Second-tier court eases punishments in investment fraud case

Photo: Martin Ilustrumm

Defendants in the investment fraud case were also found guilty in the second-tier Tallinn Circuit Court on Wednesday but the Estonian court decided to ease their punishments.

While a lower-level court in Estonia on May 30 found the defendants guilty as charged and imposed shock imprisonments on them, the second-tier court decided that no-one would have to go to prison and that a conditional sentence will suffice. The court also annulled the punishment imposed on Sarunas Skyrius since it found that his case has expired. The defendants will still have to pay their fines.

Erki Piirsalu was sentenced to two years in prison, while Tonis Haavel and Harles Liiv were handed prison sentences of seven months. All the sentences come with three years' probation.

Haavel told BNS on Wednesday that he is planning to appeal the decision of the second-tier court since the court decision was really not changed.

Gild Financial Advisory Services, prosecuted as legal entity, was fined 50,000 euros.

The Harju County Court in May ordered the defendants to pay solidarily the procedure expenses and compensate investors for the loss caused them.

The defendants pleaded not guilty at the trial that started in March 2013.

The Public Prosecutor's Office charged the four individuals and the legal entity with submitting false information in a bond issue organized through Gild Financial Advisory Services and with using the funds raised in the issue not for the intended purpose.

In July 2007 Gild FAS arranged a private placement of bonds of Seaside Residence Baku with a planned volume of 16.5 million euros. The purpose of the issue was to finance the purchase of 147 hectares of land in the Baku district of Azerbaijan, establish a site plan, build infrastructure and then sell the property.

In the course of preparing and carrying out the issue several circumstances not corresponding to the conditions came to light about which potential investors were not informed, nor was the placement suspended, the prosecutors said. The false data submitted by the accused showed the offering in a more favorable light motivating investment. The issue raised more than 12 million euros.

Investors did not recover their money or earn profit on it. More than 30 victims have filed civilian claims in the criminal proceeding.