Volksbank has announced that its exposure in the EUR 85 million bank fraud scheme identified by the Organized Crime and Terrorism Investigation Department (DIICOT) within the Romanian Police and involving two unnamed financial institutions is of only EUR 8 million. Meanwhile, some of the names involved in this case have surfaced in the media: Dana Bajescu, director of the BRD Dorobanti unit in Bucharest, as well as notary Paula Rosenberg, the wife of artist and senator Damian Draghici.

Lucian Cojocau, former BRD director and current vice-president of Volksbank, the head of BRD Unirii and Dorobanti units and ATE Bank representatives are also part of the investigation. The head of the crime ring were businesspeople Marius Locic and the Crestin brothers, according to Mediafax, quoting judiciary sources.

“In this case, Volksbank notified the authorities back in May 2010 on account of loan files including forged documents,” reads a Volksbank press release on the matter. “The total exposure incurred with the respective client and its affiliates is, however, EUR 8 million, significantly lower than the EUR 85 million announced by the DIICOT", reads a Volksbank press release.

As the loans in questions were under a mortgage guarantee, the bank initiated forced execution procedures against the fraudulent applicants and set up adequate provisions.

“Under the coordination of influential members of the Bucharest business environment, the accused obtained significant financial gains by committing bank fraud, namely by illegally securing loans from two banks for 35 companies controlled by members of the organized crime group", according to a DIICOT statement.

The prosecutors made public the intricate infrastructure of the case, namely the existence of support for the crime group from seven general or commercial managers of bank units as well as from certified real-estate assessors. This allowed the crime group to obtain loans despite the beneficiary companies not meeting the bank risk and legal requirements, with mortgages set on real-estate property the declared value of which was artificially and illegally inflated.

Ioana Jelea ioana.jelea@romania-insider.com