RIGA - A Riga court was set to hand down sentences to three defendants charged with fraud and negligence in the bankruptcy of Banka Baltija, the financial institution that took hundreds of million of euros 's and almost the country's entire banking system 's in depositors' savings when it collapsed in 1995.
The Riga Regional Court on April 26 began reading the judgment in the criminal case against former leaders of Banka Baltija. The judgment, however, takes up 475 pages and the court is expected to read it for approximately a week. Court justices did say in the descriptive section of the judgment that there was proof of the criminal actions of the defendants as specified in the indictment.
The court said it had found two defendants 's former Bank Baltija supervisory council head Aleksandrs Lavents and former bank president Talis Freimanis 's guilty on more than 50 counts. However, it did not mention several other counts, saying that they would be analyzed later. The court said that guilt of the third defendant, former Banka Baltija employee Alvis Lidums, had also been proven.
According to the court judgment, Lavents, Freimanis and bank director Valentina Golusko and loan manager Marina Polevskiha had entered into conspiracy with intention of malicious bankruptcy. The latter two are still at large. The court said that the bank had doctored its accounting figures and set up shell companies to receive loans from Banka Baltija.
Prosecutors have demanded 13 years in jail for Lavents, nine years in jail for Freimanis and six years in jail for Lidums, as well as the confiscation of property from all three defendants. In addition, the prosecution wants the court to bar Lavents and Freimanis from any business activities for the next five years.
Prosecutors claim that the bank's collapse caused over 200 million lats (285 million euros) in damages to thousands of individuals and corporate entities, who had deposited their money in the bank. By the mid-'90s Banka Baltija had become the most powerful bank in the Baltic states, promising interest rates of up to 90 percent in a low-inflation environment. As many as one-fifth of Latvia's poorest residents saw their savings evaporate when the bank disintegrated.
Reportedly during that time managers were able to transfer over $200 million in assets out of the country. Later some managers were arrested in connection with fraud. The first trial began in 1998 and lasted three and a half years, with defendants constantly delaying hearings through health complaints and filing petitions to remove the judge. It was completed in 2001 when the court passed a nine-year prison term for Lavents, six years for Freimanis and three and a quarter years to Lidums, who was released because he had already spent this term in pretrial detention.
