{"id":1837,"date":"2019-10-23T18:01:04","date_gmt":"2019-10-23T16:01:04","guid":{"rendered":"http:\/\/zdg.md\/eng\/?p=1837"},"modified":"2019-10-23T18:01:06","modified_gmt":"2019-10-23T16:01:06","slug":"politicians-and-state-dignitaries-involved-in-billion-dollar-bank-fraud-commission-reports-2","status":"publish","type":"post","link":"https:\/\/www.zdg.md\/en\/politicians-and-state-dignitaries-involved-in-billion-dollar-bank-fraud-commission-reports-2\/","title":{"rendered":"Politicians and State Dignitaries Involved in Billion-Dollar Bank Fraud, Commission Reports"},"content":{"rendered":"\n

This week, Moldova\u2019s Parliamentary Commission of Inquiry debated their report on the investigation into the billion-dollar bank fraud of 2014 in Parliament. The deputies recommended that the President of the Parliament dismiss two deputy governors of the National Bank in connection with the fraud, and that the Anti-Corruption Prosecutor’s Office examine the criminal actions of the leadership of the Leanc\u0103 Government  and the National Bank at that time.<\/strong><\/p>\n\n\n\n

On October 17, the Parliamentary Commission of Inquiry made public its report explaining the circumstances of the devaluation of the banking system in Moldova and the investigation into the billion-dollar bank fraud known as the \u201ctheft of the century.\u201d <\/p>\n\n\n\n

Although the theft of the billion started in 2012, the scheme was not revealed until 2014 when three Moldovan banks, Banca Social\u0103, Banca de Economii (BEM) and Unibank went bankrupt after issuing enormous sums to companies from the Shor Group through non-performing loans. These companies, linked to Moldovan businessman and politician Ilan Shor, became the beneficiaries of around $2.9 billion in fraudulent loans. <\/p>\n\n\n\n

The bank fraud became infamous as the \u201cstolen billion\u201d that robbed Moldova of just over 12 percent of its GDP, leading to a deterioration in the financial and economic sectors. The Moldovan Leu saw a 42 percent depreciation in the five months that followed the bank fraud, and the country experienced higher inflation. What\u2019s more, when the banks involved went under, the Moldovan Government offered two bailouts totalling $900 million, which were transformed into internal debt to cover up the fraud and left taxpayers to foot the bill \u2013 with interest. <\/p>\n\n\n\n

According to the Commission\u2019s report, the process of devaluing the banking system was an operation carried out in three stages, which was “well prepared over time and coordinated with politicians and state dignitaries.\u201d<\/p>\n\n\n\n

ZdG breaks down the Commission of Inquiry\u2019s report, starting from the 2011 \u201craider attacks\u201d that allowed for the illegal takeover of a key Moldovan bank and ending with the government bail-outs that the country\u2019s citizens are still paying for.<\/p>\n\n\n\n

Phase 1. Raider attacks <\/strong><\/p>\n\n\n\n

As early as 2011, Moldova\u2019s future top oligarch Vlad Plahotniuc and influential businessman and former parliamentary deputy Veaceslav Platon already had plans for the takeover of one of Moldova\u2019s main assets: the then state owned Banca de Economii (BEM). And according to the Parliamentary Commission of Inquiry, public institutions such as the National Bank of Moldova (BNM), the National Commission on the Financial Market, and the courts colluded to aid these private efforts.<\/p>\n\n\n\n

The Inquiry Commission\u2019s report starts with the 2011 \u201craider attacks\u201d (illegal takeovers often facilitated by corrupt court decisions), which resulted in Rietel Limited \u2013 an offshore company that the National Anti-Corruption Center claims is linked to Plahotniuc \u2013 illegally taking over 18.5 percent of BEM shares through alleged loans. Combined with the shares belonging to another Plahotniuc-controlled company, \u201dSisteme Informationale,\u201d he came to control 25 percent of BEM shares. <\/p>\n\n\n\n

Shortly after gaining \u201cillicit ownership\u201d of BEM shares, Plahotniuc sold a package of major financial assets he held in Moldova to Veaceslav Platon. This included shares at Victoriabank and, through a secret transaction, 28 percent of the shares at BEM.<\/p>\n\n\n\n

Other entities subsequently took over these BEM shares, including two companies listed in the \u201cRussian Laundromat<\/a>\u201d scheme. Constituting the biggest money laundering case in Eastern Europe\u2019s history, the \u201cRussian Laundromat\u201d saw between $20 and $80 billion taken from Russia and laundered through countries like Moldova and Latvia.  <\/p>\n\n\n\n

Meanwhile, through various manipulations, Platon came to control over 39 percent of BEM shares. <\/p>\n\n\n\n

While the shares kept moving to other owners, some institutions in the state still put up a resistance to the original \u201craider attacks\u201d and subsequent hand over transactions. This came primarily from the Ministry of Finance, which also represented the interests of the majority BEM shareholder \u2013 the Moldovan state. During this period, the Government still had plans to privatize BEM and thus sell its shares and was consulting on these plans with the International Monetary Fund (IMF) and the World Bank.  <\/p>\n\n\n\n

Phase 2. Shor\u2019s takeover of BEM, Banca Social\u0103 and Unibank<\/strong><\/p>\n\n\n\n

The year 2012 came with a reverse transaction of BEM shares, sold back from Platon linked entities to Plahotniuc, through businessman Ilan Shor. From 2012 to 2013, Shor had been piece-meal taking control of shares at three of Moldova\u2019s banks: Banca de Economii, Unibank and Banca Social\u0103. <\/p>\n\n\n\n

Between November 7, 2012 – June 18, 2013, 39 percent of BEM\u2019s shares, belonging to seven shareholders affiliated with Veaceslav Platon, were transferred to several companies under Shor\u2019s control.<\/p>\n\n\n\n

Then in August 2012, all of Unibank shares were sold to new shareholders affiliated with Shor. According to the Kroll report, the Shor Group companies pre-arranged this transaction, using numerous intermediary accounts to merge and stratify funds in order to conceal their true origins. And the troublesome origin of the funds is credits to companies linked to new shareholders. <\/p>\n\n\n\n

The Prosecutor General\u2019s Office is currently investigating the acquisition of Unibank shares, which includes looking into the possible involvement of members of the current Parliament. <\/p>\n\n\n\n