The Massive Property Scam. Romania overpaid 356 million euros compensation for property seized by the communists

Foto: INQUAM/Liviu Florin Albei

Romania’s property restitution agency paid 356 million euros too much for 190 properties which were overvalued in a variety of corruption schemes from 2007 to 2011, G4Media.ro reported Wednesday.

The head of the National Authority for Property Restitution told the site that from 2009 to 2013, the Romanian Court of Accounts, where ex-Prime Minister Nicolae Vacaroiu was director, asked for the buildings to be re-evaluated resulting in higher compensation for  former owners and others.

The process was plagued by corruption after former owners, who were impatient with the process or didn’t have political connections, sold their property rights cheaply to unscrupulous businessmen who cut deals with corrupt officials to get more money for them and then sold them for high prices during a property boom.

A number of real estate crooks and public officials were prosecuted.

 The current head of the agency, George Baesu, said in 2017 he then checked on “compliance with international evaluation standards in the case of 1,079 evaluation reports,” made from 2009 to 2011

As a result, 819 of the valuation reports were declared non-compliant. In 190 cases, the overvaluation was worth 1.72 trillion lei (356 million euros), Mr. Baesu said.

However, total overpayments are likely to be even higher as the agency is still waiting for the  reevaluation reports for another 569 properties.

G4media.ro reported that in one case, a 20.5 hectare plot of land just outside Bucharest was overvalued by 60 million euros by expert evaluator Alexandru-Florin Hanu, according to Romania’s National Anti-Corruption Directorate, and the High Court of Cassation and Justice.

The beneficiary was businessman Valentin Visoiu from the southern city of Pitesti who received over 100 million euros for the land in 2008.

In October 2019, a former justice ministry official, the former deputy director of the property agency were sentenced to eight years in prisons and the evaluator was handed a three-year sentence for the fraud.

The communists confiscated land and real estate when they came to power after World War II until the overthrow of communism in 1989.

The National Authority for Property Restitution was established in 2005 as Romania prepared to join the European Union.

It drew up a legal framework to enable the former owners and their descendants to receive compensation for properties that had been seized.

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