The story
On 5 August 1986, under the Riga's City Committee of the Komsomol, Gints Marga created Parex, which is a portmanteau of export parity, as a self supporting youth enterprise. Valērijs Kargins had been working at VEF but could not live on its salary so, in 1987, he purchased for five thousand Soviet roubles the Parex shell which was later reorganized into a cooperative and then a limited liability company for tourism. After Kargins had travelled to Yugoslavia in 1985, then Vietnam, and then the United Kingdom in 1988 where he facilitated an exchange between Riga and Durham for youth tourist groups, he realized that he needed to establish a currency exchange among groups from France and the United Kingdom in Latvia. The first youth group to exchange currency at Parex was from Czechoslovakia.
In 1988, he and Viktors Krasovickis, who had a tourism agency, became partners in Parex.
On 3 April 1991, Parex Bank received the first licence issued to a private company for currency exchange operations in the territory of the Soviet Union – issued by the second President of the Bank of Latvia, Paul Sakss. In May, Parex opened the first exchange office which was used by many clients from all over USSR.
On 13 August 1991, Kargins, along with Viktors Krasovickis and his wife Nina Kondratyev reorganized Parex and became the new bank AS PAREX's sole owners. Kargins owned half of the shares (valued at 1,086,200 Soviet roubles), while the remaining 50% were distributed in similar amounts between Viktors Krosovickis and his wife.
In January 1992, Parex Bank was founded, with the owners Valērijs Kargins and Viktors Krasovickis having equal shares in the bank. Krasovickis' wife, Ņina Kondratjeva, did not participate in the bank`s future activities as they divorced that year. However, she continued to hold significant deposit in it.
Persons from all over the Soviet Union and later the former Soviet Union exchanged through Parex and, when the Russian rouble fell into the abyss of inflation, the Latvian rouble and later the Latvian lats were much more stable in which to exchange currency. Riga was intended to become the global financial center in the former Soviet Union and Parex Bank advertised that "We are closer than Switzerland!" (Russian: "Мы ближе, чем Швейцария!") According to Kargins, Kargins and Krasovits were on friendly terms with Anatoly Sobchak and Vladimir Putin personally authorized Parex's Saint Petersburg office. In May 2015, Spanish prosecutors alleged that Parex Bank, which held mostly offshore deposits for persons from Russia, was the preferred Latvian bank for the money laundering of Vladimir Putin, Yuri Chaika, and Russian Mafia especially the Tambovskaya Mafia from Saint Petersburg and that very large sums were laundered for them through Latvian and German firms associated with Parex Bank and Overseas Services, which is a sister firm of Parex Bank, by Mikhail Rebo, also spelled Rabo, and his wife Tatiana Rebo who was the manager of the Parex Bank Berlin. Also, the Spanish prosecutors alleged that Grigory Rabinovich benefited from the looting of Parex Bank by receiving a fake unrecoverable loan which he received as a refund for his purchase of shares in Parex while United States and Swedish shareholders of Parex Bank received no money. Ilmars Poikans alleged that both Valdis Dombrovskis, who is a European Commission Vice President responsible for the integrity of the euro, and the Bank of Latvia Governor Ilmars Rimsevics, who is a member of the council of European Central Bank, supported the fraud at Parex Bank and that Rimsevics received a very large sum for his efforts.
In 1993, about 30% of Parex Bank's shares were bought by offshore company Europe Holdings Ltd and by the year 2001 its share (without voting rights) reached 51%. The company remained in the list of owners until 2002, when Kargins and Krasovickis formally repurchased parts of Europe Holdings Ltd, again becoming the sole owners of the bank. However, by the end of 2007, around 14% of the Bank`s total paid-in share capital was in the hands of 59 small shareholders.
Parex was closely involved with Enron, Arthur Andersen and later Ernst & Young prior to the collapse of Enron in 2002.
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In the early 2000s, John Christmas, a United States banker who joined Parex in 2002 and was the head of the Parex's International Relations, informed the Financial Services Authority in London about a massive money laundering network involving shell companies with accounts at Parex but the Financial Services Authority took no action to stop the illicit affairs. In 2005, Christmas informed the Chairman of the Bank of Latvia, Ilmārs Rimšēvičs, that Parex was involved in money laundering schemes but Rimšēvičs took no action.
In 2001, Jānis Skrastiņš (30 October 1949, Liepa, Liepa Parish - 10 July 2021), who was the first Prosecutor General of Latvia serving from September 1990 to August 1998 and drafted Latvia's Law on the Prevention of Money Laundering in 1997 following the April to June 1995 Banka Baltija financial crisis and collapse, was elected to the supervisory board of Parekss Banka and became its legal advisor and headed the anti money laundering division of the bank until 2009. From 2004 to 5 August 2008, Skrastiņš was a member of the management board of Parex Bank.
In 2001, the ruling coalition of left wing groups at Riga, which were very close to the Kremlin, shifted all financial dealings with the mayor's office to Parex Bank.
On 7 May 2004, Parekss Banka changed its name to Parex Banka.
In May 2005, President George W. Bush travelled to Latvia to discuss Latvian banking irregularities. The Lithuanian branches of Parex were associated with pro-Russia, pro-Kremlin, and pro-Putin Viktor Yanukovych money laundering scandals with large support from the Donetsk Clan, which was formed by Akhat Bragin and headed by Rinat Akhmetov after Bragin's death on 15 October 1995, in the 2004 Ukrainian elections according to the Lithuanian newspaper Respublika. The United States branch of Deutsche Bank, Deutsche Bank Americas (DBA), had Parex's correspondent account, but shut it down after pressure from the United States Treasury Department.
A company called International Overseas Services (Russian: Международные зарубежные услуги) also known as International Offshore Services has had close ties to Parex. Established in 1996 in Dublin, Ireland but moved to Dublin, Virginia in the United States in 2007, International Overseas Services had subsidiaries in Riga, Kyiv and Moscow, had Philip Burwell (Irish: Pilip Boireil) listed as its representative in Latvia, and had dummy directors. IOSG Secretaries was the firm's branch in Panama with Ricardo Cambra La Duke as its agent. Both Milltown Corporate Services and Ireland and Overseas Acquisitions, which had Erik Vanagels (Latvian: Ēriks Vanagelis) and Stan Gorin (Latvian: Staņislavs Gorins) as directors (both in reality were pensioners from Latvia) and Burwell as administrator, were shell companies of International Overseas Services. Milltown Corporate Services had been registered in Ireland until 2005, then briefly in British Virgin Islands, then in Belize, then
From Wikipedia’s article on Parex Bank, shared under CC BY-SA 4.0.4