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Lavrentiadis arrested over €700m Proton Bank embezzlement case

Greek tycoon and former main shareholder of Proton Bank Lavrentis Lavrentiadis was arrested Thursday afternoon in Athens over a case of alleged transfer of hundreds of millions of euros to companies of his own interests in form of commercial loans. Right after his arrest, Lavrentiadis, 40, was taken to a hospital apparently due to sickness. It is considered as sure that he will appear before the prosecutor on Friday.

 Lavrentiadis’ arrest occurred on charges for fraud, embezzlement, money laundering, breach of faith and forming a criminal gang. According to the charges, the questionable loans by Proton Bank to Lavrentiadis companies are reportedly 700 million euro.

According to reports, police went to his house at 17.00 pm Thursday in the area of Vouliagmeni, some 30 km east of Athens. The arrest was made following a warrant issued by the investigating judge suspecting Lavrentiadis could flee abroad.

During the search at Lavrentiadis’ home “police has reportedly seized  personal computers, two safes with several hundred thousands  of euros, jewelry and two armored vehicles,” so private Mega TV.

The arrest comes one day after the Athens court called for the seizure of assets belonging to Lavrentis Lavrentiadis but also to 29 of his former associates, among them businessman Petros Kyriakidis, owner of several media also of english-speaking weekly Athens News.

The First-Instance-Court ruling followed an appeal by Proton Bank shareholders who claimed to have suffered massive losses due to the activities of Lavrentiadis and his associates. 

Lavrentis Lavrentiadis has repeatedly denied the allegations even when investigations were ongoing and no charges were made. An audit by the Bank of Greece had allegedly found that more than 40 percent of Proton’s commercial loans in 2010 were made to companies related to Lavrentiadis. Proton Bank was nationalized in October 2011.

Tailored-made Laws

In the time between PB nationalization and his arrest Lavrentiadis avoided prosecution thanks to a law passed  by the Greek Parliament, a law that allowed people suspected of wrongdoing to avoid prosecution if they repaid the money they were accused of stealing in certain crimes. The idea, legislators said, was to speed resolution of cases in Greece’s notoriously slow courts.

Lavrentiadis quickly paid back the 55 million euro to Proton Bank and claimed immunity. For that time being. Then the scandal was much bigger and  the economic prosecutor continued digging in the case.

The businessman was back in the spotlight last month as one of the names on the so-called Lagarde-List with 2,059 names of Greeks with deposits in HSBC bank, Geneva branch, apparently suspected of tax evasion.

Example for entrepreneurship

Having bought several media or shares in media companies, Lavrentiadis was the ‘darling’ of the Greek press whether as “successful entrepreneur”, “faithful Christian” or “visionary patriot”or through his contacts to political, business and church elite or even just due to his life-style. He held close relation to former US-ambassador to Athens Daniel Speckhard, who later quited the dimplomatic service to join the Proton Bank as non-executive chairman (February-August 2011).

“In a meteoric career, Lavrentiadis used family wealth and his own ambition to build one of Greece’s fastest-growing business empires. He took over his father’s company Neochimiki, a supplier of raw chemicals across southeast Europe, when he was just 18, and expanded the firm aggressively with a spate of acquisitions. In 2003 he floated it on the Athens stock exchange.

Ernst and Young named Lavrentiadis Greek Entrepreneur of the year in 2007. That year he founded a new pharmaceutical company, Alapis SA, which grew so quickly that within months it was one of the 20 biggest on the Athens stock exchange, measured by capitalization.

Lavrentiadis has invested in Greek media firms and the country’s most famous football club, Olympiacos [ KTG note: Olympiacos football stadium Karaiskakis stadium, not the team, though]. He also founded a private equity fund, Lamda Partners, based in London and Guernsey, and in 2009 endowed a research chair at the influential Washington think tank the Center for Strategic and International Studies.

Lavrentiadis moved into banking in December 2009 when he took a controlling 31 percent share in Proton Bank, enough to become chairman and appoint key executives. In the same month, he also registered a new bank in Liechtenstein, the Lamda Private Bank.” (Reuters)

“In December 2009, four months before Greece sought a foreign bailout, Mr. Lavrentiadis bought a controlling stake in Proton Bank, which had expanded rapidly after acquiring a small bank called Omega in 2005. Omega’s board members included Mr. Lavrentiadis; the father-in-law at the time of Evangelos Venizelos, now the Socialist Party leader; and a brother of George Papandreou, a former prime minister.” (NYT) —-[Greek weekly HOTDOC refers to a cousin of Venizelos’ wife, not his father-in-law]

Lavrentiadis had bought shares in prominent media holdings, but also smaller media companies, often through his close associate Kyriakidis, who allegedly was receiving generous loans from the Proton Bank, as member of the board. The bookstore owner from Thessaloniki had managed to buy shares in 20 media outlets.

Member of the ruling elite

While the Greek press refrained from sharp comment on Lavrentiadis arrest, the New York Times seems to have a special interest on the businessman, described him as one of the ‘oligarchs’ who put obstacles to Greece to recover.

“A dynamic entrepreneur, Lavrentis Lavrentiadis seemed to represent a promising new era for Greece. He dazzled the country’s traditionally insular business world by spinning together a multibillion-dollar empire just a few years after inheriting a small family firm at 18. Seeking acceptance in elite circles, he gave lavishly to charities and cultivated ties to the leading political parties.”

In an interview to NYT beginning of the month, Lavrentiadis denied accusations of wrongdoing, saying that he was “clean” and that he was being targeted as a “scapegoat.”

Nevertheless on example of Lavrentiadis, NYT’s article was published with the title For Greece, Oligarchs Are Obstacle to Recovery

“Greece’s economic troubles are often attributed to a public sector packed full of redundant workers, a lavish pension system and uncompetitive industries hampered by overpaid workers with lifetime employment guarantees. Often overlooked, however, is the role played by a handful of wealthy families, politicians and the news media — often owned by the magnates — that make up the Greek power structure.

In a country crushed by years of austerity and 25 percent unemployment, average Greeks are growing increasingly resentful of an oligarchy that, critics say, presides over an opaque, closed economy that is at the root of many of the country’s problems and operates with virtual impunity. Several dozen powerful families control critical sectors, including banking, shipping and construction, and can usually count on the political class to look out for their interests, sometimes by passing legislation tailored to their specific needs.”

Oligarch or not, older Greeks speak of Lavrentiadis as the “new Koskotas“.

George Koskotas, former banker and publisher, spearheaded a financial scandal that brought down the PASOK government in 1989. From a simple bank officer at the Bank of Crete, Koskotas managed to buy the bank in 1984 and then built a banking and publishing empire that controlled three daily newspapers, a radio station and Olympiacos soccer team. He fled to the USA charged with embezzling more than $200 million from his own bank.

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2 comments

  1. Wow! This guy sure aint no petty thief.

  2. “He [Lavrediadis] held close relation to former US-ambassador to Athens Daniel Speckhard, who later quited the dimplomatic service to join the Proton Bank as non-executive chairman (February-August 2011).”

    I am wondering why Daniel Speckhard would have left the diplomatic service and joined as non executive chairman of Proton Bank.

    A few links (see below) highlight a strong Nato operative and US diplomat (Iraq/Belorussia/Greece) with involvement in US foreign policy formulation both through his career and his Fellowship at the Brookings Institute.

    Particularly active in implementing US/Nato interests in the Balkans:

    Decorated by Nato for successfully getting Albanian rebel troops out of Aracinovo, FYROM: http://www.nytimes.com/2001/06/26/world/26CND-MACE.html and further using Albanian interests in Kosovo by sponsoring Kosovo Independence in pursuit of the US Balkan regional ‘stabilisation’ policy see here:

    Let us take a look also at another aspect of the same US Balkan ‘stabilisation’ policy in relation to the using Turkey as a bridge for implementation of US policy in the Muslim world:

    So why leave this interesting world of diplomacy & politics (left the post as US Ambassador in Greece end of 2010) for a job in the Commercial world of Lavrediadis Proton Bank for a period of 6 months, then resigned when the scandal broke into the surface.

    What he does now? his name pops up here: http://www.northerngp.com/cgi-bin/team?SECTION=executive on the advisory board of Northern Gulf Partners, “the leading investment firm and financial advisory services provider in Iraq”