LAW |
CRIME
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PROFILE
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By Tatyana Merkulova (Delovie Vedomosti),
Martins Naglis,
Vaidotas Vyniauskas (Lietuvos Rytas)
There is a stereotype in society that claims bankers to be amongst the richest of people. Nevertheless, this is often far from the truth, and frequently a banker is only someone managing somebody else's money. Over the past eleven years of Baltic financial history, not all the bankers having gained access to big bucks managed to stay away from the temptation of making them their own. The same history has also proven another rule, which states that it's not easy to punish a dishonest businessman, and - some may add - especially those with impressive Swiss bank accounts. Financial crimes in the Baltic States seem to be more of a philosophical problem than a criminal one. We've made an attempt at tracing the destiny of the loudest and most controversial financial scandals in Estonia, Latvia and Lithuania.
In the summer of 1992, Estonia was the first of the Baltic States
to change to its own currency. In accordance to a signed agreement with Russia,
Estonia took upon itself to give the cash rubles collected during the money
reform to the Central Bank of Russia. However, after one and a half-years
it became clear that the money did not arrive in Moscow. The money was not also
in the Bank of Estonia. Estonia's government opposition started to ask an increasing
number of unpleasant questions to the Prime Minister of the time, Mart Laar,
and of course also the president of the Bank of Estonia, Siim Kallas.
Eventually, a fair amount of compromising evidence forced Laar and Kallas to
admit that the rubles were actually sold to some other customer in order to
add more money to the already lean treasury of the new Republic of Estonia.
All attempts to find out who the 3.5 billion Estonian rubles were actually sold
to, ended in failure. Almost a year later, during which the dollars received
for the rubles were kept in unknown bank accounts, the money was transferred
to the Bank of Estonia. Some experts claim that the exchange rate did
not turn out to be advantageous for Estonia. The most widely spread version
of this story is as follows: the rubles were carried out of Estonia by a military
plane, which was related to the former Johar Dudaev brigade in Tartu, eastern
Estonia. It is well known that by 1992, Dudaev was already the President of
the Republic of Chechnya.
In 1996, the Estonian security police pinned this case to Laar's former advisor,
Tiit Pruuli, and two other businessmen who were likely to be involved
in the ruble bargain. Laar, who is now again the Prime Minister of Estonia,
and Kallas, who has now been appointed by Laar a minister of finance, both stood
as witnesses at court, but in the end nobody was actually imprisoned for the
ruble hustle.
The Bank of Estonia and its president of the time, Siim Kallas,
were again connected to another reverberant financial scam in 1993. In this
year, the Bank of Estonia, using the services of a local investment bank,
Pohja-Eesti Pank, transferred 10 million US dollars to a Swiss company.
The fact that this money actually disappeared to the most renowned banking country
of Switzerland only became known three years later, when Kallas had already
left his position at the Bank of Estonia and was the pillar of his own founded
Reform Party - and still is, as well as being the country's minister
of finance.
It turned out that the 10 million US dollars were transferred to Switzerland
on the basis of a fairly dubious contract, according to which the Bank of
Estonia was to receive unbelievable dividends from the oil trade. Neither
the mediators, nor the final receivers of the money practically bore responsibility
for the success of the investments, therefore, Estonia did not manage to get
its money back. In connection to this scandal, Kallas (already posted as minister
of finance) was brought to court, but was acquitted. According to certain other
sources, the current president of the Bank of Estonia, Vahur Kraft,
was also involved in the case, but no charges were brought upon him.
In court Kallas gave the same arguments as the previous time when he spoke of
the ruble hustle. He claimed that the founders of independent Estonia's financial
system did not have enough experience, but the wish to earn more money for the
young country was huge, and various bad people took advantage of it.
During the early years of the Estonian banking system, several
banks went bankrupt, and, in addition, all of these cases are said to have been
connected with suspicious businesses. Nevertheless, the story of Maapank
could be deemed as the most resounding of all, when the head of the bank, Malle
Eenmaa, became the first and last banker in Estonia to be taken to prison
so far. Eenmaa was imprisoned for the fact that in 1996, while heading the bank
and, also being a member on the council of the U.S. Fund for Agricultural
Aid to Foreign Countries, she organized the transferring of 29.4 million
Estonian kroons (almost 2 mln USD) through the fund. This money was transferred
into the bank's fixed assets. The court decided on a conflict of interests and
corruption, and last year, Eenmaa was imprisoned for one and a half-years.
The banker herself insists that she has played the role of a scapegoat. The
bankruptcy of Maapank was followed by a wave of bankrupt farms and companies
dealing with agriculture, eventually even leading to mass protests. To Eenmaa's
mind, somebody had to be put in prison in connection with Maapank, and
she was chosen to be the one. Her case helped forget about the fact that during
the last months of Maapank's operations, many state institutions started
depositing rather large sums in the bank, resulting in around 700 million Estonian
kroons of state money simply hanging in the bank. Even newspapers had been writing
about the bank's difficulties, so all persons responsible should have known
about the bank's situation.
All claims against Maapank made up to around 1.3 billion Estonian kroons,
from which the large creditors managed to get not more than a quarter. As for
the small private depositors, they received small compensation sums amounting
to no more than 18,000 kroons.
Another juicy story is connected with the rather small Era
Pank and its owner Andress Bergmann. What spices up this story is
the fact that Bergmann was an Estonian expatriate having returned to his historical
homeland at the beginning of the Nineties to help with the foundation of the
local financial system. He created not only a bank, but also an insurance company
and a leasing firm. Neither of them managed to survive during the rough period
for Estonian finances 1998, and all went bankrupt. Nevertheless, as the insolvency
administrators of Era Pank approve, the bankruptcy of this small financial
empire had already been prepared a long time ago.
Upon studying the bank's documents, the administrators discovered that ever
since 1991, a significant portion of the assets of Era Pank had been
settled in bank accounts of companies, connected to Bergmann, in result the
bank lost 214 million Estonian kroons. No case of fraud or abuse of service
position was ever proven, nevertheless, the ex-baker was forbidden to take part
in any form of business. Last year Bergmann was also the first in the recent
history of Estonia to be declared bankrupt as a person. Furthermore, money demanded
from him added to 233 million kroons, and ironically his own bank and companies
ended up the main creditors.
Currently Bergmann still lives in Estonia and, although officially he has no
income, doesn't seem to be feeling bad at all. He lives in a private house,
drives a good car and, apparently, does not have to count every cent he spends.
Of course, rumor has it that all he owns is actually de facto owned by
others.
One of the most interesting figures on the Latvian banking circuit,
is undoubtedly the former president of Latvijas Tautas Banka (Latvian
People's Bank, LTB) Maris Argalis. An artist and designer, he became
the president of the bank, which would be a rare enough case even for the Russian
market. Weird may it seem, but particular interest in the person of Maris Argalis
was arisen in 1995, that is, after LTB had already crashed. The insolvent
banker made a bold announcement about a suspected operation coming by the name
of Baiba, which would result in, as Argalis said, financial power being
concentrated into one set of hands. The managers and owners of Latvijas Depozitu
Banka, which up to that time had also already gone bankrupt, were named
as being these hands.
Today nobody can exactly say what operation Baiba was and did the plan
to capture financial power in Latvia even exist in reality. Nevertheless, several
months later - in June 1995 - this Latvian Sherlock Holmes was arrested. The
managers of the insolvent people's bank or LTB handed the Public Prosecutor
accounting documents, according to which 83 percent of all the credit, given
by the bank, was received by companies owned by the bank's former president.
Maris Argalis was charged with the abuse of his position.
It is also true that five months later, the former head of the bank was transported
to hospital. Later the preventive punishment was changed to house arrest, and
even later he was released after signing to not leave the country. It seems
possible that big politics, with which he had become involved in while leading
the bank, was involved in his fate. In 1994, thanks to Argalis' patronage, LTB
financed the pre-election campaign of the National Block for the Riga
City Council. But in winter 1995, Argalis even pompously announced his intention
to found the third Latvian Popular Front (Latvijas Tautas Fronte), a
political movement that ended even before it began.
It is very likely that due to his links to big politics it was for quite some
time impossible to start a lawsuit in connection with the seemingly great banker,
artist and master of unmasking. Only six years after his arrest, in May 2001,
did Maris Argalis get to hear the charge consisting of 16 clauses at a district
court in Riga. The ex-president of LTB was charged with causing damages
to the bank amounting to 2.343 million LVL, and also causing the bankruptcy
of his bank. The case is still under way.
The Latvian banking crisis in 1995 resulted in around ten Latvian
banks going bankrupt. Among them was also the Olimpija bank, historically
renowned as holding close connections with organized crime in Latvia. And particularly
in connection with the once influential Pardaugava group, named after
a company with the same name, the leaders of which were at different times known
to be Vladimir Leskov, Boris Raigorodsky, Alexander and Emils Lavent.
After Olimpija crashed, its owner, Vladimir Leskov, escaped to Russia.
It is generally believed that Leskov managed to leave Latvia under the protective
cover of the country's political elite, to which so-called Latvian banking establishments
were connected during the mid Nineties. One side of the story goes that Leskov
was to be arrested on the way to the airport, hurrying to catch a Riga - Moscow
flight, but personnel of the Presidential and Parliament security office apparently
stopped the strategic group sent to arrest him, and Leskov managed to escape
from justice.
Whether this is the truth or not - it is unlikely to ever be known. More than
five former officials of the bank are to face justice in connection with the
criminal cases of Olimpija; among these people are the owner of the
bank, Vladimir Leskov, the former president, Lev Kremer, and the bank's
credit department manager, Victor Guberev. The main charges are connected
to swindling G-24 loans, also issued by Olimpija. Vladimir Leskov himself
has been charged with fraud for issuing a loan of 2.5 million US dollars.
In 1997, Leskov was detained twice. The first time was by the Moscow Interpol,
and then later in Belarus. Nevertheless, in both cases he was let go, and eventually
Russian authorities officially refused his extradition to Latvia. The reason
was simple: Russia, a citizen of which the ex-banker now is, did not see any
basis for his extradition.
As for the others charged with crimes related to Olimpija, they are all
officially wanted. A few of them are no longer alive. And in April last year,
the former president of Olimpija, Lev Kremer, was shot in uncertain circumstances
in his own car.
Enter the case of the bankrupt Banka Baltija - undoubtedly
the most engrossing in the history of Latvia's banking system. Only around five
years were needed for Alexander Lavent and his father Emils to
set up the most powerful private credit institution in the territory of the
three Baltic States by early 1995.
When in the summer of 1995 the Bank of Latvia stopped all activities
of Banka Baltija, it turned out that the bank had frozen the assets of
every tenth inhabitant of Latvia. As it turned out later, these assets were
not only frozen, but had disappeared into oblivion, leaving only humble greetings
to depositors in form of scanty compensations handed out by the end of the Nineties.
Why the Lavent family's child went bankrupt is a question to which usually two
answers are given today: an official and an unofficial version. As the first
story goes, Banka Baltija was just your average financial pyramid that
stood sturdy until its financial glut, which stopped the payment of extremely
high dividends it promised to depositors. The second version - the bank was
shut down intentionally in order to cover up the flow of dirty Russian capital
looking for shelter in the west. Special services of the U.S. are even named
to have been customers. Others claim that the closing of Banka Baltija
was just the start of a large-scale operation carried out by American authorities,
which by the mid Nineties had grown quite worried about the fate of the billions
it had given to the still young and developing Russia. D-day for this massive
operation is said to be the sensational scandal involving the Bank of New
York (BoNY) - once Banka Baltija's main partner on the opposite coast
of the Atlantic Ocean.
Nevertheless, today Banka Baltija no longer exists. Only tens of thousands
of cheated depositors are left, along with hundreds of millions in bad debts
and three ex-bankers who have been imprisoned waiting sentence for over six
years now - namely the owner of Banka Baltija, Alexander Lavent, its
president, Talis Freimanis, and the manager of the credit department,
Alvis Lidums. They are all charged with various accusations - sabotage,
ill-intentioned management of the bank leading to bankruptcy, forging accountancy
documents, improper allocation of funds in exceptionally large sizes, founding
of fictitious companies to whom loans were given to and to top it all off, illegal
possession of firearms.
Although pre-trial investigation ended two years ago, it is still quite impossible
to even start considering this far from simple case. Medical personnel claim
that the key figure of the process, Alexander Lavent, has in the past years
acquired around ten different diseases, among these angina, heart and kidney
insufficiency. Due to different reasons, including the periodical complications
of Lavent's health, judges are forced to postpone the court hearings, thus making
the Banka Baltija case an endless soap opera, where it is still not entirely
clear as to who the good guys really are and who the bad.
In the meantime, the Strasbourg Court of Human Rights has received a complaint
filed by Lavent against the Republic of Latvia. The owner of the ruined bank
demands compensation from the Latvian government for the infringement of, as
his lawyers claim, elementary human and citizen rights. If Strasbourg declares
his claims well grounded, Latvia will not only be forced to pay up a certain
compensation - an amount in the millions, but will also undermine its prestige
in the eyes of the European Union.
The brightest and most ambitious figure on the background of
Latvian financial lawsuits is Armands Stendzenieks. A Latvian, who in
Soviet times lived in Leningrad for around 11 years, also a permanent resident
of Germany, and founder of the ZuS Rohstoffe Trading GmbH (ZUS) company
in the early Nineties, which around five years later became known across all
of Latvia. Its fame was spread not by advertisements in newspapers or commercials
on TV, but thanks to a report by Interpol on the detention of a man
charged with embezzling especially large amounts.
In 1998, a local magazine called Klubs placed him among the ten best-looking
millionaires of Latvia - together with such persons as Valery Kargin, Sols Bukingholts,
Raimonds Gerkens and other well-off people in Latvia. In March 1995, the fixed
assets of his German company ZUS added up to 1 million DEM, and the assets
of his Latvian company, ZUS Trade Latvia, stood at 3 million USD. Between
1993 and 1995, the turnover of ZUS amounted to several tens of millions
of US dollars. The main operations carried out by ZUS dealt with the
trade of non-ferrous metals and oil products, and later with food products and
alcoholic beverages. The Alfa electronics plant in Riga was even ready
to set a plaque in marble to honor Stendzenieks in gratitude for the 220,000
LVL deposit it received for selling the plant's largest building to him, but
the remaining 1.28 million LVL to close the deal were never paid up and the
contract was terminated. After the crash of Banka Baltija, Stendzenieks
was named by the mass media in connection to two loans of 18 million US dollars
each, which Banka Baltija and the Moscow InterTEKbank received
in 1994 - 1995, guaranteed by Latvia's Ventspils Nafta oil terminal.
The contracts were signed just before the bankruptcy of Banka Baltija.
According to the loan documents, the money should have been paid for the purchase
of a German chemicals factory Leuna Werke AG, set to be used by Ventspils
Nafta.
In July 1997, German police detained Stendzenieks and extradited him to Latvia,
where he was arrested for embezzlement of especially large amounts. Since November
1997 (with the exception of three months when imprisonment was changed to police
surveillance) he has been moving from prison to prison waiting for the hearing
of his case. Initially, the 18 million scam was part of the Banka Baltija
case, later in 1996 it was allocated as a separate criminal case, opened in
1997.
Although the loan to the Moscow bank was returned in full and Banka Baltija
administrators received 4 million US dollars for repaying the loan, the chemicals
factory never did get bought. The details of this story are still unknown, but
the short time in which the money was returned can cause only one natural assumption:
ZUS was not just a company that dealt solely with the implementation
of industrial projects, but was probably otherwise known as "Armand's Laundry",
which was successful at dealing with soiled capital brought in by his "clients".
Some people in Latvia, even Stendzenieks himself, insist that the 18 million
case is of political nature. In 1995, the Prime Minister at the time, Maris
Gailis, asserted that Stendzenieks had paid for the pre-election campaign
of a one-day-party named the Revival Party. Seriously. In addition, Stendzenieks
is said to have been close to the sources of the Latvian Way union, which
during recent years has been one of the leading parties in Latvia and is still
in government. Nevertheless, just before parliamentary elections in 1998, Stendzenieks,
under arrest at the time, founded the Latvian Party of People's Power.
Thanks to a powerful campaign, he even managed to be released for three months,
but was arrested again several months before the elections, but his party, as
was expected, did not get elected to parliament.
In early 2000, the Riga District Court started considering his criminal case.
But the ice has still not melted. The case has been postponed due to various
reasons. There are only another two and a half years for Stendzenieks to remain
in prison until he receives amnesty. When talking to him in June, Stendzenieks
told The Baltic Course that he is also preparing an application to the
European Court of Human Rights: "I am sure that I will win the case. I am prepared
to stay in prison for this even longer, another three or three-and-a-half years.
That does not make me worry at all. I will never forgive the fact that I was
put in prison in the first place and ransacked to boot. I am one thousand, five
thousand percent sure of my victory at the European Court of Human Rights. I
think that they will have never seen anything like the stuff I am preparing
for them. Nevertheless, I will prove that swines and villains do exist among
the authorities. If I had the possibility to work with a computer, I would have
prepared all the materials a long time ago.
In April this year, the Regional Court of Vilnius closed a case
against the former Prime Minister of Lithuania Adolfas Slezavicus and
the former manager of Lietuvos Akcinis Inovacinis Bankas (LAIB) Arturas
Balkiavicus.
The case had lasted 4 years and ended in nothing, although both - the ex-PM
and the banker - were accused of serious enough crimes: forging documents, embezzlement
and abuse of position. The court decided that both these heroes of the banking
crisis in 1995 were not guilty, but after another scandal and bankruptcy of
the biggest private bank in Lithuania at the time, the banker had to leave his
banking hobby, and the prime minister submitted his resignation. Slezavicus,
the former PM, still called Mr. 10 % in Lithuania, has filed a case at the Strasbourg
court of Human Rights in order to demand his own sort of satisfaction.
LAIB was a real favorite for the Lithuanian political and business elite.
Balkiavicus and other officials from the bank made up their own laws and rules,
approximately appointing annual interest rates for deposits and loans to the
people of their choice with ease. They thought of no guarantees or secured loans
whatsoever, and the Bank of Lithuania had neither the experience, nor
the necessary laws for controlling the operations of the country's credit establishments.
The prime minister himself had a deposit at LAIB for the sum of 271,000
LTL, and this deposit or, to be more precise, the deposit's pay-out even after
the bank went bankrupt became a cause for a big scandal and the steadfast interest
of law-enforcement and judicial bodies. Slezavicus managed to draw the deposit
and even interest after the bank accounts of other clients had long been frozen.
After these circumstances appeared Adolfas Slezavicus submitted his resignation,
but this evidently illustrates the conditions in which the majority of Lithuania's
banks had been working at the time. There was a lot of money to go around, the
state behaved foolishly, businessmen were beginners in the game, bankers felt
invincible, and the central bank had no real power to control the situation.
After the bankruptcy of LAIB, it became clear that the bank was actually
led by a former figure of Komsomol (the Young Communist League) in Kaunas
and manager of the LAIB Kaunas branch, Algirdas Aleknavicus. Around
70 percent of the bad loans were issued through this branch of the bank. Besides
this, a considerable proportion of these loans was also issued to people well
known in the criminal world.
After freezing the bank's license in 1995, a search was carried out in the house
of Algirdas Aleknavicus, but he was not arrested, and nobody even tried to determine
the real role played by the Kaunas branch in the LAIB bankruptcy procedure.
After the crash, the most spoken of version for why the bank actually went bankrupt
was that it was an order placed by major political forces and competitors, leading
to one of the main gravediggers for LAIB dropping all responsibility
whatsoever.
The bank itself was a really remarkable phenomenon in those years. Its speed
of growth was impressive. In October 1995, the bank's assets made up 965.5 million
LTL, and it was the only private credit establishment comparable in size to
the larger state-owned Lietuvos Taupomasis Bankas (state savings bank)
and Lietuvos Valstibinis Komercinis Bankas (state commercial bank).
Even though in the eyes of society, the bank remained the most aggressive in
terms of growth and advertising right up to the end of 1995, problems had begun
at the bank much earlier. By November 1995, after an audit of the LAIB,
an emergency situation was pointed out, but nobody really paid any due attention.
Later the bankers began to fuss amongst themselves. LAIB asked the Ministry
of Finance to abolish the power industry's debts of 60 million LTL. Later it
turned out that problems with liquidity had already began mid 1995, but this
was carefully masked. Moreover, a meeting between LAIB shareholders'
and Litimpeks caused sensation, after deciding to merge the two banks.
Endless meetings began and silly plans appeared, but in the meantime, the bank
sank to rock bottom fast. Neither the loans allocated by the Bank of Lithuania,
nor did an order on additional governmental guarantees rescue the situation.
The last point became the arrests of Balkiavicus and the chairman of the board
at Litimpeks, Gintautas Preidis. Although they were later set
free without being accused, it was the beginning of a crisis in the entire banking
system of Lithuania. It was noted that LAIB had somehow splurged around
270 million LTL, hence the 10%, and Litimpeks - 150 m LTL.
The arrest of Balkiavicus sounds almost like a Hollywood movie script. When
employees of the economic police arrived at LAIB one evening to detain
the banker they were met by security guards. After a long and hardy fuss with
papers, nobody let the police in. At around midnight, the Aras special
police swat team arrived and the bank's security guards started preparing for
defense.
To avoid bloodshed, the head of the Ministry of Internal Affairs and later also
the managers at the Bank of Lithuania personally called up and asked
the banker to surrender peacefully. Only a day later, when an Aras storm on
the building was inevitable, Balkiavicus called the police commissioner and
said he would surrender.
After his arrest and later being set free, LAIB fell into a state of
agony, during which managers changed and the government even issued special
bonds for compensation to clients of the bank, but Balkiavicus himself no longer
reappeared as a banker.
As the case is now closed, it was not really discovered whether he was actually
the victim or the swindler. Did he lose all his money or is it safely stashed
away? And finally, it is still not really clear as to whether Balkiavicus was
a puppet in the hands of the LAIB Kaunas branch or if he too participated
in bargains of obviously bad loans issued to criminal circles. The only sure
thing is that LAIB was most definitely a castle made of sand and this
Bakiavicus should have known. The Bank of Lithuania also probably knew,
but it only took action when it was already too late, and these actions were
a ridiculous failure.
But the Litimpeks situation was not as tragic as the LAIB case,
and the police as well as a special parliament commission didn't prove anything
significant, and Preidis soon returned at the steering wheel of Litimpeks,
which, for some reason, was allowed to continue its operations. The bank reduced
its fixed capital from 40 to 4 million LTL, and a year or so later it started
operating as a 'normal' credit institution.
Not all that long ago, Preidis had said that LAIB and Litimpeks were
ruined in 1995 by politics and competition. There may well be a shard of truth
in this statement, but in 1999, Litimpeks was ruined completely by its
bankers, and the fault of Preidis was obvious this time.
Litimpeks had continued its activities just as before with bankers blowing
fixed capital by giving out loans without pledges to offshore companies, which
in turn bought new issues placed by the bank. On paper the bank's capital was
increased, and the central bank was pleased, but there was no real money in
the bank. Preidis and other heads of Litimpeks inflated the soap bubble,
hoping that some day it may buy-up some foreign bank (Latvia's Parex Bank
was mentioned as one of the candidates).
The bubble burst in 1999. The Bank of Lithuania granted a loan of 20
million LTL to Litimpeks for solving its problems with liquidity, problems
that could no longer be concealed. The bank surely enough solved some of its
problems in its own way - according to some sources, this money also settled
snugly in the accounts of various offshore and untouchable companies.
The bank was declared bankrupt in September 1999, and the administrators are
still searching for assets that in numerous ways escaped the bank even after
its operations had been frozen. The bank still owes its creditors 189 million
LTL (47 mln USD), while accounts receivable stand at 157 million LTL (39 mln
USD).
And what has become of the hero of this banking saga Gintautas Preidis? Nothing.
Today the banker is involved in some small business and is peacefully finishing
off his small house. As the case has not gone to courts or been investigated
yet, and considering the cases involving Arturas Balkiavicus and Adolfas Slezavicus,
it only proves that financial crimes seem to be more of a philosophical problem
rather than a criminal one.
Despite the abundance of crashed banks, Lithuanian authorities
have not managed to prove the fault of bankers and crafty financiers in any
of the most scandalous cases. An indicative example is the bankruptcy of Klaipeda's
Vakaru Bankas. The bank was for a long time considered as one of the
most perspective banks of Lithuania's western region, offering services basically
to the entire branch of powerful industrialists and port companies.
In 1995, the Bank of Lithuania was forced to stop the activities of Vakaru
Bankas (VB), appearing unable to carry out its financial obligations. According
to statements made by the managers of the bank, the government led by PM Adolfas
Slezavicus is to blame, having not returned a loan of 10 million USD issued
for buying power resources in Russia.
An initial audit revealed that in 1994 and 1995 Vakaru Bankas issued
loans to companies owned by officials at the bank - VB president Piatras
Kravtas and vice-president Robertas Taraskus. Besides this, just
about all of the loans were issued, as they say, upon word of honor, without
real guarantees or pledges. Further investigation proved that in order to implement
these rather mercantile plans, the two above mentioned bankers periodically
took upon themselves the management of the bank's credit department.
Both Kravtas and Taraskus were arrested and charged with plunder of property
in especially large sizes, ruthless infringement of financial operations and
falsification of banking documents. The Office of the Prosecutor General has
counted up that their conscience must be weighted down by at least 64 million
LTL (41 million USD), all of which today is officially documented as irretrievable
losses.
Despite all this, it was impossible to condemn the two, although Kravtas still
went under investigation for another 18 months. Only in spring this year did
the litigation of both cases finally come to an end. A well-mastered defense
saw both defendants justified on all items. The Klaipeda Public Prosecutor Office
has already declared that it will appeal against this court decision, but from
an objective point of view, it doesn't have much of a chance in succeeding.
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