Financial Crime World

€2BN Money Laundering Ring Busted in Lithuania: Three Suspects Arrested in Coordinated EU Raids

By AML Intelligence Correspondent

Dismantling of a Large-Scale Money Laundering Operation in Lithuania

European authorities announced the dismantling of a Lithuanian money laundering ring that allegedly laundered approximately €2BN over the past seven years. The following details the outcome of the coordinated raids in Italy, Latvia, and Lithuania.

Coordinated Raids Result in Arrests

  • 18 suspects were arrested, including three main perpetrators.
  • The two main suspects had managed an Electronic Money Institution (EMI) offering money laundering services to European criminals.

Strawmen-Run Enterprises Hid Fictitious Transactions

European crime prosecutors at Eurojust explained how the money laundering operation worked:

  1. The financial institution offered money laundering as a service to thousands of criminals across the EU.
  2. They made fictitious financial transactions via a web of enterprises run by strawmen.

Criminal Activities and Origins of the Laundered Funds

The laundered funds were not just from ordinary criminal activities. They also involved proceeds from:

  • Tax evasion
  • Cybercrime
  • Fake bankruptcies
  • Organized crime, including drug trafficking

Fraudulent ‘Building Bonuses’ Scheme

Part of the €2BN in laundered funds originated from a fraudulent scheme where Italian national authorities were defrauded of €15 million in ‘building bonuses’ (source):

  1. A practicing tax consultant orchestrated the fraud.
  2. They arranged the awards for 72 individuals, knowing no actual repairs or inspections took place and the applicants were not their rightful owners.

Defrauding the Italian Authorities of €5 Million

Another main suspect was leading an organized crime group (OCG) that defrauded the Italian authorities of €5 million in public funds, further contributing to the same network of shell companies connected to the Lithuanian EMI.

European Collaborative Efforts and Asset Seizures

  • The three countries worked together, identifying and freezing assets worth over €11.5 million.
  • Lithuania closed down the electronic payment institution, revoked its banking license, and initiated bankruptcy procedures due to non-compliance with money laundering prevention regulations.

The Importance of Collaboration and Agencies Like Eurojust and Europol

  • These actions showcase the collaborative efforts of law enforcement agencies in Europe.
  • Agencies like Eurojust and Europol play a crucial role in addressing organized cross-border financial crimes that threaten the EU’s economic stability and integrity.