Infamous Bulgarian Fraudster Is Back in the Business with EU Bids Mind the horns!

7,687,438 levs have been approved and 4,996,836 levs have already been absorbed by several companies under the European Union Operational Program “Competitiveness”. According to sources of Bivol, controversial businessman Mario Nikolov is the person behind these companies. If we add another four projects from the Rural Program for 5.1 million levs, the total is over 13 million levs in EU funds, which have been already spun in a new scheme under the good old model – inflated invoices for old machines instead of new ones.

Nikolov, who defines himself as “hereditary socialist”, rose to fame at the end of the rule of the Three-Party Coalition with the massive theft of EU funds exposed by OLAF. The so-called SAPARD case, in which Nikolov was tried together with Lyudmil Stoykov on charges of money laundering, became a byword for the dysfunctional Bulgarian judicial system. While several people were sentenced in Germany for the same scheme and even already served their time, in Bulgaria Mario Nikolov and his accomplices remain at large and the case is still dragging on. The scandal also shed light on a political corruption scheme that was not investigated at all – after receiving the EU money, Nikolov gave generous bonuses to his employees, who in turn spontaneously donated several thousand levs to the Bulgarian Socialist Party (BSP).

With the “right” bank again

To apply successfully for an EU project, a company must provide bank guarantees and co-financing. Major credit and collaterals are needed for projects worth several million levs, such as those listed below. FIB co-financed and guaranteed the projects with which Mario Nikolov cheated the EU through the SAPARD program. After OLAF exposed the scheme, money had to be returned and as result Nikolov owes the bank a considerable sum.

The projects under OP “Competitiveness” and “Rural Development”, discovered by Bivol, not only are identical and for nearly identical amounts, but have the same standard contracts for loans and bank guarantees. The contracts for bank guarantees even have consecutive numbers or were signed on the same date, a check in the Commercial Register showed. And all without exception are again from the same bank, which after being rescued with State aid, is now branded as FIBANK.

EUROFRIGO Two

The new companies with which Nikolov applies and wins EU bids are not even trying to hide the relationship with the “mother ship”. Instead of EUROFRIGO, which was forced to return 3.8 million levs to the SAPARD program, we now have a new company under the name EUROFRIGO STAR, but it is registered at the same address and even has the same manager as EUROFRIGO. Plamen Tsvetanov Danyov was Chairman of the Board of Directors of EUROFRIGO from 2008 to 2012 with Mario Nikolov’s wife Mariana, who is also a defendant in the SAPARD case. Now Plamen Tsvetanov is the manager of EUROFRIGO STAR and his signature appears under the contracts for the EU funds. Another company is also registered at the same address – 1 “Malashevska” in Sofia – its name is AVISPAL.

All four companies that have received millions from the operational program have changed owners recently. Svetoslav Lachezarov Mitov, born in 1985, has become the owner of AMAREL BULGARIA on July 15, 2015. This is a company with 100 levs in capital, has no activity and one person with social security, perhaps the very Mitov. Since November 2014, AMAREL BULGARIA is owned by EUROFRIGO STAR. With what money a company with no history acquires another company with 2.5 million in net sales revenues and capital of 3 million levs is very intriguing question.

Svetoslav Mitov is the owner of SIKAN Ltd as well, since February 2015. This company is also a beneficiary of millions under the same scheme, paying social security for only two persons and has 104 thousand levs in sales for 2014.

In comparison, Dimitar Kerelov from INTELLIGENT FOOD SYSTEMS has enviable experience because he has become the owner of the company back in 2011, having invested only 50 levs in capital. His company has earned net 474 thousand levs from sales in 2014, and has won in 2015 a bid worth one million euro to modernize itself. Kerelov is known as

Mitko the Flash Drive

to whom the former Chair of the Sofia City Court Vladimira Yaneva granted full access to the video surveillance systems, the hardware and the system for random allocation of cases in the key Sofia Court. The connection of Dimitar Kerelov with Mario Nikolov was examined in a publication of Capital daily which showed that INTELLIGENT FOOD SYSTEMS holds 49% stake in EUROFRUIT INTERNATIONAL, which was founded by Mario Nikolov in 2004. Nikolov is also known for his friendly relations with high-ranking magistrates with whom he has been seen having lunch.

The AVISPAL company, which is also the beneficiary of nearly one million euro, has a more serious record. It boasts publically two million levs in profit for 2014 and 44 employees. On June 22, 2015, however, AVISPAL was sold to FUNEX Ltd, which has one person with social security and no sales. Like EUROFRIGO STAR, this company is probably prepared to be turned into a shell one after the absorption and partaking of resources.

Ducks are not what they seem

Besides the eight million for refrigeration installations under the “green program”, Mario Nikolov is about to absorb another five million levs under the “Rural Development” Program with four identical projects for poultry farms for ducks and turkeys in the village of Zhivkovo in the municipality of Ihtiman.

Four companies, registered to proxies, have received funding from the State Fund Agriculture under measure M121 “Modernization of Agricultural Holdings”, a check of Bivol showed. As the companies-beneficiaries of OP “Competitiveness”, these four companies also have identical credit agreements with FIB, signed on the same dates in June and July 2015. The loans are guaranteed with rural properties as collateral.

The scheme

Some of the companies on the list will buy equipment from abroad. Whether these will be old machines, painted like new, as is Nikolov’s trademark, or new machines at twice inflated prices, the margin must be large. The other companies will build, will install machinery and other equipment and will put whatever they want on the invoices. Finally, the State Fund Agriculture and the Economy Ministry will pay to the companies 50% of the amount from the inflated invoicing.

This is the optimistic scheme. The pessimistic is that there will be neither machines nor poultry or loans repaid to FIB, while the “squished” by the judicial system Nikolovi family will seek solace on some exotic island. They say that with a few million in your pocket nostalgia was more bearable.

Firms beneficiaries under OP “Competitiveness”

EUROFRIGO STAR 202156765

BG161PO003-2.3.02-0387-C0001 “Investments in energy saving refrigeration equipment” in EUROFRIGO STAR LTD

Total budget: 3,879,548 BGN

Approved budget: 1,939,774 BGN

Total disbursements: 1,260,853 BGN

http://umispublic.government.bg/srchProjectInfo.aspx?menu=search&id=115234

FIB

Credit: 750, 000 BGN; Contract 000LD-L-000 617/June 26, 2015

Bank guarantee: 1,260,853 BGN; Contract 000LG-L-005 171/June 26, 2015

====================

INTELLIGENT FOOD SYSTEMS 201699270

Energy efficiency investments in “Intelligent Food Systems” LTD

Project Economy Ministry: 3,840,951 BGN

Approved budget: 1,920,475 BGN

Total disbursements: 1,248,309 BGN

http://umispublic.government.bg/srchProjectInfo.aspx?menu=search&id=113108

FIB

Credit: 750,000 BGN; Contract 000LD-L-000 616/June 26, 2015

Bank guarantee: 1,248,309.01 BGN; Contract 000LG-L-005 178/June 26, 2015

===================

AVISPAL 201696783

BG161PO003-2.3.02-0388-C0001 “Investments in new energy-saving equipment in “AVISPAL” LTD

Total budget: 3,776,329 BGN

Approved budget: 1,888,164 BGN

Disbursed: 1,227,307 BGN

http://umispublic.government.bg/srchProjectInfo.aspx?menu=search&id=115188

FIB

Credit: 750,000 BGN; Contract: 000LD-L-000 615/June 26.2015

Bank guarantee: 1,227,306.88 BGN; Contract 000LG-L-005 072/June 26.2015

===================

SIKAN Ltd 175326107

BG161PO003-2.3.02-0386-C0001 “Investments in energy-saving equipment” in SIKAN Ltd

Approved budget: 1,939,025 BGN

Disbursed: 1,260,367 BGN

http://umispublic.government.bg/srchProjectInfo.aspx?menu=search&id=115241

FIB

Credit 750,000 BGN; Contract 000LD-L-000 612/June 26, 2015

Bank guarantee 1,260,366.50 BGN Contract 000LG-L-005 183/June 26, 2015

====================

Companies beneficiaries under the Rural Development Programme, measure 121 “Modernization of agricultural holdings” RDP 2007-2013

SAMI Meat BG 200303323

Project for 2,831,952.92; Contract 23/121/05720 /April 26, 2013

“Building a poultry farm for breading turkeys and a domestic-administrative building in the village of Zhivkovo, municipality of Ihtiman”

Contracted 1,415,976.46 BGN

FIB

Credit 1.47 million BGN; Contract with 000LD-L-000 630/June 26, 2015

=================

HOLID 202374415

Project for 2,878,016.38 BGN; Contract 23/121/05700/March 15, 2013

“Construction of a farm with domestic-administrative building for poultry”

Contracted 1439 008.19 BGN

FIB

Credit 1.47 million BGN; Contract 000LD-L-000 614/June 26, 2015

=================

NICK FOOD BG 200303273

Project 2,799,077.38 BGN; Contract 23/121/05606/March 13, 2013

“Building a poultry farm for breeding ducks in the village of Zhivkovo, municipality of Ihtiman”

Contracted 1399 538.69 BGN

FIB

Credit: 1.47 million BGN; Contract 000LD-L-000 620/24 July, 2015

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APROVAL BG 200303425

Project 2,114,492.96 BGN

“Poultry farm for breeding turkeys with a domestic-administrative building in plot 036 055 in the site “KARATOPRAK”, village of Zhivkovo, Ihtiman Municipality

Contracted 1057 246.48 BGN

FIB

Credit: 980,000 BGN; Contract 000LD-L-000 631/July 27, 2015

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