REVEALED: Cyprus Bank Linked to Putin’s Inner Circle Funneled $8 Million in Interest Payments

A shell company financed by the Central Bank of Cyprus (CB) has been found to have given the rights to $8 million in interest payments to Sergei Roldugin, a billionaire businessman and long-time friend of Russian President Vladimir Putin. This move has raised concerns about the country’s reputation as a hub for laundered Russian money.

Who is Sergei Roldugin?

Roldugin, known as “Putin’s wallet,” is a cellist who introduced Putin to his first wife, Lyudmila, and is godfather to Putin’s daughter Maria. He has been involved in several high-profile business deals and investments over the years, including a stake in the Russian state-owned bank VTB.

The Shell Company: RCB Bank

The CB-financed shell company, Russian-owned RCB Bank, has been linked to other major money-laundering schemes in the past, including the so-called “Russian Laundromat” scheme, which allegedly moved more than $20 billion out of Russia between 2011 and 2014. The bank’s actions have raised concerns about its compliance with anti-money laundering regulations.

European Central Bank Scrutiny

The European Central Bank (ECB) has come under scrutiny for its supervision of RCB Bank and other Cypriot financial institutions. Critics argue that the ECB has not done enough to prevent money laundering and terrorist financing in the region.

ECB Response

In a statement, the ECB said it “cannot disclose any confidential supervisory information on specific credit institutions” and that it “looks at all information either provided as part of the file or publicly available” when assessing potential shareholders. However, critics argue that this approach is insufficient and has allowed illicit actors to exploit weaknesses in the financial system.

US Treasury Department Concerns

The U.S. Treasury Department has also raised concerns about Cyprus’ reputation as a hub for laundered Russian money. In a report to Congress last year, the department charged that the country “continues to host a large volume of suspicious Russian funds and investments” and slammed its “permissive” citizenship program and “weak” supervision of service providers.

Implications

The controversy has raised questions about how the European Union should wield its influence over Cypriot financial institutions. As one expert noted, “Everybody understands if you do supervise the business models, you can’t distance yourself from the risks that apply to the servicing of non-residents.”

Previous Scandals

This revelation is just the latest in a series of scandals involving Cypriot banks and their links to Russian money laundering schemes. In 2017, OCCRP found that Hellenic Bank, Cyprus’ second-largest bank, received over $500 million in proceeds from another notorious scheme known as the Russian Laundromat.

What’s Being Done?

The ECB has acknowledged that money laundering poses risks to banks’ viability and is working to establish a new centralized authority to oversee anti-money laundering efforts. However, critics argue that more needs to be done to address the issue and prevent further scandals.