The Plenary of the Audit Court will decide whether or not former LAOS leader Giorgos Karatzaferis will pay the state the sum of 5,512.372.57 euros, which has been requested to be charged to him, as this amount is not justified by his legal and apparent sources of income and was not included in his declarations of his “πόθεν έσχες” (assets and liabilities), while he had established an offshore company.

The Plenary Session of the Court of Auditors has heard a petition by the State seeking to overturn a decision of the First Chamber, which ruled that Mr Karatzaferis does not owe the State the sum of €5,512,372.57 and also dismissed the request for imputation by the Commissioner General of the Court of Auditors. The decision is now awaited.

The general commissioner of the Court of Auditors requested in 2014 to impute the amount of 5,512,372.57 euros to Mr. Karatzafferis, as “during the period of the financial years 1993-2011 he was subject to the obligation to submit a declaration of property status, due to his qualities as a member of parliament until the year 2004, as a member of the European Parliament until 26.9.2007 and from then on as a member of parliament – leader of the political party “LAOS” represented in the National Parliament and the European Parliament”. This amount was proposed to be imputed “because the legal origin of an equivalent property benefit that he acquired during the period from 1993 to 2011 (ed: 18 years), during which he held the above-mentioned positions and was subject to the obligation to submit a declaration of property status” (declarations of “patrimony”) was not proven, but also “the origin is not justified”.

The €5.5 million profit

According to the imputation proposal (which was finally finalised in 2016), the property gains of Mr Karatzafferis relate to:

a/ US$ 6,600,000, an amount corresponding to the value of the Portfolio of the offshore company “CATALINA INTERNATIONAL Ltd”/”SUNSHINE DELIGHT Ltd”, on 21/9/2009, which he set up and was the beneficial owner of its assets, even after the transfer of his shares to his sister P.V. from January 2010 onwards. The above amount in USD corresponds to EUR 4,502,660.66, calculated at the US dollar (USD)/euro exchange rate prevailing on the above date (21 September 2009) (i.e. USD 1.4658 per EUR 1).

It should be noted that since 2010, participation of political persons in offshore companies has been prohibited.

These amounts (5,512,372.57 euros) constitute property benefits of Mr. Karatzafferis, “the origin of which is not justified by his legal and apparent sources of income” and for this reason it was requested “to be charged against him and in favour of the Greek State”.

The appeal

Four years later, in 2020, the First Chamber of the Court of Auditors heard the proposal for an imputation application of the Commissioner General and three years later, in 2023, the decision of that Chamber was issued, which rejected the imputation proposal as inadmissible and unfounded, on the grounds that it was indefinite or otherwise insufficiently reasoned. The Chamber relied, inter alia, on a ruling that the amount sought to be imputed “was not the product of the exploitation of Mr Karatzafferis’ properties” and “was not even related to them, and one of them (£1,056) did not belong to him, but had been given to him for safekeeping by his mother to be given to her grandson and his son”.

The State has appealed the decision of the First Chamber which was heard last Wednesday in the Full Court of the Supreme Fiscal Court, presided over by Soteria Douni.

The hearing before the Plenary of the Supreme Court lasted only a few seconds, as both the public defender (State Legal Council) and the two brothers and lawyers of Mr Karatzaferis chose to state their positions and develop their legal arguments in pleadings which they will file, instead of developing in the hearing and refuting the legal issues raised by the Chamber’s decision.

Next, the State Commissioner (something akin to a prosecutor in criminal trials) Antonis Nikitakis suggested that the Greek State’s appeal be dismissed, which was commented on variously by the lawyers present for other cases.

In the end, the Plenary of the Court of Auditors reserved its decision, which is expected with great interest. It should not be overlooked that the statute of limitations for the attribution of undue pecuniary benefit is 20 years, according to the Court’s jurisprudence.

And criminal prosecution

However, the criminal aspect of the case in question is of great interest, as the Corruption Prosecutor’s Office was also involved, which in 2014 brought criminal charges against Mr Karatzaferis for: a) submitting an incomplete declaration of assets and b) participating in offshore companies in his capacity as a political party leader, MP and MEP.

The Appeals Council converted the felonies into misdemeanors. In 2015, he was sentenced to 12 months’ imprisonment with a three-year suspension and a 10,000 euro fine by the Three-Member Plenary Court for making an inaccurate tax return and was acquitted for the offshore, as the court accepted his claim that his accountant failed to include it in the tax return.