European Prosecutor Seeks Arrest in BaltCap Fund Misappropriation

Published: 06 February 2024

Casino RouletteŠarūnas Stepukonis has been suspected of misappropriating nearly $30 millions, part of which he invested in two casinos. (Photo: Uutela, Wikimedia, License)

By Zdravko Ljubas

The European Public Prosecutor’s Office (EPPO) called on Friday for the arrest of Šarūnas Stepukonis in Lithuania, suspected of misappropriating 27 million euros (US$29 million) from BeltCap, the leading Baltic private equity firm where he held a partnership.

Before the EPPO took over this case, Lithuania’s Regional Prosecutor’s Office in Vilnius was investigating the misappropriation of funds from the BaltCap Infrastructure Fund, an 80 million euro ($85.94 million) investment fund focusing on infrastructure projects in the Baltic countries.

The fund also benefits from 20 million euros ($21.49 million) in support from the European Investment Bank (EIB) through its Investment Plan for Europe. The EPPO is in charge of investigations involving European Union funds.

“During the pre-trial investigation, it was established that Mr Stepukonis, a former partner of the BaltCap Infrastructure Fund, and former member of its Investment Committee, is suspected of embezzlement of at least €27 million,” the EPPO said in a statement.

The Prosecutor’s Office subsequently filed a request with the pre-trial investigation judge of the Vilnius City District Court to apprehend the suspect, who is evading authorities. The judge granted approval for the arrest, according to the statement.

Reuters had reported in late January that companies owned by BaltCap were suing Stepukonis for allegedly misappropriating 16.7 million euros ($17.94 million), with some of the funds traced to two casinos, registered in Lithuania and Estonia.

The BaltCap companies have reportedly petitioned the court to compel Stepukonis and the casinos to return the alleged misappropriated sum, along with 6% interest.

Reuters quoted the spokesperson of the Vilnius District Court, who pointed out that the suit, filed in December last year, accuses Stepukonis of misappropriating a total of 16.7 million euros ($17.94 million) from three companies that he headed. The funds were allegedly deposited into accounts with Lithuanian and Estonian casino operators, both of which hold undefined shares of the money.

The court has reportedly placed a freeze on Stepukonis’ assets, including those in his gambling accounts, without impacting the assets owned by the casinos.

According to the report, BaltCap announced in October last year its decision to terminate the contract with Stepukonis, who served as a partner in its Infrastructure Fund, after a routine review exposed misconduct.