• How the billion was stolen. Details from the case of Dorin Dragutanu, Governor of the NBM during the banking fraud period

    How the billion was stolen. Details from the case of Dorin Dragutanu, Governor of the NBM during the banking fraud period
    07 December 2023 | 22:00

    He allegedly acted “in the interest of the criminal organization” and “in accordance with the criminal plan’, favouring the criminal group, led by Vladimir Plahotniuc, of which and Ilan Shor was part, facilitating the theft of billion from the banking system of the Republic of Moldova. These are the charges brought by prosecutors against Dorin Draguțanu, Governor of National Bank during 2009-2016, when the banking system was embezzled by approximately one billion dollars. Ziarul de Garda analysed the indictment in the name of Dorin Dragutanu and showed what were his implications in the theft of the billion, according to the prosecutors. The former Governor says he doesn’t understand why he is being charged and believes that “neither do the prosecutors”.

    Former Governor of the National Bank of Moldova (NBM) is accused of complicity to commit fraud in particularly large amounts and money laundering in particularly large amounts by an organised criminal group or organisation criminal organisation. The charge was brought against him on 5 March 2020, the criminal investigations were completed on 4 July 2022, and the criminal case, which also involved the former deputy governor of NBM, Ion Sturzu, was sent for trial on 22 September 2022. Subsequently, on 16 March 2023, the case of Dragutanu and Sturzu was merged with the criminal case against the former bank presidents involved in the fraud, as was the case against another former deputy governor of NBM, Emma Tabirta. The indictment on the Dragutanu/Sturzu case, examined by ZdG, describes in detail how the ground was prepared to commit the bank fraud in the period preceding it, starting in 2011. This machinery was executed in several stages, with the support and involvement of the NBM leadership and Dragutanu personally, as the state prosecution claims.

    How it began. Ilan Sor was active in the criminal organisation led by Vladimir Plahotniuc: the indictment states that the bank fraud was allegedly designed in the first half of 2012, when Ilan Sor allegedly decided to “create an organised criminal group to commit crimes of embezzlement from the banking system of the Republic of Moldova”, with the aim of “financing the criminal activity of this group and the criminal organisation led by Vladimir Plahotniuc”. The indictment also mentions that Ilan Sor was a member of the criminal organization headed by Vladimir Plahotniuc and was responsible for creating financial funds and other funds to support the organization’s activities. To this end, Ilan Sor allegedly decided to gain effective control of several banks through intermediaries. Thus, between August 2012 and September 2013, he took control of the activities of Unibank, the Social Bank and the Savings Bank (BEM), being assisted in this by members of the governing bodies of these banks, by public persons and public dignitaries within the state institutions, including those regulating and supervising the financial-banking sector, claim prosecutors.

    By Dragutanu’s decision, Sor became chairman of the BEN Board. The name of Dorin Dragutanu is mentioned for the first time in the indictment when Ilan Sor was nominated for the position of chairman of the Board of the Savings Bank of Moldova. On April 29, 2019, when a member of the BEM Board proposed Sor for this position, Dorin Dragutanu issued the decision on Ilan Sor’s confirmation as a director, even though deputy governor Marin Molosag had reportedly pointed out that not all the necessary documents were attached to the application, a fact confirmed by NBM employee responsible for verifying the documents and endorsing conclusion, according to prosecutors. The Sor-Plahotniuc organisation already controlled BEM, after the state’s share was substantially reduced in 2013 to 33.3% + one share.

    Insidown LTD acquires Victoriabank shares with cash borrowed from other banks. In August 2014, the company Insidown LTD, registered in Cyprus, controlled by Vladimir Plahotniuc, according to the indictment, started preparing the paperwork to acquire a substantial part of Victoriabank shares. According to the indictment, then “communications were initiated” with Veaceslav Platon, who controlled 38.2% of Victoriabank shares through ten local and foreign companies. The indictment states that on 27 August 2014, on a holiday and non-working day (Independence Day), with the purpose to implement the so-called “criminal plan”, Dorin Dragutanu allegedly called the head of authorisation department, Lilia Mirza, to the NBM headquarter, to whom he would have given instructions to check the set of documents submitted by Insidown LTD with a view to taking over a substantial part of Victoriabank stock. Subsequently, also the NBM deputy governor, Emma Tabirta, would have given instructions to Lilia Mirza to check additional documents, but without officially registering them.

    The company Insidown LTD was officially represented by three foreign nationals. The company was represented in Moldova by lawyers Vitalie Nagacevschi and Fadei Nagacevschi by power of attorney, as stated in the same document. On 3 October 2014, the NBM Executive Board, which included Dorin Dragutanu, Emma Tabirta and Ion Sturzu, allowed Insidown LTD to acquire the substantial part of shares from Victoriabank, although there were several irregularities, according to prosecutors. In the second half of October 2014, lawyers Denis Ulanov and Victor Andronachi became representatives of Insidown LTD. The money for the purchase of 38.2% of Victoriabank shares held by Veaceslav Platon through several companies was taken from the Savings Bank controlled by Ilan Sor, which in turn itself borrowed from other banks for this purpose. There were two sides to the transaction, one official and one unofficial, and the money borrowed by BEM from the other banks would have been used to pay Veaceslav Platon, prosecutors claim.

    Thus, on 6 November 2014, Viorel Birca, interim president of BEM, who allegedly acted at the direction of Ilan Sor, took out two interbank loans in the amount of 8 million euros and 10 million euros from Moldova Agroindbank and Moldindconbank. Almost 14 million US dollars of this money were allegedly used for the purchase by Insidown LTD of Victoriabank shares, after several transactions without financial backing between companies controlled by Sor. This also required permission from the NBM, to halve the amount of the transaction from 28 million euros, for which the NBM had initially offered permission, to 14 million US dollars, the state prosecution also notes. Permission is granted on the same day it is requested, on 12 November 2014, by the BNM Executive Board, which included governor Dorin Dragutanu, deputy governors Emma Tabirta and Ion Sturzu. They “acted in the interest of the criminal organization and according to the criminal plan, and by Decision No. 238, they intentionally and unjustifiably altered the content of the decision,” says the indictment.

    On November 13, 2014, at 12:55 p.m., Denis Ulanov orders the transfer of 12.5 million US dollars from the account of “Insidown LTD” to the brokerage account of Moldova Agroindbank, payment for 38.2% of Victoriabank shares held by Veaceslav Platon’s affiliated companies, this being the official part of the transaction, according to the indictment. The unofficial part of the transaction implied that the remaining value of the shares held by Veaceslav Platon’s affiliated companies in Victoriabank was to be compensated by the “criminal association” through the method of extinguishing the loans of several companies affiliated to Veaceslav Platon, contracted from Victoriabank during 2011-2012.

    Role of central public institutions. During November 2014, both the official and unofficial parts of the transaction would have been supported by the NBM. In addition, the decision-makers within NBM were ensuring definite non-intervention of the banking regulator in the activity the domestic banking system, say prosecutors. According to the indictment, the NBM knew about the fact that the Savings Bank was experiencing difficulties in keeping required reserves in national currency. And the BNM leadership would have limited itself to “strict warnings” without issuing any decisions in this regard. At the same time, according to the indictment, already at the beginning of February 2014, the BNM had identified the groups of Sor and Platon, which consisted of dozens of companies. And by 25 July 2014, the BNM leadership was already treating Social Bank, Unibank and BEM as banks controlled by Ilan Sor, claim the prosecutors. As proof, on 25 and 31 July 2014, Ilan Sor was invited to two meetings attended by Dorin Dragutanu, Emma Tabirta and Matei Dohotaru (at the time, deputy director of the department of regulation and banking supervision of the NBM). During the meetings, were discussed, among others, the interbank borrowings of these 3 banks and the loans received from the banks by the companies they control.

    Informal meeting. Plahotniuc proposes that the Government assumes state guarantees in favour of NBM. Prosecutors write that the deplorable situation at the three banks was also discussed at an unofficial meeting held in early November 2014, at the initiative of then Prime Minister Iurie Leanca, at State Residence, a meeting allegedly attended by former President Nicolae Timofti and his adviser at the time, Ion Paduraru, former speaker of the Parliament Igor Corman, Vladimir Plahotniuc, at the time first vice president of the PDM and Vladimir Filat, chairman of the PLDM. Vladimir Plahotniuc is said to have stressed that the only solution is for the government to assume the release of state guarantees in favour of the NBM, so that the National Bank can offer emergency loans to the three banks. “Thus, even if the situation of the three banks was known to Dorin Dragutanu and Ion Sturzu and Emmei Tabirta, they did not take the necessary action, and even actively facilitated the members of the criminal organisation in obtaining the money needed to carry out the plan to redistribute property within the organisation”, prosecutors claim.

    7 November 2014, an important date for the completion of the bank fraud. According to the indictment, on 7 November 2014, Dorin Dragutanu, “acting in the interest of the criminal organization, according to the preestablished role and plan, which involved the use of the powers of the NBM governor”, presented to the National Committee for Financial Stability the contingency plan, which provided for the establishment of special administration at three banks: Unibank, Social Bank and Savings Bank. The amount needed for the recovery measures was 6.3 billion lei, but on the same day, at the proposal of Dorin Dragutanu, the amount of emergency loans was increased to 9.5 billion lei. According to the indictment, Dragutanu did this, even though he knew that in the period following November 2014, Victoriabank was going to make interbank deposits and interbank borrowings to these three banks. Also on November 7, 2014, the Leanca government adopted a decision “on ensuring macroeconomic stability in the regional context,” which grants from the NBM emergency loans to the three banks in the amount of 9.5 billion lei. The decision is voted in secret, without public access. At the proposal of Dorin Draguțanu, as well as of then Minister of Economy, Andrian Candu, additional amendments were introduced in the draft decision, which offered the possibility of returning funds to companies regardless of their residence. “In this way, the criminal organisation obtained the possibility of receiving funds for the realisation of the interests of the leaders of the association and the possibility of cover the created deficits with public money on account of emergency loans granted by the NBM, secured by state guarantees issued by the Ministry of Finance,” the indictment states.

    Introduction of special administration deliberately delayed. Special administration was not introduced then. Also, on 7 November 2014, at 20:39, deputy governor Ion Sturzu approved the request of BEM signed by Viorel Birca to conclude an overnight forex SWAP in the amount of 300 million US dollars against lei, in the amount of 4.4 billion lei. This would have ensured the functionality of the BEM, artificially creating the necessary conditions for the NBM not to have grounds to intervene with special administration mechanisms, prosecutors claim. Only on 27 November 2014, the NBM Executive Board decided on the establishment of the special administration of the Savings Bank, even though NBM employees had prepared draft decisions and notes on the establishment of the special administration as early as 7 November 2014. During this 20-day period (almost three weeks), the most serious misconduct took place at Victoriabank, Unibank, Social Bank and Savings Bank, the indictment points out. These culminated between 19-26 November 2014, a period when neither Dorin Dragutanu, nor Ion Sturzu and Emma Tabirta intervene to stop the illegal activities, even though their subordinates reported to them daily about these activities, the same document notes. “Thus, during November 2014, Dorin Dragutanu, Ion Sturzu and Emma Tabirta assisted members of the criminal organization and removed obstacles both for the money embezzlement and the laundering the stolen funds”, prosecutors note in the indictment.

    The interbank borrowings through which the money was stolen. Between 7 and 27 November 2014, several interbank deposits were placed at BEM from Victoriabank, including through Unibank and Social Bank, which were subsequently returned through state guarantees. As a result of these transactions, Savings Bank recorded debts to Victoriabank in the amount of 105 million euro, 12.4 million US dollars and 90 million lei. The indictment states that the president of Victoriabank, Natalia Politov-Cangas, and its first vice-president, Corneliu Ghimpu, approved the borrowings to Savings Bank, directly or indirectly through Unibank and Social Bank, in various forms. Other persons involved, according to the indictment, were: Viorel Birca, Natalia Rahuba, Dumitru Țugulschi, Ion Ropot, Dorin Dragutanu, Ion Sturzu and Emma Tabirta. From the money placed in the BEM by Victoriabank, Social Bank and Unibank, fraudulent loans were immediately given to companies affiliated with Ilan Sor. To repay these loans, the group of companies took out other loans from Social Bank, which allegedly offered these loans without having the necessary resources, i.e., based on false registrations, including with the involvement of the Latvian bank “Privatbank”, the indictment states. At the same time, these operations were carried out with the involvement of NBM, prosecutors allege. Debts to the Social Bank of the companies in the Sor group were subsequently assigned to the “Fortuna United LP”, also affiliated to the criminal organisation, as stated in the indictment, the total amount of the transfer constituting 13.4 billion lei.

    The establishment of special administration at BEM and the immediate return of “debts”. Immediately thereafter, on 27 November 2014, special administration was instituted at BEM by decision of the NBM Executive Board. The next day, on 28 November 2014, “members of the criminal organization and persons acting in their interests, carried out one of the last stages of the criminal plan, by returning to Victoriabank, Moldova Agroindbank and Moldindconbank the borrowed money”, according to the indictment. Thus, on 28 November, BEM requested and the NBM accepted to grant the emergency loan in the value of 5,273 billion lei to repay these debts. The contract was signed between Dorin Dragutanu and Ion Ropot, who had been appointed special administrator at BEM. From this money, BEM returned to Victoriabank the amounts of 105 million euro, 12.4 million US dollars and 90 million lei, accumulated as debts incurred before the establishment of the special administration at BEM. Of this money, 48.4 million euro and 2.4 million US dollars would have gone to companies controlled by the “criminal organisation” – “Zenit Management LP” and “Terios Systems Holding LTD”, according to the indictment. From the same emergency loan, BEM returned the debts of Plahotniuc-controlled “Insidown LTD” to Moldova Agroindbank in the amount of 8 million euro and to Moldindconbank in the amount of 10 million euro. These sums were previously used to purchase 38.2% of Victoriabank shares from Veaceslav Platon, through the company “Insidown LTD”. “In this way, the members of the criminal association, being assisted in their criminal activity, including by Dorin Dragutanu, Ion Sturzu, Emma Tabirta, Viorel Birca, Dumitru Tugulschi, Ion Ropot, Natalia Rahuba, Denis Ulanov, Victor Andronachi, Natalia Politov-Cangaș, Corneliu Ghimpu and the legal person CB “Victoriabank” SC, have obtained, used and integrated fraudulently obtained financial means in order to increase their property both on territory of the Republic of Moldova and abroad, and the burden of financial responsibility has fallen on the national public budget”, concludes the indictment in the case of Dorin Dragutanu and Ion Sturzu.

    Dragutanu: “Did you understand something? Neither did the prosecutors ”. ZdG attended the court hearing of 21 September when the indictment against the defendants was read. Before the hearing, Dorin Dragutanu did not wish to make a statement, but afterwards, he said that he did not understand the prosecutors’ accusations.

    ZdG: How do you respond to the charges? You are accused of favouring a criminal organisation.

    Dorin Dragutanu: No comments here. You listened to prosecutors for two hours today. Did you understand anything? The prosecutors didn’t understand either. Goodbye.

    ZdG: Did you or did you not favour the criminal organisation?

    Dorin Dragutanu: That’s too early to talk. The court will have to decide.

    Former deputy governor of the NBM, Ion Sturzu, did not wish to answer the question whether he was guilty or not, saying that he would comment “in due time”. Vitalie Nagacevschi, who is Ion Ropot’s lawyer in this trial, told ZdG that he did not represent the company “Insidown LTD” by power of attorney: “There is a power of attorney document, but I was not the representative, because the power of attorney was a unilateral act and was made without me having been informed that there was such a power of attorney. Neither I did know.”



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