Ljubljana related

14 Feb 2020, 09:52 AM

STA, 13 February 2020 - There was much controversy on Thursday as the parliamentary Commission for the Oversight of Intelligence and Security Services discussed the state prosecution's decision to reject a criminal complaint filed by a parliamentary inquiry over an alleged Iranian money laundering scheme at NLB bank a decade ago.

Addressing reporters after the session, Janez Janša, the leader of the Democrats (SDS), said that the session heard "things that explain much of what is happening" and what was keeping the media busy these days, something that would become very concrete in the future, which he said was "from now on".

After what the commission heard today, Janša said it had become obvious why the "law enforcement authorities that should have investigated the matter found there was nothing wrong (...) People who made possible a criminal act of epic proportions investigate themselves."

Darko Muženič, now director of the National Bureau of Investigation (NBI), served at the Office for Money Laundering Prevention at the time that roughly one billion US dollars was allegedly laundered through NLB bank.

In a bid to "protect the dignity and integrity" of the NBI and Muženič, Police Commissioner Tatjana Bobnar explained today that Muženič at the time served in the department of the Office for Money laundering that was not in charge of the Farrokh case.

Farrokh was the name of the company of Iranian citizen Iraj Farrokhzadeh that the parliamentary inquiry in 2018 found laundered the money on behalf of Iran to skirt international sanctions.

The prosecution's decision of July last year not to prosecute abuse of office suspects in the case was debated by the parliamentary Home Affairs Committee on Wednesday, but the session was suspended because the SDS and the fellow conservative New Slovenia (NSi) wanted to hear from NBI and NLB representatives, who were not present at the session.

NSi deputy Jernej Vrtovec described the findings of investigators which prompted the prosecution not to prosecute as very unusual.

The case was the subject of two parliamentary inquiries, whose extensive reports allege that NLB bankers failed to exercise due oversight and abused their powers at last in the case of some transactions, said Vrtovec.

The police said that that Tuesday's session of the Home Affairs Committee was attended by Police Commissioner Bobnar, who is the NBI director's superior, and director of criminal police Boštjan Lindav.

The police noted that it was the criminal police and not NBI investigators which in 2010 and 2011 handled the case of alleged money laundering at NLB.

Bobnar noted that the police directorate had reviewed police activities in that case 2017 and that the guidelines issued by the then interior minister in connection to that had been fully implemented.

She said that the special department of the specialised prosecution service had rejected a criminal complaint filed against criminal police investigators over the case.

Bobnar also said that the police performed their duties in accordance with the standards of evidence, in compliance with the constitution, penal code and the criminal procedure act and as an independent body whose work in the pre-trial procedure can only be directed by the state prosecutor in charge.

A specialised investigation group formed in 2017 and comprising representatives of the NBI, Office for Money Laundering Prevention and the central bank drew up a plan of work in the Farrokh case to look into suspected criminal offences, including money laundering, terrorism financing and abuse of office.

In the case pertaining to suspected abuse of office, the state prosecutor in charge issued a decision in July 2019 rejecting the criminal complaint by the parliamentary inquiry.

However, Bobnar noted that the specialised investigation group continued work in connection to other suspected criminal offences in the case.

All our stories on money laundering are here, while those on Iran are here

13 Feb 2020, 11:02 AM

STA, 12 February 2020 - The European Commission has issued a letter of formal notice to Slovenia and seven other member states for failing to transpose the 5th anti-money laundering directive. Anti-money laundering rules are "instrumental in the fight against money laundering and terrorism financing," the Commission said on Wednesday.

It added that recent money laundering scandals had revealed the need for stricter rules at EU level and that legislative gaps in one member state had an impact on the EU as a whole.

EU member states were obligated to transpose the directive by 10 January, however, Slovenia, as well as Cyprus, Hungary, the Netherlands, Portugal, Romania, Slovakia and Spain, failed to do so.

Unless the countries fail to provide a satisfactory response to the Commission within 2 months, the Commission will send them reasoned opinions, after which they get another two months to act or else face the European Court of Justice.

In December, Slovenia's National Assembly passed changes to the act on anti-money laundering and terrorism financing, transposing into Slovenian legislation the 4th anti-money laundering directive adopted by the Commission in 2016.

The Finance Ministry meanwhile said that it had stepped up efforts to draft the needed legislation after receiving the formal notice. The ministry expects the draft changes to be filed in government procedure shortly.

18 Jan 2020, 11:58 AM

The covers and editorials from leading weeklies of the Left and Right for the work-week ending Friday, 17 January 2020

Mladina: Health bill vote may be behind attempt at govt destabilisation

STA, 17 January 2020 - "It is unclear what or who causes hysteria in Slovenian politics," the left-wing weekly Mladina says as it analyses peculiar events before the congress of the coalition Pensioners' Party (DeSUS) and opposition Democrat (SDS) leader Janez Janša's latest attempt to destabilise the government.

Editor-in-chief Grega Repovž accuses the media for helping create the hype around tomorrow's DeSUS congress by demanding senior DeSUS members reveal who they will support in the leadership battle between incumbent leader and Defence Minister Karl Erjavec and his most serious challenger Agriculture Minister Aleksandra Pivec.

"Is it really unusual that not all DeSUS MPs are behind Erjavec," wonders Mladina on Friday. "Since when is it normal for all MPs to have the same opinion and since when one has to say it loud and clear before a secret ballot which candidate one supports".

What is wrong if there are challengers to the party leader at a congress, Repovž says, but points to the fact that there are many "personal" parties in Slovenia which have the party leader's name in their name so it is hard to imagine them being led by anyone else.

He implies that "such a perception of democracy probably stems from at least some fascination with the only orderly party in Slovenia, namely the SDS, which does not wonder who would stand for party president even if Janša's name in nowhere to be found in the party's name".

However, it is clear that this fire is being kindled by those who would like to destabilise the government - the opposition, says Repovž, but adds there is nothing wrong what that, this is something the opposition does.

Janša's intention is clear, he wants to make coalition parties and the prime minister nervous, Repovž says in reference to his Sunday interview in which he said the government coalition was clinically dead.

But there could also be more substantive reasons to undermine the government, Repovž says, noting a bill to abolish top-up health insurance and stop further privatisation in healthcare will go into third reading at the end of January.

Neither the SDS nor the opposition New Slovenia (NSi) or DeSUS hide their connections with the health insurance lobby, which is trying to undermine the bill at all cost. This could perhaps be the reason for trying to destabilise the government before a key vote, according to Mladina.

Demokracija: Iran-NLB case comes with an inconvenience

STA, 16 January 2020 - While the investigation into the contentious transactions worth US$1 billion by a British-Iranian citizen through the NLB bank is still ongoing, the "inconvenient" thing is that the head of the National Bureau of Investigation is actually investigating himself and "protecting political godfathers", the right-wing Demokracija says in its latest commentary.

The right-leaning weekly refers to Iraj Farrokhzadeh, who is suspected of laundering Iranian money through his NLB accounts in 2009-2010 in breach of anti money-laundering legislation, while Iran was subject to international sanctions.

The commentary comes after the Specialised State Prosecution announced earlier this month it had abandoned a part of the investigation related to abuse of office by bankers at NLB.

The announcement came "at the moment when the democratic world was being appalled by Iran, when new sanctions and similar investigations of money flows from Tehran to cells around the world were being announced".

"The matter is not innocent. Farrokh, the Iranian company owned by Iraj Farrokhzadeh, laundered a billion dollars through NLB between 2008 and 2010, during the government coalition under the Social Democrats (SD) and Borut Pahor."

In the commentary Length of the Shadow of a Dollar Banknote, editor-in-chief Jože Biščak adds that there is suspicion that the money was used to purchase goods that could be used for nuclear armament.

"In other words, at the time of international sanctions against the regime in Tehran, the Slovenian state-owned bank helped Iran break through the embargo."

The investigation is still ongoing, but the "inconvenient" thing is that Darko Muženič, the head of the National Bureau of Investigation, is actually investigating himself and protect political godfathers.

Demokracija refers to Muženič serving as the head of the Office for Money Laundering Prevention when the scandal broke out in 2017.

"He apparently became the boss of the National Bureau of Investigation only to steer the investigation so that only pawns on the chessboard are (possibly) eventually found guilty," it adds.

But those who think that foreign intelligence services (US in particular) are not informed in detail about the true perpetrators and that they do not know what the modus operandi was, are so wrong.

"If nothing happens and perpetrators do not get punished, sanctions against Slovenia, formally still an ally of the US and western democracies, will not be visible and public, but they will be very painful."

All our posts in this series are here

27 Sep 2019, 10:47 AM

STA, 27 September 2019 - While the Financial Administration (FURS) has just highlighted the continuing positive trend in the recovery of tax debt, it is bound to have a hard time recovering what are EUR 25 million owed by one of the biggest tax debtors in the country. Zlatan Kudić reportedly disappeared as a tax fraud trial against him was about to end.

According to Thursday's report by public broadcaster TV Slovenija, the former director of the Ljubljana company Maxicon, which went into receivership in 2012, has had an arrest warrant issued against him.

Kudić was undergoing a trial, along with two co-defendants, for tax evasion, money laundering and destruction of evidence.

The court ordered that he be detained when he stopped attending trial a few weeks ago and the police issued an arrest warrant, but so far to no avail.

According to TV Slovenija, Kudić and Maxicon have been erased from the list of tax debtors with the company's termination, but FURS could theoretically still go after the debt via a pecuniary claim in a criminal procedure.

The question, however, is whether Kudić will ever again be available to Slovenian courts and whether he officially has any assets at all, the report added.

15 Jul 2019, 11:43 AM

STA, 15 July 2019 - Reporter, the right-leaning weekly, analyses the background story of the Slovenian citizen Mihael Karner and his web of accomplices who have allegedly made a fortune selling steroids online.

The editorial believes that the story probably started at an office in the Augusta villa in Ljubljana more than 20 years ago, with young men hanging out, working out and discovering the effects of anabolic steroids.

"There it was that those young men probably came up with this "business idea" and developed it into a global business in the following years.

"Since they walked the razor's edge and likely even crossed it, the group, who was dubbed a criminal organisation by the US Drug Enforcement Administration (DEA), was making easy money and a lot of it, which mostly ended up in real estate projects in Slovenia and its neighbouring countries through a complex tax haven scheme."

Karner and his wife were then arrested in Austria in late 2011 on US Federal indictment for conspiracy to distribute anabolic steroids, conspiracy to import anabolic steroids and conspiracy to launder money.

www.state.gov Mihael Karner.JPG

www.state.gov

The editorial presumes that Karner and his wife met through her brother who socialised with Karner at the villa. Another link was the wife's uncle, Danilo Slivnik, who set up the office there.

The editor-in-chief Silvester Šurla points out that allegedly several members of Slivnik's family were involved in Karner's illicit drug business, but the US government has targeted only two other people apart from Karner himself - his wife and his brother, offering up to five million dollars each for any information on their travelling abroad plans which would help to arrest them.

The three targeted people could thus face extradition to US and up to 20 years in prison. Slivnik, who was involved in Karner's real estate business projects, which were a way to launder the money gained through selling anabolic steroids, committed suicide soon after the 2011 arrest.

"It's tragic and rather sad that Slivnik paid the biggest price in this unfortunate story, a man who was only a supporting actor in this scandal and was not involved in anabolic steroids trafficking as opposed to his relatives," says the editorial, concluding that Slivnik was never a target of the US government investigation.

Related: US Govt Offers Millions to Catch Slovenian Steroid King

02 Apr 2019, 14:38 PM

STA, 2 April 2019 - The Koper District Court sentenced on Tuesday former Istrabenz general manager Igor Bavčar to two years and six months in prison for abuse of office. Since he is already serving a five-year prison sentence for money laundering related to a deal involving Istrabenz shares, he was handed a uniform sentence of seven years and five months.

 

The other defendant, former Maksima Holding director general Miroslav Golubić, got a prison sentence of a year and eight months.

The prosecution demanded two years and a half for Bavčar and two years for Golubić.

The pair were on trial over a 2007 deal involving a purchase of Intereuropa shares.

The Istrabenz conglomerate entered a forward contract Maksima Holding had with the bank Banka Celje which set down a mandatory purchase of Intereuropa shares at a set price and in a specified period.

It bought almost 288,000 Intereuropa shares at 49 euro a piece from Banka Celje on 20 December 2007 at a price of EUIR 14.1m, and sold them back to the bank a day later at 36 euro a piece, or for around EUR 10.4m.

The prosecution has argued that by overpaying the shares by EUR 3.7m, Istrabenz incurred the damage that would have been otherwise incurred by Maksima Holding.

The court ordered today that all assets illegally gained by Maksima Holding be confiscated.

The ruling is not final yet.

The head of the judicial panel, Orjana Trunkl, said the deal was unnecessary, even harmful for Istrabenz. Bavčar clearly ventured into it to prevent damage to Maksima Holding, she said.

This was in his best interest as the absolute owner of the company FBI, which held a controlling stake in Maksima Holding, which was preparing the ground for the takeover of Istrabenz.

Golubić, whom the court found to be actively helping Bavčar, received a milder sentence because he was an accomplice and had no previous criminal record.

Neither of the defendants were in court today, but given their line of defence, they will probably lodge an appeal.

The prosecution in contrast, is happy with the ruling and will not appeal unless any procedural problems arise.

05 Dec 2018, 16:50 PM

STA, 4 December 2018 - Slovenian authorities and banks took part in a massive Europe-wide effort to combat money laundering between September and November. In Slovenia, 33 money laundering cases were investigated during that period, with the authorities uncovering 32 money mules and seizing nearly EUR 1m.

The Police Administration said in a press release on Tuesday that it had investigated an increased number of money mules, individuals who receive money stemming from criminal activities to their bank accounts.

The funds most often come from fraud, business fraud and cyber-crimes such as IT breaches, phishing and online fraud, the police added.

What is a money mule?

A money mule is a person who transfers in person, via a courier, or electronically, money that has been illegally acquired for someone else. A money mule is usually paid from the money transferred, and often engage in such work thinking it is legitimate.

Fraud, forgery and money laundering

During the autumn campaign, the Slovenian police investigated 33 cases related to fraud, business fraud, forgery of documents and money laundering. The police investigated 32 money mules who received a total of EUR 2.8m to their bank accounts.

In cooperation with the Office for Money Laundering Prevention and Slovenian banks, the police temporarily seized EUR 970,000. They also arrested two suspects and conducted two house searches.

Money mules in Slovenia are typically foreign citizens who open bank accounts in the country to launder money.

The press release also says that Slovenian police conducted a long criminal investigation that resulted in the apprehension of two money mules, both Serbian citizens.

They were part of a scheme defrauding US companies via telephone and the internet. More than 60 transactions were carried out, defrauding 10 US companies of a total of EUR 3.7m.

In total, the Europe-wide campaign, dubbed EMMA 4, uncovered more than 1,500 money mules and nearly 170 people were arrested, the European Banking Federation said in a press release today, as it launched a campaign against money muling.

17 May 2018, 15:07 PM

STA, 17 May 2018 - A parliamentary inquiry into suspected money laundering at NLB and NKBM banks has spread the blame wide for suspected misdeeds at Slovenia's largest banks. In the case of NLB, it pointed the finger at the Borut Pahor government (2008-2011), former central bank governor Marko Kranjec and several senior bank executives. 

20 Jan 2018, 12:54 PM

Claims transactions simply a way to avoid sanctions. 

18 Nov 2017, 13:09 PM

 

What are the main issues of the biggest state-owned bank? 

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