Moldovan Banks Scandal: USD 2 Billion Laundered Through Core Mechanism

Massive Money Laundering Scheme Uncovered

A shocking investigation has revealed that at least USD 2 billion was laundered through a complex network of bank accounts in Latvia and Moldova. The staggering amount includes USD 600 million that was stolen, while another USD 300 million was used to pay off loans, with significant losses estimated between USD 600-900 million.

The Core Laundering Mechanism

The scheme involved the creation of fake deposits from Russian banks and the issuance of dubious loans by three Moldovan banks. The investigation identified a key role played by the so-called “Shor Group” in the fraudulent scheme, with several Moldovan-based individuals also found to have benefited from or been connected to the fraud.

Credit Decisions Made Illegally

The boards of the three banks made credit decisions without approval from their credit committees, bypassing normal lending procedures.
Board meetings took place without the presence of some members, leading to concerns about the legitimacy of the transactions.

Documentation Lost and Burnt

Credit documentation related to dubious transactions was lost under mysterious circumstances just days before the banks were placed under external administration.
The van containing the documents was allegedly stolen and later found burnt, suggesting that the loss may have been intentional.

State Intervention Suspected

The Moldovan authorities’ handling of the crisis has raised suspicions of state intervention in the affairs of the three banks. In September 2014, a series of legislative amendments were adopted to provide state aid to commercial banks facing systemic financial crises.

Secret Government Meetings

In November 2014, a secret government meeting decided to provide financial assistance worth 9.5 billion lei (approximately one-third of Moldova’s annual budget) to some “needy” banks.
The sources of funding were not disclosed, and the National Bank of Moldova was tasked with distributing the money.

Concerns Over State Aid

Experts have expressed concerns that the state aid may have been used to improve the financial situation of the robbed banks at the expense of the state. Former Prime Minister Pavel Filip has revealed that a secret government meeting took place in November 2014, where the decision was made to provide financial assistance to the three banks.

Second State Guarantee

In March 2015, the Gaburici cabinet signed a decision regarding a second state guarantee for the National Bank of Moldova, amounting to 5.34 billion lei.
The money was allocated as a loan to the three banks from the reserves of the NBM.

Public Debt Increased

In October 2016, the Law on the Issue of Government Bonds was passed, transferring a loan of 13.6 billion lei to public debt.
The law provided for the transfer of funds from the NBM to the government, increasing Moldova’s public debt.

Unanswered Questions

The investigation has identified several individuals and entities involved in the fraudulent scheme, but many questions remain unanswered. The authorities’ handling of the crisis has raised concerns about corruption and state intervention in the affairs of the three banks.