As international media are extensively reporting, members of the United States Congress, as well as, most probably, former FBI director Robert Mueller in a separate probe, are investigating whether the Trump Organization and members of the family of US President Donald J Trump were connected in any way to a well-documented Russian money laundering scam uncovered by Sergei Magnitsky.
One of the companies under scrutiny is Cyprus-registered Prevezon Holdings Ltd, which was due to be taken to court by the US authorities in May after a four year investigation for its role in an alleged $230m money-laundering ring. However, the case was abruptly settled two days before court proceedings were due to begin for just $6 million and no admission of guilt by Prevezon.
"Based on the settlement stipulation, it also appears that the [US] government had caused the freezing of an overseas fund in the Netherlands, which it agreed to relinquish as part of the settlement, and agreed to inform a number of other countries, including Switzerland, Latvia, Lithuania, Estonia, Ukraine and Russia, that the matter had been resolved," says an account of the legal case by the law website Law360.
But as a previous report from Law360 shows, if the case had gone ahead, prosecutors from the US Department of Justice were hoping to rest part of their case on evidence of "a new fact witness" from Latvia.
Prevezon's lawyers reportedly objected to the witness on the basis that "The new fact witness is in Latvia and would need to be deposed there at great expense and effort."
The identity of the Latvian witness was not revealed, nor whether he or she was a Latvian citizen, or of some other nationality and only resident in Latvia.
A Latvian citizen named 'Voldemar Spatz' was earlier named as nominee director of several companies involved with Prevezon-linked transactions, but he is very unlikely to have been the witness in question as his name was simply used to register hundreds of offshore companies in various jurisdictions (other Latvian identities used in a similar way include 'Erik Vanagels' and 'Stan Gorin' but nominee directors are not active in the companies to which their names are attached.)
Furthermore, Latvian bank records were due to be held up by prosecutors as a key piece of evidence for the reason that they could be corroborated from other sources involved in the transactions according to an 'opinion and order' ruling from the judge William H Pauley III on May 9, just days before the case was settled:
“For those records that involved the sending of funds abroad, a number of transactions were corroborated by sources in different countries. Bank accounts located in Latvia, and Moldova contained entries for transactions in the flow of funds,” the ruling says, adding that this adds "to the aura of trustworthiness that courts look for in assessing records."
Several Latvian banks have been linked to the Magnitsky case and other major money-laundering scandals, as previously reported by LSM.
The Organized Crime and Corruption Reporting Project (OCCRP) has a useful summary of the links to and from Prevezon.