Criminal case opened in Chernivtsi over potential millions in damages to the community

The District Prosecutor's Office of the city of Chernivtsi officially announced the start of a pre-trial investigation into possible violations during the disposal of communal property. The response was sent to the editorial office of "Stop Corruption TV" in reply to an appeal registered on 19 October 2026 under number 9488-26.

On 20 October 2026, information about the offence was entered into the Unified Register of Pre-trial Investigations (URPI) under number 42026265010000229. The pre-trial investigation was assigned to the investigative department of the Chernivtsi District Police Department of the Main Directorate of the National Police in Chernivtsi Oblast. The criminal case was registered under the signs of an offence provided for by Part 2 of Article 367 of the Criminal Code of Ukraine — negligence in office that caused serious consequences.

Background: auction and years-long court proceedings

The basis for the appeal to law enforcement agencies was a journalistic investigation dedicated to the transparency and legality of the use of Chernivtsi's communal property. At the centre of attention was the history of the rental of a premises with an area of 83.4 sq. m, located at 5 Stepan Bandera Street.

On 14 June 2022, an electronic auction was held to extend the rental agreement. Nataliia Vargotska offered the highest price, exceeding her competitor's bid by only one hryvnia. However, on 21 June 2022, the Department of Communal Property of the Chernivtsi City Council disqualified her by Order No. 208 due to the failure to submit mandatory documents.

The electronic system automatically determined sole proprietor Larysa Nahorniak as the winner, who had named the next highest price. On 5 July 2022, the auction protocol was approved, and on 19 July, a five-year rental agreement No. 72 was concluded.

The actual handover of the premises took place only on 1 August 2025 — three years after the signing of the agreement. This occurred in execution of the decision of the Commercial Court of Chernivtsi Oblast dated 14 March 2025 in case No. 926/2191/24, which was upheld by the appellate and cassation instances. Journalists noted that during this time, the entrepreneur had no opportunity to use the premises for business due to prolonged court disputes.

Financial losses and court decisions

On 11 February 2026, the Chernivtsi Court of Appeal in case No. 727/13582/23 declared rental agreement No. 72 dated 19 July 2022 invalid. The court established that the Department of Communal Property had groundlessly disqualified Nataliia Vargotska, violating the procedure for conducting the auction.

The declaration of the agreement invalid created grounds for the return of the rental fee paid by Larysa Nahorniak in the amount of 554,838.28 UAH. In addition, the entrepreneur incurred additional expenses totalling 917,632.73 UAH, which included:

• 26,254.23 UAH — remuneration to the operator of the electronic auction;
• 25,000 UAH — preparation of design documentation;
• 316,378.50 UAH — purchase of a franchise package for opening a restaurant of the "Na Mangal KEBAB HOUSE" chain;
• 550,000 UAH — completion of construction works.

The editorial office also refers to the decision of the Commercial Court of Chernivtsi Oblast dated 30 July 2026 in case No. 926/1135/26 regarding the reimbursement of damages caused to the entrepreneur as a result of the unlawful actions of the city council and the Department of Communal Property.

According to journalists' calculations, taking into account the rental rate of 60,000 hryvnias per month, the lost profit for the budget over three years could amount to approximately 2.16 million UAH. Together with the claimed damages to the entrepreneur, which are to be reimbursed at the expense of the city budget, the total potential losses to the community are estimated at approximately 3.23 million UAH. This figure is an estimate provided in the appeal, not an established amount of damages within the criminal proceedings.

Prosecutor's decision and further steps

In the appeal, the editorial office requested to verify the circumstances of the property disposal, provide a legal assessment of the officials' actions, and, in the presence of violations, enter information into the URPI. Journalists requested to verify the signs of offences under Articles 364 (abuse of authority or official position) and 367 (negligence in office) of the Criminal Code of Ukraine, as well as to examine the materials of electronic auction No. LLP001-UA-20220510-35893 and court decisions in cases No. 727/13582/23 and No. 926/1135/26.

The Prosecutor's Office confirmed the registration of the case specifically under Part 2 of Article 367 of the Criminal Code of Ukraine. The extract from the URPI states that officials of the Chernivtsi City Council and the Department of Communal Property, through improper performance of their official duties, caused harm to the rights of sole proprietor Nahorniak L. Y., which resulted in serious consequences.

The prosecutor's office promised to inform the applicant of the investigation results in the manner established by law. It is worth noting that the entry of information into the URPI signifies only the start of a pre-trial investigation, not the establishment of criminal liability of specific individuals.

Meanwhile, the NGO "Stop Corruption" reminded about cases of forgery of their documents. Thus, in February 2025, in Odesa Oblast, an unknown person forged the organisation's logo and seal for an appeal to state bodies, and in February 2024, a clone of the organisation appeared, whose representatives presented themselves as anti-corruption activists. The NGO calls for verifying the authenticity of documents and not associating appeals with the organisation solely based on the mention of its name or the surname of a representative.