Romania: money laundering ring unveiled
Dozens of mafia companies have headquarters in a warehouse on the outskirts of Bucharest. The groups “connected” to the illegal grouping “Container” sold among themselves fictitious firms on millions of euros.
Constanta Port’s Mafia, led by former Director of the Port of Constanta, Eugen Bogatu (45 years), and protected by PDL Senator Mircea Banias (45 years) and by the general secretary of the Romanian Ministry of Interior, Laurentiu Mironescu (43 years), has links with the Arab mafia, represented by Lebanese Said Baaklini (46 years), who was arrested six months ago, after trying to prejudice the Romanian state with the help of Bogatu through VAT illegal returns in the UCM Resita case.
According to the official indictment, the former Director of the Port of Constanta, Eugen Bogatu, complied with the orders given by Baaklini. There are tracks that show that tens of millions of euros, from customs illegally entered in the accounts of the mafia, which did the laundering. Baaklini Said Hassan’s business partner Awdi (46 years) is known as the gravedigger of Romanian press distribution company Rodipet. The money was laundered through a series of ‘ghost’ companies based on a field on the outskirts of Bucharest.
Expensive Internet cafes in the field
Bucharest’s belt road. A desolate field: thick clouds of dust floating through the atmosphere before they sit quietly on the blanket next to the asphalt waste. According to the Ministry of Finance records, there should be one of the most luxurious office internet cafes in the world. It was bought in 2008, with astounding amount of 23 million lei (5.6 million euros).
In fact, it’s not the best place to drink your coffee and check your e-mail. In the middle of the desert, rises a warehouse surrounded by high fences. Here is the headquarters of the Arab mafia, head of the dozens of ‘ghost’ companies that ‘haunt’ the national economy for years.
Internet café’s story begins four years ago, and along the route appear a lot of names from the Arab mafia, as well as of persons from the Romanian political class: Awdi Hassan, owner of bankrupted company Rodipet, and Said Baaklini, caught a few months ago when he tried to fool the Romanian state with 60 million euros, an illegal VAT return.
According to documents published in the Monitorul Oficial on the 2nd of May 2007, the City Internet Café company, with a zero turnover, paid 28 million lei (6.6 million euros) to enter the network led by Hassan Awdi. More specifically, Internet City Café participated in the capital increase of holding Supremo Media, from which Rodipet company was part. Since then, Internet City Café figured in the documents with a debt of 6.6 million euros. For a year, through successive changes of ownership, the café was walking like a hot coal from a family member of Awdi to another.
In the cemetery of Rodipet kiosks
In February 2008, Internet City Café has suddenly become very attractive for one of the most important pawns in Arab mafia, Rajeh Mohammad Sharif, recently used in Baaklini’s criminal scheme too. Internet Café’s figure still figured with huge debt of 28 million lei (6.6 million euros), compared with an extremely small income: 39 lei.
It is clear that even the most novice entrepreneur in the world wouldn’t take a company with such a balance. But Mohammad Sharif not only took over this company, but also paid for another 23 million lei (5.5 million euros), brought into the illegal circuit. In June 2008, less than three months after the fraudulent transaction, the café has been under new management, this time Iraqi. Mohammad Sharif sold the LLC plus 23 million lei to a company belonging to Kamal Motar.
Rodipet kiosks, removed from the cities two years ago, line outside the headquarters of the Internet cafe, the deposit on the ring road. Besides the windswept leaves, nothing in the yard moves. The door-keeper has never heard anything about Internet City company. “We have 30 companies here. F*** them, who knows the name of all” he says, taking the attitude of a busy and tired door-keeper, although most of the companies exist only on paper. The name Morad Ahmed (cafe manager) sounds familiar to him.
“He’s the boss. As far as I remember his name is Ahmed Morad. And Bilal. Is it the same person or not, I don’t know. However, he is Arab. “At the Trade Register appears the person named Bilal Mokdad Mohamad as an administrator at several companies related to Internet café. Bilal is the Lebanese who took all affairs of Awdi for a few months now.
Baaklini and Awdi, spoiled by all governments
Said Baaklini has enjoyed a close relationship over time with both PSD members or close associates, as well as with representatives of the ruling party. In the National Register of NGOs, Baaklini appears in the same foundation with Ionut Costea, Mircea Geoana’s brother, and Aleodor Frâncu, Office Chief of ex-Prime Minister Calin Popescu Tariceanu. Moreover, his name appears in the same case as the PDL Senator Mircea Banias, and the former Director of the Port areas, Eugen Bogatu. His business partner, Hassan Awdi, especially enjoyed the unconditional support of the PSD. He received the national distribution network Rodipet press in 2003 after a privatization led by Ovidiu Musetescu.
Contacted by reporters of “Adevarul”, Bilal swore that he knew nothing about suspicious transactions of the companies he took over. Then suddenly hangs. “I don’t know. Since I’ve been an administrator I haven’t sold or bought anything. I don’t know this fact, about money laundering. I’m sorry, I can’t speak”.
”Adevarul”’s Reporters presented the Internet café’s case to an expert employee of the National Office for Preventing and Combating Money Laundering (NOPCML) who, under condition of anonymity, concluded this is a typical money-laundering scheme. “In this case there are real signs of tax evasion.
On the one hand, transactions are clearly made to lower the company’s financial performance, which buys social parts of the companies with no activity, and on the other hand it is clear that in some accounts some money circulate to subsequently justify some payments. Laundering money”, says the NOPCML expert.
Mohammad Sharif, who started the successive transactions through which Internet City Café has become a million-euros LLC, is also the only shareholder of another company, Mike Trading & Investment LLC.
The figures of this company would befuddle any accountant used to working for legal firms. The most recent turnover shows a number with a lot of zeros: 523 million lei (127 million euros), although the company has not even one employee.
Considering those figures, the ‘ghost’ company entered, according to an economic site, in the top 50 of the most efficient private companies in Romania, ranking the 18th place, before giant companies with thousands of employees.
In compliance with the documents, the company would deal with the sale of food “including fish, crustaceans and molluscs” and the “molluscs” of 127 million euros are traded in a village near Bucharest, Petrachioaia. “It’s the first time I hear about such a company. It doesn’t appear in our records and didn’t paid taxes” said the Secretary of Petrachioaia City Hall, stunned when he found out that in the village there is a company so rich.
The address of the Mike Trading & Investment company in Petrachioaia is the same with Said Baaklini’s company, Libarom Agri Ltd., which tried to damage the Romanian state through illegal VAT refund with 60 million euros.
Molluscs and motors
The relation between Baaklini and Mohamad Sharif is much more complex than the simple fact that their businesses operate at the same address. Mike Trading & Investment LLC name appears in the indictment for illegal VAT return. Last year Baaklinii bought from UCM Resita some scrap engines at a thousand times over-hyped price, 250 million euros, thereby increasing the tax which the State must return. The export ought to be facilitated by Eugen Bogatu, Director of Port Estates.
According to the indictment prepared by the prosecutor Gheorghe Bocsan, the fake price was possible with the help of “crustaceans and molluscs” company in Petrachioaia who billed documents indicating how the engines should be mounted for the benefit of Baaklini.
The technical documentation does not exist in reality, being fictitiously “bought” by Mike Trading from a Chinese company dealing with sales of lingerie at the shopping complex in the Red Dragon district.
When the scandal started in Resita, the company accounts of Mike Trading, who also bought the internet cafes on the ring road, was found in an abandoned car in the parking lot of a supermarket in Bucharest Rahova district. It was Baaklini’s car.
Arrest warrants for 29 days
The supreme court decided to arrest 28 people for acts of corruption and smuggling in the port of Constanta. Also, judges have issued arrest warrant in absentia for the Lebanese citizen Ahmad El Haj.
Border guards and anti-corruption prosecutors raided 40 homes and business offices in Constanta, to collect evidence in a case of smuggling and tax evasion. The General Secretary of Romanian Ministry of Interior and a PDL senator were brought to DNA, being accused of involvement in an illegal network of oil and cargo traffic from China. Laurentiu Mironescu and Mircea Banias are suspected of coordinating a network of Chinese and Turkish citizens that controlled the port of Constanta, as well as with Baaklini’s group.
Laurentiu Mironescu is believed to have asked for, in June 2010, at the time he was the President of PDL office in Constanta, to the administrator of Container Clearance Services Constanta LLC, Aurelian Catalin Pilca, 2,000 euros to give him a position in the party he coordinated. Thus, Mironescu would have promised that, through its influence in the Ministry of Transport, he will head the National Company Maritime Ports Administration Constanta.
Mironescu’s lawyer, Armeanu Apostol, says that former secretary general of the Interior did not want this position, but a management position in Constanta. Laurentiu Mironescu specified in the courtroom that he had a good relationship with Transport Minister Anca Boagiu, but his desires to obtain a job in the port of Constanta faced the opposition of former Minister Radu Berceanu.
Banias: products for children in need
PDL Senator Mircea Banias, also accused in this cased of influence peddling, admitted yesterday that he asked Eugen Bogatu, former head of the Constanta Port Estates, to give him confiscated goods, but that approach was just to help children in need who would have benefited from this products.
In exchange for the goods, Banias committed to Bogatu, due to his position as a parliamentarian, to direct more economic and administrative projects for the purposes required by the interests of the former manager of the Constanta Port Estates. Moreover, Banias is believed of having promised to Bogatu that he would intervene personally in blocking a proposal of restructuring the customs of the county of Constanta.
Also, the parliament has promised to Bogatu that it would appose a ministerial order which require the scanning of all containers in the port of Constanta South – Agigea.
Editing and translation by Diana Adela Ionita