With the money tight all over Europe, one high-flying Greek businessman allegedly found a novel way of getting easy credit: two years ago he bought a controlling share in a bank, installed his own managers and then loaned himself and his associates nearly 600 million euros ($760 million).
Greek prosecutors allege Lavrentis Lavrentiadis, 39, turned the country’s Proton Bank, which has since been nationalized, into what one Athens newspaper called a “bank of cronies.” Lavrentiadis, who vigorously denies the allegations and has accused the authorities of acting illegally, has been called to appear before public prosecutor Ioannis Dragatsis at an Athens court next week. He is formally under investigation over accusations of fraud, embezzlement and corruption, but has not been charged.
An audit by the Bank of Greece, which regulates the industry, found that more than 40 percent of Proton’s commercial loans in 2010 were made to companies related to Lavrentiadis. The report says this was part of a “misuse of the basic principles of lending and assurance.”
A separate investigation, signed by a senior prosecutor who heads the country’s money laundering authority, found that Lavrentiadis – once hailed as the rising star of Greek business and known as a leading patron of the arts – had with others “formed a criminal team” that embezzled up to 51 million euros from the bank. It alleged loans made to dormant companies had been wired from Proton to another bank, the Piraeus Bank, and then withdrawn by an employee in bags of cash.
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