Cyprus Mail
Cyprus

Court told of suspect’s suspicious bank activity

Former central bank governor Christodoulos Christodoulou

The former director of compliance at now-defunct Laiki Bank stated in court on Tuesday that they had flagged an account held by the former son-in-law of ex-Central Bank governor Christodoulos Christodoulou due to a suspicious transfer to the account of some €1.06m.

Testifying for the state prosecution, Era Michaelidou said that in 2009, €1,060,085 was wired to the Laiki bank account of Andreas Kizourides, Christodoulou’s former son-in-law.

The money was transferred from an account held by AC Christodoulou Consultants with Marfin Egnatia bank in Greece. The consultancy firm was nominally run by Christodoulou’s daughter Athina.

At the time, the verbal justification given for the transfer was that the money was for the sale of two plots of land in Strovolos.

Michaelidou further said that in 2012 the bank reported the potentially suspect transaction to Mokas, the police unit dealing with money laundering activities.

The information was eventually relayed to Mokas in May 2012 because by that time the bank had yet to receive from the beneficiary – Kizourides – the required documentation for the wire transfer, nor a bill of sale proving the alleged land transaction.

In the interim, the bank monitored Kizourides’ account, she said.

But during a previous hearing in the same trial, it emerged that despite misgivings, the money in question was in fact subsequently released to Kizourides.

The cash was initially paid to the consultancy firm on July 27, 2007 by Focus Maritime Corp, which belonged to Michalis Zolotas. That payment had been justified as “consultancy services” without any accompanying documentation.

At the previous hearing, another former Laiki officer had stated that Michaelidou herself had made the decision to accept the cash and release it to Kizourides without the necessary documentation.

Under cross-examination on Tuesday, Michaelidou was asked why they waited until 2012 to report the transfer to authorities.

Responding, the witness said it was at that time that it came to their attention that Andreas Vgenopoulos – the former Laiki strongman – had a relationship with Zolotas.

Michaelidou said Kizourides personally called to tell her that the €1.06m was related to the sale of land. Later, she also received a call from Panayiotis Kounnis, the bank’s deputy managing director at the time, who likewise gave her the same verbal assurances.

Kounnis told Michaelidou that he had received a call from Christodoulou himself, who confirmed the land sale was real and legit.

Going on these assurances, the bank therefore decided to release the money – which it had earlier put on hold, preventing withdrawals – but flagged Kizourides’ account for suspicious activity.

Asked on what basis did she think that Zolotas and Vgenopoulos had a relationship, Michaelidou said she and others at the bank inferred it from the “excessive loans” granted to Zolotas’ company Focus by Marfin Egnatia, a bank also controlled by Vgenopoulos.

These loans were granted without collateral, she added.

The trial continues.

The case centres on the allegation that the former governor of the Central Bank was bribed to the tune of €1m to look the other way while Greek financier Vgenopoulos – now deceased – took control of Laiki Bank in 2006.

Apart from Christodoulou, Zolotas and Kizourides, the charge sheet includes former Laiki official Michalis Fole, Christodoulou’s daughter Athina and companies AC Christodoulou Consultants Ltd, Marfin Investment Group (MIG) and Focus Maritime Corp.

The defendants face a total of 24 charges including corruption, bribery, abuse of authority, abuse of trust, and money laundering.

Zolotas faces a single count relating to money laundering.

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