Greek prosecutor charges banker with fraud

ATHENS Wed Mar 21, 2012 7:07pm GMT

Greek businessman Lavrentis Lavrentiadis addresses the congress of the Greek-American Chamber of Commerce in Athens December 1, 2009. Picture taken December 1, 2009. REUTERS/ICON/Elias Anagnostopoulos

Greek businessman Lavrentis Lavrentiadis addresses the congress of the Greek-American Chamber of Commerce in Athens December 1, 2009. Picture taken December 1, 2009.

Credit: Reuters/ICON/Elias Anagnostopoulos

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ATHENS (Reuters) - A Greek prosecutor filed felony charges against prominent Greek banker Lavrentis Lavrentiadis over a financial scandal that has led to the demise of small lender Proton Bank, court officials said on Wednesday.

Lavrentiadis, a high-flying businessman who started from the chemicals industry to rapidly expand into banking and media, has vehemently denied any wrongdoing in what is seen as one of Greece's biggest financial scandals in years.

Economic crimes prosecutor Grigoris Peponis formally charged Lavrentiadis, 39, with being part of a criminal gang that embezzled Proton funds and defrauded the government, a court official said on condition of anonymity.

If convicted, he could face life in prison. Another 27 suspected associates, including Proton executives, face convictions adding up to life imprisonment.

"A second prosecutor has banned Lavrentiadis and another five accused from leaving the country," the court official added.

The charges are related to accusations that Proton issued more than 600 million euros of bad loans to companies he owned or had connections with, as reported by Greece's central bank in an audit last year.

Proton's management also "developed continuous, intense and to a great extent criminal activity which led to the deception of depositors," using "unusually high interest as a bait" to draw savers in, the audit said.

"I deny all charges attributed to me," Lavrentiadis said in a statement. "I will prove the extent of the conspiracy that was hatched against a Greek businessman who believes in Greece and believes in God," he added.

The Bank of Greece activated in October an EU/IMF-sponsored rescue fund to save Proton, effectively nationalising the lender.

Proton was the first bank to fall under the Financial Stability Fund (FSF), a safety net set up by Greece and its international lenders for banks that need to recapitalise as a result of the country's debt crisis.

Prosecutor Peponis also ordered an investigation into possible criminal responsibility on the part of regulating and supervising authorities, the court official said.

Proton's lending spree peaked as most Greek banks stopped credit to firms and households in a desperate attempt to save cash amid the country's debt crisis, which shook the euro.

(Reporting by Harry Papachristou; Editing by Mark Heinrich)

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