LATEST INVESTIGATION REVEALS MASSIVE MONEY LAUNDERING SCHEME
A recent investigation has uncovered a massive money laundering scheme, known as the “Laundromat,” which involved the use of shell companies and banks to launder an estimated $20 billion in illegal funds between 2011 and 2014.
The Scheme
The Laundromat was operated through a network of 21 shell companies that used accounts at Trasta Komercbanka and Moldindconbank, two major banks in Latvia and Moldova. These companies made payments to over 96 countries, including many of the world’s largest banks.
According to an investigation by the Organized Crime and Corruption Reporting Project (OCCRP), the core-group companies were owned by proxies standing in for hidden owners, with even directors and shareholders being fake. Payments were made using bogus copy-pasted paperwork that specified goods that the company didn’t sell.
Key Players
Among those implicated in the scheme are:
- Alexey Krapivin, a businessman close to Russian President Vladimir Putin
- Georgy Gens, a Moscow businessman who owns one of Russia’s major IT distributors
- Sergey Girdin, whose Russian Marvel group is involved in IT business
Some Laundromat money was also funneled to companies owned by Russian citizens abroad, including Trident International Corp., owned by Pavel Semenovich Flider, a naturalized US citizen who was indicted in 2015 for smuggling electronics components to Russian defense technology firms.
Banking System Criticized
The Laundromat illustrates the weaknesses in the global banking system, which has failed to prevent massive flows of illicit money. Bank officials have cited lack of cooperation from Russian banks as a major obstacle in detecting and preventing such schemes.
Investigations Stalled
Investigations into the Laundromat scheme have stalled in three countries since it was first reported. Moldovan-Russian cooperation on the investigation seemed to be off to a good start, but Russian investigators’ behavior has been questioned by Moldovan officials.
The Moldovan Parliament has lodged an official complaint against Russia, accusing the country of “harassing” and “abusing” Moldovan officials trying to enter Russia.
Cases Against Moldovan Judges
Viorel Morari, head of the anti-corruption prosecution office in Moldova, said they have brought criminal charges against 16 judges and are investigating seven individuals from Moldindconbank.
Conclusion
The Laundromat case highlights the need for greater cooperation between countries to combat money laundering and corruption.