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Investigation 01 May 15

Albanian Judges’ Wealth Escapes Scrutiny

The 25 judges of the Tirana Appeals Court collectively own real estate worth more than 5 million euro, in spite of earning only modest salaries - but attempts to query their assets have gone nowhere.

Leonard Bakillari
Gjin Gjoni, a judge in Tirana's Appeals Court was accused of hiding his wealth byt the case was dropped on procedural grounds | Photo by : LSA

A judge in the First Instance Court of Berat, who had only slight oscillations in his wealth over a period of eight years, was caught between a rock and a hard place when he bought a new apartment and investigators found an undeclared bank account.

In April 2012, Albania’s High Inspectorate for the Declaration and Audit of Assets, HIDAA, filed charges against the judge with the prosecution office for failing his asset declaration claim.

However, three months after the charges were filed they were dropped. Prosecutors blamed the inconsistencies in the judge’s wealth declaration on “forgetfulness, misunderstandings and misinterpretations”.

According to the charges filed by HIDAA, the judge bought an apartment for 65,000 euro, which he registered in its asset declaration disclosure as having cost €42,500). When prosecutors quizzed him over the difference, he blamed human error.

The judge was also accused of failing to disclose a bank account registered in his wife’s name that contained €13,400. He claimed he had no idea that his wife had set this amount of money aside.

According to the prosecution’s office file, which BIRN has obtained a copy of, the judge claimed the cash in his wife’s account was a gift from her parents. When prosecutors quizzed the judge’s father-in-law, he claimed the money had come from his earnings in trading coal.

“I made up to 30,000 lek per day from selling coal,” the old man declared. “I gave the money to my daughter because I was afraid of thieves,” he added.

As part of the investigation, prosecutors verified the source of the money that the judge used to buy a 120-square-metre apartment in the seaside town of Durres. The judge declared he had received several transfers through banks and informal channels from his son who had lived in the UK for ten years.

Although the judge’s son had never set foot in Albania between 2005 and 2010, he had allegedly transferred 11,000 pounds and 15,000 euro from England during that time to his girlfriend in Albania.

The problem with this story was that they had allegedly met in a gym in Durres in 2008, when the judge’s son was not in the country. 

The judge also claimed his son had transferred the money in 2010. However, his girlfriend did not open an account in this bank until 2012.

Despite the inconsistencies in the judge’s story, the prosecutors concluded that there was not evidence to send the case to court.

The charge against the judge in the First Instance Court of Berat was one of ten cases filed against judges by HIDAA from 2004 to 2014.  Eight of the ten cases were dropped by the prosecutor’s office, however, while two remain under investigation. 

Surprisingly rich judges:

The judge from Berat is not alone in having inconsistencies in his assets declaration.

BIRN reviewed the assets declarations submitted over the last decade of all 25 judges that sit on the bench of Tirana’s Appeals Court.

The data show that the 25 judges over the last decade disclosed millions of euro in financial transactions over real estate, luxury cars and company shares.

The asset declarations reviewed by BIRN also show that their net wealth grew exponentially from year to year.

However, HIDAA has been able to document legal breaches and has filed charges against only one judge from this court.

An official from HIDAA, who spoke on condition of anonymity, told BIRN that since this institution was set up more than a decade ago, it had never carried out a full review of the asset declarations of all the judges in Albania.

The institution has also had poor results when it comes to convictions. None of the cases filed with the prosecutor’s office over the past decade has ended in a conviction.

Of the 250 declarations of appeal court judges in Tirana that BIRN reviewed, it emerges that they collectively carried out more than 5 million euro in real estate transactions.

Two judges also declared ownership of entire apartment buildings, one located in the city of Vlora and the other in Tirana, while their value has not been disclosed.

The 25 judges have also not disclosed the book value of over 20 apartments, including land under ownership. Real estate transactions are frequent among the Tirana Appeal Court judges. The value of the homes they declared ownership of ranged from 14,000 euro to 200,000 euro.

The majority of the judges paid for these real estate investments though bank mortgages and loans from relatives. For example, one bought a property for 130,000 euro with the assistance of an aunt and uncle in Canada.

BIRN has discovered that over the last eight years, the 25 judges spent over 840,000 euro on cars alone. Only four of the 25 judges from the court do not own cars.

Spouses play a key role in the wealth declared by judges. In eight cases, the declared wealth of the judge’s wife exceeded his own. In three cases, they owned shares in construction companies. Spouses often received gifts in real estate, land and cash from family members.

Apart from accepting gifts from their own parents, the wives of judges also received big gifts from their fathers-in-law. In one case, the father of a judge gave his daughter-in-law two apartments, which were then rented out for significant sums.

Most of the savings of the judges in the appeals court are in cash, despite having bank loans at the same time. They also earn a considerable income from renting out apartments, shops and offices, often at above-market prices.

An accounting expert, Hekuran Vladi, who was asked by BIRN to review the assets declarations, noted that the wealth of the judges on the appeals court had grown year on year.

After conducting an in-depth review of the declaration of one of the judges, he noted that his real estate assets had grown five-fold over ten years.

The income of the same judge grew by a factor of 28 over the ten years, although no major changes were recorded to his salary.

A judge in the Tirana Appeals Court earn an annual salary of 1.58 million lek (€11,200).

According to HIDAA, the asset declarations of the Tirana appeals court judges are mathematically correct.

However, Vladi told BIRN that the way the assets and income are declared did not meet high criteria because income and expenditures cannot be crosschecked.

“The asset disclosure forms are formatted to hide rather than disclose the real wealth of officials,” Vladi said.

No convictions in court:

Most Albanians see the court system as one of the most corrupt branches of government.

According to the Berlin-based watchdog Transparency International, 80 per cent of Albanians believe judges are the most corrupt of all public officials.

However, the HIDAA and the prosecutor’s office have yet to convict a single judge for concealing his wealth. It is believed that many judges hide their assets using friends and family members.

An official in Albania’s anti-money laundering office, who spoke on condition of anonymity, told BIRN that relatives of judges were often involved in such schemes.    

“We have found cases where family members of judges have been involved in money laundering through construction companies,” he said.

Vladi, the accounting experts, said problems in investigating the wealth of public officials were complicated by the way the self-disclosure mechanism functioned.

“The asset disclosure form does not have traps to identify dishonest officials,” he said.

Since its creation in 2003, HIDAA has filed charges against ten judges for concealing wealth when filing assets disclosures and falsifying documents. Four of the cases belong to the period 2006 to 2012, while six were sent to the prosecutor’s office only last year.

The prosecutor’s office has dropped charges in eight cases after concluding that no criminal offence occurred, however.

The prosecutor’s office and HIDAA did not see eye to eye over the cases that were dismissed, each blaming the other for the failure.

Prosecutors have accused HIDAA of conducting poor administrative investigations, which they say affect the criminal case.

“When they file charges, we need to carry out verifications that HIDAA itself should have carried out,” a prosecutor who spoke on condition of anonymity told BIRN.

“After the verifications are done, we often discover that there was no false declaration or an attempt to hide the wealth,” he added.

“The HIDAA inspectors often just crunch the numbers arithmetically and reach conclusions,” he said. “For a criminal investigation, an audit of the asset declaration by an accountant is key,” he added.

The accounting expert Vladi told BIRN that the HIDAA administrative investigation was made even more difficult because of the methodology they use.

“The technology used to analyze the disclosures… does not allow for proper analyses,” Vladi claimed.

BIRN asked HIDAA’s chief inspector, Shkelqin Ganaj, to respond to these queries but he declined an interview.  Under Ganaj’s tenure, HIDAA over the past year has filed charges against six judges.

One of the cases involved the Tirana Appeals Court Judge Gjin Gjoni, who is also a member of Albania’s High Council of Justice.  HIDAA accused Gjoni of failing to account for 2 million euro of his wealth.

The case against Gjoni was closed, however, based on court order that challenged the prosecutor’s office probe on procedural grounds.

 This article was produced as part of the initiative “Raising Awareness About Corruption Through Investigative Reporting,” supported by the National Endowment for Democracy.

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