Moldovan kingpin Filat arrested over $1bn bank fraud

By bne IntelliNews October 15, 2015

Iulian Ernst -


Vlad Filat, a leading member of Moldova’s fragile ruling coalition, was arrested and charged with involvement in a $1bn fraud on October 15 after MPs voted to lift his parliamentary immunity.

The arrest of Filat, the president of the senior ruling Liberal Democratic Party (PLDM), throws the fragile pro-EU coalition into disarray. It is not yet clear how this will affect the government - Moldova’s third in the last year. Prime Minister Valeriu Strelet, who took office in July, says he will not resign and has taken over as interim leader of the PLDM.

79 of Moldova’s 101 MPs voted in favour of lifting Filat’s immunity, including those from the PLDM’s coalition partners. The vote was held at the request of head prosecutor Corneliu Gurin, reported. After the vote, officers of the National Anticorruption Centre (CNA) detained Filat for 72 hours and will ask a court to place him under police custody. Broadcaster shows the former prime minister being escorted into the centre’s headquarters by masked CNA officers.

While the PLDM claims Filat's arrest is a manipulation, prosecutors say they have evidence linking the politician to a massive banking fraud in which $1bn - around 10% of the country’s GDP - was siphoned off from three Moldovan banks.

“We are in possession of solid evidence proving the involvement of Filat in the frauds at Banca de Economii, with the volume of the frauds estimated at hundreds of millions of euros,” Gurin said on October 15.

Gurin based his request on testimony from Ilan Shor, a businessman-turned-politician who was the visible beneficiary of the $1bn fraud, according to a report by international audit firm Kroll, which does not identify the ultimate beneficiaries. Shor also claimed that he paid $60mn to Filat, who was then Moldova’s prime minister, in exchange for not having his firm Dufremol checked by state authorities, for being appointed Moldova’s honorary representative in Russia and for being given a license to trade oil products.

Shor also claims that Filat asked him for $190mn in return for instructing the state authorities to allow a capital increase at Banca de Economii, which diluted the state’s participation in the bank to 33%. Following the dilution, Shor’s group of firms took control of the bank.

Before his arrest, Filat defended himself in parliament, accusing Gurin of following the orders of Vladimir Plahotniuc, Moldova’s richest man. Plahotniuc is the deputy president of the Democratic Party, one of the PLDM’s coalition partners.

“The whole system in Moldova is rotten for the simple reason that it is under the control of a single person. This person is no one other than Plahotniuc, who attempts to avoid direct responsibility by tricks, by forcing Shor to sign a statement,” Filat said.

Plahotniuc resigned from his position in the party on October 15. “The accusations against me have never been demonstrated, but I find appropriate to step back until the frauds at Banca de Economii are fully ellucidated,” Plahotniuc stated on his Facebook account. Plahotniuc had already resigned from parliament at the end of July this year.

The PLDM said in a statement published on its website that it condemned the actions against Filat. “We think it is a cynical sting against Vlad Filat and the Liberal Democratic Party of Moldova, which has in recent years become permanent target of attacks from various political camps,” the party said.

Filat was Moldova’s prime minister from 2009 to 2013, when his government lost a no-confidence vote over corruption allegations.

His arrest and the split within the coalition add to Moldova’s already chaotic political scene.Two mass demonstrations were organised in September, as Moldovans expressed their frustration over official corruption and the lack of progress in bringing those responsible for the bank frauds to justice. Pro-EU and pro-Russia demonstrators have set up two rival tent cities outside the government and parliament respectively.

As the CNA prepared to arrest Filat, several thousand people joined a protest outside the parliament organised by Igor Dodon’s pro-Russian Socialist Party, the largest opposition party represented in the parliament. Some protesters reportedly tried to block the parliament’s exits to stop Filat from leaving.

Dodon’s aim is for Moldova to hold early elections, which he hopes will give the Socialists the chance to build a new parliamentary majority and backtrack on the pro-EU reforms initiated by recent governments. A September poll by CBS-Axa shows that support for the Socialists and fellow leftwing party Partidul Nostru is around twice as high as for the ruling coalition. However, the majority of respondents said they had no confidence in any party or politician.

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