Former Hypo Alpe Adria Bosses Jailed for Fraud

By , 07 Jan 2020, 09:08 AM Business
Former Hypo Alpe Adria Bosses Jailed for Fraud pxfuel CC-by-0

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STA, 6 January 2020 - Four former top executives of Hypo Alpe Adria have been sentenced to between six and eight years in prison for defrauding the now defunct financial group of EUR 22 million through property transactions.

Former Hypo Alpe Adria CEOs Anton Romih and Božidar Špan, former Hypo Leasing director general Andrej Potočnik and former Hypo Alpe Adria Consultance director Andrej Oblak were found guilty of abuse of office and money laundering by the Ljubljana District Court on Monday.

"Guilty because they abused their position with the intent of gaining a pecuniary advantage for themselves," judge Srečko Škerbec declared at the close of a long-running trial, one of the first in the country to put bankers in the dock.

He said the quartet committed the crimes with the assistance of Hilda Tovšak, the former boss of builder Vegrad, who pleaded guilty to aiding in the abuse of office and money laundering in the case in the pre-trial hearing in November 2015, agreeing to a suspended sentence.

The highest sentence, eight years in prison, was given to Oblak, the former CEO of Hypo Alpe Adria Consultance. Romih was given six years in prison, Špan six years and six months and Potočnik six years.

The judging panel also imposed fines of EUR 37,000 on Oblak and EUR 35,000 on each of the other three defendants. Once the judgement becomes final, they will also have to pay back the illegal proceeds they made.

The court upheld the prosecution's view that the defendants had defrauded the bank of several million euro, the money which they had moved off-shore to Liechtenstein and Luxembourg before attempting to launder it.

The court held that Oblak had sought to hide the origin of proceeds by means of numerous financial transactions and swaps for equity stakes, while the others had accepted what they knew was unlawfully gained money and covered its origin.

The criminal acts were related to real estate projects in Ptuj in the north-east of the country and Trzin in central Slovenia.

"It involved an enormous procedure and complex financial transactions," said judge Škerbec as the reading of the judgement went on for several hours. The defendants were not present to hear it.

He noted the many twists and turns in the trial, including obstacles in the reading of evidence, interruptions and defendant absences, noting that witnesses from Austria, Liechtenstein and Luxembourg had been called to the stand.

Early on in the trial, the defence succeeded with its motion to suppress evidence because the court had failed to inform witnesses in a Luxembourg law firm about their rights.

More than 60 hearings into the trial after more than 40 witnesses had been heard, the trial had to start anew last year after it had been interrupted for more than three months.

The delays were due to numerous motions for exclusions of evidence and the judging panel, and defendants being absent for medical reasons, including one losing consciousness in court.

"The defence sought exclusion of the presiding judge or the entire judging panel 14 times, and several motions concerned exclusion of evidence," said the judge.

"In their closing arguments the defence repeatedly asserted that the panel did not follow their proposals. However, I accepted at least one third of the defence's motions," Škerbec said.

The prosecution had sought a total of 38 years in prison for the quartet, a year and a half more than the combined sentence handed down by the court.

Nevertheless, prosecutor Ana Bučar is happy with the ruling, so she is yet to decide whether to appeal against it.

She is happy the court has recognised the defendants' acts as criminal acts and sentenced them to prison, and also that "this lengthy trial which was extremely complex from the aspect of evidence and procedural law has ended".

Meanwhile, the defence has already announced appeals and highlighted that a number of procedural mistakes had been made, so it expects the rulings to be quashed by higher-instance courts.

Lawyer Žiga Petrnel said that "we didn't agree with the indictment five years ago and we agree even less with the verdict now".

His colleague Dejan Markovič is disappointed that in the lengthy trial with more than 160 hearings the court has made several procedural mistakes to the detriment of the defendants. "So the ruling will definitely be quashed at one of the appellate courts."

Lawyer Blaž Kovačič Mlinar said he had expected "such an outcome" because the judge had been steering the trial towards "a guilty verdict".

He thus believes that "only at the appellate courts will we be able to start discussing the substance of the matter".

Kovačič Mlinar also believes "the defendants were found guilty also because their defence had been decisive and active".

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