Seven people are facing charges in a fraud trial beginning on Monday, following the near-collapse of Dutch housing corporation Vestia.
Public prosecutors have spent four years investigating financial irregularities at Vestia, which came close to bankruptcy in 2012 as a result of speculating in high-risk derivatives. The total losses have been estimated at €2 billion.
Vestia was once the largest social landlord in the Netherlands, with 900,000 homes at its disposal. Since the fraud inquiry began, it has reached out-of-court settlements with 11 former board members but none has admitted liability. Vestia is also taking legal action against 10 banks for selling the complicated derivatives, which had a total value of €23 bn.
Treasurer Marcel de Vries, who was responsible for the derivatives portfolio, was found to have earned €10 million in eight years in side payments. He bought the products from banks through an intermediary, Arjan Greeven, who earned tens of thousands in commission on the deals.
De Vries and Greeven are the main suspects and are accused of bribery, money laundering and defrauding Vestia. De Vries is also charged with documentary fraud by setting up secret bank accounts to pay Greeven.
Greeven, who triggered the fraud inquiry in 2012 and has admitted bribery in a non-official capacity, denies all other accusations, including a charge of making a false tax declaration.
Among the other suspects are Greeven’s father, who set up a bank account in Switzerland which received €3 million from his son and daughter-in-law. Prosecutors claim this was the proceeds of criminal activity.
Greeven’s ex-wife Pascal is also facing charges because she received half of her former husband’s annual earnings. When the couple divorced, Pascal bought a house for €500,000 without a mortgage, which prosecutors suspect was paid for with criminal cash.
A preliminary hearing in the case is being held in Rotterdam on Monday.