How I investigated an Ex-Credit Swiss broker sentenced to 4 years prison
How I investigated an Ex-Credit Swiss broker sentenced to 4 years prison
Foto: Jordan Simeonov
"Are you sure?"
"Where did you find this?"
"In the official site of the American Bureau of Prisons."
"So what's in it?"
"The Inmate Locator."
"And what the Locator says?"
"It said that the man has been released on January 2013."
"How did you discover this?"
"I simply typed the name of our man and found his prison number, his age, his race and the release date."
"Where is he now?”
"I do not know."
"So, what then? You have only one sentence..."
"I will be investigating..."
This dialog between my Editor and me happened in May 2013. It was about a Bulgarian, ex-Credit Swiss broker, who was imprisoned in the USA for 4 years after intensive investigation and FBI involvement as result of 18 pages complain of the Securities and Exchange Commission sent to United States District Court - Southern District of New York. The case was on the first pages of the major US media in 2009 and 2010. The last thing I had heard about it was that the Bulgarian - Julian Tzolov, was sentenced on 4 years imprisonment.
One day I questioned myself - what happened to the former Credit Swiss broker? As far as I knew most of the foreign prisoners in the USA were subject of extradition after serving their terms in the prison.
However I wanted to be sure that our man was extradited and to tell his follow-up story. So I sent an electronic FOIA request to Federal Bureau of Prisons authorities within US Department of Justice asking for Julian Tzolov's file.
As a result of my FOIA request Number 2013-07735 I got a reply 15 days later. It was sent by regular mail and stated that my "authorization was incomplete because the authorization was not signed and dated by the person to whom the records pertain" and that "the authorization provided does not authorize release to a third party".
I decided that the name and the release date, which I found in the online Inmate Locator, were more than enough to continue my investigation even without Bureau of Prisons help. I knew enough wonderful places with public records both in the USA and in Bulgaria where I could continue my journalistic investigation.
One of these places was the US Property registers which are online. From my previous experience working with the Property registries in the USA I knew that each county Register had different search options. Some property records are searchable by owner's name, other are searchable by parcel number, third are searchable by address. If you could not find details there or the Records are not searchable by the criteria you have, you could visit online the Office of City Register where many documents have been registered and even placed online on PDF format.
I already knew that my man has lived in New York so I went searching online in the Automated City Register Information System (ACRIS) which allowed to search property records and view document images for Manhattan, Queens, Bronx, and Brooklyn from 1966 to the present.
Among the documents which I found there were Real property transfer reports, power of attorneys, residential unit deeds, documents about paid or unpaid property tax bills and common charges, assessment information, etc.
It took me no more than a few hours to make a research there. I typed the searched name and about 15 records appeared. I took time to read and print the found documents - about 90-100 pages all together. At first look this was more than enough to finish my investigation. But I still did not feel that this was enough.
When I found the addresses of my man's property I decided to check Curbed.com - a popular American real-estate blog. I suddenly found that Tzolov's Condo on 5th Avenue which he had bought for 1,9 mln USD in 2007, was sold on auction on November 2011 for nearly $2,9 million.
From the same blog I learned that the responsible Auctioneer was Richard Maltz. From its site I found details about the condo itself, the viewings, the auction location, date and time, the terms and conditions of sale etc. I even found pictures of the condo.
However I did not feel that this was enough for a good investigation. No less interesting was to understand what has happened to Tzolov's rights as broker.
Generally every broker in the USA has to be registered with Financial Industry Regulation Authority - FINRA - the largest independent securities regulator whose role is to "protect investors by maintaining the fairness of the U.S. capital markets".
On FINRA's site everybody can see a detailed BrokerCheck Report which includes the exams a broker has passed, his qualifications, his registration number with FINRA and his employment history, his other business activities, and disclosure events like regulatory, criminal, civil events and eventual termination.
There I was pleased to find about 35 pages related to Tzolov in several financial institutions dated back from 1998 when he registered for first time as broker.
I was surprised that I did not find online a ruling by the Financial Industry Regulation Authority that Tzolov and his friend Eric Butler, also involved in the case, would not have to return the $ 4,45 mln. that Morgan Stanley lent to each as a singing bonus - a fact that the US financial press has reported.
However I thought that I had more than enough from the US public records online for the US site of my investigation. It was time to explore the Bulgarian public records.
I was optimist because I had several registers in mind and also a site called www.publicregisters.info compiled by the Access to Information Program in Bulgaria with the help of Trust for Civil Society in Central and Eastern Europe.
This site is a place that even the Bulgarian journalists do not know too much and do not use largely. Nevertheless I very often ask my Master degree students of Investigative Journalism in Sofia University to dig there when I teach them. So a had a good chance to explore myself practically the theoretical knowledge I have been armed with.
I opened online the Bulgarian Company register. It is not very expensive and easily accessible – you can use a prepaid card for one of the several companies which offer this service. The same service is available online with the Trade register.
I found in the Company Register and in the Trade Register that in July 2013 Tzolov had registered a company in Sofia together with another person. I also found documents with his signature and I thought that he was most probably back to Bulgaria.
Further I visited online the Property Register within the Registry Agency. The property records could be accessed after registration and a small payment.
There I found initial details about the properties that Tzolov and his mother had bought in Bulgaria in the last 10 and more years. Since there was not very detailed information online I went personally to the Registry Agency to ask for documents.
I got access to documents without any problems - according to the law these documents are public. I noticed from there that some of the properties on question had been put in an execution for a while from a Bulgarian Court after the US investigation against Tzolov had started and the US authorities asked for a help their Bulgarian counterparts. It was good that I went personally to dig deeper in the documents because I read that the distraints had been removed from the Bulgarian court in certain time.
In the property register online I found some identification numbers of the properties. Using them I found addresses using Geographic Information System Register in Sofia, which is also online.
Thus I had enough basic information for a field work - I visited the places, talked to some people around and even took pictures which I could use in my publication.
Armed with the above solid public data I approached Tzolov's mother asking her for help to contact him. She refused twice. I really regretted about this since I very much wanted to hear how this young bright man found himself in conflict with the law. This would be a good lesson for other young bright people like him.
Less important detail is that I also checked my man in the lists of debtors within the National Revenue Agency which is also online and the Health Insurance Register within the same agency. Since I did not find anything significant I decided that I had enough to complete my story.
Researching this case I did not need to fill in FOIA requests in Bulgaria - most of the documents I needed were public under the Bulgarian Access to Information Law and were published online.
To wrap - I have always been a strong supporter of the Access to Information laws though lots of journalists claim that these laws are useless or do not work properly. Finding information online is a great demonstration how these laws could work helping journalists and especially investigative journalists.
However I have to confirm that there are cases when the info is not public or not so easily accessible but I always struggle for it even if I had to go to the court in 4 cases.
This article has been published as part of Public Data Now project supported by the Dutch government.