Baltic fund manager suspected of misappropriating $29 million detained in Lithuania

Stepukonis, a former partner of the 80 million euro BaltCap Infrastructure Fund at Estonian-registered BaltCap, was arrested on Saturday in Lithuania, said a spokesperson for European Public Prosecutor's Office (EPPO) that requested his arrest. Companies owned by BaltCap, the Baltics' largest private equity fund manager, had asked a Vilnius court to order Stepukonis and two casinos to return 16.7 million euros ($18 million) allegedly misappropriated by him.

A Lithuanian court has detained Sarunas Stepukonis, a former equity fund manager suspected of misappropriating 27 million euros ($29 million), a court spokesperson said on Monday. Stepukonis, a former partner of the 80 million euro BaltCap Infrastructure Fund at Estonian-registered BaltCap, was arrested on Saturday in Lithuania, said a spokesperson for European Public Prosecutor's Office (EPPO) that requested his arrest.

Companies owned by BaltCap, the Baltics' largest private equity fund manager, had asked a Vilnius court to order Stepukonis and two casinos to return 16.7 million euros ($18 million) allegedly misappropriated by him. A spokesperson for Vilnius District Court said Stepukonis, a Lithuanian citizen, would be detained for 14 days from Saturday but did not give details of any charges.

The EPPO, which deals with cases affecting the EU's financial interests, has not detailed charges against him. Simonas Gustainis, managing partner at BaltCap, said late last month he believed "protection and warning systems" to guard against money laundering had failed at the casinos.

Lithuania-registered Casino Olympic Group Baltija, one of the two gambling firms named in the lawsuit, told Reuters it "adheres to the highest standards of compliance with legal requirements". Estonia-registered OB Holdings 1, the other gambling operator named in the lawsuit, did not respond to a Reuters' request for comment sent on Jan. 29.

BaltCap's Infrastructure Fund invested in projects in the Baltic countries Lithuania, Latvia and Estonia, and in Poland. The European Investment Bank, the European Bank for Reconstruction and Development and pension funds managed by the Baltic subsidiaries of Swedish banking groups Swedbank and SEB were among investors in the fund.

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