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

Law enforcement authorities have placed sequesters on the assets of Finpar Invest, a company controlled by oligarch Vladimir Plahotniuc. This took place a year and a half after they got hold of the documents in the Kroll 2 report, which, for the first time, showed that the firms affiliated with Plahotniuc are among the beneficiaries of the 2014 bank fraud. During this period, Plahotniuc alienated some of the most luxurious properties owned by his companies on the territory of the Republic of Moldova and liquidated another company listed in the appendices of Kroll 2. As for businessman and politician Ilan Shor, law enforcement authorities placed sequesters on the affiliated companies of the former mayor of Orhei, only after he succeeded in alienating them.

December 20, 2017: The National Bank of Moldova (BNM) receives from the Kroll and Steptoe & Johnson companies the second report investigating the bank fraud at Banca de Economii, Banca Sociala and Unibank. The same day, the institution receives a cover letter informing them that in January 2018, Kroll will make available to prosecutors a confidential set of bank fraud documents. The companies say that data will only be made available to investigators because their publication or wider circulation would harm the process of recovering defrauded funds. The next day, BNM publishes a summary of the report known as Kroll 2.

March 22, 2018: The Anti-Corruption Prosecutor’s Office (PA) receives all the documents related to the Kroll 2 report from BNM, and Viorel Morari, then the Chief Prosecutor of the PA, signs a confidentiality agreement assuming the non-disclosure of data and information contained in the documents. Prosecutors have not announced any public actions targeting the bank fraud since they received the papers. The Kroll 2 report has not been made public yet.

Plahotniuc liquidates “Prime Management”

April 6, 2018: About two weeks later, the liquidation procedure of Prime Management company began. At the time, 90 percent of the share capital belonged to Vladimir Plahotniuc and 10 percent to his godson Andrian Candu, then President of the Parliament. The company managed Plahotniuc’s family businesses and at the time of the delisting procedure, had a share capital of 46.5 million lei (approximately $2.65 million). 

June 13, 2018: The Anti-Corruption Prosecutor’s Office publishes the “Strategy for the recovery of the financial means taken out from Banca de Economii, Banca Sociala and Unibank.” Plahotniuc’ s companies do not appear in the document, whereas politicians and businessmen Vlad Filat, Ilan Shor, Ion Rusu, Veaceslav Platon and Petru Lucinschi appear as the main beneficiaries of the bank fraud.

Finpar Invest sells assets of millions of euros

July 4, 2018: A few months after the Kroll 2 report and bank fraud documents reached the PA, Finpar Invest, one of the oldest companies affiliated with Vladimir Plahotniuc’s family, alienated the Global Business Center on Cantemir blvd., in downtown Chișinău one of the most luxurious buildings in the real estate empire of Plahotniuc’s family. The multi-storey building becomes the property of the Concept Real Imobil firm, founded just one day earlier, presently in the portfolio of an offshore company from Gibraltar. The firm is administered to a Russian citizen, Iulia Rogozhina. 

In April 2019, following a mortgage loan agreement with Victoria Leasing, a company owned by the family of Democratic Party (PDM) deputy Vladimir Andronachi, one of Vladimir Plahotniuc’s close friends, the property is mortgaged for 100 million lei ($5.7 million). Two months later, on June 7, 2019, following a mortgage priority cession agreement, the property is mortgaged through Moldindconbank for 90 million lei ($5.1 million). On the same day, Finpar Invest cedes a villa in the center of Chisinau and a plot of over 10 hectares located on Tudor Vladimirescu street, in downtown Chișinău to the Real Concept Imobil company. After the lots are divided, in November 2018, both become the property of the ExFactor-Grup LLC, one of the most active companies in the real estate market in recent years. 

ZdG previously reported on ExFactor-Grup building a 12-level hotel in the courtyard of the former Râşcanu-Derojinschi mansion in the center of Chisinau. The same company headed by Vladimir Tonu carried out the construction and modernization works at Chisinau International Airport, controlled by Ilan Shor through Avia Invest. Exfactor-Grup was also the company that built the multi-storey car park, as well as the airport’s second runway. 

In May 2018, ExFactor-Grup purchased 23 hectares of ​​land near the US Embassy in Chisinau, previously offered by the Chisinau City Hall to the National Olympic and Sport Committee for free. In September 2018, Vladimir Tonu’s company registered with the Public Services Agency their ownership rights on the Cosmos Hotel, built during the Soviet period. The impressive building of over 18,000 square meters, formerly owned by the National Confederation of Trade Unions, was bought by ExFactor-Grup from Infoton-Com, one of the companies previously controlled by Ilan Shor. Earlier, in June 2017, Finpar Invest ceded the building of the former Guguţă café, as well as the headquarters of his security company Argus-S, and a year earlier sold the Codru Hotel building to Moldova Agroindbank.

October 24, 2018: Prime Management is delisted from the Registry. Meanwhile, Plahotniuc opens businesses in the United Arab Emirates and the Samoa islands, which appear for the first time in his personal net wealth statement for 2018. 

Shor alienates Dufremol and the company that manages duty free businesses

April 9, 2019: Dufremol LLC, a company that belongs to deputy Ilan Shor, changes owners. Ilona Shor, Ilan Shor’s stepmother, is replaced by a Bulgarian businessman Todorov Marko Stefanov unknown to the Bulgarian business circles. Dufremol was a firm mentioned in both Kroll reports. Dufremol employees were the most important donors to the Shor Party in the most recent election campaigns.

April 25, 2019: Vladimir Plahotniuc finalizes the reorganization of his media business companies. The company General Media Group Corp takes over, by absorption, Radio Media Group Corp, the company that owns the radio stations Publika FM and Muz FM.

June 8, 2019: The Parliament of the Republic of Moldova announces the formation of a parliamentary majority between the ACUM bloc and the Socialist Party. For the first time since 2009, the Democratic Party led by Plahotniuc, holds no power in government. Two days later, the Parliament sets up a Committee to investigate the bank fraud. Alexandru Slusari, head of the Committee, announces that deputies will request access to the Kroll 2 report.

June 11, 2019: The Supreme Security Council calls on the National Bank and the Office of the Prosecutor General to publish the Kroll 2 report. After a period of political uncertainty, PDM announces that it relinquished power to the new government, and on 15 June 2019, the Constitutional Court reviews its previously adopted decisions. Thus, Maia Sandu’s Cabinet, as well as all the decisions adopted by Parliament, are made legal. During the same period, the parliamentary committee, headed by Alexandru Slusari, requests the report and all bank fraud related documents from the Kroll Company. During the same period, Ilan Shor alienates another company, DFM LLC. It is presented as “the largest duty free operator in Moldova.” The company has stores at Moldova’s borders with Romania and Ukraine, as well as in the Chisinau International Airport. Before June, Ilan Shor’s stepmother, Ilona Shor owned the company. As a result of the transaction, the company’s capital share of 11 million lei ($626,230), was ceded in parts to Moldovan citizen Alexadru Vâlcu (30 percent), to Ukrainian Viktor Iakovlev (30 percent) and to German citizen Andriy Minayev (40 percent).

Plahotniuc leaves the country and sells the apartments on Bulgara street

June 21, 2019: Vladimir Plahotniuc sells two apartments on Bulgara street with a total area of 368 square meters, to his godson and party colleague Andrian Candu. Additionally, Candu buys two non-residential spaces in the same building from Plahotniuc. As a result of these transactions, Vladimir Plahotniuc no longer has registered real estate on the territory of Moldova. Oxana Childescu, his life partner, owns a 1,500 square meter flat in the same block on the Bulgara street, after combining several apartments in 2017-2018. Parents and other members of Plahotniuc’s family continue to own apartments on Bulgara Street.

June 24, 2019: Vladimir Plahotniuc, who left the country right after the PDM surrendered power, announces that he resigns from his position as party leader.

Assets Affiliated with Shor and Plahotniuc Sequestered

June 26, 2019: The Agency for the Recovery of Criminal Goods (ARBI) places a sequester on the accounts of Finpar Invest, affiliated with Plahotniuc, as well as other properties of the company that were not yet alienated: The Nobil Hotel in the center of Chisinau and the buildings on Ghioceii street, which host the broadcasters owned by Vladimir Plahotniuc: Prime, Channel 2, Channel 3 and Publika TV.

The next day, the sequester of the same goods is applied by the National Anti-Corruption Center, which obtains a judicial mandate in this respect. Also on June 26, the Anticorruption Prosecutor’s Office announces a sequester on goods affiliated to Ilan Shor, although the same announcement had been made four years before when Shor was detained for the first time in the bank fraud case.

According to information verified by ZdG, sequesters were applied on the two 158 and 239 square meter apartments on Florica Niţă street in Chisinau, owned by Ilan Shor. They had “escaped” from the law enforcement authorities in the first attempt to place sequesters on Shor’s fortune. A day earlier, on 25 June, the property of DFM LLC, run by the Shor family, which manages duty-free shops at the border crossing points, became subject to sequestration despite the fact that, a few days earlier, the firm, including its stores, had changed owners. On June 26, 2019 – the day the sequesters were applied – the 600 square meter  house on Lacului street, in which Ilan Shor lived, changed its owner. The building transfers ownership from Ion Cojocaru, who worked for Shor companies, to another close person of the former mayor of Orhei, Sergei Trohin. He is 30 years old and is part of Shor’s circle. 

July 4, 2019: The Kroll 2 report is published. The document does not contain the beneficiaries of the bank fraud, and the names of several companies are blurred. 

July 12, 2019: Politician Renato Usatii publishes several appendices of the Kroll 2 report. As it turns out, law enforcement authorities in Chisinau had these documents as early as March 2018, although they denied it. In the documents filed by the law enforcement authorities, Vladimir Plahotniuc’s name appears for the first time alongside his affiliated companies. Finpar Invest and Prime Management appear among the beneficiaries of bank fraud. However, Prime Management is now liquidated, while Finpar Invest had previously sold several of its major assets without being impeded by the law enforcement authorities.

July 16, 2019: Sequester is also applied on the building from Lacului Street where Ilan Shor used to live and which had already been alienated to Sergei Trohin on 26 June 2019.

Ştefan Gligor, lawyer, program director at CPR Moldova:

“Why were the sequesters so late? The answer is simple. The General Prosecutor’s Office, the Anticorruption Prosecutor’s Office and the National Anti-Corruption Center are complicit in covering the criminal investigation of the organized criminal group that planned and executed the theft of BNM reserves. They didn’t have to wait for the Kroll report to place sequesters on them, but even so, a year and a few months have passed since they knew about these appendices to the Kroll report and they could act. I think they have tried, first of all, to hide the fact that these appendices exist in the Kroll report, which details the routes and beneficiaries. When they realized there is big problem, they applied the sequesters to these goods for show, only to satisfy public opinion and justify their activity. They just have to justify their existence, right? The impression is created that the law enforcement authorities have given Plahotniuc and Shor sufficient time to clean up their assets and after they have succeeded, a sequester was applied.”

Victor MOŞNEAG, [email protected]