BANKS SUFFER MORE FRAUDS DIICOT investigating managers of BRD and Volksbank

The prosecutors of the Department for the Investigation of Organized Crime and Terrorism (DIICOT) have announced yesterday that they are investigating a suspected fraud of 85 million Euros, which involves branch heads from several banks, including BRD and Volksbank. The defendants illegally obtained loans from the two banks, for 35 companies they control, according to the statement of the DIICOT. The crimes were aided by seven general managers and business officers, who coordinated the procedure for the selection of the companies, the risk verification and loan approval, even though the documents submitted by the companies did not meet the legal requirements, as well as by six employees of the banks in question, who handled the loan applications, the DIICOT said.

"The members of the faction were also helped by authorized evaluators, who drew up overvalued assessment reports on the real estate assets submitted as collateral", the document also states. 90 people will be taken to the headquarters of the DIICOT in the following days.

One of the people under investigation there is Lucian Cojocaru, vice-president of Volksbank, for his activity when he was a director at BRD, according to judicial sources.

The announcement comes shortly after in the beginning of November, the prosecutors of the DIICOT dismantled a criminal network which defrauded several banks. Claudiu Cercel, vice-president of BRD, is among those who are being investigated.

Managers of the BRD Unirea and Dorobanţi branches, where the prosecutors of the DIICOT conducted searches yesterday, and officials of ATE Bank are under investigation. Dana Băjescu, the head of the Dorobanţi division, was heard yesterday, her lawyer said.

The officials of BRD said that the operations of the bank are not affected by the prosecutors' operation. "According to the provisions of the law, the bank has ensured the conditions needed for conducting the searches, according to the warrants issued by the authorities. At the same time, the operations with the bank's customers have continued under normal circumstances.

We want to announce that the activity of the bank is not affected by this operation and that we will continue serve our customers.

BRD has been cooperating with the authorities on the current investigations and it continues to provide all the necessary support for the completion of the investigations concerning this case".

The representatives of Volksbank România claim that Lucian Cojocaru is not being investigated concerning his activity at the lender, because he joined the bank after September 2010, whereas the fraud was uncovered and reported to the authorities in May 2010.

"We want to specify that in this case, Volksbank has notified the authorities ever since back in May 2010, concerning loan agreements for which falsified documents were used", a press release of the bank says. The total exposure to the customer and to its affiliated companies, is approximately eight million Euros, the document stipulates.

"The loans have real estate collaterals. In this case, after uncovering the fraud, aside from notifying the authorities, Volksbank România has begun the foreclosure procedures. The loans have also seen adequate provisions set up for them, considering that this case dates back to 2010", the representatives of Volksbank said.

The representatives of ATE Bank Romania have said that the lender is marginally/only tangentially included in the investigation, as part of the predetermined routine in such cases, as it has provided the full support of the representatives of the law and has been opened to cooperation with them, according to the legislation in effect.

The fraud also involved four notaries. One of them is Paula Rosenberg, wife of artist Damian Drăghici, advisor to prime minister Ponta on Rroma issues, who was elected as a senator on the lists of the USL. Paula Rosenberg was also heard.

• Marius Locic, Vasile and Dumitru Creştin, among those indicted; Vasile Blaga, Liviu Popa and Bebe Ionescu, had their phone calls tapped

Defendants in this case include businesspeople Marius Locic, Vasile Creştin and Dumitru Creştin, according to media sources. Also, Vasile Blaga, president of the PDL, Liviu Popa, former chief of the General Police Inspectorate of the Romanian Police (IGPR), as well as Bebe Ionescu, the father of the husband of Elena Băsescu, Bogdan Ionescu, had their phone conversations tapped.

However, Vasile Blaga has denied that he interceded in anyone's favor to allow them to take out any loans, and he also denied that he knows the Creştin brothers. "I have never interceded in favor of anybody to help them get a loan. I've never talked to these Creştin brothers in my life", the PDL leader said.

Dumitru Creştin says that he has never taken any loan for businesses shared with or managed together with his brothers, which is why he hasn't been searched or investigated by the DIICOT in the case of the frauds. His representatives said that the businessman is still in Romania.

Marius Locic, who was heard by the DIICOT yesterday, said he is "absolutely innocent", he has a very good relationship with banks and lending, and that most likely, in his opinion, he has bothered certain people by opening specific markets. He said: "I want to tell you that I am completely innocent in this case involving bankers or the frauds that everyone keeps saying it exists. From my point of view, there is no fraud in the relationship between Locic and the bank. As far as I am concerned, Locic has only done one thing: do business. As for concerning what has been shown on all TV channels today (ed. note: Thursday), that the loans were reevaluated, that banks have been defrauded, it is not true. All the banks that Locic has borrowed money from have monthly meetings to help companies jumpstart their trade activities, and, to your surprise, at least as far as I am concerned, the banks have shown all the goodwill towards me. All the loans of Locic lean towards the positive. If there are frauds in the banking system, they have no connection to Locic".

The businessman thinks that he has probably upset certain people, with his projects to build two markets in Bucharest. "At the moment, there are two major markets: one in the 2nd district, the Basarabia Market, and one in the 1st district, the Gara de Nord (Northern Railway Station) market, for which work would begin next week. I think, or I get the impression that I have upset somebody who is involved in the import of vegetables and fruit, because I doubt that all of the sudden somebody has a problem with Locic, considering that there are permits from the mayoralty, and there is goodwill from the banks. As for these loans that we are dealing with, Locic has committed no fraud, Locic has only done one thing: do business, and as proof that I was right in doing so, is that a few days ago I have been invited by the banks to talk and I received a positive answer for resuming all the commercial activities which I have with them", Marius Locic said.

When asked whether he knows the Creştin brothers and whether he had business dealings with them, he said that he "knows many people", and said that he has no idea why he was summoned by the prosecutors of the DIICOT.

• Valentin Nedelcu, the informant in this case

Businessman Valentin Nedelcu is the one who filed a denunciation with the DIICOT concerning the bank frauds, according to some legal sources. He provided the prosecutors involved, as well as the mechanisms by which the money was illegally obtained.

Valentin Nedelcu was arrested in February 2011, and detained until May 2012 on account of those charges. At the time, he submitted a large denunciation in which he gave names, including managers of several banks, and he explained to the investigators of the DIICOT all the workings of the system they used for committing the fraud.

On October 11th, Valentin Nedelcu was sentenced to four years in prison by the Court of Bucharest in the case where he was convicted starting and setting up an organized criminal group. The ruling in that case is not final, and the case is currently in the appeal trial stage at the Court of Bucharest.

According to the quoted sources, Valentin Nedelcu has also convicted in 2005 for fraud.

Valentin Nedelcu is also the one who denounced, in 2004, the former general director in the Ministry of Agriculture and Food (MAA) Gheorghe Reman Domocoş, as well as the former members of the management of the Ministry, who were eventually indicted for corruption.

Also, Nedelcu is the same person who ten years ago allegedly paid money which reached the former minister of Agriculture Ioan Avram Mureşan, in order to receive extremely lucrative loans and export premiums on the sale of agricultural products. Mureşan was sentenced to seven years in prison, in 2012, in a final ruling.