Bulgaria files indictment in $1.5 billion Corpbank embezzlement probe

SOFIA (Reuters) - Bulgarian prosecutors said on Thursday they had indicted the main shareholder of bankrupt Corporate Commercial Bank (Corpbank), two former deputy central bank governors and others over the 2014 demise of the country’s fourth largest lender.

The indictment against Tsvetan Vassilev and 17 other people suspected of involvement in Corpbank’s collapse was filed to the Specialised Criminal Court and is seen as one of the Balkan nation’s biggest post-communist fraud investigations.

Prosecutors charged Vassilev and his group with embezzling 2.56 billion levs ($1.51 billion) between 2008 and June 2014. Separately, Vassilev and three other bank officials are indicted for taking 207 million levs from the bank’s coffers.

“In essence the Corpbank model.... is a mechanism through which a group of people led by Tsvetan Vassilev managed to appropriate the public funds attracted and entrusted to them for management in the bank,” the prosecutors said in a statement.

Vassilev, who fled to Serbia in 2014, could not immediately be reached for comment on the prosecutors’ indictment, which accuses him of setting up a criminal group with the bank’s former chief executives, chief accountant, cashiers and auditors.

In the past Vassilev has repeatedly denied any wrongdoing, blaming the bank’s collapse on a plot hatched by his business rivals. A Serbian court has yet to rule on Bulgaria’s almost three-year long request to extradite Vassilev to stand trial.


Corpbank went bankrupt after a run on deposits and an international audit showing two thirds of its assets had to be written off due to major failings in the way the bank was run.

This triggered the biggest banking crisis in the European Union member country since the 1990s.

The fiscal deficit jumped to 5.8 percent of national output in 2014 and Bulgaria paid over 3.67 billion levs ($2.16 billion) to guaranteed depositors at the lender.

The collapse badly hurt confidence in the banking system and its regulation, prompting the central bank, under a new governor, to tighten supervision rules and carry out an asset quality review of all lenders.

On Thursday prosecutors also indicted two former deputy central bank governors in charge of banking supervision, as well as the head of the central bank team that carried checks on Corpbank in 2013 for failing to carry out their professional duties.

Reporting by Tsvetelia Tsolova; editing by Radu Marinas and Gareth Jones