Chernivtsi businessman arrested over large-scale construction fraud

On September 30, the Hlyboka District Court in the Chernivtsi region ordered the arrest of local developer Mykhailo Akostakioaye, head of Zakhbudkom LLC, on suspicion of large-scale fraud, the local prosecutor’s office reported.

According to the court ruling, since June 1, 2021, the suspect had been selling non-existent housing.

"Investors were shown projects, plans, and even taken on tours of the supposed construction site. However, the developer had no land permits and offered only simple contracts without notarization or property registration. Some works were carried out merely for show, to create the impression that construction was in progress. Despite making payments, investors never received ownership documents. As a result, they suffered losses exceeding UAH 13 million," the prosecutor’s office said.

To attract investors, the suspect used media, social networks, and advertising campaigns, and even set up a sales office in Chernivtsi.

Prosecutors argue that the suspect was fully aware that neither Zakhbudkom nor he personally owned the land plots, and that he had no legal right to use or dispose of them.

During meetings at the sales office, he allegedly misled potential investors about the legality of the construction and the availability of permits, showing them promotional materials presented as real projects and working plans.

According to the investigation, he collected money in cash, bypassing the company’s accounting system—likely to evade taxes.

His actions have been classified under Part 5 of Article 190 of the Criminal Code—fraud on a particularly large scale.

• In July 2025, it was reported that a new residential complex for 5,000–7,000 residents was planned in Perechyn, Zakarpattia region—potentially doubling the town’s population.