Hidden power networks:

Peevski exerts influence through lawyers pouring millions into reallocating company

Part of the money syphoned off from Bulgartabak and BDB
Биволъ

Aviora Consult, the legal firm servicing Delyan Peevski’s businesses and hiring high-level lobbyists to defend him against Magnitsky Act measures in the USA, has received over 19 million BGN from Peevski himself, from a company he owns and from tobacco producer Bulgartabac. Attorneys Sasho Angelov and Geno Andreev have then withdrawn a large part of the money in their personal capacity. 

Five million BGN received from Bulgartabac is not included in the company’s annual financial reports. The money is most likely from a loan issued by the Bulgarian Development Bank (BDB). Peevski has paid the lawyers 1.7 million BGN in his personal capacity but he is not registered under Bulgaria’s VAT law. This has become clear from the company’s registers, which were seen by Bivol and are at the disposal of the National Revenue Agency. The data we have managed to acquire and investigate is not entirely complete but is quite detailed and sheds light on Peevski’s methods for exerting influence in various areas, businesses and institutions through individuals and companies loyal to him. The tax authority has so far ignored the above data and the government has made no indication that it plans to scrutinise the ownership of Bulgartabac.

THE REVENUE

05.01.2017 BG831636680 Булгартабак Холдинг АД Услуги 240,000
10.02.2017 BG831636680 Булгартабак Холдинг АД Услуги 200,000
28.03.2017 BG831636680 Булгартабак Холдинг АД Услуги 340,000
14.03.2017 BG831636680 Булгартабак Холдинг АД Услуги 200,000
10.04.2017 BG831636680 Булгартабак Холдинг АД Услуги 300,000
12.05.2017 BG811154751 Благоевргад-БТ АД Услуги 9,725,475
05.01.2017 BG831636680 Булгартабак Холдинг АД Корекция -40,000
30.08.2017 BG800727XXXX Делян Славчев Пеевски Услуги 150,000
15.08.2017 BG831636680 Булгартабак Холдинг АД Услуги 120,000
17.11.2017 BG800727XXXX Делян Славчев Пеевски Услуги 90,000
21.05.2018 BG800727XXXX Делян Славчев Пеевски Услуги 170,000
26.07.2018 BG800727XXXX Делян Славчев Пеевски Услуги 257,000
07.08.2018 550722XXXX Ирена Ангелова Кръстева Услуги 7,000
14.12.2018 BG20253XXXX Ди Ар Си Инвест ЕООД Услуги 1,800,000
14.12.2018 BG800727XXXX Делян Славчев Пеевски Услуги 55,000
16.01.2019 BG800727XXXX Делян Славчев Пеевски Услуги 335,000
19.06.2019 BG800727XXXX Делян Славчев Пеевски Услуги 130,000
25.06.2019 BG800727XXXX Делян Славчев Пеевски Услуги 160,000
23.06.2019 BG800727XXXX Делян Славчев Пеевски Услуги 55,000
18.06.2019 BG811154751 Благоевргад-БТ АД Услуги 5,000,000
19.12.2019 BG800727XXXX Делян Славчев Пеевски Услуги 340,000
Общо 19,634,475
Пеевски 1,749,000
Булгартабак Холдинг АД 1,360,000
Благоевград-БТ АД 14,725,475
Ди Ар Си Инвест ЕООД (Пеевски) 1,800,000

The money received by the legal firm comes from a total of 5 customers controlled by Delyan Peevski. Among them are Blagoevgrad BT, which paid Aviora 14.7 million BGN, Bulgartabak Holding with 1.4 million, DRC Invest (Doreco Commerce) with 1.8 million and Peevski himself with 1.7 million BGN. In the interval 2017-2019 Peevski personally paid Aviora 1,742,000 levs for their services. Companies linked to Peevski paid the legal firm a total of nearly 17.8 million levs.

Most of those substantial revenues likely come from loans received from the Bulgarian Development Bank (BDB), which has been issuing financial support to the Bulgartabac group since 2016. One of those companies – Blagoevgrad BT – has received a 126 million BGN loan from BDB, an investigation by Capital has revealed. 

Delyan Peevski does not currently hold any official ownership in any of the companies in the Bulgartabac Holding group. In the past few years, however, he has been their owner and has legitimised millions through company shares and dividends. The state has never before taken the initiative to examine who is behind the offshore companies in control of 92% of the company’s shares. According to the 2018 shareholder book those are three companies based in UAE free zones: TI Holding FZE with 12.23%, Lawand General Trading FZE with 13.97%, Gifted Master LTD (Adjman) with 18.10%; and two more based in Lichtenstein: Woodford Establishment with 33% and Stiga Anstalt with 14.75%.

Over the years Bivol has built up the most substantial archive of investigations and publications on Bulgartabac‘s criminal privatisation and activities, its ties to Delyan Peevski and to political, economic, financial and criminal entities (see here). For years Bulgarian government institutions have placed a taboo over any inquiries or investigations into the story of Bulgartabac – the way the largest tobacco holding in Europe was privatised and then plundered. A comprehensive revision of the entire Bulgartabac saga would be the litmus indicating a shift in the deep behind-the-scenes-powers within the state and the unravelling of the main criminal networks of corruption and oligarchy in Bulgaria.

Information about payments to Aviora is easily traceable and the National Revenue Agency should be aware of the financial flows. Besides, Delyan Peevski in his personal capacity was not registered  under the VAT Law after March 2018, which should have immediately flashed a red light at the NRA regarding his revenues. Before that date Peevski paid Aviora 240,000 BGN and after his VAT deregistration he paid a further 1.5 million BGN.

It should be investigated what kind of funds Peevski used to pay his personal fees to Aviora after his VAT deregistration and whether any VAT on those revenues was paid. Large-scale tax evasion is punishable under the Penal Code by “three to eight years of imprisonment and partial or full confiscation of the perpetrator’s property.”

Magnitsky case

It is notable that Aviora’s company revenue increased severalfold in 2017. The dramatic growth can also be seen in the annual financial reports submitted by the company.

Aviora Consult’s annual financial report for 2017. The difference in revenues and expenses compared to the previous year can be seen clearly.

 

This raises the question what caused the sudden increase in Aviora’s revenue and expenses in 2017 in particular. Annual financial reports submitted after that year have not been published yet. The company’s balance sheets, which Bivol has access to, show that Aviora continued to operate at much higher turnover rates.

2017 wasn’t just a year like any other for Peevski and Aviora. It was the year when the dossier under the Magnitsky Act was opened in the USA and the procedure to impose sanctions was first initiated. The legal defence of the then MRF member of parliament and local oligarch was entrusted to the American lobbying group BGR Government. The company is managed and consulted by former long-serving FBA agent and chief Thomas Locke. Locke himself is responsible for lobbying in favour of Delyan Peevski with the State Department, the Department of Justice, the Treasury and the National Revenue Service. The initial contract with BGR was negotiated by attorney Miglena Hristova, who has close ties to Peevski. Hristova has been a board member at Bulgartabac Holding, Lafka market, Blagoevgrad BT, Sofia BT and Shumen Tabac. The contract was signed by Paraskev Paraskevov – a former state security service officer, former deputy interior minister in Jean Videnov’s government and father of attorney Alexander Angelov. The contract provisions include regular monthly payments of 30,000 USD and the reimbursement of additional lobbying expenses. That means that within a year Peevski’s payments to the American lobbyists via Aviora must have grown to the amount of several hundred thousand dollars. The precise final amount would be very hard to estimate.

The expenses

Attorney Alexander Angelov, Aviora Consult owner and CEO

  Aviora’s espense column contains staggering amounts. The company’s owner Alexander Angelov is the highest paid person, having received 12.8 million BGN in fees. In early 2019 Angelov was exposed by Bivol as the actual owner of the offshore company Viafort, which was behind the attack on weapons producer Dunarit, trying to seize it from Emilian Gebrev with help from the Prosecutor’s Office and the National Revenue Agency. Gebrev and his son were poisoned with novichok and nearly died. Angelov denied being Peevski’s lawyer until Bivol exposed his hidden ties to the former MP’s networks. All our attempts to obtain any comments from Alexander Angelov have been met with a refusal to speak to us.

Bulgartabac and Lafka director Miglena Hristova, who is Peevski’s correspondent in his defence under the Magnitsky Act, has received 1.4 million USD. Another 500,000 has been transferred to attorney Geno Andreev. Attorney Vanya Zhelyazkova was also paid about 30,000 BGN by Aviora.  Our inquiry has revealed that she is the daughter of another one of Peevski’s collaborators sanctioned under the Magnitsky Act for criminal activities – Ilko Dimitrov Zhelyazkov.

Panama Papers: Trusted Lawyer of Controversial MP Owns Key Offshores, Ghost of Bulgarian KGB

Regular payments have also been made to other law firms. The Plovdiv-based Pancheva, Panov and Partners received about 580,000 BGN. It is owned by tax lawyers Nedyalka Pancheva and Svetlin Panov. Bivol approached Pancheva and Panov for comment via email but no answer was received.

Payments were made to the Kotlarski law office, owned by attorney Vladimir Kotlarski, former legal counsellor at First Investment Bank, where Peevski’s companies have their accounts and loans.  Kotlarski was later elected board member at Municipal Bank, which is also considered to be among the businesses controlled by Peevski via its owner Georgi Samuilov of Insa Oil. Samuilov is known to be the person to whom Peevski has transferred much of his Bulgarian property, including his residence, the infamous Berlin Hotel in Boyana.

Substantial payments have also been made to individuals

One example is Evelina Miroslavova Koleva, who received about 64,000 BGN. She is on the management of several companies linked to Delyan Peevski’s media projects. 

Tsvetemir Martinov Sandulov received nearly 117,000 BGN. He is linked to the persons who in 2017 acquired the publishing house and website Legal World, after which point its editorial policy was synchronised with that of Peevski’s propaganda outlets. Sandulov is the son of the former chair of the Sliven District Court Martin Sandulov, who was exposed as an agent of the former regime state security services under the alias Stefanov. Tsevetemir Sandulov worked alongside Geno Andreev as attorney for the Peevski-linked company Technomarket, representing them in the infamous court battles with the international Glorient corporation, who were denied rent for their retail facilities used by Technomarket after the latter was acquired by Delyan Peevski 5 years ago. 

In 2017 public relations company Mitra-PR received 80,000 BGN. At that time it was owned by a person named Zhue Tian but its manager Peter Kolev has links to Ditmax, a company where the famous Cyprus proxy Michael Tymvios, working with businesses linked to the former head of the Financial Supervision Commission Stoyan Mavrodiev, is also present. Mavrodiev is known for his close ties with Peevski, which he admited in a recording published by CM-BOEC (Civil movement “Bulgaria United with One Purpose”). Tymvios and Mavrodiev filed a libel case against journalists at Capital after a series of publications about properties in Greece purchased by Mavrodiev. 

Another name on the list of beneficiaries of Peevski funds via Aviora is Dimiter Valentinov Bogdanov. He is the bankruptcy administrator of over 25 large firms in a state of insolvency or liquidation. In that capacity he makes decisions about those companies’ assets. Bogdanov was also appointed chairman of the board at Sofia Airport. His nomination to the post happened at the precise moment when the government-owned company was sentenced by the court to pay over 40 million BGN in penalties for failing to fulfil obligations in their contract with a Kuwaiti investor for the construction of a new runway. It is hardly a coincidence that the company chosen to defend the interests of the state and of Sofia Airport at the time was none other than Aviora. It was well-known that Peevski was interested in acquiring the concession of the airport and the lost court case would repel major international investors. Bogdanov was also embroiled in a scandal related to the sale of assets of the bankrupt Himco chemical plant in Vratsa. A foreign investor accused him of large-scale extortion and claimed he was flaunting a personal connection to Boyko Borissov. Bogdanov is also believed to be an intermediary between Peevski and Borissov’s close aide, “the cat” Alexander Staliyski. It is hardly surprising that Dimiter Bogdanov and his wife have turned out to be among the largest customers of the failed Corporate Commercial Bank (CCB), also known as Peevski’s bank up until 2014. The Bogdanovs had over 11 million BGN in the bank but just before it shut down they withdrew their money leaving only 350,000. Shedding light on their close financial connection to Peevski makes it easier to understand how the prosperous family knew in advance about the bank’s imminent bankruptcy.

The relatively small amount of 22,374 was received by attorney Preslava Karadjova, Alexander Angelov’s wife. Karadjova was on the board of directors at the Yuri Gagarin tobacco plant in Plovdiv, which is part of Bulgartabac Holding. She was also on the management of arms trader Petar Mandjukov’s foundation. It seems plausible that she could be the operative link between Peevski and the businessman. After all, the former MP first entered Bulgartabac as shareholder by buying the shares of Tobacco Investment owned by Madjukov, which had a 5% share in Bulgartabac holding in 2015. Through that move Peevski clearly manifested himself as shareholder in Bulgartabac Holding and made huge profits from the subsequent sale of his shares (not even taking into account the rest of his indirectly owned shares).

The most obvious conclusion would be that Aviora is like a cash reallocation hub where money is poured in and can later be used to pay Peevski’s lawyers in a legal way. That is one of the ways in which Peevski secures his influence in various spheres through loyal persons and proxies working in his interest. The mechanism also demonstrates a typical modus operandi of the hidden powers in the state and oligarchy, their dependants and their true nature and loyalties.

Five million missing from the accounts. Who pays the US lobbyists?

A review of Aviora Cosult’s financial reports submitted to the Registry Agency shows that a substantial amount of over 6 million BGN was not listed as revenue in 2019. Most of the money came from Blagoevgrad BT and was entered in the company ledgers on 18.06.2019 but was not included in the 2019 balance sheet. After Alexander Angelov’s offshore accounts and properties were exposed by Bivol in 2019 he must have decided not to submit reports on Aviora’s revenues and expenses, despite being categorically bound by article 29, paragraph 6 of the Accountancy Act, which states: “The annual financial report of a small enterprise may consist of a concise balance sheet by sections and groups, an abridged report of revenues and expenses and an annex.” The documents submitted by Geno Andreev do not include any report or annex. From the available balance sheet it is impossible to tell what kind of money made its way in and out of Aviora. The documents collected by Bivol however give enough information to conclude that the annual turnover was over 6 million BGN.

Attorney Geno Andreev

Aviora’s ledgers also bear no trace of the payments made to BGR Government Affairs, the company lobbying for Peevski in the United States in exchange for 30,000 USD per month, which has been on contract terms with Aviora since 2017 as already mentioned before. It is not clear if there is a link between the lack of official financial reports and the payments to the American company. It is also possible that BGR Government are receiving the money from individuals like Alexander Angelov in their personal capacity but then the question would be why the contract is not between himself and the lobbyists. It is instead with the legal entity, which then makes it mandatory to transfer the payments officially from the company’s accounts for the sake of transparency and traceability of the money’s origin. Only an offical inquiry can show if the defence of Peevski’s interests in the USA is paid for in a legal and transparent way (which is not supported by any data we have seen so far) or is carried out via linked individuals and their offshore accounts.

Bivol tried reaching out to BGR Governement Affairs for comment by email and telephone but no response was received.

It needs to be mentioned also that Peevski is the defendant in court proceedings under the RICO Act at the United States District Court for the Southern District of New York, case number 1-18-cv110072. The 200-million-dollar claim was filed by the bankruptcy administrator of the US company Air Logistics Ltd. The claim is under the RICO Act (Racketeer Influenced and Corrupt Organizations Act) aimed at combatting mafia, money laundering, tax evasion and the investigation of income from criminal activities. For his defence on this case Delyan Peevski has hired one of the most expensive legal firms not only in USA but globally – Morgan Lewis. According to well-informed sources, lawyers of that calibre charge their fees by the hour and on certain complex cases the rates can exceed 1000 USD.

Morgan Lewis’ appellation at the New York District Court in defence of Delyan Peevski in proceedings under the RICO Act

Aviora Consult balance sheets again bear no trace of any payments made to Morgan Lewis. It is not clear if the contract with the lawyers was also signed by Aviora, as in the case with the Magnitsky defence, or directly by Peevski himself. In any case the money flow since the beginning of 2019 is substantial and is estimated to amount to a seven-digit number.

As a whole Aviora’s money flows raise serious questions of illicit incomes for Peevski, syphoning off of huge amounts from Bulgartabac, tax evasion and money laundering. All this can be easily checked by the National Revenue Agency. The information should also be taken into consideration by the US Government with respect to the sources and means of payment to the two American law and lobbying companies promoting the interests of a major Bulgarian oligarch from the Magnitsky and RICO legislation. Information about Delyan Peevski’s connections and hidden networks of influence should be taken into account by the Bulgarian government so that the list of companies linked to his activities can be expanded further.

Unfortunately the revenue authorities have ignored our questions whether they were aware of any breaches of tax legislation by Delyan Peevski. Such breaches should be detectable through a simple search in the available databases for the payments made by him to specific companies. The National Revenue Agency (NRA) information centre has asked us to submit our questions according to the requirements of the Public Information Act and when we insisted they were journalists’ questions, our enquiry was sent further to the NRA press centre, from which no reply had been received by the time of publication of this article. This attitude on behalf of government institutions is painfully familiar and is completely in line with the prevailing inaction of all relevant authorities and powers with regard to the revenues and businesses linked to Delyan Peevski and the miraculous transformation of the “child prodigy” into a billionaire over a few years. The current refusal of the president’s caretaker administration to take any real action and their unwillingness to provide the public with adequate information are in keeping with the corrupt practices of all governments of the last 20 years. However, now that Peevski has been sanctioned under the Magnitsky Act, pretend action and double play in his favour will be the millstone inevitably weighing down anyone in power, who has succumbed to the pressure of the Peevski Empire.

Who’s who at Aviora?

Aviora Consult is officially owned by attorney Sasho Angelov. His father Paraskev Angelov Paraskevov and attorney Geno Andreev are the managers. Bivol has previously unveiled Sasho Angelov‘s role as Peevski’s trusted man and owner of key offshore businesses based on the Panama papers. 

His father Paraskev Paraskevov is a high ranking officer of the former state security services, former deputy head of the National Service for Protection of the Constitution and deputy interior minister in Jean Videnov’s BSP government.

Attorney Geno Andreev is the son of Rumen Genov Andreev, a high ranking officer of the former state security services, a long-serving director of the National Investigation Service and former deputy interior minister in Sergey Stanishev’s BSP government.

Miglena Petrova Hristova is among Peevski’s most trusted persons. Both she and Geno Andreev are on the list of people who can be appointed managers at BT Invest, the company that owns Bulgartabac, as revealed by documents published by Bivol back in 2015. 

The Bulgartabac Pandora’s box

After a half-hearted hint by economy minister Kiril Petkov that Peevski was behind Bulgartabac, Technomarket and other major beneficiaries of credit from the Bulgarian Development Bank, the government’s enthusiasm for exposing Peevski’s businesses seems to have suddenly evaporated. This is also evident from the lists of linked persons and companies that were published after the Magnitsky sanctions were announced.

Dogan, Peevski, Borisov, Bulgartabak, smuggled tobacco and money for terrorism

There is an obvious unwillingness to dig deeper into the matter because that would expose old and current connections and dependencies in a network that spans the entire state apparatus. Another sign of that unwillingness is the silence of all state institutions after the publication of a confidential report about the smuggling of Bulgartabac cigarettes into the Middle East, which mentions Peevski and Dogan by name. But their professed aspiration to shield state-owned businesses from sanctions can’t justify any protection of Peevski’s secret assets. Perhaps the recent reinstatement of some old and sinister dinosaurs on the Bulgarian Socialist Party’s leadership – the new executive bureau of BSP’s national council, appointed less than a month ago – can explain the timidity of Radev’s government when it comes to reaching deep into Bulgaria’s biggest wound during the entire post-communist transition. Is Peevski “making them afraid” – that is something we will find out unequivocally and very soon!

All the information so far makes it crystal clear that the interests of Peevski, of Bulgartabac and other significant economic spheres are intertwined in the Aviora law firm, which exclusively defends Peevski in the USA. This is accompanied by serious doubts of corruption and law violations, which the NRA and other state institutions are clearly not too enthusiastic to investigate for the time being.

One way or another the Pandora’s box will be opened. Whether by the efforts of investigative journalists or those of foreign countries intelligence services, a time will come when Peevski’s ownership of Bulgartabac and other companies via his proxies will come to light and be clearly demonstrated by documents. Unfortunately that will come as yet another proof of the harm done by Bulgarian institutions, which are definitely able, pretending to be willing but ultimately reluctant to  dismantle the corrupt mafia model that has turned our country into the sick man of Europe.

***

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