Oligarchs Kargin and Koval still at it UPDATED: Boiko

The collapse of Latvian and Estonian payday lender MiniCredit shows that banking oligarchs Valery Kargin and Dmitri Koval are still at it, not slowing down their activity even after Kargin’s Parex Bank was revealed as a pyramid fraud and then fraudulently bailed out by the corrupt Latvian government.

Apparently Kargin and Koval worked with Rolands Petersons of PrivatBank, which was also a pyramid fraud, to license MiniCredit in Latvia and Estonia and amazingly given their histories were granted licenses.

They then opened a bank account at Citadele Bank, which is a successor to Parex and still apparently controlled by Kargin since his top offshore banker Valery Hudorozhkovs is still there.

A large amount of money was somehow run through MiniCredit’s account and then disappeared.  Some of this was presumably from low-income clients with payday loan accounts.  And perhaps some of it was from Russians running money through the accounts for laundering purposes, given the size of the withdrawals relative to the size to the company’s legitimate activities.

An interesting detail of this case is about Koval, whose Saules Bank of Latvia was caught laundering money although authorities never bothered to prosecute anyone.  Saules Bank is today merged into Rietumu Bank which is also a money launderer.

Just after Parex whistleblower John Christmas gave details of massive frauds at Parex to Latvian authorities in 2005, who ignored the information, Koval invited Christmas to meetings to discuss establishing a new bank in Latvia to serve Koval’s clients, who he described as Jewish billionaires in Moscow.  Koval wanted Christmas to be a front for the bank, making it seem like an American bank even though the clientele would be Russian.

Kargin and Koval don’t need Christmas to be their American front anymore since they found someone better.  Supposedly former Fed chief Paul Volcker is the owner of Citadele today, although we doubt Volcker has any clue what is happening there.

We continue to hope the EU and US authorities will wake up and realize that the Latvian government is running a racket to help Russians steal money from Europeans, Americans, and especially Latvians.

http://www.lsm.lv/en/article/economics/economy/payday-lenders-strange-transactions-uncovered-in-estonia.a221430/

UPDATE:  Oleg Boiko, also from Parex Bank and therefore also being protected by the European Bank for Reconstruction and Development, is also still active providing high-interest loans to desperate poor people.  http://theblacksea.eu/malta-files/article/en/cash-loans-czar-maltese-tax-escape-plan

SEC nails Malta broker linked to Kargin, Parex, Citadele, M2M

Malta licensed broker Exante has been caught by the S.E.C. in a massive fraud scheme.  Although Exante is licensed in Malta, it has an office in Latvia and some employees are formerly from Parex Bank.  Exante has strong relationships with two Parex successor banks Citadele Bank and M2M Bank and employees boasted of meetings with Parex Oligarch Valery Kargin.  The Latvian government is responsible for this new fraud scheme because the Latvian government refused to prosecute Parex for many previous fraud schemes.

http://www.maltatoday.com.mt/business/business_news/56060/maltabased_hedge_fund_involved_in_100_million_fraud

KGB links Parex Bank with Russian Mafia nukes

A former KGB agent sent an email to Parex Bank whistleblower John Christmas.  While reading about connections with the “Russian mafia” and smuggling “nuclear component,” remember that Parex is fraudulently funded by the EBRD and has been “audited” for many years by Ernst & Young and PWC.  Latvian taxpayers should wonder why the highest spending priority of the Latvian government in all of Latvian history was bailing out the shell-company deposits at Parex.  The email below is being posted with the permission of the author.

 

Date: Sat, 26 Jan 2013 08:34:11 +0000
From: xxxxx
Subject: RE: Latvian State Police – referral by Luke Harding
To: xxxxx

Dear John,

Many thanks for your emails, which I found out to be very interesting. In relation to possible exposure of Parex: First of all, apart of yourself, I have completely different background (not financial one) and therefore, my knowledge about Parex an, particularly about its two “main gurus” – Kargin and Krasovitsky – is based on slightly different info. I was familiar with both these ‘geniuses’ since the time when Parex was not a largest bank in Latvia, but when it was a small currency exchange company. At that time, I came across to knowledge that they were heavily involved into money laundry (including ‘legalisation’ of so-called soviet communist party’s secret assets) ops conducted by both the Russian organised crime and Russian security services illegally operating in Baltic region. For instance, I am aware that Parex (Kargin and Krasovitsky) actively used for these ops certain ‘commercial’ firms which were in front of the Russian security services. In addition, I am aware about one illegal deal with participation of Parex (provided cash), when the specific amount of the nuclear component has been smuggled through the territory of Latvia to the West. Secondly, all my further intel I have received regarding Parex, due the nature of my ex-espionage work, was related to that similar “business”. For instance, I am aware they used for their illegal operations some offshore “bank” located in Republic of Nauru, as well as I am aware about one shadowy deal with issuing a fictitious bank guarantee (by Parex Bank) to the representatives of Russian mafia in the amount of 50mlns USD in 1997/98. Based on all the above, I am afraid my expertise about Parex is quiet specific and differ from your own intel. In the given circumstances, please, feel free meeting me so we can discuss the possible effective way whether and how can we work together in the future.

Kind regards,

Boris Karpichkov from London

 

Here is an article about Mr. Karpichkov:

http://www.guardian.co.uk/world/2012/feb/22/confessions-of-a-kgb-spy

AP Bank, Switzerland, Parex Bank, EBRD

AP Bank was the Swiss subsidiary of Parex Bank.

Parex president Valery Kargin openly said that Parex established a Swiss subsidiary because many deposit clients at Parex wanted to move their deposits to Switzerland when Latvia joined the European Union so that records of the deposits would not be in European Union computers.

As it turned out, there was no reason for Parex depositors to worry.  Parex had thousands of offshore shell-company deposits and the European Union has not taken any legal action against the account holders.  In fact, European Union taxpayers funded part of the bailout of these accounts.

Parex attempted to sell AP Bank to Latvijas Krajbanka before handing liabilities over to the Latvian taxpayers.  The sale was never completed and the public has never been told the reason.

Now in 2012, AP Bank is owned by Parex successor Citadele Bank which is owned by the Latvian government and the European Bank for Reconstruction and Development (EBRD).  Interestingly, even though AP Bank is funded with public money, it still offers illegal deposit services.

Specifically, AP Bank offers to open deposit accounts with “foreign banks” in its own name but on behalf of clients.  This service is illegal by Latvian law, Swiss law, and the law of (almost every) “foreign” country as well.

Even though this service is illegal, it has been openly advertised on the AP Bank website for many years.

pdf snapshot from 18 March 2012:

AP Bank

link, if the website has not suddenly been changed:

http://www.apbank.ch/services/deposits.html

Valery Kargin, Viktor Krasovitsky, Ernst & Young, undisclosed compensation

Soon after the Parex Bank nationalization in late 2008, the Latvian media revealed several large and fraudulent deals between Valery Kargin and Viktor Krasovitsky’s families and the bank.  This was a rare time of honest reporting by the media.

The “auditors” at Ernst & Young must have known about all of these deals.  However, they signed Parex annual reports containing false statements that the Oligarchs received no compensation from the bank.

Latvian authorities refuse to prosecute the perpetrators in all of these cases.

One headline story was about the fleet of luxury cars transferred from Parex in early 2008.  The transfer occurred when the bank was still reporting profits every quarter and therefore before the surprise request for a bailout in late 2008.  The implication is that the quarterly reports were fake and the Oligarchs already planned to give bank liabilities to the taxpayers in early 2008, but wanted to keep the luxury cars.

Another headline story regarded subordinated loans from the Oligarch families to the bank, done for the apparent purpose of compelling the Latvian government to pay huge amounts of money to the Oligarchs after the handover of bank liabilities.

And, if that wasn’t bad enough already, the article below describes an unreported reciprocal loan/deposit deal that existed for many years.  It was revealed in December 2008 that Kargin and Krasovitsky each borrowed 28 million lats (twice as many dollars) from Parex and used it to make deposits at Parex at 36% percent interest.  The apparent motive was to transfer millions from the bank to themselves without reporting the compensation to creditors and minority shareholders and without paying taxes, since interest income was not taxed.

pdf snapshot from 20 March 2012:

Delfi looting article

link, if not yet censored by Latvian authorities:

http://www.delfi.lv/news/national/politics/kargins-un-krasovickis-aiznemusies-no-parex-56-miljonus-latu.d?id=22584768

 

VIP Avia and Parex Bank

Parex Bank used to have a subsidiary called VIP Avia.  In the early 2000’s, consultant ABN AMRO advised Parex not to have this frivolous subsidiary, the function of which was providing private jets for the Parex oligarchs.

Parex did not react by selling the subsidiary.  Instead, Parex changed its balance sheet to show VIP Avia as a loan to an unrelated party instead of a subsidiary.

This reaction was illegal.  However, Latvian authorities refuse to prosecute the responsible people from Parex and Ernst & Young.

John Christmas blew the whistle on this fraud in 2004/2005.  Dienas Bizness newspaper published an article about this fraud in 2009.

pdf snapshot from 18 March 2012:

DB VIP Avia

link, if not yet censored by Latvian authorities:

http://www.db.lv/citas-zinas/vip-avia-ierosinats-arpus-tiesiskas-aizsardzibas-process-134233