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Madagascar Beach Resort Built with Black Money from Romania

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C’est terrible ou horrible ! Les médias nous livrent ces derniers temps des infos qui font froid dans le dos. “Honoris causa bidon”, “ faux permis de conduire biométrique” “faux conseiller du président”… et aussi des “suspicions sur les vaccins” et et etc. Et voici une autre information. Merci pour l’autorisation de publier.

Madagascar Beach Resort Built with Black Money from Romania

Madagascar Beach Resort Built with Black Money from Romania

Facing accusations of corruption, a former Romanian mayor left the country just before New Year’s, taking refuge in Madagascar.

An arrest warrant in his name was issued on January 10 after Radu Mazăre failed to show up for a probation hearing. Mazăre has informed the police that he was in Madagascar, where he intends to stay and request political asylum.

What led the flamboyant former mayor of Constanța, an ancient seaport, to a distant tropical island?

As it turns out, Mazăre has a stake in a kitesurfing resort on Madagascar -- into which, anti-corruption prosecutors say, he has invested bribe money from a different, earlier corruption case.

Reporters for the RISE Project, an OCCRP partner, traced funds that came out of an alleged €175,000 bribe the mayor had received along with his brother to the four-star Mantasaly Resort.

According to court documents, the bribe was meant to snag a contract to build low-income housing for Shapir Structures SRL, a subsidiary of Israeli construction giant Shapir Engineering and Industry Ltd.

“(T)he representative of Shapir wanted to make sure he would win the tender for the project,” the court document says. “As a consequence, the amounts representing the bribe ... were transferred to an offshore company controlled by [an intermediary].”

The money ended up in the Israeli bank accounts of the former mayor and his brother Alexandru (who also left Romania for Madagascar over the holidays).


The bribe appears to have done its job. Shapir got the €10 million contract. The housing project, called the Henri Coandă Social Campus, was built in the city’s northwest.

The “representative of Shapir” mentioned in the court document is Avraham Morgenstern, the former head of Shapir Structures. Morgenstern was convicted of tax evasion in January 2017, but left the country before the final decision was handed down in August. He was arrested in Argentina on December 13, and extradition procedures are ongoing.

The “intermediary” in the deal was Emilian “Elan” Schwartzenberg, a Romanian-Israeli millionaire who has a history of doing business with the Mazăre brothers.

Schwartzenberg, who lives in Israel, describes what happened as business among friends. Mazăre did not respond to questions forwarded by RISE reporters, saying he had nothing to add to the statements made in court.

How a municipal scandal in Romania played out at an upscale resort on an African island renowned for lemurs and sunny beaches is rooted in events that took place nearly 30 years ago.


Adventures in Post-Soviet Space

In the heady days after the collapse of Communism in the late 1980s, four Romanians left to seek their fortunes elsewhere. Lăcrămioara Toader ended up in Madagascar, where she eventually ran a chocolate factory. She comes into the story later.

The other three were the Mazăre brothers: Radu, the ex-mayor, and twins Alexandru and Mihai.

Schwartzenberg says he made friends with the Mazăres as Romania took its first steps towards a market economy. In a statement to the Romanian Supreme Court, he explained that they “would bring merchandise from Turkey, which I sold in Iași,” his home town in Romania.

Schwartzenberg eventually succeeded as an advertising and media tycoon and started doing bigger deals with the brothers. The arrangement was for him to stay in Romania and cover expenses while the Mazares travelled the world in search of investment opportunities.

“Many years ago, we decided they would propose projects to me and I would finance those that presented hopes for profit. They were going to places of potential interest where I wasn’t going,” he explained in an email to OCCRP.

From Business to Politics

Radu Mazăre entered politics and in 2000 was elected mayor of Constanța, a post he held for 15 years and in which he developed a reputation for outrageousness, hosting elaborate parties, posing for the cover of Romanian Playboy with three naked women. He was also known for dressing up for fashion shows and carnivals as various scandalous historical characters, including a Nazi, an Egyptian Pharaoh, and a Roman emperor.

His brother Alexandru entered politics as well, first as a Constanța city councilor and, in 2004, as a deputy and then senator, also from Constanța. Mihai stuck to tending the family businesses.

The alleged bribery scheme began in 2011, when the city announced what became a €10 million housing plan -- and Shapir wanted in. Prosecutors say Schwartzenberg was the intermediary between Avraham Morgenstern, the company’s head at the time, and then-Mayor Mazăre. They say that the mayor received €95,000 and Alexandru got €80,000; the money ended up in the brothers’ personal bank accounts in Israel.

Schwartzenberg says his links to Shapir go back at least 15 years, which explains why Romanian anti-corruption prosecutors found “transfers from Shapir to me and from me to the brothers.”

“Never mind [that] the amounts and dates don’t coincide, or that my business relationship with Shapir (proven by contracts and bills possessed by the National Anticorruption Directorate) dates back 15 years, mostly in countries outside of Romania,” he said.

The case took time to coalesce. In 2012, Schwartzenberg left Romania for Israel. On April 8, 2014, Radu Mazăre and Morgenstern were charged with bribery. Around the same time, Alexandru was charged with complicity in bribery and making false statements. Two years later, on May 30, 2016, Schwartzenberg was arrested in absentia, accused of facilitating the bribe.

As politicians, the two brothers were required by law to declare their financial assets, but neither had reported the money banked in Israel.

In total, €1.3 million -- including the $175,000 in alleged bribe money -- passed from the accounts of Radu and Alexandru Mazăre to the account of their brother Mihai, who transferred it to a company called Ocean Dunes SARL. That money was used to build the first bungalows at the African resort.

Radu Mazăre told the Supreme Court in a statement that roughly €1 million had accumulated in his Israeli account between 2003-2011, paid by Schwartzenberg both from his private and business accounts.

In an email, Schwartzenberg denied brokering a bribe for Radu Mazăre, telling reporters that “the money is from my personal funds.”

A Hidden Paradise

Mantasaly is a paradise well-hidden even from locals. Private owners enjoy 16 bungalows that are surrounded by lush gardens with a pool, water sports facilities, and a kite-surfing school.

For most of the year, strong winds kiss its Indian Ocean shore at perfect angles for kitesurfing. The resort rests in a forest, surrounded by marshes and ocean.

An OCCRP reporter visited last May. Only one road goes in, but access is also possible by boat or helicopter. Armed guards patrol the perimeter at night to protect the tourists, most of whom are Romanians.

High-profile Malagasy officials, however, are well aware of the investment. The resort was inaugurated in August 2016 in the presence of the Minister of Tourism, Roland Ratsiraka. An October 2016 post on the resort’s Facebook page shows Prime Minister Olivier Mahafaly Solonandrasana, who had “just shown up for a quick visit.”

Local laws ban foreigners from buying land as private persons, but foreign investors can acquire real estate through leases with a maximum, renewable duration of 99 years, as long as the property is solely and continuously used to carry out commercial activity. Radu, then still mayor, and Mihai Mazăre leased the 17,400 square meters for 99 years in a contract starting in April 2012.

Two days after the start of the lease, Radu Mazăre told Romanian media that he had rented the land from a local tribe, which delayed his business, because “they didn’t have documents for the land... They dug out their ancestors’ urns, took measurements, tabulated it, brought everything to legal form.”

However, reporters found that Mazăre’s “tribe” is really land-owner Freeman Manahadray, the son of Lăcrămioara Toader, the woman who left Romania at about the time the Mazăre brothers were starting out in business.

Last February, she was named first-ever Honorary Consul of Romania in Antananarivo, Madagascar’s capital. Authorities must still approve that appointment.

Mihai Mazare founded the company that owns and operates the resort, Ocean Dunes SARL, on Oct. 18, 2012 -- about half a year after the land lease. This is the firm that ultimately got the €1.3 million from Schwartzenberg.

The resort changed hands on May 22, 2013, when Radu and Mihai Mazăre went to a notary public in Schwartzenberg’s new home of Tel Aviv and signed it over to the Belize-registered Casemont Trading SA. This company is fully owned by Schwartzenberg, according to a statement Radu Mazăre made to the Supreme Court.

Belize is one of the world’s most opaque offshores, providing turnkey companies and fake owners for politicians, businessmen and criminals.

Meanwhile, according to notary documents Radu Mazăre brought to court, he was to receive one bungalow for his “direct investment of 95,000 euros” at the end of the project and split 5 percent of the annual turnover with his brother Mihai.

Wanted: Missing Briber

Morgenstern -- the former Shapir head who allegedly paid the bribe -- fled Romania after being sentenced last January to 12 years in prison for evading €10 million in taxes in a case tangentially related to the Constanța housing scandal. The sentence was reduced to eight years in August. On December 13, he was arrested in Buenos Aires.

According to the prosecution of the National Anticorruption Directorate, Shapir defrauded the public budget by filing false tax returns and failing to declare income, including the contract for low-income housing in Constanța.

The €10 million were then transferred through fictitious contracts signed with two Cyprus companies: Larton Consultants and Comrad Leasing Ltd. Larton Consultants was also involved in routing the bribe money to Radu and Alexandru Mazăre, according to court records.

Before reaching the former mayor and his brother Alexandru, the bribe money passed through Melici Management Inc., a firm registered in the British Virgin Islands, another opaque jurisdiction in the Caribbean.

Schwartzenberg, the beneficiary of Melici, said the €175,000 was related to a separate and legitimate business deal.

Melici Management was founded two decades ago in the law offices of Mossack Fonseca, whose business records on setting up offshore companies became the Panama Papers when they were leaked to reporters.

Both the former mayor and the parliamentarian transferred €1.3 million into their brother Mihai’s Israeli account.

All three brothers stated in court that about €235,000-300,000 of the money belonged to Emanuela “Ema” Gavrilă, a businesswoman from Constanța with political ambitions who Alexandru Mazăre dated.

In a phone interview, Alexandru Mazăre told reporters that he had nothing to do with the Madagascar business. “I’m not part of this deal,” he said. “I answered in court and I’m not answering you. That’s all I have to say. I have nothing there and I am not involved.”

But in court, he said the money had been poured into the African business. “In 2011, I went to Israel with Ema Gavrilă to close the account. Both of us were needed for this operation. The account was closed at the request of Emanuela Gavrilă because she wanted to liquidate the account and invest the money in the Madagascar project.”

Gavrilă didn’t declare the money in the assets declaration she filed in 2012 when she ran unsuccessfully for office in a small town near Constanța, and, a few months later, for Parliament. “Had I held a public position, I should have (declared the money),” Gavrilă told RISE reporters.

In exchange for her investment, she received two 105-square-meter bungalows.

A Falling Out Among Friends

Meanwhile, after leasing his island property, Dorin-Freeman Manahadray worked at the resort for four years as a logistics and administrative manager. But a conflict arose in late 2016, leading to his dismissal.

Day-to-day business at the resort is run by another Romanian, Ileana Mihalache. She is also the administrator for the mantasaly.com domain, which she registered in November 2015. Her daughter, Roxana Mihalache, has been Radu Mazăre’s long-standing girlfriend.

Contacted by OCCRP, Roxana Mihalache had only this to say: “I’m going about my own business and what I have to do, and that’s it. Internal issues don’t concern me ... If you are interested and want to book a room, then you can contact me.”

Where They Are Today

Radu Mazăre and his brother Alexandru are now in Madagascar.

In an unrelated case, Radu was convicted last summer of the illegal restitution of property, including valuable seafront property on the Black Sea. He is appealing the verdict. Until the resolution of that case, he is consulting for another tourism business on Egypt’s Red Sea shore. He was hired in August of 2016 by Orascom Hotels and Development, chaired by the Egyptian multi-millionaire Samih Sawiris, to help develop the El Gouna resort.

Last August, an appeals court affirmed Morgenstern’s conviction for tax evasion and reduced his sentence in absentia to eight years in prison. He was arrested in Argentina on December 13 after an operation involving the Romanian police, Interpol, Europol, and US Marshals.

From Israel, Schwartzenberg has complained to the European Court for Human Rights in Strasbourg, accusing the Romanian authorities of having failed to properly subpoena him in Israel and then having issued an order for his arrest in absentia, while the Mazare brothers were prosecuted while free.

In the complaint reviewed by reporters, Schwartzenberg accused the prosecution of refusing to meet with his lawyer, David N. Shimron, Israeli Prime Minister Benjamin Netanyahu’s cousin and personal lawyer. Israeli police held this lawyer in July on allegations of corruption in a $2 billion deal with Germany to buy submarines and naval patrol craft.

This story is part of the Global Anti-Corruption Consortium, a collaborative effort between OCCRP and Transparency International to fight corruption by combining investigative journalism and grassroots activism.



One of the 16 bungalows on the resort. (Photo: Riana Randrianarisoa)



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