Lawyer: There are many problems and few solutions in the Lembergs criminal case

Due to negligence, carelessness or some other reasons, the court of first instance has not looked into the property issues of the Lembergs criminal case; the nature of the prosecution itself and, consequently, the 13-year-long trial of Aivars Lembergs is patently absurd, said lawyer Jānis Zelmenis, a representative of the owner of the property seized in the criminal proceedings, in a conversation with Neatkarīgā.

But yesterday, the court of second (appeal) instance in the Lembergs case changed the detention order for Aivars Lembergs, setting bail at €100,000 instead of detention.

Yesterday, the court also heard the views on the appeals and a request previously made by several participants in the proceedings to revoke the first instance judgment and send the criminal case back to the first instance for a new hearing.

The case has highlighted a really serious problem - how property belonging to Aivars Lembergs was first seized in 2007 and then, in 2022, property belonging to other persons was subject to confiscation. These real owners of the seized property had no possibility to appeal against the seizure decisions issued by the prosecutors in 2007, nor to defend their interests in the court of first instance, nor were they informed by the process facilitator of their right to participate in the court of first instance. Some of them, it was said in court, only learned of the possible confiscation of their property when the first instance judgment was read out.

But in 2017 (after the first instance court proceedings in the Lembergs case had been ongoing for eight years), the Latvian Criminal Procedure Law integrated the European Union Directive, which stipulates that owners of property related to criminal proceedings must have the right to effectively defend their interests at all stages of the criminal proceedings, as well as real (not illusory) possibilities to appeal against decisions on seizure and confiscation. These rights have been completely ignored by the first instance court panel headed by Judge Irīna Jansone (who became chair of the Riga Regional Court Criminal Chamber a few days before the verdict was read out), which will sooner or later lead to the case being sent back to the first instance court.

"It is better that this happens sooner rather than later," the participants in the proceedings said yesterday.

But already last week, attorney-at-law Jānis Zelmenis, who is representing the owners of the seized property in this trial, agreed to answer questions from Neatkarīgā about the problems related to the seized property.

It turns out that what he said sheds quite a bit of light on the situation that several other participants in the Lembergs criminal proceedings, including those who were not represented at all in the first instance court, spoke about at yesterday's hearing (more on this in a future publication)!

The point of the case

At the court of appeal, lawyer Zelmenis is representing two foreign companies that had funds wrongly seized from a Swiss bank and also subject to confiscation last year. At first instance, the representative of these two companies, attorney-at-law Valdis Bergs, sat in the courtroom for many days waiting to be heard, but Judge Boriss Geimans told the representative - your problem will be solved in the judgment of the court of first instance.

After 12 years of waiting for the first instance judgment, the owners of the seized property saw that their problems had not been solved, or even attempted to be solved at all, because the court had simply copied, with all its errors and contradictions, the seizure decision drawn up by the prosecutors 13 years earlier.

Only now, at the court of appeal (14 years after the decision to seize the property was issued), the two companies finally had the opportunity to be heard - this is what Neatkarīgā spoke to lawyer Zelmenis about.

How do you assess the work of the court of first instance in settling property disputes in criminal proceedings?

I represent Kestrel Holdings and Logistics Holdings in New Zealand, which have waited patiently for 12 years for the revelations of our excellent court and how long this court is going to block their money. Of course, at the very beginning of the proceedings, the court was asked to unblock the accounts of the companies. I feel quite angry with the court because it is not going to unblock the money. Having studied the 1920-page judgment of first instance, I found no connection between the main defendant [Aivars Lembergs] and the companies' money. I therefore do not understand why it is intended to confiscate funds held in the accounts of these companies. The court of first instance has not seen fit in 12 years to investigate and analyze what assets have been seized, where and for what purpose. The prosecutors wrote something in the indictment, the court copied it in the judgment and now says: execute! The problem is that much of what has been seized has gone out of business, has gone bankrupt, has closed down. In my case, the question is: what do the seized assets have to do with the defendants, and why is the claim made that they are their assets? In the entire lengthy judgment, not a single piece of evidence is cited that it is Lembergs' property. Why the hell, then, have we been forced to wait 12 years for these revelations in the judgment? Before the trial, the prosecutors were leading us around by the nose. They played a trick - the prosecutor [Andis] Mežsargs demanded the seizure of assets in the criminal case against [businessman, co-owner of several Ventspils companies] Laimonis Junkers. Switzerland reciprocated and seized the money. The proceedings against Laimonis Junkers were dropped and all the arrests were revoked, but they are being maintained in this case on the grounds that it is part of a separate criminal case, which is why it has now turned into the proceedings we are seeing in court [the Lembergs criminal case]. But, my dear friends, you asked Switzerland for legal aid in a completely different proceeding, where everything has come to an end! Release the blocked money at last! The process facilitators have been avoiding this conversation this whole time. I wonder why the court does not even say anything about it in its judgment.

What prevented the court from finding out whether this seized property is really the property of Aivars Lembergs?

I also think that 12 years was enough time to find that out in the proceedings. The court should certainly have found out whether there was any justification for seizing the property, or whether the prosecutors simply felt or thought that they had to do so at the time. We never found out anything in the course of the proceedings. For the court to rely on the 2006 and 2007 decisions to seize assets and not independently verify anything in the course of the proceedings - well, that is very foolhardy, to put it mildly. The court has produced a judgment that is, a priori, unenforceable because the court has not drafted it well. How can you enforce what is unenforceable? Why is it unenforceable? Because the court has not checked whether such property exists in nature at all and, if it does exist in nature, who, after all, owns it?

We can recall that during the 12 years of the proceedings, many requests were made to the court to examine the condition of the seized property, but the court's position was entirely supportive of the prosecutors' position - that the concern about the condition of the property was merely a delay in the proceedings because there was no reason to doubt the integrity of the custodian of the property, Rudolfs Meroni.

One variation of this story is about the famous custodian, but in my case it is a different story, because I was told - you sit calmly with your clients and wait for the verdict! So we sat quietly and waited for 12 years. Now we feel unpleasantly surprised. The Latvian State chose Rudolfs Meroni as the sole main custodian of the assets. He was also a participant in this trial as one of the prosecution's key witnesses. That alone is a clear conflict of interest. It is very strange! We are not talking here about assets such as confiscated cigarettes and alcohol, but about "live" businesses. This is what the lawyer Mārtiņš Kvēps once said in an interview with Neatkarīgā, that the seized property in this criminal case is a business - not some dubious business, but an absolutely legitimate transit business even at the time of the seizure. The fact that the geopolitical situation has changed the business is another matter. At that time, they were not only legitimate businesses, but thriving businesses. And in this context, one would need to assess the strength of the legal position of the Latvian state. It was not by trickery that Meroni wrested this custodian status. The state granted it to him and did not revoke it for more than ten years! After all, in legal proceedings, when assessing the guilt or innocence of defendants, the question of possible punishment is also linked to the possible confiscation of property. Here is the question: confiscation of what property? It would be logical if it were a question of confiscation of property belonging to the defendant or attributable to the defendant. Paradoxically, [on the issue of confiscation of property] the Latvian court relies on what some prosecutor wrote back in 2007. The question is, who helped him write it? The Latvian court does not even want to go into what is written there. Let us imagine a situation: the appeal is quickly over and the judgment enters into force. So many things to comply with, according to the judgment! This is not just a story of Kestrel Holdings and Logistic Holdings, which have had several million seized in Luxembourg. But first we have to find out: are the millions there or not? We are talking about dizzying sums of money here, and therefore the fundamental question is: has the court done a good job of investigating and verifying the facts and the material concerning these seized assets? Imagine if we were to litigate with you and the court ordered the recovery of money from Jānis Zelmenis, but it ordered the recovery of money not from Jānis Zelmenis' bank account, but from the money in your account. You would probably ask indignantly: what has Zelmenis' money got to do with your account? You would want an answer as to why the state thinks that your account contains money from Zelmenis! "Please, State, answer this elementary question!" Of course, we can wait for the judgment in the hope of finding an answer there as to why Zelmenis' money should be held in journalist Rozenbergs' account. But 12 years later, we read the judgment and find that there is no answer. This is absurd. Do you, the court, understand what you have written in the judgment? You have written something, if not absurd, then something absolutely impossible. How can anyone confiscate the money that Zelmenis has in Rozenbergs' account? How are you going to do that?

Is there a reasonable explanation why the court in the Lembergs trial is so blindly following what the prosecutors have written?

It may be that there is this nuance, that they are obeying. The other nuance is total laziness and unwillingness to do anything. All the indications are that this court definitely cannot be called too hard-working. A man was deprived of his liberty on summary judgment on February 22 last year. It was said: "Lembergs, we are taking you away to prison because you have been found guilty. But why you are guilty, after 12 years of trying you, we will write and tell you at some point in the future." If the court did that in a week, it would be understandable. A month at the most - still acceptable. But in Latvia, it is considered that human rights standards are respected if you are put in prison and only six months later you are given a verdict on which you can start preparing an appeal. There is a question here about the quality of the work of the courts.

Criminal proceedings are criminal proceedings for the very reason that there is a competition between the prosecution and the defense. The only place where there is competition in criminal proceedings is in court. Before that, there is no competition - it is all in the prosecution's interest. Has the state not been able to ensure something even resembling a competition during these 12 years of prosecution? This competition involves not only questions of guilt or innocence, but also questions of property - who owns it or not, how it is managed. Surely someone has already compiled statistics on how many requests for the property have been made in these proceedings and how many of them have been rejected or granted, and how many of them have been rejected without any motivation whatsoever. The question, then, is: Honorable Court, what principle of competition has been observed in these proceedings? In Latvia, the principle for public officials is: even if there is a flood behind me, I will write something, sign my name under the judgement, then retire or be promoted to another post, and then let others deal with it, I have done my job. The trial is the culmination of the criminal proceedings, where the competition between the two sides must finally take place. So, there you are, court, be so kind as to look into the arguments of both sides, analyze them and reflect the conclusions in the judgment. But the judgment in the Lembergs case has no analysis; the 1920 pages are crammed with whatever - mostly copied from something else. I did not find anything specific there about my Kestrel Holdings and Logistic Holdings.

There is another nuance. On August 17, 2020, six months before the judgement, the court referred the matter to the Provision State Agency. A year and a half has passed, but the agency has never managed to recover the seized property, let alone transfer it and audit what is left of it. Has the court of first instance resolved the issue of the property in this way?

That logic was lacking from the start. In 2006-2007, it was the simplest solution to return the property to Meroni for safekeeping. Other solutions would have required much more effort and a better understanding of the situation. For the prosecutor, everything seemed very simple - here is a guy who controls everything and even gives evidence for the investigation and says all sorts of other good things - what more do you need? "I'll write you a letter, dude, and you'll keep it for the state." The prosecutor thought it was easier. Rather than going into details such as: who are you, dude, to control everything here; who is going to supervise you; how much and what kind of remuneration are you going to get for this work; what will be the accountability and its regularity? All these issues should have been sorted out in 2007 [when the seizure of the assets was imposed]. The word "control" already includes voting on boards and councils of transit companies, receiving dividends, opening accounts, transferring money - so control of everything and everyone to the highest degree. After eleven years of litigation, the court realized in August 2020 that an independent custodian should be appointed. In the meantime, countless requests for assets have reached the court. The question is, what has been the attitude of the State to this process?

Is it not the case that sooner or later it will turn out that the seized property has been siphoned off?

Yes, well (laughs)... The seized property ... (laughs even more). Here we go back to the beginning of our story. If the court had taken the time and done the quality work in these 12 years of litigation, it would have realized that some of the seized property has survived and some has not survived, some has expired. Confiscation of seized assets at the level of a first instance judgment is very difficult to enforce, in many cases it is not enforceable at all. The "property" has a priori diminished. But it is not possible to clearly say whether it has fallen partly because of some mistakes or directly because of the manager's mistakes, or whether it has fallen objectively because Russia closed transit, Belarus also diverted cargo, and our government itself declared the transit business to be harmful and even asked partner countries to impose heavy sanctions against transit. But at the very least, the court could have analyzed whether the documents prepared by the prosecutors in 2007 on the seizure of assets corresponded to reality. But I wrote about the business relations between Ventspils businessmen in the 1990s and early 2000s, and what the seized assets in this case are about, in my book "The pendulum of wealth, or the privatization of Ventspils nafta and myths about Zelmanis' offshore webs" (Turības svārsts jeb “Ventspils naftas” privatizācija un mīti par Zelmeņa ofšoru tīmekļiem) (see, for example, https://neatkariga.nra.lv/tieslietas/332242-ka-ventspilnieki-rudolfu-meroni-atrada).

If, at the end of the proceedings, it turns out that the seized property has disappeared, will the true owners of the seized property file a claim against the Latvian state?

This would only be logical, because, after all, responsibility for irresponsibility, recklessness and negligence has to come at some point. The state also has to answer for something.

We can begin to unravel the issue of responsibility, even by only asking how, in this criminal case, the extortion of a bribe - the extortion, not simply the taking or giving of a bribe - can be proved by the testimony of people who suddenly begin to recall events allegedly connected with extortion that took place more than twenty years ago, and some of these witnesses were not only business partners of the main defendant but also close friends of his? I would find that strange, to say the least. I could still perhaps understand if the accusation had referred to giving a bribe or taking a bribe, but certainly not to extortion. Let us begin researching this story with such elementary matters and end with such matters as the health of the accused. It is now his second year in prison. The defendant's health is not improving. He is already close to 70 years old. If the proceedings continue while he is in custody for five years on appeal and five years in cassation, this case could end in nothing more, nothing less, than physical death. Here it is: the Latvian State has investigated and tried this man for thirty-three years since May 1999. I have to ask: what is it that is going on here? There is another nuance: who, when and where has asked for reports on the seized property? Another aspect: in one case, the property is seized, in other cases, the property is not seized. Who determines this policy of seizing assets? This is a painful and unpleasant problem for the country. Not solving the problem and pushing it further down the bureaucratic chain will not improve the situation. But the answers are not going anywhere. Years from now, it will all be analyzed and looked through to see what is left of the matter. In this story of extortion of bribes, there was a case of political corruption, where parties were allegedly bribed. That is where it all ended. We can listen to the Re:Baltica distress stories on the radio about this closed case. But it was clearly more important for the state to investigate the extortion of bribes than the buying of political parties. Prosecutors have nothing to say about the topic that the radio stories are discussing.

I see a lot of problems and very few solutions in this Lembergs criminal case. Now everything has become a big mess - who is the good guy and who is the bad guy in this criminal case? Even if the one who was the good guy in this criminal case used a lot of unfair and wrong methods in the fight, then he has now become the bad guy himself. Unfair practices, from procedural deadlines that are difficult to grasp, to questions of actual guilt and the handling of seized property. That is what is evident in this story.