The headlines all week have been about the Trump dossier which is a memo by ex-MI6 officer Christopher Steele containing unverified information that the Putin Regime has been blackmailing Donald Trump to allow Russia to attack Ukraine.
Part of the memo is about Alfa Group of Russia, which was closely linked to Parex Bank of Latvia. Alfa Group oligarchs Mihail Fridman and Piotr Aven are close friends with Parex oligarchs Valery Kargin and Viktor Krasovitsky. According to the media, Alfa was negotiating a purchase of Parex in 2007. Alfa apparently decided not to purchase Parex and instead a billion euros of Parex assets disappeared and Parex liabilities were handed to Latvian taxpayers in 2008 as Parex’s offshore banking employees and clients were shifted to Citadele Bank and AB.LV. The government made no attempt to recover the missing billion and didn’t bother to prosecute anyone despite clear evidence of massive frauds.
Aven in particular is well known in Latvia because he together with Russian oligarch Yuri Shefler control Latvijas Balzams. When Latvian oligarch Andris Skele invited them to Latvia to become owners of this state company, there were approximately seven assassinations of Latvian citizens linked to the transaction. Parex made illegal fraudulent loans to Latvijas Balzams which were never investigated.
The memo names Latvia as a country where Russia is bribing people. This is consistent with the fact that Latvian politicians decided to give a quarter of the national budget to Parex in 2008/2009 thus causing the economic and demographic collapse of Latvia. Still today there has been no investigation and the government is still lying that “Sweden” caused the collapse.
We welcome a whistleblower from within the UK/US intelligence agencies. For many years, the UK/US intelligence agencies have been protecting Putin’s oligarchs by keeping information about their crimes secret. Maybe now they can arrest the criminals instead of protecting them.
It has been a mystery for a few years why new Latvian General Prosecutor Eriks Kalnmeiers, just like his predecessors, has been unable to prosecute any of the criminals from the KGB who have been stealing enormous amounts of money from Latvian taxpayers. For example, why couldn’t he prosecute the criminals from Parex Bank and Riga Transportation who organized the Daimler/Solaris kick-back scheme? A whistleblower gave information to the prosecutors. The FBI completed a case and gave that to the prosecutors also. But despite being handed full information and a full case, the prosecutors still didn’t do anything.
Some new information has come out giving us a glimpse into Latvia’s “deep state” which is the real government behind the fake façade of constitutional democracy.
It seems that General Prosecutor Kalnmeiers is close friends with the KGB Oligarchs which could explain his inability to prosecute them. Specifically, he is in a small hunting group with Yuri Savitsky, Leonids Loginovs, and Guntis Ravis. KGB agent Savitsky controls gas transit in Latvia on behalf of the Kremlin. KGB agent Loginovs controls Port of Riga on behalf of the Kremlin. And, Ravis runs KGB-successor Skonto which among other things charged Latvian taxpayers over a billion euros to construct a small bridge over the Daugava which should have cost a couple hundred million euros.
By extension, we can assume Kalnmeiers is also friends with the other KGB functionaries who run the Latvian economy: Viktor Krasovitsky, Valery Kargin, and Kirovs Lipmans. This could explain why the Latvian government has illegally given billions of euros to these KGB agents while ordinary Latvian people suffer in poverty and nobody ever gets prosecuted.
We continue to hope that bureaucrats in Washington/Brussels/London wake up and realize that Latvia is a KGB Mafia state. If the Western bureaucrats cut off all funding to Latvia until Latvia arrests the KGB Oligarchs, then finally Latvia can have real democracy and prosperity. Millions of people inside and outside Latvia will benefit.
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?
The Latvian government, right now in 2016, is trying to lock an anti-corruption protestor in prison. So much for any dreams that the government is getting less corrupt…
Back in January 2009, while the government was destroying the Latvian economy by fraudulently bailing out the pyramid fraud at Parex Bank, Latvian activists rightfully and correctly defended themselves by protesting at the parliament building and the Parex headquarters. The bailout fraud was a crime against Latvia on a scale not seen since World War II. The government doubled the national debt with the money mostly going to offshore account holders from Russia. Up to 20% of the Latvian population was forced to move to Western Europe to escape the economic devastation.
Parex was the main money-launderer for Vladimir Putin’s Tambovskaya Mafia. The government had full information that Parex was a pyramid fraud because a whistleblower gave details to the prosecutors in May 2005. The fraud was the largest in Latvian history, however the government didn’t investigate. Instead, the government made the fraud larger and gave awards, promotions, and cash to the criminals. The whistleblowing included information about an assassination, which the government didn’t investigate. And, the whistleblower received death threats for years, which the government also didn’t investigate.
However the government treated the January 2009 protest very differently. Suddenly the prosecutors had lots of time and energy to do investigations! They immediately opened criminal cases against 70 protestors. Some of those heroes are currently outside of Latvia and cannot return. This is ironic, since officially the government is asking Latvians outside of Latvia to please return home since the Crisis which the government says was caused by “Sweden” is supposedly finished.
For example, the government is forcing Ansis Ataols Berzins to stay in exile outside of Latvia by threatening him with 20 months in prison if he returns. He made an appeal for justice at a recent Latvian festival (see link below).
We hope the European Union and United States will wake up and realize that Latvia is a fake democracy controlled by a small circle of oligarchs who are robbing and terrorizing the Latvian people. The EU and US could help by issuing arrest warrants for the government officials who were responsible for the Parex fraud (Godmanis, Dombrovskis, Repse, Rimsevics, Karins, Maizitis, Sudraba, Rubess, Vilks, Lagzdins, etc.) and adding them to sanctions lists. Threatening an exiled European anti-corruption protestor with prison to protect corrupt Russian billionaires is horrible tyranny, unacceptable within the EU and NATO.
Attached below is a document dated 29 May 2015 by the “Fiscalia Especial Contra la Corrupcion y la Criminalidad Organizada.” It is the case prepared by Spain against Vladimir Putin’s Tambovskaya Mafia. The Tambovskaya are involved in looting governments, international heroin trafficking, and murdering informants. The wars in Chechnya and Ukraine in which tens of thousands of people were killed could also be blamed on Tambovskaya.
It was already known that Mikhail Rebo (sometimes spelled Rabo) was the main money launderer for Tambovskaya and his wife Tatiana Rebo was manager of the Parex Bank office in Berlin. Now we have more details.
Parex Bank is mentioned in the document on pages 130, 137, 276, 277, 278, 379, 380, and 392. Parex sister company International Overseas Services is mentioned on page 130. Several other notorious Latvian banks are mentioned throughout.
Parex is mentioned again on pages 404, 405, and 406 including specific mention of Tatiana Rebo. Throughout the document there are references of money going through Latvia and Germany, with Germany sometimes used to mean Parex Bank Berlin.
Page 429 mentions “Rabinovich” who owns a store in Riga. This could be a reference to Parex shareholder Grigory Rabinovich who was a close friend of the Parex oligarchs. When Parex was looted prior to the handover of Parex liabilities to European taxpayers, the bank made a fake unrecoverable loan to Rabinovich which seemed to be a refund of the money he paid to purchase Parex shares. The other minority shareholders including Americans and Swedes didn’t get refunds. Obviously this was illegal however nobody got punished except taxpayers.
On page 429 starts a discussion of “Chaika” who seems to be Russian General Prosecutor Yuri Chaika who is known to have laundered money through Latvia, and “Vova” who is Vladimir Putin.
The Latvian government and European Bank for Reconstruction and Development have been running a propaganda and disinformation campaign since 2009 to blame the disappearance of the assets of Parex on the United States and Sweden. Even though it was already revealed in 2014 that the Latvia/EBRD/Parex bailout of 2009 was a cover-up fraud, most newspapers refuse to publish truthful articles and are still sticking with the United States/Sweden story.
The signer of the fraud, Valdis Dombrovskis, is now European Commission Vice President responsible for the integrity of the euro. Another fraud organizer, Bank of Latvia Governor Ilmars Rimsevics, is on the council of the European Central Bank. The ECB is the largest investor in Latvian bonds and Rimsevics knows that the bonds were issued fraudulently to bailout a Russian Mafia bank. The only person Latvia prosecuted in connection with the fraud bailout was whistleblower Ilmars Poikans who exposed Rimsevics for paying a huge bonus to himself after organizing the fraud.
Baiba Rubess, a long-time board member at Citadele Bank, has declared to exiled and terrorized Parex/Citadele whistleblower John Christmas that Parex/Citadele is “no longer criminal.” This is interesting because Parex/Citadele never announced that they were criminal in the first place and nobody ever got prosecuted when over a billion euros disappeared and the bank was caught intermediating huge bribes (Daimler, Solaris, Alstom, Kempmayer, TeliaSonera, etc.). In fact, the government has been telling the voters since 2008 that the collapse of Parex and the national economy was caused by “Sweden.”
If Parex/Citadele wants to change from being a “criminal organization” to being a lawful organization, then it will have to take certain steps: (1) admitting that all Parex annual reports were materially fraudulent from at least 1998 to 2008, (2) admitting that the EBRD bailout in 2009 was fraudulent, (3) admitting that all Citadele annual reports from 2010 onwards have been materially fraudulent because the EBRD transaction was not explained truthfully.
Prosecutions for all Citadele directors would be an easy straight-forward slam-dunk since, following a five-year cover-up, the prime minister admitted in 2014 that the 2009 EBRD/Parex/Citadele deal was fraudulent. However the prosecutors are instead focusing on their efforts to put Parex/Citadele dissident Ilmars Poikans in prison to punish him for being honest.
The Latvian media speculates that Ms. Rubess might become the head of Rail Baltic, in keeping with government policy of appointing Oligarch loyalists to important positions.
We at LawlessLatvia are still wondering when anyone in Washington or Brussels will wake up to what is happening in Latvia.
It happened again. Yet another massive money laundering scandal in Latvia. Of course, this should be no surprise since Latvia never prosecutes anyone even when foreign governments hand completed investigations to Latvian officials. Latvia’s only efforts have been directed at whistleblowers – terrorizing them to make them shut up. Since there are only a tiny number of people who benefit (the Oligarchs and their cronies) and millions of people who are hurt (Latvians, Russians, Europeans, Americans) it is really amazing that the Western governments allow this racket to continue.
Parex Bank got caught again. Parex organized the bribery for TeliaSonera in Uzbekistan. More than 64 million euros of bribes went through Parex to the family of President Islam Kerimov.
A bit of progress – LSM in Latvia has been regularly reporting these large crimes. In the past, when Parex organized the bribery for Daimler and Alstom in Latvia, the stories did not appear in the press.
But some things haven’t changed. The Latvian regulator FKTK still won’t punish anyone for anything.
Something to keep in mind for all people from the 65 countries where taxpayers support the European Bank for Reconstruction and Development – your tax money fraudulently funded the bailout of the offshore deposits at Parex when its assets were embezzled in 2008.
Neighboring Russia, and Under Its Sanctions’ Shadow Too
November 13, 2014 By Kira Zalan
Whatever the effectiveness of sanctions meant to sway Russia’s involvement in Ukraine, one thing is certain: they’ve worsened the country’s capital flight problem. By year’s end, approximately $128 billion will have moved abroad, up from $63 billion in 2013, according to Russia’s central bank. The European Central Bank in May cited a figure four times Moscow’s numbers.
But tracing where those funds are winding up and how they got there is difficult, according to financial crime experts. For countries with long-held financial and political ties to Russia, such opacity is only deepening suspicions that their financial institutions may be conduits for sanctions dodgers and money launderers.
Take Latvia, a former Soviet republic that earlier this year became the latest nation to adopt the euro. As part of an effort to align its banking sector with international standards, the Baltic country in 2008 passed an anti-money laundering law and established a financial intelligence unit—steps recognized by the Council of Europe’s Moneyval in 2012.
Latvia’s financial markets regulator hasn’t registered a subsequent increase in Russian capital deposits since March, the beginning of western sanctions over Russia’s involvement in Crimea.
Official statistics notwithstanding, “there’s a big industry in moving Russian money through Latvia,” said Josh Simmons, policy counsel at Global Financial Integrity, a Washington, D.C.-based advocacy group.
With Russian clients, “it’s difficult to know a lot of the time where the money is actually coming from,” said Simmons. “You don’t know if it’s proceeds of corruption, a state-owned entity or an individual that’s been sanctioned by the U.S.”
Under U.S. and EU sanctions, banks must freeze the assets of dozens of Russian companies and individuals and sharply limit the maturation windows on credit extended to certain businesses. The restrictions have forced banks to decipher hundreds of corporate arrangements worldwide to determine their exposure to monetary penalties.
‘Quite a temptation’
With a population of two million and a complex history with Moscow, Latvia has leaned toward the West since gaining its independence in 1991. That hasn’t stopped an influx of suspicious Russian funds, however.
An investigation by the nonprofit Organized Crime and Corruption Reporting Project in August exposed a scheme in which 19 Russian banks allegedly used fake debts and courts to transfer $20 billion through Moldova’s Moldindconbank to Latvia’s Trasta Kommercbanka AS between 2010 and 2014.
The exposure of Latvian banks to criminal exploits is exacerbated by the financial sector’s reliance on non-resident clients. Nearly half of all deposits in the country’s banks belong to foreign clients, according to national statistics.
“One of the biggest challenges in general is the presence of money of foreign origin in banks,” an official in Latvia’s Financial and Capital Markets Commission (FCMC) told ACAMS moneylaundering.com via e-mail. To better monitor foreign money, the regulator has imposed stricter anti-money laundering (AML) duties on banks with high shares of non-residential accounts, the person said.
“For so long, there’s been a boutique banking sector: customer oriented, whatever you want done, we’ll find a way to do it,” said Mark Galeotti, a professor at New York University. “It’s difficult [for regulators] to say, in effect, sometimes you’ll have to turn away business, particularly when the banking sector faces a lot of competition and livelihood depends on turnover.”
Galeotti, who has researched money flows into Latvia, said there is anecdotal evidence that Russians are willing to pay as much as double in percentage fees to have their money laundered.
“This is quite a temptation for Latvian bankers,” he said.
“Risks are increasing, but so are opportunities in the short-term.”
One day before the imposition in March of U.S. sanctions over violence in Ukraine, the chief executive officer of Latvia’s PrivatBank described plans to grow the banks non-resident deposits, particularly from clients in Russia, Ukraine, Kazakhstan and Azerbaijan—“countries in which businesses are interested in EU banks,” according to Latvian news agency LETA.
Small sector, big perks
Although the size of Latvia’s banking industry remains modest when compared with offshore hubs like Cyprus and Malta, the country is nevertheless a regional financial center, according to the country’s regulator.
That’s because Latvian banks have carved a niche by “dealing with short-term incoming cash flows,” said Kristaps Zakulis, FCMC chairman, in a statement. The specialization differentiates Latvia from historical financial sectors, such as Switzerland and London, which focus more on attracting long-term deposits from non-residents, according Zakulis.
With Scandinavian-owned Swedvank, SEC and Nordea dominating the domestic market, Latvian boutique banks have had to cater to Russian-speaking clientele, according to Galeotti and Andrew Bowen, a Boston College Ph.D. candidate working with Galeotti.
Rietumu Banka, which in August was the subject of a FCMC enforcement action for inadequate customer controls, advertises 5-year residence permits for foreign investors who deposit more than 300,000 euros in 5-year-term deposits or bonds—“the fastest and easiest way to the residence permit.”
The permits, which can also be obtained by investing 72,000 euros in real estate or 35,000 euros in a business, come with an EU national ID card and a guarantee of free movement within 25 countries of Europe’s Schengen Area.
With the exception of Hungary, Latvia’s permit thresholds are lower than any other EU country, including Spain, Greece and Portugal. But while Hungary’s permanent residence program has “reportedly attracted little interest,” over 7,000 people—75 percent of whom are Russian—had been granted permits as of 2013, according to an August 2013 story by The Wall Street Journal.
“Cyprus is still under heavy surveillance while Latvia is still an integral point for getting capital out of Russia,” said Bowen, adding that there has been talk recently of repealing the lax residency visa system. “They’re trying to be more careful,” likely as a result of pressure from other European economies, he said.
If Latvia has made progress in policing its financial sector, it has done so following decades of banking troubles.
Immediately after the fall of the Soviet Union, in the early 1990s, the Baltic nation adopted a posture on financial regulation that was “extremely liberal,” said Anders Aslund, a senior fellow at the Peterson Institute. “They simply didn’t understand what they were doing.”
Parex Banka, established in 1992, was “a money laundering bank from the outset,” that would “exchange all currencies and ask no questions,” said Aslund. Parex became the second largest bank in Latvia and was subsequently faulted for facilitating money laundering and corruption.
In 2005, the U.S. Treasury Department designated Multibanka and VEF Bank as institutions of “primary money laundering concern” under Sec. 311 of the Patriot Act.
Two years later, six Latvian banks were among the financial institutions implicated in the so-called “Magnitsky Affair,” in which attorney Sergei Magnitsky allegedly uncovered evidence of a $230 million Russian tax fraud. The perpetrators purportedly funneled $63 million through Latvia’s banking system.
Following a probe into the allegations, FCMC fined one unnamed bank approximately $200,000, the maximum monetary penalty the regulator can impose for poor internal controls. Latvian media reported that $365 million may have been laundered through an account at Trasta Komrcbanka, $6.2 million of which may have had links to fraud scheme.
The Latvian bank has denied the allegations.
Other scandals have linked Latvian banks to money laundered by Mexican drug cartels and deposed Ukrainian officials.
Following compliance troubles at home, at least one U.S. bank—JPMorgan Chase— decided earlier this year to end its dollar-clearing transfers for Latvian lenders, officials confirmed. Commerzbank and Deutsche Bank are still providing the services for Latvian banks, according to the bank Web sites.
To address concerns, Latvia intends to impose tougher AML rules on banks “to sharpen the combat of potential money laundering through the Latvian financial sector,” officials said in an e-mail.
But more rules may not be enough, according to Galeotti.
“To be honest, there is a need for people to get caught and tried and put in prison to get people to realize that the balance between risk and opportunity has shifted,” he said.