Moldovan parliament dismisses central bank chief over $1 billion fraud scandal

By Alexander Tanas

CHISINAU (Reuters) – Moldova’s parliament dismissed central bank chief Octavian Armasu on Thursday for failing to act over Moldova’s “theft of the century” fraud scandal in which $1 billion disappeared from the country’s banking system in 2014-15.

Armasu was removed after two years of discussion and failed attempts to recover any of the money that was taken out of the banking system and spirited out of Moldova.

The sum amounted to 12% of Moldova’s gross domestic product at the time. Two of the figures alleged to be the masterminds of the fraud remain at large.

Eighty-one deputies backed Armasu’s dismissal. Members of the Russia-friendly opposition Socialist party joined President Maia Sandu’s pro-European Party of Action and Solidarity in securing a two-thirds vote in the 101-seat chamber.

In the run-up to the vote, the head of parliament’s Budget and Finance Commission, Radu Marian, accused the central bank of obstructing an investigation into the fraud and even protecting certain individuals.

“The Commission concluded that the central bank, in particular chairman Armasu, had taken no action: sabotaging the process of recovering assets, hiring and keeping on personnel implicated in bank fraud and hindering investigation into the billion dollar theft,” Marian wrote on Facebook.

He said the bank had repeatedly ignored requests to press on with the investigation from prosecutors and investigators who had been obliged to resort to searches and seizure of documents.

Armasu was appointed in 2018, when nearly all aspects of Moldovan politics were under the influence of businessman Vlad Plahotniuc, one of the alleged figures behind the fraud.

Sandu, elected in 2020 on a pledge to eliminate corruption and move closer to the European mainstream, had repeatedly considered his dismissal.

But international financial institutions, critical in providing financing for the impoverished country, viewed his leadership of the bank as vital to stability.

Banking sources, speaking on condition of anonymity, said prosecutors had produced compelling evidence of various institutions, including the central bank, hindering the investigation. And that prompted members of parliament to join forces in ensuring Armasu’s dismissal.

Plahotniuc fled the country in 2019 and his whereabouts remain unknown.

Pro-Russian businessman Ilan Shor, sentenced in absentia to 15 years in prison this year for his role in the scandal, helps coordinate anti-government protests from exile in Israel.

A party bearing his name was declared illegal by the Constitutional Court. Sandu last month accused Russia of “buying” voters in a local election by funnelling funds to “criminal groups” led by Shor.

(Reporting by Alexander Tanas, writing by Ron Popeski; Editing by Josie Kao)