CorpBank affair, 5 years later

Tsvetan Vassilev rolls in money in his hideout, flaunts BGN 5bn wealth

Tsvetan Vassilev

Five years after the most massive heist in the Bulgaria’s modern history – the collapse of the CorpBank pyramid – fugitive banker Tsvetan Vassilev is still keeping at his disposal about BGN 5 to 6bn. He squanders the money of the defrauded depositors on lavish life in Belgrade and generous fees paid to lawyers, judges of the oligarchy and, of course, the media and expensive journalists who run his talking points and try to present him as a “victim” of robbery, while they themselves are the real victim.

Exactly on 16 June 2014, the CEO of CorpBank Orlin Rusev was called to the Bulgarian National Bank (BNB) to explain how the bank handles the growing number of drawings from the accounts of its depositors. Rusev informed about the conversation Tsvetan Vassilev who at that time was in Vienna. A day later, CorpBank asked the Deposit Protection Fund for BGN 250m aid which was denied because the first evidence of shady affairs in the bank has surfaced. The BNB warned Tsvetan Vassilev that he urgently has to provide BGN 1bn to ensure the emergency liquidity so that the bank keeps on functioning normally. Four days later, on 20 June the pyramid collapsed. The CEOs demanded that CorpBank be put under special supervision. By late afternoon the questors are already on the premises.

Shocking facts emerge at the bank. There is no necessary information about 67,2% of the bank’s credit portfolio that would allow to trace the money flows. It involves BGN 3,5bn out of a total of BGN 5,4bn in provided loans. The gap constitutes 137 loan files, most of them without banking particulars, which automatically makes them bad loans. These are exactly the loans provided to shell companies where billions of leva have sunk. In the opinion of specialised prosecution, if the lender did not go bankrupt in 2014, it would have ruined the state two years later opening a gap to the tune of BGN 8bn, an astronomical figure for Bulgaria. Translated to everyday terms, the CorpBank model is the biggest economic, public and financial fraud that has ever happened in Bulgaria’s modern history,” the specialised prosecution stated in its bill of indictment. The companies gravitating to the orbit of Vassilev, such as finance house Fina C and Bromak, which he calls by a high-sounding name “The Firm” and every day requests financial information about it.

The final recepients of money vary but they are always connected with Vassilev. Initially the ex-banker feverishly buys out the assets to re-sell them. Then the money is spent on purchasing really unprofitable businesses and payment of interests for the used bank resources. Finally the CorpBank pyramid sinks so deeply in provided loans that it starts using them to increase the bank’s own capital.

Almost over 100 companies are involved in the complicated financial scheme of Vassilev which he employed for syphoning off CorpBank, as his own companies (which he calls The Firm) are on the top position in his fraudulent scheme, namely these companies drain the financial resources of the depositors.

Tsvetan Vassilev faces charges as the ringleader of an organised crime group set up for financial gain. This mafia structure comprises 18 members.

The body of evidence consists of 1,360 volumes and the bill of indictment has an impressive volume of 500 pages. The fugitive banker is held accountable for BGN 4,4bn missing from CorpBank. According to Deputy Prosecutor General Ivan Geshev, Vassilev embezzled from 5 to 6 billion leva. US economists Prof. Steve Hanke, founding father of the Monetary Board in Bulgaria, and Matt Sikorski recommended to the Bulgarian government to liquidate CorpBank immediately as early as October of 2014 because, apart from everything else, “it appears that its top management was not only incompetent but they are also criminals,” they stated in their article published by Keyto Institute NGO. They also recommended to use the collectible funds for reconstruction of the guaranteed share of deposits paid from the Deposit Protection Fund. Later, the international consulting company AlixPartners and authoritative arbitration court in Washington confirmed that CorpBank was functioning as a pyramid and Vassilev was a fraudster. In order to protect the small depositors, the Deposit Protection Fund applied for a state loan worth of BGN 1,2bn, as by that time the available cash amounted to BGN 2bn and the sum was not sufficient for paying off these deposits.

Two times the fugitive banker attempted to plunder CorpBank again – to lay hands on the “golden” assets bought with the depositors’ money with the help from his Russian patrons. The “One Euro” gang of the Belgian holder of Russian passport Pierre Louvrier comes to the scene in March of 2015. He turned out to be the figurehead of the so-called Orthodox Russian oligarch Konstantin Maloffev, owner of the Kremlin propaganda mouthpiece Tsargrad TV. 

It was then that the “Russian” Belgian announced that his group is planning to lay hands on BTK, defence plants Avionams and Dunarit, Multiplex, First Digital and GARB Peoplemetric Company. And all these companies were to be sold for one Euro, because these “geese laying golden eggs” were head over heels in debts. After these attempts turned out a complete fiasco another associate of Malofeev appeared on the scene – Russian businessman Dmitri Kosarev, who tried to lay hands even on TV7.

Nevertheless, Vassilev is still draining the Dunarit armory which he control via his puppet arms dealer Emilian Gebrev, as well as Sana Spa hotels which he uses as his piggy banks to be able to pay for lavish lifestyle and his media balloons. This is the reason why his cohort of “media in-waiting” spew out fake after fake contesting the “Peevski amendment” which the lawmaker introduced together with his colleagues Yordan Tsonev and Hamid Hamid to forestall the secondary plunder of CorpBank. According to the bankruptcy administrators, by March of 2019 the total insolvency mass amounts to about BGN 830m, which means that apart from the BGN 570m dished out in May there are another about BGN 260m to be dispensed. Initially the insolvency mass was estimated by independent auditors at BGN 1,378bn, as it was believed that the sum is collectible through sales and lawsuits during the insolvency case hearings. It means that, according to the most optimistic scenario, not more than 20-25% of the billions plundered by Vassilev can be restored.

And while the oligarch’s media sorrow for the fugitive banker and sing praises to him, as, for instance, the God mother of fake news in Bulgaria and the soft voice of ex-PM Ivan Kostov, they all play possum about the fact that it was exactly Kostov who installed Vassilev on the banker’s post. In 2010, the Bulgarian Madoff laid hands on CorpBank via his 10 offshore companies, as each of them owned 9,99% of the lender just to circumvent the Banks Act. And this happened with the blessing of Emilia Milanova, close associate of Ivan Kostov, who at that time was head of the bank supervisory agency. Kostov conceived CorpBank as a gem in the crown of his Democrats for Strong Bulgaria party (DSB). And virtually raked in the money from the bank. Once DSP had two accounts in CorpBank worth of BGN 2,5m and later opened the third one, for BGN 1m, while the mustachioed fraudster sheltered Demokratsia Foundation in the bank’s building. The junior daughter of Ivan Kostov, Mina concluded a contract with one of Vassilev’s iconic firms, Aflik Bulgaria through her sole company Antorna and received ample loans from CorpBank worth of millions. Under this contract Mina Kostova had BGN 270,000 in deposits in CorpBank. Kostov himself deposited BGN 155,894 and his late father Yordan Genkov also had an account in the bank. Mina had BGN 213,202 and her sister Yana – BGN 115,202. The interests they were paid were so generous that only a pyramid of a bank could afford it. It comes out that the fugitive banker not only replenished the piggy bank of Demokratsia Foundation but also sustained the entire political project of Ivan Kostov who was kept by Vassilev until the pyramid built with the money of the defrauded depositors collapsed.

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