Court acquits all accused in second Digitalgate in spite of serious charges

On Monday, 31 January, Latvia’s Court of Economic Affairs declared all of the accused in the so-called second Digitalgate criminal case.
Judge Kaspars Vecozols told journalists after reading the verdict that all persons were accused of large scale fraud committed in a group, adding that in order to uncover such criminal activity, there has to be a victim and losses caused by fraud. According to the criminal case, LLC Tet (prev. Lattelecom) is a possible victim. However, the company did not admit victim status. As for the former and standing officials interrogated in this criminal case were not misled. The signing of the contract was not achieved through deceit, nor were there any damages caused to society.
«Considering the aforementioned, the court had no reason to declare them [the accused] guilty of fraud,» explained the judge.
The judge admitted there were problems with finding signs of a crime at certain points during the review of the case.
Vecozols said on a political – Cabinet of Ministers – level there was a procedure that provided decisive advantage to the contender that would have helped bring digital television to Latvia the fastest. The advantage was provided to the one who engaged in cooperation with the company already engaged in telecommunication services. «Since Lattelecom was the one who cooperated, this provided the contender with victory in the tender,» said Vecozols.
When asked how credible the testimonies provided by Tet employees were, the judge said they are credible.
Tet officials testified in court, and details of the criminal case confirm it, that initially the financing amount was listed for the commencement of provision of services but later was turned into license fee. This means the criminal case does not clearly state this was a way to defraud money, said the judge, adding that LLC Hannu Digital had an enormous advantage in a specific situation, and if any contender wanted to win, they had to cooperate.
«Evidence presented in the case definitely prove there were talks behind the scenes. I believe something like that happens during all business talks, but this does not automatically mean there was fraud committed,» said Vecozols.
The full text of the verdict is expected to be prepared by 24 February. However, Vecozols says the term may be extended in order to detail all evidence.
Considering the number of people involved in the process, the broad range of questions coming from the charges, the case was rather complicated, to say the least. At the same time, it is necessary to mention that all the people involved were interested in a quick review. There were no obstacles that could have slowed the process, said the judge.
Vecozols admits there was a great deal of interest from society for this case. He also adds there was no political pressure.
The verdict is subject to appeal at Riga Regional Court.
Previously prosecutor Monvīds Zelčs requested a three-year prison sentence with confiscation of property for Latvia’s ex-PM Andris Šķēle. As for the other accused – Latvia’s ex-Minister of Transport Ainārs Šlesers – the prosecutor requested a fine of EUR 65 000.
The prosecutor asked the court to find Šķēle guilty of fraud and money laundering and sentence him to three years in prison, a fine of EUR 75 000 and confiscation of property and no probation.
According to the prosecutor, the fine is for fraud and prison and property confiscation is for money laundering.
Latvian law enforcement authorities had previously imposed an arrest on shares Šķēle owns in businesses.
The prosecutor also requested an enforcement of EUR 1 266 355 from the former politician. According to Zelčs, this amount was illegally obtained.
The prosecutor requested the court to declare Šlesers guilty of fraud and enforce from him EUR 65 000. No confiscation of property or probation was requested for him.
For the former board chairman of telecommunications company Tet (prev. Lattelecom) Juris Gulbis the prosecutor requested a fine of EUR 75 000, for the ex-Minister of Transport state secretary Nils Freivalds – a fine of EUR 60 000, for ex-board chairman of Latvian State Radio and Television Centre Lauris Dripe – a fine of EUR 75 000.
The prosecutor also believes the former board member of LLC Hanny Digital Gintars Kavacis should be fined EUR 75 000.
For then the commercial director of Tet Jānis Ligers the prosecutor requested a fine of EUR 60 000, for the head of the Commercial Office Toms Ābele the prosecutor requested a fine of EUR 50 000, and for the Commercial Support Office manager Toms Meisītis – a fine of Eur 45 000.
Prosecutor Monvīds Zelčs requested the court to find Gulbis, Freivalds, Dripe, Kavacs, Ligers, Ābele and Meisītis guilty of fraud. He did not request confiscation of property or probation for them.
The prosecutor believes the severe penalty, as covered by the Criminal Law, for all nine of the accused persons was based on the severe crime committed by them. The crime committed was aimed at unlawful and unjustified involvement of LLC Hannu Digital in the digital television project and acquisition of Lattelecom finances in favour of LLC Hannu Digital and its intermediate creditor Šķēle. This caused the nation-wide project’s costs to inflate, causing major damages to Lattelecom. The prosecutor also outlined in debates that LLC Hannu Digital should be fined EUR 2 million.
Because the prosecutor believes all of the accused except Šķēle are not to be subjected to additional penalty – confiscation of property – and no request was submitted during the criminal procedure for compensation of damages, the property arrest should be lifted for those people, said Zelčs.
As previously reported, charges in this criminal case were raised in regards to the tender for digital television organised by the Ministry of Transport in 2008 and the contracts signed based on it with Tet, Hannu Digital and LTRTC.
According to the prosecution, the accused acted in order to illegally and unjustifiably involve Hannu Digital in the project in order to acquire finances from Tet worth several million euros, artificially inflating the project’s costs.
The prosecution believes the possible size of the illegally obtained finances is approximately EUR 3 million.
Although Tet did not submit complaints and did not involve itself in the criminal procedure as a victim, the prosecutor nonetheless stresses that the case will not suffer because of it.
Riga Regional Court is currently in review of the so-called first digital television case. This case is related to the scheme uncovered in 2003.
Šķēle’s name was mentioned in the context of this criminal case as well but no charges were presented to him so far.