There are many ways to rob a bank. But the best one is to be an employee.
The renowned American film director Alfred Hitchcock wrote a collection of detective stories by various authors called "The Murders I Loved." But contrary to the title, the collection contains stories about more than just murder. One of them is called "Three Ways to Rob a Bank." The plot revolves around a former bank clerk who finds ways to scam loans, allowing him to semi-legally "rob" a bank.
Our Ukrainian colleagues have gone far beyond their American protagonist and come up with a more intriguing scheme. It involves bankrupting a financial institution, leaving the bank's owners with the money but avoiding liability.
Naturally, such schemes are profitable for smaller banks. Such a case recently occurred at Zoloti Vorota Bank, which served primarily Kharkiv depositors. Let's start from the end: in accordance with NBU Board Resolution No. 781 of December 4.12.2014, 1, "On the revocation of the banking license and liquidation of the Public Joint-Stock Company 'Zoloti Vorota Bank,'" the executive directorate of the Deposit Guarantee Fund for Individuals decided to appoint an authorized representative to liquidate the bank for a period of one year.
According to Article 37 of the Law of Ukraine "On the Deposit Guarantee System for Individuals," the Fund's authorized representative has the right to contact law enforcement agencies if they discover evidence of fraud or other illegal activity by bank employees. This is precisely what happened this time. The bank wasn't bankrupt at all. It simply siphoned off funds through shell companies and into the pockets of bank executives, declaring bankruptcy.
Insider
It all began in April 2011, when NTC LEASINGSTANDART LLC (EDRPOU code 37574920) approached Zolotye Vorota with a request for a short-term loan of 4.1 million hryvnias at an interest rate of 1% per annum. It's worth clarifying that such a loan is provided exclusively to "a reliable client in excess of their current account balance with this bank within a pre-agreed amount." The bank is essentially lending a small amount. In practice, this looks like an overdraft on the card account, which can be a useful reserve for unforeseen circumstances. In essence, the bank trusts the client not only by issuing a credit card but also by providing a certain amount of credit that can be used in case of force majeure, but nothing more. So, at the time of the loan application, NTC LEASINGSTANDART LLC was inactive, having been registered a month earlier (a classic scheme), and opened its account at Zolotye Vorota only at the end of March. How can we possibly be talking about a trusted client here? But it's not that simple. The founder of this very limited liability company is Vladimir Valentinovich Volkov, who...that's right—he was also the deputy head of the department and head of the economic and internal security department at Zolotye Vorota JSC! And in July 2012, he was transferred to the position of head of the bank's security.
And so, a day after NTC LEASINGSTANDART LLC opened an account at Zolotye Vorota Bank, the credit committee decided to sign a short-term loan agreement with the company, repayable by April 28.04.2011, 10.12.2014, secured by property. But this is only part of the ingenious scheme. During the loan term, 36 amendments (agreements amending the agreement) were made, transforming the short-term loan into a long-term one (until December 12, 050), and increasing the amount to UAH 000. Consequently, as of January 2016, the loan remains unpaid, and the overdue debt amounts to almost UAH 17 million. Needless to say, the loan is not secured by collateral.
The bank had no right to issue a short-term loan (especially in such a large amount) to a company that was inactive and had no cash flow in its current account. Most interestingly, according to documents prepared by loan officers at Bank Zolotye Vorota in April 2011, NTC LEASINGSTANDART LLC was insolvent. While the bank loaned the company at 1% per annum, it was attracting hryvnia-denominated loans from individuals at interest rates ranging from 12,5% to 16,5%. Such a disparity in interest rates is incredibly high. The 1% rate was simply devised "for the benefit of their own." As a result, as of December 21, 2015, the bank's loss under the agreement with NTC LEASINGSTANDART LLC amounted to 16,406,978.42 hryvnia.
Can I have another one?
However, this isn't Mr. Volkov's first foray into banking fraud. In February 2010, he approached his own bank for a loan as an individual. He was to receive it in the form of a non-revolving credit line for UAH 3,500,000 for payment under an assignment agreement. Typically, a template assignment agreement is required if the parties specifically require the transfer of rights as a result. In most cases, an assignment agreement is used to assign a claim. A simple (non-revolving) credit line implies a drawdown limit, allowing the borrower to withdraw funds once over a specified period (issued in tranches). This means that the borrower can withdraw funds only when needed, but only once. Naturally, Mr. Volkov receives a consumer loan at 11% per annum (with a minimum rate of 12,5%) secured by movable and immovable property. However, the Credit Committee decided to ignore the fact that Volkov is a bank insider. The violation consists in the fact that he was given a loan at a preferential interest rate completely without reason, which posed a threat to the financial condition of the bank.
Everything I owe, I forgive.
But that's not the most interesting part. When applying for the loan, Volkov listed three outstanding balances: 300,000 hryvnias, 1000 hryvnias, and 150,000 hryvnias. But he lied—the bank knew this, as his actual debt was over 7,5 million hryvnias. This proves that Vladimir Valentinovich Volkov, together with the bank's board members, simply carried out a scam to misappropriate bank funds for his own personal gain. As in the previous case, 10 amendments were made to the agreement, increasing the loan amount to 5,5 million hryvnias, and the repayment terms were extended from three months to a year, reducing the interest rate to a paltry 7,5%.
The climax of this case is the pledge agreements provided by V.V. Volkov. All four agreements bear forged signatures from the pledgers. Furthermore, under the assignment agreement drawn up in February 2010, he received assignment rights under the loan, mortgage, and pledge agreements. Thus, Zoloti Vorota assigned him the right to claim under the credit line between the bank and Medex LLC (a company in Ivano-Frankivsk). Interestingly, according to the minutes of the credit committee, no such decisions were made.
Key to the apartment where the money is
In October 2015, another case involving Volkov and Zoloti Vorota Bank surfaced. Two officers from the Ivano-Frankivsk Regional Department of Internal Affairs arrived at Zoloti Vorota Bank to question Volkov at the request of an investigator in a criminal case involving an attempted murder of a certain V. Fishchuk, whose property had been alienated under an assignment agreement signed by Volkov in February. Thus, the bank "squeezed out" a two-room apartment at 6 Striltsiv Sichevykh Street in Ivano-Frankivsk and resold it to a certain Lyubov Vasilievna Belan. Volkov, together with bank employees, illegally removed the property from the bank's collateral, thereby causing significant damage to the bank once again.
We have to go back to February 2010. At that time, JSCB Zolotye Vorota and Firma Express LLC entered into an assignment agreement, under which the right to claim the mortgage from Medex was transferred to Express. Incidentally, this firm, according to Bank Zolotye Vorota, was insolvent and, as of this year, owed 54 million hryvnias. This firm is controlled by none other than Yevgeny Zelmanovich Chernyak, a member of the Supervisory Board of Bank Zolotye Vorota PJSC. Chernyak is indirectly believed to coordinate Volkov's activities, which is confirmed by concurrent letters from Volkov and Express LLC regarding the right to forfeit the Medex loan.
Take it, take it!
In 2014, PJSC Bank Zolotye Vorota entered into an assignment agreement of the primary creditor's right of claim (Consequences of the assignment of the right of claim: the primary creditor ceases to be a party to the obligation; a new party enters into the obligation in its place; the subject composition of the obligation changes, but its content remains the same) with OOO BIZNESTSENTR TECHNOLOGY 2 for a loan from V.V. Volkov from February 2010. The founder of this OOO was... no, not Volkov, but his subordinate, Vladislav Aleksandrovich Bezugly. As a result, on May 23, 2014, the amount of 5,5 million hryvnias was transferred from the account of OOO BIZNESTSENTR TECHNOLOGY 2 through a transit account to repay V.V. Volkov's debt.
However, back in April 2011, BUSINESS CENTER TECHNOLOGY 2 LLC received a short-term loan of UAH 2,320,000 at 1% per annum, due until the end of the month. Is it worth mentioning again that at the time the loan was received, BUSINESS CENTER TECHNOLOGY 2 LLC was not in any activity, and the company had no cash flow on its current account? And, as usual, 33 amendment agreements extended the loan term by three years and increased the amount to UAH 30 million. Two of the collateral agreements also contained forged signatures. Currently, the company's debt amounts to UAH 53,936,627.97.
In November 2011, bank security officer Viktor Petrovich Nepochatyi was issued a loan of 1,600,000 hryvnias at 8% per annum (again, with uncalculated benefits). After six amendment agreements, the bank employee received 2,273,178 hryvnias through the cash register. The bank then assigned Nepochatyi's debt to BUSINESS CENTER TECHNOLOGY 2 LLC, which at that time already owed the bank over 31 million hryvnias.
In 2014, a similar loan scam was perpetrated against SKIF-2011 LLC. All the fraudulent schemes, including those not mentioned in this article, resulted in Bank Zolotye Vorota JSC's total debt to creditors amounting to UAH 649,000,155 as of January 13, 2016.
According to the authorized representative of the depositor guarantee fund, Volkov repeatedly threatened him, citing connections to the FSB and GRU of the Russian Federation. According to unconfirmed reports, Volkov planned to leave for Russia after completing his business.
However, an interesting detail later emerged: Mr. Volkov himself admitted that the authorized representative of the Deposit Guarantee Fund for Individuals, a certain Valeriy Oleksandrovich Yermak, had defrauded the bank of more than 10 million hryvnias. To profit from credit fraud, he hired a true expert in the field, namely Volkov himself. Furthermore, Yermak regularly violated the rules by sending Volkov on business trips, even though he was not a bank employee. Those "in on the case" included lending advisor Nadezhda Fil, head of the credit department Tatyana Mukhina, deputy chief accountant Viktoria Tur, and administrative advisor Konstantin Alperovich.
These same individuals also surfaced in other scandals. According to law enforcement, Yermak used blackmail to seize the property of bank depositors—Nepochatov, Kashura, and Volkov. The former's two plots of land in the Yaremchensky district (Ivano-Frankivsk Oblast) were transferred to Yermak Tatyana (the Authorized Person's wife) through a fictitious sale and purchase agreement. Two more adjacent plots were registered to Alperovich and his wife. Kashura's one-bedroom apartment was similarly transferred to Yermak's godfather, and Volkov's two garages were transferred to a close friend of the swindler. He also has an excellent cover. According to Volkov, Ivan Holub, head of the State Service for Combating Economic Crimes of Ukraine in Kharkiv Oblast, is Yermak's business partner and a relative of Alperovich.
I told you: it works!
A similar situation occurred at Eurogasbank, where 300 million rubles allocated by the NBU to save the bank disappeared without a trace, according to Nashi Groshi, citing a court registry.
According to the case materials, in February and March 2014, PJSC Eurogasbank, "with the aim of obtaining funds from the National Bank," submitted "deliberately false documents" to the National Bank, which were used to conclude loan agreements. The NBU, in connection with this, transferred 299 million hryvnias to restore liquidity. But the management of Eurogasbank transferred the received funds to the companies it controlled: Elite Soyuz LTD LLC — UAH 13.83 million, Indexagroholding LLC — UAH 76,50 million, Pergola TBK LLC — UAH 3,90 million, Lumika LLC — UAH 118,280,000, Novaya Informatsiya IG LLC — UAH 3,20 million, Integra Publishing House LLC — UAH 1130000, SS-Bureau LLC — UAH 3 million, Jet Investments LLC — UAH 6650000, Spectrum Consult LLC — $96,901, and Gold Trading Trading House LLC — UAH 3050000. The pledgers and guarantors for the said loan agreements were the bank's shareholders and officials.
Is such a scheme possible? Of course, says expert Andrey Blinov. Although, he adds, it's rare for a bank to act so rudely.
"This scheme, in principle, worked in many banks. Although not quite in this format, admittedly. But there were cases of loans being extended to individuals affiliated with shareholders or employees. These weren't necessarily shell companies, as in this case. They could have been perfectly functioning companies. It could simply have turned out that, for some technical reason, it was easier to bankrupt the bank than to repay the loan. In recent years, this scheme has become more popular. The situation you describe indicates a virtually complete lack of regulatory oversight or any potential supervisor. Today, in operating banks, in my opinion, such a scheme is impossible because there is much stricter control over collateral, much less over loans to individuals affiliated with the banks. Fraudulent practices involving loans issued to security guards or carried out by bank clerks without the knowledge of management are possible, but this is common worldwide."
As a result, Mr. Volkov and the board of the Golden Gate Bank pulled off a nearly perfect scheme for gradually robbing the bank, but they failed to take into account that this time they would be unlikely to escape responsibility.
Ivan Nechupara, Facenews
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