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Cyprus

16 held over co-op scam pending remand order

Sixteen people arrested in connection with a loan scam worth around €12mln at the Ayia Fyla co-op bank were brought before Limassol’s district court on Tuesday where, during a nine-hour hearing, police requested their remand.

Three more suspects are still being sought.

The court reserved its decision on remand orders until Wednesday. The suspects will remain in custody until then.

The suspects appeared before court at 11am. The 12 defence lawyers who represented them objected to their remand and cross-examined the police investigator.

Warrants were issued for a total of 19 individuals: two business people, two of their former employees, five former co-op members and three former members of its committee, four property valuers, and three relatives.

The case concerns the approval of 11 loans worth €11.9 million between 2007 and 2009.

Using a 27-page statement, the investigator went through the loans one by one.

Loans were granted without the necessary collateral, property was overvalued, there were unjustified deposits to accounts, and even prostitutes were used to get people to sign as guarantors.

As in a separate co-op loan scam between 2006 and 2009 worth €9.6mln, committee members allegedly acted on behalf of the two businessmen, approving loans without the required collateral, while valuers overvalued property to secure loans bigger than the value of the mortgage.

Six of the 19 are also involved in the first case.

In one instance, the court heard, two valuers set a property value at €1.1mln while its real value, according to the land registry, was €307,000.

Another property was valued at €1.6m instead of €297,000.

People with financial or psychological problems, often on allowances, were paid or offered other things in return for their signature as guarantors.

The documents were later changed, making them the primary debtors without their knowledge.

Money from the loans ended up in the businessmen’s personal and company accounts. The co-op officials who mediated were rewarded financially.

Police are currently investigating 71 bank accounts, some with deposits that cannot be justified, according to the investigator.

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