Entries Tagged "Moldova"

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Stealing a Billion

It helps if you own the banks:

The report said Shor and his associates worked together in 2012 to buy a controlling stake in three Moldovan banks and then gradually increased the banks’ liquidity through a series of complex transactions involving loans being passed between the three banks and foreign entities.

The three banks then issued multimillion-dollar loans to companies that Shor either controlled or was connected to, the report said.

In the end, over $767 million disappeared from the banks in just three days through complex transactions.

A large portion of this money was transferred to offshore entities connected to Shor, according to the report. Some of the money was then deposited into Latvian bank accounts under the names of various foreigners.

Moldova’s central bank was subsequently forced to bail out the three banks with $870 million in emergency loans, a move designed to keep the economy afloat.

It’s an insider attack, where the insider is in charge.

What’s interesting to me is not the extent of the fraud, but how electronic banking makes this sort of thing easier. And possibly easier to investigate as well.

Posted on May 8, 2015 at 6:13 AMView Comments

Sidebar photo of Bruce Schneier by Joe MacInnis.