Eurostat communicates!

Dear LawlessLatvia fans,

Something amazing happened. For the first time since the EBRD-Eurostat-Dombrovskis cover-up campaign began eleven years ago, Eurostat has in a way communicated with me. They won’t talk directly and won’t acknowledge that they know I exist. However I was messaging with a journalist and he was asking them questions and they were uncharacteristically responding to him.

As we know, the assets of Parex were fake for many years because of their policy of making related-party loans and booking them fraudulently. This sort of ‘lending’ (actually, embezzlement) can continue as long as a bank is growing however is exposed if a bank has to deleverage.

In 2009, Valdis Dombrovskis was Prime Minister and he signed a deal which gave the appearance that Latvia sold a stake in Parex to the EBRD. If this was true, then it meant that the EBRD thought Parex was solvent.

Then, Dombrovskis won re-election because, according to himself, he rescued Latvia from ‘Sweden.’ The oligarchs are still probably laughing in their palaces about how anyone believed that stupid make-believe story.

After Dombrovskis was re-elected, I managed to get confirmation from the Dutch Parliament that he didn’t really sell a stake to the EBRD in 2009 because of a secret side-deal with the EBRD which they called a ‘put option.’

In 2014, the EBRD exercized the put option and Latvia reversed the 2009 privatization, paying a premium to the EBRD.

Explained more directly, Parex was worthless in 2009. It had been looted. Dombrovskis knew this and the EBRD also knew this. In order to protect the criminals who looted the bank and as an alternative to trying to recover the stolen money, Dombrovskis convinced the EBRD to buy the stake by secretly promising to reverse the transaction in 2014 after the election.

A surprise was that Eurostat was aware that he had done this and approved. Eurostat is responsible for integrity in EU statistics thus they were doing exactly the opposite of what they are supposed to be doing.

The first comment from Eurostat was that the amount of public money Dombrovskis secretly used to pay the EBRD was 100 million euros which is only 0.4% of GDP and therefore unimportant.

I countered that I believe 2 billion euros or more was embezzled from the bank, which means that the true cost to taxpayers was 2 billion plus 100 million euros. This was a significant part of GDP.

Eurostat countered that the amount of money that disappeared from the bank was only 800 million euros and therefore this transaction only caused Latvians to lose a total of 900 million euros which is ok.

Eurostat said that their rules allow member states to use put options and to keep the put options secret from voters and creditors. With Dombrovskis, the put option wasn’t even disclosed to rival political parties. It was designated as a state secret meaning that anyone who spoke of it would face criminal prosecution.

Calling a secretly negotiated reversion a put option doesn’t make sense. Eurostat indicated that if a put option is exercised, then the government must tell people about it, but not earlier. Eurostat rationalized that there was a possibility that the EBRD would not use the put option. But the only reason the EBRD ‘bought’ the stock in 2009 was because of the put option and they would have lost 100% of their investment if they didn’t use it!

We still aren’t sure when this will end since the Parex privatization fraud has been rolled over into the Citadele privatization fraud. According to Eurostat’s report on Latvia published in 2018 but read by almost nobody and not appearing in the Latvian media or Citadele annual reports, the sale of Citadele stock to the EBRD will also be reversed because of another secret put option.

Just wanted to keep everyone updated, especially since Dombrovskis is now European Commission Executive Vice President. Eurostat is aware of the ongoing cover-up and they could shut down the Latvian oligarchy and the largest money laundering racket in European history by reversing their decision to approve the so-called ‘put option’ however so far they are refusing to do their jobs.

Thank you,

John Christmas

Rubess: Parex/Citadele “no longer criminal”

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.


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.

Eurostat confirms Dombrovskis’ fraud

Eurostat has written a letter confirming that Valdis Dombrovskis’ deal to sell Parex Bank stock to the EBRD in 2009 was a fraud.  The “sale” was actually a “loan” because Latvia must buy back the stock.  The Eurostat letter indicates another fraud also:  when Latvia gave free Citadele stock (the EBRD bought Parex stock, not Citadele stock) to the EBRD this should have been recorded as an expense.  Latvia is required, according to the illegal deal, to buy back the Citadele stock for an unknown price at an unknown time.  However, Latvia made the deal “confidential.”  We thought “confidential” was for military secrets.  How can the national debt be “confidential” from voters, taxpayers, and creditors?  We hope the next government will repudiate the debt and sue the EBRD to take back the Citadele stock.

Eurostat letter September 2014

UPDATED: Bloomberg picks up story!


Dutch Lawmaker Asks Eurostat to Review Latvian Accounts
2014-08-26 11:29:53.256 GMT

By Corina Ruhe
Aug. 26 (Bloomberg) — Financial statements for Latvia are non-compliant with Eurostat standards, Pieter Omtzigt, Dutch member of parliament for the Christian Democrats, says in letter to Eurostat.
* Says Lavia “sold” shrs of nationalized Parex Bank to
European Bank for Reconstruction and Development in 2009
with secret “put option”, requiring Latvia to buy back the
shrs in future, guaranteeing unknown profit to EBRD at
expense of Latvian taxpayers
* Says money for Parex was only a loan effectively
* Says put option was major breach of European standards
* Says Eurostat obliged to instruct Latvia to restate
financial statements back to 2009; to include amount of put
option as debt
* NOTE: Latvia plans to sell Citadele this year
* NOTE: Dijsselbloem Says EBRD Has Put Option on Citadele,
Reverta Stake

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

–With assistance from Aaron Eglitis in Riga.

To contact the reporter on this story:
Corina Ruhe in Amsterdam at +31-20-589-8526 or [email protected] To contact the editors responsible for this story:
Fergal O’Brien at +44-20-7330-7152 or
[email protected]


We have been sending emails to Bloomberg for years that the EBRD/Latvia/Parex bailout was fraudulent because of a secret put option, and finally they have picked up the story!  This is one of the largest frauds of the European Financial Crisis, and is even larger if incoming rumors are true that the EBRD has committed similar frauds in other countries.


United States Senate briefing

Here are photos from the 4 June 2014 United States Senate briefing.  Senator Jeff Sessions gave a talk about the need for rule of law in Eastern Europe.  John Christmas explained the Parex/EBRD/Latvia fraud cover-up, which has been going on since 2009 with no action from prosecutors.  Four anti-corruption NGOs were involved in the event, which will hopefully lead to more media coverage of the problem and a Senate hearing later this year.

me at podium 2

sessions at podium

This is the slide show from Christmas’ presenatation:

slide show

This is the approximate text of Christmas’ presentation:

(slide 1 – dirty money flowing through Latvia)

Good morning, my name is John Christmas and I am here to talk about the offshore banks in Latvia and the disconnect between the mission and the actions of the European Bank for Reconstruction and Development – the EBRD.

I would like to thank the Adriatic Institute for Public Policy, International Leaders Summit, and Global Financial Integrity for organizing this event. Also, I would like to thank all attendees here at the Capitol, and thank Senator Jeff Sessions for his remarks.

(slide 2 – President Berzins and President Putin)

Latvia has an image in the media as a country with Western values which is on the side of NATO and opposed to the Kremlin.

Latvia is a member of NATO and most Latvian people share the values of NATO. But is the government of President Berzins really on the side of NATO?

The economy of Latvia is similar to the model in Russia. Oligarchs with connections to the Russian security services are rich from receiving state assets. Almost everyone else is poor.

Additionally, in the early 1990’s, Latvia became an offshore banking center under the guidance of KGB man Grigori Loutchansky who had a close relationship with Russian Prime Minister Viktor Chernomyrdin.

This early cooperation between the Latvian government and the KGB kicked off a racket for Latvian politicians that is still continuing.

Today, from the seventeen banks licensed in Latvia, fourteen specialize in offshore accounts for clients from Eastern Europe and Central Asia.

This racket has played no small part in the destruction of democracy and capitalism in the region, as national treasuries have been looted by tyrants and their cronies. Already violent revolutions in Kyrgyzstan and Ukraine were closely linked to Latvian banks.

(slide 3 – May 2007 KGB quote)

The largest offshore bank in Latvia for many years was Parex Bank. Here is a quote linking Parex to the Russian security services.

Parex served thousands of non-resident deposit accounts and sister company

International Overseas Services registered account holder companies for other Latvian banks as well, including those used for money laundering in the horrifying Sergei Magnitsky case, which of course you are familiar with because the U.S. Senate passed the Magnitsky Act in 2012.

Parex recruited me in 2002 to be their Western spokesperson to dispel what they called rumors that Parex was the Russian Mafia.

(slide 4 – photo of Mitterrand, EBRD facts)

The European Bank for Reconstruction and Development was established in the early 1990’s and was intended to heal the post-Communist countries of Eastern Europe and Central Asia. It was the brainchild of the president of France, Francois Mitterrand. The 2,150 EBRD employees responsible for $67 billion of public assets have a modern office tower in London, and as taxpayers you are paying their generous compensation and premium rent.

The EBRD was supposed to be a modern-day Marshall Plan. The Marshall Plan succeeded in healing the economies of Western Europe after World War II. However the EBRD has failed at healing the economies of Eastern Europe and Central Asia after the collapse of the USSR.

Although the EBRD has failed, this hasn’t stopped the EBRD propagandists from congratulating themselves for success, and the mainstream media is repeating these false claims. As a result, the EBRD is expanding into the “Arab Spring” countries.

(slide 5 – the USA and the EBRD)

The EBRD is funded by 65 countries.  The United States government owns 10% of EBRD shares, making it the single largest contributor.

(slide 6 – “vitality” comment from annual report and “put option” comment from Nomura)

Now for the specific case which exposes what the Latvian government and EBRD are doing.

In 2004, I blew the whistle on Parex. Latvian authorities refused to investigate. I left Latvia after receiving threats.

Parex grew much larger, always reporting profits. Then suddenly at the end of 2008, the bank was bailed out and mostly nationalized, even though the government had no obligation to do this.

The government turned to the European Union, International Monetary Fund, and World Bank to fund the bailout and inflicted a brutal austerity program on the population.

The government maintained that the Parex was worth book value, however could not find any private-sector investor who would buy it.

That’s when the government turned to the EBRD. In 2009, the EBRD announced the purchase of 25% of Parex stock in a 144-million-dollar deal citing the “vitality” of Parex. Why did the EBRD think Parex was valuable when none of the other potential investors did?

In 2010, a website leaked a report from Nomura indicating that the EBRD had a secret “put option” to sell the shares back to the government. In other words, the stock sale was reversible and therefore fake with the likely objective of falsifying national accounts thus defrauding all creditors of the government.

(slide 7: London Stock Exchange filing)

This is a London Stock Exchange filing from 2010. The filing indicates that all Parex shareholders were equal, which should have included the EBRD plus the other minority shareholders.

In 2010, a new “good bank” called Citadele was spun off from Parex.

The government capitalized Citadele with taxpayer money and gave 25% of Citadele stock to the EBRD.  The other minority shareholders from Parex got nothing and therefore lost their entire investments.  This mysterious transaction could have represented compensation to the EBRD for conducting a false purchase of Parex stock a year earlier, thus backing up the Nomura report.

(slide 8 – Italian and Dutch headlines)

Since 2010, I have encouraged anti-corruption websites to publicize the EBRD fraud evidence since all Latvian newspapers refuse.

My “LatviavEBRD” videos have a quarter-million views on Youtube. 

Also, European journalists Mauro Caterina and Arno Wellens published the allegations

The EBRD refuses to respond and therefore we have concluded that the EBRD must be guilty.

Other journalists have been slow to pick up the story, however they will eventually. Latvia and the EBRD are apparently doing the same thing Enron did in the 1990’s: fooling investors with fake reversible deals.

(slide 9 – Parex and government blame USA)

For now, the mainstream media is repeating pronouncements from Latvian politicians that they have heroically rescued Latvia by bailing out Parex which they say collapsed because of the United States.  Here is language about that from a Parex annual report.

How can the United States be responsible for Parex overstating the value of its assets?  And why should the United States put up with this slander?

The mainstream media is describing Latvia’s austerity program as a success story.  But how can this make sense?  The oligarchs are still in control.  The national debt has doubled. And almost 20% of the population left.  Latvia hasn’t seen an outflow of refugees like this since World War II

(Slide 10 – EBRD fostering)

The EBRD is spreading disinformation as well. For example, it is issuing press releases about fighting corruption in Ukraine while at the same time Citadele Bank is wooing Ukrainian clients offshore.

The EBRD claims that it is “fostering transparency and accountability.” However, the only feedback journalists are getting is “no comment.”

(slide 11 – Poikans)

It is frustrating fighting the EBRD in order to fight corruption. However, I recently gained new motivation.

It is well known that Latvian prosecutors never prosecute large crimes in Latvia, even when foreign countries provide completed cases.

But now, it’s not just about criminals not being prosecuted. Now, it’s about another whistleblower who is getting prosecuted.

The man on the screen is Ilmars Poikans. In 2010, he became the second whistleblower against Parex.

Mr. Poikans is expected to receive an eight-year prison sentence for his “crime” of informing taxpayers about how their money is being spent.

The cruelty of the prosecution is beyond comprehension for me.  It is similar to Russia prosecuting whistleblower Magnitsky instead of the crooks he blew the whistle on.

If you hear a representative of the Latvian government saying how terrible it is that Russia chose to prosecute a whistleblower, please ask: why is Latvia doing the same thing?

If you hear an EBRD employee complaining about the human rights abuses in the Magnitsky case, please ask: why does evidence indicate that the EBRD is covering-up fraud at a bank connected with the case?

(slide 12 – Adriatic Institute logo)

Today begins a new chapter in the battle to expose the Latvian government and the EBRD. My intention is to work with the Adriatic Institute and its partners to publicly demand an explanation from the EBRD.  More information will be on the Adriatic Institute website soon. 

Of course we hope the United States government will support this effort.

(slide 13 – bar chart)

Finishing up, this chart shows the scale of the problem.

The first bar is $20 billion, the size of notorious bank BCCI at the time it was shut down in 1991, in part by Senator John Kerry and Jack Blum.

BCCI was similar to Parex. It specialized in offshore account services except it targeted Colombians rather than Russians and Ukrainians.

BCCI had a captive government, General Manuel Noriega’s Panama, just as Parex and other offshore banks have a captive government in Latvia.

The second bar is $66 billion, the size of Enron at the time it was shut down in 2001.  As mentioned, the Enron fraud was similar to what the EBRD appears to be doing today.

The third bar is $94 billion, which includes all non-resident deposits in Latvian banks today plus the assets of the EBRD today because insiders told me that the EBRD has done deals similar to Parex in other countries.

(slide 14, actor Clive Owen)

This is from the 2009 movie about BCCI called “The International” starring Clive Owen. From this photo, it sure looks difficult and dangerous to shut down a bank fraud.

But the EBRD/Latvia battle can be much easier.  All it takes to expose what is going on is for institutions with authority to demand an explanation.

Thank you.

European Commission investigation!

The European Commission has opened an investigation into state aid to Parex Bank and successors Reverta and Citadele Bank.  It’s about time somebody investigated, since clear evidence of massive frauds has been openly available online for years.

The EC release listed specific ways in which Latvian government loans to Parex were noncompliant.  They were larger than allowed, and also the government extended the maturities to longer times than allowed.  Presumably, the government did this because the loans won’t be paid back however the government wants to delay until after the next election before taxpayers find out how much money was lost in the black hole of Parex.

Strangely, the EC release did not mention that the sale of Parex stock from Latvia to the EBRD was a fraud (a fake reversible purchase designed to fool the public) since that fraud is even worse than the others.

We at LawlessLatvia have already sent information to the EC investigators:  Parex was a fraud and the Parex bailout was a fraud and the purpose of the bailout was to protect corrupt government employees and oligarchs.

Hopefully the EC will investigate with an objective of uncovering and exposing the truth.  When the EBRD conducted “due diligence” on Parex in 2009, it had the opposite objective – tricking the public that Parex was not a fraud even though it was.

The EC release was not censored in the Latvian press.  However, we wonder if the press knew about the noncompliance of the bailout loans already and covered this up for as long as they could.