Only Candidate to Become Bulgaria’s New Prosecutor General Teams Up with Organized Crime? Mind the horns!

Two organized crime groups (OCG), dealing with syphoning of Value Added Tax (VAT) and dubbed by former Bulgarian Interior Minister Tsvetan Tsvetanov “The Untouchables 1” and “The Untouchables 2” were crushed by the Ministry of Interior and the National Revenue Agency (NRA) in 2010 and 2011. Pre-trial proceedings began as early as September 2009 over intercepted bank transactions through UniCredit Bulbank of over BGN 800,000, causing suspicions of large-scale money laundering. Investigators have been able to prove that the groups have actually managed to syphon hundreds of millions of VAT from the budget through dozens of shell companies registered to low-income individuals, drug addicts and under groups of people at risk. The investigation has led to charges of involvement in an organized crime group.

Prosecutor or Lawyer?

Despite successful operations and the gathering of huge amount of evidence of criminal activity, the prosecutors in the pre-trial proceedings in “The Untouchables 1” case have been replaced with new ones, coming from the Regional Prosecutor’s Office in the second largest city of Plovdiv and the Regional Prosecutor’s Office in the capital Sofia. These are, respectively, Lyubka Krasteva (now in the Sofia Prosecutor’s Office of Appeals) and Ivan Geshev (current Deputy Prosecutor General and only candidate to become Bulgaria’s next Prosecutor General). The reshuffle has been done with unclear motives and despite the perfect work of the previous team of prosecutors – Yulia Hristova and Yavor Dimitrov. They have been removed without any explanation and replaced by Geshev. At that time, six people from the OCG have been in detention and bank accounts in the amount of BGN 1 million have been frozen. With his arrival, Geshev has called for the interrogations of the arrested individuals to continue, even though they have been questioned more than ten times before that and have made full statements, including in the presence of a judge from the Sofia City Court.

During these new interrogations, the leader of the OCG – Vladko Dimitrov, has literally “haggled” with prosecutors for the conclusion of a plea bargain. In the end, such bargains have been reached between Geshev and the group, resulting in extremely lenient and even symbolic sentences, while the “detention” measure has been changed to “house arrest”. The “shameful” haggling can be heard in four recordings that Bivol has obtained and whose authenticity it has verified. The recordings had been made with a mobile phone in the office of Prosecutor Ivan Geshev at the end of March 2011.

The recordings are of poor quality due to side noises, so they had to be further cleared. However, it is obvious enough from them that Prosecutor Ivan Geshev does not have any misgivings about “covering up” charges of serious economic crimes under the Penal Code, twisting testimonies and “finishing” ongoing investigations in order to curry favors for the defendant Vladko Dimitrov. Dimitrov even asks for a modest sentence for himself and lifting the charges against his girlfriend Kamelia. And in the end, he gets them. The interests of the criminals are served, as opposed to the interests of the State and the public.

The analysis of the audio recordings shows that Geshev does the following:

 Negotiates an agreement not with the defense lawyer, but directly with one of the defendants (the same Vladko Dimitrov), contrary to Article 381 paragraph 1 of the Penal Code;
 Negotiates with the defense lawyer of one defendant an agreement with third parties in the pre-trial proceedings, but in their absence;
 Declares in an inadmissible for a pubic prosecutor manner and in the presence of the main defendant and his lawyer that he “does not see evidence of tax crimes”, thus rendering the previous work of his colleagues meaningless;
 Begs involved persons and their defense counsel to negotiate plea bargains;
 Excludes economic crimes and money laundering from the scope of the indictment and does not say a word about the recovery of inflicted damages, despite the explicit provision of Article 381 paragraph 3 of the Penal Code, which sets such recovery as an explicit and mandatory condition for a plea bargain;
 Apart from narrowing down the specific charge, he also wants to join other investigations into the plea bargain to completely clear the defendant;
 Addresses the defendant in an informal and even friendly manner;
 Hinders criminal prosecution against Kamelia Gospodinova, who is Vladko Dimitrov’s girlfriend;

The actions listed above not only raise doubts about the legal expertise and integrity of the Prosecutor, who appears to be acting simply as the defendants’ lawyer. These conversations, disguised as additional interrogations, are disgraceful and shameful for the Office of the Prosecutor and call for charges under Article 288 of the Penal Code, namely “Crime against Justice”, and for one to six years of imprisonment.

Bivol’s editorial office has the audio files and their transcripts in Bulgarian.

Cover-up for “The Untouchables”

In April 2010, in the course of an investigation against “The Untouchables”, the authorities detained Vladko Dimitrov, Zhelyaz Ivanov, Ivaylo Yordanov, Yassen Savchovski, Borislav Hristov and Kamelia Gospodinova. Ivanov and Yordanov were detained at a teller counter at UniCredit Bulbank while trying to withdraw BGN 800,000 from an account there.

According to the investigators, Vladko Dimitrov is the ringleader. His subordinates, Zhelyaz Ivanov and Borislav Hristov, have been on the lookout for various destitute persons to establish shell companies in their names. The companies controlled by Dimitrov have made transfers of large sums to the accounts of the companies of the “straw people”. Vladko Dimitrov’s clients have been real companies with large tax liabilities that have been cleared by deducting VAT refunds. Vladko Dimitrov has been receiving 20-25% of the VAT refund for his services.

The companies and entities using the debt-clearing scheme are affiliated with controversial energy mogul Hristo Kovachki. This is evident, both, from the intercepted contacts of Vladko Dimitrov with Kovachki’s employees, and from the numerous donations to Kovachki’s political party “Leader”, made by the investigated destitute persons, including poor Roma people. “The Untouchables” have donated a total of BGN 125,000 to the party for the 2009 European Parliament elections.

The initial prosecutors in the case – Yulia Hristova and Yavor Dimitrov – have been replaced by Geshev and Krasteva by the order of notorious prosecutor Roman Vassilev immediately after the first arrests and freezes of bank accounts.

Instead of completing the expert reports, summarizing the enormous volumes of gathered evidence and information, Prosecutor Geshev has started his work by requesting unnecessary additional interrogations. As it became clear, during these interrogations he has simply haggled with the defendants for light sentences and even releases, while completely ignoring the damages inflicted on the budget. In addition, Geshev has divided the case into two separate proceedings, causing a complete legal mess.

However, while Geshev had haggled, the National Security Agency (DANS) had been working on “The Untouchables 2”, another group dealing with syphoning VAT under the same scheme. The two groups are connected through the same persons – Zhelyaz Ivanov and Borislav Hristov, use some of the same destitute individuals and have some of the same real companies as their clients.

The authorities have identified Borislav Lashkov as the ringleader of “The Untouchables 2”. He has been a business partner with the former Prosecutor General Boris Velchev and with Krasimir Stoyanov, the Secretary of the former President of Bulgaria Georgi Parvanov.

The Main Directorate for Combatting Organized Crime (GDBOP) and the late former Secretary General of the Interior Ministry Tsvyatko Tsvetkov have also provided a cover-up for the group. On the other hand, side, DANS has continued to work on the case without the knowledge of the GDBOP. It has used Special Surveillance Devices (SSDs) to intercept a conversation at a restaurant in Sofia in which the ringleaders have discussed the amount to be paid to Prosecutor Ivan Geshev to terminate the proceedings and unfreeze the BGN 820,000. For these services, he should have received 50,000 (it is unclear from the recording if these had to be in EUR or BGN).

The plan has apparently succeeded because Geshev has reached the plea bargains, and the court has not even ruled on confiscating the amount in favor of the State. This happened because Geshev’s plea bargain, which became effective on August 3, 2011, had explicitly stated that no damage had been inflicted.

Previously, in June 2011, ten people were detained in “The Untouchables 2” case, including Bozhidar Lashkov. Prosecutor Margarita Nemska explained before the media then that the operation had been premature because there had been a leak of information to the ringleaders. At that time, more than BGN 20 million in VAT syphoning was reported, but subsequently, the damage established by the investigators swelled to BGN 145 million.

Seven years later, in 2018, Bozhidar Lashkov received in the first instance from the Special Court (for organized crime and high-level corruption) a suspended sentence. The Prosecutor’s Office protested before the Special Court of Appeals, which subsequently returned the case to the lower instance.

During one of the courtroom hearings in the Special Court, evidence obtained through SSDs was read, mentioning the amount to be given to the prosecutors to crush “The Untouchables 1” and unfreeze the sum of BGN 820,000.

Bivol asked the Special Court to be allowed to see the SSDs’ content. We received a strange formal refusal under the Access to Public Information Act (APIA), although our request was not under the APIA. The Court confirmed the existence of this evidence, but refused to provide it on the grounds that it had been added to another criminal proceeding. We assume that these are proceedings initiated because of the return of the case to the lower instance and expect the Court’s final decision in the case for the syphoning of BGN 150 million.

When Roman Vassilev appointed Ivan Geshev as prosecutor in “The Untouchables 1” case, one of his first “remarkable” actions was to plead before the court to free Vladko Dimitrov from detention and change the measure to house arrest. It is noteworthy here that Prosecutor Geshev, as a the State’s representative in the case, had been “begging” the Court along with the defendant’s lawyer. Since all parties in the case had wanted the same thing, the Court had changed Dimitrov’s measure to house arrest.

However, what is more important here is the division of the pre-trial proceedings into two separate cases – for organized crime and for tax fraud, which Geshev had done at the end of 2010. Because of this move, some of the overwhelming volumes of evidence had not been recorded in either case and the BGN 800,000 in the accounts of two of the companies had not found a place in the new pre-trial proceedings for tax fraud.

It is further clear from the decree for the separation of the pre-trial proceedings that Geshev had separated the collected evidence and documentation not by subject and by inventory, but by the color of the folders. This had led to complete documentary chaos and eventually to the termination of the pre-trial proceedings for tax crimes by prosecutors Ivan Geshev and Lyubka Krasteva.

Geshev then had proceeded to reach a secret (without the knowledge of DANS or NRA) plea bargain with the defendants in the pre-trial proceedings for organized crime, which became fact on August 3, 2011.

The strikingly friendly attitude towards the defendant, revealed by the recordings, is strange and worrying, but even more alarming is the bargaining to suspend the tax crime charges.
Obviously Geshev’s position on the lack of tax crimes has evolved with time, because the decree by which he divided the pre-trial proceedings into two separate ones lists exactly article 253 of the Penal Code – money laundering and Article 255 – tax evasion.

It turns out that VladkoDimitrov has been investigated for other tax crimes and Geshev has been aware of this fact, but has haggled over them as well.

Geshev does not notice Kamelia and the damage to the budget

We learn from the recordings, that the defense lawyer’s request is not to press charges against Kamelia, Vladko Dimitrov to receive a year and a half behind bars, and serve the rest as a suspended sentence. In the course of the bargaining, Geshev offers to Dimitrov four years of jail time, apparently agreeing with the other demands, but then softens and Dimitrov gets only two years.

In addition, while the sentences, though very lenient and suspended, are nevertheless sentences, Kamelia’s exoneration is a scandalous and unacceptable act on the part of the Prosecutor. In the course of the investigation, it has been established that Kamelia Mihailova Gospodinova has been in an intimate relationship with Vladko Dimitrov and has participated in several companies used in the VAT spin.

Kamelia Gospodinova has significant assets and real estate in Sofia, on the Black Sea coast and the SPA resort town of Sandanski. If sentenced, she would have faced their confiscation by the Commission for Confiscation of Illegally Acquired Assets.

In the end, Prosecutor Geshev and the defendants reach an agreement for a two-year prison sentence for Vladko Dimitrov. Zhelyaz Ivanov receives a two-year suspended sentence and five years probation. The other members of the gang receive suspended sentences. Meanwhile, Dimitrov’s girlfriend

Kamelia completely disappears from the case file

Neither the supervising prosecutors Ivan Geshev and Lyubka Krasteva, nor the Court that approved the plea bargains, have mentioned her name.

The other major thing missing from Geshev’s haggling with “The Untouchables 1” is the damage to the fisc. The plea bargain explicitly states that no material damage has been inflicted. As a result, the BGN 820,000 in bank accounts had been unfrozen, against the backdrop of NRA experts and investigators conclusions that the fiscal damage to the budget by shell companies amounts to BGN billions.

Despite the refusal by the Special Court to grant access to the material evidence, it should not be underestimated as it contains critical information about the case. The Supreme Judicial Council (SJC) must request it and become acquainted with it, as well as with the entire documentation in the case file before voting on Geshev’s candidacy. In view of the fact that in Bulgaria the Prosecutor General has excessive power and is virtually untouchable, something pointed out by the European Commission as a relic from the Communist past and one of the main shortcomings of the judicial system, it is a must to do everything necessary to have complete transparency of the candidate’s activities and decisions.

UPDATE: On Thursday, October 24, 2019, the majority in the JSC, which has all along stood firmly behind Ivan Geshev’s candidacy, elected him with 20 votes “for” and four “against” to become Bulgaria’s next Prosecutor General. The finalization of the process is now in the hands of President Rumen Radev, who is entitled to a one-time veto. He also should become aware of the above information, the SSDs and all other facts and circumstances in this case.

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