Merrianol Fraud Scheme
On Mar. 29, 2013, Probusinessbank entered into an agreement with BrokerCreditService (Cyprus) Limited (BCS). The executives registered a new Cyprus-based shell company: Merrianol Investments Limited with an authorized share capital of €2,000 and two staff members employed.
Merrianol was yet another link in Probusinessbank’s money-laundering chain. Merrianol and Vermenda were exchanging large amounts of money, which was detected by Trasta Komercbanka’s Control Division that found the companies’ affiliation.
Merrianol took out a loan from BCS. Probusinessbank offered its funds and securities it had transferred to the BCS accounts as the Merrianol loans collateral.
The Merrianol fraud scheme was almost identical to the Ambika scheme. The loans granted to the shell company were backed by the securities borrowed from the broker.
In a June 2015 letter to Probusinessbank, a BCS employee said the bank could recover its securities by paying the collateral covering Merrianol’s indebtedness.
On Aug. 10 and 11, 2015, after the temporary administration took over the bank, BCS took around $105 million in Probusinessbank’s assets to cover the debt.
By the time the CB revoked Probusinessbank’s license and appointed the ASV to take charge of the bank, the bank’s accounts had at least $470 million missing. Although the financial reports covered that amount, the money was withdrawn from the bank using the Vermenda, Ambika, and Merrianol embezzlement pathways.
But it did not stop there. There were many more such schemes in play.