By Elias Hazou
MILLIONS OF pounds in cash were jammed into plastic bags and then shipped from Yugoslavia to Cyprus in the 1990s, in contravention of a UN embargo, a former Serbian bank treasurer testified in court yesterday.
Dusan Colic, who worked as a treasury manager at Beogradska Banka, described in detail how, “under instructions from above,” millions of Deutschmarks (DEM) were siphoned away to the island.
With authorisation from Yugoslavia’s National Bank, the money was counted by treasury employees at Beogradska, arranged in packets and placed inside bags. The bags were then transported by car to the airport by Beogradska security personnel.
Each wad of cash typically consisted of 1,000 DEM, the bags containing anywhere from 300,000 to 500,000 DEM, although “sometimes there were millions inside”, Colic said.
“We realised that we were breaking the law, but we had instructions from the National Bank.
This practice was like a state secret, it was known only to certain circles.”
Because of the embargo, Colic said, wire transfers abroad were not allowed, so the only way would be to physically transport the cash.
“To my knowledge, all of the money going abroad at this time went to Cyprus,” he said.
The case concerns a claim by Predrag Djordjevic, a Serbian businessman based in Nicosia, against the Popular Bank of Cyprus (now known as Laiki Bank), for compensation and damages in a DM900,000 transaction that was never completed.
Djordjevic says he first heard of an offshore company called Antexol in 1994, after arranging to sell raw cotton worth DM900,000 purchased from a Russian company to a Serbian businessman.
The businessman had a licence issued on humanitarian grounds by the United Nations that allowed him to sell cotton for making medical products to a Serbian company while sanctions were being applied against Yugoslavia.
To facilitate payment, Djordjevic opened an account at Beogradska Banka in Nicosia in the name of Genemp, his trading company. But instead of receiving the full amount from Belgrade directly, Genemp was credited with DM537,000, which had been transferred from Antexol's account at Popular Bank.
Djordjevic is claiming the remaining DM360,000 plus damages from Popular Bank. He believes this amount was also credited to Antexol's account at Popular Bank but was used for other purposes.
The Popular Bank accepted Antexol made the DM537,000 payment, but claimed it had no knowledge of the DM900,000 transaction.
Antexol and several other Serbian-owned offshore companies were used for sanctions-busting by the government of Slobodan Milosevic, the former Yugoslav president.
Many of these were registered as “trading corporations” by the Tassos Papadopoulos law firm.
It is Djordjevic’s contention that his company was mistaken for one of these fronts, and inadvertently caught in the money-laundering web at the height of the Bosnian war.
Several billion dollars transferred illegally to the island by the government of Milosevic were deposited in the Cyprus Popular Bank.
The funds were used to buy weapons, equipment and fuel for the Milosevic regime to pursue wars in Bosnia and Kosovo, according to an investigation by the United Nations war crimes tribunal at the Hague.
In court yesterday, Colic was grilled by Kikis Tallarides, the chief lawyer for Laiki.
In his cross-examination, Tallarides tried to demonstrate that there was no way of establishing a solid connection between the bags of money, the Cyprus branch of Beogradska and the Popular Bank.
Moreover, citing a payment order for the transfer of the 900,000 DEM to Djordjevic’s account, Tallarides asked the witness whether the name of the recipient – in this case Genemp Trading – was written on the bag of cash.
The witness said he did not recall the specific transaction – which took place 12 years ago –but said the name of the recipient was not written on the bag. However, each bag was accompanied by a payment order.
Tallarides next asked whether a copy of the payment order was sent to Beogradska.
Colic replied that a copy was sent to the Popular Bank, because it “didn’t make sense to send this to Beogradska.”
“The bags were to be delivered to the Popular Bank. How exactly this was done I do not know.”
Tallarides then tried to cast doubt on the witness’ credibility, asking Colic who had paid for his travel expenses and accommodation in Cyprus.
“Mr Djordjevic, of course,” said Colic.
“And did he pay or offer you anything else in exchange for your testimony here today?” pursued Tallarides.
“No sir, he did not,” Colic replied.
Tallarides then proposed that the reason why the claimant, Djordjevic, did not receive all of his money might have been because the Yugoslav National Bank cancelled payment.
Although not a banker by profession, Colic said that payment cancellations are made for the whole amount concerned, not part of it.
Copyright © Cyprus Mail 2006
http://www.cyprus-mail.com/news/main.php?id=29468&cat_id=1
Showing posts with label Yugoslavia. Show all posts
Showing posts with label Yugoslavia. Show all posts
on Thursday, November 23, 2006
By Elias Hazou
A WITNESS in the Predrag Djordjevic trial yesterday told the court how he came up against a brick wall with authorities in Cyprus when trying to investigate the case.
Djordjevic, a Serbian businessman, is suing Laiki Bank and a now-defunct offshore company called Antexol for illegally holding his money in an account, as a result of which he was unable to access the funds, missing out a number of contracts.
The money was supposed to be transferred to Beogradska Banka in Cyprus. After a long legal wrangle with Beogradska, Djordjevic found his money had been moved into an account with Laiki. A company he had never heard of, Antexol Trade Ltd, controlled the account.
This was in 1994, at the height of the Bosnian war, when Yugoslavia was subject to a strict UN embargo. Antexol was one of eight offshore ventures tagged as “Milosevic companies” by the Hague Tribunal as part of a money-laundering network. Most of them had opened accounts with Laiki.
Antexol was incorporated in 1992 by the Tassos Papadopoulos law firm as the nominees. But since it was an offshore company, its real owners or beneficiaries could not be Cypriots. The beneficiaries were named as Yugoslav nationals Ljljana Radenkovic and Radmila Budicin.
But neither Radenkovic nor Budicin had ever heard of Antexol, and had no idea their names were being used to front an offshore company in Cyprus.
They only found out years later, after both their names appeared on a blacklist issued by the Office of Foreign Assets Control (OFAC) of the US Treasury.
The two women subsequently managed to clear their names.
In trying to get to the bottom of the affair, they had hired Cypriot lawyer Pavlos Angelides.
Testifying in court yesterday, Angelides said that his clients, Radenkovic and Budicin, complained that the Tassos Papadopoulos law firm was calling the shots, conducting Antexol’s business without their consent.
But when Angelides tried to secure documents relating to Antexol from the Tassos Papadopoulos law firm, he was brushed off.
“Pambos Ioannides [a partner with the Tassos Papadopoulos law firm] spoke to me very condescendingly… he almost insulted me,” Angelides said.
Next, the witness said, he contacted Laiki for some information, but the bank “sabotaged me all the way”.
According to Angelides, one senior bank official told him: “Do you really want to get into this?”
Angelides was then cross-examined by Laiki’s lawyer Kikis Tallarides.
Tallarides attempted to question the witness’ credibility, putting it to Angelides that by 2002 – when he began investigating – neither Radenkovic nor Budicin were any longer the owners of Antexol.
He also suggested that Angelides’ evidence was flimsy, telling the witness that he had never actually seen his clients in person, only talked to them over the phone.
Angelides admitted he did not see Radenkovic or Budicin, only talked to them.
“Yet you still decided to represent them in Cyprus, only to later drop the case?” challenged Tallarides.
The witness said he did abandon the case, but only because he was getting nowhere. The Registrar of Companies could not give him the names of Antexol’s real owners, only of the nominees – the directors of the Tassos Papadopoulos law firm.
Records of the real owners of offshore company are kept only by the Central Bank. But when Angelides turned to the Central Bank for help, he was told the information could not be disclosed at the time because all Antexol files were being held by the police, who were investigating the company.
“If you want to hear the truth, sir, the Central Bank tried to cover it all up,” Angelides said, addressing Tallarides.
Other witnesses on the day were Nairy Merhej, one of the directors of Antexol in 1994 and a member of the Tassos Papadopoulos law office, and Elena Mouskou of Costouris & Michaelides auditors (now PriceWaterHouse Coopers).
Questioned by the plaintiff’s lawyer Christos Clerides, Merhej identified her signature on Antexol’s act of incorporation, co-signed by Pambos Ioannides.
But she could not specifically recall the company.
“Our law office set up hundreds of companies… and this was a long time ago,” said Merhej.
Antexol was struck off the Registrar of Companies in August 2003, even though this is prohibited when a company is involved in litigation.
Clerides also summoned Elena Mouskou, who worked for Costouris & Michaelides, auditors of Antexol at the critical time.
Mouskou was not sure that she “made the books” for Antexol, nor did she remember who the shareholders were.
Also, she had never heard of Djordjevic or his company, Genemp Trading Ltd.
Lastly, a former assistant manager of Laiki’s Larnaca branch Andreas Iacocou took the stand. The witness was not sworn in, as he was subpoenaed with a special summons known as duces decum – requiring him simply to produce a document in court.
The document was a sworn testimony by Iacovou to the International Criminal Tribunal, where he admitted to meeting at Larnaca airport with Yugoslav couriers bringing suitcases packed with cash.
Tallarides objected, arguing the testimony was irrelevant because it dated to a period other than that in question.
That prompted a tirade from Clerides, who said that Antexol was inextricably linked to the whole money-laundering scheme perpetrated by the Milosevic regime in the 1990s.
Judge Nikos Sandis admitted Iacovou’s testimony, and the witness was excused.
The trial resumes on December 4.
Copyright © Cyprus Mail 2006
A WITNESS in the Predrag Djordjevic trial yesterday told the court how he came up against a brick wall with authorities in Cyprus when trying to investigate the case.
Djordjevic, a Serbian businessman, is suing Laiki Bank and a now-defunct offshore company called Antexol for illegally holding his money in an account, as a result of which he was unable to access the funds, missing out a number of contracts.
The money was supposed to be transferred to Beogradska Banka in Cyprus. After a long legal wrangle with Beogradska, Djordjevic found his money had been moved into an account with Laiki. A company he had never heard of, Antexol Trade Ltd, controlled the account.
This was in 1994, at the height of the Bosnian war, when Yugoslavia was subject to a strict UN embargo. Antexol was one of eight offshore ventures tagged as “Milosevic companies” by the Hague Tribunal as part of a money-laundering network. Most of them had opened accounts with Laiki.
Antexol was incorporated in 1992 by the Tassos Papadopoulos law firm as the nominees. But since it was an offshore company, its real owners or beneficiaries could not be Cypriots. The beneficiaries were named as Yugoslav nationals Ljljana Radenkovic and Radmila Budicin.
But neither Radenkovic nor Budicin had ever heard of Antexol, and had no idea their names were being used to front an offshore company in Cyprus.
They only found out years later, after both their names appeared on a blacklist issued by the Office of Foreign Assets Control (OFAC) of the US Treasury.
The two women subsequently managed to clear their names.
In trying to get to the bottom of the affair, they had hired Cypriot lawyer Pavlos Angelides.
Testifying in court yesterday, Angelides said that his clients, Radenkovic and Budicin, complained that the Tassos Papadopoulos law firm was calling the shots, conducting Antexol’s business without their consent.
But when Angelides tried to secure documents relating to Antexol from the Tassos Papadopoulos law firm, he was brushed off.
“Pambos Ioannides [a partner with the Tassos Papadopoulos law firm] spoke to me very condescendingly… he almost insulted me,” Angelides said.
Next, the witness said, he contacted Laiki for some information, but the bank “sabotaged me all the way”.
According to Angelides, one senior bank official told him: “Do you really want to get into this?”
Angelides was then cross-examined by Laiki’s lawyer Kikis Tallarides.
Tallarides attempted to question the witness’ credibility, putting it to Angelides that by 2002 – when he began investigating – neither Radenkovic nor Budicin were any longer the owners of Antexol.
He also suggested that Angelides’ evidence was flimsy, telling the witness that he had never actually seen his clients in person, only talked to them over the phone.
Angelides admitted he did not see Radenkovic or Budicin, only talked to them.
“Yet you still decided to represent them in Cyprus, only to later drop the case?” challenged Tallarides.
The witness said he did abandon the case, but only because he was getting nowhere. The Registrar of Companies could not give him the names of Antexol’s real owners, only of the nominees – the directors of the Tassos Papadopoulos law firm.
Records of the real owners of offshore company are kept only by the Central Bank. But when Angelides turned to the Central Bank for help, he was told the information could not be disclosed at the time because all Antexol files were being held by the police, who were investigating the company.
“If you want to hear the truth, sir, the Central Bank tried to cover it all up,” Angelides said, addressing Tallarides.
Other witnesses on the day were Nairy Merhej, one of the directors of Antexol in 1994 and a member of the Tassos Papadopoulos law office, and Elena Mouskou of Costouris & Michaelides auditors (now PriceWaterHouse Coopers).
Questioned by the plaintiff’s lawyer Christos Clerides, Merhej identified her signature on Antexol’s act of incorporation, co-signed by Pambos Ioannides.
But she could not specifically recall the company.
“Our law office set up hundreds of companies… and this was a long time ago,” said Merhej.
Antexol was struck off the Registrar of Companies in August 2003, even though this is prohibited when a company is involved in litigation.
Clerides also summoned Elena Mouskou, who worked for Costouris & Michaelides, auditors of Antexol at the critical time.
Mouskou was not sure that she “made the books” for Antexol, nor did she remember who the shareholders were.
Also, she had never heard of Djordjevic or his company, Genemp Trading Ltd.
Lastly, a former assistant manager of Laiki’s Larnaca branch Andreas Iacocou took the stand. The witness was not sworn in, as he was subpoenaed with a special summons known as duces decum – requiring him simply to produce a document in court.
The document was a sworn testimony by Iacovou to the International Criminal Tribunal, where he admitted to meeting at Larnaca airport with Yugoslav couriers bringing suitcases packed with cash.
Tallarides objected, arguing the testimony was irrelevant because it dated to a period other than that in question.
That prompted a tirade from Clerides, who said that Antexol was inextricably linked to the whole money-laundering scheme perpetrated by the Milosevic regime in the 1990s.
Judge Nikos Sandis admitted Iacovou’s testimony, and the witness was excused.
The trial resumes on December 4.
Copyright © Cyprus Mail 2006
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