Financial Institution Fraud in Lithuania Uncovered

International Money Laundering Ring Cracked Down by Europol and Eurojust

In a significant operation, authorities in Lithuania, Latvia, and Italy have arrested 18 individuals, including three main suspects, and frozen over EUR 11.5 million in assets and bank accounts as part of an investigation into financial institution fraud. The operation was carried out on February 27, involving around 250 judicial representatives and law enforcement officers.

Financial Institution at the Center of the Scandal

The financial institution at the center of the scandal was set up in Lithuania in 2016 by an Italian-based organized crime group (OCG). It offered money laundering services to thousands of criminals across the EU. The institution made fictitious financial transactions via a web of enterprises run by strawmen, advertising its alleged consultancy services online.

Activities of the OCG

The OCG laundered proceeds from a range of criminal activities, including:

• Tax evasion
• Cyber fraud
• Fake bankruptcy
• Organized crime such as drug trafficking

Part of the proceeds were injected into the Latvian and Lithuanian economies through the purchase of real estate and luxury vehicles.

Investigation and Arrests

The investigation was initiated in 2021 by the Public Prosecutor’s Offices of Naples and Lecce in Italy, involving counterparts in Latvia and Lithuania via Eurojust in 2022. The financial and judicial authorities in Lithuania had already closed down the electronic payment institution, revoked its banking license, and started bankruptcy procedures due to non-compliance with money laundering prevention regulations.

Rapid reaction by Latvian and Lithuanian authorities to reports of suspicious transactions led to the identification and freezing of millions in funds, real estate properties, and luxury vehicles. Eurojust supported the setting up and funding of a joint investigation team between national authorities involved and set up a coordination center to support simultaneous actions in the three countries.

Support from Europol

Europol has been supporting the case since January 2022, working closely with national investigators to uncover the magnitude and complexity of activities carried out by the OCG. During the action day, two Europol experts were deployed to Latvia to support authorities with investigative measures, while a third specialist was deployed to the coordination center at Eurojust.

Joint Statement from Eurojust

The operations against the OCG are the result of long-term intensive cooperation across Europe between the three countries involved. The joint statement from Eurojust Vice-President and National Member for Lithuania, Ms Margarita Šniutytė- Daugėlienė, acting National Member for Italy, Mr Aldo Ingangi, and National Member for Latvia, Ms Dagmāra Skudra, highlighted the importance of a well-coordinated and prepared approach across Europe. They emphasized that “criminal networks, such as the one we tackled, will know no borders either.”

Authorities Involved

The authorities involved in the operation included:

• Public Prosecutor’s Offices of Naples and Lecce in Italy
• Guardia di Finanza of Naples and Lecce
• Prosecutor General’s Office
• Rīga Judicial Region Prosecution Office
• 1st Unit of the Economic Crime Enforcement Department of the Central Criminal Police Department of the State Police in Latvia
• Vilnius Regional Public Prosecutor’s Office
• Vilnius County Police Headquarters in Lithuania