updated 5/7/2004 6:52:21 PM ET 2004-05-07T22:52:21

A federal judge on Friday dismissed nearly half the U.S. government’s case against Pavlo Lazarenko, a former Ukrainian prime minister charged with money laundering, wire fraud and extortion.

Before the defense called any witnesses at Lazarenko’s trial, U.S. District Court Judge Martin Jenkins dismissed 23 charges of the 53-count indictment. He said the government failed to prove the allegations during its six-week presentation.

Prosecutors were not immediately available to comment.

Defense attorneys said Lazarenko faced a 20-year sentence or more before the judge’s decision. A conviction on the remaining counts could bring less than five years, said Doron Weinberg, one of Lazarenko’s attorneys.

Dismissed were charges that Lazarenko funneled hundreds of millions of dollars into bank accounts, some of them in the United States, in exchange for awarding natural gas contracts to a company in Ukraine when he was that country’s top energy official in 1995.

The judge left in place charges that Lazarenko extorted a California businessman to help him launder millions of dollars in San Francisco.

Before trial, the judge said the government must prove Lazarenko violated both U.S. and Ukrainian law. Ukraine was in the midst of a building a capitalistic society following the Soviet Union’s collapse, and Jenkins said Friday the alleged conduct was not illegal there at the time.

The defense is expected to begin its case next week. Lazarenko contends he neither siphoned funds from his government nor accepted bribes from big business.

According to the indictment, Lazarenko used his clout to set up an international underground network of bank accounts to launder profits made through schemes involving natural gas, agribusiness, housing and other businesses in Ukraine. The government said $114 million was directed to banks in the United States, mostly institutions in San Francisco.

The judge also dropped counts in which Lazarenko was accused of bilking Ukraine of $500,000 through a scheme in which he allegedly inflated the price of fabricated houses.

Lazarenko claims he earned his fortune legitimately in a burgeoning and nearly lawless free-market economy. He also says he planned to use the money in a campaign to unseat Ukrainian President Leonid Kuchma, who anointed him prime minister in 1996 and fired him a year later.

Lazarenko, now 51, fled to the United States in 1999 in the midst of his country’s presidential election campaign, and sought asylum, claiming there had been three attempts to assassinate him.

The U.S. government has said it put Lazarenko on trial to show the world that criminals can’t use the United States as a repository for dirty money.

The government also alleges that Lazarenko used ill-gotten funds to purchase a $6.7 million mansion where actor Eddie Murphy once lived in Novato, a San Francisco suburb.

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