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Bulgarian Businessman Investigated After Helping Reveal 'Eight Dwarves' Scandal

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Sofia businessman Iliya Zlatanov

SOFIA -- Bulgarian prosecutors want to question a prominent Sofia businessman who fled the country after helping to reveal a fraud scheme allegedly involving prosecutors in the capital, Sofia.

The move against Iliya Zlatanov appears to be part of a related criminal investigation, and is the latest chapter in the scandal that erupted last year with the release of a documentary called The Eight Dwarves. The scandal has highlighted Bulgaria's continuing problem with corruption and organized crime.

The film alleged that the Sofia Prosecutor-General’s Office and other official entities were involved in a scheme to defraud Zlatanov and take control of the country’s biggest elevator manufacturer, which Zlatanov was the majority shareholder of.

The elevator manufacturer was seen as a prime target by shady business interests because of government efforts to rebuild and repair much of the country’s aging housing stock, which dates back to the communist era.

The European Union is helping to fund that effort, part of which would include upgrading elevators in thousands of multistory apartment blocks.

In the film, Zlatanov accused the former head of the Sofia prosecutors’ investigative unit, Petyo Petrov, his wife, and special prosecutor Dimitar Petrov (no relation to Petyo) of a number of crimes related to the takeover of Zlatanov’s company, called Izamet.

Among other things, they allegedly threatened that if Zlatanov refused to turn over his shares in the company, his son, who suffers from a kidney ailment, could be deprived of medical hemodialysis treatment.

The film caused an uproar in Bulgarian politics; the reporter and anti-corruption activist who spearheaded the film, Nikolay Staykov, has received dozens of death threats and has gone into hiding.

Last week, however, Sofia investigators visited Zlatanov’s daughter’s house, as part of an investigation into alleged forgery involving a former employee of the elevator manufacturer.

Speaking in an interview with RFE/RL’s Bulgarian Service on February 15, Zlatanov said prosecutors want to question him as a witness as part of a criminal investigation against a company accountant who, they allege, falsified his signature on a company document.

However, Zlatanov, who spoke to RFE/RL from an undisclosed location, said he personally signed the document in question. He said it appeared the move was an attempt to pressure him. He said he feared for his personal safety if he were to return to Bulgaria and submit to questioning.

"Instead of gathering evidence, the prosecutor issued a decree on February 4 ordering [Sofia police] to determine Zlatanov's address. In the course of this procedure, my client found himself in the search system,” Zlatanov’s lawyer Greta Ganeva told RFE/RL.

The Sofia City Prosecutor’s Office did not respond to queries from RFE/RL seeking comment.

The name of the film, The Eight Dwarves, refers to a well-known Sofia restaurant where prosecutors and lawyers, and crime bosses, were known to meet regularly.

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