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Washington: The United Nations has ordered one of its former officials to repay $97 million personally, after he lost a vast amount of UN funds by entrusting them to a man he met at a party, according to court filings.
The $US63.6 million penalty that the UN is seeking to impose on the former official, Vitaly Vanshelboim – once the second-in-command at the UN’s logistics agency – is the latest fallout from a scandal that The New York Times first reported last year.
Vitaly Vanshelboim (centre), with his former boss Grete Faremo.Credit: Getty
Vanshelboim and his boss, seeking to raise their profile within the UN, amassed millions for the organisation by charging governments and other UN agencies extra for construction jobs. Then they invested about $US60 million with companies all linked to a British businessperson named David Kendrick, defying internal warnings and dangerously concentrating their risk.
The investments were meant to finance renewable energy and housing projects, but they went poorly, according to UN audit reports. An inquiry last year found that the UN had recouped only about 10 per cent of its investment.
Hours after the Times reported on the disastrous investments, Vanshelboim’s boss, Grete Faremo, resigned.
Vanshelboim, who is Ukrainian, was fired by the UN in January after an internal investigation. In a recent filing with the UN’s internal court system, Vanshelboim revealed other aspects of his punishment: He said he was fined a year’s salary and told to repay $US63,626,806 personally. If he does not repay the money, the filings said, he will not be eligible for a UN pension.
Vanshelboim has asked the UN’s court system, which often handles personnel disputes, to overturn the firing, the fine and the order to repay. The court will hold a virtual hearing on the case early next year.
Vanshelboim declined to comment. He has not been charged with any crime.
Kendrick has denied any wrongdoing. A lawyer for Kendrick said his companies are still working on the projects funded by the UN and “very significant progress has been made”.
This article originally appeared in The New York Times.
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