Bank Fraud in 2014, Moldova: Stolen Billion and Money Laundromat. Causes and Lessons Learned

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Brief description

Stolen Billion

Period of commit: Years: 1990th – 2010th;
As the result of fraud, in the form of compromised and non-reimbursed loans, from the banking system of Moldova were stolen about one billion dollars;
Most of the money was stolen from the Savings Bank of Moldova – bank under state control, committed by the state’s representatives on the bank’s board;
Fraud has led to the liquidation, in the year 2015, of three banks: Banca de Economii (Savings Bank); Banca Sociala; Unibanc.

Laundromat

Period of commit: Years 2000th-2010th;
By means of the fictitious and illegal transactions, some Moldovan banks laundered important amounts of money, most of them originated from Russian Federation;
It is worth mentioning that frauds were possible due to the banks’ non-transparent shareholders;
The most affected bank was Moldindconbank, which was placed in the year 2016, under bank resolution.

Basic schemes

Stolen Billion

Laundromat

General information, for both

Main Causes

Lack of independence contributed to inefficient regulation and supervision by National Bank of Moldova ;
Captured state agencies, including National Anticorruption Center and Prosecutors;
Corruption in public sector as well in private sector.
Lack of corporate governance at banks along with too many bad actors in the banking sector.

Protagonists

Criminal structures, with members infiltrated in business company, banks and state agencies;
Corrupted civil servants from state agencies;
Corrupted bank owners, managers, and employees;
Complicity of judges.

Lessons learned / Measures taken

Strengthening agencies and institutions, including through changed leadership and the establishment of civilian surveillance;
Anti-corruption actions, including new internal regulations and servant verifications;
From total of 12 banks, Three banks liquidation: Banca de Economii; Banca Socială and Unibank;
Other Three banks under special resolution: Moldindconbank; Moldova Agroindbank and Victoriabank;
Canceling the shares or rights of vote to the non-transparent shareholders of two banks – Moldindconbank and Moldova Agroindbank;
Legislative changes, including National Bank of Moldova straightening and anticorruption package of laws – regarding integrity; shareholders transparency; declaration of assets; criminal prosecution of corruption crime and others;
Prosecution of Filat cases – former prime minister; Platon cases – former Moldindconbank main shareholder; Gacikevici cases – former president Savings Bank of Moldova and about 125 more cases.

Vadim ENICOV, National Bank of Moldova, Supervisory Board, Member

Round Table, United States, Department of State

November, 2017

References for Stolen Billion

References for Laundromat

Research