Investigation of bank fraud: actions, perceptions, reasonable timeframes. IPN debate

The bank fraud remains topical, at least until the persons involved in it are punished and at least a part of the money is recovered. It also remains topical because, alongside other events of the country’s contemporary history, it characterizes the Moldovans as a society and as a state both inside and outside the borders. It was recently a year since the authorities declared their intention to review the approach in the investigation to the bank fraud that until then lasted for five years, without practical or even fully erroneous results. A year ago, there was set up the parliamentary commission of inquiry into the robbing of the baking system that carried out particular activities and presented a particular repot. It was a year since the new plans, but the perception and experience tell us that we should be further attentive to what is going on in this case. The aspects were discussed in a public debate titled “Investigation of bank fraud: actions, perceptions, reasonable timeframes” that was staged by IPN News Agency.

The project’s standing expert Igor Boțan said that this year it has been nine years since we witnessed the raider attack on the banking system in the summer of 2011 and those developments culminated in 2014. “In November 2014, there were held ordinary parliamentary elections and wired things happened in the summer of 2014. The Government for two times assumed responsibility and the last assumption of responsibility in September enabled the Government to offer guarantees to banks without the Parliament’s involvement. The election campaign started then and, while public attention was aimed at the elections, the bank fraud was committed based on normative documents adopted by the assumption of responsibility. In several weeks after the elections, public opinion was informed that the equivalent of US$ 1 billion at that time was stolen from the national banking system. That stealing of money from the banking system is called bank fraud,” stated the expert.

“Later, all those who had savings in Moldovan lei were defrauded of 30-40% of their savings in the banking system. The metaphor “theft of the billion” derived from here. Everyone feels the consequences of that fraud and realize why the bank fraud affects the people. The metaphor “theft of the century” was related to its size in relation to Moldova’s GDP, which was of 12%. The theft related to the GDP makes a “champion” of the Republic of Moldova compared with other countries.”

Igor Boțan related that a protest movement appeared later and under the pressure of this, the Parliament sitting of May 7, 2015 debated the problems related to the bank fraud. “That sitting involved the National Bank governor, the prosecutor general, the director of NAC and the vice director of the SIS. The citizens heard from people responsible for ensuring the observance of order in Moldova’s financial sector details of the way in which the bank fraud was committed. What impressed was the statement that the authorities and representatives of those institutions knew everything and informed the country’s senior administration, but it was surprising that they could not say why they didn’t intervene if they knew everything. We had to invent the answer ourselves. The law enforcement and regulatory agencies had managers who had been named according to political criteria and who served the interests of political leaders,” he stated. A proof of this was the meeting held at the State Residence of the then President Nicolae Timofti in November 2014, which involved two party leaders without public posts – the then vice president of the Democratic Party Vlad Plahotniuc and Vlad Filat, who since 2013 had held no public position. In that meeting, it was decided that the offering of state guarantees – the transfer of money from the National Bank to the banks of the Shor group – was the best solution.

The project’s standing expert noted that among the players involved in the bank fraud are the Shor group, the National Bank, the Prosecutor General’s Office, the National Anticorruption Center, the Security and Intelligence Service, the Presidential Office and a series of financial institutions. Igor Boțan considers it is import for society that the law enforcement agencies, after all the reasonable timeframes expired, should investigate the fraud so as to identify those to blame and hold them accountable.

MP of the Party “Dignity and Truth Platform” Alexandru Slusari, chairman of the parliamentary commission of inquiry into the robbing of the banking system, said the Civic Platform DA and later the political party appeared mainly because the banking system was robbed. What happened in the baking system was a maximum level of degradation of the political class.

He noted the commission reached the conclusion that not all the actions formed part of the bank fraud of 2014. There was a premeditated, well-through-out scheme implemented in a number of stages. The first stage occurred at the end of 2011-2012, when a raider attack was staged and “the Plahotniuc-Platon grouping” tried to enter Moldova-Agroindbank, Victoriabank, ASITO and Banca de Economii (BEM) through hostile takeover of shares. In some of the cases, the Europeans intervened and that attack was annihilated. “At BEM, this didn’t happen yet. There, through different hidden transactions, US$5 million was transferred to Switzerland bypassing all the jurisdictions and the State Tax Service. Another US$75 million was transferred by a number of carousel schemes, through loans raised from Moldinconbank and Victoriabank, by violating the prudence norms. All the sums were withdrawn through fictitious transactions or money laundering and tax evasion schemes. The goal was to enable Veaceslav Platon to gain control over Banca de Economii. He, through different schemes, consolidated almost 40% of the shares of the BEM. Also in 2012, he tried to take the BEM under control. After Veaceslav Platon realized that he cannot gain control by such a method, he gave up,” said Alexandru Slusari.

He also said that the second stage started in 2013, when Veaceslav Platon’s shares were sold to Ilan Shor. “There is not much information about this, but it is alleged that Vladimir Plahotniuc was behind Ilan Shor when the shares were taken over from Veaceslav Platon. Then, the state was dispossessed of controlling interest. There was then created the commission of inquiry into the BEM led by MP Oleg Reidman, which played a decisive and underestimated role. The report presented by the commission in Parliament wasn’t approved, but only taken note of. In two months, the state lost the controlling interest and the shares were redistributed to four companies that were formally controlled by Ilan Sor,” stated the MP.

The third stage was implemented in 2014, when money from the BEM and two more banks that in 2013-2014 were joined to the BEM was systematically and consistently withdrawn in the form of nonperforming loans, deposits at low-rating Russian banks, etc. “It was clear that the system was being robbed before the eyes of the National Bank, the SIS, the NAC and other state bodies. The Leancă Government later assumed responsibility and state guarantees of 9.5 billion lei were provided initially, without introducing central administration at the three banks, in breach of the law, without declaring a financial crisis,” said Alexandru Slusari, noting that over 25 billion lei was stolen, but the exact amount is not known as the theft went on.

Socialist MP Adrian Lebedinschi, a member of the commission of inquiry, said that he formed part of different commissions of inquiry into the bank fraud and can say that the law enfacement agencies until 2019-2020 intentionally didn’t do their job. “Immediately after commissions were set up to investigate the circumstances of the theft, the Prosecutor’s Office, instead of proving and identifying, hid all traces. If we talk to the prosecutors who are examining this case now, they will tell that more than 50% of the initial evidence was destroyed, regrettably,” he stated.

According to Adrian Lebedinschi, it is hard to identify all the involved persons, but seeing the intention of incumbent Prosecutor General Alexandr Stoianoglo, he believes that particular palpable results will be achieved in the nearest future.

“It is important to manage to recover at least a part of the stolen money as we are told that the money was returned to the state budget in 2017-2019, but that wasn’t the stolen funds, but proceeds from the sale of assets of the banks. A part of those assets were sold at much lower prices than their real value. There are cases when employees of the three banks, by different schemes, using the legal system, managed to free a part of the enterprises from security. The courts of law later annulled the decisions, but the security no longer existed,” stated the MP, noting the damage was estimated at about 25 billion lei.

According to him, even the Kroll Company played another role than the declared one. “The Kroll Report could serve as evidence in a trial only if it is subject to an accounting examination within the Moldovan judicial system. There are ex-colleges from the law enforcement system who wanted then to prove the truth, but their superiors prevented them,” he said

The debate “Investigation of bank fraud: actions, perceptions, reasonable timeframes” was the 143th installment of the series “Developing political culture through public debates” that is supported by the Hanns Seidel Foundation.

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