How Mijalkov went from 1.5 Million to 36 Million Euros Worth of Property within Seven Years?

The property that Mijakov did or did not report seven years ago will be under state control. The question remains “how is it possible for any natural person to go from 1.5 million worth of property to property worth over 30 million Euros within seven years”? To be more specific, how much, if at all, and how the State sanctions possible illegally acquired property? Otherwise, it is legitimate to pose the question “how easy is it to get a lower sentence through property transfer to the State, which was not acquired nor registered legally to begin with?

 

Author: Meri Jordanovska

 

In 2015, Saso Mijalkov, ex-director of the Administration for Security and Counterintelligence (ASC) left office – i.e. resigned – and then his estate was worth 1.5 million Euros, including all art paintings, bonds, company shares, flat in Skopje, Prague, house in Stip…

Within seven years, many things changed. Mijalkov was taken to court with several court proceedings against him, and he was sentenced to prison for the cases “Treasury” and “Target-Fortress”. He settled with the Prosecution in the case “Empire” and was sentenced to three years imprisonment. But the one thing that changed more than anything else was – his property.

According to the State Commission for Prevention of Corruption, the Assets Declaration Form reported by Mijalkov shortly before his resignation in 2015, was worth approximately 1.5 million Euros.

On 3^rd July, the Prosecution for Organized Crime and Corruption announced that in addition to Mijalkov’s sentence of 3 years imprisonment for the case “Empire”, his property worth 36 million Euros will be confiscated, specifically, 30 million Euros in property and six million in cash. Meanwhile, Mijalkov changed his address from Skopje to Ohrid in order to serve his sentence in the prison in Struga, which is of open type where he can only spend the nights there.

As Mijalkov’s property is concerned, while he was in office, all of his property was listed on two pages. Now the Prosecution has published pages and pages of property for confiscated, starting with twenty flats, plots, business premises of the company “Exico” in Centre, hotel business premises, shares from “Exico” in Stopanska Banka – Bitola, undeveloped construction land in Aracinovo, land in Kavadarci, property managed by the company “Bet Com Co” owned by “Exico”, etc.

Or, to be more precise, the property that Mijalkov did not have – or did not report – seven years ago will be state-controlled. Even more precise is the question ““how is it possible for any natural person to go from 1.5 million worth of property to property worth over 30 million Euros within seven years?” To be more specific, how much, if at all, and how the State sanctions possible illegally acquired property?

It is quite legitimate to pose the question “how easy is it to get a lower sentence through property transfer to the State, property that was not acquired nor registered legally to begin with”? This is something the Prosecution is not currently investigating.

The elements of the criminal acts concerned do not imply the manner in which the property was acquired, but the fact that the property of the convicted person exceeds his legitimate income substantiated by false or incomplete information that clearly indicates illegally acquired property, stated by the Prosecution.

Several time Mijalkov offered millions of Euros to defend himself from freedom, and last year the amount offered reached over 11 million Euros. The media wondered whether the institutions would investigate the origin of the property of the ex-director of ACI, and Arafat Muaremi, Director of the Financial Police Administration, stated that the origin of Mijalkov’s property was not under verification because he was subject of an investigation himself.

We would have never found out about Mijalkov’s property if proceedings were not lodged against him leading to the confiscation and his property. Practice to assign property to third parties while a person is in office, is not new, although difficult to prove. It only becomes known when some kind of property is to be exchanged for freedom and to be released from prison or to get a lower sentence.

Saso Mijalkov stopped hiding his capital when he was no longer in office. Having left office, he acquired shares from very successful companies through his family holdings. Although his name was nowhere to be found in the official documents, as a rule, the name of the company with mysterious ownership appeared in the papers – “Exico”. Later on, as Mijalkov’s family companies started appearing in the ownership structures, “Exico” started disappearing from the picture.

 

Property and shares bought by third parties as to hide the real owner

Control over capital has never been a strong side of the State. According to the Law On Prevention of Corruption, every appointed or elected official has to submit an Assets Declaration Form on the property owned within 30 days of going into office and 30 days after leaving office. Meanwhile, any change in the property or the property of household members is also reported. Anti-Corruption Commission monitors if an official acquires property disproportionate to his/her income, and to notify competent institutions – Financial Police, Public Prosecution, PRO or the Financial Intelligence Authority – that then need to investigate the case and decide whether to open proceedings against the person concerned.

For two judges – for example – we suspected their assets had increase disproportionately to their income, and informed the Financial Police. The cases, however, were not followed up, explains Biljana Ivanovska, President of the State Commission for Prevention of Corruption (SCPC) for “Truthmeter”

If you look at the Assets Declaration Forms, a large number of officials reported literally nothing, or they only registered an old car in the name of the wife, or a flat or construction land registered in their name.

The biggest problem is the fact that anyone who disposes of illegally acquired assets – especially cash – can buy property in the name of a third party. Once that person is no longer in office (thus there will be no obligation to submit an Assets Declaration Form and the person will not be scrutinized by the public) the property can be to transferred to their own name. That already enters the domain of personal data, and the mystery remains about the kind of property these people have.

An expert working group has been drafting the Law on Property Origin for quite some time. The group was established by the Cabinet of the former Deputy Prime-minister, Ljupco Nikolovski, and the Council of Europe.

The development of the draft version of the law is in its final stage. The proposed legal solution provides for verification of the origin of property if there is any doubt about the way it was acquired. With this legal solution, control over the capital is introduced for the first time, paving the way for confiscation of illegal proceeds and prevention of illegal riches on the backs of the citizens, states the Government’s website.

Experience, according to Nikolovski, shows that officials transfer illegally acquired property to other parties. Once their post ends, they return the property back to their own name. Hence, the time benchmarks set in the draft version of the law.

All those who will not be able to prove the origin of property over 30 thousand Euros acquired in the previous year, shall have that property confiscated, provides the draft Law on Origin of Property, announced the media last year.

But this Law has not been passed yet, and Ivanovska said that she has suggestions for including more provisions to make the law as efficient as possible. All that, however, costs a great deal of money.

What I thought should be included into the law is the obligation for a natural person to submit proof for the funds the moment he/she acquires certain property. Such a system should be created by connecting all the data from different institutions, starting with the banks, Financial Police Administration, PRO, etc. All this can be done with a well-designed software, after which we will see what is missing as to further develop the given software. But nothing happened, because it cost a great deal of money. According to current solutions, officials can buy property in the name of third parties and once he/she is no longer in office they return the title back to their own name and that’s where everything ends, says Ivanovska.

Past experience does not identify any official person who was held liable for declaring assets that significantly exceed their income. The penalties for undeclared property in the Anti-Corruption Commission are light. Hence, in a manner of speaking, officials have more incentives not to declare assets, rather than to declare assets, thus avoiding public scrutiny.

 

 

 

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