Zagreb Commercial Court judge Mihael Kovacic, suspected of fake bankruptcy proceedings, has been remanded in custody due to the risk that he could repeat the offence he is accused of, while three of his associates have been remanded in custody also due to the risk of witness tampering.

The other three suspects are the head of the Zagreb Commercial Court registry, Aleksandra Mazic, bankruptcy commissioner Branko Petanjek and his daughter Iva Petanjek, also a bankruptcy commissioner, Zagreb County Court spokesman Kresimir Devcic said.

The anti-corruption office USKOK suspects Kovacic, Mazic and the Petanjeks of bankruptcy fraud whereby debtors were defrauded of more than HRK 30 million. Among the suspects are several members of Kovacic’s and Mazic’s families.

USKOK says that in the period from May 2009 to February 2021 Kovacic, as Sisak Commercial Court president and judge and then as Zagreb Commercial Court judge, acting in collusion with the Petanjeks and ten other suspects, used his authority to approve payments to creditors.

In the bankruptcy proceedings of which he was in charge, Kovacic made and issued orders, with the help of Mazic, to the court’s accounting department and public notaries to pay debtors’ money and transfer it from the court’s or public notaries’ trust accounts to his private bank accounts as well as to the accounts of the other suspects and a large number of people and companies related to them, using false identities.

The bankruptcy commissioners Branko and Iva Petanjek are suspected of having used, in a large number of bankruptcy proceedings, their authority to manage money in debtors’ bank accounts, however, not to make payments to actual creditors and cover actual costs related to bankruptcy proceedings, but to transfer the money into notarial trust accounts so they could further divide the illegal gain.

In several cases the money was also paid into the suspects’ private accounts and the accounts of related persons and companies.

The suspects are believed to have thus acquired at least HRK 20 million in illegal gain while debtors were defrauded of at least HRK 22.5 million.

USKOK says that of that amount, more than HRK 10 million was paid to seven companies that were founded, taken over or used to cover up the illegal origin of the money through transactions on their accounts.

The money was used to buy real estate, cars and securities.