Bulgarian Prosecutors Confirm Large-Scale Fraud in Energy Sector
Bulgaria's prosecuting authority has confirmed that large-scale fraud schemes were implemented in the energy sector, including destruction of documents certifying payments made after the termination of the project for the Belene nuclear power plant.
The Monday media statement of the prosecuting authority comes only a few days after the joint special operation of the Sofia City Prosecutor's Office, the State Agency for National Security (DANS), and the Interior Ministry during which former executives of the National Electric Company (NEK) were arrested.
In early August 2013, the Sofia City Prosecutor's Office received a report from DANS about energy fraud schemes implemented in connection with the project for the construction of the Belene NPP which incurred substantial damage to the state coffers.
On the basis of the data contained in the report, on August 9, 2013, the Sofia City Prosecutor's Office initiated pre-trial proceedings against an unknown offender for an offense under Article 203 of the Penal Code (aggravated case of large-scale embezzlement).
The investigation also included an offense under Article 2019 of the Penal Code (deliberate mismanagement).
The media statement of the prosecuting authority lists the facts which have been established so far.
On March 29, a moratorium was imposed on the Belene NPP project through a decision of the government, which entailed the termination of all activities related to its implementation.
Under the N-plant project, contracts for construction oversight had been signed with the companies WorleyParsons and Risk Engineering.
Although the provisions of these contracts made it clear that the decisions of state bodies (in this case the moratorium) were to be interpreted as force-majeure circumstances under which the parties to the contract were freed from their obligations, two of the former CEOs of the National Electric Company (NEK) failed to initiate a procedure for stopping payments.
As a result, over the next year and a half, despite the lack of a reason behind the payments, sums of around EUR 950 000 a month were transferred to the accounts of companies WorleyParsons and Risk Engineering for construction oversight under a project which had been stopped.
On September 19, 2013, the Sofia City Prosecutor's Office received a new report from DANS saying that steps had been taken to hide or destroy incriminating documents.
This necessitated an urgent operation on September 20, 2013, during which searches and seizures were conducted at the offices of WorleyParsons, Risk Engineering and NEK EAD in order to guarantee that the documents relevant to the investigation would be included to the case materials.
During the operation, Ivo Lefterov and Krum Anastasov, former CEOs of NEK EAD, and the CEO of Worley Parsons, Sabin Sabinov, were detained for 24 hours under the Interior Ministry Act.
No charges have yet been pressed under the case.
The prosecuting authority is yet to analyze the huge amount of information and documents seized during the special operation and to decide on the next procedural and investigative activities.
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