Present day broker scandal tied to past organized crime, assassinations

Investigations into the broker scandal of 2015 have dusted off the files for cases that date back to the ’90s, the story branches out to organized crime and killings.

The broker scandals of 2015 revolved around Buda Cash and other investment firms that were found to have mishandled their clients’ money for possibly decades and rigged the records to cover their tracks. The widely covered events are rooted many years in the past and may also be linked to the times in the mid to late ’90s when organized crime was the most rampant in democratic Hungary.

The Budapest real estate management company FIK was a state-owned firm originally founded in 1949 meant to handle the matters of municipal property. By the time it was privatized in 1994, it was essentially a monopoly and it continued to receive contract after another for handling the sale of municipality-owned residential property until the local governments realized that they could do it themselves and save the costs.

FIK was sold to a curious pair, Ferenc Rozsa Tibor Kovacs, who undoubtably made the deal of their lifetime. It is still unclear how these two people with little education or business experience, not to mention criminal records could have gotten control of what was a very important and lucrative business.

Despite their relationship dating back to the ’80s the relationship between two soured in the next few years, both were filing lawsuits and pressing charges against the other while mutually trying to force each other out of the firm. Both of them were also looking for supporters in or close to law enforcement, allegedly because hey needed lobbyists to smooth out matters that he police may have been looking into. Eventually Kovacs won in court, he was registered as the FIK owner.

The company’s history remained colorful. One of its board members conducted business on behalf of FIK with Jozsef Boross, who was famously killed in a bomb attack in downtown Budapest in broad daylight.

Kovacs was also one of the founders of the incriminated Buda Cash brokerage in 1995, where he was also leading executive for years. He stepped down only when a municipality accused him of causing damages through one of his earlier real estate deals, but those in the profession believe that even without any formal title he never drifted too far from the investment firm. Buda Cash was suspicious from its inception, even at its founding police were looking into the matter on suspicions that it was set up with fake bonds to cover finances. This investigation – which is also often linked to the dispute with Rozsa – produced no results.

Investigators in the scandal inquiries likely also followed the trails into the past, seeing as they reopened a 2000 case, the death Ignac Reichardt , who was gunned down by an assassin and even though its been 15 years, the investigators got no closer to finding out who the perpetrator was. The ties can be supported by the fact that Reichardt’s London Broker had dealings with Buda Cash, this is likely the channel through which investigators acquired the new information that validated reopening the case. It is also clear that Kovacs and Reichardt also conducted private business together.

The police confirmed that there is an ongoing investigation on manslaughter charges but declined to disclose any further details.


Original article in Hungarian.