Of course Snoras, a Lithuanian bank taken over by the Lithuanian government on 16 November, has been in the news a lot recently. I first wrote about this situation here: Fifth largest bank in Lithuania seized by government. It turns out that the situation at the bank is much worse than the government first suspected.
In this article (in Lithuanian), Vitas Vasiliauskas, the head of the Lithuanian national bank (Lietuvos Bankas), says that it was thought that Snoras had the flu but it turns out that it has cancer. Fewer assets and more irregularities were found than the government had been expecting.
In this article (in Lithuanian), Vasiliauskas states that the Lithuanian government suspects that the heads of Snoras were trying to increase the authorised capital of Snoras by using customers' deposits.
This article (in Lithuanian) reports that both Vladimir Antonov (who controlled 68.1% of Snoras) and his father were employees of Snoras, as well as both sitting on the Snoras board of supervisors. Vladimir Antonov was hired as an administrative consultant and was making LTL 58,500 (EUR 16,685 / USD 22,110) a month after taxes for this "work". Antonov's father was making LTL 14,700 (EUR 4,256 / USD 5,677) a month after taxes. (This doesn't include the money he was making for being on the board of supervisors.) I wonder whether he has even stepped foot in Lithuania. The article also says that the members of the board of supervisors were making an average of LTL 51,500 per month (EUR 14,911 / USD 19,887). Raimondas Baranauskas, president and owner of 25.31% of Snoras made LTL 58,500 (EUR 16,938 / USD 22,590) per month after taxes. That doesn't include the amount he got for sitting on the board of directors of the company. The members of the board of directors were pulling in an average of LTL 40,100 (EUR 11,611 / USD 15,485) a month for sitting on the board. To put this in perspective, the average Lithuanian makes somewhere around LTL 2,000 a month (EUR 579 / USD 774).
Latvijas Krajbanka, a bank in Latvia controlled by Snoras, has also been seized by the Latvian government because of financial irregularities. This article (in Lithuanian) states that the bank's current administrator, Janis Brazovskis, discovered what had happened to LAT 100 million (EUR 143 million / USD 190.8 million) that disappeared from the bank. Brazovskis said that the money had been used for two purposes: to raise the authorized capital of the bank and to finance a personal project of Vladimir Antonov--his plans to purchase the automaker Saab. Mortgage bonds were used to move the money out of the country. Brazovskis stated that this was "a crime, indeed several crimes".
In this article (in Lithuanian), Edward Lucas, who is the International Editor of The Economist, says that the activities of Snoras should have been carefully looked into much earlier and that the former Lithuanian government and Lietuvos Bankas share the blame for their lack of action. According to Lucas, it had been known for many years that the bank was run by suspicious people and was engaging in suspicious activities. (I wonder how many Lithuanian officials profited from their silence?) He also states that the Lithuanian authorities acted improperly by not earlier sharing information with the Latvian authorities concerning their suspicions about Snoras.
On a good note, at least Vladimir Antonov and Raimondas Baranauskas have been arrested. They were seized in the UK and are currently out on bail.
After looking over the situation at Snoras, the Lithuania government has decided to liquidate it. Earlier there was talk of trying to preserve the bank, but the situation appeared hopeless. In this article, Andrius Kubilius, the prime minister of Lithuania, stated that the scope of financial crimes at Snoras had never before been encountered by the government. He added that Snoras could hardly be called a real bank; rather it was a massive financial scheme reminiscent of Bernard Madoff's Ponzi scheme. Still, few actual details of the fraud that took place at the bank have been released by the government.
In a related (but minor) note, a Mercedes-Benz driven by Sigita Baranauskiene, the wife of Raimondas Baranauskas, was seized by the government as she tried to drive to Riga, Latvia. As this article reports, her reaction to this was to tell a journalist that she wanted to "like that Norwegian Breivik [who in a murderous bombing and shooting rampage killed almost 80 persons this past summer] pick up a machine gun and kill" the people involved in the downfall of her husband's evil empire. Nice woman. I like her humility after it became common knowledge that she and her husband have been living the good life on the deposits of the people putting money in their bank. Yeah, just gotta love it.