With tears in his eyes, retired electrical engineer Kiril Atanasovski raises his finger in the air to point to a half-built building in the Macedonian capital, Skopje.
“Look, look at the top floor over there! That’s the apartment I bought for my daughter 14 years ago, the apartment she never went into.”
Her name is Antigone, after the famous Greek tragedy by Sophocles.
The 77-year-old man is now experiencing his own tragedy. He sold everything he owned to, he thought, provide a home for his daughter. In 2003, he paid 28,000 euros (about $30,000) to a construction company for a two-bedroom apartment. The contract provided that his daughter could move in 24 months later.
Little did he know he was buying an apartment in a building that would become the center of the nation’s largest residential real estate scam. Atanasovski was left without money – and without an apartment too.
The owner of Fikom, the company that built Antigone, and his wife were later found guilty of fraud and tax evasion for deceiving hundreds of people by selling the same apartments several times. While both are in prison, the block remains empty.
People like Atanasovski are not alone.
Risky business
Buying a new apartment in Macedonia and its northern neighbor Serbia has proven to be a risky business in the quarter century since the breakup of Yugoslavia plunged both countries into enormous turmoil political, economic and legal.
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In the absence of official statistics, estimates collected from informal associations of deceived buyers put the number of such fraud cases at more than 6,000 in both countries, with victims defrauded of more than 180 million euros ($205 million).
Some fraudsters fled to South America or elsewhere before they could be arrested. Others were arrested and convicted. But in all cases, lawyers say, the money was stolen without any chance of recovery, and those defrauded were left without money or an apartment.
The victims, many of whom invested their entire savings in what they hoped would be a safe property investment, do not understand how they could have been left behind.
“I bought a problem”
Like Atanasovski, Nenad Pejin, originally from Novi Sad, Serbia’s second-largest city, spent more than a decade seeking justice.
Pejin studied his case so thoroughly that he could be mistaken for a professional lawyer. He is ready to fight with fascinating perseverance for the 18,000 euros he paid in 2003 for an apartment he has never seen.
Pejin had sold his large apartment with the intention of buying two smaller properties – one for himself and his wife and the other for his son.
To his horror, he later learned that the 28 square meter (300 square foot) apartment had already been sold more than once.
“My life changed overnight. Instead of an apartment, I bought a problem. My fight has been going on for 13 years. I don’t intend to give up even if I had an accident stroke last year and, thank God, I survived,” Pejin said.
He is president of the so-called Association of Deceived Buyers of Novi Sad, which currently has 90 members. They estimate that there have been around 3,000 such scams in this city alone, accounting for more than half of the approximately 5,000 suspected cases across Serbia.
Attracted by cheap prices
Most real estate frauds in Serbia and Macedonia developed shortly after the turn of the century, before the existence of an electronic property register database or any specific legislation preventing multiple sales of properties.
Buyers were lured by cheap prices that seemed too good to be true – and actually were, said Nenad Djordjevic of Klaster Real Estate of Serbia, an association that campaigns for a more transparent real estate market.
“The lure was a reduced price per square meter. That’s why buyers said ‘yes’ and handed over the money without ever having seen the property. Investors offered apartments at a discount of 20 to 30 for hundred, so buyers fell for it to save money,” he said.
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A few years ago, Lorija Vanevska from Skopje was a lawyer representing victims of the Fikom scandal, including herself. She had purchased one of around 100 apartments sold several times in the 150-unit Antigone building.
“The owner of the company, Nikola Nikolic, was just a puppet hiding fraudsters at a much higher level,” she said, accusing some banks of complicity in the scam.
Nikolic and his wife were arrested in 2006 and sentenced to 15 years in prison on several counts of fraud and tax evasion. The two men never said where the money ended up. Two years ago, Nikolic was found dead in his cell in what was officially recorded as a suicide. Subsequently, many apartment buyers lost hope that the truth would ever be revealed.
“The situation would have been completely different if Nikolic had spoken to the court and revealed who else was involved in this huge case,” said Vanevska, who points the finger at the courts’ culpability.
Corrupted justice?
Pejin from Novi Sad shares his distrust of the justice system. He said he took on most of the tasks the state should have done, such as collecting evidence and warning others. He is frustrated and distrustful of endless trials.
“The millions of euros from this scam must have ended up somewhere, perhaps even in the hands of justice officials who were asked to delay the trials,” he said.
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Some victims give up because the cost of litigation becomes too high – not only in money but also in nerves.
Miodrag Djukanovic, a Serbian notary, said the victims were mostly from poorer families, attracted by the heavily reduced prices. He suspects that all these scams are not just random cases but a well-planned fraudulent scheme.
“These fraudsters generally do not own any assets in their own name, so they have no chance of seizing anything if convicted. They know they are committing fraud and they are setting the stage for it. Unfortunately , citizens can win in court, but the chances of any of them getting their money back are very low.”
Back in Skopje, Atanasovski looks at the date – January 21, 2003 – on which he paid for the apartment and reacts as if it was the first time he realized all this wasted time. Today, 14 years later, her daughter still rents an apartment.
“We are aging with the building. Some buyers have died while waiting for the courts to rule, others are seriously ill, few still believe that they will get the apartments they paid for,” he said. he declares.
He then moves away from Antigone, but he cannot escape the financial tragedy which continues to torment him.
By Aleksandar Manasiev in Skopje, Macedonia and Marijana Krkic in Novi Sad, Serbia.
The investigation was supported by the Robert Bosch Stiftung and the Thomson Reuters Foundation.
