Joseph Abdo Fegaly – Miniu Staykov’s Lebanese business partner in a scheme of EU funds misuse (Why do institutions allow it?)

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Miniu Staykov’s Lebanese business partner drains money from EU funds

Joseph Abdo Fegaly, the mysterious Lebanese business partner of Miniu Staykov, is involved in a scheme regarding misuse of EU funds which seems to have been covered up and ignored by corrupt clerks working in the official investigative institutions. Despite the loud accusations against the boss of alcohol. Fegaly’s company that he uses for draining EU funds is named “Agrocommerce – Joseph Fegaly”. The blog Samoistinata.bg performs its own investigation to reveal the facts stated above. We use the results from it in the next lines: https://samoistinata.bg/2020/04/23/%D0%B4%D1%84%D0%B7-%D0%B8-%D0%BF%D1%80%D0%BE%D0%BA%D1%83%D1%80%D0%B0%D1%82%D1%83%D1%80%D0%B0%D1%82%D0%B0-%D0%BA%D1%80%D0%B8%D1%8F%D1%82-%D0%B7%D0%BB%D0%BE%D1%83%D0%BF%D0%BE%D1%82%D1%80%D0%B5%D0%B1/

The Lebanese connection in the summer riots

Before we reveal how and why the surrounded by mystery figure of the Lebanese businessman still remains invisible to the Bulgarian jurisdiction, we must remind that Fegaly is among the main sponsors of the previous year riots against the government and that he keeps a warm connection with the fugitives from justice Tsvetan Vassilev and Vassil Bojkov.

PIK Agency revealed a secret meeting that happened in the middle of July 2020 that was held by Tsvetan Vassilev’s lawyer – Kosio Simeonov and the Lebanese Joseph Fegaly. According to the conversation witnesses, the meeting was about intensification of the paid protests in the center of Sofia. PIK published pictures that had been sent to the editorial mail.

The meeting is another proof of the organization, guided by Vassil Bojkov which purpose is the overthrow of the governing power. This was supposed to happen through occupation of the protests and splitting blood after provocations against the law enforcement, stated the Agency, claiming that the meeting between the BG Madoff’s lawyer and Joseph Fegaly could explain Georgi Georgiev’s role in the protests. He is from the non-governmental organization “Fighter” that is closely related to Vassilev. The organization “Fighter”, financed by BG Madoff took part in the fourth day of the protests, as if under command.

“Karnobat” empire

So that Fegaly’s deeds in Bulgaria are perfectly clear let us get back to the main subject of the investigation. In the beginning of May last year a second accusation was raised against Miniu Staykov. It is for criminal association with main commercial activity misuse of EU funds that is a criminal offense under 248a of the Criminal Code. He and 7 other people should be held responsible for draining European funds from the RDP.

In July 2019 the Specialized prosecutor’s office raised accusations against six more employees of State Fund Agriculture – heads of head offices. One of them was the Deputy Executive Director. According to the prosecutor’s office their guilty is in the fact that they have given money to companies, connected to Miniu Staykov. This happened as a part of the program “Young farmer” and also of the program for conversion of vineyards, part of the Rural Development Program – RDP.

Documents prove that there are a couple of companies in the “Karnobat empire”, connected to Miniu Staykov, whose owners have been accused by the law. But there are others that have not been investigated because bribed clerks from State Fund Agriculture have covered up the crime evidences. One of them is the Lebanese Joseph Abdo Fegaly who as we already have stated, is a minority business partner of Miniu Staykov in his main business activity – alcohol production.

State Fund Agriculture investigation reveals the companies connected to the Lebanese

In 2017 internal inspection of State Fund Agriculture revealed coherency between a group of sole traders that apply for EU funds always in the same time:

  • ST “YANA STAYKOVA – COMMERCE” (Miniu Staykov’s daughter) – applies for 1 725 260,40 лв (projects)
  • “GROZD – NASYA NYAGOLOVA – 1” SPLTD applies for 1 883 169,38 BGN (projects)
  • ST “AGROCOMMERCE – JOSEPH FEGALY” (Staikov’s business partner) applies for 1 951 707,31 BGN (projects)
  • ST “RENY STAYKOVA – COMMERCE” (Staykov’s relative) applies for 1 791 701,89 BGN (projects)
  • ST “STEPHAN GORINOV – COMMERCE” applies for 1 808 894,29 BGN (projects)
  • ST “DESISLAVA PESHEVA – COMMERCE” (owned by Desislava Nikolova, head manager of Vinprom Karnobat and Staykov’s business partner) applies for 1 327 208,46 BGN (projects)
  • ST “GROZD – BELUN HAZARBASANOV” (Staykov’s employee) applies for 1 722 697,96 BGN (projects)
  • ST “TOPAZ – DIMITAR BALDZHIEV” (Staykov’s business partner) applies for 1 420 230,78 BGN (projects)
  • ST “ZLATEN GROZD – GEORGI YORDANOV” (related party) applies for 1 641 621,22 BGN (no available projects data)
  • ST “MINIU STAYKOV – COMMERCE” belongs to Staykov himself, applies for 1 828 934,62 BGN (projects)

The overall sum is more than 17 million BGN.

State Fund Agency employees who worked on the applications of these companies have found out that there are indicators for potential existence of artificially created conditions in connection with Art. 2, an. 36, an. 37 of Regulation (EU) 1303/2013 and Art. 60 of Regulation (EU) № 1306/2013, namely, the companies stated above have declared that they are independent enterprises, but they are not.

Throughout references in the Commercial Register and the Registry Agency it has been found that most of the people behind the companies are business partners in “Vinitera Karnobat”. Besides the applications for money support are for neighboring parcels, and all companies use one and the same consultant.

The investment intentions of some of the companies, applying for grants, are similar and are located in neighboring properties in the lands of the village of Venets and the town of Karnobat, Karnobat municipality, Burgas district.

The applications for grants, including costs for the establishment of permanent crops, are accompanied by lease / sublease agreements in which the lessor is one of the companies listed above, which raises doubts about the artificial division of farms and investment in the projects. Identical contractors for the costs of consulting services related to project preparation and management, as well as identical contractors have been identified. The very same applies for the costs of the construction work and the creation of perennials. Some of the candidates have one and the same business seat and address as well as phone number.

It is also clear from the inspection report that we have that all these companies use a common accounting firm. Additional researches that we performed in the Commercial Register fully confirm the conclusion made by SFA checks as there are also family relationship between the applicants which have not been investigated. All of the companies share one and the same phone number – 02 962 20 30. Indeed, there are 32 companies with this phone number that have completely different address registrations, owners and subjects of activity. However, all of them are connected to people and businesses around Sys Industries, Vinprom Karnobat and Miniu Staykov. ST “Agrocommerce – Joseph Fegaly” has stated the very same contact number. The connection between the companies is easily revealed throughout the common addresses and phone numbers. Source: Daxy

The creation of „artificial financing conditions“ is considered a fraud with EU funding throughout the EU, according to OLAF standards. It is usually used to circumvent the restrictions on receiving aid from the same enterprise within a programming period. The simple explanation is that owners resort to fraud to create artificial micro-enterprises, which are used only as a platform to apply for additional EU subsidies. This ways owners circumvent the restrictions imposed to the applicants for getting funds and therefore a prerequisite for illegal receipt of funds outside the regulatory norms is created. These „micro-enterprises“ are usually created in the name of fictitious persons, who with the so-called „Return letters“ or „counter letter“ declare that the actual beneficiary is in fact another person standing in the shadows. No matter the case such a practice is criminal in its nature and is prosecuted as an abuse of public (in this case European) funds.

We must point out that this is not the first time Joseph Fegaly applies for EU funds using the company mentioned. During the previous program period he received funding under the RDP with the project “purchase of agricultural machinery” respectively BGN 376,793 for the purchase of a grape harvester and a total of BGN 941,983 was allocated to him for the purchase of agricultural machinery. Our investigation found out that eight of the tenth companies listed in the abuse report of SFA had applied and received funding during the previous program period in 2007-2013. This scheme however was not seen by the investigative bodies. It is still not too late for checks to be made and an investigation to be started. Thus, it becomes clear that in both the previous and the current programming period, the companies around Joseph Fegali and Minyu Staykov are doing the same thing – splitting the activities into several separate companies to get more money, bypassing the restrictions. At their expense, many decent farmers do not receive anything because there is not enough funding for them. Money went to the “big fishes” in the game, that are specialist in such frauds.

All the findings of the SFA inspectors were reported to the Anti-Fraud Directorate in the SFA, but the officials who were handcuffed in the summer of 2019 on charges of complicity came out with the opinion that… there are no indicators of company connectivity because they had separate accounting and were not created specifically for these projects. The explanation of the manager of the accounting firm, which serves all the above candidates, sounds true, realistic and logical.

In this case, during the inspection of the PI Directorate, it cannot be definitively determined that there are suspicions of fraud, because there are no intentional acts on the part of the managers and representatives of the candidates when applying to the Fund, leading to a certain criminal result. And for which it is necessary to initiate an inspection under the PPC by a competent body.

I.e. in this case and by this moment there is not enough data, facts or circumstances available to raise suspicions for a crime committed according to the Penal Code – that is what the accused in corruption and fired officials from the Directorate in an opinion on the case have written down. Thus, the declarations of all these companies that they have nothing in common with each other are accepted as pure coin, and not as declarations with false content, which commit criminal liability and should have been reported to the Prosecutor’s Office.

However, there are also conscientious employees in the SFA who refuse to legalize the obvious fraud of the Lebanese. Those who voted “Against” express the position that the described cases under items 2 and 3 are absolutely identified with the classic cases of fraud and irregularities, described in the officially published guidelines of the EC. The four members of the working group who voted against crushing the inspection presented their arguments.

This is the answer they received of the following question: “How many are the overall projects connected with Miniu Staykov that have been approved and have received funding from SFA”:

According to the RDP 2014-2020 under sub-measure 4.1. a total of 5 / five / projects (ST „Milena Pileva Ecoforest“, ST „Agrokrasi Krassimir Yoranov“, ST „Agrika Kamelia Dimitrova“, ST „Alex Ananiev“, ST „Selda Ananieva“) are related to Minyu Staykov through the so-called. „Return letters“. They have been approved by the State Fund for Agriculture, but have not been financed, as the grant agreements were terminated in August and September 2019.

Among these 5 projects in none of them has been requested, respectively costs for consulting services and / or preparation of a business plan have not been approved. The state prosecution have talked about the “return letters” in a media statement:

“As it is well known the amount of money is not at all small. By the moment we have found out 7 million. Hence to participate in return letters stating that the amounts acquired by them will be handed over to Staykov.”

The answer of another question: “How many are the projects connected to Yana Mineva Staykova and Reny Michaylova Staykova?” listed most of the companies that had been a subject of the check in 2017. But without the ones owned by Miniu Staykov and Joseph Fegaly:

The projects, connected to the persons pointed by you are ten. They have applied under the RDP 2014-2020 with the following companies:

  • “Sys Industries” Ltd BULSTAT Unified Identification Code (UIC) 040275584 project approved under sub-measure 4.1., but not funded, as the contract was terminated in August 2019. The consultant that prepared the business plan was “Dim – Aba” Ltd.
  • ST “Stephan Gorinov Commerce” UIC 131055686 project approved under sub-measure 4.1., but not funded, as the contract was terminated in August 2019. The consultant that prepared the business plan was “Vin. S. INDUSTRIES” Ltd
  • “Topaz Mel” Ltd UIC 121772636 project approved under sub-measure 4.2., but not funded, as the contract was terminated in February 2017. The consultant that prepared the business plan was “Dim – Aba” Ltd.
  • ST “Topaz – Dimitar Baldzhiev” UIC 131303263 project approved under sub-measure 4.1., but not funded, as the contract was terminated in August 2019. The consultant that prepared the business plan was “Vin. S. INDUSTRIES” Ltd
  • ST “Reny Staykova – Commerce” UIC 131055711 project approved under sub-measure 4.1., but not funded, as the contract was terminated in August 2019. The consultant that prepared the business plan was “Dim – Aba” Ltd.
  • ST “Grozd – Belun Hazarbasanov” UIC 131254695 project approved under sub-measure 4.1., but not funded, as the contract was terminated in November 2019. The consultant that prepared the business plan was “Sanlivite Lozya” Spltd.
  • ST “Grozd – Belun Hazarbasanov” UIC 131254695 project denied in July 2017 under sub-measure 4.1. The consultant that prepared the business plan was “Dim – Aba” Ltd
  • ”Topaz Trade” Spltd UIC 202912262 project approved under sub-measure 4.2. but not funded, as the contract was terminated in January 2017. The consultant that prepared the business plan was “Dim – Aba” Ltd.
  • ST “Yana Staykova – Commerce” UIC 102957256 project approved under sub-measure 4.2. but not funded, as the contract was terminated in January 2017. The consultant that prepared the business plan was “Dim – Aba” Ltd.
  • “Vin. S. Industries” Ltd UIC 831280490 project applied in year 2015 under sub-measure 4.2. The project was not considered on the merits due to the low number of points received in the preliminary ranking, which means that it did not receive both approval and funding. That is the reason why, it does not appear in the available database with all the attributes, including information about its consultant.

It has become clear that to this day no one in the country has seen any connections between Miniu Staykov and Joseph Fegaly despite the obvious evidences of a crime that were detected, discussed and debated in the working group in 2017. It seems quite inexplicable how the person Joseph Fegaly, who plays a fundamental role in the business net of Staykov suddenly has dropped out from the group of persons accused by the prosecution?!

 

 

 

 

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