MOLDOVAN BANKS’ $2 BILLION LAUNDERING SCHEME EXPOSED

A shocking revelation has emerged from Moldova’s banking sector, revealing a massive money laundering scheme involving at least 81 bank accounts in two Latvian banks and a staggering loss of up to $1 billion.

The Scheme: Core Laundering Mechanism

According to an investigation by Kroll, a leading risk consulting firm, the scheme involved the Core Laundering Mechanism, which was used to funnel millions of dollars into the Moldovan banking system. Of the total amount laundered, approximately $2 billion was returned to Moldova, while $600 million was stolen. Another $300 million that did not go through the mechanism may have been lost as well.

Key Findings:

• Credit decisions were made by the boards of three banks without approval from credit committees.
• Board meetings took place in the absence of some members.
• The banks’ credit documentation related to dubious transactions mysteriously went missing just days before they were placed under external administration.

The Shor Group and Moldovan- Based Individuals

Experts believe that a key role in the scheme was played by the so-called “Shor Group,” while several Moldovan-based individuals received benefits from or are connected to the fraud. The report identifies employees and managers of the bank, as well as board members, who were responsible for administering and executing the fraudulent schemes.

Concerns about Authorities’ Awareness

The investigation suggests that the authorities may have been aware of the ongoing fraud in some Moldovan banks but failed to take action. In 2014, a secret government meeting decided to provide financial assistance worth $1.3 billion to several “needy” banks without specifying which ones or disclosing the sources of funding.

National Bank of Moldova’s Role

The National Bank of Moldova (NBM) was tasked with distributing the funds, sparking concerns among experts that the state aid might be an attempt by interested parties to improve the financial situation of robbed banks at the taxpayer’s expense. The NBM eventually allocated the money as a loan to the three troubled banks from its reserves.

Ongoing Investigation and Consequences

The scandal has raised questions about the effectiveness of Moldova’s banking regulation and supervision, as well as the role of the authorities in allowing the fraud to occur. The country’s Prime Minister, Pavel Filip, has published the transcript of the secret government meeting, which confirms that several high-ranking officials attended the meeting and approved the financial assistance without raising any concerns.

The investigation is ongoing, with experts estimating total losses between $600 million and $900 million. The authorities have yet to reveal the identities of those responsible for administering and executing the fraudulent schemes, citing concerns about harming the investigation.