* BaltCap alleges partner placed money with two casinos

* Baltic casino group says adhered to highest compliance standards

* Court says has frozen some assets

VILNIUS, Jan 29 (Reuters) - Companies owned by BaltCap, the Baltics' largest private equity fund manager, are suing a former partner they allege misappropriated 16.7 million euros ($18 million), some of which is in the hands of two casinos, a Vilnius court spokesperson said.

The BaltCap companies have asked the court to order the former partner, Sarunas Stepukonis, and the casinos to return the 16.7 million euros, plus 6% interest, the spokesperson said. The court filing has not been made public.

Simonas Gustainis, managing partner at BaltCap who has taken over management of the Infrastructure Fund, was quoted as telling newspaper Verslo Zinios on Thursday the fund believed "the protection and warning systems" against money laundering and "pathological gambling tendencies" had failed to be triggered at the casinos.

Gustainis did not respond to a Reuters request for comment.

Stepukonis, who has not commented publicly on the allegations, did not answer Reuters' phone calls.

Lithuania-registered Casino Olympic Group Baltija, one of the two gambling companies challenged in the lawsuit, told Reuters by email on Monday it "adheres to the highest standards of compliance with legal requirements".

It said it was "committed to ensuring the trust of our customers, supervisory authorities, other interested parties and the entire society".

Estonia-registered OB Holdings 1, the other gambling operator named in the lawsuit, did not respond to Reuters query.

CONTRACT TERMINATED

BaltCap said last October it was terminating the contract of Stepukonis, partner of Baltcap's Infrastructure Fund, direct owner of the three companies, after a regular review revealed misconduct.

Lithuanian prosecutors subsequently told media they launched a criminal investigation into alleged misappropriation of assets.

The European Public Prosecutor's Office (EPPO), an independent public prosecution office of the European Union that deals with cases affecting the bloc's financial interests, took over the investigation, they said.

The EPPO did not immediately respond to a request for comment.

The suit, filed in December last year, alleges Stepukonis misappropriated a total of 16.7 million euros from the three companies and deposited those funds in accounts with Lithuanian and Estonian casino operators, both of which own unspecified shares of the money, the spokesperson for Vilnius District Court told Reuters on Friday.

The three companies were headed by Stepukonis, according to the official registry.

The court has frozen Stepukonis’ assets, including those in his gambling accounts, but not assets owned by the casinos, said the spokesperson.

MAY TAKE TIME

The 100 million euro Estonia-registered BaltCap Infrastructure Fund was launched in 2017, and the European Investment Bank and European Bank for Reconstruction and Development both invested 20 million euros in it.

EIB is the lending arm of the European Union, and its investment was guaranteed by the European Commission’s European Fund for Strategic Investments (EFSI).

The BaltCap's fund invested in projects in the Baltic countries Lithuania, Latvia and Estonia, and in Poland.

Pension funds managed by the Baltic subsidiaries of Swedish banking groups Swedbank and SEB were also investors in the fund.

Swedbank’s Estonian pension fund wrote down 2 million euros, a fifth of its investment, following Stepukonis' dismissal, Estonia's public broadcaster reported on Monday.

"Our team is making every effort to maximise the return on this investment, including recovering any misused funds, but this process may take some time", the Lithuanian branch of Swedbank told Reuters on Friday.

Gustainis was quoted as telling Lithuania's Delfi news website on Friday that BaltCap will compensate investors for any losses after their extent is fully determined.

($1 = 0.9215 euros) (Reporting by Andrius Sytas in Vilnius; Editing by Elaine Hardcastle, David Holmes and Barbara Lewis)