Financial Crime World

Croatian Financial Crimes: Foreign Funding and Money Laundering

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A recent investigation has uncovered a series of suspicious transactions and cash withdrawals in Croatia, raising concerns about money laundering and potential links to predicate crimes.

Large Cash Withdrawals

Several domestic natural persons have been making large cash withdrawals from giro accounts at different commercial banks on the same day. The total amount withdrawn ranged between HRK 200,000.00 and HRK 300,000.00, with individual transactions never exceeding the legal threshold or triggering mandatory reporting requirements.

Characteristics of Large Cash Withdrawals

Same Day Transactions

The withdrawals were made on the same day, suggesting a coordinated effort.

Different Bank Officers

Different bank officers were involved in each transaction, making it difficult to track and monitor.

International Remittances

Several domestic natural persons have been remitting cash funds internationally through a company that provides payment services, including money transfers. The receivers and senders of these cash remittances are different natural persons from various countries, including:

  • Russia
  • Ukraine
  • USA
  • Germany
  • Israel
  • Nigeria
  • Mali
  • Liberia
  • United Arab Emirates
  • Portugal
  • Italy
  • Moldova
  • Canada
  • Brazil
  • Argentina

Characteristics of International Remittances

No Declared Income

The senders of these cash remittances do not declare any income, raising suspicions about the source of the funds.

Cash Instead of Bank Transfers

The transactions were made in cash instead of using bank accounts and commercial banks’ services, making it difficult to track and monitor.

Fundraising for a New Bank

Several domestic natural persons have been raising funds from other domestic individuals with the aim of establishing a bank in Croatia with foreign majority ownership. The raised funds were used for currency trading, and several investors were given securities that turned out to be false and worthless.

Characteristics of Fundraising

Large Amounts Below Threshold

Large amounts of incoming payments below the legal threshold were made over a short period.

Outgoing Payments

Outgoing payments of larger amounts were also made, raising suspicions about the use of funds.

Lines of Credit Investigation

An investigation into lines of credit has revealed that several domestic natural persons established a domestic legal entity and contributed their own real estate to its share capital. Later, international remittances of large value were made in favor of foreign currency accounts held by the same individuals under a remittance order issued by a foreign company from an offshore financial center.

Characteristics of Lines of Credit

International Remittances

Large international remittances were made in favor of foreign currency accounts held by the same individuals.

The investigation has raised concerns about potential links to predicate crimes such as fraud and money laundering.

Conclusion

These cases highlight the importance of vigilance in detecting and preventing financial crimes, particularly those involving foreign funding and money laundering. It is essential for law enforcement agencies and financial institutions to work together to combat these types of criminal activities and protect the integrity of the financial system.

Recommendations

  • Increase transparency in transactions and cash withdrawals.
  • Implement stricter monitoring and reporting requirements for international remittances.
  • Conduct thorough investigations into lines of credit and fundraising activities.
  • Collaborate with law enforcement agencies and financial institutions to combat financial crimes.