By Sonja Methoxha
TIRANA, March 12- The Organized Crime and Corruption Reporting Project (OCCRP) have made available a number of media reports alleging that several major European banks have been drawn into money-laundering activities centered on Russian origins. Several investigations are being done in the Baltic nations, the U.S., U.K. and Nordic countries. The Bloomberg writes that the International Monetary Fund has estimated the amount of money laundered globally per year to be 2 percent to 5 percent of global GDP, or as much as $2 trillion.
The first to hit the papers was the Danish giant Danske Bank in 2018. The Estonian branch of Danske is suspected of handling iffy funds from former Soviet states. Bloomberg writes that Denmark’s biggest bank admitted in September 2018 that much of about $230 billion that flowed through its small Estonian unit between 2007 and 2015 was probably of suspicious origin.
Even though Danske is currently being investigated by U.S. Department of Justice and the Securities and Exchange Commission, and authorities in Denmark, Estonia, the U.K. and France under these allegations, it did start a domino effect for other banks and their suspicious large money inflows.
The latest bank caught in this scheme was Austrian Raiffeisen Bank International after a report filed by the Hermitage Fund. The Fund is urging authorities to investigate a ”‹”‹”‹”‹$967 million of suspicious money flows from Danske Bank and Lithuanian Ukio Bankas to Raiffeisen, as well as in other lenders in the country. These allegations and concerns are raised by Hermitage Fund’s and prominent Kremlin critic Bill Browder, claiming that Austrian banks have enabled Russian criminals to launder funds in the past ten years, by continually failing to respond to warning signs.
“This illicit scheme would not have been possible without the gross negligence or acquiescence from the employees of Austrian banks,” Hermitage said.
An article on the Raiffeisen Intl. involvement by addendum.org, an independent journalistic organization in search of “what’s missing” , wrote that the money landed according on a total of 1055 Austrian bank accounts at 78 banks. About $634 million flowed into accounts at the Raiffeisen Zentralbank (RZB), which has been a so-called correspondent bank of Ukio Bankas. Correspondent banks support other financial institutions in international business, such as cross-border money transfers.
Browder stressed on the lack of attention paid to such money movements towards Austrian accounts. The complaint states that some of the companies sending money were unknown and had no business activities. Other companies lacked normal expenses, and some were shell companies registered in Belize, Seychelles, the British Virgin Islands, or Panama, countries with opaque jurisdiction.
Hermitage stated that several money-receiving account-holders had no clear connection with Austria and conducted no business there. Many of the accounts sending money were linked to an organized criminal group, whose members include Russian government officials. Some of the funds moved were used to buy houses, charter yachts, and rent private jets. OCCRP takes as example in its written report on an Austrian account opened for a relative of a Moscow official, who received more than $4 million and later used it to purchase a 344 square meters apartment with a wine cellar in downtown Vienna.
Hermitage places Raiffeisen Bank at the center of its allegations, naming it as the recipient of more than $600 million from Ukio Bankas accounts. These allegations are linked to what is named as the Troika Laundromat, created by once Russia’s largest private investment bank Troika Dialog. This system was discovered by OCCRP with Lithuanian news site 15min.lt. OCCRP writes that Troika Laundromat channels billions of dollars out of Russia. The Laundromat also allowed Russian oligarchs and politicians to secretly acquire shares in state-owned companies, to buy real estate both in Russia and abroad, to purchase luxury yachts, to hire music superstars for private parties, to pay medical bills, and much more.
Hermitage places Raiffeisen Bank at the centre of its allegations, naming it as the recipient of more than $600 million from Ukio Bankas accounts. OCCRP and 15min.lt has previously exposed Ukio Bankas to operate the $6 billion financial system created by Russian investment bank Troika Dialog. Ukio was shut down in 2013 by regulators.
There are other banks which are allegedly involved in this laundromat titanic scheme, like Helsinki-based Nordea and Sweden’s Swedbank. The sums that may have flowed through these banks are small change when comparing to Danske’s impressive standards, yet, as The Economist writes Nordea allegedly handled some 700 million euros, while $5.8 billion is reported to have moved between Swedbank and Danske.
Hermitage claimed that money entering Austrian banks included $230 million allegedly stolen from the Russian treasury. OCCRP partners claim that Finland’s Nordea Bank and Germany’s Deutsche Bank have received 700 million euros and $889 million respectively in potentially dirty money from Ukio. The case, one of the biggest tax frauds in recent years, was exposed by Hermitage lawyer Sergei Magnitsky who subsequently died from ill treatment in prison.
Austrian prosecutors could not be reached for comment and Raiffeisen says it is investigating the situation. As the materials prepared by the Hermitage Fund and provided by OCCRP are pretty convincing, has Raiffeisen Intl. served as a dirty Russian money laundromat? Raiffeisen is also the second biggest bank in Albania with annual profits of 4.5 billion lek, or $40.7 million. Could the Albanian branch be implicated in such suspicious activities?
The Economist writes that when these news surfaced all these banks lost a good amount of their market share, for instance Swedbank’s share price has shed 18 percent, other European banks caught up in such allegations have lost around 20 billion euros in stock market value in the past six months, and Raiffeisen tumbled by more than 12 percent on March 5 after the complaint was filed. This is the biggest fall that the Austrian international bank has experienced in 11 months.
“Until banks come clean and reveal the full extent of what suspicious transactions they have been involved in, this looks set to run and run,” said Philip Richards, a Bloomberg analyst said on its website.
