Economy

Kroll 2 report: Summary and Reactions

Published

3 years ago

December 29, 2017

On 21 December 2017, the National Bank of Moldova published the summary of the investigation report made by Kroll and Steptoe&Johnson. The report, otherwise called “2nd Kroll report”, completes the 1st Kroll report on the loan exposure of the Three Moldovan banks (BEM, BS, Unibank) that were defrauded in 2012-2014.

The 2nd Report comes with a more detailed scheme of how the leading “Shor group” defrauded Banca de Economii, Banca Socială, and Unibank by directly participating in the administrative councils of these banks and by falsifying reports on bank liquidities. Moreover, Kroll revealed several laundering mechanisms that were used to channel the funds from the three banks to the destination accounts. Even if it mentions the name of Ilan Shor as one of the facilitators and beneficiaries of the banking frauds, the summary does not provide any other names in order not to impede the ongoing investigation and prosecution in some cases.

What 2nd Kroll report says

Control over the Moldovan banks, and not only the Three failed ones, was constantly the aim of several interest groups. Several shareholders took advantage of the poor evaluation of banks’ shares and some could acquire small portions of shares through proxies. In the case of the Three Banks, the so-called “Shor group” could take control by buying shares on the behalf of off-shore companies, thus hiding the origin of the funds;
The administration councils at the Three Moldovan Banks were acting in coordination, involving conflicts of interests and integrity lack in the bank governance process. At Banca de Economii, where the Moldovan Government was the main shareholder, the Government delegates were periodically not invited to the meeting of the administration council;
What Kroll continues to say in its 2nd report is that Ilan Shor and around 77 companies in his entourage are known to be the beneficiaries of the fraudulent loans given between 2011 and 2012:
Source: bnm.md
The liquidity level at the Three Banks was maintained at acceptable levels with the help of resources coming from pensions and social security funds operated by the respective banks, with the help of loans given by the National Bank guaranteed by the Moldovan Government, but also with the help of fake deposits in Russian banks;
The summary shows that most of the defrauded funds were channeled through Latvian banks (otherwise called “Core Laundering Mechanism”) for mostly British off-shore companies.
Source: bnm.md/ Kroll

The Core Laundering Mechanism based in Latvia was either used for paying the loans back or to send the funds in different bank accounts in multiple jurisdictions such as Cyprus, China, Russia, Switzerland, USA or Hong Kong. Some banks in Moldova and Estonia were also used to launder money and disguise their origin.

Source: bnm.md/ Kroll;

Since some of the loans, worth approximately 2 billion USD, were channeled back to the origin banks to create a good credit score, the net loss of the Three Banks between 2012 and 26 November 2014 is estimated at 600 million USD;

Source: bnm.md/ Kroll

So far, the traces of only 50 million USD out of the total sum could be totally discovered;
Kroll and Steptoe&Johnson are planning to present a more detailed investigation in 2018 in Moldova;

Reactions

According to Expert-Grup, the 2nd Kroll report did not fully explain the role of the state guarantees issued in November 2014, but also the actions conducted by the Moldovan Government regarding the reimbursement for the clients of the Three Moldovan Banks. Moreover, multiple NGOs called on the Moldovan Government to abandon the initiative to decriminalize several economic crimes, including banking frauds, an action would impede the prosecution of those involved in the “Moldovan Grand Theft” and encourage new frauds in the area;
Ilan Shor, the main figure in the “Grand Theft”, announced that his lawyers filed in court against Kroll for defamation, conspiracy to injure by unlawful means and wrongful interference with his economic interests. According to Shor, the reports issued by Kroll do not reveal the real beneficiaries of the frauds;
Pavel Filip, Prime-Minister of Moldova: “If we had to publish all the names that are found in this report, I assure that 90% of the names are absolutely honest people, but that were simply part of this circle. These names cannot be made public”, claimed Moldova’s PM, promising that all the responsible persons would be prosecuted;
Maia Sandu, PAS leader, ex-Minister of Education in 2014, did not seem surprised that Kroll pointed out to Shor’s primary role in the banking frauds, but rather asked his case is slowed down by the Prosecution’s Office. Her party organized a flashmob asking for the restart of Shor’s case. In addition, Sandu stated that current Parliament speaker, Andrian Candu, was the main promoter of the state guarantees for the loans of the National Bank to the failing banks;
Andrian Candu, speaker of the Parliament and Economy Minister in 2014, is waiting for the Kroll experts to come in January 2018 in Moldova to coordinate the investigation of the banking frauds;
Iurie Leancă, PM in 2014, now appointed Deputy PM, says that he is the most interested in the results of the Kroll investigation, but rejects claims his Government rushed into offering the huge guarantees for BNM loans.

The reaction of the Moldovan people to this 2nd Kroll report is that of confusion: nothing much new was revealed and the main figure of the “Grand Theft” is only under judiciary control in a delayed case.

Justice

The Office of the Prosecutor General requested the seizure of Vladimir Plahotniuc’s property from abroad

Published

3 days ago

October 12, 2020

Maria Dulgher

The real estate and other properties belonging to Vladimir Plahotniuc located in Romania, France and Switzerland, which are estimated at over 160 million lei, are about to be seized by the authorities of the respective countries, as the Office of the Prosecutor General (OPG) of the Republic of Moldova announced today. “Following the information presented by the Security and Intelligence Service (SIS) and by the Asset Recovery Agency, the Prosecutor’s Office obtained conclusive evidence showing that Vladimir Plahotniuc is the actual beneficiary of assets estimated at over 160 million lei,” the Security and Intelligence Service (SIS) added.

Plahotniuc’s villas from Switzerland, France and Romania, 5 cars and a boat registered in Switzerland, 9 apartments that are officially the propriety of his wife, as well as 4 cars registered in the Republic of Moldova are to be seized. “The beneficial owner of the properties is the accused, even though they are all registered in the name of third parties,” is also mentioned in the institution note.

According to the findings, the assets resulted from the money that was illegally withdrawn from the banking system of Moldova. Therefore, “in order to ensure the recovery of the caused damage, prosecutors insisted on seizing his properties in the country and abroad,” the OPG also announced.

At the end of May, the Chisinau Court ordered the seizure of 10 buildings belonging to Vladimir Plahotniuc – namely 6 apartments and 4 non-residential rooms located in the Republic of Moldova that were estimated at about 33 million lei.

“All the properties of Vladimir Plahotniuc that are on the territory of the Republic of Moldova have already been seized.”

The authorities from the Republic of Moldova claimed that the translated set of documents have been sent to the authorities in France, Switzerland and Romania to be executed.

In Plahotniuc’s case, an arrest warrant was issued on May 22, 2020, the former Moldovan politician being accused of scam, money laundering, as well as organising and leading criminal organisations, for which the law provides up to 15 years in prison.

Photo: NewsIN

Politics

The last time Igor Dodon met Vladimir Plahotniuc or the ghosts of the past that show up before elections

Published

5 days ago

October 10, 2020

Maria Dulgher

At the end of August, the current president of the Republic of Moldova and the candidate in the presidential elections, Igor Dodon, announced his visit to the Athonite monasteries to “pray for people, for a Moldova that lives in peace and unity,” as he stated on social media, despite all the restrictions related to the coronavirus pandemic.

Igor Dodon during his trip to the Athonite monasteries in August 2020| Source: Romfea.gr

Still, according to a recent investigation of Ziarul National, the real purpose of Dodon’s visit to Greece was the meeting with Vladimir Plahotniuc, a former political leader from the Republic of Moldova who has been declared internationally wanted on October 28, 2019.

“While Dodon was heading to Bucharest to reach Thessaloniki, Vladimir Plahotniuc packed his bags and left the United States. He returned to Europe, including Thessaloniki,” as it is mentioned in the investigation. Plahotniuc and Dodon’s arrival in Thessaloniki in the same period of time wasn’t considered a coincidence by journalists, a set of confirmatory documents being presented. The investigation showed that Plahotniuc arrived in Berlin first, then he had a flight to Nice, where he saw his family, and from there he flew to Greece.

The meeting would have taken place at Pomegranate Hotel in Halkidiki on August 30, that hotel being the propriety of Artiom Ceaika, the son of the former Prosecutor General of the Russian Federation.

Moreover, according to the same investigation, Igor Dodon arrived at the hotel on a yacht that belonged to one of Plahotniuc’s business partners – the Bulgarian citizen Vasil Bozhkov who was hiding from the Bulgarian justice in Dubai. The Bulgarian judiciary issued an arrest warrant in his name, just like the Moldovan judiciary did in the case of Vladimir Plahotniuc.

In Plahotniuc’s case, the arrest warrant was issued on May 22, 2020, the former Moldovan politician being accused of scam, money laundering, as well as organising and leading criminal organisations, for which the law provides up to 15 years in prison.

Igor Dodon denied that the meeting with Plahotniuc in Greece happened: “I had the last meeting with Mr. Plahotniuc on June 7, 2019. I very much hope that the next meeting, if it takes place, will be in one of the penitentiaries of the Republic of Moldova,” Igor Dodon declared for Ziarul National.

“These are aberrations thrown by electoral opponents. Those who published this forgery will be prosecuted,” said president’s spokesperson, Ludmila Muntean for ZdG.

Plahotniuc’s travel itinerary

In March 2020, the US Embassy in Moldova confirmed that Vladimir Plahotniuc was on the US territory. On August 28, Plahotniuc left the US. “The US Embassy in Moldova confirms that Vladimir Plahotniuc voluntarily left the United States on August 28, 2020. […]Due to his involvement in significant acts of corruption, Mr. Plahotniuc is not eligible for entering the United States,” stated the institution for Jurnal TV.

After the meeting with Dodon, Plahotniuc supposedly took the same private jet to Otopeni Airport in Bucharest, where he was seen at the beginning of September.

Still, on September 30 only, the Ministry of Internal Affairs of the Republic of Moldova published a communiqué, officially announcing that Plahotniuc crossed the border of Romania and Turkey between September 7-10, 2020. “The Interpol office in Chisinau has sent an official request and we are currently waiting for a response from the competent institutions in Turkey, to let us know if Vlad Plahotniuc has not left this country,” is mentioned in the communiqué.

One day before that, the Office of the Prosecutor General (OPG) announced that a request was sent to the competent authorities of Turkey to extradite the former democrat leader in order to be held accountable in the Republic of Moldova. The OPG mentioned that Plahotniuc entered Turkey on September 10 remaining in the same country until that moment.

Here it becomes quite clear that the communication between the Moldovan institutions is not very efficient in this regard.

The journalists from Jurnal TV declared that Vladimir Plahotniuc also met several politicians while staying in Turkey, including former President of the Parliament, Andrian Candu, and former Prime Minister, Vladimir Filat. The latter was sentenced to nine years of imprisonment on October 15th, 2015, being found guilty of passive corruption and influence peddling. He was released from detention in December 2019.

At the same time, the same source claimed that Plahotniuc has visited the United Arab Emirates at the beginning of September in order to manage his offshore bank accounts. There, he supposedly met with Vasil Bozhkov, as he tried to obtain asylum in UAE.

“Plahotniuc would try to obtain asylum in the United Arab Emirates because, in Turkey, it would be much more difficult. Turkey has an extradition treaty with the Republic of Moldova. Plahotniuc also has problems with the law related to money laundering in the Emirates. If he does not solve them, he has no chance to stay there.”

Today, nobody can say for sure where Vladimir Plahotniuc is, whether it’s Turkey, the UAE or any other country. Today, Vladimir Plahotniuc – the most famous oligarch in the history of Moldova – is still free and has no other care than where to hide his stolen money. No matter how much effort authorities say they make to held Plahotniuc accountable and how politicians swear they don’t meet him, nobody has any reason to believe them.

Photo: agora.md

Elections

Transnistrian residents will vote in Moldova’s presidential elections

Published

2 weeks ago

October 2, 2020

Maria Dulgher

On November 1, Transnistrian residents will be able to leave the region in order to vote in the presidential elections of the Republic of Moldova. The decision was taken by the Transnistrian Commission for the Management of the COVID-19 Pandemic. “The decision was made at citizens’ request. The Transnistrian side held consultations with the Moldovan side and requested to ensure all quarantine measures at the polling stations located near the border,” as the Transnistrian media reported.

Previously, the Transnistrian leader, Vadim Krasnoselski, proposed the quarantine regime extension for crossing the so-called border until December 1, 2020. Transnistrian authorities claimed that movement restrictions were imposed due to the COVID-19 pandemic. A document in this regard was published by the Tiraspol management administration.

Currently, Transnistrian residents are not allowed to leave or enter the region without a special permit issued by the separatist authorities.

On September 29, the Central Electoral Commission of the Republic of Moldova (CEC) informed that a total of 2143 polling stations will be organised for presidential elections, out of which 139 polling stations for citizens of the Republic of Moldova living abroad and 42 polling stations for citizens living in Transnistria.

The pre-registration process for the establishment of polling stations abroad and for the voters on the left bank of the Dniester was identified as being a possible source of electoral fraud. Opposition party leaders have issued warnings regarding that, as controlled transport of voters from the region was organised in the 2019 parliamentary elections.

The European officials are also aware of falsified pre-registration applications for establishing polling stations in the Russian Federation and the probable vote-buying schemes that involve Transnistrian residents, calling for the CEC to abide by the rules and ensure a free and fair election campaign for all candidates. “Any manipulation or deviation from democratic standards will result in a strong condemnation and a revision of the EU-Moldova relations,” is mentioned in the MEPs note.

Photo: unimedia.info

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