Romanian businessmen and bank executives, involved in one of the biggest bank fraud cases in the last 15 years

Prosecutors of the Romanian anti-organized crime division DIICOT have been working in the past months on one of the biggest bank fraud cases in Romania. Several local businessmen, some with strong political connections, as well as top bank managers have become suspects in the investigation.

UPDATE: French CEO reacts in BRD fraud case as two of his executives face prosecution

The case is about a bunch of loans that a BRD agency in Bucharest granted to local businessmen, who have not repaid them. The bank took a damage of more than EUR 43 million, according to preliminary data released by DIICOT. BRD is one of the top three banks in Romania and part of French group Societe Generale.

One of the main suspects is Remus Truica, former Prime Minister Adrian Nastase’s chief of staff. The prosecutors questioned Truica on Tuesday morning, May 19, and told him that he was a suspect in this case. The investigators also seized several plots of land that the businessman owns, according to Hotnews.ro.

The investigation started in 2013. The prosecutors then began looking into how Remus Truica and his driver along with several others got loans totaling more than EUR 35 million even if they didn’t qualify for such significant sums. They came up with overvalued collateral, mostly land.

One suspect allegedly took a EUR 3 million loan that he vouched for with a land plot in Snagov that was overvalued from EUR 58,000 to EUR 11 million, according to Digi24 news station. Others did the same. Most money got to Truica via his driver and was never repaid.

Romanian businessman Adrian Sarbu, the owner of the Mediafax group, and former senator Sorin Rosca Stanescu were also questioned on Friday, May 15, in the same case. They both got multi-million euro loans from BRD, which they didn’t repay. Sarbu is currently under arrest for tax evasion and money laundry in a case related to his media group while Sorin Rosca Stanescu serves a prison sentence for capital market manipulation and money laundry in the Rompetrol case.

The prosecutors also called in for questioning several former BRD top managers, who are suspects in the fraud case. One of them is Sorin Popa, an ex-vice president of BRD, who allegedly approved the loans. Another suspect is Lucian Cojocaru, the former commercial director of BRD’s network. Claudiu Cercel, BRD’s current Deputy CEO, is also investigated, according to judicial sources quoted by Mediafax.

This is the second large fraud case in which BRD’s name has appeared in the past years. In December 2012, the prosecutors arrested several BRD employees, including the manager of the BRD agency in Dorobanti where Truica, Sarbu, and Rosca Stanescu got their loans from, for another bank fraud of some EUR 85 million. The BRD employees were accused of illegally granting loans to 34 companies, which the firms did not pay back.

In this case, the loans were warranted by the National Guarantee Fund for Loans to SMEs (FNGCIMM), a state institution that helps small and medium enterprises get loans from local banks by vouching for them. So it was the FNGCIMM that took the loss in this case. Local businessmen Marius Locic and Ioan Crestin were also arrested as beneficiaries of the loans. Locic currently serves another jail conviction in a corruption case.

Some BRD top officials were also questioned in 2012 related to that case, but none of them was indicted.

BRD, which was Romania’s second largest bank at the end of 2014, had cumulated losses of EUR 161 million in 2012 and 2013, which were mainly generated by non-performing loans. The bank returned to profit in 2014 when it made a net profit of almost EUR 10 million.

One-fifth (20%) of BRD’s total loans granted to clients were still non-performing at the end of March 2015, down from a quarter (25%) in March 2014.

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