facilitate fraudulent schemes.

Without legislative reforms, Ukrainian businesses remain vulnerable to organised economic crimes.