The deal, known as “Contract Pr-05”, was signed between OTL and Progress, a state-owned Ukrainian arms trading company. Progress declined to answer questions from the FT about why it chose to wire millions to a little-known Arizona gun shop....OTL was represented in its deal with Progress by Mykola Karanko, a Kyiv-based lawyer. OTL later alleged in arbitration that Karanko was in fact working for Ukraine’s defence ministry, not for the company, and that he asked OTL to make payments to unnamed “third parties” to keep the contract alive. The claim was left unexplained in the arbitration process. Karanko declined to comment.Karanko had previously helped broker a Progress arms deal with Iraq that ended in a 2009 civil case in Texas, in which he was accused of interfering in an arms deal by trying to pay kickbacks to Iraqi officials. Karanko and his co-defendant were found liable and ordered to pay multi-million-dollar damages.
