The Ukrainian government announced on December 18th that it nationalized Privatbank. According to the Kiev Post, the reason is because 80% of the loan portfolio is insider loans. In other words, the bank was a pyramid fraud and the assets were stolen. Now, Ukrainian taxpayers are expected to repay the bank’s deposits.
The numbers seem to indicate that the Ukrainian national debt could double from this. It’s a repeat of the nationalization of Parex Bank which doubled Latvia’s national debt.
Privatbank maintains a subsidiary in Latvia that is specialized in money laundering. Latvia is an excellent location for money laundering because (1) it is in the European Union and (2) the government is 100% corrupt and never enforces money laundering laws.
The big money laundering oligarchs, Valery Kargin and Viktor Krasovitsky of Parex and AB.LV in Latvia, Ilan Shor with several banks in Moldova, and Ihor Kolomoisky with Privatbank in Ukraine and Latvia, all appear to be friends with each other because often their money laundering schemes are done in cooperation. They have now successfully destroyed the economies of all three countries.
We wonder when the international community will stop bailing out these frauds and instead force Latvia/Ukraine/Moldova to put these oligarchs in jail and take back the stolen money?
UPDATE: Government nationalizes PrivatBank, guarantees deposits
In 2008, when the public discovered that $1 bln disappeared from Parex Bank of Latvia, the government fought long and hard to cover-up for the Oligarchs. The government chased the first whistleblower into exile and started a “show trial” prosecution of the second whistleblower, at the request of offshore bank AB.LV. Many accounts from Parex moved to AB.LV when Latvia and the EBRD bailed out Parex in what was later revealed to be an Enron-style cover-up featuring a secretly reversible share transfer designed to help Latvia temporarily overstate income and understate debt while actually increasing the total bailout expense to taxpayers. In 2015, when the public discovered that $1 bln disappeared from three banks in Moldova, with the cash moving through AB.LV, Latvijas Pasta Banka, and Privatbank (Latvia), something different happened. Moldova ordered an investigation (Latvia never investigated Parex) and the Speaker of the Parliament published the investigation on his blog (in Latvia the Prime Minister lied to voters that “Sweden” caused the crash). Moldova is attempting to recoup the lost money, and the responsible Oligarch is under house arrest and expected to spend the rest of his life in prison. Contrast this to Latvia where the government made no attempt to recoup the money and the Oligarchs are free enjoying life in their Jurmala palaces. Maybe Latvia can learn something from Moldova?
investigative report from Kroll: