Romanian Media Mogul detained on Money Laundering Charges

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November 9, 2011

Romanian media mogul, Sorin Ovidiu Vantu and the head of the Employees Union at the Romanian Petrom Service gas company, Liviu Luca were detained for 24 hours on Monday related to charges of embezzlement from Petrom Service and money laundering, amounting to some € 83 million. On Tuesday, a judge issued an additional arrest warrant for 29 days.

A group of companies connected to Vantu is the owner Realitatea-Catavencu, a privately held group of media companies. He is also the former main shareholder in Realitatea Media, a TV station that he sold earlier this year to a real estate investor Elan Swartzenberg and a series of offshore companies. Liviu Luca also owns Realitatea Media shares.

Also detained were businessman Ovidiu Turcan, and the former director of Petrom Service, Gheorghe Supeala. The four Romanian businessmen are accused of using Petrom money to buy overvalued shares in other companies, then transferring the earnings to offshore ,  company, and personal accounts in order to conceal the true identity of the beneficiaries. Allegedly, Realitatea Media received around € 14.2 million, SC Imobiliar Network 2002 received some € 6.7 million, and SC GM Invest SA around € 1.3 million.

The prosecutors said that their actions led to the bankruptcy of Patrom Service which caused losses of € 98 million to the state. Also affected were the 72,000 members of the Employees Union at Petrom Service - the minority shareholders in the company – who lost their investments.

Vantu, who was considered the 5th richest man in Romania in 2008, is no stranger to the Romanian judiciary system. He was detained in April this year for allegedly blackmailing Sebastian Ghita, a manager at Realitatea Media at the time. Along with two others, Vantu was also investigated for aiding Nicolae Popa, the Romanian businessman convicted for running the Fondul National de Investitii (FNI) Ponzi scheme. Popa fled to Indonesia to escape imprisonment, and was extradited to Romania earlier this year. Thousands of people lost their savings when the FNI fond went bankrupt in 2000. Although Vantu founded the FNI fond, he was never indicted in the case.

Many of Vantu’s companies were set up by Laszlo Kiss, the offshore company registration agent featured in OCCRP’s project Offshore Crime Inc. Kiss was arrested for evading taxes for his role in designing the Petrom Service scheme.