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Court Froze Houses in Bosnia, but the Arslanagićis Bought New Ones in the US

Family members of the former director general of Bosnalijek have spent 3.75 million KM over seven years on houses, flats, villas and companies, which is 1.05 million KM more than their combined declared income in BiH.
Bosnalijek’s former director general Edin Arslanagić has 788,000 KM frozen in various banks. (Photo: CIN)

While the Bosnian judiciary was preparing to freeze the assets, apartments and summer houses of Vedad Arslanagić and his family members in Bosnia and Herzegovina (BiH), this Sarajevan was buying new assets worth several-fold more in the United States (US).

Apartmani, Bjelašnica
With a discount of 154,000 KM Edin Arslanagićs’ sons became the owners of two apartments in Babin Do complex. (Photo: CIN)

Arslanagić bought nearly nine thousand square meters of development land near Atlanta and then bought a two-storey house for nearly four million KM. The bill of sale for the house was signed on December 30, 2015 on the very day when the Cantonal Court in Sarajevo froze the bulk of Arslanagić’s property in BiH, including Vedad’s house with a swimming pool near the Sarajevo old town of Baščaršija and a four-room apartment in the city centre.

The freezing of family members’ assets and accounts followed in the wake of indictments against Vedad’s father Edin Arslanagić, former CEO of Bosnalijek and his other son Amar, the former director for marketing and sales abroad. Father, son and five other businessmen and former Bosnalijek managers are charged with multiple counts of embezzlement, and siphoning of money from the company between 2005 and 2012. Even though Vedad has not been charged, Bosnalijek’s financial records obtained by the Center for Investigative Reporting in Sarajevo (CIN) show that some of the Sarajevo generic drug producer’s money also ended up in his bank account.

The Court froze the assets on suspicion that they had been acquired illegally and to enforce a judgment in the case that the defendant is found guilty. Bosnalijek is believed to have been damaged by around 23 million KM, and some of this money could be paid back from the defendants’ bank accounts or by auctioning off their property if a guilty verdict is served.

Edin Arslanagić refused to talk with CIN reporters, while Amar Arslanagić’s lawyer, Nermin Vila, said that his client should not give interviews. Edin’s other son Vedad lives in the US. Reporters tried to get in touch with him through a dozen telephone numbers, but no one picked up the phone. Vedad wrote on his profile on Linkedin business social network that he worked for a company Aon Intergramark. However, a company clerk said that a person of that name could not be found in the company’s registry of employees.


How the Family Got Rich and Bosnalijek’s Business Affairs

The trial against Bosnalijek’s former directors and their business partners began last month. At the first hearing the Arslanagićies testified that they were middle-income.

However, the family of Bosnalijek’s former director nowadays owns: four apartments; three houses; a summer house and land in BiH and the US. Earlier on they had another apartment and cafe-cum-cake shop in Sarajevo centre, an apartment at Bjelašnica ski resort and a house in the US, but they either sold or gave away these properties in the past four years. They bought or built most of the properties between 2005 and 2011, at the time when Bosnalijek lost millions through business deals with Sarajevo-based private firms Brštanica and Carpe Diem.

Amar Arslanagić bought a 110 square meters’ apartment with a garage in a luxury building Bolgrano in the Sarajevo neighbourhood of Šip for 248,000 KM. (Photo: CIN)

Between 2005 and 2011, Edin Arslanagić, his sons Vedad and Amar and Amar’s wife Meliha, had a combined income of 2.7 million KM in BiH. This is 1.05 million KM less than the value of the properties bought in BiH during this period. Amar bought a house for around 630,000 KM in the suburbs of the US city of Atlanta during this time. He took a loan of 505,000 KM and paid it back four years later. After all these purchases, Edin and Amar had around one million KM on their BiH bank accounts at the end of last year.

In its analysis, CIN did not take into account the living expenses of the Arslanagićs during those seven years; how much they spent on furnishing the newly-acquired properties; the value of their 100 or so paintings, or how much they paid for four luxury cars: a Porsche Cayenne GTS, an Audi 6, a sport utility vehicle Mercedes 350 CDI and a Lexus. It was not possible to establish with certainty the value of the movable property and the living costs of the Arslanagićs.

Edin Arslanagić reported to the tax authorities the greatest income among the family. During this period, he declared income of 1.37 million KM to the Federation of Bosnia and Herzegovina Tax Authority. Bosnalijek’s former director did not buy properties in his name during this period. In 1999, Edin bought the occupancy rights from Bosnalijek to the 106 square meter company apartment in Sarajevo that the family used since 1982. In the same year, he bought 1,500 square meters of land in the Sarajevo neighbourhood of Faletići to build a summer house. The neighbourhood is about ten kilometres away from the centre of Sarajevo. Also, since 1970s, the Arslanagićis have owned a chalet in the ski center of Jahorina.

Amar Arslanagić
In 2015, Amar Arslanagić was sentenced for embezzlement of Bosnalijek travel advances. Nowadays, he’s on trial for making a sweetheart deal for drug transport to Russia. (Photo: CIN)

During those seven years, Edin’s sons Vedad and Amar, bought seven luxurious properties in BiH and Croatia and a cake shop in the centre of Sarajevo. This property cost them more than 3.75 million KM, which is 2.43 million KM more than their reported income in BiH during this period.

Between 2005 and 2011, Amar and his wife Meliha declared 312,000 KM in income, while Vedad declared 14,537 KM for three years, between 2009 and 2011, while working for his Sarajevo company AZ limited. During this period, he had at his disposal an additional one million KM, which he did not declare.

In 2005, Amar bought a 90 square meters’ apartment for 203,000 KM in Bjelašnica ski resort. Bosnalijek financed this construction. Had his father Edin, the then Bosnalijek director general not indirectly approved a discount, Amar would have had to pay 83,000 KM more.

Two years later, Amar paid 300,000 KM for a 106 square meters’ apartment in Sarajevo and in 2008 he bought a mansion in the suburbs of Atlanta for 630,000 KM. He mortgaged the house the same year when he took out a 504,000 KM loan in the US.

Their passion for collecting property did not subside in 2010 either, when Amar bought a 110 square meters’ apartment and a garage in a luxury building Bolgrano in the Sarajevo settlement of Šip. He paid 248,300 KM for this property. He owned another three-room apartment in the centre of Sarajevo, but he sold it for around 210,000 KM, before his assets were frozen.

Since their legally declared income was not sufficient to explain these property investments, it is possible that they siphoned the money that they had lacked from Bosnalijek, through damaging contracts that Amar and his father made with certain companies. Amar has abused Bosnalijek’s money in other ways too.

Vedad Arslanagić built a house with a swimming pool near the old town of Baščaršija in Sarajevo with some of Bosnalijek money. (Photo: Ingenium Properties)

Amar Paid to Avoid Serving Time

At the beginning of 2015, Amar was sentenced to a year in prison and had to pay Bosnalijek back 71,500 KM, which he embezzled on official trips around the world between 2005 and mid-2012. During this time, he was firstly the director of Bosnalijek’s Division for the Middle East and Africa Markets and later the director of the Sector for Foreign Sales and Advertising. Amar benefited from a legal provision when he chose to pay 36,000 KM instead of serving prison time.

Edin Arslanagić is also implicated in his son’s embezzlement case. The indictment charges him as director general, with signing off on his son’s requests for advances for official trips, even though he was aware that these were not business, but tourism trips. He is also accused of embezzling €140,632, $59,081 and 350 KM of travel expenses.

According to the indictment, Amar falsely spent Bosnalijek money during 80 official trips across Europe, the Middle East, Africa and the US. After these trips he was filing false travel expense claims, and he forged other peoples’ signatures or asked to be paid per diems for days he spent in Sarajevo.


During one of those controversial trips to the Middle East in November 2005, while allegedly visiting Kuwait, Qatar, United Arab Emirates and Libya, Amar spent $8,429. He was reimbursed for the claim even though he had not submitted a report about the results of the trip. FBiH Financial Police found that during this business trip, his family bills in Sarajevo were paid from his business credit card.

Two years later, after a trip to Bahrain, he tried to cash in a blank receipt filled out for $6,000 for reasons of incorporating a company in that country. In the same manner, he later submitted another cash receipt of $4,500 for participating in a bid in Abu Dhabi and another cash receipt of $ 4,000 for advertising Bosnalijek’s products during his trips to Tripoli, Kuwait and Qatar. A later audit revealed that all cash receipts were from the same receipt book.

On top of this, Amar submitted taxi receipts and receipts related to discretionary spending with dates preceding or succeeding the dates of those official trips.

Amar was also accused of commissioning a Sarajevo firm Rhea Express for forwarding and transporting drugs to Russia, without a tender or authorization. Having secured a contract, the firm hired subcontractors to transport Bosnalijek goods. The indictment states that Bosnalijek paid 113 percent more for this firm’s transport services than other carriers might provide and thus he harmed the Sarajevo drug factory by around 1.57 million KM.

Modest Income of Big Landowners

According to his declared income in BiH, Vedad Arslanagić did not have enough money for basic living requirements. Still, the younger son of Bosnalijek’s former director general spent at least 3 million KM on purchasing real estate and a company in BiH.

Vedad, just like his older brother Amar, acquired most of his properties after 2005. That year he bought a four-room apartment of 157 square meters with a garage in the centre of Sarajevo for 278,000 KM and a 90 square-meters apartment on Bjelašnica. Bosnalijek financed the apartment’s construction. Vedad paid 214,000 KM for it after his father indirectly approved a discount of 71,000 KM.

Sarajevo Canton Prosecutor’s Office did not ask for the freezing of this apartment even though Vedad Arslanagić had placed its title in his name. The prosecutors could not explain why this happened. Vedad took advantage of the situation and sold the apartment at the beginning of this year. The apartment’s new owner is Lejla Karagić, daughter of Huzeir Prašović – the owner of Hing, one of the firms involved in building the same apartment complex at Bjelašnica. According to the contract, Karagić was to pay 170,000 KM for this property over the next five years. Arslanagić was in a hurry to transfer the title to Karagić’s name and authorized this immediately. A notary warned him that there was no legal means to protect him in case the buyer decided not to pay the agreed sum.

Vedad Arslanagić bought Bombon cake shop for 600,000 KM, and then he gave it away to the wife of his father’s former driver. (Photo: CIN)

According to the indictment, more than 6.9 million KM were embezzled during the construction of the apartment complex on Bjelašnica. The prosecutors listed the culprits as: Edin Arslanagić, Brštanica’s director Hasan Šepo and the work supervisor Izet Arslanagić who pleaded guilty during initial court proceedings.

In January 2005, Bosnalijek made a contract with Brštanica on a joint investment into the construction of 98 apartments at Bjelašnica ski resort. However, an investigation revealed that only Bosnalijek funded the construction, whilst Brštanica charged for its role as a proxy in the construction of the settlement.

The Sarajevo drug maker invested 13.7 million KM in this project. Meanwhile, Brštanica took out a 7 million KM loan that it was supposed to invest but never did, which Bosnalijek was meant to pay back.

The contract on joint venture stated that after selling the new apartments Bosnalijek would make a profit of 3 million KM. However, instead of the agreed profit, Bosnalijek accepted in exchange 15 apartments. The sale of these and other suites was entrusted to Brštanica.

Kuća, Lake Forrest
Vedad Arslanagić bought a house near the city of Atlanta, USA, on the very day when the court blocked his assets in Sarajevo. He paid nearly 3 million KM for it. (Photo: Redfin Corporation)

The apartments were heavily discounted by up to 30 percent and were approved for Bosnalijek employees and their families as well as for family members of Brštanica’s owner. Bosnalijek was damaged, just in this instance, by 1.84 million KM. Other losses were incurred because Bosnalijek paid twice for the same work or the work was falsely accounted for.

Bosnalijek was a source of legal income to the Arslanagićs, but the investigation shows that family members additionally used the company’s resources for personal gain. In most of the cases, the money from Bosnalijek was bled through controversial deals with Brštanica that often received loans worth millions from the Sarajevo drug maker.

At the end of July 2008, in one such transaction, Bosnalijek wired one million KM to Brštanica upon Edin Arslanagić’s authorization on the grounds that this was for the purpose of offsetting a part of a loan that never had existed. In the beginning of the following month, Brštanica forwarded the money to Vedad Arslanagić’s bank account. A loan that Brštanica concluded with the Bosnalijek’s director’s younger son eight days earlier was stated as the reason for the payment. It was an interest-free loan for a period of nine years with no collateral or guarantees. At the time, Vedad Arslanagić had a monthly salary of 450 KM. The loan mainly paid back Edin Arslanagić with his own money and some that Vedad had sent to him via his private firm in the US. However, just two-thirds of the loan was paid back and Brštanica’s owner Hasan Šepo wrote off nearly 240,000 KM of debt at the end of November 2011.

Zemljište Riverside
Vedad Arslanagić paid more than one million KM for nearly 9,000 square meters of development land in the suburb of Atlanta. (Photo: Fulton County Assessors Office)

According to the investigation, he used this money to finance the building of a 602 square meter villa with a swimming pool not far from the old town of Baščaršija in Sarajevo. Vedad bought the land for 370,000 KM in 2007.

A year later, he paid 600,000 KM for a hospitality company AZ in Sarajevo. The company runs a cake shop Bombon in the centre of the city.

However, after the opening of the investigation into embezzlement in Bosnalijek, Vedad gave away AZ in July 2012 to Gordana Balić, the wife of Jasmin Balić, former driver of Edin Arslanagić.

Gordana Balić said that the cakeshop was making a loss and that Vedad left for the US leaving the firm to the employees.

Jasmin Balić told CIN reporters that Vedad wanted to come back from the US, but when he saw what a sorry state the country was and how much was the business’s daily turnover and profit was, he told him: “’Jasmin, I don’t want to live there, do you want to take over and give it a try, you and your wife to make the effort?’ Simply, he gave it away to us, under the condition that the workers remain.”

During the time when Vedad Arslanagić was its owner, the cake shop supplied large amounts of cakes and biscuits to Brštanica which ran Bosnalijek’s company restaurant and organized cocktail parties and receptions on behalf of the Sarajevo drug maker. During four years AZ earned 318,000 KM from cakes and biscuits supplied to Bosnalijek’s restaurant.

However, the records obtained by the FBiH Financial Police show that Bosnalijek often paid for services to Brštanica that never existed, such as meals for employees who were on sick leave, vacation or an official trip. According to the findings, an excess of 346,428 meals were accounted and paid for during seven years. The KS Prosecutor’s Office concluded that Bosnalijek was harmed by 3.6 million KM in this manner.

Vedad Arslanagić
Vedad Arslanagić invested 7.74 million KM in real estate and a firm between 2001 and 2015. (Photo: Linkedin)

Money from the firm was also siphoned out through cocktail parties and other ceremonies at the firm’s Sarajevo factory. Bosnalijek financial statements show that it paid Brštanica more than 9 million KM to organize 849 gatherings and 23 cocktail parties serving around 225,000 people between 2005 and 2011. However, the financial inspectors did not find supporting documentation confirming that the gatherings indeed happened or that this many people were served. There were no purchase orders, proofs of delivered services or explanations of reasons for holding the receptions and cocktails.

The investigations and freezing of assets in the country did not stop the Arslanagićies from continuing to buy property worth millions in the US. At the end of 2014, Vedad Arslanagić bought a plot of land in an exclusive suburb of Atlanta for around 1.05 million KM. American real estate agencies depicted it as a perfect development plot in an exclusive suburban area.

A year later, Vedad bought in a nearby neighbourhood a 523 square meter house for nearly 3 million KM. A two-storey house with five bedrooms and the same number of bathrooms became Vedad’s new home in America.

He moved into the new house from the town of Smyrna where he bought a house with a swimming pool in 2001. After purchasing new real estate, he sold it for nearly 1.2 million KM in February.

CIN Published a Correction Related to Story about the Arslanagićis’ Property
The Center for Investigative Reporting in Sarajevo (CIN) wrote an incorrect data in a story “Court Froze Houses in Bosnia, but the Arslanagićis Bought New Ones in the US”, that has been corrected.

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