In Romania, 24 board directors of the company MediaPro Pictures have been taken into custody under the suspicion of money laundering. They are believed to have masked profits to avoid paying as much profit tax as they actually owed. The local government has taken matters into its own hands because of how much that large amount of money affects local budgeting.
Prosecutors claim that between 2009 -2014, four managers issued invoices to pay other companies for services. Those payments were made to several “dummy companies” that were allegedly set up for this purpose. When the tax officials attempted to trace where that money went, they found that these companies were not real and that the money was never sent.
They believe that part of the unaccounted for money was invoiced to these fake companies as bonuses for services provided by the companies. Other large sums of money were paid to the companies, with fictitious receipts drafted as proof. Prosecutors are quick to point out that all of this money never left MediaPro’s bank account. Instead, it was all used to pay employee salaries’.
The total amount of money believed to be laundered is somewhere around RON 15 million. In US dollars, that is just over $3.7 Million. That much money can make a huge dent in what Romania can and cannot budget each year.
What makes this interesting is that the majority shareholder of MediaPro pictures is Ronald Lauder, the heir to the Estee Lauder cosmetics fortune. Ronald left the company in 2014, right when the money laundering is believed to have stopped, but still remains the majority shareholder of the organization. While his former staff got arrested, no one has questioned Mr Lauder on whether or not he had anything to do with it.
According to public records, Ron Lauder withdrew tens of millions of dollars from MediaPro pictures before he parted ways in 2014. This caused outrage among the Romanian media, which outraged the public.
MediaPro Pictures is the largest production company, of both TV and film, in the country of Romania. They have produced a string of successful movies in the past, but more importantly, they control the local news companies. This has allowed them to keep this story mostly under wraps for the time being.
Some of those who were arrested have been released, but the main culprits are still being held for questioning. No one can be positive of what will be the outcome of these alligations, but we can be sure that the government will set an example in this case. If they do not, they risk looking week and being taken advantage of other companies looking to do the same thing.