Courts target white-collar criminals

  • 2006-11-08
  • By Joel Alas

Aavik has been arrested over accusations of embezzlement.

TALLINN - Estonian courts have become increasingly likely to jail accused white-collar criminals, legal experts say, with four high-profile businessmen waiting to be charged and tried. The latest corporate handcuffing came on Nov. 2, when Erki Aavik, the former chief executive officer of the state-controlled rapeseed oil refinery Werol Tehased, was arrested over accusations of embezzlement.

A court later authorized his detention for up to six months while prosecutors compile their case, citing concerns that Aavik might interfere with the investigation.
Aavik joins three other businessmen 's Kalev Kangur, Einar Vettus and Tarmo Pedisaar 's who have also been incarcerated while investigators probe into allegations of corrupt property exchange.
The courts' tendency to hold accused white-collar criminals in custody and refuse them bail has concerned lawyers and legal experts.

Aavik's lawyer, Monika Magi, said the detention of her client was unsubstantiated.
"I can see no sensible reason why Aavik 's a father of four children with a place of residence and work 's should attempt to influence the investigation in some way," Magi told the Baltic News Service. "The arrest and handcuffing of so-called white-collar people, which has now become the fashion, is a form of circus." Aavik is accused of transferring more than one million kroons (63,898 euros) from Werol funds to a Latvian bank account.
According to prosecutors, the transfer was recorded as a payment to the Russian company Tetra Invest, which claimed to know nothing about the funds. Part of the money was later transferred back to an Estonian account, while other funds were withdrawn in Latvia. Later, attempts were made to make a payment to Tetra Invest to make the transfer seem legitimate, prosecutors have alleged.

A second set of allegations have been leveled against Aavik over a deal he struck with fuel producer Biodiesel. Under Aavik's initiative, Werol purchased a stake in Biodiesel and assumed the obligation of supplying the producer with raw material, something it was incapable of. Biodiesel later slapped Werol with a claim for almost 140 million kroons in damages, which is the subject of an ongoing dispute.
Aavik was dismissed at the end of 2004 after striking an agreement with the company's supervisory council that included a sizeable severance payment.

On Nov. 3, the Tartu County Court granted an application from prosecutor Marge Puss that Aavik be held in custody. Puss argued that Aavik had attempted to interfere with preliminary investigations, and that the amount of the alleged embezzlement warranted detention.
Criminologist Jaan Ginter from Tartu University's faculty of law said it appeared that courts were attempting to get tough on corporate crime.

"The number of people being detained before their trial is decreasing overall. But the trend is the opposite toward white-collar crime," Ginter told The Baltic Times. "Earlier, such crimes were rarely treated as a crime that might involve imprisonment as a likely sanction. Now real imprisonment is quite likely."
In Ginter's opinion, the earlier system, where white-collar crime almost never led to imprisonment, was wrong. Yet Estonia's present system is not much better.
"But I am not sure that today's situation, where imprisonment is likely before a person is tried, is substantiated. Maybe there should be some position in between," the criminologist added.
He said the fact that the men had not be charged should not be of concern, as the Estonian legal system worked differently than other criminal law systems.

"In Estonia, the charge comes only at the very end of the investigation, just before the case is sent to court. To be held under suspicion, the prosecutor has to offer the court evidence that there are reasonable grounds," Ginter said.
The Estonian Bar Association, Advokatuur, has spoken out against the arrest tactics, especially since one of their own members was affected. The group fired off an angry response when lawyer Toomas Alp was arrested from his Viljandi house while his family ate breakfast on Oct. 23.
"The way the attorney was arrested was humiliating. It was in front of his kids in the morning, when everyone was going to work. It could have been done in a better way. It was not appropriate or proportional," a spokeswoman for Advokatuur told The Baltic Times.

Alp has since been released from custody, but awaits charges of encouraging perjury and forging evidence, charges he insists he will defend.
Meanwhile, prosecutors continue to hold Kangur, Vettus and Pedisaar in custody as they investigate a series of allegedly shady property exchanges. The men were arrested in early October, and will be held for up to six months before being charged or tried.
It has been alleged that Kangur, head of Estonia's Land Board, authorized the exchange of unprofitable land owned by Vettus and Pedisaar for developable city blocks.
The scandal also engulfed Environment Minister Villu Reiljan, who resigned from his post for having signed off on the controversial land swaps.