Banks, Crime, Financial Services, Latvia, Legislation

Kristine Sutugina, a spokeswoman for the prosecutor’s office, told LETA that five former Krajbanka managers are facing criminal charges in the case.

One of the bank’s ex-managers has been charged with large-scale embezzlement, abuse of office powers for personal gain, as well forging and hiding statistical reports and data.

Another person has been charged with organizing a major embezzlement scheme, abuse of office powers for personal gain and laundering large amounts of money.

The third person has been charged with large-scale embezzlement and abuse of office powers for personal gain, and two other persons have been charged with adding and abetting large-scale embezzlement, abuse of office powers for personal gain and money laundering.

The case has been sent to Riga City Vidzeme District Court for hearing.

The prosecution has declined to elaborate on the case for now.

Although the prosecutor’s office has not released the names of the persons charged in the case, LETA reported earlier that the State Police sought the prosecution of the bank’s former CEO Ivars Prieditis, the bank’s former owner Vladimir Antonov and former members of the bank’s management board for embezzling EUR 90 mln.

The State Police said in a statement to the press that six persons were suspected of pocketing EUR 90 mln of the bank’s funds, abusing their office powers, laundering large amounts of money and breaching bookkeeping and accountancy rules. Investigators said that charges had to pressed against the organizer and executor of the crimes, as well as four accomplices.

The Krajbanka case is one of the largest and most complex fraud cases of recent years, and its investigation took three years. Materials of the case make up 183 volumes.

A part of the Latvijas Krajbanka case, about embezzling 27 mln euros and exceeding office powers, was separated from the rest of the case and sent for prosecution already in January 2014. This part of the case is being heard by the court already.

On November 21, 2011, the Latvian financial watchdog, the Finance and Capital Market Commission (FKTK) ordered Latvijas Krajbanka to suspend all financial services. The decision was made due to a shortage of assets discovered at the bank, and a criminal investigation was started.

The Riga Regional Court declared Latvijas Krajbanka insolvent on December 23, 2011. On May 8, 2012, the court ruled to satisfy the request by KPMG Baltics auditing firm, which had been appointed the insolvency administrator of Latvijas Krajbanka, to start the bankruptcy procedure against the bank. Latvijas Krajbanka's banking license was annulled on May 10, 2012.