Criminal network protected by organized crime prosecutors

Businessman Horia Șchiopu Simu was indicted in again in early October 2015 when the prosecutors charged him of fraudulent administration. His shady businesses were under investigation for years but were protected by high ranking officials and prosecutors who kept hidden the criminal files against de billionaire.

Șchiopu Simu is one of the most controversial businessmen who took advantage of the corruption within the National Authority for Property Restitution (ANRP). He illegally obtained tens of millions of euro from the government, according to the prosecutors. A Romanian Centre for Investigative Journalism – RCIJ story reveals why a network of crime was supported by the authorities.

Șchiopu Simu is placed under preventive arrest and indicted for money laundering and accessory to abuse of office. In another criminal investigation Șchiopu Simu was accused of giving 230.000 euro bribe to a former director of the National Agency for Tax Administration – the Romanian revenue service – as well as to the former Head Prosecutor of Directorate for Investigating Organized Crime and Terrorism, also arrested.

The Foradex deal

Horia Șchiopu Simu nicknamed The Copper’s Banker by the media owned together with the Romanian Government a company although his firms were investigated for money laundering. In 2007 the Authority for State Assets Recovery (AVAS) offered for sale Foradex a company where the Romanian government was co-shareholder with Amteck Investiții SRL.

Amteck Investiții, Șchiopu Simu and 20 other companies and four individuals were investigated for money laundering for years. One of the Șchiopu Simu’s business partners was Ionuț Costea former State Secretary within the Ministry of Finances, deputy director of the European Bank for Reconstruction and Development, president of Raiffeisen Banca pentru Locuințe, president of Eximbank. Currently retired Costea is the brother-in-law of Mircea Geoană a runner-up for the Romanian presidency as the leader of the Social Democrat Party, former Ministry of Foreign Affairs and ambassador in United States, currently senator in the Romanian Parliament.

Horia Șchiopu Simu – The Copper Banker

AVAS refused RCIJ request to make public Foradex privatization file as well as any information regarding post-privatization monitoring process for this company. The government took a very surprising decision to sell a company with a growing turnover. AVAS received two bids in June 2007 for the major shareholding of Foradex. The company was founded in 1939 under the name of Commercial Administration for Mines, Prospecting and Exploration, and changed its name several times. The company main activity was exploitation of mineral resources. Foradex had identified 850 deposits of oil, geothermal water, mineral water, iron or gold ore.

Under American license Foradex had begun manufacturing drilling tools for oil or diamonds since 1970 and had prepared projects for over 300 wells with depths varying from 300 meters to 800 meters in Libya. The company had works or drilling assistance in various fields in Zambia, Tanzania, Peru, Greece, Kazakhstan, Moldova, Algeria, Turkey, Yemen, Turkmenistan, Iraq, Germany, Ghana, South Africa and Tunisia.

After a few failed selling attempts in November 2006 a single big was submitted by the consortium composed of Amteck Investiții, Cuprom and Ipronef SA to buy Foradex.  Amteck Investiții owned by Șchiopu Simu and his partner bought 99.70 per cent of Foradex shares. In 2010 Alabastra Mining Limited a Cyprus based off-shore company took over 90 per cent of the company. On the same date Șchiopu Simu’s resigned form his office as manager and Chairman of the Board.

Charges of money laundering

According to AVAS officials Amteck Investiții became shareholder in Foradex after an investment company get away the shares. Șchiopu Simu told RCIJ he bought the shares from the stock exchange. However Amteck Investiții was created several months before taking over the Foradex shares and had two partners: Horia Șchiopu Simu and Mircea Stroe. Both together with Horia Pitulea, Amteck Investiții and Marc Rich – Co Investment AG are indicated in a document from the National Office for the Prevention and Control of Money Laundering (ONPCSB) as involved in suspicious financial transaction. ONPCSB alerted the General Prosecutor’s Office under the Supreme Court of Justice who started an investigation. This 2004 document shows that Horia Șchiopu Simu also mentioned in a previous document, dating from June 2003 also sent to General Prosecutor.

“The accounts of the companies Vita Care International and Nordexo Manufacturing SRL have been credited with 520.037,50 USD, respectively 860.030 USD by Innalios Consultants Limitied. Innalios Consultants Limited recorded external revenues in the amount of 24.059.221 EUR, under the justification other operations: proceeds after delivery of cargo export/import and made external payments in the amount of 2.574.516 EUR under the justification other operations. The authorized person for the accounts is Șchiopu Simu Horia; the company is not listed in the Customs database with foreign trade operations or as a foreign partner; Innalios Consultants Limited is based in Cyprus a well-known tax haven”, indicate the ONPCSB classified document.

The National Bank of Romania warned the ONPCSB

”I’ve made of Cuprom into a very cool thing. I don’t want to risk Cuprom or my freedom by making shady deals with these fellows” said Șchiopu Simu to the RCIJ reporters during the acquisition of Foradex in reference to AVAS officials. He saw no problems in the partnership with Ionuț Costea whom he says he met while working in the banking system. Șchiopu Simu argue that his relations with the government were not very good, precisely because of the political and especially because of Dan Ioan Popescu, the former Minister of Industries in 2001 – 2003 and Minister of the Economy in 2003 – 2004. Popescu was a very influential figure of Social Democrat Party.

”During Dan Ioan Popescu’s mandate I wasn’t able to do anything, because he was in conflict with Geoană. I was unable to buy cheap electricity, cheap gas… All I accomplished was through bank loans. If my name appears in the media the banks will then say stop. I did sell goods to Marc Rich and I have documents attesting the sale”, Șchiopu Simu told to RCIJ at that time. He added he provided full transparency to investigators even though there were only two police officers who visit him once.

Cuprom Headquarter

Șchiopu Simu said he went into business as he was sick of making money for others and with a well-established business plan without major investments he took over Cuprom, the largest former copper plant in Romania. He considered Cuprom as flagship of his business which also includes among others mineral water, real estate or glass factory.

Profile of a young businessman

The weekly Business Magazin published over ten years ago a story in which Horia Șchiopu Simu was described as being the head of the group of investors who gradually took over the copper industry in Romania. At the age of 31 Șchiopu Simu was the president of Cuprom SA after resigning from his position of vice-president of Citibank Romania. Șchiopu Simu held this position in Citibank since 1998 when he was only 23. His job was to coordinate bank loans of over 300 million dollars for Petrom, Romgaz or Transelectrica, major state-owned key players on the Romanian energy market.

Between October 1996 and December 1998 Șchiopu Simu was a junior manager working for a Swiss company called Norasco. He was an expert in intra- and intergovernmental debt recovery. RCIJ found out the only company under the name Norasco listed in the database of the Trade Registry in Switzerland is Norasco SA, with the previous name of Norasco Trading. In November 1996 Norasco appointed Ueli Güller as manager while the secretarial duties were provided by Russian nationals. Güller was also related to Metalloy Company Ltd, a firm operated in the same small building as Marc Rich – Co Investment AG.

The currently deceased businessman Marc Rich was convicted in the United States to several hundreds of years in prison for various financial crimes. He was pardoned by Bill Clinton at the end of the presidential mandate. Marc – Rich Co Investment founded Glencore Investment AG a company which according to Bloomberg sold under false documents poor quality oil to the Romanian state in 1993 – 1996.

In March 2015 a court in United Kingdom ruled that Glencore would pay to Petrom – at the time of the transaction a company owned by the state – 40 million dollars. Șchiopu Simu says that in ‘96 he was a student and not an expert in any recovery: “I did a student internship when I was 21; I had a scholarship. I was at Crans Montana Forum serving coffees. Some attending companies saw I was smart or bright and took me to some training. My first job after graduation was at Citi. Unfortunately, I am not a wise fellow!”.

When asked about the Directorate for Investigating Organized Crime and Terrorism (DIICOT) investigations Șchiopu Simu told RCIJ he was never summoned to hearings. In 2007 DIICOT prosecutors were working on two cases related to Cuprom. At that time the DIICOT deputy chief prosecutor was Alina Bica. Her subordinate prosecutor Adriana Cristescu explained to RCIJ back in 2007 that it’s difficult to collect evidence for a money laundering case in only four years. When asked why were the investigations were taking so long the prosecutor cleared up the situation: „Yes, so? It depends on how vast the circuit is and on how quickly the state authorities, and especially the banks work in providing us with information. And it also depends on the importance of the case; if you see that some things are confirmed, you push forward, and if not, you lay back a little!

Șchiopu Simu claimed however that he was not disturbed by any investigator: “The prosecutors never called me. There are people reporting for the intelligence services and a criminal file appears by magic. You’re putting me in an extremely unpleasant situation! If this is printed or broadcasted my image is already damaged! I am not under investigation. I only saw the policemen once and the second time when I gave them copies of the documents.”

Bribes to DIICOT chief prosecutor

Șchiopu Simu’s claimed innocence was just a facade. A Recent investigation shows he tried to escape the criminal cases in which he is being investigated for money laundering. In 2014 Șchiopu Simu closed two legal assistance contracts amounting to 80.000 euro with the former head of the National Agency for Tax Administration (ANAF), Şerban Pop. Moreover, he also gave Pop 150.000 euro as part of this amount would have reached as bribe to Alina Bica, the former DIICOT chief prosecutor. Bica was arrested in several cases. In September 2015, Șchiopu Simu, Pop and Bica were indicted by anticorruption prosecutors.

„On November 8th 2014, the defendant Bica Alina Mihaela, in her capacity as chief prosecutor of the Directorate for the Investigation of Organized Crime and Terrorism received for herself and indirectly through intermediary the amount of 17.500 euro of the total amount of 20.000 euro which the latter as interposed received from the defendant Pop Şerban”, argue the anticorruption prosecutors. According to the indictment Bica changed the case prosecutor and made pressure on another prosecutor to close the case investigating Șchiopu Simu. The prosecutor obeyed the chief demands.

Șchiopu Simu was also arresting for receiving compensation of 100 million euro for ten hectares of land located in Bucharest. He acquired in 2006 the litigious rights for the land and in less than a month the Central Compensation Commission approved his request for priority analysis. Thus  Șchiopu Simu received his money in record time regardless the legal procedures. According to the indictment he was helped by the chiefs of the National Agency for Property Restitution (ANRP), all of them indicted for abuse of office.

Upon receiving the money, Şchiopu Simu exchanged part of it in foreign currency and transferred to off-shore companies he controlled under the justification „loan contract/ loan repayment”. The anticorruption prosecutors reveal that between March and August 2008 Şchiopu Simu ordered the transfer and exchanged about 30 million USD into off-shore companies accounts. Afterwards he used the money to buy shares in three Romanian companies: Compania de Construcții Căi Ferate – CCCF București S.A, Foradex SA and Cuprom SA.

In November 2008 only few months after Șchiopu Simu ordered the currency exchange the Romanian Competition Council issued a decision approving the takeover of CCCF București by Wagma Holdings Limited a Cyprus based shell company owned entirely by Șhiopu Simu. Subsequently, Wagma changed its name into CCCF Limited which is connected to Drum Art SRL one of the largest construction companies in Romania. Drum Art is almost 95 per cent owned by Rosintaly Management Limited another Cyprus based shell company.

The Fortress

When arrested Șchiopu Simu was at his home a fortress built on Barajul Argeș Street northern Bucharest. He had built a 400 sqm two-store villa which he sold to Rosintaly Management Limited from Cyprus. The transaction was conducted in May 2009 and subsequently the building was offered as collateral for a 1.9 million euro loan fully paid in April 2015. No Drum Art representative could be found to give details related to this transaction.

Vila lui Șchiopu Simu din Barajul Argeș

Rosintaly Management is a company founded on September 2008 and is currently owned by another off-shore: Cerentia Management Limited also from Cyprus whose owner is Cypriot national Petros Avraam. His name is connected to several real estate companies in Bucharest. Rosintaly also owns Pitar Moș 6 SRL a real estate company whose manager is involved in almost all the off-shore companies around Șchiopu Simu and his partners; she is also the representative of Alabastra Mining Limited the company which now owns Foradex SA, currently named Foraj București SA.

In the ONPCSB documents which go back more than 10 years Șchiopu Simu’s name appears next to a long line of off-shores. One of these companies is Astra Consultancy Limited, whose sole shareholders were  Ionuț Costea and Gheorghe Piscu a businessman from Constanța a city on the Black Sea. When Astra Consultancy was dissolved the company was owned by Cerentia Management. Ionuț Costea owned the company for only 20 days after which he sold it to another off-shore connected to the name of convicted lawyer Doru Cătălin Boștină. His law firm also employed Mircea Stroe the other associate of Amteck Investiții and Șchiopu Simu’s best friend.

Consel Consultancy is another off-shore Gheorghe Piscu took over in the same day with Astra Consultancy and sold to Ionuț Costea. When Consel Consulting was liquidated the company was also a shareholder of Cuprom SA. Even though Șchiopu Simu and Mircea Stroe were mentioned in the ONPCSB and DIICOT documents Ionuț Costea was not shying away from doing business with them. Costea was appointed as administrator at Cuprom in July 2006 and it was known that he had been involved in the business before that. Astra Consultancy and Consel Consultancy were dissolved in the same day in March 2014 before the 100 million scandal involving Șchiopu Simu emerged.

Ionuț Costea a scos bani din Cipru

Ionuț Costea claims the companies he bought didn’t have any bank accounts and consequently no transactions were made through them. ”I had shares in Cuprom from the two companies. At some point I told Horia Simu to evaluate Cuprom and then I sold them to him. The prosecutors asked my about the two companies in Horia’s money laundering case but as they didn’t have any bank accounts no money was wired through them. I cannot disclose the price of the transaction for the shares but it was substantial”, explained Ionuț Costea for RCIJ. Ionuț Costea’s statements of assets reveal that he loaned money from Astra Consultancy and Consel Consultancy: 200.000 de euro loan due in 2013, respectively 1.2 million US dollars also due in 2013.

Constanta based businessman Gheorghe Piscu rejected RCIJ questions to disclose the price of the transaction with Ionuț Costea. ”I sold my business and that’s that. We’ve been friends for a long time. We were university classmates; we are both wood industry engineers. I also knew Mr. Șchiopu before his 100 million recovery deals”.

Șchiopu Simu was indicted in early October 2015 in another case investigated by the local prosecutors in Transylvania. He was indicted together with two other individuals. The prosecutors claims that in 2004 the three decided to transfer the assets of  a company to Cuprom and to Nordexo Manufacturing Bucharest, both companies controlled by Șchiopu Simu. The deals included a very complex financial scheme and fictional loan contract followed by payment conventions.  The company which remain with no assets in value of six million euro was managed by Nordexo.

Nordexo Manufacturing is also mentioned in the ONPCSB money laundry document back in 2004 as the company credited with 560.030 US dollars by Innalios Consulting Cyprus. The sole shareholder of Innalios was also a Cyprus based shell company connected to Cuprom.

The businesses Șchiopu Simu made throughout the years are only now slowly beginning to be revealed in spite of the help he received from state officials. Although he vigorously denied any political support it is curious how a 23 year old young man became the vice-president of a bank and at the age of 31 one of the most influential businessman in Romania.