* Fraud reflects deep-seated corruption in Europe’s poorest state
* Protesters have camped out in capital since Sept (Releads on Filat, adds background)
By Alexander Tanas
CHISINAU, Oct 15 (Reuters) - Former Moldovan prime minister Vlad Filat was detained in parliament on Thursday over the theft of $1 billion from the banking system, a crime that has led thousands to camp out in the capital in protest.
Television footage showed Filat being handcuffed by masked officials from Moldova’s anti-corruption bureau. Anti-government protesters had blocked the exits to the building for most of the day to prevent him leaving.
A spokesman for the anti-corruption office said Filat had been formally taken in for questioning. Under Moldovan law he can be held for 72 hours after which the court must make a decision on his status.
Filat denies any connection to the large fraud, which has weakened the former Soviet republic’s currency and damaged living standards in what was already Europe’s poorest country.
Thousands of protesters have camped out in central Chisinau since early September demanding resignations of senior government officials and early elections.
Earlier on Thursday, Chief Prosecutor Corneliu Gurin asked parliament to strip Filat of his immunity from prosecution as a lawmaker.
“We have irrefutable evidence that Filat, while prime minister, was directly involved in the withdrawal of money from the banking system,” Gurin said in his written appeal to parliament.
Of the 99 lawmakers registered to vote, 79 voted in favour of the decision, comfortably over the 51-vote minimum.
Last November, three of Moldova’s largest banks were placed under special administration after they were reduced to insolvency by the haemorrhage of the $1 billion - equivalent to around one eighth of its gross domestic product - through a web of toxic loans, asset swaps and shareholder deals.
Filat, who heads the pro-European Liberal Democrat Party of Moldova (LDPM) and served as prime minister from 2009 to 2013, on Thursday protested his innocence. “This is just cheap show. I can prove my innocence in court,” he told journalists.
A protest leader, Renato Usatii, promised to buy a Mercedes car for any policeman who handcuffed the former premier inside the parliamentary chamber.
Usatii is a millionaire businessman and head of a pro-Russian political party, and says he wants to run for president.
The fraud has held up the disbursement of valuable budget support from international lenders and highlighted the corrosive rivalry between oligarch groups in Moldova that might yet derail its avowed course towards European integration.
Protesters say pro-Europe leaders have done little to halt economic mismanagement or shake off graft accusations in a country where the average family income amounts to little more than $300 a month.
They have promised to camp out in Chisinau until their demands for a new president and government are met. They also want officials from Moldova’s central bank, prosecutors’ office and anti-corruption bureau to be held accountable for the banking swindle.
Central bank governor Dorin Dragutanu announced his resignation last month, but denied responsibility for the fraud.
Moldovan President Nicolae Timofti has been in office since 2012 and Prime Minister Valeriu Strelet since July. Strelet’s predecessor, Chiril Gaburici, quit after just 100 days in office after allegations surfaced that his school diplomas were forged. (Writing by Alessandra Prentice; Editing by Mark Heinrich)