Yavor Zlatanov’s interview for ACF confirmed the “Eight Dwarfs” story

On 4 October 2021 and 8 October 2021, the Anti-Corruption Fund (ACF) published the two parts (Part I, Part II) of an interview with Yavor Zlatanov and his wife Emiliya Zlatanova, hosted by Nikolay Staykov and Andrey Yankulov. The interview was requested by Yavor Zlatanov as a right to reply to the statements in ACF’s investigation “The Eight Dwarfs,” published in 2020. The four parts of the “Eight Dwarfs” investigation (Part I, Part II, Part III, Part IV) tell the story of how an alleged criminal network, which exerts undue influence over multiple public institutions and is led by the former head of the Sofia Investigation Service — Petyo Petrov, nicknamed “The Euro” — intervened in the legal dispute between the co-owners of a group of companies for the production of Izamet elevators, Iliya and Yavor Zlatanov. The investigation reveales information about specific instances of exerting undue influence in order to settle legal disputes, of attempts to take over a business with the help of law enforcement institutions, and of unlawful dispositions of high-value material evidence by the Prosecutor’s Office of the Republic of Bulgaria. The facts of the case are analyzed in detail in the publication “The Eight Dwarfs” What was shared by Yavor Zlatanov in his interview? How does his account tie up with the facts already established in last year’s investigation? In this interview, as well as in last year’s investigation, we aimed to keep the focus away from the personal feuds and property disputes within the Zlatanov family, as we do not consider them to be of public importance. We believe that the public should instead turn its attention to the manner of functioning of important institutions when considerable financial interests are at play. In his interview for ACF, Yavor Zlatanov made several statements that clarified the “Eight Dwarfs” story substantially. It is important to note that even though Iliya and Yavor Zlatanov are in conflict regarding the Izamet companies, their accounts of the interference of Petyo Petrov’s alleged criminal network coincide on all key facts. The key facts are: 1) The contacts between Iliya Zlatanov and Petyo Petrov Yavor Zlatanov knew about Iliya Zlatanov’s arrangements with Petyo Petrov and that he pledged a considerable amount of money to Petrov in order to have Yavor arrested and ruined by the relevant public institutions. On 15 July 2019, Iliya Zlatanov indeed indebted himself to Petrov’s wife, Lyubena Petrova, by means of a promissory note for the amount of BGN 2,816,395. Only two days later, on 17 July 2019, the Specialized Prosecutor’s Office (SPO) was already pressing charges, ordering arrests and performing search and seizures — all against Iliya Zlatanov’s opponents, including his son Yavor, his daughter Proletina Zlatanova, his wife Yuliya Zlatanova and other people around them. Yavor was arrested in the early morning of 17 July on charges of heading an organized crime group; he was later placed in custody by the Specialized Criminal Court (SpCC), while Proletina and Yuliya were released on bail. 2) Yavor Zlatanov was pressured while he was in custody and in a poor health condition During his stay in custody, Yavor Zlatanov’s health deteriorated considerably due to a kidney infection that later led to the surgical removal of one of his kidneys, while the other one is only partially functioning. His situation was further aggravated by the fact that his wife Emiliya was left home alone with their newborn daughter and was receiving threats from unidentified persons. While he was in custody, Yavor was told that he would only be released if he transferred his shares in the family business to a person selected by Petyo Petrov. To give a sense of the brutality, with which he was being pressured, Yavor Zlatanov revealed that a doctor at the Sofiamed Hospital told him that he had to be discharged despite his ill health condition, as otherwise he (the doctor) would be arrested. Iliya Zlatanov also shared that in the months following his son’s arrest, Petyo Petrov ceased helping him resolve the conflict surrounding the ownership and management of the family business, and gradually took action to gain control of that business. He recounts that in January 2020, Petrov summoned him in the “Dwarfs” restaurant and told him that he had to transfer all of his assets to him, or he would be thrown in jail. However, due to the worsening of his health condition, Yavor was released on bail. 3) Involvement of the Special Police Forces Following his release from custody, Yavor Zlatanov was still in a critical health condition, but he slowly started recovering and looked for ways to resume the production process at his factory. On 4 February 2020, he visited the factory with a private bailiff in order to recover his raw materials and set up a new production line. However, he was hampered by two vans of the Special Police Forces, and the police officers threated that they would arrest everyone. “The Eight Dwarfs” investigation also presents ample evidence of irregular interference by MoI officials; for instance, the police security at the entrance of the eponymous restaurant — Petyo Petrov’s informal office — as well as the actions of the police in the town of Dupnitsa in 2020 when proxies of Iliya Zlatanov were denied assistance to gain access to the Izamet factory, despite the legal obligation of the police to provide such assistance. 4) Meeting attorney Desislava Kotseva and receiving threats Yavor and Emiliya Zlatanov recounted their meeting in a private club, located at 22 San Stefano St in Sofia, in February 2020, where attorney Desislava Kotseva threatened Zlatanov and instructed him to give up his shares in the family business by 10 March 2020, without offering him anything in return. Yavor recalled the following threats: that his baby would grow up without a father; that her superiors would throw him back in jail and he would never come out; that when he ended up back in detention, he would have to obey them, or he would not be released, even if dying, as he was of more use to them dead. When questioned who “they” were and whether they were commanded by Pepi “The Euro,” attorney Kotseva replied that Mr Petrov was a very powerful figure and that in the next seven years — while Ivan Geshev is Prosecutor General — they would have to do as they are told, or else Yavor Zlatanov would rot in jail. Iliya Zlatanov also highlighted the role of attorney Desislava Kotseva, recalling a meeting with her, Lyubena Petrova and the owner of Delta Guard, Dimitar Spasov (nicknamed “Karate Mitko”), where Zlatanov was told that everything he owned was now theirs, and that he should be happy to be alive. The words were accompanied by the showing of a gun. 5) Blackmailed to pay EUR 350,000 and transfer his shares in Izamet On the morning of 16 March 2020 (Monday), the ultimatum issued by Kotseva expired, and as Yavor Zlatanov had still not fulfilled her demands, he was once again arrested in his home and taken to the Sofia Directorate of Internal Affairs. Since Zlatanov had an appointment for hemodialysis that day, he asked the police officers to release him or take him to the hospital, but they refused, saying that they were waiting for orders from prosecutor Peychinov of the SPO. The clock was ticking and, fearing for his life, Zlatanov called his attorney, Georgi Stefanov, who told him he had to give EUR 350,000 to Pepi “The Euro.” Zlatanov replied that he did not have that much money, but said that his wife had EUR 200,000 that she could give. Emiliya Zlatanova handed over the said amount to Georgi Stefanov, who was to bring it to Petyo Petrov. At the end of the day, Yavor Zlatanov was taken for hemodialysis to the Lozenetz Hospital. After that, doctors in the Medical Institute of the MoI decided he was fit to survive in detention conditions, and he was taken to the detention center, located at Major Vekilski St. On 18 March 2020, he was taken to the Lozenetz Hospital for hemodialysis. While he was connected to the dialysis machine, attorney Georgi Stefanov came into the hospital room and told him, in a peremptory tone, that in order to be released, he had to give another EUR 150,000 to Petyo Petrov, as well as his shares in Izamet; otherwise, he would be sacrificed and would serve as an example for everyone else. Assessing that he would not be able to bear the conditions in the detention center in his health state, Yavor Zlatanov decided to give up his business and savings. On 20 March 2020, he was once again taken to the Lozenetz Hospital for hemodialysis, and when the procedure was over, he was informed that the hospital director had ordered to keep him there a bit longer. After hours of waiting, he was pushed in a wheelchair to a doctor’s office, outside which were gathered officers of the General Directorate for the Execution of Penalties, a person presented as the Chief Officer of the Vekilski detention center, several lawyers and female notary public. Everyone was under the command of Lyubena Petrova. Yavor was made to sign documents for the transfer of his company shares and the Izamet trademark to an unknown person, Kristiyan Hristov, who was not present at the scene. Emiliya Zlatanova recalled that the supposed chief officer of the detention center told her that this was not the first time he saw “people being pressured like this.” This part of Yavor Zlatanov and his wife’s story also corresponds to the account of Iliya Zlatanov and the documents disclosed in “The Eight Dwarfs.” Iliya Zlatanov shared that on 20 March 2020, he was summoned to the “Dwarfs” and was directly told by Petrov that he should sign all the necessary documents to transfer his business, or else his son would not receive treatment and would die, and he himself would go to jail. Iliya Zlatanov was then taken to the Lozenetz Hospital where — in the presence of lawyers, Lyubena Petrova and notary public Ivcheva (who admitted to having been in the hospital, but claimed this was a regular and perfectly legal practice) — he signed, among many other documents, a contract for the transfer of his company shares to the 1996-born 6) Paying the remainder of the requested amount After the transfer of shares was completed, Georgi Stefanov told Yavor Zlatanov that there was one remaining condition for his release: he had to pay EUR 150,000, which was the remainder of the initial amount of EUR 350,000 requested by Petyo Petrov. Emiliya Zlatanova withdrew the money from the company account in Raiffeisenbank (the company accounts were not frozen) and gave it to a designated person waiting in front of the bank on Monday. On Tuesday, after his preventive measure was reviewed by the Specialized Criminal Court of Appeal (SCCA), Yavor Zlatanov was released and placed under house arrest. He states that he later found out from a friend that the group around Petrov took stock of everything they had stolen from him, and that the recorded amount was EUR 150,000, not EUR 350,000; therefore, the remaining EUR 200,000 was stolen by Georgi Stefanov. 7) The SPO disposed of the money and gold seized from Yavor Zlatanov in violation of the law Regarding the material evidence seized from Yavor Zlatanov and his mother at the beginning of the investigation — 38 kg gold, EUR 550,000, and another EUR 17,000 — Yavor claims to have found out from “The Eight Dwarfs” movie clips that the SPO has given the gold to Iliya Zlatanov, and the money to Dimitar Lambovski, who is a former MP of the NMSP party linked to the crime group SIK. Yavor Zlatanov said that he does not know Lambovski and has never seen him. According to Emiliya Zlatanova, the money and gold have never been taken to the National Bank, which is the appropriate legal procedure after confiscation. Yavor Zlatanov and his mother have never been asked to produce documents regarding the origin of the seized valuables, before the latter were handed over to third parties. This part of the testimony also matches the information disclosed in “The Eight Dwarfs” regarding the fate of the material evidence, the only difference being that the Prosecutor’s Office announced the confiscation of 35 kg of gold, not 38 kg. Iliya Zlatanov and Dimitar Lambovski relate how they were made to participate in a conspiracy to appropriate the said valuables. Iliya Zlatanov shares that after he struck a deal with Petyo Petrov and the then head of the SPO, Dimitar “František” Petrov, the SPO received a request, sent on his behalf, to have the gold returned to him, even though it was confiscated from his son and ex-wife. The request was accompanied by purchase invoices showing that Iliya Zlatanov bought the gold in Vienna. However, he claims that he never purchased the valuables and that the invoices are forged. The arrangement was to divide everything in half with Petyo Petrov, but the goldwas instead loaded in Lyubena Petrova’s car at the SPO parking lot, and Iliya never saw it again. Lambovski recounts that an acquaintance of his told him Dimitar “František” Petrov wanted to meet him. He went to the “Eight Dwarfs” restaurant where he met with Petyo Petrov and two figures of the criminal underground. Under pressure that he perceived as a threat, Lambovski agreed to sign an odd document titled “contract for responsible safekeeping of financial assets,” by virtue of which he fictitiously gave Yavor Zlatanov EUR 650,000 to keep for him. Lambovski was told that everything was carried out with the knowledge of the Head of the SPO and the Prosecutor General, Ivan Geshev. Lambovski claims he has never met Yavor Zlatanov, let alone given him money to keep, but believes he was selected to participate in this conspiracy, because he had declared significant incomes in the past years and paid all due taxes. Just like with the invoices mentioned above, the contract was used to prove that Lambovski owned the money seized from another person. Similar to what happened with the gold, Lambovski’s request was approved by the SPO, however only for the amount of EUR 550,000 seized from Yuliya Zlatanova’s safe box. Lambovski also claims that the money was handed over to Lyubena Petrova in front of the SPO building, and he never saw it again. In both cases the requests to the SPO to have the material evidence returned were drafted by the lawyers Magdalena Monchovska (former secretary of Petyo Petrov in the Sofia Investigation Service) and Tsvetelina Tsvetkova (who is in the Board of Directors of Lyubena Petrova’s NGO “Plan B,” famous for supporting the status quo in the judicial system) of the law firm on 2 Pozitano St, fl. 5. Iliya Zlatanov and Dimitar Lambovski both turned to the same law firm, even though they are not connected to one another, and Lambovski is not even involved in the investigative proceedings. In both cases the requests were approved — by means of three separate orders issued between 16 March 2020 and 26 March 2020, two for the gold and one for the money. All the orders were issued by prosecutor Kiril Peychinov (see here and here), who was the SPO’s administrative head and spokesperson at the time. What needs to be ascertained and whose is the responsibility? The testimonies of Yavor and Emiliya Zlatanov complement the questions already posed in “The Eight Dwarfs,” to which the relevant institutions have not responded to date.  In view of the new information in the interview: 1) The Prosecutor’s Office of the Republic of Bulgaria should examine the considerable evidence for committed crimes, focusing above all on the information about the existence of a criminal network for business takeovers and corrupt influence in key public institutions, including the courts, the Prosecutor’s Office, the MoI, and public healthcare facilities, as well as in law and notary offices.  The “coincidence” that the SPO started acting exclusively in favor of Iliya Zlatanov after he indebted himself to Lyubena Petrova for the amount of BGN 3,000,000 (proven with documentation) is now complemented by another “coincidence”: right after Emiliya Zlatanova transferred the amount of EUR 150,000 to a proxy of Petyo Petrov, Yavor Zlatanov was released from custody by the SCCA. The withdrawal of the money can be easily verified, as both the bank and the timing are clear. The fact that the bank accounts of Yavor Zlatanov’s companies were not frozen, given that he was charged with heading an organized crime group for money laundering is at best questionable. It leads to the conclusion that the accused was purposefully allowed to keep control over his accounts, so that he would be able to transfer funds wherever needed. The first part of another ACF investigation, “List of Quick Control: The story of Veselin Denkov and the specialized justice system,” tells the story of how Ivaila Bakalova, the partner of the prominent restaurant owner Veselin Denkov, was asked to pay EUR 100,000 in order to get him released from custody. Denkov was also charged by the SPO with participating in an organized crime group and his preventive measures were also reviewed by the SpCC/SCCA. However, he did not supply the requested amount of money, so it remains unclear whether he would have been “coincidentally” released from custody shortly after. In her interview for ACF, Emiliya Zlatanova recalled a conversation with the supposed chief officer of the detention center at Vekilski, who told her that he had witnessed other cases of pressuring arrested people to give up their property. This testimony should prompt a comprehensive inspection of all investigative proceedings led by the SPO, in which people were placed in custody, and which involved the already identified lawyers or notaries. Moreover, a notary public can only visit a person in custody with the explicit prior approval of the prosecutor in charge of the case — Art. 295, par. 5 of the Rules on the Application of the Execution of Penalties and Detention in Custody Act. This “pressure” that the chief officer spoke of in his conversation with Emiliya Zlatanova has its legal definition — the crime of extortion within the meaning of the Criminal Code, committed multiple times against Yavor Zlatanov, his wife, and his father, Iliya Zlatanov. Extortion means unlawfully coercing a person, by means of violence or threats, to dispose of his/her property against his/her will. In this case, the property in question was money and shares in the Izamet company. The use of law enforcement and judicial authorities by crime groups to extort and take over businesses for private gain is a common occurrence in the post-Soviet world. For more information, see Thomas Firestone, Armed Injustice: Abuse of the Law and Complex Crime in Post-Soviet Russia, 38 Denv. J. Int’l L. & Pol’y 555 (2010). 2) The Prosecutor’s Office should conduct a thorough inspection of the SPO’s dispositions of material evidence of high value The publication ““The Eight Dwarfs” – The facts, a legal analysis, conclusions, and an appeal to the institutions” argued in detail that the manner in which a prosecutor of the SPO had disposed of material evidence with a total value of over BGN 5 million raises concerns about a recurring criminal practice. Back then, ACF appealed for a comprehensive inspection of all dispositions of material evidence of high value by the SPO; however, such an inspection was never carried out or at least not transparently. On the other hand, this year another party investigated and charged by the SPO — the businessman Vasil Bozhkov — revealed that antique objects confiscated from his offices by the SPO appeared on the antique market, from where he bought them again. A detailed inspection is even more necessary now that it has become clear that Yavor Zlatanov and his wife’s accounts about the valuables seized from Yavor and his mother match the testimonies of the other witnesses in “The Eight Dwarfs” investigation. It is inexplicable that the Prosecutor’s Office has not yet established whether Iliya Zlatanov and Dimitar Lambovski’s independent accounts of the gold and money taken by Lyubena Petrova are in fact true, given that the SPO building is full of surveillance cameras. Emiliya Zlatanova’s suspicions that the gold and money were never taken to the National Bank after the confiscation — which is a violation of Art. 110, par. 5 of the Criminal Procedure Code) — but were kept at the SPO (with the only logical aim to be disposed of quietly), are also easy to verify, as there would be documentary evidence if the valuables were kept in the bank. 3) Examining the allegations of “trade in influence” or fraud As regards the money given by Emiliya Zlatanova to different intermediaries, her account contains evidence of the so-called “trade in influence” (accepting a gift in order to influence the decision of an official) or of fraud (misguiding a person that such influence can be exerted), which has to be investigated. The information about threatening doctors to refuse due care and act against the interest of the patient’s health should also be investigated. 4) Investigating the allegations regarding the involvement of the Special Police Forces The Ministry of Interior should verify whether officers of the Special Police Forces took part in the events at the Izamet factory on the date specified by Yavor Zlatanov. Zlatanov’s treatment in the Medical Institute of MoI should also be investigated. 5) Verifying the information about violations committed in healthcare facilities The Ministry of Health should examine the evidence for violations committed in Sofiamed and in the Lozenetz Hospital.

• Examining the behavior of the involved lawyers and notaries

The relevant bar associations and the Notary Chamber should examine the information related to the mentioned lawyers and notary. Yavor and Emiliya Zlatanov’s accounts confirm the statements made in “The Eight Dwarfs” regarding the signing of the documents for the transfer of the Izamet shares in the Lozenetz Hospital. The deal was certified by notary public Ivcheva, given that the buyer Kristiyan Hristov was not present, the seller Yavor Zlatanov was in a wheelchair and in a poor health condition after his hemodialysis, and the entire operation was managed by Lyubena Petrova, who should have no involvement in that transaction. It is unimaginable how all these circumstances did not raise suspicions in the notary about what was truly going on; instead, she certified the deal without hesitation. ACF’s conclusion to “The Eight Dwarfs” was that the one thing that undermines the rule of law in Bulgaria more than the facts of the story is the inadequate reaction (or rather, the lack of any reaction) of the competent public authorities long after the material has been published. We can only hope that the situation will not remain the same now.