The Billion
that didn’t exist

In 2016, the Moldovan Anti-Corruption Prosecutor’s Office charged Ilan Shor with fraud and money laundering in connection with the collapse of the Moldovan Banks. 8 years later, the case is still pending in court and tens of thousands of pages with evidence have been prepared by Shor’s legal representatives – even if the court refuses to review most of them.

The criminal proceedings against Ilan were politically motivated, specifically with an ulterior and predominant purpose: to “silence and punish” him for his activism and popularity as a leading opposition politician, and to “suppress political pluralism”, as his lawyers argued in court.

In short, the Government argues that Ilan took out loans from the bank which he didn’t repay, and that he transferred these funds to Austria. However, no expert evidence to that effect has ever been obtained by the prosecution or court; rather, the only expert evidence available indicated that the imputed loans had in fact been repaid.

In addition, against allegations that funds were illegally transferred to Austrian banks, the Austrian authorities terminated all investigations regarding the allegation due to lack of factual grounds or suspicious activity.

The prosecution has further failed to prove material damage and primarily relied on evidence of a witnesses Matei Dohotaru (and through him, a report prepared by the American corporate investigation and risk consulting firm, Kroll Inc.), even though he did not give live evidence during the appeal and the Kroll report expressly states that it should not be relied upon under any circumstances.

Key witness Matei Dohotaru

One of the main witnesses in the First Instance Proceedings was Mr. Matei Dohotaru, who was employed as a director of the Banking Supervision Department at the National Bank of Moldova from November 2014.

In his interrogation by the investigative authorities, dated 8 July 2016, he stated that companies allegedly controlled by Ilan Shor had taken out loans amounting to 13 billion MDL and that the repayment of these loans were “fictitious”. His evidence was accepted without proper forensics investigations. As the judicial procedure continued, Dohotaru was not made available for cross-examination on this issue, on the excuse that he resided in the United States and could not be compelled to attend. The court also dismissed evidence by other witnesses, which contradicted his testimony.

Proceedings against Mr. Matei Dohotaru in the US

On September 11th, the District Court for the District of Colombia, U.S., issued an order against Matei Dohotaru, holding him in conditional civil contempt for failing to comply with two subpoenas.

The developments come after lawyers for businessman and politician Ilan Shor filed a 1782 application in the U.S., asking for the court to grant a deposition with Dohotaru in relation to Shor’s criminal proceedings in Moldova. Dohotaru was a key witness against Shor in the Moldovan bank fraud case, which is still pending in Moldovan courts. After providing evidence against Shor in 2017, Dohotaru left the country.

Shor’s submission in court was successful and Dohotaru was called to appear for a deposition, however failed to do so. The court issued a daily fine, $500 and $1000, against Dohotaru and ordered him to pay Shor’s legal costs. Failing to respect court ordered decisions in the U.S. can lead to imprisonment.

In December 2023, the deposition of Matei Dohotaru took place in the District Court of DC Colombia. When he finally was deposed, Dohotaru – according to the deposition transcript published by the court – was no longer able to confirm having knowledge of the alleged evidence he provided against Shor in 2017.

At the time, Dohotaru testified that fictitious funds had been used to repay the loan exposure at the Moldovan bank – where the money was claimed to have been stolen by Shor. His testimony was a key part of the evidence that served as the foundation for Moldova’s Court of Appeal’s conviction of Shor.

During the deposition, Dohotaru stated that he is unable to confirm whether the funds were fictitious. He denied that he ever reached that conclusion and claimed that he merely suspected that this might have been the case. Dohotaru further confirmed that he did not review the underlying documents at the time of his testimony.

The Kroll Reports

• The Prosecution relied on the Kroll Reports in finding that the value of the funds allegedly misappropriated by Mr. Shor from BEM amounted to MDL 5.2 billion and that the repayments of the loans were “fictitious”.
• The Kroll report was commissioned by NBM to prepare a “preliminary scoping report”, which was never formally admitted into evidence in the criminal proceedings. However, the report was leaked to the press by Mr. Andrian Candu - the then Speaker of the Moldovan Parliament.
• A further report dated 20 December 2017, “Project Tenor II Summary Report” was also leaked online. Despite the Defence's objection to the Kroll Reports, Kroll I was used as a main evidence which the Appeal Court relied upon in its judgement.
• The main arguments against the reliance by the courts on the Kroll Reports are as follows:
• Kroll I author was not subjected to cross-examination; accordingly, the courts and the defence, could not critically examine the report and ensure its relevance, conclusiveness, or usefulness.
• Kroll I source material (including banking records, documents and emails), which constituted the basis for the report was never disclosed and could not be analysed or scrutinised by the court or defence.
• The authors of the report did not hear Mr. Shor’s arguments and the report is, as a result, entirely one-sided.
• Kroll I states expressly that it “should not be relied upon as such under any circumstances”, that it should “not be relied upon as financial, regulatory or legal advice which Kroll is not authorised to provide”, that “Kroll has relied upon information and analysis conducted by the NBM” and that “It has not been possible within the scoping phase to conduct sufficient analysis and investigations to independently verify information presented to us by the NBM.”
• Mr. Dohotaru was reported to have been the source at NBM from whom Kroll obtained instructions, making the prosecution’s arguments on the movement of funds entirely circular.
• The language used throughout Kroll I suggests an unquestioning acceptance of what the investigators have been told by the NBM rather than an evidence-based investigation leading to a reinforced conclusion.

The statement and report of Ms. Ana Litr and the Court’s refusal to appoint an expert

• Ms. Litr, a licensed auditor, filed an expert report with the Appeal Court on behalf of Mr. Shor's defence; she then underwent a cross-examination contradicting many of the statements made by Mr. Dohotaru.
• In her testimony, Ms. Litr reported that based on the banking evidence on the case file that she had reviewed, the loans received by the Companies were repaid in full, including interest, by the end of November 2014.
• At least four times, the courts refused Mr. Shor’s request that the court or the prosecution appoint a forensic expert to analyze the complex financial and accounting nature of the allegations.
• As no expert evidence was produced by the prosecution or commissioned by the courts, Ms. Litr’s report is the only expert evidence in both the First Instance Proceedings and the Appeal Proceedings. In these circumstances, it is hard to explain how the prosecution could prove its case as far as it relates to the movement of funds. In particular, the suggestion that the loans were not repaid because the monies used were somehow “fictitious” (because they derived from unauthorised overdraft facilities) is unsubstantiated by any documentary or witness evidence, defies common sense, and is undermined by the fact that the banking records on the case file demonstrated that the loans were in fact repaid.

Review of evidence against Shor by former U.S. law enforcement officials

Two former senior U.S. law enforcement officials have conducted a review of the evidence against Shor and presented their findings in April 2024.

Justin Weddle has extensive experience in investigating organized crime and money laundering having previously served as the Assistant United States Attorney in the Southern District of New York, and the US Department of Justice’s Resident Legal Advisor to two law enforcement cooperation centres based in Bucharest, focused on boarder crime and corruption across the region, including in Moldova.

Matthew Hoke is a former US Federal Bureau of Investigation (“FBI”) Special Agent with over 26 years of experience leading high-profile, cross-border criminal investigations across multiple jurisdictions, including Ukraine, Romania, the United Kingdom, and Finland.

Both reports highlight the lack of credible evidence and witnesses in the case against Shor, and conclude that in the U.S. – the evidence presented by the Moldovan authorities against Shor would have been insufficient to pass the threshold for a DOJ indictment. Both experts also state that neither the Moldovan Court of Appeals decision, nor its reasoning, should be treated as a reliable basis for U.S. institutions to reach conclusions about Shor and his conduct.

Key extracts from their reports:

• Critical portions of the Court of Appeals’ decision relied on incompetent witnesses, who provided mere hearsay, in the form of un-confrontable and uncross-examinable evidence and testimony – it fails to live up to the fundamental principles that ensure reliability according to US justice system principles.
• There were material irregularities in the investigation of Shor by the Moldovan government. Moldovan authorities failed to take certain very basic—almost common sense—steps to test the validity and strength of key evidence that was submitted to the court, including information provided by a third-party private advisory firm which conducted evaluation specifically for internal review purposes and the exculpatory nature of the defendant’s voluntary statements.
• Hoke stated that based on his experience, the irregularities he had explained in this report create a strong suspicion that the investigation was done with a centrally operated and pre-scripted narrative with a goal of convicting a specified target.
• Key witness Dohotaru’s “evidence” was not competent and was not meaningfully subject to Shor’s confrontation or cross-examination. Dohotaru was—by his own admission—an official of the National Bank of Moldova who had “no personal knowledge of Banca de Economii or Banca Sociala’s transactions.” And that “Instead of personal knowledge, Dohotaru offered his opinions and surmises, often based on many unidentified underlying levels of hearsay”.
• Reference to the Kroll reports in the court judgments strongly indicates that the authorities took the Kroll reports at face value. Weddle said that he does not recall a single case over the course of my career in which Kroll’s findings were read into evidence without any kind of independent analysis/vetting by the authorities. The reason is obvious—Kroll is not the investigative authority itself and taking its findings at face value would effectively mean that they are doing the investigation on behalf of the authorities. “This is simply unacceptable,” Weddle stated.

WATCH: Justin Weddle, former Assistant United States Attorney in the Southern District of New York and at the US Department of Justice, talks about the legal case against Shor