Banks, Corruption, Financial Services, Latvia, Legislation

International Internet Magazine. Baltic States news & analytics Friday, 23.08.2019, 23:36

Probe against Rimsevics was started based on Trasta Komercbanka shareholders' application

BC, Riga, 29.06.2018.Print version
The Corruption Prevention Bureau (KNAB) started the criminal probe against Bank of Latvia Governor Ilmars Rimsevics and entrepreneur Maris Martinsons based on an application filed by two shareholders of Trasta Komercbanka, the case’s supervising prosecutor Viorika Jirgena said at a press briefing today without naming the shareholders, reports LETA.

The prosecutor said that the two shareholders featured in the case as bribers but that would not be prosecuted as they had voluntarily reported the corruption case to law enforcement authorities.

Jirgena said that back in 2010 one of the shareholders had asked Rimsevics to help Trasta Komercbanka deal with issues concerning the Financial and Capital Market Commission (FCMC), promising to buy Rimsevics a trip to Kamchatka in return for his services. In 2012, this and another shareholder of Trasta Komercbanka again asked Rimsevics to help resolve issues with the FCMC. In that case, Rimsevics demanded EUR 500,000 as a reward which would be paid in two installments, one before and the other after the FCMC decision.

The prosecutor said that after the 2010 deal Rimsevics repeatedly provided advice to the Trasta Komercbanka shareholders on how to influence the FCMC’s decisions. Such consultations continued also after the 2012 deal, but although the Bank of Latvia governor succeeded in persuading the FCMC to take some decisions in favor of Trasta Komecrbanka, the regulator also took decisions unfavorable to the commercial bank. According to the prosecutor, Rimsevics helped Trasta Komercbanka prepare answers to the regulator’s questions about the bank’s liquidity and non-resident clients.

Since Rimsevics failed to fully meet the shareholders’ demands, they only paid him EUR 250,000. Martinsions, who helped negotiate the illegal deal, received 10 percent of the bribe, which in the prosecutor’s words was given in cash.

After the two Trasta Komercbanka shareholders reported the case to KNAB, a probe was started in which Rimsevics and Martinsons were briefly detained and searched in February, Jirgena said. Until mid-June, when the case was sent to the prosecutor’s office, one of the suspects had chosen not to provide any testimonies but has now submitted various materials related to the case. Prosecutor Jirgena indicated that since the case has been forwarded to the prosecutor’s office new evidence has been obtained confirming the fact of bribery.

The prosecutor said that investigators used materials obtained in 2013 when KNAB wiretapped several conversations. The probe during which these materials were obtained is classified, Jirgena said, explaining that she therefore did not know why other investigative activities did not follow already at that time.

Martinsons and Rimsevics have asked to give them time until August to provide written statements. The prosecutor voiced hope that more progress could be achieved on the case by the end of this year.

As reported, Rimsevics has been charged with graft and Martinsons with aiding and abetting graft. If found guilty, they may face prison sentences of three to 11 years.

As reported, the Latvian Corruption Prevention Bureau (KNAB) on June 18 sent the materials of the criminal case to the prosecutor’s office, asking to launch criminal prosecution against Bank of Latvia president Ilmars Rimsevics and businessman Maris Martinsons.

KNAB explained that the bureau has sent materials of the criminal case to the Prosecutor General’s Office, asking to launch a criminal prosecution against two persons – a Bank of Latvia official and a private individual. Names of these two persons were not revealed.

The corruption watchdog asked to prosecute the Bank of Latvia official for bribery, and the individual for abetting bribery.

An infographic was attached to the KNAB statement with the scheme of the crime, according to which the case is related with liquidation of Trasta Komercbanka.

It has also been reported that the Corruption Prevention Bureau has started a criminal proceeding against Rimsevics, who is suspected of having solicited and accepted a bribe of at least EUR 100,000. Businessman Maris Martinsons is suspected of aiding and abetting Rimsevics.

Rimsevics insists he is innocent and therefore will not step down as the head of the Latvian central bank. He said that the accusations against him was a retaliatory action from ABLV Bank and other banks serving non-residents.

For the duration of the investigation, Rimsevics has been banned from performing his responsibilities as the head of the Latvian central bank, from leaving Latvia and from contacts with certain individuals.

Rimsevics has lodged a complaint with the European Court of Justice over he restrictions that prevent him from performing the duties of a member of the European Central Bank's Council. He claims the restrictions had been imposed on him unlawfully.

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