Croatia: Corruption and Money Laundering Scandal in Pictures — Hypo Alpe Adria Bank

25 04 2013

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Croatia: Corruption and Money Laundering Scandal in Pictures — Hypo Alpe Adria Bank





Domagoj Margetic, a EU Parliament Speech re Croatian Corruption & Money Laundering (4/23/13)

23 04 2013

When I was just a teenager, my father, who was a COO at Privredna Banka Zagreb came home one day proclaiming that he has no other choice but to quit his job as an executive.  “The rulling party is making me sign illegal papers transferring large amounts of money,” he said in early 1991.   He quit his job that winter.  By June 1991, there was a civil war in the Former Yugoslavia.   Some other coworkers of his did not quit their jobs, and this is what begun happening in Croatia.

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Please watch Domagoj Margetic’s speech and questions and answers session on this day, April 23, 2013.  This is the day, when the sun started shining and wrongs were unveiled.

Speech at the European Parliament, on April 23, 2013

http://www.youtube.com/embed/IzkSjogx1hE

Questions & Answers Session at the European Parliament, on April 23, 2013

http://www.youtube.com/embed/C7lvsZFBxDo





EU Parliament: Special Committee on Organised Crime, Corruption and Money Laundering

22 04 2013

ImageWatch the hearing

Date & Time: April 23, 2013  10:30 AM – 12:30 PM @ European Parliament, Brussels

at http://www.europarl.europa.eu/ep-live/en/committees/video?event=20130423-0900-COMMITTEE-CRIM

HEARING PROGRAMME

23 April 2013 – 10.30 to 12.30

Money laundering and tax evasion in EU Member States and the consequences on the EU

Room ASP 3E2, Brussels

Opening by

Ms Sonia Alfano, Chair of the Special Committee on organised crime, corruption and money laundering.

1. (10.30 – 10.45) Money laundering and tax havens from the German perspective, Michael DEWALD, Bundeskriminalamt, Deutschland

2. (10.45 – 11.00) Money laundering and tax evasion and acceding countries, Domagoj MARGETIC, Investigative journalist, Croatia

3. (11.00 – 11.15) Money laundering and tax evasion – analysis of recent developments, Brigitte UNGERProfessor of Public Sector Economics at Utrecht School of Economics, Utrecht University

4. (11.15 – 12.30) Q & A Session

– end of hearing –





Croatian Journalists Self-Censor Themselves (U.S. 2012 Human Rights Report)

22 04 2013

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Picture:  Born in 1963, Lebanese-Iraqi cartoonist Hassan Bleibel publishes in several Middle-Eastern newspapers including Lebanon’s Al-Mustaqbal and As-Safir, and Egypt’s Al-Ahram.  His work has also featured in the western press – in Le Monde and Courrier International in France, and also in the International Herald Tribune.

The below write up is taken from the 2012 U.S. State Department Report on Human Rights. Issued: April, 2013.

Section 2. Respect for Civil Liberties, Including:

a. Freedom of Speech and Press

The constitution and law generally provide for freedom of speech and the press; however, growing economic pressures led journalists to practice self-censorship. Specifically, a number of journalists reported that publishers and media owners feared they would lose advertisers and frequently practiced self-censorship in reporting on advertisers or those linked politically to them. Direct government efforts to influence the media were occasionally reported at the local level.

Freedom of Speech: The law provides for no less than six months’ and no more than five years’ imprisonment for hate speech. Hate speech committed over the Internet is punishable by six months’ to three years’ imprisonment. While freedom of speech is guaranteed by the constitution, the criminal code sanctions individuals who act “with the goal of spreading racial, religious, sex, national, ethnic hatred or hatred based on the color of skin or sexual orientation or other characteristics.”

On November 6, the Supreme Court ruled that Vlatko Markovic, former president of the country’s football federation, must publicly apologize for calling homosexuals “unhealthy” and for proclaiming that he would never allow a homosexual player in his league. Markovic subsequently apologized. A court in Zagreb rejected the case in 2011, but LGBT activists appealed to the Supreme Court.

Freedom of Press: Many private newspapers and magazines were published without government interference. However, according to a May declaration from the Croatian Journalists Association (CJA), media ownership was not fully transparent; some business and political interests concealed their influence on media outlets. CJA President Zdenko Duka said in a September 16[, 2012] interview that the country’s National Security Council had done little to reveal the identity of media owners.

The law regulates the national television and radio networks separately from other electronic media. Independent television and radio stations operated in the country, and two of the four national television channels were privately owned and independent. There were no reports of the government influencing these outlets via advertising revenue. Local governments partly or fully owned approximately 70 percent of the local broadcast media, making them particularly vulnerable to political pressure. Approximately 46 percent of local radio stations depended on local authorities for financial support.

Minister of Internal Affairs Ranko Ostojic announced on December 21[,2012} that an internal police investigation uncovered police misconduct in the 2011 surveillance of journalists, including the editor in chief of national daily newspaper Jutarnji list. According to Ostojic’s statement, the country’s former police chief ordered the operation to determine the source of leaked information from corruption investigations against former prime minister Ivo Sanader. Ostojic turned over the results of the investigation to the Prosecutor’s Office. On December 13, the CJA called for an investigation into the case stating, “If Croatia is to be a democratic country, then its leaders must not allow journalists to be followed and tapped in the course of their professional activities. It is necessary to step up civil control of the police and secret services.”

Libel Laws/National Security: Libel is a criminal offense. During the year there were no reports of politically motivated libel cases being filed. A large number of earlier libel cases remained unresolved due to judicial backlogs. Courts may fine, but not imprison, persons convicted of slander and libel.

Internet Freedom

There were no government restrictions on access to the Internet or credible reports the government monitored e-mail or Internet chat rooms without judicial oversight. According to December 2011 statistics from Internet World Stats, there were 2,656,089 Internet users, representing 59.2 percent of the population.

Academic Freedom and Cultural Events

There were no government restrictions on academic freedom or cultural events.





We Are Not Going To Kill You, But We Will Not Let You Live, Either

15 04 2013

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Picture: “Medical research has proven that the best remedy against depression is to take a walk.  Should you end up walking long enough, you may end up leaving this depressing country.” — Occupy Croatia.

Sisak, Croatia, Thursday, April 11, 2013

BD put her tennis shoes on, on Thursday, April 11, 2013, to go for a quick power-walk.  Walking very quickly preoccupied with her worried thoughts about the latest unbelievable happenings in the country, she momentarily realized that she has coincidentally arrived at the Sisak train station.  In her sporty outfit, she quickly realized the meaning of why she was here – she purchased the train ticket and hopped on the train.

35 miles later she was in Zagreb, Croatian capital.  She arrived to support her friend, Domagoj Margetic, an investigative journalist, at the peaceful protest rally “No to Censorship!” (Ne Cenzuri!).

25 protesters were present at the peaceful rally, and each one of them had an ‘angel savior,’ a policeman, shadowing over them, empty-handed citizens with often only a pencil in their hand, in support of journalistic excellence.  Every policeman had body armor and a helmet.  Five official police cars were present, along with five police motorcycles.

Thirty days earlier, on March 11, 2013 Domagoj Margetic wrote in his letter declaring why he has chosen Hunger Strike as a mode of protest:

“This is my last attempt to set, through my example, to point out the extremely difficult existential and professional position in which Croatia’s investigative journalists have found themselves. We sought to open cases and corruption scandals, which, because of their political background and because [of] high-profile corruption which are networked [within] institutions in this country, and [linked] to a certain political party, never should be published. So my fault and some of my colleagues is very clear: we wrote what was forbidden to write, we provided the public access to information that never should have become public. In short, we wrote and spoke about the forbidden truths.”

At the British Square, or the so called ‘Britanac,’ after all the rally members were rounded up together, and the news crews presented their reporting to the TV cable news, the official statement was issued.  Domagoj Margetic sent a public appeal to the President of Croatia symbolically urging two things:

“First the public statements of the President, which will notably thank investigative journalists who uncovered major corruption scandals for their contribution in the fight against corruption in this country, in which the President would ask the government and public sector to rehabilitate those journalists after numerous difficulties that they faced confronting certain ‘censored’ topics.

Second, the public statements of the President on the necessity of passing the Whistleblowing Law on the Protection of those persons who notify of corruption and legal mechanisms to protect journalists who reveal those corruption affairs.”

As an investigative journalist, Domagoj Margetic has been publically ostracized for years.  He knew too much, and he could not be paid off.  He understood that it takes only one bribe to fall under the control of the ‘legacy political systems,’ and in that respect he was not going to be compromised.

It was publicly known that Margetic was the one of the first investigative journalist who researched, wrote and discovered some of the biggest corruption scandals in Croatia, among them:

  • Hypo Bank scandal;
  • Political Corruption in the Customs;
  • Affair HAC;
  • Case Soboli;
  • Affair INA and smuggling oil through INA;
  • Cigarette smuggling and tobacco mafia;
  • Illegal conversion and privatization of TDZ and TDR;
  • Case U.S.;
  • Case Geotechnical Engineering;
  • Case secret bank accounts in Villach;
  • Case of secret bank accounts at Privredna Banka;
  • War crimes cases: Sijekovac, Brod, Mrkonjic Grad and Sisak;
  • Affair on illegal conversions, privatization and illegal operations of the Bank of Zagreb, as well as
  • Cases of the Croatian Post, Croatian Postal Bank and the Bank of Dubrovnik.

In America, an investigative journalist like Domagoj Margetic would have followed career steps of someone like Michael Lewis, earning millions of dollars and being successful.  In Croatia, he will go on a hunger strike to hard headedly prove his point, because no one is listening.  Everything is censored.

As one of the Croatian journalists once said, in a 2011 focus group ran and sponsored by international organization, including George Soros’ Open Society, “TV shows easily get killed on the Croatian state television. It is forbidden to talk about everything, including about the fact that it is forbidden to talk.”  In Croatia, censorship is in force.   Censorship is not punishable. Those that enforce censorship are getting richer by censorship, and hence, Croatian media refuses to seriously tackle this issue.  Non-existence of the real freedom of the press and speech – ends up as marginalized personal stories of journalists such as Domagoj Margetic.  Speaking on television shows about politicians mainly means signing the death penalty for the show, and as Margetic has often done so – for himself.  As of today, April 15, 2013 Domagoj Margetic is on his 36th day of Hunger Strike.

Back to the “No to Censorship!” Rally on April 11th.  The group strolled to Pantovčak, best known as the location of the Croatian Presidential Palace where the current Croatian President, Ivo Josipovic, receives visitors.  The group strolled quietly, without shouting and without provoking.  The police shadowed the pedestrians walking and riding along them.

Police cars passed the pedestrians, and 100 meters prior to the Presidential Palace, they stopped the protest proceedings.  Here they stood for a longer than half an hour.  Domagoj Margetic sat in the wheelchair designed for handicapped.  He was too weak after his 30+ days of hunger strike to stand any longer.

In a swirl of activity, police received some more assistance at this point, and invited the group to enter into the little street with no pass through.  There, they collected everyone’s identification documents, and having named the reasons of ‘walking on the street’,  police arrested five or six people who are taken into police cars, including a young woman, Marijana Mirt, who has joined the hunger strike six days prior.

The event culminated at the point when the police fetched Domagoj Margetic, who has been feeling nauseous the whole day.  Police stood him up from the wheel chair to take him into the police car.  Domagoj could hardly walk at this point, and in front of the police car door, he falls unconscious.

The protestors call the “Urgent Care Ambulance” – but there appears to be a strange delay in arrival.  The protestors talk amongst themselves about how a pizza delivery would arrive faster than the ambulatory car.  Domagoj was taken into one hospital, and then to another, followed the whole time by a police member.  The police did not allow anyone else to come with him to the hospital.  From the hospital, after his condition improved, he was taken directly into the Police Station.

Margetic was told by police during this time: “We are not going to kill you, but we will not let you live, either.”

As Seebiz.net reported, “So far it is not known why they were arrested.”

Disclosure: Domagoj Margetic regularly reports for Seebiz.net as an independent freelance journalist.

Instead of reacting to Domagoj Margetic’s requirements, which are indeed symbolic, President Josipovic has requested from the police to enforce a police state-type strictness.  According to Seebiz.net, about 30 people were arrested, and among them were Marijana Mirt and Ana Veliki both who have begun a hunger strike, in support of Domagoj Maregetic’s demands.

A day later, police insisted that no one was arrested, and that protestors were only moved from the premises near the Presidential Palace, a statement, which speaks for itself with no further comment required.

BD from Sisak commented the following day,

“I just want to note one thing.  Not very many people showed up at the rally again today, not even those who live in Zagreb and that support Domagoj Margetic and his cause.  I came to the protest all the way from Sisak, because I cannot watch what is happening in our country any longer.  I came to be with my friend, a man who is protesting in the most difficult way, with hunger, in order to fight for truth and for justice.  Of course, not many colleague journalists came by either, except for Ms. Hana Tabakovic, and we are much thankful to her.  She is the only brave journalist, committed to the dissemination of the truth.”

Not the only one though.  During the last week of the hunger strike, several other Croatian news casters fought for Margetic’s cause against censorship.  A prominent Denis Latin was only able to join the cause after he was removed as an editor from the state-run Croatian television station, HTV.  He was replaced.

On Friday, April 12, the “No to Censorship!” protest resumed in the capital’s center square joined by two presidents of the independent road building union and the national teachers association.  Domagoj Margetic was thrilled and ecstatic.

On Sunday, April 14, Croatian citizens voted, in a low turnout of only 25% election, who voted to choose whom they would be sending as their representatives to the European Parliament, assuming that Croatia joins European Union in July, 2013.  70% of those that voted, either voted for “Nobody” or declared their vote as invalid through various tragically humorous ways.

On Monday, April 15, Domagoj Margetic, after much deliberation, and written documents requiring Formal Appeals, received travelling papers from the local Police Station, which will allow him to testify in front of European Parliament about the Hypo Alpe Adria Group scandal in the Balkans.  Despite his failing health, he will be putting his tennis shoes on, to thread all the way to the Brussels.

He is on 36th day of Hunger Strike.  His symbolic requests have still not been met.





BREAKING NEWS: Croatian Government Refuses to Issue Travel Papers to Investigative Journalist Domagoj Margetic

12 04 2013

Edit to this Article dated April 15, 2013 – Domagoj Margetic did receive travel papers after several placed appeals.  He has yet to leave the Croatia to make it to European Parliament.

We have learned this morning that the Croatian Government will not issue travel papers to Domagoj Margetic, an investigative journalist who has uncovered details of a Hypo Alpe Adria Bank scandal across Balkans.

Margetic is slated to testify in the European Parliament in one week’s time.

During the last 24 hours, Croatian Government and the Police have undertaken a series of administrative steps, to unable Margetic’s capacity to travel abroad:

  • At 14:00 hours today (April 12, 2013), the journalist’s Place of Residence is to be canceled from the residence registry database;
  • This will not allow the Police to the issue the Identification Card and the Passport

This is yet another way that the Government is stepping in to prevent the inevitable witnessing of a journalist in front of the European Parliament.

The same administrative procedures were put in place by the former government and the former Minister of Interior, Tomislav Karamarko, when he wanted to stop Domagoj Margetic from having international contacts outside of Croatia.

What is Croatian Government so afraid of?

Express your concern either on this blog or by supporting Domagoj Margetic or any other investigative journalist at the following link:

http://www.change.org/petitions/support-for-croatian-investigative-journalist-domagoj-margetić-support-to-cratian-journalist-who-is-on-hunger-strike-since-11-03-2013

You can also call :

Secretariat of the Department of the European Social Charter of Social Security

Council of Europe

Directorate General of Human Rights and Rule of Law

F-67075 Strasbourg Cedex, France

Tel +33(0) 3 88 41 32 58

Fax  +33 (0) 3 88 41 37 00





Hypo Group Alpe Adria Bank – Scandals that Encompassed the Bank from its Inception to 2007 – Money Laundering, Inside Trading and Links to Ultra-Right Wing Nationalism

9 04 2013

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I have been reading Domagoj Margetic’s book called “Banking Mafia” (2008) describing the money laundering that took place after the collapse of the Former Yugoslavia.  A big player in this scandal was Hypo Group Alpe Adria bank.  As somewhat versed in financial language, reading in Margetic’s book about € 100 billion of money laundered from Croatia and Serbia, completely affected destruction of the financial banking system in the Former Yugoslavia before, during and after the split of the country.  It was also a big enough of a figure to enrich the 200 Croatian political elite families allowing them to capitalize some of their private ventures in the region.  This is what economists would call ‘transition of wealth’ from socialist into capitalist hands, a term not  exempt to irony, mostly because the money that was stolen came from employee-owned companies and employees whose lives were stripped from their own retirement packages, etc.  € 100 billion was a big enough of a chunk, to continue to enquire more about Hypo Group Alpe Adria, and who originated these operations, helped during origination and made some serious profits.  The most concerning in this whole money laundering scheme is a strong connection to arms-dealing and ultra-right wing nationalism which continues among masses as the feeding frenzy in Croatia, today.

Six Mega Fraudsters

Behind the scandal hide six mega fraudsters, who have together or separately brought down the Asian banking crisis in Thailand in 1997, have been an international marketing arm of Lockheed and were involved in Iran Contra scandal in the United States, and have continued working together worldwide (some of them still live in California, U.S.) to execute deceptive deals annually, each generating millions of U.S. Dollars – often working in conjunction with company management and CEOs.  Those men are:

  • Regis Possino, U.S.citizen
  • Amador Pastrana, Filipino citizen
  • Sherman Mazur, U.S. citizen
  • Raoul Berthaumieu, a Canadian citizen of Belgian origin
  • Adnan Khashoggi, Saudia Arabian citizen
  • Rakesh Saxena, Indian citizen

The Hypo Group Alpe Adria

The Hypo Group Alpe Adria (HGAA) is an Austrian banking group with numerous cross-border activities in eight (8) countries of the Alps-Adriatic region.  Its network of branches and offices extends from Austria through Italy and Liechtenstein, from Slovenia through Croatia, Bosnia-Herzegovina, Serbia, Montenegro, Hungary and Germany on to Brussels.  Hypo Group Alpe Adria aims to become the leading commercial bank in the Alps-Adriatic region.

There are three strategic business sectors of the Hypo Group—banking, leasing and consulting. The Group’s owner share includes: 100% Republic of Austria.

Much of the below research, often word-for-word, is taken from Nachrichten Heute (click on the link to follow to the source, and I own no rights to neither research nor to the attached picture found on the web).  Dates have been checked, and in certain instances, more details have been added.

In May 2007 the BayernLB (owned by the German State of Bavaria) bought 50% plus one share (controlling stake) of HGAA, Austria’s fifth largest bank, for € 1.63 billion.  The majority shareholderin the BayernLB was up to then the Austrian county of Carinthia/Kaernten, whose governor was Joerg Haider, ultra-right winger and well known for his praise of Adolf Hitler’s labor market policies and his derogatory remarks about foreigners as well as asylum seekers.

When in 2000 his Party, the FPOe or so called Liberal Party of Austria, formed a coalition government with the OeVP, Israel recalled its ambassador from Vienna and the European Union reduced its contacts to Austria to a minimum.

In early 2008 it was revealed that BayernLB had made large losses due to investments in sub-prime mortgage securities in the United States.  Although the extent of these investments has been the topic of speculation, it was revealed from the company’s Second Quarter (Q2) 2008 financial report that over €24 billion had been invested in critical securities, with losses of €2.3 billion in 2007 and a further €2 billion in the first quarter of 2008.  On December 14, 2009, BayernLB, Kärntner Landesholding and Grazer Wechselseitige Versicherung, sold their stakes in the bank to Austrian government for one Euro each.  HGAA was nationalized by the Austrian government to avert a bank collapse.

Hypo Group Alpe Adria, however, was not a stranger to controversies since its inception.

Let’s Start in the U.S. in the year 1993

A man by the name Robert “Bud” McFarlane, security adviser to former US President Ronald Reagan at the time of the Iran-Contra scandal (resigned in 1985, convicted and pardoned by President George H.W. Bush on Christmas Eve 1992 along with the other key players in the scandal, during the lame duck period of Bush’s presidency) and was at that time an adviser to the mercenary company AEGIS Defence Services, headed by Tim Spicer, on a Pentagon contract in Iraq, was with others founding a bank by the name of Czech Industries. The company was in 1996 merged with a company Eastbrokers International, in which a certain Wolfgang Koessner from Vienna became a shareholder.

Wolfgang Koessner brought with him a Bank in Austria by the name of WMP AG, which was now merged with Eastbrokers to be named Global Capital Partners.  However disagreement led Koessner to disengage from Global Capital Partners and after the Global Capital Partners issued more shares, Koessner lost control of the WMP Bank and became a minority shareholder. Noteworthy is the fact, that Czech Industries was majority-owned by Stratton Oakmont, a broker house that was closed by the Securities and Exchange Commission because of fraud.

Minority shareholder at the WMP-Bank, that was now renamed “General Commerce Bank,” was as well the Hypo Alpe Adria Bank.  Koessner did a lot of work to establish the relationship with this bank, before he lost control at the WMP.  As a result, Hypo Alpe Adria Bank sold shares and bonds of Global Capital partners to its customers, worthless shares as it would turn out and many of the customers were at that time suing the bank.

A Crack Crew Arrives

Wolfgang Koessner, no longer in control, had to witness a “turnaround.”  A crack crew appeared in 2000 at the WMP Bank for a “turnaround”, however not for better, but for worse. The crack crew comprised:

  • Regis Possino, former US lawyer, who was arrested after he tried to sell in 1978 Cocaine to undercover agents.  He tried also to land a deal over the monthly sale of Cocaine at a street valued at US$680,000.  He tried to sell stolen bonds to the public, and was arrested during his trial because he tried to influence one member of the jury.  Possino was disbarred as a lawyer in 1984 because of his criminal record.  In 1996, he was again sentenced for stock fraud.
  • Amador Pastrana, Filipino king of the “boiler rooms”. He allegedly commandeered at least 100 boiler rooms, offices, where fraudulent telemarketing of worthless shares is organized from.
  • Sherman Mazur, US citizen, convicted in 1993 in Arkansas for severe check fraud and sentenced to five (5) years imprisonment. Mazur allegedly authorized, while in prison, Amador Pastrana to continue with his fraudulent activities.
  • Raoul Berthaumieu, a Canadian of Belgian origin, alias Raoul Berthamieu, alias Lee Sanders, convicted for check fraud in the US in 1991, met in prison Sherman Mazur, who allegedly taught him there a thing or two.
  • Adnan Khashoggi, international arms dealer and fraudster, involved in the Iran-Contra Scandal. While irrelevant for this research, Adnan Khashoggi’s sister Samira Khashoggi Fayed married Mohammed Al-Fayed and was the mother of Dodi Fayed.  At some point, Adnan Khashoggi was for practical purposes considered to be a marketing arm of Lockheed.
  • Rakesh Saxena, Indian, international megafraudster, allegedly committed fraud at the Bangkok Bank of Commerce in the 1990s, together with the then CEO Krirkiat Jalichandra, to the tune of US$2.2 billion and thus triggering the Asian Banking Crisis in 1997.  Saxena fled with allegedly US$88 million “pocket money” to Canada and continuing his fraudulent activities there from self-paid house arrest.  Extradition procedures to Thailand (Thailand wanted him) lasted until 2009.

This crack crew, with Saxena under house arrest via the phone, allegedly turned the WMP/General Commerce Bank in 2000 into a boiler room, with the fraud allegedly amounting to US$ 1 billion within 1 year.

Dr. Kulterer, CEO of Hypo Adria until 2006, trusted Berthaumieu, the convicted fraudster, according to information he received from the police (The local police station?) an honest man! The Hypo Alpe Adria Bank gave Berthaumieu several loans and tasked him to sort out “problems” at the General Commerce Bank.

In late 2000, Berthamieu introduced Adnan Khashoggi to Dr. Kulterer and his team.  A couple of months later, reacting to pressure from the FBI and SEC, the General Commerce Bank was closed by the Austrian authorities.  One would expect that the day for departure or better sacking of CEO of Hypo Adria, Dr. Kulterer had arrived by now, however the clocks in Haider’s Kaernten/Carinthia were ticking in a different way.

A Friend, a Good Friend

Kaernten/Carinthia was, as already mentioned, the biggest shareholder of Hypo Alpe Adria bank. And the Governor (Landeshauptmann) of Kaernten/Carinthia is Joerg Haider.  Haider praised Dr. Kulterer as “Visionary” and “Austria’s Best Bank Manager.”  Kulterer in return gave a loan to Haider’s then party, the FPOe, for expected election expenses with terms through 2013.  Obviously the voters in Kaernten were “owners” of his party and were going to serve as collateral.  Kulterer accompanied Haider on his trip to Libya in 2000 meeting with Gaddafi, when Libya and Gaddafi were still part of the “axis of evil”.

Ed Fagan Comes on Stage

In 2003, however, Ed Fagan, U.S. star-lawyer entered the stage and took CEO Kulterer and his Bank to court.  He accused them of insider trading, fraud and falsifying balance sheets. Kulterer in return lodged a complaint with the state prosecutor in Austria, accusing Ed Fagan of blackmail.

14 Days in 2004

In 2004, Dr. Kulterer could prove, what a ‘visionary’ he was.  His bank started trading in Swaps and within 14 days lost €328 million.  His bank managers then allegedly tried to hide the loss in the balance sheet by stretching it over several years, a criminal act which came under the spotlight in a parliamentary subcommittee of the Austrian parliament. And he allegedly informed the supervisory board only six (6) months later.

And when the bank ran short of the legally required capital, the bank allegedly issued shares and sold them to customers, giving them at the same time loans in order to buy them, the loan supplied from a subsidiary of the bank in Liechtenstein, re-routing then the money via Virgin Islands back to Austria – a carousel as a money-spinner.

Dr. Kulterer had to vacate his position as CEO however was immediately installed as head of the Supervisory Board, the ‘visionary’ became the controller.  Haider wanted to park him there for a while, and then put him back as CEO. And Kulterer was, in view of his performance at the Hypo Alpe offered and he accepted the job of the head of the Flick Foundation and the manager of the Flick money.

As a remainder: Friedrich Flick was a convicted war criminal in the Nuremberg trials and later he became a billionaire and one of the richest, if not the richest man in post-war Germany.

His son, Friedrich Karl Flick, regarded the inheritance tax, which his heirs once would have to pay as too high in Germany and hence, he emigrated lock stock barrel before his death to Austria.

A Former Croatian General

In February 2007, the former Croatian General Vladimir Zagorek was arrested in Vienna on request of the Croatian government.  He is accused of embezzlement of state money and money laundering. He was a prominent customer of the Hypo Alpe Adria Bank, which is now also under investigation for alleged money laundering.

That year, the weekly DIE ZEIT reported yet another scandal involving the bank, this time in Istria/Croatia, where large tracks of pristine state land were bought at low prices and then sold with a 200 fold price increase, after the land was subdivided into plots in collusion with the local authorities, many of them now behind bars.

A Bank on Sale

The Hypo Alpe Adria Bank was supposed to be floated on the stock market in 2007, however this became impossible in view of the scandals.  Dr. Kulterer actively looked for a buyer and found the Bavarian “Landesbank” (county bank) 100% owned by the state of Bavaria/Germany as being very interested.

Haider flew on May 16, 2007 to Munich to seal the deal.  He was not only met by the CEO of Bayerische Landesbank, Werner Schmidt, but also by the Bavarian Finance minister Kurt Faltlhauser and Home Affairs Minister and future Prime minister of Bavaria, Guenther Beckstein.  They did, what the European Union refused to do, to negotiate with and thus uplifting the reputation of Haider.  And they were not only meeting him, but also exploring ways to strengthen the ties between Bavaria and Kaernten.

Insider Trading?

The sale of the Bank went ahead not without another suspected scandal: Insider Trading.  An investment Company headed by Tilo Berlin, the Berlin AG, where the Flicks had also invested their money, bought in January, when the negotiations started with Bayerische Landesbank, 4% of the shares, and another 10%, when the negotiations were coming to a close.  These shares were now sold to Bayerische Landesbank with 50% gain, 148 million Euro profit, and cash to carry in less than 6 months. If this is not Insider trading, what is it?  However there are more scandals connected with this bank.

A Jewish Family and a Plot in Belgrade

On April 22, 2005 the Hypo Alpe announced, that they had acquired for €20 million from the state, the prime land in Belgrade’s city center.  What the Hypo Alpe regional representative did not tell was, that this plot had a history.  It was called “Three Tobacco Leaves” and was owned for generations by the Jewish family Galich. Two of the family members were killed in 1944 by the SS when they tried to defend the building against German troops, on the retreat, who wanted to blow up the building, which they eventually did.  Immediately after the Germans had left, the Galich family rebuilt the Three Tobacco Leaves Building, however were later expropriated by the Tito government of Yugoslavia.

The Galich Family Emigrated to the U.S.

The building was eventually torn down by the Milosevic Government of Serbia.  Potential buyers were advised by the Galich family, that they intend to reclaim the plot from the state, and thus no buyers came forward until eventually the Hypo Alpe Adria Bank entered the stage.

Totally disregarding the interests of the Galich family and the history of the plot and its former buildings on it, Hypo Alpe Adria Bank grabbed the plot.  However, protests against this ridiculous grabbing mounted and in May, 2005 several hundred people, some of them Holocaust survivors, demonstrated in front of the Hypo Alpe headquarters in Belgrade.  The local newspapers, reporting about the scandal, asked, whether the Hypo Alpe had learned nothing from the scandal related to the Croatian ski-athlete Ivica Kostelic in 2003.

A Ski Athlete Named Kostelic

Kostelic was sponsored by the Hypo-Alpe Adria Bank, better named Scandalpe or Skandalpe. He became not only famous for his skiing performance, but also for his remarks about Nazi-Germany similar to Joerg Haider, Governor of the Austrian county of Kaernten which owned half of the shares of the Hypo Alpe Bank.  Haider, similar to Kostelic also became famous for his praise of Nazi Germany’s labor policy, recommending it as a good example to Austria’s government.  A few statements of Kostelic in 2003:

  • The Nazi-System was a healthy system for an ambitious person.
  • Before a start to one slalom, he felt well prepared like a German soldier on the 22nd of June in 1941 (the day, Hitler attacked the Soviet Union).
  • The Nazi Regime equals to 2000 years of Roman history, compressed into 12 years.
  • The Communists were worse than the Nazis, because under Nazi rule one could pursue a career.
  • He was excited when watching in a movie the attack of the Nazi air force on Britain, the so called Battle of Britain.

As a remainder: England was at that time alone in its fight against Adolf Hitler’s army.  In a heroic performance the British pilots pushed back Hitler’s air force. Their performance was acknowledged in Churchill’s historic speech in the commons “never before in history owed so many so much to so few”. One would have expected, that the Hypo Alpe Adria bank would have immediately cancelled the sponsorship.  That did not happen.  They were satisfied with a lukewarm apology from Kostelic.

What Happened to the Alleged WMP Criminals?

  • Regis Possino was still in business as of February 2013, a resident of Pacific Palisades in Los Angeles (perhaps your neighbor?) when he was charged with 13 others, including Sherman Mazur, for manipulating stock prices, and could face life in prison, for allegedly manipulating stock prices and causing more than 20,000 investors to lose over $30 million.  After the fall of HAA Bank, in 2009, he was with his company “Geneva Equities” on a “roadshow” in Asia and collected US$ 28 million from investors. Geneva Equities was also involved in a fake company by the name of “L-Air” supposedly to be an airline, however its planes never made it to the runway, only the money of the investors flew away-forever.
  • Sherman Mazur was arraigned together with Regis Possino in February 2013, and they were held with no bail, awaiting their trial.  In 2009, Mazur was busy in the United States.  He created a company with his children by the name of “Accu-Poll-Holdings”, and was selling the shares via boiler-rooms, the usual story.
  • As Pacific Palisades Patch reports in February, 2013: “The defendants (referring to Possino and Mazur) are serial market manipulators that executed several deceptive deals per year, each generating several millions of dollars, according to court documents. They often worked in conjunction with company management and CEOs and targeted several industries including the pharmaceutical, green tech, oil and gas development and e-commerce.”
  • Adnan Khashoggi, now close to 80 years old, is allegedly in either the United Arab Emirates or in Monaco and enjoying his retirement.  Deutsche Bank, Germany’s biggest bank, paid US$ 350 million US Dollars in compensation for share fraud, in which both, Deutsche Bank and Khashoggi were involved, in the GenesisIntermedia scandal.
  • Khashoggi, along with Ramy El-Batrawi, was the principal financier behind GenesisIntermedia, Inc. (formerly NASDAQ: GENI), a publicly traded Internet company based in Southern California.  After the September 11 attacks, Khashoggi’s U.S.-based checking accounts were frozen and Khashoggi was unable to make a margin call with Native Nations Securities, whose CEO and largest shareholder, at the time, was Valerie Red-Horse, former office manager of junk bond king Michael Milken.  In turn, Native Nations and Red Horse were unable to meet their obligations on the margin loan to MJK Clearing, Inc.  Trading in the stock of GenesisIntermedia was halted in September 2001.  Khashoggi’s unwillingness to pay his margin loan to Native Nations Securities, and Native Nations (and Red Horse’s) inability to pay its debts to MJK Clearing, began a series of bankruptcies that ended in the largest payout in Securities Investor Protection Corporation history.  Native Nations Securities and MJK Clearing both eventually filed for bankruptcy.
  • Rakesh Saxena was put in prison, pending extradition to Thailand. On October 29, 2009, he was deported to Thailand after fighting the longest extradition battle in Canadian history, which lasted thirteen (13) years.  He is accused of embezzlement in 1994-1995.  He is widely reputed to have been engaged in dozens of high risk ventures and deals throughout the world over the previous three decades.  Saxena has been accused of many things but has not convicted of anything yet.  In India, Saxena has been accused of culpable homicide, extortion, uttering death threats and cheating in the death of biscuit tycoon Rajan Pillai.  Those allegations were laid after the tycoon’s widow, Nina Pillai, accused Saxena and three others of conspiring to kill her husband. Former bank officials in Thailand have claimed that Nina Pillai continued to be financed by Saxena after her husband’s death.
  • The Government of Thailand accuse Saxena embezzling $88 million from the Bangkok Bank of Commerce (BBC) and sought his extradition from Canada. The bank had separately filed civil proceedings against Saxena. He has filed a counter-suit.
  • The collapse of the BBC was one of the first dominoes in a financial crisis that spread across Asia, shaking the world economy in 1997. While some blame Saxena for sparking the inferno – The Wall Street Journal described him as the “Mrs. Leary’s cow of the global financial crisis” – he is not facing court action on that score. He is also linked to some of the major hedge fund problems of the late 1990s, particularly problems linked to third world bonds and leveraged currency and interest rate derivatives on such bonds and to problems now associated with Russian and East Europe privatizations of the Yeltsin era.
  • No charges were laid in the ill-fated Sierra Leone affair.  The British Parliament’s Report of the Sierra Leone Arms Investigation concluded that the purchase of weapons with Saxena’s money only technically broke a United Nations embargo and that Canada was not yet enforcing the embargo.
  • Raoul Berthaumieu did not get a good reputation either.  If you put the name of his company, Pacific Federal SA into a search engine, plenty of warnings appear, not to do business with this company. In 2001, Raoul Berthaumieu, was a head of the supervisory board of GenesisIntermedia.







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