How to Steal a Billion

Andrei Nastase

I believe that it is appropriate to start by giving a little context and background about our case, to be better able to understand how something like this could happen and, most importantly, where this has indeed  already happened. The first scenario that comes to mind is probably some kind of hedge fund or financial speculation on Wall Street, but even for those guys one billion in a single shot might be a little too spectacular. The second scenario that naturally comes to mind is some kind of corrupt post soviet republic where the people have little voice in how their government’s act, and I’m “pleased” to say that this is our case.

The website Freedom House ranks Moldova as a “partially free” country in 2015 and awards it a rather worrying 6/12 in “functioning of the government” and 7/16 in “rule of law”. Just to transmit a general impression, underneath I will recall some meaningful statements from the Freedom House reportCorruption remains a problem in Moldova, and the country’s politicians regularly trade accusations of graft and illegal business activities. […] Major cable services dropped three channels known for critical reporting on the government […] After an outcry from international institutions and local nongovernmental organizations (NGOs), the channels were quickly restored.[…] Judicial and law enforcement officials have a reputation for politicization and corruption.

The climax of our story is reached when you add two extra spicy elements to the status quo described above. In the months before the November 2014 parliamentary elections, the Moldovan political landscape remained sharply divided over the goal of European integration. This is when our two main actors made their move. Throughout 2014, central bank officials and protesters accused the EU backed, former Prime Minister of Moldova Vlad Filat of being involved in dark money laundering schemes with Ilan Shor, an Israeli-born Moldovan businessman, who reportedly embezzled almost 1 billion dollars from three major Moldovan banks leading to a severe financial crisis in the country.

The impoverished ex-Soviet nation’s central bank was so puzzled by the fraud that it hired a leading financial investigation consultancy called Kroll to help it get to the bottom of the caseCNN Money reports – the report said Shor and his associates worked together in 2012 to buy a controlling stake in three Moldovan banks and then gradually increased the banks’ liquidity through a series of complex transactions involving loans being passed between the three banks and foreign entities. Kroll’s report estimates that  over $767 million disappeared from the banks in just three days[ just days prior the parliamentary elections]and the Central Bank adds that the total loss from the scheme could reach $1 billion.

It is fair to say that in almost every post soviet state (with the cautious exception of the Baltic states) the problem is always the same: rich and powerful oligarchs ready to do anything to stay in power, considering that if they are overthrown, by the next lot of oligarchs, they are likely to end up in prison, facing impoverished citizens who simply want to get rid of corruption.

Andrei Nastase, leader of the Moldovan party Platformei Demnitateși Adevăr says: A truly transnational protest [not ideologically defined as pro/anti EU] broke out when the new pro-European government was approved in only 6 minutes, without even the resemblance of a democratic discussion of the policies in program. Not only the name of the new Prime Minister, Pavel Filip, former Minister of Informational Technologies, was approved in 6 minutes by the Parliament, but the entire composition of the executive as well. As such news came through, the Parliament was stormed by protesters chanting “Stop the dictatorship, bring back our motherland” as they made it through the police lines into the congress hall. AP reports the words of some protesters who believe that the new governmentis a compromise solution which will not tackle endemic corruption and undertake reforms, they believe that Pavel Filip is yet another oligarch, a different face for the same political establishment that has been ruling the country since its independence.

The judges still have to issue their verdict, and much is yet to be proven so stay tuned to find out more as new evidence is released. For the moment we can conclude that the tiny country of Moldova doesn’t seem to be getting very far on the way to European integration, struggling to tackle corruption, not to mention the Transnistrian problem, an extremely interesting topic I’m considering writing about.