A key suspect in the dodgy loans case concerning the now-defunct Ayia Fyla cooperative bank, Iordanis Kostekoglou, 45, was arrested on Tuesday evening at a beach hotel in Limassol.
The case concerns the approval of 22 loans worth €9.5m that were given by the co-op bank to a 54-year-old businessman’s business and personal accounts between 2006 and 2009 without the required collateral. The irregularities were reported to police in March this year after the findings of an internal audit at the co-op were forwarded to the Legal Service.
Kostekoglou, wanted since September 10, was arrested after a three-day police stake out. He is reportedly the manager of the land development company of the 54-year-old businessman who is also in custody.
To avoid being recognised since police had circulated his photo, Kostekoglou had shaved his hair and grown a beard. He was staying at the hotel under a different name.
In addition to the two men, three co-op employees are in prison, a 43-year-old loan manager and his 40-year-old assistant and a 55-year-old former employee. The arrested bank employees were reportedly acting on behalf of the 54-year-old contractor, for a fee, securing loans for him and his company with fake collateral.
The contractor’s 52-year-old driver and a 69-year-old man, also an employee of the contractor, were released earlier on Tuesday without charge due to their limited involvement in the case. They will reportedly be used as prosecution witnesses.
The two men were allegedly approaching people with money problems and paid them to sign as guarantors for the businessman’s loans. The documents were later changed, making the paid signatories primary debtors of the loan without their knowledge.
For the same case, the businessman’s 49-year-old accountant is wanted. She is believed to have fled abroad.