Hungarian police arrest Orbán-era central bank governor on suspicion of fraud and other crimes

BUDAPEST, Hungary — Hungarian police arrested the country's former Central Bank governor on Wednesday, a significant escalation in the new government’s pursuit of suspected financial abuses during the reign of former Prime Minister Viktor Orbán, whose government has been accused of widespread corruption.

Hungary's Central Investigative Prosecutor's Office issued a statement early Wednesday saying it was “carrying out coordinated investigative actions" in several locations in connection with a Central Bank-related investigation into criminal misappropriation of funds, but did not mention the former bank governor, György Matolcsy, by name.

In a later statement, the office said it had detained and interrogated Matolcsy and his accomplices, but that they had refused to testify.

Matolcsy led Hungary’s central bank from 2013 to 2025, after serving as Orbán’s minister of economy from 2010 to 2013. He was long one of Orbán’s closest economic allies, and has denied any wrongdoing.

Much of Matolcsy's tenure as head of the central bank was mired in accusations of corruption related to the bank's establishment of foundations that it endowed with hundreds of billions of forints — equivalent to hundreds of millions of dollars — in public funds, ostensibly for investment purposes.

The central bank's current leadership filed a criminal complaint last month on suspicion of embezzlement, negligence, fraud and abuse of office while Matolcsy was governor. The complaint came after the bank audited past real estate investments that it found to have been purchased for inflated prices, causing the institution significant financial damage.

In its statement on Wednesday, the Central Investigative Prosecutor's Office said that Matolcsy's detention and interrogation were related to a central bank foundation formed in 2014 that was endowed with 288 billion forints ($817.8 million) in public assets derived from the bank's exchange rate gains.

Prosecutors said a private equity fund represented by Optima Investment Ltd., which managed the foundation's assets, concluded a fictitious securities loan agreement on Matolcsy's penultimate day as bank governor for the purpose of giving control of the foundation's assets to a group of people over whom Matolcsy would have influence even after leaving his seat at the bank.

This was done, prosecutors said, “with the aim of enabling (Matolcsy) and his son to make investments with the assets in accordance with their own objectives in order to make a profit.”

The prosecutor's office on Wednesday issued a warrant for the arrest of Matolcsy's son, Ádám, on suspicion of fraud.

In an exclusive interview with The Associated Press on Tuesday, Hungarian Prime Minister Péter Magyar said it was clear that “certain members of the previous government as well as oligarchs, businessmen and family members connected to them committed serious crimes, typically corruption crimes, both with national funding and EU funding.”

His administration in July launched the National Asset Recovery and Protection Office, which holds investigative and prosecutorial powers to pursue cases of misused public funds.

Magyar called the office a “superauthority” that can enlist police, prosecutors and the national tax authority “so that it doesn’t take years to uncover a complicated corruption case.”