The International Consortium of Investigative Journalists (ICIJ) published on May 9, 2016, partial information on the leaked Panamanian documents, known as the Panama Papers, in the form of an interactive database. The first results from the research in this database shows that companies associated with oligarchs and organized crime are receiving services and are concealed by international firms with offices in downtown Sofia.
The type of evidence that can be found in this database became clear from the first publications in global media (in Bulgaria, the partner of ICIJ is journalist Alexenia Dimitrova, also known with the alias agent “Vladimir” of the communist secret services, while her stories are published in 24 Hours daily). These are lists of companies, beneficial owners, shareholders and proxies. The lists were prepared by the Panamanian company Mossack-Fonseca for their internal needs and contain a small piece of the information which leaked through the Panama Papers.
In reality, this database contains the summarized information that more than 200 media partners of ICIJ are publishing for several weeks already. Now, the public is given a chance to dig into the lists on its own, and possibly spot some small fish that passed through the net of the investigative journalists.
One should not expect new sensational revelations. The big fish are hidden in the correspondence and in the scanned documents of companies that are not public and according to ICIJ will never become public, because they contain personal data and bank details. Here is a concrete example – the revelations about offshore companies of the Bulgarian Banevi family, published in 24 Hours, list at least nine companies associated with Nicholay Banev and Evgeniya Baneva. The ICIJ database provides information on just two companies – Uniworld Incorporated and Buzzard Holdings – only two of the nine, or less than 25% of the information. How the seven other offshore companies have surfaced can be established from the public appearances of Alexenia Dimitrova who has access to the documents. Some of them are texts – exchange of e-mails between the offices of Mossack-Fonseca and their partners worldwide. The majority, however, are scanned files that have not been processed with OCR and the information in them cannot be searched online. Working with such an array of data is like looking for a needle in a haystack; it takes hundreds of hours to find a treasure trove. It is not clear who will do it and probably much of the names that would be of interest for law enforcement will remain buried in these scanned documents and forgotten in time. This is what happened with another leak managed by ICIJ, which contained the names of persons with Swiss accounts. They also included Bulgarians who stashed more than 300 million euro, but very few of them became known.
The offshore agents
If you want to visit some exotic destination, it is unlikely that you will jump on the first plane and then try to find accommodations on location. You will probably turn to a specializing company, a travel agent which will offer a travel package. The same happens if you want to register an offshore company. In Sofia there are a few firms that offer such services. Let’s call them offshore agents. They communicate with major international companies such as Mossack-Fonseca, which is the fourth in the world in the industry, and in addition to Panama, has offices in the capitals of popular offshore destinations such as the British Virgin Islands, Seychelles, etc.
The offices of the Bulgarian offshore operators are located in downtown Sofia and their addresses are public. Here are the most active among them:
SAVA MANAGEMENT SERVICES 1113 Sofia, 12, “Nikolay Haytov” street http://www.onlineoffshore.info
BULGARIAN CORPORATE SERVICE Sofia 1527, 68-70 “Iskar” street
Dimitar Radev, Sofia, 15 “Tsar Simeon 15” street
Individuals such as Ivaneta Mandzukova, who operates from her home on “Belovodski put” in Boyana, Petar Georgiev Tomov and Ivan Marcos Hristanov also emerge among Mossack-Fonseca’s proxies. Their contribution as proxies is, however, negligible. Even the most active one – Sava Management – has registered only 38 companies. However, if we take into account that Mossack-Fonseca is not the only provider of offshore companies and those Bulgarian firms work with its competitors, the probability of finding “persons of interest” among politicians and businessmen in the lists of customers of Bulgarian offshore registrars should not be underestimated. If the National Revenue Agency (NRA) and the Prosecution are interested, instead of inquiries through international legal cooperation, they can simply visit these companies.
Some Bulgarians with offshore companies have chosen to leave no trace at all in Bulgaria and have used operators in other countries. Banevi have entrusted MFT SERVICES SA in Switzerland, the owners of “Technomarket” – Kitovi – CURACAO TRUST MANAGEMENT N.V., Denis Barekov – ILEX FIDUTRUST SA, etc.
The proxy of Peevski and the “Killers”
However, the most interesting names associated with Panamanian offshore companies, operating in Bulgaria, are not related to proxies in Bulgaria as they are very small players. A discreet Cypriot company has registered through Mossack-Fonseca thousands of companies. The company is named Consulco and has offices in Sofia, Larnaca, Bucharest, Dubai and London. The Bulgarian office is located on 37, “Vitosha” boulevard in Sofia.
Among the companies associated with Bulgaria and registered by Consulco, we find the notorious offshore Cibole Services, linked to controversial lawmaker and mogul Delian Peevski.
The information about it in the database of the “Panama Papers” does not provide more details than the Bulgarian Trade Register. The shareholder is Intercon Limited. It is a mystery where this company is registered, but it appears that it is a shareholder in another 37 offshore companies – a typical example of a shell company, behind which the true owners are hiding.
Bivol used several public registries to dig up the information that Intercom Limited is actually owned by the very same Consulco, whose headquarters are in Cyprus. Thus, the ownership of Cibole and the other companies concealed by Intercom, remains somewhere in the registers of Consulco. The fact that Mossack-Fonseca failed to ask about the beneficial owners is a serious violation of the law and one of the sins of which the Panamanian company is accused. This tax evasion is considered wrong not only because it is used to avoid paying taxes. In some cases, however, we have something much more serious such as concealment of income from
Serious organized crime
Such is the case with the company Zorgane Asia, which is also registered by Consulco. It is owned by Formia Limited in the Seychelles, which in turn is owned by Intercom Limited. The disclosure of the beneficial owners also boils down to Consulco. So far, no one has answered the Bulgarian phone number of the company and there is no reply to a request for comment sent via e-mail.
In a previous investigation, Bivol established that this company owns 100% of the Bulgarian company Genesis Laboratory. The manager of Genesis is Mila Ivo Georgieva, who is facing criminal charges as part of an organized crime group in the legal cases known as the “Universals” and the “Killers”. The company has a loan of 1.3 million euro from First Investment Bank (FIB).
In addition to financial crimes, Georgieva’s group was involved in drug trafficking, murder and extortion, according to investigators.
To these charges we should add the accusations of the Romanian anti-corruption prosecutor’s office for the theft of 26 million euro of EU funds (see here) from the money for the poor. In addition to Mila Georgieva, representatives of FIB are also involved in this largest single theft of EU funds, is written in the indictment of the Romanian prosecutors that Bivol sought, obtained and published.
The money is laundered through Cyprus
The money from criminal activity passes through the accounts of a shell company in FIB, goes to the Cypriot account of Zorgane Asia and back in the account of Genesis again in FIB, from which the boss of “Killers” withdraws cash, an investigation of Bivol established.
For instance, on July 19, 2010, Mila Georgieva has withdrawn 300,000 euro in cash. This money was transferred a few days earlier from the Cypriot account of Zorgane Asia.
Zorgane’s account in Alpha Bank Cyprus is padded through a shell company- BRANDEL SENT 2000. In the period June 2008 – October 2010, over 5 million levs and 3.5 million euro have been transferred from the FIB account of BRANDEL SENT to Zorgane Asia. The money was deposited in cash at a teller counter in huge quantities: 50,000, 100,000 and 200,000 euro and was leaving via transfers to Cyprus on the same day.
The official justification for such transactions is contracts between BRANDEL SAINT and Zorgane Asia for the import of meat, but they are fictitious. An inquiry under the Access to Public Information Act (APIA) to the Bulgarian Food Safety Agency showed the BRANDEL SAINT is not a registered dealer of meat and has not carried out any imports or exports. Furthermore, the company is not registered for VAT and has no right of a turnover larger than 50,000 levs year.
Our investigation also established (see here) that the account of the same company BRANDEL SAINT is used for transfers to companies directly related to FIB’s majority shareholders Tseko Minev and Ivaylo Mutafchiev. There is an obvious complicity of the bank and its owners in criminal schemes. However, they have enjoyed for years and still enjoy the stately patronage of the National Security Agency (DANS) and the Prosecutor’s Office. Media that are generously sponsored by ads from FIB do not dare to write a word on the subject, even in the presence of documents and proven facts.
The property declaration of the former boss of DANS’ department for counteracting money laundering, Polina Kavrakova, reveals how this corruption is carried out. She was entitled by FIB to an overdraft of 140,000 levs, is written in her property declaration in the National Audit Office. It is not for a mortgage loan, but an overdraft for her checking account, just to have some money to spend. And while she was spending it, Ms. Kavrakova somehow failed to notice the huge amounts traveling to and from the Cypriot accounts. Although by law any transaction over 10,000 levs shall light the computer monitors in DANS…
To date, there is no sign that the Bulgarian investigators are interested in what is happening in FIB where Delyan Peevski transferred his loans after the collapse of Corporate Commercial Bank (CCB). FIB remains untouchable despite glaring evidence of money laundering from criminal activity, including theft of EU funds, and the massive drain on the bank by its owners. The revelations from the “Panama Papers” will hardly break the omerta of Bulgaria’s rulers. However, there is hope that the salvation could come from our northern neighbor, where the investigation into the theft of EU funds by Romania’s anti-corruption Prosecutor’s Office is progressing at a rapid pace.
Previous publications on the subject:
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