By Paul Serran with Frank Parlato
This is the story of Radovan Vítek. For you and me, this name may not mean anything – but for thousands of Americans, it spells huge financial losses.
More than a billion dollars in US pension funds were allegedly lost in a scheme orchestrated by Vítek, according to lawsuits.
European regulators did find that Vítek looted pension funds, concealed his control through shell companies ‘owned by his mother’.
While he paid fines, he was able to retain control of his empire. Europeans let him walk away with everything.
But in Europe, Radovan Vítek built an empire.
Vítek is married, with four children, and lives in Switzerland – but he also owns Rydinghurst, a 17th-century mansion with a 200-acre estate in Surrey, England.
But, according to Luxembourg regulators from the CSSF, Rydinghurst was not bought with the fruits of his labor or his genius.
It was bought, the CSSF found, with assets stripped from the ORCO Property Group, a public real estate company based in Capellen, Luxembourg.
Yes, you read it right: the castle was allegedly funded by retirement money stolen from US pensioners.
According to Luxembourg regulators, starting in 2012, Vítek used shell companies and false board actions to take control of ORCO.
The result was catastrophic: Kingstown Capital lost 94 percent of its investment. So did JPMorgan and other investors.
Through the shell companies he used, Vítek was able to accumulate share control while avoiding disclosure.
It is claimed that ORCO’s founder Jean-François Ott became a willing coconspirator who walked away with a golden parachute of more than $18 million.
Ott bought millions of ORCO shares with money arranged by Vítek, having reportedly lied to American investors, saying the shares were his.
Once control was secured, Ott pushed through the sale of ORCO’s crown jewel: the Endurance Office Fund, with properties worth about €330 million.
The remaining Endurance assets were bought by a company called Sidoti, even though there was another company willing to pay more.
What the ORCO board didn’t know, and was not told, is that Sidoti was secretly owned by Vitek’s mother, Milada Malá.
Nice family business: the mother got a €13 million profit and Vitek gained $265 million.
And what about ORCO? The stock collapsed, and Kingstown exited its investment with a near total loss.
In 2017, Luxembourg’s financial regulator CSSF concluded that Vítek, Ott, and the shell companies owned by Milada Malá had secretly acted ‘in concert’ to seize control of ORCO, in violation of takeover and transparency laws.
But European regulators, well intended but toothless, hit Radovan Vítek with a simple fine.
In all likelihood, asset forfeiture and decades in federal prison would follow.
Kingstown did sue Vítek in 2019, in United States District Court for the Southern District of New York, claiming violations of the Racketeer Influenced and Corrupt Organizations Act (‘RICO’) in the United States.
On 4 September 2020, the SDNY Court dismissed the claims on lack of jurisdiction – but NOT on merit.
American teachers, nurses, and firefighters, whose pensions were allegedly looted, have no idea that their hard-earned retirement money financed a mother-and-son operation, a real-estate empire, and even a Beatle-owned British manor.
But the story doesn’t end here – a group of people who believe they were swindled by Vítek are organizing, and, while we are not in a position to disclose any details, further legal action is expected.
