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Financial Mirror (Cyprus) - - FRONT PAGE -

The for­mer head of the cen­tral bank was handed a five month prison sen­tence on Mon­day for his in­volve­ment in a case of tax eva­sion over a mil­lion-euro deal dur­ing the fi­nal days of his term in of­fice.

Christodou­los Christodoulou, who has also served as Fi­nance and In­te­rior min­is­ters in pre­vi­ous ad­min­is­tra­tions, pleaded guilty last month to six charges of tax of­fences after the state pros­e­cuted him over the trans­fer of EUR 1 mln to the company man­aged by his daugh­ter in 2007, just a few months after his term as gov­er­nor ex­pired.

The Court also or­dered the fam­ily company (A.C Christodoulou Con­sul­tants Ltd) to pay a fine of EUR 13,500.

In­vited to com­ment on the court decision, gov­ern­ment spokesman Ni­cos Christodoulides said that in gen­eral, so­ci­ety wants ‘cathar­sis’ over the eco­nomic scan­dal. He added that the peo­ple have sac­ri­ficed a lot and this re­flects to the re­cent stress tests re­sults. He added that the peo­ple have been pa­tient and want all those who are re­spon­si­ble for the eco­nomic cri­sis to be pun­ished.

Christodoulou first ap­peared in court in May and faced eleven charges of tax fraud, con­spir­acy and forgery in a trial that be­gan in June.

Christodoulou, his daugh­ter Athina, her es­tranged hus­band and for­mer Laiki Bank ex­ec­u­tive An­dreas Ki­zourides and AC Christodoulou Con­sul­tants were al­leged to have re­ceived an amount of EUR 1 mln from Fo­cus Mar­itime Cor­po­ra­tion in Greece and not de­clared it in their ac­counts be­tween 2007 and 2009, while tax­able div­i­dends re­ported were nearly a tenth of the ac­tual amount, ac­cord­ing to state pros­e­cu­tor An­dreas Aris­tei­des.

The Nicosia Dis­trict court had also asked the Greek au­thor­i­ties to in­ves­ti­gate the rea­sons for the money trans­fer and if there had been any trade-off re­lated to the deal.

One of the charges also sug­gests that the amount was trans­ferred to Athina Christodoulou’s ac­count less than two months after her fa­ther left the cen­tral bank.

Press re­ports al­leged at the time that the real ben­e­fi­ciary be­hind the Fo­cus deal was for­mer Laiki boss An­dreas Vgenopou­los whose Marfin In­vest­ment Group had been named in sev­eral in­quiries prob­ing the col­lapse of the is­land’s bank­ing sys­tem due to un­prece­dented lend­ing with lit­tle or no se­cu­rity to business as­so­ciates.

Vgenopou­los re­futed the al­le­ga­tions and chal­lenged Fo­cus Mar­itime ex­ec­u­tives to come for­ward and clear his name.

Fo­cus Mar­itime was also men­tioned as be­ing a ma­jor donor to the is­land’s two lead­ing par­ties – the Demo­cratic Rally (DISY) af­fil­i­ated to the Euro­pean Popular Party, and the com­mu­nist AKEL, af­fil­i­ated to the NGL-United Left al­liance within the Euro­pean Par­lia­ment.

Rul­ing DISY was re­ported to have re­ceived EUR 500,000 and AKEL EUR 1.5 mln, em­bar­rass­ing both par­ties and de­stroy­ing the cred­i­bil­ity of their lead­ers who had been vy­ing to win the six seats al­lo­cated to Cyprus.

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