Fraud, Disinformation, and Money Laundering
The sordid story of the US Treasury, Latvia, Lithuania, Ukraine, and the EBRD, Part 3
Editor’s Note: This is the final article in a three-part series written by John Christmas—an exiled whistleblower against Parex Bank of Latvia, co-author of the award-winning “KGB Banker” novel, and co-producer of the award-winning “Bankers Game” documentary and his continued story of massive fraud and the EBRD. You can watch the documentary below and read the third in this amazing series of allegations!
Same people, different roles, privileged connections
Following the collapse of Ukio Bank in 2013, Latvia’s financial regulator “FKTK” appointed Arnis Lagzdins—Head of Compliance at Parex while Parex was top money launderer for the Tambovskaya Mafia—as special liaison to the US Treasury.
Lagzdins right after leaving Parex became Head of Compliance for Ukio and somehow came to be in charge of engaging with the US Treasury Department. Lagzdins went to Washington with a diplomatic passport, was welcomed in the United States, and the US Treasury engaged with him while refusing communication with me on these issues of fraud and money laundering, among other things.
This was frustrating for many reasons, including the fact that the US Embassy in Riga had asked me three times to provide evidence against Parex. When I did what the ambassador and commercial attaché asked, the US government decided not to use the information and to deny ever having received it. I was sent into exile from Latvia doomed to watch news reporting on the same crooks about whom I blew the whistle stealing more money.
The ABLV connection
Another place where Parex activities moved, besides Citadele and Ukio, was ABLV Bank of Latvia. A core goal of the Latvian government after the demise of Parex was to lobby the US Treasury not to sanction ABLV.
This effort was not successful.
FinCEN designated ABLV a foreign financial institution of primary money laundering concern subject to a special measure under Section 311 of the USA PATRIOT Act in early 2018. However, before ABLV was designated, it helped Serhiy Kurchenko loot Ukraine and Ilan Shor loot Moldova.
At the time, FinCEN noted that:
…ABLV has institutionalized money laundering as a pillar of the bank’s business practices. ABLV’s management permits the bank and its employees to orchestrate money laundering schemes; solicits high-risk shell company activity that enables the bank and its customers to launder funds; maintains inadequate controls over high-risk shell company accounts; and seeks to obstruct enforcement of Latvian anti-money laundering and combating the financing of terrorism (AML/CFT) rules in order to protect these business practices.
ABLV’s failure to implement, and disregard for, effective AML/CFT and sanctions policies and procedures have made the bank attractive to a range of illicit actors engaged in organized crime, weapons proliferation, corruption, and sanctions evasion. Illicit financial activity at the bank includes transactions for parties connected to UN-designated entities, some of which are involved in North Korea’s procurement or export of ballistic missiles. In addition, ABLV has facilitated transactions for corrupt politically exposed persons and has funneled billions of dollars in public corruption and asset stripping proceeds through shell company accounts. ABLV failed to mitigate the risk stemming from these accounts, which involved large-scale illicit activity connected to Azerbaijan, Russia, and Ukraine.
Both Kurchenko and Shor then moved to Moscow where they are still helping the Kremlin undermine Ukraine and Moldova.
After its designation, ABLV was supposed to be liquidated, and it has been in voluntary liquidation since. A Latvian individual who volunteered to act an independent administrator, Martins Bunkus, was murdered by Kalashnikov-wielding assassin, prompting Riga to allow ABLV to “self-liquidate.”
Some ABLV assets were sold to Citadele. I suspect those assets could be fake and similar to the assets Parex used to originate which are also at Citadele. Fake assets are typically “loans” where the money went to insider oligarchs who have no intention of repaying the loan.
Theoretically, ABLV could begin operations again after FinCEN in 2024 withdrew its finding that ABLV was a foreign financial institution of primary money laundering concern.
In addition, nobody from ABLV was prosecuted, and the two main shareholders, Ernests Bernis and Olegs Fils, are often in the Latvian media because somehow they got much richer during the incomplete liquidation process.
Danske Estonia
Finally, the record-breaking Putin money laundering at the Dankse Bank branch in Estonia ties in to this scandal, and no one has investigated the connection.
I worked with an offshore banking expert at Parex, who was transferred to the Parex subsidiary bank in Switzerland which later became a Citadele subsidiary. Therefore, he was indirectly working for the EBRD, which is partly funded by the United States.
When news came out in 2018 that 200 billion euros were laundered through Danske Estonia, a Marshall Islands shell company appeared to be in the middle of the scam. This shell company was almost certainly connected to the Parex/Citadele banker in Switzerland, based on information from the Marshall Islands company registry and UK company registry.
It’s also possible to connect my former coworker to the embezzlement of the Parex assets which is still being covered up by the EBRD. Had Latvia prosecuted the embezzlement at the time of my whistleblowing instead of secretly paying the EBRD for a cover-up, I am certain this individual would have been prosecuted, and the money laundering at Danske Estonia would not have happened.
In addition, Putin would have lost 200 billion euros, and the world would be a safer place. However nothing was done back then and still nothing is being done now.
The US government, instead of going after the responsible individual, chose to fine the shareholders of Danske Bank, mostly pensioners in Denmark.
Call to action
Latvia sold a stake in Parex to the EBRD in 2009 and reversed that deal in 2014.
Latvia sold a stake in Citadele to the EBRD in 2010 and that deal has not been reversed yet, although Eurostat claims it will be.
The US Treasury should demand that the EBRD reveals the amount that Latvia will have to pay to the EBRD to reverse the Citadele deal plus the total amount of billions of euros Latvian taxpayers lost from this cover-up.
Latvia could sue the EBRD for the funds the taxpayers lost if Latvia gets a new government.
The US Treasury should also force the EBRD to reveal the details of the transactions with Ukio in Lithuania and Megabank in Ukraine. It should also demand that the EBRD disclose a full list of all investments it made in all countries since its inception in 1991 in which the transactions weren’t really stock or asset investments, but rather secret high-interest loans to governments.
The US Treasury can stop what appears to be a gigantic fraud, disinformation, and money-laundering racket, and it should.
John wrote a six-article series for FinCrime Central about a year ago, which has even more details than what I’ve published here.
You should also read the first and second parts to this series here and here.
The EBRD fraud, explained in this series, poses a serious economic and security threat to the US. Not sure why it's been so difficult to wake up the authorities, but maybe most people simply cannot believe the EBRD people would do something like this. The evidence is undisputed and the fraud is real, and the FBI or US Treasury can stop this any day.