Greeks Suing Cyprus for Lost Millions in Bank “Bail-In”

Olav A. Haazen, PhD, a director at the law firm Grant & Eisenhofer, is the lead attorney on the case against Cyprus on behalf of Greek citizens. Photo: © Rod Goodman Photography – NYC

NEW YORK – The Cypriot bank “bail-in” of 2013 has led to a multimillion dollar lawsuit. Olav A. Haazen, PhD, a director at the law firm Grant & Eisenhofer, is the lead attorney on the case against Cyprus on behalf of Greek citizens who were customers of Laiki (Marfin/Cyprus Popular Bank) or Bank of Cyprus, or both. He spoke with The National Herald about the case, noting that the total claim is for €307,530,865, which includes interest.

He said, “As you know, the Cypriot ‘bail-in’ of 2013 was a historic measure that wiped out life-savings, college funds, and pensions of thousands of Greek middle-class people. It has found no parallel in other rescue programs in other countries anywhere, especially the part where depositors lost all or half their money.

“The reason this was done the way it was done was to shift the burden away from Cypriots and the Cypriot State onto foreigners – which is illegal under international law.  Besides the haircut itself, there are other elements of the bail-in plan, which involved placing an excessive burden on a healthy bank (Bank of Cyprus) to ensure that the other bank’s (Laiki’s) debt to the government would be re-paid and to avoid placing burdens on the Cypriot State. Those measures involved billions and resulted in Greek depositors and bondholders paying an even higher bill. We argue that the measures were discriminatory and arbitrary, expropriatory, unnecessary and disproportionate.”

Haazen added that, “Cyprus has now admitted its guilt 3 times. In an email to the International Monetary Fund (IMF) it admits that expropriating nonresidents violates international law. In a letter to the Cyprus Bar Association, Cyprus’ Central Bank admits that a haircut on depositors violates the Cypriot Constitution and international law. And in a 2012 Government Position Paper it admits that bondholders should be compensated and that it is unfair to let bondholders bear the burden of the government’s wrong decisions. But Cyprus has never paid any compensation to Greek citizens who trusted Cyprus and its banks.”

TNH spoke with Greek citizens who are part of the lawsuit, Konstantinos Panagiotopoulos, Ioannis Kloukinas, Ioannis Vamvakaris and his wife Maria Synoulis, in Athens.

Asked by TNH about how he got involved with the lawsuit, Mr. Panagiotopoulos said that Laiki Bank stole his and his wife’s money. He told TNH, “At the time they stole our money, I happened to go on the internet and by chance found a lawyer, Mr. Kyriacopoulos, through his website. I then telephoned him and Mr. Kyriacopoulos informed us about a meeting that would be held at a hotel by a New York lawyer on our subject. So I and many others have been informed about the ‘theft,’ because it was a theft for us since they took away 90% of our capital. The American lawyer informed us that we also have a right to appeal on the basis of the transnational agreement between Greece and Cyprus, and indeed with much hope for justice. That was how my wife and I got started since we had a joint account.”

He noted that he suspected something at first, that there was a financial problem in Cyprus. “I called the bank’s manager in Cyprus and he told us not to worry that there’s no problem. Then the Central Bank of Cyprus Governor came out telling the world that there was no problem until we woke up one morning and they had taken our one million Euros. They left us a little to pay for hospitals because the whole situation made us sick.”

“We sent the money with three remittances to Laiki Cyprus because we were afraid that we would be bankrupt in Greece. Since then there have been many judges and prosecutors who have wondered about the loans that were never collected and how they were forced to take our money. I think it was a premeditated and organized theft,” said Panagiotopoulos.

Asked if he has reasonable hopes of receiving compensation, he told TNH that “we depositors will have justice. I believe that the American lawyer did not come to Athens to waste his time. Otherwise, my wife and I will go along with about twenty others to file a lawsuit in the United States for the mockery of this theft.”

Civil Engineer Ioannis Kloukinas told TNH, “With regard to the lawsuit I was informed through a TV program and if I remember well, through an interview in a newspaper about the case. I must inform you that the loss of my invested capital, initially amounting to 1,585,000 in Euro, was significant and with the current situation, even more so.

“I note that the above bond was replaced with a bond of reduced value (1,149,000) but with high collateral and this just before the collapse. This has decisively influenced my life both physically and psychologically because part of it was for retirement and medical care; another part was intended to complete a residential complex which remains half-finished with total depreciation of its value; and finally, part of it was intended to settle debts to third parties who participated in the building program.

“Consequently, above all, the deterioration in my quality of life and the ongoing anxiety, insecurity, and uncertainty for the rest of my life has had an impact on my health and this has serious implications for someone my age, 74 years.

“If the case is successful, I estimate that my psychological state will immediately improve with a positive effect on my health and treatment with fewer medications. I will take care of my financial commitments to my old associates to restore the faith they had in me. The unfinished and devalued residential complex will be completed with the aim of delivering it and relieving me of the economic burden in which this activity took place. Our family balance will also be restored for my wife, children, and grandchildren.

“Finally,” Kloukinas said, “there will be a great deal of satisfaction in seeing justice done for the ruined investors and the law firm which has taken on this case as well.”

Ioannis Vamvakaris and his wife Maria Synoulis are managers for the late Anastasios Vamvakaris and his widow Despina who is now almost in a vegetative state after a severe stroke following what happened to them. Mr. Vamvakaris and Ms. Synoulis spoke about the deceased’s bank accounts, which they say were purposely cut. They said that the managers of Marfin Bank constantly pestered the elderly Anastasios Vamvakaris to transfer over 1.2 million Euros in deposits to Laiki for more security than Greece could offer at the time noting that everyone was afraid in 2010. “The money was his entire life savings,” they told TNH.

“We had the funds at Marfin in term deposits and in 2010 executives of the bank’s management began contacting us to transfer the money to Cyprus for safety. And with a very good interest rate. In fact, there was pressure and somehow persuasion, as we were terrified of the situation in Greece. You cannot imagine what brainwashing they did to the deceased. We were overwhelmed by Marfin telling us that Laiki was one of the safest banks in the world,” they said, noting that again the deceased was trying to tell them that he wanted to transfer the money to a foreign bank abroad, not to Cyprus, but those who called him from Marfin insisted that their money in Cyprus would be guaranteed and eventually they agreed.

Ioannis Vamvakaris, an entrepreneur, was traveling abroad at the time and became involved too late. In fact, when he and his pregnant wife went to Nicosia in May 2013, Laiki’s management and the Ministry of Finance of Cyprus treated them rudely.

“They behaved in a disgraceful way,” said Mr. Vamvakaris, and after waiting hours a guard appeared and told them to leave because they would call the police.

“The deposits were 1.2 million, but with the interest we would have paid off our other debts… Add to that the debts that could not be paid, after the savings of an entire lifetime was lost. So we had health problems, psychological issues, our creditors were chasing us, my wife miscarried and she can no longer bear children since she is not in her twenties, and Anastasios Vamvakaris passed away from sorrow in 2017 at age 90. We found ourselves completely hung out to dry.”

The couple was informed about the lawsuits through their representative in Greece and, of course, have related their story in detail to the lawyers on the case.

Finally, when asked how they would feel about receiving justice, they said “We can continue our lives. If we do not receive justice, we will not want our lives… because it was unjust what they did by treading on human souls!”

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For more information: Website:  www.CyprusAction.gr<http://www.cyprusaction.gr/> / www.ΚυπριακηΑγωγη.gr<http://cyprusaction.gr/>

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