The so-called Troika Laundromat was a financial network set up by a Russian investment bank to help clients move money out of the country and hide it. The scheme exported about $4.8 billion over seven years, with the help of a now-defunct Lithuanian bank.
That much we know from disclosures by the Organized Crime and Corruption Reporting Project [OCCRP] and its partner news organizations. Almost daily revelations over the last week have widened the group of banks involved and added to a picture of massive laundering — perhaps facilitated by the absence of a central enforcement agency in Europe.
What we don’t yet know is the identity of many of the participants on the Russian side, what proportion of the money was illicit, and whether additional banks are likely to be named. Financial institutions from Stockholm to Amsterdam already face uncomfortable questions, with investigations under way in the Baltic nations, the U.S., the U.K. and the Nordic countries.
While the sums reported by the OCCRP are small — at least compared with the $230 billion handled by a tiny Estonian unit of Danske Bank A/S between 2007 and 2015, much of it suspicious — the disclosures this week give a more detailed glimpse of the Russian money trail.
Here’s what we know:
- The scheme consisted of at least 75 shell companies set up by Troika. Money was moved between them for deals that were entirely made up, including fake invoices, in order to disguise the recipients.
- In total, $8.8 billion of internal transactions were generated to obscure the source of the money. Clients used the funds to buy real estate or luxury yachts, while criminal groups worked to launder illicit funds.
- Troika needed a commercial bank that wasn’t looking too closely at contracts and trades. It chose Lithuania’s Ukio Bankas. Ukio set up accounts for 35 of the companies in the Laundromat, probably more, OCCRP says.
- Because Lithuania wasn’t yet using the euro, it needed correspondent banks to handle euro-denominated transactions. That’s how most of the Western banks seem to be connected to the system. Analysts say for that reason, potential fines, if any, would be limited, because the onus is usually on the respondent bank to vet clients.
- OCCRP previously exposed three similar money-laundering schemes. The latest is based on a subset of a data trove that includes about 1.3 million leaked transactions from 238,000 companies, the bulk of them between 2003 and 2013. Reports by the group’s media partners keep adding fresh details about the role of Western banks.
- Nordea Bank Abp, the biggest Nordic bank, allegedly handled about 700 million euros ($790 million) in potentially dirty money, with funds arriving from Ukio and heading to shell companies in countries such as the British Virgin Islands and Panama, according to Finnish broadcaster YLE.
- More than $889 million moved from accounts at Deutsche Bank AG to Laundromat accounts from 2003 until 2017, according to Süddeutsche Zeitung, a German daily. The report comes on top of regulatory scrutiny of Deutsche Bank’s role as a correspondent bank in the Danske Bank money-laundering scandal.
- At ING Groep NV, hundreds of millions of euros passed through bank’s Moscow branch from companies that were part of the Troika Laundromat, the Dutch newspaper Trouw reported. A former unit of ABN Amro Group NV was used by the Troika Laundromat to move about 190 million euros, Trouw and De Groene Amsterdammer, a Dutch magazine, reported. That unit was bought by Royal Bank of Scotland Group Plc, which is now looking into the matter, in 2008.
- About 43 million euros [$48.6 million] from the Troika Laundromat landed in an account at Cooperatieve Rabobank UA for a Dutch yacht builder, Heesen. The money was for the construction of two boats for Russian senator Valentin Zavadnikov, according to Trouw and De Groene Amsterdammer. Turkiye Garanti Bankasi AS’s Dutch unit processed 200 million euros [$226 million] in transactions from two Lithuanian banks, the Dutch media outlets reported.
- Accounts at Credit Agricole SA’s Geneva unit received about $150 million from the Troika system through 2012, in more than 500 transfers, Tages-Anzeiger reported. Austria’s Raiffeissen Bank International AG was accused by Bill Browder, an investor, of ignoring red flags in the transfer of $634 million from Ukio Bankas and the Estonian unit of Danske Bank.
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- Scandinavians Stunned over Region’s Growing Money Laundering Allegations
- Estonia Probes Allegations Swedbank Linked to Danske Money Laundering Scandal
- Danske Bank Investigated by French Authorities for Suspected Money Laundering
- Danske Money Laundering Scandal Damages Denmark’s Reputation: Regulator
- Danske Bank Faces Shareholder Lawsuit over Money Laundering Scandal
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- Danske Accused of Lying to French Investigators over Alleged Money Laundering
- Danish Prosecutors Charge Danske with Alleged Money Laundering Violations
- UK Companies’ Role in Alleged Danske Money Laundering a ‘Disgrace’: Whistleblower
- Update: Danske Whistleblower Says U.S., European Banks Helped Launder Money
- Explaining Danske Bank’s €200 Billion Money Laundering Scandal
- Deutsche Bank, BofA, JPM Drawn into Danske Money Laundering Probe: Sources
- Danske Bank’s Money Laundering Could Implicate Other Banks: Whistleblower Lawyer
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