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EBRD Fraud: Media Articles

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As more articles appear in the media about the EBRD/Latvia/Parex “put option” fraud, it will be more difficult for EBRD employees, police, regulators, and auditors to pretend they don’t know about it.  The fraud caused an economic and demographic crisis in Latvia.  The problem will continue to grow until the responsible people are exposed and prosecuted.  Each article has a link and pdf, in case the EBRD is able to force some of the articles offline.  The EBRD already forced the original leaked document (the Nomura document on www.Kargins.com) offline.

“Il Manifesto” 21 April 2013 by Mauro Caterina

http://www.ilmanifesto.it/area-abbonati/ricerca/nocache/1/manip2n1/20130421/manip2pg/06/manip2pz/339238/manip2r1/lettonia/

Il Manifesto 21 April 2013

“Lithuania Tribune” 1 March 2013 by John Christmas

http://www.lithuaniatribune.com/30931/the-ebrdparex-bank-mystery-widens-201330931/

Lithuania Tribune Mar 2013

“Lithuania Tribune” 12 November 2012 by John Christmas

http://www.lithuaniatribune.com/18678/the-ebrdparex-bank-mystery-201218678/

Lithuania Tribune Nov 2012

KGB links Parex Bank with Russian Mafia nukes

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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

Ventspils, Latvian Prosecutors Office, Gunvor

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It has been well-known for many years that all of the wealth of Ventspils is going to five individuals:  Aivars Lembergs, Olafs Berkis, Olegs Stepanovs, Igors Skoks, and Genadijs Sevcovs.

When the Latvian Prosecutors Office announced in 2007 that it would prosecute Lembergs, Latvians were amazed because it always seemed that the oligarchs were above the law.  The prosecution should have been extremely easy because of discoveries of shell-company activities by law enforcement in Austria, Lichtenstein, and Guernsey.

But now in 2012, it is clear that the Lembergs prosecution is not real.  He is not in jail.  And, he and his friends are still able to take money from the state.

Perhaps most disturbing of all, a company named “Gunvor” is mentioned in this article.  Could this be a link to the KGB’s notorious ”Gunvor” in Switzerland?

Article link:

http://media-reading.com/2012/07/27/incredible-prosecutors-office-weak-lembergs/

Pdf in case link goes down:

Gunvor

Sergey Magnitsky, Latvia, money laundering

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Are you horrified by the murder of Sergey Magnitsky?  Are you disgusted by the involvement of Russian government officials in the related theft of hundreds of millions of dollars?  Please know that Latvian banks were involved.  The Latvian offshore banking system is funded by the EBRD, EU, IMF, and World Bank.  Why does the world tolerate this outrageous use of taxpayer money?

The attached letter details the movement of stolen money through the following Latvian banks:  AB.LV, Baltic International Bank, Baltic Trust Bank, Paritate Bank, Rietumu Bank, and Trasta Komercbank.  All have links with Parex Bank, and all used shell companies from the same “International Overseas Services” that was run by the former Parex chairman.  When half of the assets of Parex disappeared in 2008, the EBRD, EU, IMF, and World Bank bailed out the shell-company depositors with a loan that must be paid back by Latvian taxpayers.  A large part of the bailed out deposits were re-deposited at AB.LV.

Please read this letter from Brown Rudnick to the Latvian General Prosecutor regarding Latvian banks involved in the Sergey Magnitsky case:

Latvian Complaint signed FULL (2)

Hewlett-Packard, Russian Prosecutors Office

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The United States announced its settlement with Daimler regarding bribes paid through Latvian banks to Latvian and Russian recipients back in 2010.  Germany followed up by announcing an investigation of Hewlett-Packard regarding bribes paid through Latvian banks to Russian recipients.

Now in 2012, Germany has announced that three former Hewlett-Packard managers have been charged with bribery.  The bribes facilitated the sale of computers to the Chief Public Prosecutor’s Office of the Russian Federation.

We can now understand why Russian prosecutors tolerate the enormous flow of Russian money through shell-company deposits held with Latvian banks.  The prosecutors themselves are receiving some of the money!

Latvian and Russian prosecutors refuse to prosecute the people involved in the Daimler case.  Therefore, it seems unlikely that they will prosecute the people involved in the Hewlett-Packard case.

When will the United States and European Union help the people of Latvia and Russia by blacklisting the offshore banks licensed in Latvia?

Here is the article from Business Week:

http://www.businessweek.com/news/2012-09-13/ex-hewlett-packard-managers-charged-in-germany-on-russia-bribery

Highest incarceration rate, but no criminals in jail!

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Latvian taxpayers have witnessed an incredible orgy of theft since Latvia regained independence in 1991, resulting in the total destruction of the national economy and the loss of a third of the national population:

(1) all state enterprises were privatized for miniscule prices to a small circle of oligarchs; the loss to taxpayers was billions of dollars

(2) all of the most desirable state properties were privatized for miniscule prices to political insiders; the loss to taxpayers was billions of dollars

(3) the largest bank in the country (notorious for its involvement in the Kempmayer, South Bridge, Alstom, Daimler and other corruption cases) was cleaned out by insiders; the loss to taxpayers was billions of dollars

Yet, nobody has gone to jail!  That’s right, from all of the crimes listed above, the number of perpetrators sent to jail was ZERO.

Does this mean the jails in Latvia are empty?  NO!

In fact, Latvia has the highest incarceration rate in the European Union.  Latvian officials say that most of these prisoners are in pre-trial detention.  In other words, the people in the jails were randomly picked up off the street and did not have trials.  Latvian officials say they are overburdened with work and therefore cannot have trials for the people who are in jail.

The officials certainly are overburdened with work.  They have been very busy giving enterprises and properties to the oligarchs and politicians!

The IMF, EU, EBRD, and World Bank should stop lending money to the Latvian government until the innocent are set free and the guilty are in jail.

Here is the link to Wikipedia:

http://en.wikipedia.org/wiki/Incarceration_rate

FATF Suggestion to Whistleblower

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The Financial Action Task Force (FATF) is an inter-governmental organization based in Paris with a responsibility for fighting money laundering.  The FATF maintains lists of “high-risk” and “non-cooperative” countries and, obviously, Latvia should be added to these lists because the Latvian government is controlled by a group of offshore Russian/Ukrainian shell-company banks.

The Latvian people are suffering because these banks are corrupting and bankrupting the country.  Europeans, Russians, and Ukrainians are also victims.  The FATF could help everyone by pressuring Latvia to close these banks.

Exiled Parex Bank whistleblower John Christmas alerted the FATF to this problem, and the FATF replied that they will do nothing and the whistleblower should ”contact a lawyer.”

Interesting advice!  The whistleblower in a multi-billion-euro fraud and money laundering case should “contact a lawyer” to fight the entire Russian/Ukrainian Mafia.

The FATF is not the only taxpayer-funded organization with this attitude.  The attitude of Europol, the British FSA, the British SFO, and the German BaFin has been the same.  No wonder Europe is being overrun by a financial crime wave.

Here is the FATF email:

FATF

New video about the EBRD/Parex fraud! UPDATED

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Why is the Media ignoring this clearly-evidenced, multi-billion-euro fraud that threatens to bankrupt a European Union country?

                               Parex Bank

http://www.youtube.com/watch?v=IBiYCPfIWFA

UPDATED WITH EBRD CONFESSION

New evidence has emerged that the EBRD purchase of Parex Bank shares from the Latvian government was a fraud, probably committed for the dual purpose of covering-up Oligarch crimes and defrauding the IMF, EU, and World Bank.

Here are quotes from the Parex Bank 2009 annual report:

“Among Parex banka’s top priorities in 2009 was concluding the deal with the European Bank for Reconstruction and Development about its involvement in the shareholder structure, signalling about the vitality and development potential of the institution.”

“In January and February 2009, the EBRD performed a complete due diligence of Parex banka”

“On 7 April 2009, the EBRD Board of Directors approved a financial package for Parex banka, including the acquisition of 25 percent plus 1 of ordinary shares of Parex banka for LVL 59.5 million (EUR 84.2 million) and a subordinated loan of EUR 22 million.”

“On 16 April 2009, the Share Purchase Agreement was signed providing that following the increase of equity capital the EBRD will purchase 57,506,825 ordinary shares comprising 25 percent and one share of Parex banka’s equity capital.  On 23 July 2009, the European Bank for Reconstruction and Development signed the subordinated loan agreement with Parex banka.”

“Finalising the deal, on 3 September 2009, 25 percent and one share of Parex banka were transferred from the Privatisation Agency to the European Bank for Reconstruction and Development.  In this initial transaction, the EBRD acquired 51,444,325 ordinary shares with voting rights.  As part of a future capital increase at Parex banka, the EBRD plans to purchase a further 6,062,500 shares, thus maintaining its stake of 25 percent and one share.”

“The signed agreement indicates not only the stabilisation of the Latvian financial system and gives a positive signal about the investment environment in Latvia, but also evaluates Parex banka’s future development potential and increases the Bank’s value.”

On 29 October 2009, the Latvian government put more capital into Parex Bank.  The EBRD did not increase its “investment” and therefore the EBRD ended 2009 with 22% rather than 25% of the shares.

In 2010, Parex Bank was split into a New Bank (Citadele Bank) and a Resolution Bank (Reverta).

The 2011 Youtube video titled “Latvia versus EBRD” informed the public that the EBRD refused to communicate with the Parex Bank whistleblower (John Christmas) when supposedly conducting “complete due diligence” on the 2009 purchase of Parex Bank shares and that the EBRD already knew that Parex Bank was worthless and criminal prior to purchasing the shares.  The purchase was apparently carried out not because of “vitality and development potential” as stated in the Parex annual report, but rather because of a secret, and therefore illegal, put option revealed in the leaked Nomura document.

The 2012 Youtube video titled “Latvian Financial Crisis – the multi-billion-euro Parex/EBRD/Ernst&Young fraud” repeated the same information and received many more views because it was professionally produced.  As of today it has over 119,000 views, making it one of the most popular videos ever about Latvia.

Finally, a journalist has begun to ask questions to Reverta and the EBRD about the crimes.  This journalist wrote two emails addressed to the whistleblower evidencing more frauds.

26 October 2012:  “I’ve heard from sources that it was normal for the Kargins and Krasovitskis to take a personal cut / kickback from the loans the bank made, is this something you heard about when you worked there?  According to the Reverta lawyers, K and K also destroyed much of the documents pertaining to loans before nationalization.”

The EBRD apparently did not conduct “complete due diligence” or else it would be aware that Parex had transferred a huge amount of money to cronies, booked the transactions as “loans,” and then destroyed the documents so that the “loans” would not have to be repaid.  Or else, the EBRD did conduct “complete due diligence” and therefore already knew this but anyway co-conspired with the Latvian government to cover up the crimes.

4 December 2012:  “The EBRD say they cant comment on the specifics of the transaction (taking a stake in Parex) but say they sometimes use put options.  They also say that the 22% figure you mention refers to the stake in Parex bank they took, not the profit.”

Since, the EBRD refuses to deny that they have a put option on the Parex shares, we can conclude that they are guilty of fraud.  And, even worse, the EBRD claims to have committed the same fraud multiple times with different deals.

Regarding the 22%, they are referring to this quote from the leaked Nomura document, “Compensation of EBRD, 22%, Resolution Bank 2014E BV 38,164, Compensation for nominal investment 57,569.”  Now we know that the 22% number refers to the EBRD’s percentage stake.  The other numbers appear to be amounts in Latvian lats:  38,164,000 and 57,569,000.  What those numbers mean is still unclear.  The term “compensation” suggests that there is a “put option,” as stated earlier in the same report, because otherwise there would be no reason why the EBRD would receive “compensation” from the Latvian government.

The EBRD can be prosecuted in many jurisdictions for its crime.  Most obviously, prosecution could take place in London or Latvia.  But also, all of the 61 countries that fund the EBRD could commence prosecution.  The secret put option is a material fraud on (1) the EBRD financial statements, (2) the Republic of Latvia financial statements, and (3) the Parex Bank financial statements.  The scope of the crime in Latvia is already huge, and according to the EBRD the same fraud has been committed in other deals as well, thus indicating an absolutely enormous criminal racket affecting millions of people in multiple countries.

Let’s hope law enforcement somewhere will take action.  The EBRD has lost its “plausible deniability” excuse by sending an email in which they confess that they know about their fraud.  They have not been covering their eyes and plugging their ears carefully enough.  The Latvian people deserve large compensation from the EBRD and the Parex auditors.

Latvian government to Oligarchs: Please bank in our country!

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Since the early 1990′s, Latvia has been the offshore banking center for Russian, Ukrainian, and other CIS oligarchs.  In the beginning, oligarchs such as Grigory Loutchansky, Viktor Chernomyrdin, Yulia Tymoshenko, and Pavlo Lazarenko were making use of Latvian banks.

Now in 2012, the offshore business has increased, to the detriment of the Latvian, Russian, and Ukrainian people.  The offshore banks of Latvia are endorsed and/or funded by the following organizations:  Moodys Ratings, Fitch Ratings, S&P Ratings, Ernst & Young, PricewaterhouseCoopers, the European Union, the IMF, the EBRD, and the World Bank.

Latvian banks are permitted to branch freely throughout the European Union with no oversight from local regulators.

Here is a list of Latvian banks in June 2012 with notes on associated oligarchs:

(1) ABLV Bank – Offshore bank serving Russians and Ukrainians.  When the European Union bailed out Parex Bank, many deposit accounts moved here.
(2) Baltikums Bank – Offshore bank serving Russians and Ukrainians.
(3) Baltic International Bank – Offshore bank serving Russians and Ukrainians.  Linked to oligarchs Valery Belokon, Boris Berezovsky, Kurmanbek Bakiyev, Alexander Lukashenko.
(4) GE Money Bank – In process of being sold to Otkritie Financial Corporation of Russia.
(5) DNB Bank – Latvian retail bank.
(6) Swedbank – Latvian retail bank.
(7) Latvijas Biznesa Banka – Offshore bank serving Russians and Ukrainians.  Owned by Bank of Moscow, linked to Yuri Luzhkov.
(8) Norvik Bank – Former Lateko Bank.  Offshore bank serving Russians and Ukrainians.
(9) Latvijas Hipoteku un Zemes Banka – Government bank linked to Latvian oligarch Andris Skele.
(10) Expobank – Offshore bank serving Russians and Ukrainians.  Formerly named LTB Bank and formerly owned by MDM Bank.  Linked to Oleg Deripaska. 
(11) SEB Bank – Latvian retail bank.
(12) SMP Bank – Formerly Multibanka.  Offshore bank serving Russians and Ukrainians.  Blacklisted by United States Treasury in 2005.  Linked to Arkady Rotenberg, Vladimir Putin’s judo partner.  
(13) PrivatBank – Offshore bank serving Russians and Ukrainians.
(14) Regionala Investiciju Banka – Offshore bank serving Russians and Ukrainians.
(15) Rietumu Bank – Offshore bank serving Russians and Ukrainians.  Linked to Suleiman Kerimov.
(16) Trasta Komercbanka – Offshore bank serving Russians and Ukrainians.  Was involved in the Sergey Magnitsky money laundering case.
(17) UniCredit Bank – Latvian retail bank.
(18) Latvijas Pasta Banka – Spun off from Latvian Post Office and privatized to former owner of Lateko Bank.
(19) Citadele Bank – Offshore bank serving Russians and Ukrainians. Spun off from Parex Bank.  Funded by EU, IMF, World Bank, EBRD.  Linked to Oleg Boiko, Yuri Shefler.
(20) Rigensis Bank – Offshore bank serving Russians and Ukrainians.
(21) (not licensed anymore, but nobody being prosecuted)  Latvijas Krajbanka – Linked to Snoras Bank of Lithuania, Alexander Antonov, Vladimir Antonov, Oleg Deripaska.
(22) (not licensed anymore, but nobody being prosecuted) VEF Bank – Was blacklisted by the United States Treasury.  Linked to Leonid Reiman, Alisher Usmanov.

Here is the list from the Latvian regulator:

http://www.fktk.lv/en/market/credit_institutions/banks1/