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English Judge Rules on £67 Million Latvian Bank Fraud

Published: 08 June 2016, in categories: Legal Updates | Commercial Litigation Updates | News and Updates

English Judge Rules on £67 Million Latvian Bank Fraud

Commercial judges in London are no strangers to dealing with the fall-out from fraud and corruption around the world. In one striking case, a judge found that a Russian businessman had ripped off a Latvian bank, of which he was formerly the majority owner, to the tune of about £67 million.

The bank’s liquidators pursued the businessman to England in respect of eight very substantial transactions which had been carried out whilst he was in control of its business. Ruling on the case under Latvian law, the judge found that, in each case, loans had been advanced to borrowers who were closely associated with the businessman which had not been repaid or otherwise recovered.

The transactions were not carried out at arm’s length and were procured dishonestly by the businessman in breach of the duties that he owed the bank. The court noted that a pattern had emerged of him subordinating the bank’s interests to his own and repeatedly abusing his position of influence for his own private advantage.

The businessman had not cooperated with the English proceedings and had been sentenced to 12 months’ imprisonment for contempt of court. However, he had escaped justice by absenting himself from the jurisdiction. The judge entered judgment against him for the sums claimed by the liquidators, plus interest.

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