According to Bloomberg, two Latvians were arrested in Kuldīga and extradited to the US for their part in a fraudulent scheme which saw luxury cars "sold" to buyers online that were never actually delivered with Tesla, Dodge and Mercedes-Benz models among those offered.
However, an official press release about the case listing the names of the ten accused suggests that many of them are likely to be Latvian, judging by the ways in which their names are given as "MARTINS APSKALNS, PAVELS BERNCS, JANIS BERNS, RAITIS GRIGORJEVS, SERGEJS LOGINS, DIANA MAKSIMOVIC, AGRIS PETROVS, IGORS PIRINS, VALTERS VOLKSONS, and VLADISLAV ZAPOLSKIJ".
Documents submitted by prosecutors speak of "a group consisting predominantly of Latvian and Lithuanian nationals operating in the United States and foreign countries" and confirm that Berns, Grigorjevs, Petrovs, and Volksons are all Latvian citizens and all visited the U.S. late last year as part of the alleged conspiracy. They were arrested as they tried to leave the country last December at John F. Kennedy airport.
The nationalities of the other accused individuals are not specified in court documents.
However, back in 2013 the BBC reported that a Latvian national by the name of Martins Apskalns was jailed for fraud and money-laundering in the UK's offshore haven of Guernsey. He was subsequently deported back to Latvia and according to local media he comes from Kuldīga.
Apskalns and Igors Pirins were arrested in Kuldiga, and Sergejs Logins was arrested in Rīga.
Investigators say some of those involved have already admitted they were knowingly breaking the law. As an example, one deposition reads:
"BERNS stated that he was recruited in Latvia to come to the United States for the purpose of opening bank accounts and withdrawing money from them. BERNS was promised payment for his services. BERNS agreed and came to the United States for this purpose, and upon arriving met with a handler. BERNS opened accounts at multiple banks in the United States and passed the account information to his handler, and the handler began bringing BERNS to banks, where BERNS withdrew money, which money he in turn provided to the handler. BERNS was paid approximately $10,000 for his services, and acknowledged the money recovered from him at the time of his arrest was derived from the fraud scheme. BERNS stated that he provided specific information to the banks regarding account openings and transactions based on information transmitted to him by his handler. BERNS admitted that while engaging in the aforementioned conduct, he knew what he was doing was illegal."
They are accused of "conspiracy to commit wire and bank fraud and conspiracy to commit money laundering."
The arrest of one of the accused in Kuldīga resulted in the police getting hold of a cellphone which in turn released a great deal of helpful information as far as the investigation was concerned, including the fact that the co-conspirators used the ICQ messaging method to communicate with each other.
U.S. Attorney Geoffrey S. Berman said: “As alleged, the defendants used an elaborate network of fictitious classic car dealers and collectors to take their victims for a ride financially. Thinking they were remitting money to purchase rare automobiles, victims were instead sending large sums to bogus auto transport companies that were really just vehicles from which the defendants allegedly vacuumed up the proceeds of their fraudulent scheme.
Thanks to our law enforcement partners here in New York and in Latvia, Lithuania, and Finland, the defendants’ once-lucrative joyride is over.”
The alleged fraud was operating from at least January 2016 and until as recently as December 2018.
The modus operandi of the gang is described in some detail by prosecutors who state: "First, co-conspirators impersonated automotive dealers and collectors and claimed to be selling classic cars on various well-known internet auction and trading websites. Victims responding to the ads were in fact corresponding with a fraud scheme participant.
"After the victims and co-conspirators came to terms on a sale price, including down payment and shipping costs, victims were next directed to purported automotive transportation companies and were told that these companies would accept payment and transport the cars.
"These companies were in fact shell corporations established by the conspiracy to help perpetrate the fraud, whose corporate bank accounts were established and controlled by the defendants and co-conspirators, awaiting wired funds from the fraud’s victims.
"After victims had wired payment, the defendants and co-conspirators went to the banks to drain the victim’s funds, often starting the same day payment had been transmitted, withdrawing from different bank branches in numerous withdrawals on the same day, and withdrawing in denominations that were varied and often kept to an amount that they believed would prevent the financial institutions from recording and reporting the fraud.
"The defendants and other co-conspirators then sent the fraud proceeds outside the United States to Eastern European countries, from where the defendants and many of their co-conspirators originated. Some of the defendants maintained managerial roles, recruiting co-conspirators to participate and providing directions and victim information to scheme participants once the co-conspirators were inside the United States. Victims never received the goods they believed they had purchased, and many were unable to recover their money or were left paying loans for cars that were never truly for sale. "
FBI Assistant Director William F. Sweeney Jr. said: “Victims of this fraud not only believed they were getting what they paid for, they were often stuck paying for the classic automobiles they never received. The FBI New York Eurasian Organized Crime Task Force would never have been able to bring these criminals to justice without the help of our task force partners, but also the work and partnership with our international partners in Latvia, Lithuania and Finland. We cannot stress enough how important it is for these suspects to understand the FBI has the ability to bring them back to the United States to face justice and punishment for their crimes.”
Each of the defendants is charged with one count of conspiracy to commit wire fraud and bank fraud, which carries a maximum sentence of 30 years in prison, and one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.