Two Estonian real estate developers to go into prison

22.05.2014, 13:39

In 2006, one of Estonia’s largest banks SEB lent almost 3 million euros to two Estonian real estate developers who promised to build an office building and parking lot in central Tallinn, but actually invested it in real estate in Spanish Costa del Sol, writes Äripäev.

The real estate businessmen in question were 42-year-old Kaido Kaljusaar and 41-year-old Andres Lauri. To be more believable for banks, they set up a company called Arco Kapital which sounded similar to the listed real estate developer Arco Vara.

The bank was paying out the loan in tranches according to expense reports which the two businessmen were forging because no construction works were going on in the property in Veerenni street.

Eight years later, the Supreme Court decided to reject the appeal of the two real estate businessmen which means they now will be serving a real three-month prison term as shock sentence.

The developers themselves claim that they are innocent and are simply victims of unfavourable business climate.