Attorney Tomov, who is currently suing the BNB, two banks and another 20 Bulgarians in the US, has received $300,000 from Tsvetan Vassilev and CorpBank
In the case filed with the district Court of New York under the American RICO Act for the failed seaside project in Balchik, the name of the fugitive banker is surprisingly not among the defendants
At the end of January 2019, a case was filed with the district Court of New York under the US Racketeer Influenced and Corrupt Organizations Act (RICO) by three companies and the Varna lawyer Zahari Tomov against a total of 24 defendants.
The dispute is over real estate in the Bulgarian city of Balchik and a project that never got off the ground – Silverbeach. The lawsuit is against the Bulgarian National Bank, the former CorpBank conservators Lyutov and Kostadinchev, the Bank of New York Mellon, First Investment Bank, the businessmen Tseko Minev and Ivaylo Mutafchiev and politician Delyan Peevski.
What is noteworthy is the absence of Tsvetan Vassilev in the story described in the over 190-page claim, which involves real estate, loans, contracts, annexes, set-offs, cessions, bank accounts and Mexican bonds. His name should also be on the list of defendants. He is the alleged secret owner of the offshore company EFV International Financial Ventures Ltd., which is identified as one of the participants in the “conspiracy”.
The claim does not even mention the fact that the fugitive banker is being tried for leading an organized crime group responsible for the embezzlement of CorpBank and that he has been hiding for over four years from the Bulgarian judicial system. Never mind that there is enough evidence, witness accounts, audit reports (including by the international consulting firm AlixPartners), a report by a special parliamentary committee and even a summary by the Prosecutor’s Office, saying that the “CorpBank model” represented a financial pyramid, which extended billions worth of loans to shell companies affiliated with Vassilev.
The suspicions that the former banker is behind everything are further increased by the fact that the RICO media campaign is eerily similar to that surrounding the Magnitsky Act claim, down to the speakers voicing their opinions on the topic and the involvement of another Bulgarian lawyer – Sylvia Rolinski, who used to head the political cabinet of the late foreign minister Stoyan Ganev. She was part of his team at the time when Ganev was President of the UN General Assembly.
The New York case is in its early stages – it is yet to be determined whether the claim is admissible on US territory (as it turns out a similar case was dropped in Texas and it did not feature the CorpBank accent, which also indicates that the connection between the Balchik real estate case and the lender’s collapse was made up later) before it can be heard on its merits.
A friendship with a price tag of $300,000, however, reveals a clear connection between one of the claimants under RICO – Zahari Tomov – and the former CorpBank majority shareholder Tsvetan Vassilev. This tie could compromise the entire construct of the filing in front of the US court because it speaks of dependence and creates reasonable doubt that this claim, like the one under the Magnitsky Act, is serving the interests of Tsvetan Vassilev.
The only person on either side of the RICO case who has given a statement is the Varna attorney Zahari Tomov. Even though in his TV interview for Lyuba Kulezich (known to give platform to Tsvetan Vassilev’s side of the story only) the lawyer parroted the claim’s content, his words seemed as part of the RICO media scenario.
Tomov’s filing with the US court omits an important detail – a likely attorney fee of $300,000, which later became a personal deposit in CorpBank in 2014.
Silverbeach was a project planned to cover a 100-ha plot near Balchik and set to be realized by Air Property Development, which involves partial US ownership.
The idea was for over $400m to be invested in the construction. A portion of the money was provided by First Investment Bank. However, the project fell through. The New York claim insists that the FIB loan was not used as intended and instead, in breach of regulations, was funneled into the purchase of Mexican bonds.
Later, when it became clear that Silverbeach will not come to fruition, neither the banks nor the US “investors” financed the project. Air Property Development entered into bankruptcy proceedings, in the course of which proceedings the bankruptcy administrator naturally proceeded to sell the land – representing Air Property Development’s only valuable asset - on a public auction. As a result, the land was purchased by Fibank which was also the first-ranking mortgagor in relation to the land. Such approach makes much sense, from Fibank’s perspective, as, first, having a first-ranking mortgage over the land, Fibank had been guaranteed that any proceeds from the auction should end up back at Fibank (at least if the applicable law was complied with by the bankruptcy administrator) and, second, Fibank had most likely been well aware of the common practice at that time of a mortgaged property sold at an auction to persons related to the respective debtor at an artificially lowered price (compared to market value) in order to wipe out the encumbrances from the property and thus damage the mortgagor. Therefore, if protecting itself from the eventual rip off of proceeds from the sale was indeed the reason for Fibank’s decision, it is easily understandable. And Fibank even had to pay the entire price for the land, instead of just off set it with its receivables from Air Property Development, because the applicable law at that time didn’t allow for such offsetting. Once received by Fibank by the bankruptcy administrator, and awaiting for its allocation in accordance to ranking priority (i.e. in favor of Fibank as a mortgagor), the money was transferred to CorpBank as it allegedly offered best interest rate for the deposit.
Following the collapse of Tsvetan Vassilev’s CorpBank, the claim was sold by Fibank to other companies, which set off the amount of their own debt to the failed lender.
Everything described so far indicates that the only victim of the scheme was probably Fibank itself, because most of the tens of millions of levs in real money it paid, practically twice over, has not been recovered.
In his RICO claim however, attorney Tomov entirely skips both Tsvetan Vassilev’s and his own roles in the case.
Here is the chronological order of events. In 2008 CorpBank, at the orders of Tsvetan Vassilev, extended a €10m loan to Project Company Development AD, secured only by a mortgage on a 29.9 ha of land of “wood-producing forest” near Balchik, owned by All Seas Property 2 OOD.
The loan had to be repaid in just five months, but its term was extended via annexes multiple times, as was the mechanism so often used in the CorpBank pyramid.
Manager of All Seas Property 2 OOD at the time was Chavdar Angelov, now a defendant in the RICO case, while the company itself is a claimant (of course, the information about his involvement was also withheld from the US court).
Although in her legal claim lawyer Silvia Rolinski maintains (including as representative of Zahari Tomov) that All Seas Property 2 was only an investor in Silverbeach project, it has been proved that the company participated, albeit indirectly, in a scheme aimed at diverting €3.5 million of the CorpBank depositors’ money.
On 3 May 2011, Air Property Development company was declared insolvent (part of the land allocated for the construction of Silverbeach included those 29.9 ha mortgaged in favor of CorpBank) and by that moment the debt of Project Company Development to CorpBank ran at about €6 million.
On 22 June 2011, the bank of Tsvetan Vassilev assigned (transferred) part of the debt (€3,5m) to Finance Engineering Company managed by Genadi Tabakov, ex-director of Central Cooperative Bank where Vassilev worked as a broker in 2000.
Finance Engineering is a firm connected with CorpBank, partner in Haskovo thermal power plant with one of Vassilev’s front companies, Aflik. In 2012 this debt was transferred to SEEK foundation LLC registered in Missouri, US whose representative is lawyer Zahari Tomov.
It turns out that another lawyer from Varna, Vladimir Skochev, was also involved in the scheme. He was a representative of Finance Engineering, and until 2006 – also a partner in All Seas Property 2.
There are no documents for either of these two transfers to confirm whether the price was really paid, be it in favor of CorpBank or Finance Engineering. From the annual reports of Finance Engineering it transpires that the company received a BGN 7m loan from Vassilev’s bank.
Its business activity does not involve revenues which could allow for such transactions and, even if such payment was effected, it was quite probably fictitious, and the money again originated from CorpBank.
On 20 February 2012, the bankruptcy administrator of Air Property Development entered Seek Foundation LLC on the list of mortgage creditors, and in the beginning of 2013 Zahari Tomov managed to get hold of a writ of execution for this claim and filed enforcement action (which made the sum soar because of additional costs).
Eventually, the payment worth €3,5m was claimed from Ganka Kolyovska, bankruptcy administrator of Air Property Development, who in her turn included Seek Foundation LLC in the list of creditors and in the initial allocation account made on 18 November 2013. Several days later, Kolyovska submitted a notice of resignation as bankruptcy administrator and Martin Apostolov was appointed in her stead. Today, he is among the alleged participants in an organized criminal group charged with laundering CorpBank money.
Most probably the sum had been already paid to Seek Foundation LLC during an earlier period and in violation of the rules for liquidation of the bankruptcy estate.
A letter made available to 24 Hours newspaper gives rise to such suspicions. It comes from lawyer Zahari Tomov and is addressed to Anelia Zagorova, a private law-enforcement officer in Targovishte. (See the facsimile on page 13.)
The letter is dated 5 August 2013 and it says that Seek Foundation LLC agrees to be substituted as a creditor in the enforcement case by the bankruptcy administrator of Air Property Development, based on payment effected from the bankruptcy estate to Air Property Development to satisfy the claim of Project Company Development AD under the writ of execution. Meaning Zahari Tomov, as a representative of Seek Foundation LLC, has received the sum.
However, even if for some reason the millions were not “utilized” (the Air Property Development insolvency case in the Targovishte District Court abounds with complaints of affected parties), it suffices to say that the sum originating from CorpBank landed in a foreign company controlled by Zahari Tomov and was duly entered in the list of approved claims (preferential ones at that, secured by mortgage) as well as in the asset allocation account.
Personal meeting and the finale of “a job well done”
It became clear what the role of Tsvetan Vassilev was several months later when on 31 January 2014 one of his front companies, Nikcommerce, provided a loan to lawyer Zahari Tomov amounting to $300,000 or about 8% of the claim collected by Seek Foundation LLC.
The account of Nikcommerce was credited on 24 January 2014 by another company gravitating around Vassilev: Yulinor, ostensibly as a “loan”, while the origin of the money was from CorpBank itself.
Most probably it was a fee for the “salvation” of €3.5m which, instead of being restored to the bank, was most likely sent abroad where its further destiny is only known to Tomov and Vassilev.
Zahari Tomov deposited the fee received in CorpBank as his own funds, as becomes clear from the list of depositors made by the bankruptcy administrators.
According to the notorious “visitors books” of Tsvetan Vassilev, Tomov visited the banker’s office on 22 January 2014 which fully coincides with the chronology of the $ 300,000 loan.
The year is now 2019 and apparently the time has come to return the "favor".
After the failure of the Magnitsky Act claim, the case with the property in Balchik is the ideal pretext for Vassilev to launch another media campaign, this time under the RICO Act.
And if the court proceedings move on, the Prosecutor's Office in Missouri, where Seek Funding LLC is registered, would surely be interested whether €3.5 million from the CorpBank pyramid have been "laundered" in the US as described above.
It is unclear whether this "small affair" worth several million has not been overlooked against the backdrop of the missing billions in the indictment already brought against Tsvetan Vassilev by the Specialized Criminal Court.