Bosnia Arrests Ten People For Banking Scam

Bosnia's State Investigation and Protection Agency, SIPA, has arrested 10 people in relation to a scam in which a now-defunct bank in Bosnia's mainly Serbian entity issued nearly 123 million KM - 63 million euros - in fraudulent loans and guarantees.

The State Prosecutor said their actions "caused damage to the banking system and the financial status of the Bosnia and Herzegovina".

Kristina Jozic, spokesperson of SIPA, confirmed that 10 persons were arrested but said she could not disclose their identities as the operation was still ongoing.

However, media reports said the arrested included key officials in Republika Srpska, starting with the director of the Agency for Banking of the Republika Srpska, Slavica Injac, and the director of the Investment and Development Bank of the Republika Srpska, Snezana Vujinic.

This information has still not been confirmed.

The prosecutor's office on Thursday said the ten were members of a criminal enterprise responsible for reckless lending and the illegal issue of guarantees to companies founded by the owner of Bobar Bank and other legal entities related to the bank.

They are suspected of the offence of organized crime in conjunction with abuse of position and authority in relation to the economy, money laundering, falsification or destruction of official documents, failure to report preparation of a criminal offence and falsification or destruction of business or trade books or documents.

The suspects allegedly committed several irregularities in the operations of Bobar Bank, primarily in granting multi-million loans and illegal guarantees for various activities, in violation of the procedures and guarantees stipulated by the Law on Banks of Republika Srpska. ...