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newspress24-blog · 2 years

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The Cashier in Dubai

Investigative report tracks tangled route for money flowing to offshore companies from Moldova.

Part One

Moldovan oligarch Vladimir Plahotniuc left his home country in 2019 to avoid corruption charges. But an investigation into his business affairs, supported by newspress24-blog, shows that money continued to flow into his pockets long after he fled.

Black Box Plus, the investigative show of Moldova’s independent Tv channel TV8, acquired documents showing that Plahotniuc profited from every document Moldova’s Public Services Agency (ASP) issued between 2014-2019. Black Box TV followed the traces left by the businessman Alexandru Vilcu and Vladimir Andronachi, a former lawmaker with the Democratic Party (PD).

Documents show that the money reached Plahotniuc via Garsų Pasaulis, the Lithuanian printing house that won the public procurements for supplying blank cards the ASP uses to issue Moldovan documents, including passports. The financial circuit leads to a network of offshore companies registered in Cyprus, Hong Kong and the United Arab Emirates (UAE).

In the summer of 2020, the scheme Plahotniuc built over the years was taken over by two Bulgaria-registered companies that appeared overnight.

These companies were the identical financial offshore vehicles through which Plahotniuc, former leader of the PD, raised alleged dividends from the auctions organised by the state telecom company Moldtelecom, the purchase of electricity from the breakaway region of Transnistria, the public-private partnership for hemodialysis services and the so��called heist of one billion US dollars from the Moldovan banking system.

The Lithuanian UAB (an acronym of uždaroji akcine bendrove, or private limited company) started supplying blank cards for Moldovan passports following tenders in 2014 and 2017. The main beneficiary of the Garsu Pasaulis company is Albert Mario Karaziwan, a Belgian citizen who owns Semlex Europe, an identification document and biometric device production company whose business practices have come under scrutiny. The Syrian-Belgium businessman has been targeted in several countries in criminal corruption cases and journalistic investigations by Reuters and OCCRP.

In 2014, Moldova’s minister of information and communications technology was Plahotniuc’s fellow party member Pavel Filip. The CRIS Registru state enterprise which in 2017 was re-organised as ASP, was headed by Sergey Railean, godfather of Filip's older son.

Between 2014 and 2021, ASP transferred 59.5 million euros to the Garsu Pasaulis company "for raw material, blank cards and personalisation services," according to documents obtained by Black Box.

ASP also paid the Lithuanian company a royalty fee for software developed for Moldova and used on three types of documents. For example, the royalty fee for each passport issued was 13.61 euros (14.49 US dollars). On October 22, 2021, prosecutors opened a criminal case against nine people from the Public Services Agency “targeted in a criminal case of abuse of office”. Prosecutors estimated that the state lost around 41 million euros (43.6 million dollars) in the case.

A LONG AND TANGLED PATH

A note from the Moldovan service for the Prevention and Combating of Money Laundering obtained by Black Box shows that more than 24 million euros (25.54 million dollars) did not stop in the company's accounts in Vilnius but ended up in Cyprus and the UAE.

“Of the 135 payments made throughout this period [2014-2019], I can tell you that the final beneficiary is obvious. At least, from what the criminal investigation bodies say, it is clear that the actual beneficiary is Vladimir Plahotniuc,” said ASP director Mircea Esanu.

Sergey Railean, the ASP former director under whose mandate the two contracts with Garsu Pasaulis were signed, said that he knew nothing about benefits for Plahotniuc.

"The tender took place according to the procedures. Therefore, nothing was outside the law," Railean said.

Told that Black Box reporters had established money transfers from Garsu Pasaulis to offshore companies affiliated with Plahotniuc, Railean was asked if he knew anything about it.

"No, absolutely not. Now it is a criminal case. The file must be completed after the trial,"he said. “[…] We did not order any software."

Railean added that ASP paid royalty fees to Garsu Pasaulis "because that was the contract".

On May 5, 2022 the Moldovan anti-corruption prosecutor's office announced that Railean had the status of accused in the so-called passport affair.

Filip, who held the post of prime minister in 2016-2019, did not answer the phone calls or requests for comment.

In May 2018, during a TV show broadcast by Prime, one of Plahotniuc's TV stations, Filip hinted that the state signed a more advantageous contract with Garsu Pasaulis than the previous one agreed in 2011 with a French company.

In 2011, Garsu Pasaulis had in fact tried to win a tender, but its application failed as it did not meet ASP’s criteria. A key condition was that applicants had experience manufacturing electronic passports for at least three European countries, as established by a decision of the Supreme Court of Justice. Garsu Pasaulis did not meet this requirement.

Garsu Pasaulis replied via e-mail that the company won the tenders and successfully delivered blank passport cards for ASP.

“As for the exact details of other commercial contracts, we cannot provide any details as confidentiality commitments bind us,” Andrius Lukosevicius, director of Garsu Pasaulis’ printing security department, wrote. “However, we can confirm that we have never had and do not currently have commercial or other relations with Mr Plahotniuc and [Romanian businesswoman] Mrs Ileana-Mihaela Burcea.”

The passport cash headed south, to the UAE firm Prime Union Solutions FZ LLC. Between January 1, 2018 and July 30, 2019 itreceived transfers for over 4.7 million euros ( five million dollars) from Garsu Pasaulis. The money continued to flow into Plahotniuc's coffers even after he fled Moldova in June 2019 when his name was linked to the disappearance of over a billion dollars - nearly one-eighth of Moldova's GDP - from the country's biggest banks between 2012 and 2014.

Employees at the Moldovan Money Laundering Prevention and Combating Service obtained information from their colleagues in Dubai and stated that the company's majority shareholders were the Romanian citizen Ileana-Mihaela Burcea and the company Inter Gnathonize Limited.

Between October 29, 2018, and July 30, 2019, a total of seven million euros (about 7.4 million dollars) were credited into Prime Union Solutions’ UAE bank account, largely sent from Garsu Pasaulis. The money then traveled to Burcea’s private account in UAE and six other offshore companies.

In liaison with UAE and Cyprus’ authorities, Moldova’s law enforcement agencies determined that Garsu Pasaulis transferred another 19.6 million euros (20.8 million dollars) to another Cyprus offshore company, Gnathonize Limited, also connected to Burcea.

The Cypriot firm opened a bank account in July 2014, four months after Garsu Pasaulis won the Moldova tender. The Lithuanian firm was the main contributor to the account until August 2018. After that, the money was transferred to the company Prime Union INC LTD in Hong Kong and marked as a "dividend payment".

Part Two

Documents from the Hong Kong public registry show that Burcea was one of Prime Union’s shareholders and in 2014-2019 the director. In 2020, Burcea requested the closing of the company. In 2018, over 600,000 euros (639,000 dollars) were transferred from one of Prime Union’s bank accounts to another offshore in Gibraltar.

In addition, 1.5 million euros (1.6 million dollars) arrived in Burcea`s personal account in the UAE and almost 800,000 euros (852,600 dollars) were directed to Recon Business Data Service, a company registered in Dubai led by Burcea. The company was closed in December 2019.

Burcea’s lawyer Cristina Savulescu declined to comment on the financial transfers from Garsu Pasaulis to her client. She also did not comment on Burcea’s connection with Plahotniuc. Savulescu said that any association of her client with an alleged criminal case was damaging to her client's image.

"The judicial procedure in any criminal case, from the time of notification to the competent bodies until the time of sending a particular person to court, is non-public and confidential, meaning that third parties cannot know the content of the carried-out procedures," Savulescu said.

Documents obtained by Black Box with the support of the OCCRP network of investigative journalists show that Plahotniuc used the same infrastructure of offshore companies to take yet more funds out of Moldova.

The former politician used the offshore network for the money obtained from other auctions organised by state enterprises including Moldtelecom, Moldova’s largest telecommunication operator, gas supplier Energocom and the health ministry for dialysis-related services.

The UAE’s Recon Business Data Services, connected to Burcea, was also involved in the financial circuit of money leaked by Plahotniuc from another scheme related to Moldtelecom, concerning public tenders won by Bass Systems SRL in PD`s ruling period.

Between March 2017 to January 2019 the Chisinau-based IT company delivered technical equipment and services for Moldtelecom worth about 41 million euros (43.6 million dollars). Out of this amount, eight million euros (8.5 million dollars) and six million dollars followed the same route to the UAE through Recon Business Data Services.

OFFSHORE ACCOUNTS

Another document obtained from the Moldovan service for the Prevention and Combating of Money Laundering shows that the Dubai-based company made several transactions to two offshores used by Plahotniuc: the UAE-based Vanguard International LTD and Vanguard International Group, registered in Samoa.

Both companies appeared in Plahotniuc's wealth statements in 2018. However, in the document submitted to Moldova’s Central Electoral Commission on the eve of the February 24, 2019 parliamentary elections, the oligarch declared 4.5 million euros (4.78 million dollars), over 11 million lei (around 585,000 dollars) and 347,000 dollars as dividends obtained from the Dubai-based Vanguard International Ltd.

Moldovan prosecutors established the origin of the money collected by Plahotniuc as "dividends".

Vanguard International LTD received 8.2 million euros (8.72 million dollars) and 2.5 million dollars from UAE-registered RECON SPC LIMITED from December 2017 to May 2019.

Burcea and another Romanian citizen, Silviu Tutuianu, were behind the company in different periods. Almost the entire amount came from the other similarly named firm, the Dubai-based Recon Business Data Service.

Plahotniuc also collected "dividends" worth 1.7 million euros (1.80 million dollars) and almost 350,000 US dollars through another offshore company, TGME INVESTMENTS SPC LTD, managed by Tutuianu.

All these companies were liquidated between the end of 2019 and the beginning of 2020, after Plahotniuc fled Moldova. The Moldovan anti-corruption prosecutor's office opened a case for the purchase of equipment and services by Moldtelecom from SRL Bass Systems. The prosecutors confirmed that Burcea was interviewed in this criminal case, but did not disclose her status.

Burcea also managed a company that benefited from transfers from Plahotniuc’s Cyprus-registered Asia Pacific Textile Limited. This had transactions with the Cypriot offshore Melopmania Limited, the founder of BB-Dializa, a company which managed the dialysis services for the Moldovan health ministry.

BB Dializa also benefited from legal services from Cyprus-registered Kinanis offshore, founded by Burcea. The company also provided secretarial and legal services for Assentis Holdings Limited, one of the founders of Bass Systems SRL.

Asia Pacific Textile LTD received money from the Energokapital shell company. Between 2014 and 2016, the firm was used by Plahotniuc and Evgheni Shevciuk, former leader of Moldova’s breakaway region of Transnistria, to sell the electricity produced by the Russian-owned Moldgres Power Plant to Moldovan consumers.

The Black Box team tracked Energokapital's connections with Plahotniuc and the involvement of former DP deputy Vladimir Andronachi in the company's management.

Moldova’s service for the Prevention and Combating of Money Laundering established the connection between Burcea and two other offshore companies involved in looting a billion dollars from the country’s banking system: Sharp Prospects Limited and Lazomar Trading Limited, registered in Hong Kong and Cyprus respectively.

According to an international independent financial audit named the Kroll report, the Lazomar company received 5.6 million dollars in transfers to a Cypriot bank account. The Kroll report was commissioned by the National Bank of Moldova to investigate the theft that ravaged the country’s banking system.

Plahotniuc did not respond to requests for comment. His lawyer Lucian Rogac said that the former politician pleaded not guilty in the case generically called "blank passport cards".

"An indictment was presented to us. Other evidence to prove guilt was not shown by the prosecution. The only comment I can give you is that my client pleads not guilty to the charges," Rogac said.

In September 2022 Plahotniuc received an arrest warrant in absentia regarding the "blank passport cards" case, alongside Vladislav Zara, former director of the civil registry ASP, ex-PD deputy Andronachi and businessman Alexandru Vilcu. All of them have fled the country. According to Moldova’s ministry of justice, Plahotniuc is currently in Northern Cyprus.

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rmlnewstimes · 2 years

Text

The Cashier in Dubai

Investigative report tracks tangled route for money flowing to offshore companies from Moldova.

Part One

Moldovan oligarch Vladimir Plahotniuc left his home country in 2019 to avoid corruption charges. But an investigation into his business affairs, shows that money continued to flow into his pockets long after he fled.

In the summer of 2020, the scheme Plahotniuc built over the years was taken over by two Bulgaria-registered companies that appeared overnight.

These companies were the identical financial offshore vehicles through which Plahotniuc, former leader of the PD, raised alleged dividends from the auctions organised by the state telecom company Moldtelecom, the purchase of electricity from the breakaway region of Transnistria, the public-private partnership for hemodialysis services and the so–called heist of one billion US dollars from the Moldovan banking system.