Lithuanian Financial Institution Busted for Money Laundering Scam Involving EU Criminals and Millions in Stolen Funds
In February 2023, in an unprecedented crackdown on financial crime, around 250 judicial representatives and law enforcement officers took part in coordinated actions across Lithuania. The operation, which involved the arrest of 18 individuals, targeted a Lithuanian financial institution accused of offering money laundering services to thousands of criminals across the European Union.
The Financial Institution and its Alleged Criminal Activities
The financial institution, which has been operating in Lithuania since 2016, was set up by an Italian-based Organized Crime Group (OCG) and advertised its alleged consultancy services online. Authorities allege that the institution facilitated the laundering of profits from various criminal activities, such as:
- Tax evasion
- Cyber fraud
- Fake bankruptcy
- Drug trafficking
Over EUR 11.5 million in assets and bank accounts were frozen in the operation.
A Significant Fraud Case: EUR 15 Million in Illegally Obtained Building Bonuses
One of the most significant aspects of the case involves EUR 15 million in building bonuses obtained illegally from Italian national authorities, which were intended for renovation and insulation works on existing buildings. However, investigators found that no repairs had taken place, and the applicants were not even the building owners or the buildings did not exist. The main perpetrator, who is a practicing tax consultant, arranged for the bonuses to be awarded to 72 other individuals aware of the fraud.
International Collaboration: Italy, Latvia, and Lithuania
Italian authorities, in collaboration with their counterparts in Latvia and Lithuania, initiated investigations into the OCG in 2021 through Eurojust. Following this, the electronic payment institution was closed down by Lithuanian authorities, and its banking license revoked. The authorities also started bankruptcy proceedings for non-compliance with money laundering prevention regulations, leading to the identification and freezing of millions of forfeitable assets.
Eurojust set up a joint investigation team between all national authorities, organized eight coordination meetings to prepare for simultaneous actions in the three countries, and facilitated the restitution of over EUR 3 million of illegally obtained public funds to Italy.
Europol’s Role in the Case
Europol has been supporting the case since January 2022, working closely with national investigators to unravel the complexities of the criminal network’s activities. Europol deployed experts to both Latvia and the Eurojust coordination center to assist local authorities during the actions.
Key Quote from Eurojust Vice-President and National Members
“This collaboration truly highlights the importance of a well-coordinated and prepared approach across Europe. It shows that criminal networks, such as the one we tackled, cannot evade justice by crossing borders. We will work closely together to obtain justice and bring those who commit fraud involving public funds to account.” - Ms Margarita Šniutytė-Daugėlienė, Eurojust Vice-President and National Member for Lithuania, Mr Aldo Ingangi, the acting National Member for Italy, and Ms Dagmāra Skudra, the National Member for Latvia.
Participating Authorities
The actions were carried out by the following authorities:
- Italy: Public Prosecutor’s Offices of Naples and Lecce, Guardia di Finanza of Naples and Lecce
- Latvia: 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
- Lithuania: Vilnius Regional Public Prosecutor’s Office, Vilnius County Police Headquarters.