We are helping clients, companies registered in Cyprus and the British Virgin Islands belonging to a real estate development group, to recover approximately 11 million EUR seized in Latvia as part of criminal proceedings. The clients’ funds were considered to be suspect and potentially related to money laundering activities, as the companies’ business activities are based in several jurisdictions and are non-typical in Latvia. Specifically, our clients’ core business is holding investments and providing financing and advisory services linked to implementing other group companies’ asset-related projects.
In this case, Sorainen’s “White-Collar Crime” practice group represented clients during both police and court proceedings. The police and the prosecution decided that the clients’ financial assets might have a criminal origin, and they were therefore seized and proposed to the court for confiscation.
We managed to convince the court of first instance that the seized funds did not originate from a criminal source. We argued that proceedings for the acquisition of criminal property should therefore be terminated. The court also found that the instigator had not proved the criminal origin of the property. The court agreed that that the form of operation of the group of companies was demonstrated by documents submitted concerning the implementation of certain real estate projects, which showed that the transfers were based on civil transactions within the framework of the holding company’s business activities. Contrary to what the investigator and the prosecutor had argued, the court found that the legal origin of the funds used in the transactions had been documented and that the transactions were not fictitious or used as a false pretext to conceal any criminal activity.
The court of first instance’s decision has not yet entered into force and may be appealed.
This case is being handled by the head of the Corporate Crime Investigations and Compliance practice group at the Sorainen Latvian office, counsel Dr. iur. Violeta Zeppa-Priedīte; senior associate Agneta Rumpa; and assistant to associate Krista Niklase.
