European prosecutors continue investigation into Šarūnas Stepukonis

The European Public Prosecutor’s Office is still investigating the alleged illegal activities of former BaltCap fund partner Šarūnas Stepukonis, whose detention was extended for another three months, LRT reported, citing BNS. Prosecutors have not said when the investigation will be completed.

“The investigation is ongoing. For this reason, and to avoid harming the proceedings and their outcome, we cannot comment further at this stage,” Paula Telvo Alves, a representative of the European Public Prosecutor’s Office, told BNS.

The Vilnius Regional Court decided on August 28 to extend Stepukonis’s detention from September 1 to December 1 after considering a request from a European delegated prosecutor of the European Public Prosecutor’s Office.

The Financial Crime Investigation Service did not say last week whether the pre-trial investigation into Stepukonis’s actions and the damage allegedly caused had been fully completed or whether an indictment had been prepared. At the end of June, the service said that final investigative actions had been completed and the final evidence had been collected and submitted. The European Public Prosecutor’s Office would then have to decide whether to close the case and prepare an indictment.

Stepukonis is suspected of embezzling more than 42 million euros from companies belonging to BaltCap’s infrastructure fund. He allegedly lost most of the money through online gambling.

European prosecutor Darius Karčinskas said last year that, in addition to the alleged embezzlement, Stepukonis had committed other offences, adding several articles of the Criminal Code to the case.

According to Karčinskas, allegations of illegal activity in Lithuania have also been brought against Estonian company OB Holding 1, where Stepukonis allegedly lost about 31 million euros. He reportedly lost another 5 million euros at Lithuanian company Olympic Casino Group Baltija and unsuccessfully invested about 6 million euros in Hungarian brokerage firm Interactive Brokers Central Europe, now known as Ireland’s Interactive Brokers Ireland.

The investigation also concerns a 3.9 million euro transfer to Stepukonis’s account from EN Efficiency, a Polish company belonging to the BaltCap fund, allegedly made for the supposed sale of shares.

Stepukonis is suspected of falsifying accounting records at companies from which funds were allegedly misappropriated. He is also suspected of providing false information about his income and assets to avoid taxes and misleading the State Tax Inspectorate.

Karčinskas said that investigators had received almost all the necessary information from authorities in Estonia, Germany, Luxembourg and Hungary.

Several court cases related to Stepukonis’s gambling are also ongoing. In June, a first-instance court ruled that Olympic Casino Group Baltija had failed to ensure responsible gambling in Stepukonis’s case. The Regional Administrative Court rejected the company’s appeal against a decision by the Gambling Supervisory Authority and an order to compensate 6.4 million euros in damages.

The same court is considering another appeal by Olympic Casino Group Baltija against a fine of almost 8.4 million euros imposed by the authority over Stepukonis’s gambling between 2016 and 2021. The fine concerned breaches of laws on the prevention of money laundering and terrorist financing and on gambling. Five violations were identified.

After the Lithuanian Supreme Court ruled last year that a BaltCap companies’ claim against Ireland’s Interactive Brokers Ireland for 5 million euros in damages could be heard in Lithuania, the Vilnius Regional Court opened the case in May.

Olympic Casino Group Baltija and its Estonian shareholder OB Holding 1, which operates the OlyBet group, have also sought compensation from BaltCap in Estonian courts. The claims include almost 95,000 euros in compensation and 414 euros for each day of asset seizure, according to Verslo žinios.