Latvian citizens Erik Vanagels and Stan Gorin should be billionaires if you look at the hundreds and maybe thousands of companies they own or control. But they are not. They are proxies.
Proxies are persons who stand in for the real owners sometimes for a fee or sometimes because their identity has been stolen. Proxies are used to hide the real owners sometimes for legitimate business reasons but more often because the companies are being used for corrupt or fraudulent purposes, to evade taxes or to launder money. Proxy led companies are being used in Eastern Europe in epidemic proportions.
Vanagels and Gorin are not unique. They show up along with a group of other Latvian proxies associated with hundreds of companies many involved in criminal behavior.
Finding out who is behind the Latvian proxies is difficult but unraveling the proxy network can help trace who is laundering the money. In the case of the Latvian proxies, that leads to the former owners of a Latvian Bank, and their associates.
That bank is Parex Bank of Riga, recently rebranded as Reverta.
Parex Bank is a name well known in the Baltic. It was once considered a glowing success in the post-Soviet Latvian banking sector, and funded events officially associated with the NATO summit in Riga 2006. But by October 2008, it was about to become an embarrassment and a massive drain on the Latvian people who paid for its corruption.
Parex board chairman Valerijs Kargins and CEO Viktors Krasovickis had built the bank from humble beginnings as the Soviet Union’s first ever exchange booth in 1991 into the largest bank by capital in the Baltics. In the process they became Latvia’s richest men and influential oligarchs.