Title: Three Dutch Employees Arrested in $1.2 Billion International Money Laundering Case

Background

In Rotterdam, three former employees of a West-Betuwe company were arrested last Tuesday on charges of money laundering involving approximately USD 1.2 billion for a client in India. The suspects are expected to appear before the examining magistrate at the Rotterdam district court today.

Collaboration between Dutch and Indian Companies

Since 2006, the Indian client, a prominent energy and petrochemical company, had collaborated with the Dutch company. The Dutch firm served as the purchase office, managing the global procurement of materials and services for the Indian project. These costs were then charged back by the Indian client to Indian gas customers and consumers.

Fraudulent Activities and Invoice Duplication

Dutch authorities suspect that the company engaged in an “invoice duplication” scheme, where they inflated the costs on invoices for sourced materials and services. This allowed the Indian client company to claim double payments from unsuspecting customers within India. The profits from the scheme were allegedly laundered through a complex web of businesses and structures, including entities in Dubai, Switzerland, and the Caribbean.

False Insurance and Organized Money Laundering

The creamed-off profits were collected through the Dutch company by taking out false insurance contracts, supposedly to mitigate risks associated with the materials procurement. However, no actual risks were present. The three ex-employees now face charges of document forgery and organized money laundering for their roles in this international construction scandal.

The investigation, which began in November 2017, was initiated by an examination of the Dutch company’s records by the Dutch Tax and Customs Administration.

Dutch Concerns over Money Laundering

The Dutch government has expressed serious concerns regarding the involvement of Dutch companies in laundering billions in foreign earnings. These alleged facilitators allow criminals to launder proceeds of illicit activities within the legitimate business world, ultimately affecting consumers and possibly individual citizens in recipient countries.

Indian Consumers and Burdened Gas Prices

In this case, the Indian client is believed to have used Dutch companies to launder suspected illegal earnings, resulting in significantly increased gas production costs for Indian consumers. As a consequence, Indian citizens bear the brunt of these expenses, facing higher prices for their gas supply.

Note

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