Inguna Sudraba, Parex Bank, Southern Bridge

Posted on March 28, 2012 by admin1

Inguna Sudraba was a member of the Parex Bank Credit Committee from 2003 to 2004 and therefore was responsible for (1) making undisclosed-related-party loans, (2) making loans that exceeded the bank’s lending limit, and (3) acting as credit committee for secret subsidiary Extro Bank of Russia.

In 2008 and 2009, the Latvian people learned that half of the loan portfolio of Parex was bad, thus indicating severe problems with the Parex Credit Committee.

Was this the end of Sudraba’s career? No! Now in 2012, she is the Latvian State Controller (Auditor)!

Sudraba, working as State Controller, cannot find any corruption in Latvia. For example, Parex arranged financing for the “Southern Bridge” in Latvia. Latvian taxpayers will pay 1,000 million euros for a bridge that is worth 300 million euros. Sudraba cannot figure out where the other 700 million euros went.

Latvian newspapers keep naming Sudraba as a wonderful person who should be President or Prime Minister in the future. The articles never mention that she was on the Parex Credit Committee.

Southern Bridge

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

Posted on March 28, 2012 by admin1

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

Banco Santander robbed buying Extro Bank?

Posted on March 28, 2012 by admin1

One of the items from John Christmas’ Parex Bank whistleblowing list from 2004 was that Parex secretly owned a bank in Russia.

Christmas claimed that Parex owned and operated Extro Bank. For example, the Parex Credit Committee approved the loans that Extro Bank extended. Latvian State Controller Inguna Sudraba was on that committee.

The fraud claim is backed up by an email written by Parex vice president james brown. The claim is also backed up by a Skype conversation (below) with former Parex manager Christa Rubstein. She also confirms in the conversation that Parex paid employee compensation illegally.

Even though three witnesses wrote that Parex owned Extro Bank, the auditors at Ernst & Young did not care at all and ignored the huge fraud.

Therefore, Parex was able to sell Extro Bank to Banco Santander. Santander is one of the largest banks in Europe and has millions of shareholders in Spain and the United Kingdom.

According to emails (below) from a private investigator who contacted Christmas, Banco Santander got “robbed” in the purchase. The loss could have been 40 or 50 million euros.

Law enforcement is not interested at all, as usual. Also, the media is not interested.

Continue reading →

Declaration by John Christmas, Parex Bank whistleblower

Posted on March 28, 2012 by admin1

John Christmas was the whistleblower from Parex Bank. He gave fraud information to Ernst & Young in 2004. He gave fraud information to the Latvian government in 2005. He was terrorized with threats and fled from Latvia. Ernst & Young and the Latvian government ignored the information.

The Parex fraud grew much larger and caused the Latvian Financial Crisis in 2008.

Now in 2012, there still has never been any investigation of the whistleblowing by Latvian (or European) authorities even though the fraud occurred in Latvia (and Europe).

This is a declaration written by John Christmas in January 2010. The declaration was written at the request of Varu Tautai. A translation (with a few errors) used to be online at VaruTautai.lv. Most of the information in the declaration has been censored in the Latvian media.

One note: In January 2010 when the declaration was written, it appeared that the FBI and United States Department of Justice were not going to use the information that they received from Christmas in October 2007. However, in April 2010 it was revealed that the information was used in the USA versus Daimler settlement. The FBI was back in communication with Christmas immediately after the announcement of the settlement.

Declaration

EBRD subsidiary Parex Bank threatened whistleblower

Posted on March 28, 2012 by admin1

John Christmas was told by representatives of Parex Bank that he can “never come to Latvia anymore” as recently as 2009. The implication is that the bank is threatening to murder or arrest the whistleblower if he returns to his home. Christmas has received many similar threats from many different people since the whistleblowing. Fortunately, this threat was recorded.

Parex was owned by the Latvian government and the European Bank for Reconstruction and Development in 2009. Christmas forwarded this transcript to the EBRD and they ignored it, just as they have ignored all of the other criminal information about their subsidiary.

Excerpts of the transcript and audio file are below, with commentary written by Christmas in capitals. In the beginning is a discussion between Christmas and a Latvian friend about his apartment. Even though Christmas is a Latvian citizen and this apartment is his home, he has not been there since 2005 because of repeated terror threats from Parex and absolute refusal by the Latvian State Police to investigate.

The threats are in boldface and appear toward the end of the transcript.

Continue reading →

BaFin, Deutsche Bank, Parex Bank

Posted on March 28, 2012 by admin1

Parex Bank whistleblower John Christmas provided fraud information to the German regulator BaFin in May 2006. BaFin gave the information to the Latvian authorities even though Christmas explained that they already had the information.

BaFin could have confirmed that some of the fraud information was true in a few hours. However, BaFin chose to do nothing. As a consequence, Deutsche Bank will lose millions of lats. Also, German taxpayers are bearing some of the burden of bailing out Latvia.

The email below shows that BaFin received information about Parex from Christmas and gave the information to the Latvian authorities. The article below shows that Deutsche Bank owned some of the 52.8 million lats (twice as many dollars) subordinated debt of Parex.

pdf of email from BaFin to Christmas:

BaFin email

pdf snapshot of Deutsche Bank article from 11 April 2012:

Deutsche Bank Baltic Course

link to Deutsche Bank article if the Latvian government hasn’t censored it yet:

http://www.baltic-course.com/eng/finances/?doc=25008&underline=dnb+nord&ins_print

Aivis Ronis slandered Parex Bank whistleblower?

Posted on March 28, 2012 by admin1

This email seems to show that Aivis Ronis slandered Parex Bank whistleblower John Christmas to the Wall Street Journal in 2007.

Ronis used to be the Latvian Ambassador to the United States. But, by 2007, he ran the Latvian-American Financial Forum. LAFF was a lobbying group with a purpose of convincing the United States government not to blacklist Latvia’s Baltic International Bank. Oligarch Valery Belokon of BIB is known for his close relationships with Boris Berezovsky, Kurmanbek Bakiyev, and Alexander Lukashenko.

Even though Ronis was supposed to be working for Valery Belokon of BIB, not Valery Kargin of Parex Bank, it appears that Ronis committed a slander crime against the Parex whistleblower for the purpose of stopping the WSJ from publishing a story about the frauds at Parex. It is a shame that the story was stopped, because that story could have prevented the Latvian Financial Crisis by forcing Parex to close one year before the government bailout.

Did Ronis get prosecuted for his action? No. He got promoted! First, he became Latvian Minister of Foreign Affairs. Now in 2012, he is Latvian Transportation Minister.

Notice that the WSJ journalist, an expert on corruption in Russia and Ukraine, believes that Parex is a violent criminal organization. In this email, he warned the whistleblower to “be careful.”

Latvian newspapers refuse to publish this email. The email used to be on Kargins.com, however the Latvian government has censored that website.

Ronis email

Mizuho Corporate Bank and Parex Bank

Posted on March 28, 2012 by admin1

This email indicates that Parex Bank whistleblower John Christmas provided fraud information to Mizuho Corporate Bank in 2005 and the relationship manager at MCB reacted by getting angry.

MCB decided to lend much more money to Parex after learning that the bank’s financial statements were false. The total amount of syndicated lending increased to approximately 800 million euros and the London office of MCB organized most of it.

When the assets of Parex Bank disappeared in 2008, the Latvian government forced Latvian taxpayers to repay the syndicated loans instead of letting MCB suffer the loss. This decision was the direct cause of the Latvian Financial Crisis.

The Latvian media is completely silent about this issue.

Mizuho Corporate Bank

UK FSA, Ernst & Young Global, Parex Bank

Posted on March 28, 2012 by admin1

The UK Financial Services Authority (FSA) and Ernst & Young Global knew that Parex Bank was a fraud already in 2007. They also knew that whistleblower John Christmas was being terrorized with murder threats.

However, the FSA and E&Y chose to ignore the information and sit and watch while Parex borrowed approximately one billion euros in London through syndicated loans and bond issuances.

The money disappeared and now ordinary Latvian taxpayers must pay back the creditors with bailout funds from the European Union.

Nobody is being prosecuted anywhere.

FSA and E&Y knew

VIP Avia and Parex Bank

Posted on March 28, 2012 by admin1

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