Greek Oligarch Arrested in Fraud Inquiry

Prosecutors charged Mr. Lavrentiadis, 40, with embezzling from a bank he helped oversee, Proton Bank, to prop up his struggling businesses. He is also accused of fraud, money laundering and membership in a criminal gang, charges that could carry a life term, a court official said.

Mr. Lavrentiadis, who built a multibillion-dollar empire only to see it stumble in the Greek crisis, is expected to face an investigating magistrate on Friday. A spokesman said he was not immediately available for comment.

The arrest coincided with the approval of the release of a $45 billion portion of aid from Greece’s European creditors, who have vigorously pressed Athens to clean up the corruption that has been a root of the country’s problems.

On Wednesday, an Athens court ordered the seizure of assets belonging to Mr. Lavrentiadis and 29 of his former associates. The ruling upheld an appeal by the shareholders of Proton Bank, once majority-owned by Mr. Lavrentiadis, who claimed to have suffered major losses after the lender allegedly issued hundreds of millions of dollars in bad loans to dormant companies.

Few figures of Mr. Lavrentiadis’s stature have been prosecuted recently in Greece. Greek news outlets on Thursday evening debated the significance of the timing of the arrest, and whether efforts were being made to make an example of Mr. Lavrentiadis.

As a relative upstart, Mr. Lavrentiadis had been working hard to gain acceptance among the small circle of Greece’s ruling families, contributing heavily to charities and buying media outlets. But in an interview recently, he raised the possibility that he was being sacrificed because he was still an outsider.

A court official said the timing was coincidental. “The investigation reached fruition and it was time for his arrest,” the official said.

The Bank of Greece and Greece’s financial prosecutor had spent over a year investigating Mr. Lavrentiadis and his associates. But a few months ago, his name resurfaced as one of more than 2,000 Greeks appearing on the so-called Lagarde list of people said to have accounts in a Geneva branch of the bank HSBC. The accounts are now the subject of an investigation into tax evasion, a charge Mr. Lavrentiadis denies.

Prime Minister Antonis Samaras has sought to make examples of some cases of suspected wrongdoing by high-profile figures. In September the government began investigating the bank accounts of more than 30 Greek politicians to determine whether they should be charged with tax evasion.

But George Katrougalos, a Greek constitutional lawyer who is a fellow at New York University, said the arrest was unlikely to represent the beginning of a sustained campaign against suspected wrongdoers.

“Quite the opposite,” he said. “He’s being made a scapegoat for the system to continue to be like it used to be, which is closed networks between government and the economic elite, which are not transparent, and no one knows what’s happening.”

Mr. Lavrentiadis has denied wrongdoing and dismissed the investigation by the Bank of Greece as not objective. In the recent interview, he said that he was “clean” and that he was being unfairly targeted.

Niki Kitsantonis contributed reporting from Athens.

Article source: http://www.nytimes.com/2012/12/14/world/europe/greek-oligarch-lavrentis-lavrentiadis-arrested-in-fraud-inquiry.html?partner=rss&emc=rss