After Delta Bank was declared insolvent and the Deposit Guarantee Fund stepped in, it discovered more than $250 million was siphoned from the bank, allegedly, by its own personnel.
By the time the bank, which was owned by Ukrainian businessman Mykola Lagun, went into temporary administration on March 3, 2015 a significant portion of the $250 million — although not all — was gone.
Now new documents from the Deposit Guarantee Fund reveal more about how the money disappeared. The Deposit Guarantee Fund would not comment, nor would the General Prosector’s Office.
How did they do it?
The fund learned that during 2011 and 2012 Delta Bank opened several correspondent accounts with no less than $250 million in total in three international banks, including Liechtenstein-based Frick Bank and Austrian-based Winter and Meinl Banks.
At the time the bank went into temporary administration, its accounts showed at least $115.5 million in a correspondent account at Bank Frick, $87.3 million in a correspondent account at Meinl Bank and $50 million in a correspondent account at Bank Winter and Co.
On March 6, 2015, the administration sought confirmation from the three foreign financial institutions that the money was still in the correspondent accounts and requested that the sums to be transferred to other banks.
Bank Frick claimed they were unable to disclose the account balance due to obligations to a third party. But through correspondence with Bank Winter and Meinl Bank, the administration established that there were discrepancies between the accounts of Delta Bank and the foreign banks.
Through further communication, it was able to establish that — after setting up correspondent bank accounts — Delta Bank signed loan agreements with offshore companies Banbury Management Lld, Silisten Trading Ltd. and Jamico Finance Ltd. and the trio of international banks.
Under the agreements, Delta would use the money from its correspondent accounts in the European banks as collateral for the loans taken out with the three offshore firms.
The agreements also stipulated that Delta gave the banks permission to write off the funds from its correspondent accounts if it defaulted on its loan, after notice of its failure to meet its obligations as a borrower.
Furthermore, the international banks were then instructed to transfer the money from Delta’s account under their own names.
Through this scheme, $115.5 million was siphoned from Delta Bank and into the hands of Banbury Management, $87.3 million to Silisten Trading and $50 million to Jamico Finance in the offsthore tax haven of the British Virgin Islands.
The writeoff in correspondent accounts in international banks was not reflected in Delta Bank’s accounts as required by Ukrainian law.
The money was written off from the correspondent accounts shortly after the National Bank of Ukraine declared Delta problematic – on Dec. 3, 2014 by Bank Winter and on Jan. 19, 2015 by Meinl Bank- with the exception of the funds in Bank Frick, which were transferred after Delta went into administration — under the nose of the administrators.
On April 2, 2015 Bank Frick notified Delta that the sum of $115.5 million has been written off from its correspondent account in cancellation of its debt to Banbury Management.
Such substantial losses affected the financial condition of the bank and contributed to it becoming insolvent.
The National Bank of Ukraine classified Delta Bank as problematic on Oct. 30, 2014.
It became clear shortly after that the bank’s financial condition was seriously deteriorating and the institution was unable to fulfill its obligations to depositors and creditors, including the Deposit Guarantee Fund, which had to pay out depositors and the National Bank of Ukraine.
Its biggest investors starting clearing out its assets after the bank was declared problematic and after it became insolvent, the Deposit Guarantee Fund had to pay $622 million to individuals who lost their deposits — the largest state payout in the country.
The suspects
On Nov. 6, 2012, Delta and Bank Winter signed off on an agreement involving savings and collateral, wherein Delta gave Bank Winter permission to write off $50 million from the correspondent account if Delta defaulted on its loan agreement with Jamico Finance.
It was found that Vitaliy Masyura, the former first deputy chairman of Delta’s board of directors, signed off on this agreement on behalf of Delta Bank.
A similar agreement between Delta and Meinl banks, concerning a $87.3 million Silisten Trading loan, was signed off on a month earlier by Olena Popova, the chairwoman of the board of directors at Delta Bank, on behalf of Delta.
Moreover, on behalf of Silisten Trading, the loan agreement was signed off by Delta Bank employee Oleksiy Sukovaty.
The original copies of all these documents are missing from the bank.
After the Deposit Guarantee Fund established a case of fraud, it asked the General Prosecutor’s Office to investigate the matter, which it began to do last April.
Masyura, Popova and Sukovaty were sent requests to transfer originals and copies of the relevant documents and to provide an explanation regarding this matter by June 20, 2015 but none of the parties responded to the request by the aforementioned date.
Where is the investigation now?
It has been more than a year since an investigation was launched but to this day no arrests have been made.
In January, the Pechersk district of the National Police issued Masyura with a notice stating that he was suspected of criminal offense connected with the siphoning of $50 million from Delta Bank.
However, the notice has not been handed to him, due to the fact that he is believed to have left the country and is suspected of hiding in London.
As part of the investigation, the Pechersk court has arrested the property of Masyura and his family, including real estate and 15 vehicles, which include a Bentley and a BMW.
Meanwhile, after evidence of criminal activity came to light, the Deposit Guarantee Fund sought victim status for Delta within the context of this case.
