One of the first things Neil Cooper did in his hunt for more than $600 million missing from Bankas Snoras AB was look at the defunct Baltic lender’s deleted files.
Tracing assets in 40 jurisdictions from Switzerland to the Cayman Islands is like “a 3-D jigsaw,” according to bankruptcy administrator Cooper, who’s searching for entities linked to Snoras’s two former owners.
“You look at one piece and you can’t tell what it is at all,” Cooper said June 27 in an interview at the bank’s headquarters in Vilnius, Lithuania’s capital. “But you put a number of pieces together and a picture starts to emerge.”
Vladimir Antonov, the Russian banker whose holding company claimed in 2011 to have $7 billion of assets, and his Lithuanian business partner Raimondas Baranauskas face extradition to the Baltic country. Snoras was the nation’s third-biggest deposit bank until regulators seized it on suspicion cash had been siphoned off to pay for high-end property, luxury cars and a U.K. soccer club.
The two men, who deny any wrongdoing, were released on bail in November after being detained in London for fraud and embezzlement under a European arrest warrant issued by Lithuanian prosecutors. They were rearrested today in the U.K. capital under a new warrant with increased claims against them and granted bail immediately afterwards.
Antonov, 37, and Baranauskas, 54, appeared in London’s Westminster Magistrate’s Court, where Judge John Zani scheduled another hearing on their extradition for July 27.
“These men need to know if they are going back to Lithuania or not” so they can “get on with their lives,” he said.
The Baltic nation’s central bank took Snoras over after discovering about 20 percent of its gross assets were missing. Prosecutors estimate the pair stole about 1.7 billion litai ($610 million) by forging documents and fixing accounts. Snoras unit Latvijas Krajbanka AS, once neighboring Latvia’s sixth- biggest deposit bank, was also declared insolvent in December after 167 million lati ($297 million) of assets disappeared.
“Our position is that the renewed arrest is unlawful and without grounds,” Gytis Kaminskas, a lawyer representing Antonov in Vilnius, said July 3 by phone.
Kevin Gold, a lawyer from Mishcon de Reya in London, where it’s representing Antonov, didn’t return calls for comment on July 3 and yesterday.
Allegations the men pushed the bank into insolvency are reminiscent of tactics allegedly used by Russia’s leaders to seize assets of political foes, James Lewis, another Antonov lawyer, told a Dec. 16 hearing in London. They call the case against them politically motivated revenge after Antonov’s media company published articles criticizing the government.
The Vilnius District Court will rule on an appeal against the European arrest warrant July 9. Should Antonov be extradited from his London home and convicted in Lithuania, he faces as long as 10 years in prison, according to prosecutors.
Cooper, a partner at Zolfo Cooper LLP in London, was appointed by the Vilnius court in December and represents creditors from 53 countries including Russia, Israel, Kazakhstan, the U.S., Aruba and the Bahamas. In all, they’re seeking 6.3 billion litai.
Antonov’s assets around the globe were frozen in May by a London court after Snoras filed a separate civil lawsuit against its former owners, seeking 395.5 million pounds ($614 million) in compensation and damages. Cooper said the holdings Antonov is obliged to declare under the freezing order may only be part of what he’s after.
“By any standards this is an international case,” said Cooper, who’s written two books on asset recovery and cross- border bankruptcy. “This is an international insolvency domiciled in Lithuania, as opposed to a Lithuanian bankruptcy with some international aspects.”
Snoras used deposits to buy securities that were later transferred to Swiss bank accounts belonging to people related to Antonov and other former shareholders, according to Lithuania’s central bank. The securities were then used as collateral for loans, which were transferred to the offshore accounts of other related parties, it alleges.
The outflow of funds continued for several years in “a really quite complex web of associations,” according to Cooper. “Without any shadow of a doubt,” the withdrawals pushed Snoras into insolvency.
He also took control of English soccer club Portsmouth F.C., which went into administration following his arrest and was later relegated to the country’s third division after receiving a points penalty because of its financial position.
The latest victim of Antonov’s crumbling empire is Dominica-based Banco Trasatlantico Ltd., which is undergoing liquidation according to a June 29 e-mail from Deloitte Consulting Ltd. in Barbados.
The sale of Snoras assets including Bank Finasta AB, a leasing business and a network of 230 banking kiosks should happen “very soon” as several interested buyers are carrying out due diligence, Cooper said.
Prosecutors in Vilnius seized personal assets valued at 300 million litai from former Snoras shareholders last year. Latvian police took possession of 14 cars and one house registered to Antonov in Jurmala, a wealthy town about 20 kilometers (12 miles) from Riga, the capital.
Depositors who held 100,000 euros ($124,000) or less at Snoras were reimbursed by Lithuania’s government through a deposit-insurance program after Snoras’s bankruptcy in December.
Alleged fraud and illegal actions at Snoras should have been scrutinized by authorities at an earlier stage, Lithuanian parliamentary investigations concluded. The central bank fired its head of banking supervision and auditing authorities canceled a license for an Ernst & Young Baltic UAB employee after reviewing his reports on the lender.
Based on the yachts, jets and a mansion in Nice accumulated by Antonov and his associates, Cooper said he’s surprised that people assumed Snoras and Krajbanka were simply engaged in everyday banking.
“There isn’t the margin in retail banking to be able to have offices like these, to run sports cars,” Cooper said. “So how much was being done with smoke and mirrors?”
To contact the editor responsible for this story: Balazs Penz at firstname.lastname@example.org