Parex krahs: nejēgas, nelgas un noziedznieki

Dear Mr. X,

Here is an email evidencing the central fraud at Parex Bank. In 2003, Parex managers always talked about how we had secret subsidiary companies. I did not understand how or why we would have secret subsidiaries.

In 2004, I met with top people from the lending department (Liga Purina, Jorens Raitums, Georgy Krasovitsky) who explained different parts of the story: how Parex loaned over 100% of equity to these related companies and the ownership of these companies had to be secret. Another related loan was also mentioned: VIP Avia.

This meant that Parex effectively already had negative equity since at least 2004, and possibly before that.

The leasing companies were being founded by Georgy Krasovitsky and Eizens Slava.

Extro Bank was being managed by Jevgenijs Olevskis. Northern Investment Bank was being managed by a man named Boris.

After I gave this list to Ernst and Young Baltics (in 2004, immediately after learning of this huge fraud), Parex Bank announced that it "bought" the leasing companies mentioned below.

This was an illegal cover up.

Thanks,
John

Date: Tue, 7 Sep 2004 12:29:25 +0300
From: John.Christmas@parex.lv
To: john_christmas@hotmail.com
Subject: [Fwd: Subsidiaries consolidation for Rating Agencies]

--Forwarded Message Attachment--
Date: Mon, 18 Aug 2003 15:37:37 +0300
From: Gene.Zolotarev@parex.lv
To: Aleksandrs.Kvasovs@parex.lv; liga.purina@parex.lv; Eriks.Brivmanis@parex.lv; roberts.stugis@parex.lv
CC: Normunds.Vigulis@parex.lv; Christa.Rubstein@parex.lv; John.Christmas@parex.lv; Valerijs.Hudorozkovs@parex.lv; Irina.Juskova@parex.lv
Subject: Subsidiaries consolidation for Rating Agencies

"Given our advantageous market and geographical positioning, Parex bank
had decided to increase our capital markets and lending activities in Russia
and the CIS. Stable economic and political climate had spurred the
growth of Russian debt and equity markets, thus allowing us to view the
credit profile of these markets with greater comfort than before.
Given our traditionally cautious view, we have continued to deal only with
blue chip names and partners. The level of activity had forced us
to consider establishing our own presence, rather than deal through preferred
partners, and since the beginning of the year we have identified a bank
(ExtroBank), a leasing company (Nezavisimost), and a financial
company (Allen Finance) which we are in a process of acquiring aiming
to complete this process by the end of 2003. Meanwhile we operate them
as de facto subsidiaries, and should the acquisition process go as planned,
these will be consolidated in 2003 Parex Group Fianancials.

Moreover, the increase of Latvia's trade with Belarus we have taken
a small shareholding in a Belarus bank (Northern Investment Bank)
which we also may upgrade by year end 2003."

Please let me know your views on whether you agree on this position,
and a consolidation commitment by year end. Needless to say,
the "ownership" structure from Parex need not be direct, but it is my strong
opinion that we MUST disclose these subsidiaries to the rating
agencies since we have difficulty justifying the level of business we do
with these regions.

regards

-gz

Dear Colleagues
As you know we have an upcoming visit from Capital Intelligence this Wednesday and, much more importantly, a visit from Moody's on 23 September. I don't need to remind you all how crucial these visits are for us this year as we are on a brink of being upgraded to investment grade. In connection to this we need to address our positioning with regard to "subsidiaries" which, to the best of my knowledge, are not being consolidated into Parex Bank / Group financials. This issue is critical for this year, since we have significantly increased our activities in Russia and CIS and need to have a position on this region that we all agree on.
Presently we would like to propose the following text in "strategic positioning section":
"Given our advantageous market and geographical positioning, Parex bank had decided to increase our capital markets and lending activities in Russia and the CIS. Stable economic and political climate had spurred the growth of Russian debt and equity markets, thus allowing us to view the credit profile of these markets with greater comfort than before. Given our traditionally cautious view, we have continued to deal only with blue chip names and partners. The level of activity had forced us to consider establishing our own presence, rather than deal through preferred partners, and since the beginning of the year we have identified a bank (ExtroBank), a leasing company (Nezavisimost), and a financial company (Allen Finance) which we are in a process of acquiring aiming to complete this process by the end of 2003. Meanwhile we operate them as de facto subsidiaries, and should the acquisition process go as planned, these will be consolidated in 2003 Parex Group Fianancials.
Moreover, the increase of Latvia's trade with Belarus we have taken a small shareholding in a Belarus bank (Northern Investment Bank) which we also may upgrade by year end 2003."
Please let me know your views on whether you agree on this position, and a consolidation commitment by year end. Needless to say, the "ownership" structure from Parex need not be direct, but it is my strong opinion that we MUST disclose these subsidiaries to the rating agencies since we have difficulty justifying the level of business we do with these regions.
regards
-gz

---------- Forwarded message ----------
From: Gene Zolotarev <Gene.Zolotarev@parex.lv>
To: "Aleksandrs.Kvasovs@parex.lv" <Aleksandrs.Kvasovs@parex.lv>, "liga.purina@parex.lv" <liga.purina@parex.lv>, "Eriks.Brivmanis@parex.lv" <Eriks.Brivmanis@parex.lv>, "roberts.stugis@parex.lv" <roberts.stugis@parex.lv>
Date: Mon, 18 Aug 2003 15:37:37 +0300
Subject: Subsidiaries consolidation for Rating Agencies
Dear Colleagues
As you know we have an upcoming visit from Capital Intelligence this Wednesday and, much more importantly, a visit from Moody's on 23 September. I don't need to remind you all how crucial these visits are for us this year as we are on a brink of being upgraded to investment grade. In connection to this we need to address our positioning with regard to "subsidiaries" which, to the best of my knowledge, are not being consolidated into Parex Bank / Group financials. This issue is critical for this year, since we have significantly increased our activities in Russia and CIS and need to have a position on this region that we all agree on.
Presently we would like to propose the following text in "strategic positioning section":
"Given our advantageous market and geographical positioning, Parex bank had decided to increase our capital markets and lending activities in Russia and the CIS. Stable economic and political climate had spurred the growth of Russian debt and equity markets, thus allowing us to view the credit profile of these markets with greater comfort than before. Given our traditionally cautious view, we have continued to deal only with blue chip names and partners. The level of activity had forced us to consider establishing our own presence, rather than deal through preferred partners, and since the beginning of the year we have identified a bank (ExtroBank), a leasing company (Nezavisimost), and a financial company (Allen Finance) which we are in a process of acquiring aiming to complete this process by the end of 2003. Meanwhile we operate them as de facto subsidiaries, and should the acquisition process go as planned, these will be consolidated in 2003 Parex Group Fianancials.
Moreover, the increase of Latvia's trade with Belarus we have taken a small shareholding in a Belarus bank (Northern Investment Bank) which we also may upgrade by year end 2003."
Please let me know your views on whether you agree on this position, and a consolidation commitment by year end. Needless to say, the "ownership" structure from Parex need not be direct, but it is my strong opinion that we MUST disclose these subsidiaries to the rating agencies since we have difficulty justifying the level of business we do with these regions.
regards
-gz

Dear Mr. X,

After I secretly gave fraud details to Ernst and Young Baltics, I was forced to sign a document requesting a "leave of absense" because my Latvian language was not good.

The person put in charge of this was Guntars Grinbergs (Chairman of the Council - the highest ranking person at Parex).

I left Latvia in fear and my lawyer met with Grinbergs.

Thanks,
John

From: daiga@balticbusinesspark.lv
To: john_christmas@hotmail.com
Subject: Re: Grinbergs/Parex
Date: Mon, 29 Nov 2004 18:29:22 +0200

Hi, John

I met Parex bankas Padomes priekssedetajs Gundars Grinbergs (board member).

G.Grinbergs asked why you are not working? I sed that you think that
agreement between you and Parex is not in power enymore because they push
you to sign document about vacation and pasword for computer was changed. He
sed that there was no pressure on you and your duty after vacation was go to
work. He asked what you want and I sed that you want cancel emploement
agreement starting from december 1. About compensation he sed, that why
Parex should pay if you are not working. Grinbergs sed you must take back
your coments about Parex as a criminal organization or you must give Parex
evidence about it or they will go to court or somewhere else, because it is
not true. I sed that this letter which you wrote was for Parex and
therefore Parex can not blame you that you manifest secret information.
Grinbergs sed that you must make document where you explane whay Parex is
criminal organization and he want to know to whom you told about it. I sed
that you sed nothing to somebody else. But I told lie, because you are
telling about that to all your friends and it is not corect and right. Do
not make problems for yourself.

my opinion - you will get no compensation and it was mistake that you did
not go to Parex at lese one day after your vacation.

So Grinbergs want you to inform Parex about all criminal things which are
going on and then Parex will cancel your empoement agreement.

----- Original Message -----
From: "John Christmas" <john_christmas@hotmail.com>
To: <daiga@balticbusinesspark.lv>
Sent: Monday, November 29, 2004 2:50 PM
Subject: Grinbergs/Parex

> Hi Daiga,
>
> You are meeting Grinbergs? I don't know anyone at Parex named Grinbergs.
> The only person I can think of is Guntars Grinbergs, who is one of the top
> people in the company. I think he is a lawyer and is very close to Kargin
> and Krasovitsky. I never met him.
>
> What I recommend in the meeting is that you listen to him and remember
> everything he says and write that in an email to me. It is possible that
he
> will make threats. Maybe he will make up something to sue me for.
>
> I am very happy that we negotiated my employment contract to limit my
> liability to Parex. Don't lose my original employment contract and don't
> bring it to the meeting, because I don't want Grinbergs to take it from
you.
> It is very important for me to keep the original.
>
> If he asks any questions about what I think or what I did, then you should
> tell him that you don't know, which is the truth. The only thing that you
> know is that I asked for my full November salary on November 30 and, if I
> get that, then I resigned.
>
> Also, remember to look in my Parex account and see if they paid me.
Please
> move the money to Hansabanka.
>
> Thanks and good luck!
> John
>
>
>

Dear Mr. X,

After I was effectively fired because I gave fraud details to the auditors, I was shocked that the auditors did not do anything when they audited the 2004 annual report.

I sent this email to the Head Legal Counsel of Ernst and Young Baltics, and he denied that I gave him the fraud information.

But I was already fired and exiled for giving him the fraud information!

This lawyer - Valters Kronbergs - told me once that he had directly knowledge that Parex was shooting people in Latvia in the 1990's. I think this is the reason why he refused to admit that I gave him the fraud information.

Thanks,
John

To: john_christmas@hotmail.com
Subject: Re: E & Y [Email checked - EMEA]
From: valters.kronbergs@lv.eylaw.com
Date: Mon, 9 May 2005 14:01:32 +0300

Hi John,

We never had a discussion concerning tax evasion or accounting fraud issues.

kind regards,

Valters Kronbergs

Zvērināts advokāts
Partner

Kronbergs & Cukste Attorneys at Law
Baltic Legal Solutions
Kronvalda bulv. 3-5
Riga, LV-1010
Latvia
Dir.tel.: +371 704-3870
Fax: +371 704-3804
GSM: +371 920-8166
E-mail: Valters.Kronbergs@lv.eylaw.com

"John Christmas" <john_christmas@hotmail.com> 2005.05.08 21:21
ToValters.Kronbergs@lv.eylaw.com
cc
SubjectE & Y [Email checked - EMEA]

Hi Valters,

Keeping busy? Having a nice spring?

I have been somewhat worried all year about my personal safety in Latvia and
I am trying to sort out the latest in the Parex situation.

After I told you about the tax evasion and accounting fraud issues at Parex
Bank, did you tell anyone at E&Y? Maybe Per?

Thanks,
John

----------------------------------------------------------
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John Christmas to balticscreen
show details 10:14 (0 minutes ago)

Dear Mr. X,

After the denial by Ernst and Young Baltics, I wrote and signed a letter listing the frauds and mailed that to General Prosecutor Maizitis. I also mailed it to Einars Repse, Krisjanis Karins, and Ilmars Rimsevics.

I met Rimsevics in 2004 and he told me that Parex was a disgusting criminal organization. He knew that already.

The confirmation came from FKTK.

Thanks,
John

Subject: Atbilde uz 11.05.2005. vēstuli
To: John_christmas@hotmail.com
From: FKTK@FKTK.lv
Date: Wed, 27 Jul 2005 15:37:33 +0300

Finanšu un kapitāla tirgus komisija
adrese: Kungu iela 1, Rīga, LV-1050
e-pasts: fktk@fktk.lv
tālrunis: 777 4800

Rīgā 27.07.2005

Nr. 05.01.06./98

(See attached file: Atbilde_Dž_Kristm_07_05.doc)

Parakstīja: Gvido Romeiko, Departamenta direktors - Padomes loceklis,
Juridiskais un licencēšanas departaments

Sagatavoja: Banku un vērtspapīru tirgus daļa,

Dear Mr. X,

After the General Prosecutor and FKTK did nothing, I tried to stop Parex from getting more syndicated loans by sending the fraud information directly to the major lenders.

ING Bank replied that Parex told them that I was "very ill" (not true) and I believe that ING Bank refused to lend to Parex after this.

Thanks,
John

Subject: RE: Parex Bank advice
Date: Tue, 20 Dec 2005 16:42:27 +0100
From: Corinna.Pattijn@INGBank.com
To: john_christmas@hotmail.com

Dear John,

Very long time no speak. I was glad to see your name when your mail flashed up on my screen because I had obviously not seen nor heard from you in quite a while and I was not sure what had happened to you. When inquiring about your whereabouts with Parex last year I was always told you were very ill and had therefore left the Bank which obviously was not tr Of course the contents of your mail told me otherwise and it really took me by surprise.

You can imagine that your mail has raised quite a few questions within the Banking World and obviously also within ING. We did take your mail seriously and have looked into the issues you raised in your very detailed message. So far we have not been able to find any proof to any of the allegations you made but we would be very interested to talk to you in order to identify possible steps we can take to get some more background on those issues.

Please let me know if you would be prepared to talk to my boss, Jan Cherim and myself during the course of this week still. Please indicate how we can reach you, otherwise you can call my mobile number on +31 652 086635.

Best regards,

Corinna Pattijn
ING Bank

-----Original Message-----
From: John Christmas [mailto:john_christmas@hotmail.com]
Sent: 17 November 2005 13:44
To: sanjay.kohli@mhcb.co.uk
Cc: antanas.petrosius@csfb.com; Pattijn, C. (Corinna); shrenik.davda@jpmorgan.com; luc.nouwen@kbc.be; adrian.walker@standardbank.com
Subject: Parex Bank advice

Dear Sanjay,

As a follow up to our conversation in Riga last week, you will now receive
information regarding criminal activities at Parex. You will notice that
this email is copied to reps of other banks involved in the syndicated loan
and Eurobond because I hope that you will work in cooperation to get your
money back.

As discussed, I came across major frauds in the Parex financial statements
in August 2004.

I immediately reported these frauds to a Latvian partner at Ernst & Young.
He chose to ignore the information.

Next, I reported these frauds to Fitch and Moodys. They also chose to
ignore the information.

Next, I was removed from Parex Bank by the security department (October
2004).

I hid outside of Latvia for a while.

In May 2005, I provided the list of frauds to the Latvian Prosecutor and the
FCMC (Financial and Capital Market Commission. They also have so far
ignored the information.

I consider going to the press next.

ACCOUNTING FRAUD

Parex Bank owns two banks secretly, through share pledges. Parex Bank had
deposits at these banks, Extro Bank of Russia and Northern Investment Bank
of Belarus, without disclosing that these are related parties. Parex also
owns Extro Bank bonds.

I was told by Georgi Krasovitsky, son of Parex co-founder Viktor
Krasovitsky, that the reason for the secret ownership is because Parex did
not want to consolidate these banks on the financial statements, as required
by law AND Parex could not legally own a bank in Russia without regulator
approval, which probably would be denied. The Parex Bank credit committee
had approval authority for loans issued by Extro Bank and deleted this from
meeting minutes, and therefore every member of the credit committee knew
about this fraud. Also, it seems that the Risk Management Committee must
have known about this fraud since they made limits for putting deposits at
these banks, which would not have qualified for limits if they were not
secretly related.

Vice Presidents Gene Zolotarev, Liga Purina, and Erik Brivmanis all know
about this.

Georgi also told me (and the rest of my International Dept, causing all of
us to quit) that he was working in the Lending Division with Eizens Slava on
a project to expand leasing business in Russia, Ukraine, and Belarus. He
said that Parex Bank owned a group of leasing companies, including Allen
Finance, Extro Leasing, Nezavisimost, and others. He said all of those were
owned by Parex through secret offshore structures. He said that all were
financed by loans from Parex which were not disclosed as related party loans
and which were each capped at 25% of equity, which would have been the legal
maximum if they were unrelated parties.

In all, it seemed that amounts deposited with or loaned to secret related
parties was over 100% of Parex equity, compared to a legal maximum for
related party loans of 15%. Also, the capital adequacy calculation for
Parex is false because these institututions are not consolidated. Brivmanis
warned that it was very important not to tell the ratings agencies about the
subsidiaries because E & Y already suspected that some of these companies
were related and Brivmanis somehow convinced them otherwise.

At about the same time, responsibilities for the relationship between Parex
and Fitch and Moodys was being shifted from me to Brivmanis on orders of the
other Parex co-founder Valery Kargin.

There was a big blow up in the Fitch meeting in 2004 when deputy head of
lending Jorens Raitums got nervous explaining a loan that was disclosed as
the largest loan on the top 20 exposures list. Fitch was horrified to learn
that the loan was a home mortgage for 100% of the purchase price for a
palace in France. Fitch was more horrified when Raitums said that he didn`t
like the loan, but the credit committee backed it because the borrower was
Kargin`s friend. Thus, some critical comments in the Fitch report and a
series of meetings between me and Brivmanis and other people from the
Finance Division and Lending Division as my responsibility was handed over.

So, I got to learn why Raitums was so nervous talking about the French loan.
The loan was to an infamous Russian oligarch, Yuri Shefler, who is owner
of company Latvijas Balzams, which was also on the top 20 list. The loans
were supposed to be combined, which would put them over the 25% maximum and
make our loan concentration ratio worse than it already was. Raitums was
afraid that Fitch would figure out that the top 20 list that his department
made was fake.

More disturbing is the borrower himself. Mr. Shefler moved from Russia to
Latvia because he was running from the police for threatening to kill a
government minister over a corrupt privatization. When he came to Latvia
and bought Latvijas Balzams, four executives of competing alcohol companies
were quickly gunned down, causing the Latvian police to begin searching for
Mr. Shefler. And, he is wanted by Europol. Parex staff seemed to think it
was a funny joke that he was our largest client and friends with Kargin. So
much for know-you-customer.

I also learned about other scandals on the top 20 loan list, which only
contains sector names so that I was previously unaware of the exact
borrowers. Every loan on the list was scandalous, either a loan to a
government agency which provoked widespread accusations of corruptions or a
loan to a private individual or company with a criminal reputation.

It turns out that Parex was also in violation of the 25% law with a loan to
Riga City subsidiary Riga Transportation which was broken into two parts on
the list for the sole purpose of cheating on the 25% rule. And, it turns
out that Kargin and Krasovitsky´s holding company for their private jets,
VIP Avia, was on the list as an unrelated party, listed separately from
Kargin and Krasovitsky themselves who were also on the list. And, it turns
out that the previous year, Parex was in violation with the 25% law with
respect to loans to Riga City.

This information is very easy to confirm and must have been known to the
FCMC and Ernst & Young. And yet, the annual reports contained false
statements that Parex was in compliance with the 25% law.

The annual report states that the bank uses derivatives to hedge currency
and interest rate risk. This is not true and should be easy to check by E &
Y and FCMC.

Much of Parex´s strong performance in 2002 and 2003 was caused by euro-heavy
assets and dollar-heavy liabilities. The mismatch was not hedged.

And, in 2004, the bank was using interest rate swaps to INCREASE the
repricing mismatch between assets and liabilities. The bank was putting its
solvency at risk because of a decision by Treasurer Normunds Vigulis and
Zolotarev in pursuit of increasing the net interest margin in the short run.
I learned about this when head of trading Arvids Sipols told this directly
to Moodys. So, this is very easy to prove and in fact is known by Moodys
and must be known by E & Y, but maybe they don´t understand the information.
This alone is reason to shut down the bank.

TAX EVASION

Parex Bank deliberately lost $1 million to an offshore company secretly
owned by Kargin and Krasovitsky in early 2002. The fake derivatives trade
was engineered by Vigulis. The purpose was to cheat on taxes, but for
lenders I suppose it was harmless because it made net income look smaller.
However, the benefit was offset by payment of employee bonuses, perhaps 10%
of employee expense, in cash in envelopes (tax evasion and accounting
fraud). There are hundreds of witnesses and again, this alone is reason to
shut down the bank.

MONEY LAUNDERING

It has long been rumored that the business of Parex Bank is laundering money
embezzled or otherwise stolen from the Russian government. The bulk of the
deposit base is comprised of 0% interest accounts in the names of
US-registered LLCs and seems to be generated by the Russian rep offices.
Zolotarev always told me that all bad things I heard about Parex were
nothing more than rumors and implied that the rumors were originated by
anti-semites.

However, I quickly learned that the stories were not just rumors. As a
Parex employee, I was invited on multiple occassions to meet with
representatives of the Russian and American embassies who complained that
they knew that Parex was laundering money but the Latvian Prosecutor was
refusing to prosecute. Later, I learned from a friend who is a lawyer at
the Office of the Prosecutor that she believed from what she heard at work
that Parex was settling money laundering charges with bribes.

According to the Russian embassy, Parex rep offices were offering to
transfer dirty money out of Russia and into 0% interest accounts in Latvia
for payment of a 1% fee. I happen to know that these rep offices are owned
by a company called AS Parex which is owned by Kargin and Krasovitsky and
which is not included in the Parex Group annual report although it should
be. If you do searches for articles on these rep offices, you will find
that they have been subject to repeated police raids in Russia and Ukraine.
Since these are the most important Parex offices, far more important than
any branches in Latvia, it is amazing that these police raids are not
disclosed in the E & Y audited annual report.

And, Zolotarev asked me to try to initiate a relationship between Parex and
the ExIm Bank of the United States. I learned that the ExIm Bank was
refusing to cooperate with Parex under pressure from the Ukrainian
government which believed that Parex was a money laundering bank.

OTHER

Maybe some of you know former Parex Bank managing director Dainis Barups?

He worked for Lehman Brothers in London, then for Parex Bank in Riga, then
for Parex Bank in London, and now for Barclays Capital in London.

His main responsibility at Parex was to find bond issuance business.
Therefore, he had to establish relationships with Aivars Veiss, Head of
Latvian Treasury, and Karlis Mikelsons, President of Latvenergo as those
were the only potential issuers in Latvia.

Veiss was dismissed from the Treasury for suspected corruption and
immediately received a job to work with Barups and Sipols at Parex Bank, and
then mysteriously was transferred to a top job at Parex Insurance Company.
(Kargin is very loyal to his government friends and has provided jobs to
other top government officials who also lost their positions because of
suspected corruption)

I noticed that Mikelsons became a private banking client with Parex at the
same time Parex got a mandate for a syndicated loan for Latvenergo. Maybe
he got a gift of a free bank account?

It seems to me that Dainis gained kompromat on Parex and was assigned to a
position as (illegal) Parex rep in London and received a salary but had no
responsibilities. I strongly suspect that his salary was hush money.
Lehman Brothers and Barclays Capital both refuse to establish limits for
Parex.

And other suspicions abound. If you order a forensic audit of Parex, please
let me know. For example, I wonder if rumors are true that Parex did not
really escape the Russia crisis of 1998 unscathed by selling GKOs early but
instead went bankrupt at that time and hid the fact with false accounting.

SILVER BULLET

Here is a quick review of the easily-proven criminal fraud which I suggested
for you to use to call the syndicated loans and threaten a personal lawsuit
against Valery Kargin, if necessary.

In Spring 2004, Parex mandated two banks for a Eurobond issuance. Big
fanfare was made of the press releases for that. In the course of due
diligence, the two banks discovered that Parex was defendant in a $1.7 bln
lawsuit in New York State for money laundering, that is for issuing debit
cards for an unlicensed financial institution that robbed a lot of people.
The two mandated banks insisted that the Eurobond issuance not go forward
unless this material lawsuit was disclosed.

This caused a panic with Zolotarev because, according to him, Ernst & Young
also thought this lawsuit was material and wanted to disclose it on the last
annual report (and maybe the previous year also?) and Parex had somehow
convinced them not to make the disclosure. Also, our old syndicated loan
was coming due so we needed to borrow more money.

So, Zolotarev quickly mandated Standard Bank, ING, and Mizuho for a new
syndicated loan. Everyone asked Zolotarev why the Eurobond was postponed,
and Gene gave false answers and did not disclose that the SOLE REASON for
the Eurobond postponement was the $1.7 bln lawsuit.

The document for the syndicated loan contained a representation that Parex
was not defendant in any lawsuits which, if adversely determined, could
materially hurt the bank. Parex president Valery Kargin signed the document
with full knowledge that this massive lawsuit was outstanding and that the
lawsuit was the whole reason why Parex needed the syndicated loan.
Technically, the loan was in default as soon as it was signed.

Thanks and good luck,
John
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>

Dear Mr. X,

I have recordings of this illegal threat and have emailed the recordings to many people.

The transcript was published by Dienas Bizness in October 2007.

The caller is Guntars Vitols, former President of Parex Asset Management.

He is effectively threatening me because I said that Parex is a fraud. But he admits a couple times to knowledge of frauds.

Since this threat was illegal, Vitols and Krasovitskis should both be prosecuted.

Even though I am a Latvian citizen, I have not been able to enter Latvia since 2005 because of this threat and other threats.

Thanks,
John

FIRST RECORDING
(ringing)
Guntars: Hi John.
John: Hi Guntars. How are you today?
Guntars: I am fine. I am just in the middle of a meeting. Can I call you back in ten minutes or so?
John: That would be great. Thanks, bye.
SECOND RECORDING
Guntars: I’m kind of sick so I wouldn’t probably go out but its not unusual.
John: Oh, that’s all right.
Guntars: Yeah we’re getting this flu epidemic I think in Latvia here.
John: Yeah I know. Well I think Daiga is healthy right now, so that’s what’s important for me. So she is getting some work done.
Guntars: You know everybody told me to get lost and get home otherwise if everybody gets sick no annual reports are submitted on time.
John: Yeah otherwise you will be back in the office well next week and all of them will be gone sick.
Guntars: Yeah that’s right. No actually flu epidemics is quite serious at this time because people when they get sick they lie down one week or so. And so that’s the deal.
John: Well I hope you get better soon.
Guntars: The reason I am calling is in regards to your matter, or case, or whatever. So basically I got a message back and today I went down to visit Krasovitsky who wanted just to tell me a few things about that. Basically the way it presently stands, he just explained quite a few things of what they have been doing so far and that of course he was assuring me about that there was no kind of any criminal misdoings or something like that in any case but they are very seriously pursuing some legal lines of ...
John: Defending themselves?
Guntars: No, no, no. Actually they are trying to... he said there is some case against you already and they are even going, you know, there is some ... he said that they might start looking, I mean the legal people, for you in other countries as well.
John: They are trying to prosecute me?
Guntars: Yes, he said that’s what they would be doing if there is no settlement is reached, but basically he said that nobody wants to spend too much time – he said that because of your initial letter that you sent out to like eighty banks or something and because of that there was this trouble that there was a lot of lawyers sitting down and due diligences and answering questions and so on and its just a big and nasty process which in their mind will end nowhere but it just takes a lot of time and therefore their suggestion is that they are very businesslike and he just said that you know why don’t we just sign a paper where you don’t raise any trouble for us and we won’t be making trouble for you and we will drop any potential cases and that will be just a confidential agreement between two parties.
John: And they actually have some proposed agreement that they would like to send to me?
Guntars: He gave me some kind of a paper which is just a sort of a rough draft of something and they said that they wanted to ask me if I could meet you and sort of negotiate for them because apparently I am sort of ... I didn’t have a relationship with them and that is exactly when you have two parties, like even if you look at a policital scene when you have two countries very hostile against each other there is somebody like myself who is not really big friends or big enemies with anybody...
John: I am very happy. It is very nice of you to be helpful with this. If they give you some proposed agreement then best is to give that to Daiga.
Guntars: I wonder if this is the case. The suggestion was that we discuss this only you and me and in person because there is no need to make too much publicity out of any of this. That is probably why they approached me in the first place in this case. Because they know I have been an insider and they are not letting anyone in on this case who is not familiar with it already.
John: The thing is that there is not going to be any personal discussion because I am not in Latvia and I am not even going to come to Latvia this year.
Guntars: I know but they are suggesting that if I may agree to go and see you someplace. Because I told them that it is not possible - that you are feeling threatened and therefore not willing to be in Latvia in any case.
John: If it’s a written agreement then maybe I can find a safe mailing address and I can give you a mailing address and it can be mailed to there and I’ll be the only one who looks at it, no one else will look at it.
Guntars: If that’s what you feel is the correct way to do it, otherwise I mean for me it doesn’t really matter. I told them that I don’t want to be involved in any sort of – I told them that I agree because I know you and I also do have trouble with them but I can only help out as a negotiator to the extent that, pass on the messages, everything is strictly legal – that there are parties that are not speaking to each other and I am just there to establish the line of communication and not anything about... So its supposed to be ... As far as I’m concerned it will be strictly only that. I don’t see any wrongdoing in just trying to get two sides together to reach a settlement.
John: I think what I will do is I will brainstorm for a good address would be where you could maybe just tell them to mail any proposed agreement they have to that address.
Guntars: I have a copy of that. Its just a one page thing and that is something we could discuss. They basically told me to amend it or do something so if we come to certain agreement so that ...
John: Could you email it to me? Could you send it to my email address?
Guntars: It is a carbon copy form. I could probably make a scan of it and email it to you. That’s probably possible.
John: That would be the best. And if I like it then I can sign it and send a signed copy by post back to whatever address I am supposed to send it to.
Guntars: Yeah. Right. If you have any major concerns or whatever their suggestion is just to call me up and do this through myself. In this case I told that I don’t want to be involved with any third party - only with Krasovitsky himself and that is very well understood and so it is to be kept very close between the three of us at this point.
John: Do you have my email address?
Guntars: I don’t think so. Supposedly somebody probably has your email but probably its Daiga’s email. Do you have a foreign email or something?
John: I can give you an email address.
Guntars: You could just SMS it to me from your mobile phone.
John: I will SMS the address to you. By the way, regarding me getting prosecuted, that is absurd because I did not do anything illegal. In fact I feel that I had a legal obligation to give the information I knew to the Latvian Prosecutor and the fact that the Latvian Prosecutor is talking about prosecuting me clearly indicates corruption. But anymore I don’t want to fight this anymore.
Guntars: I will tell you John what I believe is the case. The fact is that you are not a lawyer. You have been very emotional in what you wrote. How you wrote. How you accused, well I haven’t seen the letter, but according to them, how you accused not only the local ... the FKTK ... and then he said even some foreign banks and whatever. So, there are a lot of small points which are picked out by a proper lawyer. Then you can go against a lot of wordings which are not based on shear facts. That is kind of a procedural thing. You know that they have enough resources and they have always been very good in litigation and stuff like that that. I am quite certain they are capable of finding places where they can sue you for and what they can sue you for.
John: And they are actually talking with the Prosecutor’s Office about this? Or they are talking with the FKTK about this?
Guntars: I don’t know exactly. They even said that ... Krasovitsky even said there is a certain ... one of the alternatives is to start looking for you not only on the territory of Latvia but going through Interpol and stuff like that. Just for accusing something... I mean he may have... maybe not telling the very ... of something .... quite clearly the message is that they are businesslike people and let’s not make trouble for each other. That is the idea. I said you are not going to take back your application to the state authorities that you have made because that is the point you made last time. He said that that that is not necessary. What is required is you both sign an agreement where you agree to certain things. And this agreement never sees the light. Any of the parties ... Their is a guarantee there that they won’t be suing you either.
John: Okay, I just want to get out of this. So I will send you an SMS with my email address. If there is something that is acceptable ... I mean I hope its just a short and simple and acceptable sort of thing, then hopefully I can just be finished.
Guntars: My suggestion to you – it’s just friendly advice - if you agree to the wording and even if you don’t agree and we change something, it would be very good if you send this letter to myself so that I get the signature from the other side.
John: So I should send it to SIA Investors? To you?
Guntars: Sorry?
John: I should send it to your office? To SIA Investors?
Guntars: Yes. Because what you need is an ageement so that you have not only a statement signed just by one party but a proper agreement and in this case sending it directly would be a little bit risky. I don’t know. Maybe not.
John: I am more comfortable working through you anyway. I am more comfortable sending it to you.
Guntars: John, remember what happened to our stock agreement? They were sort of signed and then hidden in some kind of a safe locker and they never ... they were probably destroyed. ... even had a copy on their hands. In order to avoid something that is just my friendly advice.
John: I will SMS this email address to you. I am very happy that the person you talked to is actually Krasovitsky himself. I hope you can vouch for me in general. Just please don’t hurt me. I just don’t want to be involved. I am a nice person. I did what I thought was honest and correct. And I am very sorry that I ever got involved. I will stay away from them. And please can they leave me alone for the rest of my life and not hurt me. That would be nice.
Guntars: I understand. That is exactly what we are starting to acheive here. That was also my point – the person who was sent to me to go up to this – I said that if I agreed to negotiate for the both of you I would only be talking to the key person and that is very important because today I found out exactly what they are looking for. But apparently both sides are willing to reach an agreement and that is very important.
John: I should go now but I will send you an SMS right now. And I appreciate this so thank you.
Guntars: Yeah SMS me or email. I will send it to you tomorrow perhaps. Or maybe even today. I will probably ask the girls just type it into the computer so I don’t have to make a scan copy.
John: Okay. Yeah that is the easiest thing.
Guntars: I would expect you to call me back tomorrow, maybe in the afternoon, just to give me some feedback on what is happening.
John: Yeah, I’ll give you feedback right away.
Guntars: Thanks.
John: Thank you Guntars.

THIRD RECORDING
(ringing)
Guntars: John?
John: Hi Guntars.
Guntars: Good morning.
John: Good morning.
Guntars: How are you doing.
John: I’m doing all right.
Guntars: I just arrived at the office.
John: Okay so I caught you right on time. I’ll be quick. So anyway I have this email from you with this proposed agreement or contract or whatever it is supposed to be and I’m not going to sign that. Its basically... it says that I agree that I was lying about everything. That is sort of what it says. My opinion about it is that first of all, I don’t believe that Krasovitsky can have the Prosecutor prosecute me now because I haven’t done anything criminal. And, I think that he is trying to trap me to get me to sign something and that after I sign that he will have me prosecuted.
Guntars: They surely have their own interests. I am sure about that. They are not very simple people as you might imagine, so I would be very suspicious about their intentions or whatever in any case. So that is the kind of reaction I would have myself if I was approached this way. I don’t know. I just suggest that you make a counteroffer or something like that. You know basically says doing something that you could... or drawing up something you might sign or whatever. Because I think, yes, they are not simple people. They do not doing it out of very friendly sort of feelings towards you or something like that. I am even not discussing that. I am not telling you they are nice people. I am not telling you they are very straight-forward people. Or that they are very frank with either myself or yourself because I have been through this machine myself, I know very well that this is not the kind of a situation where you can really trust each other. So I agree with you, John. I am more on your side than on their side. I am not trying to take any sides for the sake of not being a part of any standing against each other. But my feeling is also that you should take things very carefully and they have done their maximum, they have drawn up this very... When I spoke with you I hadn’t even read this paper very thoroughly. But after retyping it into the computer I noticed they want to notify the Prosecutor’s Office about such an agreement which is, I think, kind of unacceptable. It should be if there is an agreement then it should be a hidden agreement so that nobody touchs anybody until the other side does something wrong. That is the kind of agreement that I would be willing to sign. Basically saying that we’re not saying that the information is correct or it is not correct...
John: Another thing is that according to your last conversation it sounded like, it is not really an agreement but rather its like if I sign this then they will tell the prosecutor not to prosecute me and if I do not sign this then they will tell the prosecutor to prosecute me. Something like that.
Guntars: That’s what they told me. That’s what they told me. But after carefully reading through the document, which I did because I typed it in the computer, I sort of realized that what they were saying was not exactly what was stated there. Apparently, I believe that it is probably not very wise to leave it as it is – the situation I mean in an unresolved manner. What you would probably do is make a counter agreement, signed paper, which does not basically . . . where you are not saying that you are actually giving false information or something ... which basically says that you are not going to act upon any information if you may have one just for the sake that they don’t act upon you and you basically have that kind of a, it is more I suggest like a peace agreement rather than an agreement where you basically say that you are not correct in the first place, which is wrong for you.
John: Well my idea was that not so much that I want to sign any kind of agreement but just my situation which you can tell to Krasovitsky is that I don’t believe that the Latvian Prosecutor can prosecute me because I didn’t do anything wrong. If the Latvian Prosecutor thinks that he can prosecute me then what you originally said is that Krasovitsky could have or you said that Parex could have someone at the Prosecutor Office call me. If they want to try to force me to sign an agreement then they should have someone from the Prosecutor’s Office call me and tell me that they are going to prosecute me because you can call me and tell me that Krasovitsky said that maybe I would get prosecuted but that...
Guntars: My feeling is if they had legal and very strong grounds... because what you can read in this proposed agreement is that they are basically saying that they have applied to the Prosecutor’s Office to investigate whether there is anything criminal doing in what you did. And in answer to that they could say „no, John didn’t do anything wrong.” He was saying all these things about „we are going and we are applying and even to Interpol and whatever.” My feeling of course is that he can tell whatever he wants and, its not like I haven’t been there, and I know that you know these people, you can’t take their word for granted. That’s all I can say.
John: Your main bad experience with Parex was just about stock options, right? Like they told you would have stock options and you didn’t have those.
Guntars: Let’s not discuss this over the phone because nobody knows who might be whatever... I don’t want to be giving any evidence for or against. But I am just saying I would be very cautious anyway. When they tell these things, I get the same feelings that you do. That’s very natural. Frankly, I expected something like that to come out of you. Because I never told them that I believing in what they said because I know if they had real cards in their hands and whatever. I don’t know. I don’t know. I can’t tell. They know that you are willing to make kind of a peace agreement. They know that. They know that you are out of the country because you are afraid of your situation and personal well-being. And probably what he was saying all these things was to impress you or whatever. To scare you even worse. Looking at it from my viewpoint, It’s okay, I am not going to tell you people that I told you wrong information because that would mean that you don’t have any cards in your hands whatever. I would be willing personally willing to sign that I am not saying this information is wrong or right but I am not going to use it potentially against you if you don’t act against me. That is the kind of agreement that I would personally be willing to sign if I were in a situation like you are. I won’t sign a paper like the one I sent you. But that’s what you told me yourself. It sounds reasonable to me. That’s all.
John: In closing all I can say is thanks for being an in-between. And I hope through all of this we continue to be friends and I hope I continue to be your client and so forth as far as other business is concerned. And I do appreciate this and I do regard you as being neutral in this and that’s nice. As far as any communication back to Parex – if you tell them that I read that and it looks to me like signing something that says that I am guilty and I am not going to sign it because I am not guilty. And also I understand that the main pressure for me to sign that is that I will be prosecuted if I do not sign that, and I do not believe that because I did not do anything wrong so I don’t think I can be prosecuted. If they think they can have me prosecuted then they should tell the prosecutor call me. The prosecutor can call me and I will answer the phone.
Guntars: Frankly I have no willingnes to call them or whatever because, believe me, this is not the most pleasant conversation for me. It wasn’t when I was there because I have so many negative feelings about the institution for emotional or objective reasons or whatever. But they were suspecting that you probably wouldn’t sign this paper in this form but what they would tell me is that .. what is he sort of... is there anything that he is willing to sign. And knowing I don’t want to be this person going back and forth from one party to another, I don’t know. May I suggest that you at least throw out some things that would look like a reasonable agreement or whatever on the points that you would be willing to sign or at least outline your points, otherwise I would be going back and forth and that is not something I would prefer to do. It is very pleasant talking to you but its with that institution its not really that.
John: You don’t have to talk to them anymore if you don’t want to. Just don’t talk to them anymore. Or if they call you and ask you just tell them that John said he won’t sign the agreement and John doesn’t believe that you can prosecute him. Another thing I had said before still is I left the bank in 2004 and my information about them is getting old. Its two years old already. And if they... they already survived the last audit and if they survive this audit, then I can’t really do anything to them anymore anyway. Just with age they’re just going to be free from me because after two audits passed when I learned all this information and they have changed everything around in the company then I don’t really have any dirt on them anymore anyway. So I think they should just be satisfied with that. And that is better than any agreement because its just factual.
Guntars: Look. The way their thinking goes, I would assume, is that unless you have a paper you really can’t trust each other what each other is saying because that is exactly how when I went there I was not inclined to take sides or even think whether he is right or telling the truth or not. Because I know that these words are used free of charge. There is no moral obligation given what has happened before. I know that there is no moral obligation to be truthful to each other. That’s why the only language they understand is that they have a written piece of paper which basically holds back each party involved. That’s how I understand that. In dealing with them I wouldn’t do differently because I wouldn’t take any words from Parex. And don’t think they wouldn’t understand if you communicate that you don’t have any extra information or it is getting old. That is not just the kind of way they are doing business. That’s what I think. I don’t know. I can tell them whatever. I will most probably send an SMS. Frankly I don’t want to even talk to them. Just basically stating that you have changed your mind and instead of looking for some kind of peace agreement which was your message the last time, I can tell that you have changed your mind, and now you are not, even though you will not go after them, you are not going to sign any papers either in any form, because they would...
John: A „peace” agreement is a funny word anyway. What we are trying to accomplish is something that is not legal anyway. It’s like me agreeing that I will not to tell anyone more about the frauds at Parex if they agree that they won’t kill me or prosecute me. How can that be an „agreement” anyway because it is completely illegal.
Guntars: It is something. It is just my recommendation. Otherwise, you leave it like it is and you don’t solve the situation. If you just give them a reasonable offer in writing then why is it illegal? If I am telling you, like „John, I know that you like cheated on your girlfriend but I will tell him if its not legal.” Is it?
John: Still the message is that you can say that I changed my mind. I read that and I changed my mind and I decided I will not sign anything with them. If they think that they can prosecute me then I don’t believe that. That’s what you can tell them.
Guntars: May I ask why did you change your mind?
John: I read the agreement and I thought about it more and I don’t believe they can do anything to me when I am outside of Latvia. So I think that I am safe now.
Guntars: Which is probably true. They reitterated that they weren’t going to do to you anything except in a very legal manner. By way of prosecuting you. That was their message. But I also told them that you were willing to end the situation and live a peaceful life here in Latvia or whereever you prefer to be, and that’s why it sort of was your approach. Now, I am just thinking how to project because it kind of looks very strange that you have been holding in and out and that would make them worry more, because they would think you are not being very reasonable – like today telling one thing and tomorrow will be a different thing.
John: I don’t care. That’s just the situation – I am not going to sign this.
Guntars: You are not willing to discuss with them any points or any other form of agreement? That would be your message?
John: My message would be that if they want me to sign an agreement, I would only sign that if I was under threat of prosecution and if I am under threat of prosecution then someone from the Prosecutor’s Office should call me.
Guntars: So unless they have a case against you, you are not going to sign anything. But if there was a case against you, you would be still available.
John: Well if there was a case against me and the case was gonna be dropped if I signed something. That is another thing that this proposed agreement doesn’t even say.
Guntars: This something that they said that of course it doesn’t look very realistic to me. They said that they do have a ... they have applied and they are in the process and it is a lot of trouble because they have a lot of lawyers on the case. I asked them if they wanted to make a deal and they said yes. That may well ... I don’t know, John. That may well not be the full truth or the exact truth. I am just telling you what he told me. I really in that situation take nothing for granted. I don’t know. Who is playing what cards and who is doing what.
John: The only way I am gonna sign an agreement is if I believe that I can be prosecuted and also if I believe that prosecution can be stopped if I signed something. And someone from the Prosecutor’s Office would have to tell me that. For it to be credible, someone from the Prosecutor’s Office would have to tell me that.
Guntars: I guess. What is beeping? Do you know?
John: What’s beeping? I don’t know. I don’t hear any beeping.
Guntars: Its my phone. Its a reminder. I’m having a visitor flying in.
John: Anyway I should go myself. But thanks again and sorry no agreement but that’s how it goes.
Guntars: I am almost feeling sorry myself because this was supposed to be a very quick matter and I am now in a very...
John: Well you can get out of it. You can just tell them „no I didn’t sign it and sorry bye.” You don’t ever have to talk to them again. They’re not going to prosecute you.
Guntars: I guess not. I guess not. I just want everybody to be in peace and doing good business. Do it in a constructive way. That’s all I want. I can’t really tell them no, I will be helping you. Basically because then they can ... whatever. They are not the kind of enemies I would like to have.
John: They won’t be your enemies.
Guntars: I hope so. You almost made out of me one when you called me some months back about this ... going to all these institutions and telling things and whatever. Then I would be in a very similar situation as you are.
John: If you did it. If you went to the State Revenue Service.
Guntars: Yeah. Well if I did something like that. I am not saying that there are grounds or not grounds for that, but just going and telling things ... its the same thing about your statements. You are saying that their statements are false. I can’t tell if they are or not. There are all these irregularities but I can’t really prove anything or substantiate... I can suspect or not suspect something. It is something that you are saying. If they are putting your word to test, then that is their right. And that’s how it should be in any country and case.
John: Its, by the way, there is supposed to be an organized way. If someone gives a letter to the Prosecutor Department and the other party thinks that that information is false, there is a legal way to go about challenging the letter. Its not threatening people so that they run away and threatening them again after they leave. There is a civil legal process for challenging what is in a Prosecutor letter.
Gunters: But think about it in a different manner. I mean, going into court ... and prosecutors ... its costly and time consuming ... that’s why people have these kind of settlements where they agree not to ... where they drop the case on both sides ... and they go and have a reasonable situation. Which is also understandable. Why wouldn’t they want to approach you ... that was your idea initially that you would want to approach them and tell them that we could reach an agreement. I’m kind of lost and I feel that, you know... whatever. I think that’s not the end of it anyway.
John: Thanks and if you want it to be the end of it for you, I really think you can do that. You can just tell them „sorry and there is no agreement” and you don’t want to be involved anymore and „please don’t call me.”
Guntars: Sorry?
John: You could just tell them that there is no agreement and you don’t want to talk to anybody about it anymore so please nobody call you.
Guntars: I will call them and I will basically tell them that unless they have real case against you, which can be dropped if you sign anything, you are not willing to sign anything either. Is that the message you want me to tell them?
John: That is exactly correct.
Guntars: Then I’ll work on it. Because I’m not going to...
John: How you said it is exactly correct. If there is a case against me and the case can be dropped if I sign something, then that would be the only reason why I would sign anything.
Guntars: If that’s your case, I won’t see you here for a long time! (laughing)
John: I think this year no. Maybe next year no also. Daiga has a long power-of-attorney for me.

Guntars: Listen John. I will call Krasovitsky some time maybe later today or tomorrow. Thats emotionally very stressful for me and I have to prepare myself. You can bet on that. This kind of relationship is not something I am looking forward to. I will call you back to get his message and I think hopefully it will be that for the time being at least. Okay.
John: Okay.
Guntars: And I hope I don’t end up in a situation where I spoil a relationship with both parties. But really benefitting from the situation and not getting anything for myself.
John: That’s all right. Your relationship is good with me. I am happy.
Guntars: That’s good to hear. Because sometimes, especially when you are messing with two married people, you are the one who its taking the blame afterward in any case. So that is why you never really try to solve two people’s relationship. Its not really a family situation so I hope I don’t end up as enemies to everybody. That’s what I hope.
John: I think you’ll be okay.
Guntars: Okay, John. I’ll just get back to you as soon as you can from them because you will want to hear their response. But I sincerely hope this will not drag forever, if you don’t want to do anything, I am certainly not willing to be the one in the middle in this situation.
John: I should go. Thanks. Bye.
Guntars: Bye.

Dear Mr. X,

This is self-explanatory.

Thanks,
John

On 25 January 2006, I received a call from a former Parex colleague named Jekaterina Ecina.

She was fired from Parex after my departure, I assume on fears that she was my friend and might have some loyalty to me.

She called me with a terrified and urgent tone and told me that someone from Parex was hunting for me and that I should stay out of Latvia and I should not use my Latvian mobile phone because Parex could spy on mobile phones.

She said that a person from Parex had asked her questions about me: where did I live, did I have a car, did I have a girlfriend, did I own anything in Latvia.

She did not directly say that Parex was trying to kill me, but she strongly implied that.

She then sent me two SMS messages, which probably could be confirmed by the phone company. I believe that both were sent from a computer and that, again, she did not use her own mobile phone because of fear that Parex would be spying.

25 January 2006
159.148.174.220
John pls be careful.
Also with yr phone calls - no surprise if they can listen to them!
I didn't tell them anything! K.

25 January 2006
159.148.174.220
I only told what they already know - i played fool.

Ms. Ecina on a previous occasion told me that when she joined Parex, a Parex lawyer named Guntars Grinbergs (now Chairman of the Council) arranged for her to privatize a home in Jurmala as part of her compensation (interesting compensation!).Ms. Ecina further told me that something went wrong during this privatization and the sudden death of her mother (a blood clot that immediately killed the healthy middle aged woman) somehow involved Grinbergs.I have complained about all of this to many people in the Latvian government but there has been no investigation.John

Dear Mr. X,

Vitols (and Krasovitsky) said I must sign this "agreement" (actually a false confession) or be prosecuted.

Thanks,
John

Date: Fri, 10 Mar 2006 04:12:24 -0800
From: johnchristmas777@yahoo.com
Subject: Fwd: Draft Agreement
To: john_christmas@hotmail.com

Note: forwarded message attached. __________________________________________________
Do You Yahoo!?
Tired of spam? Yahoo! Mail has the best spam protection around
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--Forwarded Message Attachment--
From: guntars@investors.lv
To: johnchristmas777@yahoo.com
Subject: Draft Agreement
Date: Fri, 3 Mar 2006 18:09:37 +0200

Hi John,

Here's the draft agreement suggested to you by the other party involved. I had the hard copy and typed it into the computer

Guntars Vitols
mob. +371 9123 914

--Forwarded Message Attachment--
From: guntars@investors.lv
To: johnchristmas777@yahoo.com
Subject: Draft Agreement
Date: Fri, 3 Mar 2006 18:09:37 +0200

Hi John,

Here's the draft agreement suggested to you by the other party involved. I had the hard copy and typed it into the computer

Guntars Vitols
mob. +371 9123 914

---------- Forwarded message ----------
From: "Guntars" <guntars@investors.lv>
To: <johnchristmas777@yahoo.com>
Date: Fri, 3 Mar 2006 18:09:37 +0200
Subject: Draft Agreement

Hi John,

Here's the draft agreement suggested to you by the other party involved. I had the hard copy and typed it into the computer

Guntars Vitols
mob. +371 9123 914

Dear Mr. X,

The closest I got to convincing a major newspaper to print an article about Parex and me was in 2007 with the Wall Street Journal.

Two people immediately contacted the Wall Street Journal to convince them not to print the article.

Arnis Lagzdins, Head of Compliance at Parex, told the WSJ that "bad shit" was happening at Parex in 2004, but said that Parex changed since then.

Aivis Ronis said that I was a liar.

The truth is that "bad shit" was happening in 2004. And "bad shit" was still happening in 2007. And "bad shit" is still happening in 2009.

An article was printed, but all of the interesting information was omitted.

It is interesting to me that a criminal case was opened against me, presumably for false whistleblowing, however the Head of Compliance seems to have told the Wall Street Journal that the whistleblowing was not false.

Thanks,
John

Subject: RE: compliance officer
Date: Sun, 4 Mar 2007 18:14:40 +0100
From: Glenn.Simpson@wsj.com
To: john_christmas@hotmail.com

Yes, I would like some prooof of the Port fraud.
Lagdnis tacity admits a lot of bad shit went on at the bank prior to his
arrival in 04 and says he has spent the last three yars cleaning the
place up. It's clear to me that he has indeed done a lot to reform the
bank's procedures, but I also know from my experiences covering other
banks that frequently, bringing in a ssrious compliance officer just
means people find ways to do things with involving the compliance
officer.

Dear Mr. X,

Aivis Ronis used to be Latvian Ambassador to the USA.

In 2007, he was head of the Latvian American Financial Forum. This is an organization of Latvian money laundering banks and supposedly does not include Parex.

However, it seems that he was following orders from Parex because he slandered me to the Wall Street Journal.

The WSJ believes that Parex is a violent criminal organization. The journalist Glenn Simpson told me that on the phone, and he hints about that below with "be careful."

Thanks,
John

Subject: RE: update
Date: Thu, 1 Mar 2007 18:34:33 +0100
From: Glenn.Simpson@wsj.com
To: john_christmas@hotmail.com

Avis Ronis just called a colleague of mine to warn the WSJ not to
believe anything we hear from a vengeful ex-employee of Parex.

-----Original Message-----
From: John Christmas [mailto:john_christmas@hotmail.com]
Sent: Thursday, March 01, 2007 6:05 PM
To: Simpson, Glenn
Subject: RE: update

Thank you for keeping me updated. J.

>From: "Simpson, Glenn" <Glenn.Simpson@wsj.com>
>To: "John Christmas" <john_christmas@hotmail.com>
>Subject: update
>Date: Thu, 1 Mar 2007 16:55:28 +0100
>
>Moving right along here...
>The bank now knows I am looking into them, and they also know I am
>aware of a good bit of their affairs including their dealings with
>Washington lobbyists. I have not forwarded your emails to anyone, nor
>have I dislcosed that I am talking to anyone who formerly worked at the
bank.
>Still, be careful

Dear Mr. X,

After I blew the whistle on Parex, the government responded by using the LIAA to make the fraud larger.

Note that everything Indra (daughter of VVF) claims in the email below is false. I wanted to get a lawyer to represent me in Latvia. I enquired with five lawyers over the past five years. Three of them told me of specific violent crimes committed by Parex and refused to help me. The other two refused to talk to me at all.

Thanks,
John

From: indra.freiberga@liaa.gov.lv
To: john_christmas@hotmail.com
Subject: RE: Parex
Date: Fri, 28 Sep 2007 11:22:42 +0100

Dear John,

Thank you for your email. As a member of the EU since 2004, Latvia has a
judicial and legal system that meets the criteria of the Acquis
Communautaire. It is possible for any individual in Latvia to have their
concerns and grievances addressed by the respective legal and judicial
institutions in place.

Kind regards,

Indra

-----Original Message-----
From: indra.freiberga@liaa.gov.lv [mailto:indra.freiberga@liaa.gov.lv] On
Behalf Of John Christmas
Sent: 28 September 2007 09:23
To: indra.freiberga@liaa.gov.lv
Subject: Parex

Dear Indra,

Remember me? We met back when I was Head of International Relationships for
Parex Bank in 2003.

I read recently that the LIAA has been using the Latvian Embassy in London
to host events promoting Parex Bank to institutional investors.

I hope that you are all aware at LIAA that you are doing a serious
disservice to Latvia by promoting Parex Bank.

I was witness to fraud at Parex Bank in 2004 and I reported this to the
Latvian Prosecutor and I was chased out of Latvia with threats that my life
was in danger and that I would be arrested. And, the Prosecutor refused to
investigate the frauds or the threats. And, a lawyer at the Office of the
Prosecutor told my lawyer that the Office of the Prosecutor makes a business
of waiving criminal prosecution for Parex in exchange for bribes.

I am working with the British and American governments for protection from
Parex Bank and the Latvian Prosecutor. You should not be surprised if I
come to the Embassy to rip up my Latvian passport before making an asylum
request to the UK.

Latvia is in a critical situation today - the government is controlled by
organized crime groups. I hope that the LIAA can be sensitive to this and
will try not to promote the mafia in future events.

Thank you,
John

Dear Mr. X,

Mizuho Corporate Bank had the opposite reaction from ING Bank.

Mizuho Corporate Bank arranged larger and larger loans to Parex.

These are the loans that the Latvian government now guarantees.

I think that Mizuho Corporate Bank deserves to lose the money.

Thanks,
John

Subject: Confidential
To: john_christmas@hotmail.com
From: sanjay.kohli@mhcb.co.uk
Date: Tue, 15 Nov 2005 15:23:15 +0000

Dear John,

Thankyou for your comments.

I am not happy about your instruction to me on how to deal with this
matter.

As I told you before, I will investigate your claims and contact the people
I think appropriate and deal with this as I see fit.

It would useful if you could provide me with "real" evidence of your claims
so I can decide to take this issue forward or not.

Regards
Sanjay

Sanjay Kohli
Director
Origination & Structuring
Central and East Europe Region
International & Trade Finance Department
MIZUHO CORPORATE BANK, LTD.
Tel; +44 (0) 207 012 4012 (Direct)
Fax;+44 (0) 207 012 4403 (Direct)
Cell;+44 (0) 07767 873034
e-mail; sanjay.kohli@mhcb.co.uk

"John Christmas"
<john_christmas@h To: sanjay.kohli@mhcb.co.uk
otmail.com> cc:
Subject: Parex Bank
15/11/2005 15:10

Dear Sanjay,

I am sitting in an internet cafe looking in my hotmail account, and
unfortunately it seems that I do not have a copy of the letter I wrote to
the Prosecutor about Parex Bank.

What I do have in my hotmail account is the email below, and attachment
letter, in which the Financial and Capital Market Commission (FCMC) states
that they will investigate the accusations in my letter.

As I mentioned to you, I discovered in August 2004 that Parex had loans on
its books to undisclosed related parties totalling approximately 150% of
equity, compared to 15% allowed by law. And, Parex had made loans over 25%

of equity, in violation of the law, to two different unrelated groups and
had deliberately falsefied the loan concentration table provided to
counterparties and ratings agencies. The latter fact should be very easy
to
prove and in fact I believe that Ernst & Young and the FCMC probably
already
knew about it but chose to remain silent. In fact, I also understand that
Ernst & Young suspected that some of the undisclosed related party
borrowers
were related parties and also chose to remain silent about that.

I reported the false accounting to an Ernst & Young partner in August 2004.

I was removed from Parex by the security department shortly thereafter and
I
left Latvia for a while.

I was back in Latvia in early spring when the new annual report was out and

was disgusted to find that Ernst & Young had again given a clean opinion on

it.

So, I believe it was in May that my letter went to the Prosecutor.

The Prosecutor appears also to have ignored the information since six
months
have gone by and even a small amount of checking would have proved enough
of
the fraud to justify shutting down the bank. According to a friend who
works as a lawyer in the Office of the Prosecutor, the Prosecutor has
settled criminal money laundering charges against Parex for bribes in the
past. So, perhaps I should not be surprised by the inaction.

Here is a quick review of the easily-proven criminal fraud which I
suggested
for you to use to call the syndicated loans and threaten a personal lawsuit

against Valery Kargin, if necessary.

The two mandated banks insisted that the Eurobond issuance not go forward
unless this material lawsuit was disclosed.

This caused a panic with Gene Zolotarev because, according to him, Ernst &
Young also thought this lawsuit was material and wanted to disclose it on
the last annual report (and maybe the previous year also?) and Parex had
somehow convinced them not to make the disclosure. Also, our old
syndicated
loan was coming due so we needed to borrow more money.

So, Gene quickly mandated Standard Bank, ING, and Mizuho for a new
syndicated loan. Everyone asked Gene why the Eurobond was postponed, and
Gene gave false answers and did not disclose that the SOLE REASON for the
Eurobond postponement was the $1.7 bln lawsuit.

The document for the syndicated loan contained a representation that Parex
was not defendant in any lawsuits which, if adversely determined, could
materially hurt the bank. Parex president Valery Kargin signed the
document
with full knowledge that this massive lawsuit was outstanding and that the
lawsuit was the whole reason why Parex needed the syndicated loan.
Technically, the loan was in default as soon as it was signed.

AS YOU KNOW, I AM PROVIDING THIS INFORMATION TO YOU ONLY AS A CONCERNED
CITIZEN AND NOT FOR ANY OTHER REASON AND MY INTENT IS TO HELP ALL PAREX
COUNTERPARTIES AND NOT ONLY MIZUHO. THEREFORE, I INSIST THAT YOU FORWARD
THIS MESSAGE IMMEDIATELY TO EMPLOYEES OF STANDARD BANK AND ING SO THAT YOU
ALL WILL HAVE EQUAL INFORMATION AND CAN PLAN YOUR ACTIONS IN COOPERATION.
YOU MUST COPY ME ON THE FORWARDED MESSAGE SO I CAN SEE THAT THE MESSAGE HAS
BEEN FORWARDED.

Perhaps you could get a copy of my prosecutor letter directly from the
FCMC.
I would be happy to confirm whether the copy they give you is correct.
And, perhaps a less extreme action than calling the loans immediately would

be to insist that Parex changes auditors and to provide the new auditor
with
the prosecutor letter. I would be happy to help the new auditor out since
I
only included frauds that I was certain about in the letter and there are
other frauds which I suspect that perhaps also should be investigated.

Thanks and good luck,
John

>From: FKTK@FKTK.lv
>To: John_christmas@hotmail.com
>Subject: Atbilde uz 11.05.2005. vçstuli
>Date: Wed, 27 Jul 2005 15:37:33 +0300
>
>
>Finanðu un kapitâla tirgus komisija
>adrese: Kungu iela 1, Rîga, LV-1050
>e-pasts: fktk@fktk.lv
>tâlrunis: 777 4800
>
>Rîgâ 27.07.2005
>
>Nr. 05.01.06./98
>
>
>
>
>
>(See attached file: Atbilde_Dþ_Kristm_07_05.doc)
>
>Parakstîja: Gvido Romeiko, Departamenta direktors - Padomes
loceklis,
>Juridiskais un licencçðanas departaments
>
>Sagatavoja: Banku un vçrtspapîru tirgus daïa,

(See attached file: Atbilde_Dþ_Kristm_07_05.doc)

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