SOFIA, Bulgaria — The Sofia City Court has granted permission for the issuance of a European Arrest Warrant (EAW) against Stoyan Mavrodiev, the former executive director of the Bulgarian Development Bank (BDB), following allegations of large-scale embezzlement.
The decision, made on November 25, 2024, at the request of the Sofia Prosecution Office, marks a pivotal development in an extensive investigation that has captured public and political attention.
Mavrodiev, who has been under investigation since October 2022, is accused of authorizing an unsecured loan of 150 million leva (approximately €76.7 million) to Roadway Construction, a company linked to controversial businessman Rumen Gaytanski, commonly known as “The Wolf.”
Gaytanski, the alleged instigator in the case, and Ivan Georgiev, a representative of the company, are named as co-defendants.
Details of the Charges
The charges against Mavrodiev are rooted in his role in approving the 2019 loan, which the BDB has been largely unable to recover. Of the 150 million leva loaned, only 5 million leva has been recovered, according to Tsanko Arabadzhiev, the current executive director of the BDB.
The loan raised significant concerns over potential financial mismanagement within the state-owned bank, which was established to support small and medium-sized enterprises.
According to investigators, the funds were issued without adequate collateral and were funneled into a company with alleged ties to Gaytanski. The Sofia Prosecution Office has accused Gaytanski of orchestrating the scheme and Georgiev of facilitating it.
The Court’s Decision
The Sofia City Court emphasized the severity of the allegations, stating that the crime Mavrodiev is accused of carries a substantial prison sentence.
Furthermore, the court expressed concerns about the potential for Mavrodiev to abscond or commit additional offenses, should he remain free. These considerations played a critical role in the court’s decision to approve the European Arrest Warrant.
Although Mavrodiev’s legal representative argued against the issuance of the warrant, citing insufficient evidence and concerns about procedural fairness, the court dismissed these objections. However, the decision is not final and may be appealed by Mavrodiev’s defense.
A Fugitive Since August
Mavrodiev, who was declared a national fugitive in August 2024, has remained elusive despite intensified efforts by Bulgarian authorities to locate him.
The case for issuing the European Arrest Warrant was first presented to the Sofia City Court in early November, with the prosecution arguing that cross-border legal measures were necessary to apprehend Mavrodiev.
The warrant aims to facilitate his detention and extradition from any European Union member state. Authorities believe he may have fled the country to avoid prosecution, adding urgency to the issuance of the EAW.
Roadway Construction and Gaytanski’s Involvement
The involvement of Rumen Gaytanski, a prominent and controversial figure in Bulgaria’s business landscape, has added another layer of intrigue to the case. Known as “The Wolf,” Gaytanski has a history of legal battles and accusations of financial misconduct.
Gaytanski was arrested earlier in the investigation but was later released on bail, reportedly due to health complications.
While Gaytanski maintains his innocence, prosecutors allege that he orchestrated the embezzlement scheme by leveraging his connections to secure the massive loan from the BDB without the necessary safeguards.
Ivan Georgiev, who served as a representative for Roadway Construction, faces charges of complicity in the alleged scheme. Both Gaytanski and Georgiev remain under judicial scrutiny, and their trials are expected to commence in 2025.
Background of the Investigation
The investigation into the loan began after the Bulgarian Anti-Corruption Commission flagged irregularities in October 2022. The alert triggered a detailed probe into the BDB’s operations, uncovering evidence of potential malfeasance under Mavrodiev’s tenure.
By 2021, the BDB had already raised concerns with Bulgarian authorities about the questionable loan. However, significant progress in the investigation was only made following the Anti-Corruption Commission’s intervention.
Arabadjiev, who succeeded Mavrodiev as the bank’s executive director, has been vocal about the need for accountability, describing the recovery of only 5 million leva from the loan as a “monumental failure.”
Political and Public Reactions
The case has sparked widespread outrage in Bulgaria, with critics pointing to systemic issues within the country’s financial institutions and governance structures.
Opposition parties have accused the ruling government of failing to adequately oversee state-owned entities, while civil society organizations have called for sweeping reforms to prevent similar incidents in the future.
The controversy has also reignited debates over the role and purpose of the BDB, which was originally established to provide targeted financial support to smaller businesses. Observers argue that the embezzlement case highlights a misuse of the bank’s resources for the benefit of politically connected elites.
Potential Consequences for Mavrodiev
If extradited and found guilty, Mavrodiev could face a lengthy prison sentence. Legal experts note that the charges of large-scale embezzlement and abuse of office carry significant penalties under Bulgarian law.
The issuance of the European Arrest Warrant represents a critical step in ensuring accountability. However, experts caution that extradition processes can be lengthy and complex, particularly if Mavrodiev contests the warrant in the country where he is apprehended.
Looking Ahead
As the investigation continues, the case against Mavrodiev, Gaytanski, and Georgiev will likely remain a focal point of public and political discourse in Bulgaria.
The Sofia Prosecution Office has pledged to pursue the case vigorously, citing its importance in restoring public trust in state institutions.
Meanwhile, the BDB’s efforts to recover the remaining loaned funds are ongoing. Arabadzhiev has indicated that the bank will explore all available legal avenues to recoup the losses, including pursuing civil litigation against those involved in the alleged scheme.
The broader implications of the case extend beyond the immediate legal proceedings. Analysts warn that Bulgaria must address systemic weaknesses in its anti-corruption framework to prevent similar incidents in the future.
Conclusion
The Sofia City Court’s decision to approve a European Arrest Warrant for Stoyan Mavrodiev underscores the gravity of the allegations against the former BDB executive.
As the legal proceedings unfold, the case serves as a stark reminder of the need for robust oversight and accountability in Bulgaria’s financial and governance systems.
For many, the case represents not only a test of Bulgaria’s legal system but also an opportunity to reaffirm its commitment to combating corruption and restoring faith in its public institutions.