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

BUDAPEST, Hungary (AP) — Hungarian police arrested the country’s former Central Bank governor on Wednesday, a significant step in the new government’s pursuit of suspected financial abuses during the rein of Viktor Orbán, whose government has been accused of widespread corruption.

Prime Minister Péter Magyar wrote in a post on Facebook that the former governor, György Matolcsy, who had also served as finance minister, was in custody, without providing further details.

Since taking office earlier this year, Magyar’s government has prioritized investigating suspected financial abuses committed by Orbán-era officials.

The arrest followed a statement from Hungary’s Central Prosecutor’s Office earlier in the day, saying it was “carrying out coordinated investigative actions” in several locations in connection with a Central Bank-related investigation into criminal misappropriation of funds.

It did not mention Matolcsy by name but said more details about the case would come later.

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.

Matolcsy’s lawyer, Pál Bátki, told Hungarian news outlet Telex that the former governor was detained on suspicion of economic fraud that caused significant financial damage and using a forged private document.

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.

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

It was unclear whether Matolcsy’s detention was related to the real estate purchases or the endowments to the bank’s foundations.

In an exclusive interview with The Associated Press on Tuesday, 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.”