The successful development of the economy of any country at the current level of industrial relations is impossible without strong business, healthy competition in the market and private initiative. The European culture of market relations has been formed for a long time and works like clockwork, however, this market is also overcrowded, which makes life difficult not only for novice entrepreneurs, but also for large companies that have existed for more than a decade.
For this reason, capital owners have to pay more and more attention to the prospects for investment in developing countries. However, the rules of the game outside the Western world are completely different, an entrepreneur who is unfamiliar with them risks operating at a loss or even burns out. This thesis is especially relevant for the post-Soviet space, where large Western business once entered in the hope of quickly mastering a new market and multiplying its profits.
Corporate fraud and corruption, from which generations of entrepreneurs have suffered, is taking on a completely different character in Russia and neighboring countries. A lot of research has been done on this topic, but the problem remains unresolved. Russian business annually suffers multimillion-dollar losses and reputational costs from typical fraudulent schemes, methods of combating which have long been known. For example, experts from Deloitte Forensic, a large international audit company, singled out embezzlement of company assets, bribery and commercial bribery, financial reporting fraud, and employee compensation fraud as popular fraudulent schemes in the CIS countries.
Of interest are other findings of the mentioned study that the departments of companies responsible for conducting procurement, as well as marketing and sales, are most exposed to the risk of corporate fraud.
Where are the Russian law enforcement agencies, which, as you know, have broad powers and a bloated staff, looking? According to the same Deloitte experts, corporations simply prefer to hush up the offenses committed and turn to the available legal instruments only in the most egregious cases.
However, we have identified another, perhaps the main reason for the current state of affairs. Russian law enforcement officers know how to work well, but they do it only on orders from above. Moreover, there is no need to talk about the possibility of punishing the criminal in the case when the authorities themselves are involved in the scheme of pumping out capital and contribute to this.
While investigating cases of illegal enrichment of Russian security officials and facts of abuse of power by them, we came across a fraudulent scheme that confirms both the conclusions of Deloitte Forensic experts and our own observations. Another victim of the post-Soviet reality was the well-known company L`Oreal, where in the recent past Olga Machilskaya was employed as a brand manager, closely associated with Russian intelligence officers who help her in her career advancement, of course, on a mutually beneficial basis.
Machilskaya has been implementing fraudulent schemes for the withdrawal of capital of the companies in which she works through her connections for several years now. As a rule, being responsible for marketing, Olga actively promotes the interests of the creative agency VMLY&R Moscow in companies. Using the powers granted to her by her position, Machilskaya secures the conclusion of contracts for marketing services at inflated prices between her employer and VMLY&R Moscow. After that, regardless of the quality of the work done, she ensures her best assessment, receiving kickbacks from the agency’s management in return.
The intermediary in the fraudulent scheme is the head of VMLY&R Moscow, Natalya Romanenko. Through it, not only the withdrawal of money is ensured, but also patronage from the Russian security forces. So, Natalya’s father is Nikolai Romanenko, a high-ranking representative of the FSB of Russia, and his brother is Andrey Nikolaevich Romanenko, a former co-owner of the Qiwi company, involved in a large number of corruption violations, about which there is a lot of information on the Internet. The Romanenko family has been using Machilskaya for more than a year, paying her “kickbacks” and providing services to “clear” her career path.
The connection between Machilskaya and the Romanenko clan did not arise spontaneously and can be traced from the time of Olga’s employment in other places. Now the L`Oreal company has acquired such a “valuable” employee, whose “track record” includes the successful implementation of fraudulent schemes in combination with the main work in such companies as:
2015-2017 Marketing Director of North Eastern Europe cluster (Riga, Latvia) at Danone;
2017-2019 Marketing Director at Hasbro Russia;
2019-2022 Director Marketing New Business Development at CJSC Multon Russia.
The only question that remains open is how much fortune Olga Machilskaya and the Romanenko clan were able to put together over the long career of such an effective manager. For comments, we turned to the head of the security division of the Russian segment of L’Oreal, Vincent Breck, who at first expressed interest in information about the details of the fraudulent scheme, but then cut off contacts and did not explain the situation in any way. Despite the reputation of Olga Machilskaya, the company was not embarrassed by the facts that were provided to them. It remains to be seen how the classic scheme will start working inside the L`Oreal corporation.
Corrupt ties with the Russian security forces in a situation where the entire civilized world is desperately fighting Putin’s bloody dictatorship can tarnish the reputation of any business, not to mention a well-known major European brand. According to the results of a number of journalistic investigations, the Romanenko family, in order to maintain their status during the purges initiated by the Russian leadership in the army and special services, donated large sums of money in support of the so-called. “special military operation” in Ukraine. It turns out that L`Oreal not only did not refuse to support the sanctions policy pursued by the European Union, while retaining the Russian segment of the business, but could unwittingly be drawn into the scheme of financing armed aggression. It looks like L`Oreal remains true to the corporate traditions that originated in the 30s of the last century to support fascism, anti-Semitism and totalitarianism in Europe.