Swiss Bank Account Tied to Hungarian Tycoon Provides New Details of Alleged Misuse of Government Funds

On 7 September 2023, a strange scene took place in a ground-floor courtroom of the Court of Justice of Székesfehérvár.

The court was hearing a criminal case, where the prime accused is a former high-ranking government official, János Nagy, former Under Secretary of State at the Ministry of Agriculture. Nagy is accused of orchestrating the payment of HUF 2.2 billion  by a state-owned enterprise to two law firms, which, according to the prosecution, did not do any meaningful work.

At the hearing in September, important details emerged about what might have happened to over half of this money.

The judge started presenting some bank documents, but several defense lawyers objected, claiming that it would harm the interests of another investigation. One lawyer specifically argued that

it would be inappropriate if the only journalist present, the one from Direkt36, would learn the contents of the bank papers.

Eventually the judge overruled the lawyers’ objection and continued the presentation of the documents. Accordingly, the law firms that received the money – the heads of which are also among the accused – transferred substantial sums to a Swiss bank account through a company in Budapest. The account holder was a Panamanian offshore company, which, according to documents presented by the judge, was linked to the Hungarian billionaire Kristóf Nobilis.

Nobilis has long been a prominent figure in Hungarian business life, having worked in the financial sector and invested in real estate and agriculture. A 2006 portrait by Manager Magazin described him as a reclusive, clearly right leaning businessman who also has left-wing and liberal business partners and friends. Nobilis also had business contacts with former or current pro-government figures such as banker Zoltán Spéder and historian Mária Schmidt.

The appearance of Kristóf Nobilis in the case involving the Ministry of Agriculture is noteworthy as one of his sons, Márton Nobilis, was the minister’s chief of staff at the time of the money transfers and is currently a secretary of state at the same ministry.

Direkt36 has learned from the prosecutor’s office that investigators have recently questioned three people as suspects in the monley laundering case. The prosecutor’s office has not yet released the names of the suspects.

Neither Kristóf Nobilis nor his son replied to our questions.

The forgotten lawsuit

In the spring of 2019, a company owned by the Ministry of Agriculture, which was about to be dissolved, disbursed HUF 2.2 billion to two law firms: Zoltán P. Kovács’s office received HUF 1.7 billion and Tamás Őszy’s HUF 500 million. According to the indictment, the transaction was in fact aimed at acquiring the remaining assets of the company and was a sham: the law firms did not carry out any substantive work, the documents submitted as deliverables had no value and were not only not filed with the Ministry, but were not even looked at.

According to the indictment, in mid-February 2019, János Nagy, Under Secretary of State for Land Affairs, was informed that the government was to dissolve the state-owned company Nemzeti Kataszteri Program (NKP) NKft. According to prosecutors, Nagy decided not to wait for the billions left in NKP’s bank account to be returned to the state budget, but rather funnel the money through law firms. A few weeks later, according to the indictment, he instructed NKP’s managing director to contract the law firms of Zoltán P. Kovács and Tamás Őszy.

The prosecutors say all parties involved were aware that the contracts were not meant to be fulfilled. The task did not, however, appear at first glance to be a random one. For historical reasons, Hungary has many pieces of undivided arable land owned by multiple owners. The tenure structure hinders the use of these parcels. NKP was set up by the Ministry of Agriculture in 2009 specifically to address this issue by coordinating government measures to speed up the settlement process, and the lawyers’ tasks were linked to this.

According to the authorities, the documents submitted by the law firms as deliverables were largely useless and of poor form, and both firms presented huge data sheets as their own work which were in fact based on data provided by an office of the Ministry of Agriculture. A forensic expert at the National Bureau of Investigation noted that the tables and graphs in the documentation could be produced with a few minutes’ work. The expert found that the 23-page text summary of the Law Office of Zoltán Kovács P. was “in large font size, with conspicuously large line spacing” and contained only 5-6 pages of original text.

“The recommendations on the use of the land parcels (sale, asset management, leasehold) are already known legal options with no added value”

– the quote is from the same experts’ written testimony, which notes that if these six pages are to be considered as the only substantive work of the agency, Kovacs’s office worked for 283.3 million per page. The expert found that the 389-page summary submitted by the Tamás Őszy Law Office, which contained spelling mistakes, had 8 pages of substantive text. As the agency was paid 500 million HUF, an estimated 62.5 million HUF per page was paid.

According to their testimonies, neither the head of the Department of Land and Spatial Information at the Ministry of Agriculture nor the technical manager of NKP knew whether the reports and data sheets produced by the law offices were used or apllied in any way later on.

At higher levels

János Nagy, however, has a very different story to tell.

The former Under Secretary of State gave a detailed testimony in court in May, claiming that the decisions for which he is facing charges were in fact made at higher levels, and that it was minister István Nagy who decided on the law firms’ fees. The minister will be heard by the court in 2024, and Direkt36 has not received a reply to questions from his ministry.

The former Under Secretary of State also stressed that his part was confined to defining the tasks set out in the contracts. He also claims that they were well-founded and of strategic importance to the ministry. He pleaded not guilty, and in several cases sought to rely on what he said were his own notes.

“I was Under Secretary of State, and anyone who knows a ministry’s workings cannot reasonably assume that an Under Secretary of State is in charge of framing contracts that worth billions”

– he argued. According to him, Őszy’s office had fully complied with the contract and Kovács’s office had completed most of the tasks entrusted to it. He also argued that the state had benefited from the lawyers’ reports: they had been used in legislation and had brought about changes that were beneficial to landowners.

Zoltán Kovács P. and Tamás Őszy also pleaded not guilty, and were also charged with the crime of misappropriation. According to them, their offices had fully performed the tasks set out in the contracts and the fees paid by the NKP were proportionate.

An obvious choice of lawyers

The two lawyers were not chosen by chance for the HUF 2.2 billion job.

Under PM Viktor Orbán’s first term between 2000 and 2002, Kovács was Under Secretary of State and then Secretary of State at the Ministry of Agriculture and Rural Development. His political career was interrupted by the change of government, but with the return of Orbán into power is 2010 he worked for several years in positions at the Chamber of Agriculture. Tamás Őszy’ serves on the board in two state owned companies, and his office has had lucrative contracts with a subsidiary of the public media.

The indictment also details the financial transactions of the law firms during the period in question. Until its dissolution on 1 July 2019, NKP paid the lawyers every penny of the HUF 2.2 billion stipulated in the contracts. This was done in several installments between March and June.

According to the prosecutors, the law offices of Kovács and Őszy transferred a total of nearly HUF 1.2 billion to a company called Astonish Zrt, over the course of a few months between April and September 2019 (Kovács’s office transferred a little over HUF 1 billion first, and the office of Őszy transferred HUF 150 million in September).

Astonish’s main business, according to the trade register, was the sale of real estate, but

the accounts show that for many years it had neither revenue nor any business activity reflected in its balance sheet.

It was this company that carried out the transfers that ended up with the Panamanian company linked to Kristóf Nobilis.

The indictment includes a note in brackets in which the Fejér Vármegyei Prosecutor’s Office mentions that Astonish Zrt. transferred the funds received from the law firms to a Swiss bank account “within days” in 2019. The transfers were marked “Robson Ltd. loan repayments” in the transfer notice. Details of these transfers were given by the judge at the hearing on 7th of September. She read out documents disclosing that the Swiss account was held by a Panamanian offshore company Robson Holding & Finance Corp. registered in 2007.

The documents the Hungarian authorities had requested from Switzerland state that

Kristóf Nobilis is an authorised signatory of Robson, i.e. he acts on behalf of the company.

The documents did not reveal the owner of the company and Nobilis did not answer our questions.

At the same time, two companies were named in the documents as “beneficiary partner companies” of Robson’s owner: KÁ 2 Kft. and Budapest Ingatlan Holding Vagyonkezelő Zrt.. Nobilis previously had interests in both companies.

The businessman’s close links with Robson are confirmed by a document sent by the Fejér county General Prosecutor’s Office to the Székesfehérvár Court. According to documents obtained from Switzerland,

on April the 3rd 2019 Nobilis informed Robson’s Swiss bank that two installments on loans int he value of two million euros each would be made to the account.

A week later, the indictment states that Astonish transferred HUF 630 million to Robson, about 1.97 million euros at the exchange rate at the time. (The indictment states a date a day earlier and an amount of 620 million. The discrepancy between the dates and amounts in the two prosecution documents, and the fate of the other two million euros could not be clarified on the basis of the documents available to us.)

Does not seem like a good investment

The two lawyers – Kovács and Őszy – denied in court that the money transferred to Astonish had anything to do with the NKP payments. When questioned by the judge, Őszy was unable to identify what business activity Astonish was involved in when his firm took a stake in it. In fact, he claimed that the investment was inspired by Zoltán P. Kovács, whose work he greatly admired.

Őszy admitted that buying shares does not seem like a good investment in retrospect.

Kovács said in court that he had suggested Őszy to buy in when his colleague asked him for investment advice. Kovács said that, in addition to being a lawyer, he was also involved in property developments around the country and that he was known to be a good money manager.

The lawyers did not answer the question about their relationship with Kristóf Nobilis and his interests. Kristóf Nobilis is a billionaire entrepreneur who has been listed among the richest Hungarians several times in recent years. His wealth was estimated at HUF 6.8 billion in 2016. He started out in the banking sector, but has become a major player in the real estate market, owned a port on Lake Balaton, founded his own brand of pálinka and is also the owner of an electric car share service.

In 2005, Nobilis bought the publisher of the news portal Index, which he shortly afterwards sold to Zoltán Spéder, a banker with formerly good connections to the ruling party Fidesz. Together with Spéder and the Fidesz-affiliated historian Mária Schmidt, he also owned BIF Nyrt., a publicly listed real estate firm which has been a dominant player in the capitol’s real estate market for many years.

One of his sons, Márton Nobilis, has much more direct ties to the government. Márton Nobilis started his career at a media company of the influential Fidesz backbencher Attila Várhegyi. Between 2015 and 2016, he headed the National Communications Bureau, a government office responsible for coordinating state advertising. Between 2015 and 2016, he was the managing director of the public media subsidiary for which the Őszy Law Office was providing legal services.

Between 2016 and 2018, Márton Nobilis was a manager at organizatons under EMMI (Ministry of Human Resources). From there, he moved to the Ministry of Agriculture in 2018, where he was the Minister’s chief of staff until 2022, and the Secretary of State for Food and Trade Policy ever since.

Márton Nobilis’ name also appears in a police investigation file obtained by Direkt36. At the end of February 2019, the imminent dissolution of NKP was also discussed at a ministerial meeting. According to a memo, János Nagy and the CEO of the agricultural company, also an accused, were present, along with Márton Nobilis as the minister’s chief of staff. We contacted Márton Nobilis in writing and by telephone to find out what information he had about the court case and his father’s involvement, but he did not respond to our questions.

  • Dániel Szőke

    Graduated from Eötvös Loránd University at 2013 as a librarian scientist. As a freelancer he worked with news-site for several years, and in 2020 attended Transparency International’s mentor program for investigative journalists. In January 2021 he started to work as an intern, and since September 2021 he is a full-time journalist of Direkt36.