“In our work, there are many observations and insights that do not appear in court rulings, legal commentaries or conference presentations. These are stories about people, corporate decisions, unexpected mistakes and, at times, crises that have been successfully averted. That is precisely why we have named this column ‘What an attorney doesn’t tell you over lunch’. In it, we will share the part of our professional daily routine that usually remains behind the scenes,” explains Violeta Zeppa-Priedīte, partner, sworn attorney at Sorainen.
Sorainen’s criminal law team deals on a daily basis with situations where legal risks intersect with the realities of business. Over the years, we have gained a wealth of experience in helping clients navigate complex situations and resolve issues that often remain beyond public view.
That is precisely why we have created the column ‘What an attorney doesn’t tell you over lunch’ – a space for stories, observations and practical insights from our professional day-to-day work.
What do we encounter most often?
A significant part of our work involves assisting clients in criminal tax proceedings, working closely with Sorainen’s tax law experts.
At the same time, companies are increasingly turning to us in situations where, as part of an ‘internal investigation’, it is necessary to establish whether a breach has occurred within the organisation, what the risks are and how to respond to them.
Most commonly, we investigate suspicions of fraud, embezzlement, corruption, document forgery, breaches of sanctions, and money laundering. In such cases, we conduct internal investigations, helping companies to establish the facts and make informed decisions on how to proceed.
Behind every case there is a story
However, legal practice is not just about laws, procedural documents and court rulings.
It is also a daily reality involving complex decisions, unexpected events, human error and, at times, successfully averted crises. It is often in these stories that the most valuable lessons for businesses lie.
That is why, in this section, we will share:
- interesting trends in practice;
- unexpected situations in business life;
- the most common mistakes;
- successfully overcome crises;
- practical insights that any business can use.
Of course, always respecting client confidentiality and the ethical standards of the legal profession.
This time’s story: this time, attorney Jānis Dobelnieks and sworn attorney’s assistant Krista Niklase share their observations.
Jānis Dobelnieks discusses why, in cases involving the alleged misappropriation of European Union funds, investigations often begin very quickly, whilst companies that have themselves become victims of a potential crime frequently have to fight for a long time to have their own cases investigated.
In short, Jānis’s comment would be as follows: European money – criminal proceedings are almost guaranteed. Commercial crime – an investigation still has to be earned.
Why is European money protected more swiftly than companies’ money?
One interesting trend has become increasingly apparent in our practice lately. If European Union funding is involved in a case, the response from the European Public Prosecutor’s Office (EPPO) and the investigating authorities is usually very swift. In contrast, in cases where the alleged victim is a private company, the path to a full-scale investigation often turns out to be considerably longer.
This difference raises a very practical question for businesses – does the state protect both European and private capital equally effectively?
When suspicion is sufficient to initiate criminal proceedings
In EPPO cases, we often see situations where criminal proceedings are initiated at an early stage, based on initial information about possible irregularities in the implementation of a project.
This does not always mean that an offence has actually been committed.
In our practice, we have repeatedly had to demonstrate that the suspicions were based on incomplete information or an incorrect interpretation of the project circumstances. In such situations, the company’s main task is to quickly organise the facts, documents and financial flows in order to demonstrate the project’s compliance and dispel unfounded suspicions.
An important conclusion for the company: a swift reaction from the authorities does not in itself mean that the suspicions are well-founded.
But what happens when the company itself is the victim?
A completely different picture often emerges in cases involving alleged offences against the private company itself. For example, a former board member may have acted in their own interests; the company’s funds may have been diverted to other individuals; trade secrets may have fallen into the hands of a competitor; forged documents may have been discovered; or the company may have suffered significant financial losses.
In such situations, business owners often expect a swift investigation. In practice, however, this is frequently followed first by protracted inquiries, refusals to initiate criminal proceedings and appeals.
As a result, the company may lose not only time but also the opportunity to secure evidence in good time or prevent further losses.
The biggest mistake is to expect the system to do everything by itself
Many companies assume that once a claim has been filed, the process will run its course automatically.
Practice shows the opposite.
It is often necessary to communicate actively with the person directing the proceedings, submit additional evidence, request specific investigative actions, appeal against unfavourable decisions, and contact the supervising prosecutor.
Companies that take an active role in the process generally achieve better results than those that limit themselves to the initial application.
Why is it important for a company to be recognised as a victim?
Another problem encountered in practice is the issue of legal entity status.
If a company is not recognised as a victim, its ability to influence the proceedings becomes significantly more limited. This means less information on the progress of the case and fewer tools to protect its interests.
Therefore, victim status is often not merely a formal matter, but an essential prerequisite for the effective protection of a company’s rights.
Are corporate crimes still perceived as ‘mere business disputes’?
In some cases, the perception persists that conflicts between companies, owners and former directors are primarily civil disputes.
However, the line between a poor business decision and criminal conduct is very clear.
If a person knowingly misappropriates company assets, abuses their position for personal gain, unlawfully discloses trade secrets or forges documents, this is no longer merely a commercial dispute.
It is precisely the timely identification of such situations that often determines whether a company will be able to effectively protect its interests.
The main question
Experience from EPPO cases shows that law enforcement authorities are able to respond swiftly and decisively when the European Union’s financial interests are at risk.
Companies have a legitimate right to expect equivalent treatment in situations where their own assets, trade secrets or financial resources are at risk.
After all, a secure business environment is not just a matter of protecting EU funds. It begins with the confidence that the rights and property of private companies will also be protected effectively and in a timely manner.
This time, Krista Niklase shares two completely different experiences of criminal proceedings. In one case, the tenacious defence of the victim’s rights helped to secure the prosecutor’s involvement and move the case forward, whilst in the other, the restriction on the client’s property rights continues even though there is, in fact, no legal basis for it.
The prosecutor agrees that a wait of more than a year is unacceptable
Our client became a potential victim of fraud and approached the law enforcement authorities, hoping for a swift and thorough investigation. From the outset, the client submitted extensive and evidence-based information regarding the circumstances relevant to the case.
However, more than a year passed, and it became clear from the information provided by the investigator that the case had effectively come to a standstill. Nothing was being done.
We weren’t going to put up with that. We approached the supervising prosecutor, pointing out that the victim has the right to expect not only that the proceedings exist on paper, but also that there is real progress and answers to key questions.
The prosecutor agreed with our arguments. He acknowledged that the investigator must be given specific instructions on the next steps in the investigation and that the case must be managed in a more focused manner.
Such a decision should not be taken for granted. Victims often find themselves in a situation where complaints are dismissed or where they are told that it is not possible to comment on the progress of the investigation. On this occasion, the prosecutor emphasised something very important – everyone has the right to a fair trial within a reasonable time.
This is not yet a victory in the case itself. However, it is an important reminder that the victim also has a voice and that persistence can produce results. Sometimes, it is precisely the active defence of one’s rights that becomes the decisive factor in getting the process moving forward again.
At the same time, Kristi also shares a story of disappointment in a case where we are assisting a corporate client due to the customs authorities’ misinterpretation of the classification of exported goods, and where a brief comment would be as follows:
The deadlines have passed, but the wait or the restriction on the client’s property rights continues.
In criminal proceedings concerning a possible breach of sanctions, goods were seized from our client. Later, in proceedings concerning criminally acquired property, the court unequivocally concluded that these goods were not linked to the criminal offence under investigation. It would seem logical that the story should end here and the goods should be returned to their owner.
However, they remain in the possession of the state. Why? The investigator’s explanation is terse – no response has yet been received to the European Investigation Order. This in itself would not be unusual, were it not for the fact that the deadline for complying with this order has already passed.
What makes the situation even more peculiar is that the goods have not been seized. This means that there are neither the time limits typical of a seizure nor a regular review of necessity by the court. As a result, the client’s property rights are restricted effectively without any time limit.
A paradoxical situation is emerging. The court has stated that the goods are not linked to the criminal offence under investigation. The seizure of property has not been applied. The time limits of the European Investigation Order have expired. Yet the owner is still unable to recover his property.
Meanwhile, the goods continue to be held by the state. This incurs costs which the investigator himself has acknowledged to be unjustified. In other words, the state is using taxpayers’ money to maintain a restriction whose necessity is becoming increasingly difficult to justify.
Nor has the complaint to the supervising prosecutor changed the situation.
Therefore, the main issue at present is no longer the forthcoming response to the European Investigation Order. The main question is another – how long can a restriction on property rights continue in a democratic state governed by the rule of law without a clear legal basis, without a time limit and without any guarantee that the wait will ever come to an end?
