Financial Crime World

Libyan Central Bank Heist: €500 Million in Contaminated Bills Laundered Through Estonia

In a shocking revelation, Estonian authorities uncovered a money laundering scandal involving €500 million worth of contaminated bills that were stolen from the Central Bank of Libya seven years ago. Here’s a closer look at this intricate case.

The Cash Order from Libya (2010)

  • The Libyan government, headed by Muammar Gaddafi, ordered €150 million in cash from the German Bundesbank.
  • Rait Roosve, the head of the cash and infrastructure department at the Bank of Estonia, mentioned that such a huge sum was insignificant compared to the total cash circulation within Estonia.

The Arab Spring and the Fractured Libya (2011)

  • The Arab Spring upheaval caused instability in Libya, leading to chaos and the country’s fracture into two major factions.
  • The western half was ruled by a Tripoli-based clan, while the eastern half was governed by the militia led by Khalifa Haftar.

The Discovery of Contaminated Bills (2017)

  • Towards the end of 2017, Haftar’s faction captured the Central Bank’s branch in Benghazi.
  • A massive cache of damaged bills, including Libyan dinars, euros, and dollars, was discovered and alleged to have been taken a roundabout route to Europe through Turkey and Estonia.

It is recounted how Khalifa Haftar, the new military leader of eastern Libya, wages war against western Libya, only to have his son, Saddam Khalifa Haftar, illegally siphon away these staggering sums from the Libyan Central Bank’s Benghazi branch.

  • Peeter Raudsik, Middle East expert

The Stolen Funds and Their Destination (2018)

  • Over €159 million was stolen, along with €372 million in Libyan dinars.
  • A significant portion of these funds, worth about €80 million, was damaged.

The Contamination of the Bills

  • The damage to the bills could not be attributed to ordinary circumstances.
  • Matis Mäeker, the head of the Estonian anti-money laundering bureau, believes the cash was contaminated with biologically tainted water at the Benghazi branch.

Attempts to Launder the Damaged Bills (2018–2019)

  • Attempts were made to transfer these soiled bills to Turkey, intending to launder them through Europe, starting with Estonia.
  • Both the Turkish mafia and Russians were believed to be involved in the process.

The First Signs of Contaminated Bills in Estonia (2018)

  • In 2018, the first signs of contaminated bills surfaced, and authorities began receiving reports of damaged banknotes that had originated from Libya.
  • A legal challenge arose as Estonian law requires evidence of an initial offense before allowing money laundering charges to be filed.
    • Libyan officials have yet to acknowledge the existence of the bank robbery.

The Ongoing Libyan Central Bank Heist

  • Since the scandal came to light, the Bank of Estonia has handled over 50 cases involving Libyan funds being laundered through its country, totaling 1,705 damaged bills.
  • The full extent of the financial machinations, the individuals involved, and their motivations remain yet to be seen.