Dutch articles about EBRD Latvia fraud

Hurray for the Dutch media!  Maybe in the future Latvia can have a free media like this.

Articles about the 26 August 2014 letter from MP Pieter Omtzigt to Eurostat:

http://925.nl/archief/2014/08/26/breek-vragen-letland

http://politiek.thepostonline.nl/2014/08/26/eurostat-werkt-mee-aan-boekhoudfraude-bij-letland/

http://www.dagelijksestandaard.nl/2014/08/omtzigt-wil-dat-eurostat-schuld-letland-herberekent

Dutch journalist David Bremmer published an article in both Algemeen Dagblad (15 August 2014) and Het Parool (16 August 2014).

https://blendle.nl/i/ad/wordt-letland-het-nieuwe-griekenland/bnl-adn-20140815-3448345/r/sh-em

Dutch journalist Jean Wanningen published an article about the Latvia/EBRD/Parex fraud.

http://www.dagelijksestandaard.nl/2014/08/wetteloosheid-letland-is-topje-van-de-ijsberg

Dagelijkse Standaard 15 Aug 2014

Dagelijkse Standaard 15 Aug 2014 Eng

 

Previously, Dutch journalist Arno Wellens published a series of articles about the Latvia/EBRD/Parex fraud.

http://925.nl/archief/2014/07/15/kredietcrisis-zelfs-dijsselbloem-lijkt-het-niet-meer-te-snappen

925 article 15 Jul 2014

http://925.nl/archief/2014/01/07/letse-banken

925nl7jan2014

925nl7jan2014eng

http://925.nl/archief/2014/01/08/baltische-banken-deel-2

925nl8jan2014

925nl8jan2014eng

http://925.nl/archief/2014/01/16/nomura-hielp-letland-probleemschulden-te-verhullen-baltische-ban

925nl16jan2014

925nl16jan2014eng

 

UPDATED: former Parex subsidiary on U.S. Treasury blacklist

UPDATED:  Here is a new detail of an old story about how Parex Bank had a secret subsidiary in Belarus called Northern Investment Bank in 2005.  After Parex assets were looted and Latvian taxpayers paid the liabilities, Northern Investment Bank changed its name to Credexbank.  The US Treasury caught Credexbank laundering over $1 billion in 2010 and blacklisted it in 2012.  Did anyone else notice a detail from the leaked ‘Oligarhu lieta’ in which Kargin told Slesers in 2010 that he is doing ‘normal’ business in Belarus?  The implication could be that Kargin stole Northern Investment Bank from Parex in 2008, then renamed it Credexbank and laundered $1 billion through it in 2010.  Of course the Latvian government will not investigate. Instead, the government is still lying that Parex collapsed because of the United States and Sweden.

On 22 May 2012, the United States Treasury blacklisted Belarussian bank JSC Credexbank as a “Primary Money Laundering Concern.”  We at LawlessLatvia weren’t aware of the Latvian connection until recently.

According to the Treasury, JSC Credexbank processed over $1 billion in shell company transfers in 2010 alone, an amount disproportionate to its size.  Also, JSC Credexbank had shell company ownership itself.

This bank was previously named Northern Investment Bank and was an undisclosed subsidiary of Parex Bank according to John Christmas’ whistleblowing to EY (2004) and the Latvian Prosecutors Office (2005).  Christmas had an internal Parex email stating that Parex secretly owned Northern Investment Bank, but nobody at EY or the Latvian Prosecutors Office cared about that.

If employees at EY or the Latvian Prosecutors Office had done their jobs, they could have stopped the Lukashenko Regime from laundering over a billion dollars.

http://www.treasury.gov/press-center/press-releases/Pages/tg1590.aspx

 

 

Dutch Parliament investigation!

The Netherlands Parliament will have a formal investigation of the Parex/EBRD/Latvia “put option” fraud.  This investigation is different from the European Commission investigation, which is about how Latvia violated state aid rules to extend the Parex bailout loans.  The apparent purpose of both frauds was to cover-up the truth about Parex at taxpayer expense.

http://925.nl/archief/2014/06/17/kamervragen-neelie-kroes-waarom-sloopte-u-ing-terwijl-nederland-eur400-miljoen-belastinggeld-aan-een-russische-witwasbank-doneerde

 

Adriatic Institute and Global Financial Integrity

Global Financial Integrity and the Adriatic Institute for Public Policy have posted about the apparently fraudulent EBRD bailout of Russian/Ukrainian offshore specialist Parex Bank of Latvia in 2009.  The bailout empowered corrupt Oligarchs and devastated the Latvian economy.  When will the EBRD explain its actions to taxpayers?

http://adriaticinstitute.blogspot.com/2014/06/us-senate-briefing-on-america-and.html

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.

http://europa.eu/rapid/press-release_IP-14-454_en.htm

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.

BTA Bank, Anglo Irish Bank

In December 2013, exiled Parex Bank whistleblower John Christmas was contacted by an investigator. The investigator was originally using a false name. The investigator made statements connecting Parex Bank, Rietumu Bank, and Regional Investment Bank (Regionala investiciju banka) to the looting of billions of dollars from BTA Bank of Kazakhstan and Anglo Irish Bank of Ireland.

This is a description of the case:

http://www.bloomberg.com/news/2014-01-09/hunt-for-kazakh-bank-s-missing-billions-leads-to-riviera.html

The investigator, in emails, made frequent use of the term “Latvian Proxy Network” to describe “a large money-laundering network” of Latvian offshore banks that work in cooperation, often using the same shell companies, for “hiding/cleaning billions of dollars.”

In March 2014, a second investigator from a different organization also started asking Christmas about the same case.

Parex (now called Citadele) is fraudulently funded by the EBRD using your tax money.

UPDATED: Chris Gwilliam fled from Latvia

The Latvian government hired Chris Gwilliam to run Parex Bank and then Reverta resolution company.  His objective seems to have been covering-up the fact that Parex was a fraud and the bailout of Parex was also a fraud.  He claimed that his objective was to recover as much money as possible for taxpayers, but obviously he did not do that because the Latvian government did not sue and prosecute Valery Kargin, Viktor Krasovitsky, and Ernst & Young.  A contact informed LawlessLatvia of Gwilliam’s secret departure in December.  That contact was afraid for his life and refused to repeat the story when asked.  Gwilliam’s departure has been completely censored from the media.  Gwilliam is featured in the 2013 LatviavEBRD Youtube video.

UPDATE:  We are not certain why Gwilliam fled from Latvia, however we speculated it was because of massive money laundering and fraud at Parex.  Now, a credible source has given a different explanation.  The source claimed to know that Gwilliam was questioned by the United Nations Security Council about arms sales from Belarus through Latvia to Togo and Ivory Coast.  According to the source, Parex was “aiding and abetting the contraband.”  Remember: Parex (now named Citadele and Reverta) is fraudulently funded by the EBRD using your tax money.

Yanukovych laundered through Latvia

Berzins Yanukovych

Ukraine 2014 is a repeat of Kyrgyzstan 2010 – a kleptocracy is overthrown by a violent revolution and we discover that the kleptocrats were using Latvian banks.

http://www.buzzfeed.com/rosiegray/companies-linked-to-ousted-ukrainian-president-connected-to

The article names the usual “dummy directors” from Parex Bank sister company International Overseas Services.  These directors have been involved in other gigantic crimes also, however Latvian prosecutors are not bothering them.  Instead, the prosecutors continue to threaten two whistleblowers with prosecution in order to dissuade future whistleblowers.

The European Union, United States, Russia, and Ukraine have been fully aware for 20+ years that the Latvian government is protecting a massive money-laundering racket.  However these governments have taken no action except to fraudulently provide more funding to the racket through the European Bank for Reconstruction and Development.

If you know anyone from the EBRD, please ask them why they are on the wrong side in Eastern Europe.

UPDATE:  http://www.kyivpost.com/content/ukraine/latvian-bank-at-center-of-allegedly-illegal-schemes-of-fugitive-kurchenko-suspected-yanukovych-front-man-342216.html

ECB letter about EBRD fraud and PWC response

Exiled Parex Bank whistleblower John Christmas wrote a letter to the European Central Bank about the 2009 EBRD fraud in Latvia and 2013 EBRD fraud in Lithuania.  The letter was sent from Rome to approximately 650 people in December and January.  You must click this link twice to get to the pdf:

ECB letter scan

UPDATE:  PWC sent a reply that sums up the attitude of thousands of professionals who have known about the EBRD/Parex/Latvia fraud for years but are pretending they don’t know about it while it continues to grow.  PWC is claiming that the letter sent to them was “mis-posted” even though it was clearly marked with a note that they signed the false 2009 Parex Bank annual report.

Perhaps this is no surprise given PWC’s horrible history in the former USSR.  They signed annual reports for Gazprom for years will full knowledge that billions of dollars were being skimmed.  And, they signed annual reports for Yukos for years with full knowledge of massive frauds there.  PWC only canceled their endorsement of Yukos when Russian authorities threatened to arrest PWC employees.

Here is the PWC email about the ECB letter:

From: gemma.morton@uk.pwc.com

To: latviavebrd@gmail.com

Subject: Letter

Dear John,

We have received a letter addressed to a Mr Draghi that seems to have been mis-posted. The subject is EBRD helping falsify financial statements. As this letter is of a sensitive nature we have destroyed it and taken no copies.

Kind regards,

Gemma Morton

PwC PA to Kevin Burrowes & Symon Dawson