Latvia’s Golden Visa Scheme Rocked by €10M Fraud Probe

Latvia's financial intelligence service has recently flagged more than 20 companies suspected of orchestrating fraudulent investment schemes under the country's golden visa program. This alarming development has come to light as around 200 foreign nationals are believed to have invested over €10 million in share capital that did not support any legitimate business activities. The investigation, first reported by Latvian public broadcaster LSM’s investigative program De Facto, revealed that more than 50 of these investors have already received temporary residence permits (TRPs). When including their family members, the total number of permit holders or applicants linked to these dubious schemes exceeds 100. The Financial Intelligence Unit (FIU) chief, Toms Platacis, explained that in several instances, investors did not make the required €50,000 contribution as a single, genuine investment. Instead, they engaged in a pattern of circular payments, where amounts were paid repeatedly in a loop. For example, one common method involved paying ten thousand euros five times in a circular manner. The investigation uncovered that the funds often flowed back to the scheme organizers through loans, fake transactions, or purchases of vehicles and real estate, with some transactions lacking any clear business purpose. Disturbingly, some investors were informed from the outset that they would not earn dividends and could not retrieve their initial investments. As the investigation continues, several companies have come under scrutiny, although authorities have yet to formally accuse any of them of wrongdoing. One notable company, based in Portugal and founded approximately 18 months ago, attracted nine investors seeking TRPs. Its shareholder list includes individuals from various countries, including India, Afghanistan, and Turkey. Data from the Office of Citizenship and Migration Affairs (OCMA) indicated that this company had one of the highest rejection rates for investors in the program. Another case involved Roberts Stafeckis, who managed several companies under the “Latvindia” group, each attracting the maximum number of investors allowed. Alarmingly, two of these companies reported no revenue and incurred losses in 2024. The issues surrounding the golden visa program extend beyond the companies currently under investigation. Data from Lursoft revealed that out of 78 companies that attracted foreign investors over the past five years, seven have ceased operations, and around 20 have unpaid taxes. Approximately half of these companies reported having fewer than five employees, and only about half met the legal requirement to pay at least €40,000 in annual taxes. The golden visa program, established in 2010, initially brought in over €1 billion in investments, primarily from Russian nationals. However, the volume of investments declined following pressure to reform the non-resident banking sector and after the geopolitical tensions arising from Russia's…