The Federal Bureau of Investigations (FBI) has initiated its own investigation into the $1bn stolen from Moldovan banks, according to Moldova’s acting head prosecutor Eduard Harunjen.
The fraud resulted in the collapse in late 2014 of Banca de Economii, Banca Sociala and Unibank. The government has since said it will repay the emergency aid extended by the central bank to the three troubled banks from the public purse - shifting any costs that cannot be recovered onto taxpayers.
“[FBI] investigators have come to help us, because their legal and technical possibilities to identify the money are broader. When the money is identified, [investigation firm] Kroll will start legal procedures to freeze the assets and initiate procedures for repatriating the money,” Harunjen explained on November 25. The FBI reportedly started its own investigation on the grounds that US dollars are involved.
Central bank governor Sergiu Cioclea also confirmed that Kroll, the financial forensic firm hired by the Moldovan authorities to find the money, is relying on the US authorities to find the money.
The recovery of the $1bn siphoned off from the three failed Moldovan banks seems problematic, given Harunjen and Cioclea’s statements to lawmakers.
Harunjen reported on the cases launched over the illegal operations of the three banks before their bankruptcy. Kroll, meanwhile, is reporting on the money that left the banks.
The central bank extended MDL14.1bn of emergency aid to the three banks in November 2014 (at MDL15 to the dollar) and March 2015 (at MDL18 to the dollar). Currently, the leu is traded at around 20 to the US dollar, and the central bank has agreed to cover the exchange rate loss.
When the banks started liquidation procedures in October 2015, after their deposits were transferred to other banks, the evaluators estimated the assets that the authorities can recover from the three banks at nearly MDL1.5bn, based on their balance sheets at that time. So far, MDL635mn has been recovered.
Separately, prosecutors initiated cases against third parties involved in allegedly fraudulent deals with the banks.
In another line of investigation, Kroll is identifying the money that left the banks since 2012.
The central bank said in a note on November 25 that it recently received its third formal progress briefing from Kroll on its ongoing investigation of the frauds. The investigation has identified the misappropriation of approximately $600mn. Tracing the end destination of this amount is ongoing.
Millions of dollars of the fraud proceeds were transferred to parties around the world, with the major part to bank accounts in Russia ($200mn), Moldova ($95mn), Estonia ($58mn) and Cyprus ($41mn). It is likely that at least some of these transfers led to further laundering mechanisms which will require further analysis.
The next phase of investigation will include initiating legal action to obtain orders in multiple jurisdictions to support the tracing exercise with a view to commencing recovery actions against individuals and organisations that benefitted from or facilitated the fraud in the first half of 2017.