Tsvetan Vassilev planned fund for secondary plundering of CorpBank

The idea was for the new structure to buy the shell companies borrowers with money from the lender

Tsvetan Vassilev

Fugitive banker Tsvetan Vassilev made plans to syphon off CorpBank a second time two years before the scandal with its collapse blew up in June 2014. This was revealed by the latest testimony of the lead witness in the case Biser Lazov for the Specialised Criminal Court. He was the chief accountant of “The Firm”, under whose umbrella were all the companies affiliated with Vassilev that received unsecured loans from the lender.

At the hearing, Lazov commented on a document listing companies with sums of money and percentages next to them, a sheet of paper he voluntarily turned over to the investigators with a protocol dated 25 June 2014. “The handwriting on this sheet of paper belongs to Tsvetan Vassilev. He would periodically sign on sums he called ‘data on the real Capital Adequacy Ratio’. This real Capital Adequacy Ratio did not add up after 2012, i.e. the loans CorpBank extended to the companies in The Firm did not add up. This list is from the 2012-14 period. At the back of it, there is a report requested by Vassilev and prepared by the lawyers of The Firm. Vassilev signed this sheet during one of my meetings with him. He wanted for the assets acquired with bank loans to be made to look like they had higher value,” the witness testified, explaining that the fugitive banker started mulling various options to get out of the situation. One was to set up a fund, sponsored by CorpBank again, that would then buy The Firm companies which had borrowed from the lender. But before he did that, he wanted for them to be given optimistic evaluations – in other words, to be made to appear as though they had real assets, even though most of them were shell companies. The idea was to wriggle out of the “unpleasant state in which the bank was at that stage”.

Lazov noted that he had no recollection of the fund ever being established. “I was never tasked with finding a team to evaluate these companies and do not remember a fund buying them,” the witness explained.

He also told the court about a case of CorpBank money being lent to offshore companies of Vassilev. The banker gave instructions for $120,000 to be transferred to one of his offshore companies and how the sum should later appear on the balance sheet. Lazov also testified how the glass factory in Paracin, Serbia was acquired, explaining that the funds came from two sources – direct funding from CorpBank and bank loans taken out by companies in The Firm. “The factory was primarily financed by CorpBank. My job was the overall financing of the project,” Lazov said. He also related how the cash shortages in the CorpBank vault were masked, recounting one of the instances. “One night, Tsvetan Vassilev came to The Firm and handed me sheets of paper with columns of figures. He wrote the totals at the bottom by hand and ordered that the cash shortages in the CorpBank vault be fixed through a method of his choosing, which was not restoring the ready cash, but reducing the amounts that should be available on paper through new bank loans to companies in The Firm,” Lazov said. In practical terms, this was done by producing documents reflecting extended loans and their utilisation when in reality the companies became CorpBank borrowers without getting any money. This is how the problem of BGN 152m in cash missing was solved.

Lazov also told the court that the financing of the channel TV7, which Vassilev acquired at the end of 2008, was done in a well-established pattern – CorpBank loaned money to companies in The Firm, which then transferred it to another company, which in turn loaned it to the owner of TV7. The monthly sums flowing to the TV channel constantly grew, reaching over BGN 6m a month in 2013 and BGN 10m a month by the end of it.

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