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Николай Марченко

Николай Марченко е зам.-главен редактор на "Биволъ" от ноември 2022 г. Той е журналист, специализиран в икономически и международни теми. Работил е във в.“Сега“, бизнес портала LiveBiz.bg. Бивш кореспондент в София е на авторитетния руски в.“Коммерсантъ“.

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• CORRUPTION SCANDAL WITH SUSPICIONS OF ESPIONAGE
  

  BULGARIAN GOLDEN PASSPORT. SCANDAL IN URUGUAY WITH A COLONEL FROM THE RUSSIAN INTERIOR MINISTRY

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• Bivol’s findings - ignored for months
  

  Bivol exposed our secret weapons in Ukraine; Petkov and Ninova denied it

  - 19 January 2023
• Investigation by Bivol
  

  Burgas refinery of greater value to Lukoil than the one in Ploiesti. Are the Russians leaving Romania?

  - 9 January 2023

Under guidance from political leader Ahmed Dogan and in Delyan Peevski’s ownership, Bulgartabak developed a complex financial, legal and logistical system for the manufacturing and distribution of cigarettes. The merchandise is officially shipped to legitimate destinations but is in fact distributed as contraband goods in the Middle East: in Iraq, Syria, Iran and Turkey. Bulgartabak’s smuggling network covers mainly Bulgaria, Dubai and a dozen ports in the Black Sea and Mediterranean, also making use of traditional smuggling channels in the Middle East. Their illegal trafficking and murky exports contribute to the financing of Kurdish structures in those countries, most notably the PKK, despite the fact that it is listed as a terror organisation in Turkey, NATO and the European Union. It is also believable that Islamic State gets a certain percentage from the network’s profits. The criminal scheme operates in a context in which mafia, the economic and the political sphere are intertwined to an extremely high degree.

These are some of the findings in a 58-page confidential report that can be dated around the end of 2016 or the beginning of 2017. The document is obviously the work of a powerful institutional or private intelligence body with access to impressive intelligence resources and unlimited amounts of sensitive trade information. Bivol acquired the document some time ago from reliable sources abroad. It took time to verify certain attributes and data in the report so its status as a legitimate document could be confirmed and it would be established as fit for publication. Due to the specifics of the information and source-protection considerations, the full report will be kept at our editorial offices and we reserve the right to use the information as professionally expedient, in view of our forthcoming investigations.

Several passages in the report specifically mention Boyko Borissov as the person holding the political umbrella over the shady privatisation of Bulgartabak by Bulgarian oligarchs, but also as a supposed beneficiary from the privatisation deal itself.

Bulgartabak in the radar of international intelligence

Up until the present moment information about two reports of that kind has been publicly circulated. However, no concrete findings from either of those documents have ever been published.

In 2017 the Turkish government body for combatting organised crime (KOM) submitted a report to Interpol and SELEC, presenting information of “products coming from Bulgarian producer Bulgartabac, which are fuelling contraband crime in our country. The Bulgarian state prosecution at the time under Sotir Tsatsarov refused to open an investigation or ask to see a copy of the full report. At the same time leading Turkish media close to the government were reporting that Ahmed Dogan and Delyan Peevski had been banned from entering Turkey. The information, however, was never publicly confirmed via diplomatic channels by the authorities in Ankara.

In 2019 one Bulgarian and one Romanian citizen were detained in Bulgaria on charges of blackmailing Delyan Peevski and Ahmed Dogan, using a report titled Smuggled cigarettes and the financing of international terror organisations. The report allegedly contained about 20 pages dedicated to Bulgaria and mentioning Dogan and Peevski’s names. The document was going to be submitted to the EU Parliament but in exchange for 12 million euro the politicians’ names could be removed from the text. That was the alleged offer made by Dilyan Georgiev and Dorin Iordache, detained over accusations of blackmail. The same allegations were made against another Romanian living in France, for whom a European arrest warrant was issued.

According to the Prosecution’s indictment, the mystery report contained information that the trafficking of smuggled cigarettes from Bulgartabac to the Middle East was contributing to the financing of terror organisations ISIS, Al-Nusra, the PKK and Bashar Assad’s regime. Dilyan Georgiev and Dorin Iordache initially pleaded not guilty but after nearly 8 months in detention accepted a plea deal with the prosecution, which virtually amounted to pleading guilty. It is not clear at the present moment if there is any development around the third suspect’s European arrest warrant.

Excerpts from the report:

“Bulgartabac Holding AD is the dominant actor on the Bulgarian tobacco market, and a very significant cigarette exporter on the international market. It is a former state-owned monopoly from the time of socialist Bulgaria.”

“Due to European regulations, Bulgarian authorities had to privatise this company. However, several attempts from foreign investors to acquire it failed because of imbricated organized crime and political networks in the country.”

“The company was finally privatised in 2011. Two Bulgarian oligarchs, namely Irena Krasteva and her son Delyan Peevski, joining forces with their regular banker Tsvetan Vassilev (since then pushed into bankruptcy by Delyan Peevski and in exile in Serbia), became owners of Bulgartabac Holding AD through several entities (some of them being highly opaque structures based in Liechtenstein).”

“Under the authority of the political leader Ahmed Dogan, it appears they managed to create a complex financial, legal and logistical system in order to produce cigarettes, send them officially to legitimate destinations in Black Sea and Mediterranean Sea, but then, in fact, have them distributed by a Kurdish network on Kurdish territories in Iraq, Syria, Iran and Turkey.”

“This smuggling “Bulgartabac System” has ramifications mainly in Bulgaria, in Dubai, in a dozen strategic ports in Black Sea and Mediterranean Sea, and on traditional trafficking trade routes in the Middle East. Through the trafficking process, such a system of opaque cigarette exports appears to finance Kurdish networks in general in Middle East, and notably the PKK, despite the fact it is listed as a terrorist organisation by Turkey, NATO and the European Union.”

“Given the current confirmed similar trafficking schemes in which it is already involved, the possibility that 1$1S became one of the local actors taking its share – either a fee or a percentage – is a credible hypothesis. This smuggling network developed itself within the context of extremely high level imbrications between mafia, economic and political spheres.”

“1. Bulgartabac Holding AD is the dominant tobacco firm in Bulgaria

The state tobacco manufacturer Bulgartabac was founded in 1947 by the Bulgarian Communist Party, which became the owner and controller of the tobacco business in People’s Republic of Bulgaria. Starting in 1947, Bulgartabac enjoyed a monopoly of tobacco production in the country. During the 1970s and the 1980s, the firm was one of the largest exporters in the world with 160 000 tons of tobacco and up to 95 000 tons of cigarettes. Until the end of the Cold War, this holding included 23 companies.”

“In 2014, Bulgartabac controlled 34% of the Bulgarian national market thanks _t~ 5 brands (Victory, EVA Slims, MM, Prestige, GD Blue) and a_ total of 4,59 0 billion cigarettes. Philip Morris and Karelia Tobacco follow with respectively 18 and 17%.

In addition to that, according to KPMG, smuggled cigarettes weigh 18,5% of domestic consumption with around 2,5 billion cigarettes.”

“According to Bulgartabac’s Annual Report of the Board of directors for year 2014:

• 2014 net profit is 31, 1 million BGN (around 15,9 million euros). 2013 net profit is 70, 1 million BGN (around 35,8 million euros).
• Market capitalization is stable.
• In 2014 the Board decided not to distribute any dividend. In 2013 it distributed 69, 7 mllllon BGN (around 35,6 million euros) to its shareholders.”

“2. Key persons involved in the “Bulgartabac System”

Ahmed Dogan, politlcal figure and former State Security agent.

Ahmed Dogan was born in 1954. He is a Bulgarian oligarch. He worked as an agent for the Bulgarian State Security from 197 4 to 1985. There are very strong indications he still collaborates unofficially. In 1985-1986, he was arrested and sentenced to a 10-year prison sentence for having created an unauthorized organization defending the cultural identity of the Turkish minority in Bulgaria. In 1989, he was released after an intervention by NGO Amnesty International. Strangely, since then he kept a very close relationship with the investigator Angel Alexandrov who got him arrested: in 2005 the same Angel Alexandrov appointed Delyan Peevski as an investigator in the Sofia Economic Crime Investigation Department.

According to several well informed intelligence and financial sources, at the end of the Cold War funds accumulated in foreign currencies trade – among other firms by Bulgartabac – were “stashed” in tax havens and then used in order to build commercial empires in Bulgaria. Such operations involved Foreign trade Minister Hristo Hristov and the former Prime Minister Andrei Lukanov; organised crime conglomerates like TIM (Chimimpot, Balkan Air, etc.) and Multigroup; and a political party created by Ahmed Dogan and called the DPS.

Indeed, in 1990, in the new context of post-Socialist Bulgaria, he founded a political party called the Movement for Rights and Freedom (DPS) to defend the interests of the Turkish minority. Several political analysts describe the DPS as also being a community of politicians with similar or complementary business interests.

• Members of the DPS are mostly business owners, who have to give part of their profits to the party treasury.
• In return, DPS members of the Parliament act as lobbyists for DPS-related businesses, among which tobacco growers and major tobacco firm Bulgartabac.
• All companies that obtain public contracts or State funds through DPSlobbying have to pay a 20-30% commission to the DPS.
• All DPS MPs own companies and assets that are officially registered as property of their family members and relatives.

Also, Ahmed Dogan is regularly mentioned in Bulgarian media as using his fina~cial clout and incentives in order to buy votes in crucial elections, which seems credible. On the contrary, allegations about his links with Islamist terrorism appear to be either exaggerated or fabricated.

The most visible part of businesses controlled by Ahmed Dogan is in the media industry. Through Irena Krasteva and her son Delyan Peevski, the DPS controls 22 national and regional media outlets, the largest Bulgarian printing company IPK Rodina, and 5 distribution companies. In addition to that, Ahmed Dogan is the owner of numerous hotels and real estate assets in Bulgaria. According to media research that could not be verified but appears credible, he also took control through various companies Bulgarian oil company Petrol: indeed, its new dominant shareholders, companies Yulinor EOOD and VIP Properties EOOD, have a close relationship to Ahmed Dogan as well as Tsvetan Vassilev.

To achieve his business operations, Ahmed Dogan relies mostly on 2 banks: Corporate Commercial Bank (CCB) DBank, and First Investment Bank (FIBANK).

Delyan Peevskl, controversial media mogul and politician.

Delyan Peevski is a Bulgarian controversial media mogul and politician. He was born in 1980. In 2001, he joined a royalist political party called the new National Movement for Stability and Progress (NDSW) created by former King Simeon Saxe-CoburgGotha. The party gained half the seats in the 2001 elections and formed a coalition with parties including Ahmed Dogan’s OPS. The then Minister of Transport Plamen Petrov, said to be close to organized crime firm Multigroup, appointed Delyan Peevski as Parliamentary Secretary of State and Chairman of the Board of the Port of Varna. Yet he was quickly dismissed because he lacked educational qualifications.

In 2003, Delyan Peevski passed the exam to become a lawyer. Two years later, he became a member of the Lawyers College in Blagoevgrad. This college was led until 2001 by Vasil Petrov, who is also a member of the Supreme Council of the Bar. Vasil Petrov is now a member of Supreme Legal Council of Dogan’s party DPS. In addition to that, Vasil Petrov’s daughter is the mother of a child with Delyan Peevski.

In 2005, the Supreme Judicial Council appointed Delyan Peevski, at the age of 25, as State Prosecutor at the Economic Department of the Sofia Prosecutor’s Office. The head of this office, Angel Alexandrov, is a close friend of Ahmed Dogan. In 20~5 as well, Prime Minister Sergey Stanichev (BPS, former Communist Party) appointed Delyan Peevski as Deputy Minister in the Ministry of State Policy for Disasters and Accidents. He then became repeatedly involved in scandals due to illegal enrichment.

To be noted that as a Deputy Minister, he then became member of an international department Commission in charge of issuing licenses for arms trade. In 2007, a major corruption scandal involved Delyan Peevski, the Minister of Economy Rumen Ovcharov, his deputy Kornelia Ninova, the head of Sofia Public Prosecution Angel Alexandrov, and the head of Bulgartabac Hristo Lachev.

In effect, the latter accused Delyan Peevski of extortion by demanding him to sign contracts with companies that would benefit Peevski himself. Minister Rumen Ovcharov was then forced to resign, prosecutor Angel Alexandrov took a long vacation leave, and both Kornelia Nlnova and Delyan Peevski were dismissed from the Bulgarian government. Yet judicial charges against the latter were dropped by the Prosecutor’s Office due to “lack of evidence”: on the contrary, it launched an Investigation against Hrlsto Lachev, who had made the scandal public, under the accusation of tax frauds. Eventually Hristo Lachev and his wife were convicted to a 9- year prison sentence but then acquitted in appeal court.

At the end of 2007, in spite of that corruption scandal, Delyan Peevski was reappointed as State Prosecutor by the Supreme Judicial Council and then reappointed as Deputy Minister by Prime Minister Sergey Stanichev. In 2009 he was elected member of the Bulgarian Parliament as a DPS representative, without having Turkish origins. In 2010 he failed becoming chairman of the parliamentary committee to combat corruption despite the full support of the DPS and several key members of the BSP (former Communist Party).

In 2013 the Parliament elected him new head of the Bulgarian intelligence and security service (State Agency for National Security, DANS). But immediately after this election, thousands of protesters march on the street and numerous online media campaigns oppose Delyan Peevski’s nomination. This nomination had then to be cancelled by the Parliament.

In addition to that, NSN Investment Ltd bought in 2015 the firm Tabaco Investment EOOD, previously controlled by Bulgarian oligarch Peter Mandzhukov, which is a 5% shareholder of Bulgartabac Holding AD. Through this move, Delyan Peevski is 12 officially, indirectly, a shareholder of Bulgartabac Holding AD (without even taking into account his other indirect shareholdings).

Irena Krasteva, mafia oligarch and mother of Delyan Peevski.

Irena Krasteva was born in 1955. She is a Bulgarian oligarch and the mother of Delyan Peevski. She started in the mid-1980s as a proof-reader in the Bulgarian Academy of Science. She moved to the private sector during the early 1990s, initially in the sector of marketing and advertisement. She and her son came under the protection of Konstantinos Livadas, a Greek businessman and former governor of the Northern Greek province that borders Bulgaria.

Thanks to his networks, Irena Krasteva began a very active social life within the Bulgarian and resident Greek business elite. She started using such contacts for business ventures, in particular in the sports betting and State lottery sector, which are major hotspots for corruption and fraud in Bulgaria.

In 2001, when former King Simeon Saxe-Coburg-Gotha created a new party, Greek businessman Sokratis Kokkalis, head of lntracom and investor in betting companies in Romania and Bulgaria, is rumoured to have funded his successful electoral campaign of that year. Sokratis Kokkalis is one of her numerous Greek resident business close contacts.

Irena Krasteva was soon appointed President of the Board of Directors of Olympic JSC, which is one of the companies of the State Agency for Youth and Sports. Yet she had to withdraw only a few months later because of a series of irregularities, undersold sports facilities and real estate, illegitimate contracts and business deals approved orally at disadvantageous conditions without supporting documentation, and so on. In 2002, Irena Krasteva was appointed by Minister of Sports Vasil Ivanov as Director of Sports Totalizators, the Bulgarian sports lottery and betting agency. She stayed until 2005.

In 2007, lrena Krasteva began investing massively in Bulgarian media by acquiring the New Bulgarian Media Group through her fully owned Balkan Media Company EOOD, thus controlling all of the following:

• television channels like TV7;
• print media “Monitor”, “Telegraph” and “Politika”;
• advertisement distribution companies llke Presmarket and Prestraflk. 13
• Also, both companies “Monitor” and Presmarket hold a participation in the printing and publishing company Rodina, via United Bulgarian Newspaper AD.

Irena Krasteva and her son Delyan Peevski are believed to control over 60% of the market of the distribution of newspapers in Bulgaria. She could only do so thanks to loans guaranteed by Tsvetan Vassilev’s Corporate Commercial Bank (CCB). Based on public and confidential sources, the following business ventures and participations are owned or strongly believed to be controlled by her:

Telecommunications:

• BTC, 1.4 billion BGN.
• NURTS Bulgaria, 213 million BGN.

Cigarettes and drinks:

• Bulgartabac Holding, 616 million BGN.
• Telish, 70 million BGN. Trading:
• K&K Electronics (“Technomarket”), 290 million BGN.
• Beach Burgas (only minority interest).

Finance:

• Insurance corporation “Victoria”, 86 million BGN.

Media and marketing:

• New Bulgarian Media Group Holding.
• Nation Distribution Agency, 9.3 million BGN.
• Newspapers: Telegraph, Monitor, Weekend, Meridian Match, Politika, Vseki den, Borba, Chernomorski flag, Minaha godini, Vtora Mladost.
• TV: TVSeven, 26 million BGN; BBT.
• Websites: 3Bey.bg, 6.6 million BGN; BNEws.

Cars:

• Litex Motors (minority interest), 65 million BGN.
• KIA Bulgaria, 32 million BGN.
• Subaru Motors.

 Infrastructure and road construction:

• Integrated Transport Systems, 211 million BGN.
• Hydropont-M, 46 million BGN.
• Euro Build Project, 98. 7 million BGN.

Production and engineering:

• Rubin, 215 million BGN.
• Shipbuilding Rus, 97 million BGN.
• Dunarit, 77 million BGN.
• Terem – Georgi Benkovski, 28.4 million BGN.

Agriculture:

• Agro Finance REIT, 73 million BGN.

Tourism and hotels:

• Health and Wellness- REIT, 147 million BGN.
• Sana Space Hotel Hissar.
• Pirin Golf Properties.

Ventsislav Zlatkov Cholakov: The operatlonal mastermind in Bulgarla and in the United Arab Emirates.

Ventsislav Zlatkov Cholakov was born in 1971. He holds several degrees in finance, banking and management. He is the Chief Executive Officer of Bulgartabac since its privatisation in 2011. He is described to be very close to Delyan Peevski. From 1998 to 2006 he worked in “Metro Cash & Carry Bulgaria” as a tax and financial expert, and then as finance and project manager. From 2006 to 2011 he worked as a financial director and head of the supermarket chain Billa Vulgaria EOOD, part of the German REWE group.

Since 2011 he is the Managing Director of Bulgartabac Holding AD and his mandate was extended in 2014 for 3 additional years. In addition to that, from 2011 to 2015 he was also director of subsidiaries Bulgartabac Sofia and Blagoevgrad BT.

He is the senior executive whose name appears the most on the board of the different subsidiaries of Bulgartabac. More surprisingly, he also appears as Director with signatory powers in foreign structures that are part of the shareholder structure of Bulgartabac: for instance BT Invest GmbH in Austria, as well as several companies in United Arab Emirates and Dubai which are believed to be shell companies used to hide real owners like the company TGI Middle East.

Ventsislav Zlatkov Cholakov is also a former shareholder (24%) in an Austrian trading company called Tobe Trade International GmbH, the other shareholder being a regular business partner of Delyan Peevski named Dimitar Ivanov Petkov. Tobe Trade International GmbH is allowed to trade in all types of services and goods: it has regularly been mentioned as a trade facilitation company for business in the Middle East and in Asia. In addition to that, Ventsislav Zlatkov Cholakov is the Managing Director for Dubai-based Bulgartabac Trade FZCO, which is the exclusive Bulgartabac trade representative for Asia, Middle East and Africa.

Such elements indicate Ventsislav Zlatkov Cholakov is an integral and crucial part of the decision-making process, from the ultimate beneficial owners to the management and operations of the company. This is in line with reports that he is the mastermind of the Bulgartabac system as a whole.

More striking is the allegation that Ventsislav Zlatkov Cholakov is the head of a money-laundering scheme, by potentially using proceeds of a crime, i.e: cigar?tte smuggling rn the Middle East, for financial transactions: this would make him subject to the European Union legislation against money-laundering. As a consequence, any European Union and Western banks dealing with him would be required by law to adopt enhanced due diligence measures.”

“Some other branches of the Dogan-Peevskl-Krasteva alllance

Apart from Bulgartabac Holding AD, Delyan Peevski, his mother Irena Krasteva, Ahmed Dogan, and by extension his DPS network, are involved in other highly opaque business ventures that depend on state subsidies and government contracts.

Among such activities are apparently companies such as Tabac Market, Sibole Services Inc. Bulgaria, and Industrial Construction Holding:

• Tabac Market is the sole owner of the company Tabac Traffic, which runs the kiosks and cigarette distribution chain Lafka.
• Sibole Services Inc. Bulgaria is the majority owner of the International construction firm Technoexportstroy. The latter was privatised in 2012 through a dubious process and sold via a bank loan to company AT Engineeering 2000 which immediately resold its shares to Sibole, owned by a Panama foundation allegedly owned by Delyan Peevski.
• Industrial Construction Holding was owned by Delyan Peevski’s company Vodstroj 98 before it was sold to Story Invest, property of PR professional lvaylo Nikolov with no track record in construction. Some subsidiaries of this holding are reported to get preferential access to government contracts thanks to the lobbying of the political party DPS, controlled by Ahmed Dogan, in exchange for kickbacks.”

“The issue of public tenders

In February, Bulgaria’s Prime Minister Boyko Borisov ordered personally the end of several public tenders, over doubts that the respective winners had ties to certain companies and people such as Lukoil Bulgaria head Valentin Zlatev and controversial politician and alleged media mogul Delyan Peevski.”

“In fact, since the beginning of 2016, a list of public tenders have been halted for suspected irregularities and lack of transparency among them: the Bulgarian Ports Infrastructure Company and the National Railway Infrastructure Company. Among the halted procedures is the 6 million BGN tender for the construction of a WiFi network on the territory of the ports in Varna and Burgas and the tender for the construction of lots 1 and 2 of the Hemus motorway (valued at 88 million BGN). According to media reports, the public tenders from 2007 until 2015 demonstrated an abnormal winning rate of companies linked with oligarchs. Following the Public Procurement Act (PPA), the Public Procurement Agency provides access to 16 information on all expenditures of the State for a period of nine years – sin~e the beginning of 2007 till the end of 2015. Information on 163,722 contracts, totaling 59 818 543 584 levs (fifty-nine billion and eight hundred and eighteen million levs) of which 15.99 billion levs in European funding are revealed.”

“Russian bank and Liechtenstein-based entitles used as a vehicle to hide real buyers of Bulgartabac

Both Tsvetan Vassilev and Delyan Peevski have a close direct or indirect relationship with Russian elites. According to a former State security agent specialized in ex-Warsaw Pact countries, Delyan Peevski’s mentor Ahmed Dogan, who is a former agent of Bulgarian secret service, kept close contacts with Russian ex-KGB agents that became businessmen and political actors in Russia. On the other hand, until Tsvetan Vassilev lost control of it in 2014, Corporate Commercial Bank also enjoyed a close relationship with Russia: it was created in 1998 as Bulgarsovinvest, a joint 19 venture between the Bulgarian Foreign Trade Bank and the Russian state-owned Vneshekonombank (now VEB Bank).

FZE, which was itself controlled by Middle Eastern company Prest Trade Ltd, with an end-owner being an unnamed individual not involved directly or indirectly in any economic activity. However, both companies are shell companies based in a free trade zone in Dubai, and the alleged beneficial owner may be merely a straw man.”

The real owners of Bulgartabac are in fact oligarchs Delyan Peevskl, Irena Krasteva, and their ex-banker Tsvetan Vassilev.

“4. Tsvetan Vassilev’s bank eliminated by Delyan Peevski.

While Delyan Peevski, Irena Krasteva and Tsvetan Vassilev were taking control of Bulgartabac, the long-lasting business partnership between them turned into a business conflict, because Tsvetan Vassilev’s Corporate Commercial Bank rejected several of Delyan Peevski’s investment projects. After numerous mutual death threats, Delyan Peevski moved his assets and banking operations to another bank. Shortly after, Corporate Commercial Bank was forced under administration because of lack of liquidity. Meanwhile, within Bulgartabac, Tsvetan Vassilev’s proposition with the support of his Italian ally Edoardo Miroglio for a dividend distribution of all the earnings of the tobacco company was rejected.

Many analysts and commentators pointed out to suspicious circumstances surrounding the crash of Corporate Commercial Bank, which was also the main finance source of Bulgartabac. Suspicions have been raised on the fact that the multiplication of unsecured and even dubious loans that Delyan Peevski enjoyed, were eventually the reason of the downfall of the bank, in particular when he started to default on the loans. Tsvetan Vassilev fled the country and is currently hiding in Serbia. While currently under liquidation, Corporate Commercial Bank still owns 6.02% of Bulgartabac.

Some commentators share the impression the liquidation of CCB followed a premeditated plan by Ahmed Dogan, executed via Delyan Peevski’s various media outlets that destabilised the bank. In addition to that, sources in the financial sector assess that the bank could have been saved by the government, which chose not to because it would have required EU approval and consequent audit or investigation by international experts. Thus Bulgarian authorities took the opportunity of the collapse of CCB to close doors on any serious scrutiny of dubious deals, potential embezzlement and money laundering.”

“While CCB was collapsing, Ahmed Dogan, Delyan Peevski, their networks and their entourages moved altogether into another bank for their daily business, called First Investment Bank (FIBANK). Bulgartabac did the same.“

“FIBANK has a rather negative reputation due to suspected business with organised crime structures. FIBANK got under serious attack from investigative media accusing it of complicity in EU fraud schemes. Delyan Peevski’s business operations using FIBANK have also attracted a lot of derogatory content in the media. Thus FIBANK might experience a bank run in the future because of its growing public image of a “mafia bank”.

In any case, the bank is currently undergoing a stress test according to the European financial requirements. The result of the stress test should become known by the summer.”

“5. The “Bulgartabac System” for cigarette trafficking.

Most cigarettes are produced in Blagoevgrad, Bulgaria.

Bulgartabac Holding AD has 3 major cigarette production sites: two in Bulgaria, the one in Blagoevgrad having almost twice the capacity of the one in Sofia; and a third site in Banja Luka, Bosnia-Herzegovina, in the autonomous region of Republika Srpska. The production site of Blagoevgrad is the most strategic one, because it is located nearer to the most widespread tobacco growing sites in Bulgaria.

It is notable that such tobacco growing regions are also the core constituencies where lobbying MPs from Ahmed Dogan’s DPS party are usually elected. The production site in Blagoevgrad is able to produce 27 billion cigarette sticks a year, compared to 16 billion for the Sofia site. Bulgartabac does not have an integrated logistics, distribution and supply department.”

Smuggled cigarettes reach Turkey by road

“Sofia based distributor ELD, with whom Bulgartabac has a contract, boasts 13 distribution centres and 5 cross-dock stations as well as over 350 vehicles, not counting outsourced independent drivers. Its main clients appear to be Bulgartabac, King’s Tobacco (KT International), the Greek tobacco producer Karelia Tobacco and Tabak Market AD.

The vast majority of the merchandise is transported on trucks or containers via the ELD logistics or its subcontractors, mostly independent truck drivers, to the port of Varna where it is dispatched via ship to other destinations. Those destinations are mostly intermediary ones, where merchandise is transferred to other ships. A very limited part is shipped via the Port of Burgas. An even smaller but unquantified part is transported via freight forwarders to destinations such as Iraq and Iran via road route in Turkey.”

“The latter take the usual transit route via the main border post between Bulgaria and Turkey, a village called Kapitan Andreevo, which is frequently and thoroughly controlled for smuggling and counterfeit cigarettes coming among other countries from Ukraine, Moldova and China. There are regular arrests of customs agents for taking bribes, despite the fact the problem is described as marginal.

Road transport shipments from Bulgartabac factories are usually considered legitimate, they carry documentation saying the freight is destined to be exported to Iraq or I ran, and so they pass the border without any problem. Whether these trucks 26 really head to the declared direction could not be confirmed as it is said that once on the Turkish territory, the transport of the containers is taken over by local drivers.”

“According to unconfirmed accounts published in Turkish media, Turkish intelligence MIT has repeatedly informed the Bulgarian counterparts about the issue of smuggled cigarettes stemming from Bulgartabac: yet no action appears to have been taken so far to counteract it.”

Shipments sent to Black Sea and Eastern Mediterranean Sea: abnormal destinations, unless the real hidden destination Is Turkey

“The Port of Varna has a strategic importance for large-scale international trade and smuggling. Bulgartabac being the biggest Bulgarian exporter of cigarettes, these exports take place thorugh direct sales by subsidiaries Sofia BT AD and Blagoevgrad BT AD. Main destinations appear to be Middle Eastern countries: United Arab Emirates, Iran, Iraq, Syria, and Egypt. Other export destinations are or were, among others: the Philippines, Russia, Georgia.”

“The majority of the containers are transported on ships that do not go directly to such destinations. Instead, Bulgartabac uses ships that operate mostly in the Black Sea and the Eastern Mediterranean region. This means that freight is meant to be offloaded from the vessel at some port and then be reloaded on another ship to continue its route. Thus the journey takes considerably more time. The hidden advantage is probably the fact that out of the Port of Varna the real destination cannot be confirmed with certainty as the trail may be lost.”

“In the Black Sea, the following ports are direct but not necessarily final destinations for the ships leaving Varna with tobacco containers on board:

• Burgas, Bulgaria;
• Constanta, Romania;
• Odessa, Ukraine;
• Novorossiysk, Russia;
• Poti, Georgia;
• Istanbul, Trabzon and Samsun, Turkey.

In the Mediterranean Sea, the main direct destinations are as follows:

• Istanbul, Ambarli, Izmir and Mersin, Turkey;
• Lamaca, Cyprus;
• Latakia, Syria;
• Beirut, Lebanon;
• Alexandria, Port Said and Damletta, Egypt;
• Piraeus and Thessalonlki, Greece;
• Durres, Albania;
• Valencia, Spain.

Some direct destinations, where freight shipments are known with certainty to have been done and the paper trail was very likely changed in order to carry freight to different destinations, include:

• Izmir and Ambarli in Turkey;
• Piraeus In Greece;
• the international container port of Marsaxlokk in Malta.”

“It is worth noting that none of the listed direct destinations are located in the geographical area of the largest export destinations of Bulgartabac: Dubai, Iran and Syria. Also noteworthy is the fact that destinations which would have been suitable for access to Iran and Iraq, and even as transit for smuggling in direction of Turkey, for instance the Port of Umm Qasr, are not being travelled to.”

“Numerous direct destinations are conveniently in the Eastern Mediterranean Sea and in the Black Sea, from where the assumed real end market – Turkey – is easily reachable by road. This is a very strong indicator that smuggling activities are underway. Accumulated abnormalities in choosing direct destinations for shipments then becomes coherent: via this “shipment ballet”, the aim would be to disconnect the legitimate origin of the production In Bulgaria and the presumed criminal trafficking use in Turkey and in the Middle East.”

“2016: The divorce between Turkey and Bulgaria over the cigarettes issue

Bulgaria’s neighbor Turkey has been increasingly affected by the smuggling of Bulgartabac cigarettes (mainly the Prestige brand) since 2010, although cigarette exports from Bulgaria to Turkey are officially very low (only 31 kilos of cigarettes reported on the UN Comtrade database). According to a Turkish police report on anti-smuggling and organized crime, 106,431,665 packages of illicit cigarettes were seized in 2014 and approximately 50% of the contraband cigarettes seized were Bulgarian (Prestige, Victory and M & M).

In May 2015 Turkish authorities seized a large volume of cigarettes smuggled from northern Iraq, Georgia and Bulgaria to the southern province of Mersin as well as several eastern, Black Sea and southeastern provinces. The PKK’s involvement in the smuggling routes was confirmed. In August 2015, Turkish customs seized 3.5 million packs of cigarettes. For the Daily Sabah, cigarette smuggling is the PKK’s biggest source of income and directly involves Bulgarian products.”

Dubai-based companies that resell Bulgartabac cigarettes are located in a vacant building, to be demolished or rehabilitated.

“Based on data collected in Bulgaria from the Port of Varna, Dubai-based company Adalus Al Sharq General Trading Ltd (Al Sharq) is by far the largest recipient and reseller of cigarettes produced by Bulgartabac Holding AD:

• Emirati investor Essa Saeed Rashid Khatfan Al Shamsi owns 51 % of the shares. Al Shamsi is a large tribe present in the whole Arabian peninsufa, in particular in southern United Arab Emirates and northern Oman.
• Iraqi investor Adel Fouad Mohamed Ali is the General Manager and holds 24% of the shares.
• Iraqi investor from Kurdistan Salam Gader Faraj owns the remaining 25%.”

“Based on enquiries conducted around the company, the two Iraqi investors are the active owners of the business with the Emirati one acting as a silent partner (a “local sponsor” as it is customary in many Middle Eastern countries). The company is known to operate very closely with Dubai-based company Beirut Shipping LLC, which is also owned by Essa Saeed Rashid Khalfan Al Shamsi (51%) and Adel Fouad Mohamed Ali (49%). It is alleged that Al Sharq moves merchandise through Beirut Shipping LLC.

Strangely, the building in Dubai in which these 2 companies are based is in fact vacant pending rehabilitation or demolition.”

Cigarette smuggling in Kurdish areas with connection to terrorist organisation PKK.

“The Bulgartabac brand “Prestige” is the most frequently illegally used and sold cigarette brand in Kurdish areas, including Northern Syria, Northern Iraq, West~rn Iran, and South-Eastern Turkey. The “Prestige” brand seems to be synonymous with the defenders of the Kurdish cause – including their fighters, the YPG in Syria and Peshmerga in Iraq -, controlling the trade and cross-border smuggling of such cigarettes. Around 90% of the Kurdish smokers smoke “Prestige” cigarettes, citing as main reasons the price, the available volume, and the fact that the trade is controlled by Kurdish businessmen.”

“Out of Northern Iraq, cigarettes are smuggled via trucks and in some instances on the back of donkeys and horses (to avoid paying truces to the border police and to the military) to reach Iran and Turkey, with the Turkish city of Van being one of the central distribution places. Proceeds from cigarette trade are either transported in person to Dubai or laundered through local currency exchange offices controlled by major cigarette traders.”

“The favourite routes are those controlled by the PKK (Kurdistan Workers’ Party), which is listed as a terrorist organisation by several States and organisations including Turkey, NATO and the European Union. PKK receives at its check-points 2500 USD per master case of cigarettes, while in areas where PKK has no control of the borders, the military get around 8300 USO per truck, which carries some 250-280 master cases within or hidden by legitimate freight.”

The central figure of the Kurdish “Prestige” cigarette trade is nicknamed “Mullah Salam”, out of respect. His real name is Salam Qader Faraj, minority partner in Dubai-based company Adalus Al Sharq General Trading Ltd (Al Sharq). Other brands that appear to be traded, apart from “Prestige”, are “MM”, “Esse” and “Victory”. According to investigative journalists, a similar Salam Qader Faraj, also appeared during the 2007 scandal of Bulgartabac with a company name Caledon Invest. Following the City Prosecutor’s Office in Sofia and based on copies of the relevant contracts, Caledon Invest Inc was a buyer of large amounts of cigarettes from Bulgartabac Holding Ltd, which were scheduled for distribution in Middle Eastern and African countries.”

“The Bulgarian authorities suspected Caledon, a company registered in Delaware in 2004, of smuggling and money laundering. Thanks to the cooperation with us judiciary agencies, investigations were thorough, the scheme was uncovered, and the final beneficial owners of Caledon (citizens of the United Arab Emirates) were identified. Caledon Invest Inc seems to have stopped its activities since.”

Terrorist connections other than PKK: the ISIS hypothesis

“There is no indication of a direct connection between Islamist terrorist organisations (Al Qaeda, Al Nusrah, ISIS) and the central figure “Mullah Salam”: however, this information might just be limited to areas controlled by the Kurds and needs to be checked. In particular, if we take into account existing intelligence about current forms of ISIS financial revenues (customs, racketeering, Islamic taxes, etc.), and given the commercial and political interests at stake (Kurdo-Turkish rivalry), a financial connection with ISIS is possible. Also, examples of this organisation getting Involved in other types of illegal trade, such as oil and gas smuggling, trade in stolen goods, kidnapping and racketeering, indicate that ISIS tolerates business activities on its territory if it receives a fee or a certain percentage.”

“As a consequence, smuggling routes between Iraq and Turkey, and between Syria and Turkey, previously controlled by either Iraqi, Syrian or Kurdish authorities that tolerated smuggling in exchange for a fee or a percentage, may now be controlled by ISIS or allied regional terrorist organisations that have perpetuated such arrangements. Following this credible hypothesis, there would then be a very strong likelihood of an indirect link between Bulgartabac products and revenue sources of the ISIS terrorist organisation.”

In 2014-2015 Bivol published a series of investigations into Bulgartabac’s activities. Our findings are to a great extent confirmed by the current report. Some of the following investigations revealed the system of smuggling channels that existed even before the tobacco holding was privatised by Peevski:

• Another shipment of smuggled Bulgarian cigarettes seized in Turkey
• Bulgartabac distibutors in the Middle East operate illegally
• Turkey points the finger at Bulgartabac as main smuggler
• Four European state prosecutions poised to attack the Dogan/Peevski model
• Bulgartabak under a new offshore owner since January
• The Bulgartabac mafia II
• The Bulgartabac mafia I
• A letter to the US Embassy explains the Bulgartabac scheme, featuring Boyko Borissov, Delyan Peevski and Ahmed Dogan
• Bulgartabac sells over a billions dollars’ worth of cigarettes per year to an Iraqi smuggler
• Panama Papers: Peevski’s lawyer is the owner of key offshore companies
• How much does Peevski weigh? – 1.5 billion levs

 Bivol has brought this publication to the attention of the new Bulgarian parliament and the newly appointed prliamentary commission for investigating the work of the Borrisov administration. We hope to contribute to a thorough, in-depth independent investigation of the privatisation, the activities and the secretive ownership of the former largest tobacco holding in Europe, i.e. Bulgartabac.  – Булгартабак. We have every reason to believe it is one of the black holes that over the last 10 years have been responsible for the stealing, the appropriating, the laundering through criminal means of billions of levs out of Bulgaria’s national wealth.

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