Since its formation in June, Moldova’s coalition Government has represented an unlikely union between pro-E.U. and pro-Russian parties. But with an anti-oligarch stance holding the alliance together, the Government under Prime Minister Maia Sandu has been determined to crackdown on corruption – and the recovery of the billion in funds stolen during a 2014 bank fraud scheme has now become its top priority for Europe’s poorest country. 

A turning point in the investigation appeared on October 11, 2019, when a Chișinău court issued an arrest warrant for one of the main beneficiaries of the scam: the country’s richest oligarch and former Democratic Party (PDM) leader, Vlad Plahotniuc. But now that he’s facing large-scale money laundering charges, he has all the more reason to remain in hiding abroad. 

The 2014 loan scheme gutted the country’s banking system, robbing Moldova of 12 percent of its GDP and leaving taxpayers to foot the bill. And Plahotniuc isn’t the only high-profile individual incriminated in the case. According to independent American investigative company, Kroll, businessman and politician Ilan Shor and former Moldovan Prime Minister Vlad Filat are both involved as well.

Although Filat has been in prison on charges connected to the “theft of the century” since 2016, Shor, like Plahotniuc, managed to flee the country. And while there have been some previous attempts to go after the perpetrators’ holdings, delays in the investigation have given them plenty of time to clean up their assets. 

• Justice in the Post-Kroll Era. Case Study: Vlad Plahotniuc and Ilan Shor

While the new Parliament set up a Commission of Inquiry to investigate the bank fraud in June, few criminal cases have been opened until now. And with the main beneficiaries of the scam in hiding abroad, the country has been forced to go after smaller players. 

Ziarul de Gardă breaks down Moldova’s investigation into the “theft of the century.” 

Backstory

In January 2015, the Moldovan Government hired the Kroll company to carry out an independent investigation into a large-scale banking scheme. The company filed its first report in May of that year, and the Moldovan Parliamentary Speaker Adrian Candu leaked it to the press. 

The Kroll Report revealed to the public that from November 24 to 26, 2014, approximately $1 billion was stolen through three Moldovan banks. Banca de Economii (BEM), Banca Socială and Unibank were accused of illegally transferring massive sums to companies connected to Moldovan businessman Ilan Shor, through fraudulent loans made out to companies within the Shor Group.

Around the same time, investigative journalists from the Organized Crime and Corruption Reporting Project and Rise Moldova uncovered that Shor’s companies were also linked to the largest money laundering case in Eastern Europe’s history: the so-called “Russian Laundromat.” Running parallel to the “theft of the century,” this scheme saw a fourth Moldovan bank, Moldindconbank, use similar methods to route $20.8 billion in Russian money through its accounts to countries overseas. 

To compensate for the stolen funds, Moldova’s government issued a $900 million bailout for the three banks involved, made up of two emergency credits taken from the National Bank’s reserves.

• Reading the Kroll 2 Report
• DOC / Latest update: The Kroll 2 report is published

The Kroll Company issued a second report to Moldova’s government in March 2018, but the Democratic Party (PDM) Government – under the leadership of Vlad Plahotniuc – kept the document secret because of who was implicated in the fraud. The report was not made public until July 4, 2019, weeks after the ouster of the PDM Government and the establishment of the new governing coalition.

The Kroll-2 Report exposed 77 Shor Group companies that had benefited from fraudulent loans and implicated Plahotniuc and ex-Prime Minister Vlad Filat, linking them and Shor to $25 million each, either directly or through their companies and affiliates. 

According to Alexandru Slusari, the chairman of the Parliament’s Commission of Inquiry charged with investigating the bank fraud, he received a partial list of people named in the Kroll-2 Report on September 20, 2019. The document confirmed the main beneficiaries of the bank fraud, as well as several less well-known individuals.

• Who Are the Main Beneficiaries of the Stolen Billion?

“The document states that Vlad Plahotniuc and his companies are the main beneficiaries of the theft. Vlad Filat’s group comes up next. There is also mention of the amounts they benefited from. The names of Ilan Shor, Ilona Shor, Marina Tauber, Reghina Apostolova, Vadim Fotescu, and Gabriel Stati are also reported on the list. Furthermore, companies affiliated with Plahotniuc appear in the document. Olga Bondarciuc’s name is featured repeatedly, with links to both Plahotniuc and Shor,” Slusari reported.

Although the fraud was initially thought to have just involved the stolen billion dollars, Kroll-2 reported that the banks had given out a total of $2.9  billion in fraudulent loans.

Going After Plahotniuc

With Plahotniuc’s PDM Government on the outs and Shor’s companies deeply embedded in the fraud scheme, both men fled the country. Meanwhile, Filat was already behind bars.  He was found guilty of “passive corruption” and “influence peddling” in June 2016 and sentenced to nine years in prison.

In June 2017, Shor received seven years and six months imprisonment for fraud and money laundering but the sentence didn’t enter into force until July 16, 2019. Meanwhile, Shor had already fled the country illegally – reportedly bypassing border controls at Chișinău International Airport sometime between June 14 and 17. 

• POLL / Shor Fled Moldova. Who Helped Him?

While the Moldovan authorities were able to work with existing criminal cases against Vlad Filat and Ilan Shor, going after the country’s biggest oligarch was a different story. Like Shor, Plahotniuc fled the country after the PDM Government fell, sparking speculation about where he was hiding abroad.

However, the latest court decision reveals some details about how exactly the fugitive oligarch could be implicated in the case. On October 11, 2019, a Chișinău court issued a 30-day arrest warrant for Plahotniuc and the oigarch’s lawyer, Vladislav Roșca, confirmed that he is now wanted for large-scale money laundering. 

• Moldova Announces National Search For Fugitive Oligarch, Plahotniuc

“According to the case files, from 2013 to 2015 citizen Vladimir Plahotniuc established a criminal scheme for conversion, transfer, acquisition, possession and use of certain goods that he definitely knew constitute illegal income,” the Anticorruption Prosecutor’s Office noted. 

To hide the illegal nature of these transactions, Plahotniuc allegedly created a number of domestic and foreign companies through intermediaries, which allowed him to circulate and thus launder vast sums of money. This reportedly includes up to $18 million and €3.5 million.

The case materials allegedly show that Plahotniuc knew these sums were obtained through illicit loans from Banca de Economii (BEM), Banca Sociala and Unibank.

Two other people were implicated in the case, one of whom – a less well known accomplice by the name of Victor Gammer –  was detained for 30 days on October 10, 2019.

Theft’s Roots Run Deep Into Political Elite

On September 16, 2019, Moldova’s Parliament voted in favour of lifting the immunity of Shor Party deputies Marina Tauber and Reghina Apostolova, whose names also appeared as beneficiaries of the bank fraud in the Kroll Report.

“There is evidence that, since August 17, 2012 deputies Marina Tauber and Reghina Apostolova have been actively involved in the devaluation of the bank. Marina Tauber, being a shareholder at Unibank, created favorable conditions for Ilan Shor to be able to devalue the bank. Thus, the two deputies participated actively in the bank fraud,” said the interim Prosecutor General Dumitru Robu during the Parliamentary plenary.

• Criminal Cases of Public Interest during the Government’s First 100 Days
• National Anticorruption Center Carries Out Searches in the Bank Fraud Case

Between September 16 and 17, Moldova’s Anticorruption Prosecutor’s Office and National Anticorruption Center carried out 21 searches in relation to the bank fraud case. The searches targeted the homes and offices of several individuals involved in the criminal case, including Tauber and Apostolova, who were detained. 

According to the Anticorruption Prosecutor’s Office, the authorities also searched the home of Vladimir Novosadiuc – the Moldova Director of the Russian news portal Sputnik. 

Both he and his partner, Rita Țvic, were listed among the beneficiaries of the banking scheme in the Kroll Report, as shareholders at Unibank, who borrowed over 600,000 euros from the off-shore company Harrogate Consulting LLP. 

The ongoing investigation has also revealed ties between a company benefiting from fraudulent BEM loans and Alexei Greceanîi – who is married to the President of Moldova’s Parliament, Zinaida Greceanîi. Accusations regarding the Greceanîi family’s involvement in the fraud have been circulating for years, but re-emerged after Zinaida Greceanîi became the country’s Parliamentary President in June 2019. 

• Family Members of Moldova’s Head of Parliament Affiliated with Companies Investigated in the Billion Case

The company in question, Alsvit-Vin (formerly Alsvit-Print), took out a €2 million loan from BEM on March 4, 2011, but according to the Kroll reports, this loan was never repaid. 

Greceanîi’s husband became involved in managing the company for a three month period from April to July 2011, but according to the Anticorruption Center was not involved in the contracting the loan. 

“At this stage of the investigations Alexei Greceanîii’s involvement in contracting the loan of around €2 million (39.3 million lei) from Banca de Economii has not been established,” Moldova’s National Anticorruption Center told Ziarul de Gardă. 

The Commission of Inquiry’s full investigative report on fraud in the Moldovan banking system is set to be released on October 15, 2019. According to Slusari, this will allow the members of the Commission to request the declassification of all materials related to the case of the stolen billion.

/Adapted by Eilish Hart, using materials from Ziarul de Gardă. Courtesy of the Russian Language News Exchange.