The scandal of the failed Proton Bank that has led to fraud and embezzlement charges being filed against its former main shareholder and 30 others has grown with the arrest of the Chief Financial Officer of one of Greece’s chief pharmaceutical companies.
Authorities said they believe that Yiannis Papavassiliou, a top executive of Alapis, was involved in the alleged transfer of some 700 million euros ($945.78 million) in commercial loans from the bank to companies controlled by Lavrentis Lavrentiadis.
Lavrentiadis, 40, and several other key suspects are currently in custody. The charges against him include overseeing an elaborate operation to steal from the bank. He faces a possible life sentence if convicted. He has denied any wrongdoing and claimed he’s being made a scapegoat for the country’s crushing economic crisis.
The newspaper Kathimerini reported earlier that an e-mail found on the computer of one of some 30 suspects in the Proton Bank scandal showed that bank executives were aware in 2010 that just over 500 million euros ($681.9 million) had been lent to Lavrentiadis’ companies, not 73 million euros ($99.57) as the bank claimed.
The newspaper reported that the e-mail shows executives knew that seven companies in which Lavrentiadis was involved had obtained loans of 357 million euros, ($486.9 million) without providing any guarantees.
Lavrentiadis was taken into custody late in 2012 just as the government got approval of a new round of 52.5 billion euros in more rescue loans from its lenders, the Troika of the EU-IMF-ECB, which has been pushing the government to rein in corruption and tax evasion. Lavrentiadis, who built a multi-billion euro empire that collapsed in the country’s crisis, was taken briefly to a psychiatric hospital before being jailed. A court ordered the seizure of assets belonging to Lavrentiadis and 29 of his former associates.
Lavrentiadis’ downfall began when shareholders who suffered major losses pressed the case against him. When police went to Lavrentiadis’ house in an affluent seaside neighborhood to arrest him, they reportedly found he was being protected by 16 bodyguards, including six police officers, who were also apprehended and are being investigated.
The Bank of Greece and Greece’s financial prosecutor had spent more than a year probing Lavrentiadis and his associates. His name also appeared on a list of 2,059 Greeks with 1.5 billion euros in assets in a Swiss bank that hasn’t yet been checked for tax evasion.