2014 Moldovan bank fraud scandal
Banca de Economii was a state-owned Moldovan bank involved in the fraudulent money laundering scheme | |
| Location | Moldova, Latvia, UK |
|---|---|
| Type | white-collar crime, banking fraud, money laundering |
| Participants | Vlad Filat, Ilan Shor, Vlad Plahotniuc, Serghei Iaralov, Nicolae Timofti, Iurie Leancă, Stéphane Christophe Bridé, Mircea Buga, Oleg Reidman |
In 2014, $1 billion disappeared from three Moldovan banks: Banca de Economii, Unibank and Banca Socială. This bank fraud was a coordinated effort involving all three banks working together to extract as much loan finance as possible from the banks without any obvious business rationale. Ilan Shor, a Moldovan businessman, together with Vladimir Plahotniuc and Serghei Iaralov "masterminded" the scam. Shor was chairman of the board at Banca de Economii (Savings Bank, BEM) up to November 28, 2014.
Funds worth $1 billion were transferred to the United Kingdom and Hong Kong shell companies used to conceal the real owners of assets, then deposited into Latvian bank accounts under the names of various foreigners.
The total loss from the scheme was equivalent to 12% of Moldova's GDP.
A carousel borrowing scheme was applied, loans at one bank were paid off with loans from another. The massive expansion of bank lending was funded with heavy borrowing from Russian companies.
During the parliamentary hearings on the bank fraud, the Moldovan Information and Security Service deputy director, Vadim Vrabie, declared that President Nicolae Timofti had known since 2013 about the robbery at Banca de Economii, Banca Socială and Unibank.