As reported by The Guardian and other international newspapers, much of the attention focuses on the Estonian branch of Danske Bank as the conduit for massive payments, but as previously discovered by Italian investigative journalists and reported by LSM, one Latvian bank is also alleged to have been involved in making a payment of 220,000 euros to Italian politician Luca Volonte via a familiar scheme involving a Marshall Islands registered offshore company that also appeared to have a Latvian connection and address.
Baltikums Bank now trades under the name BlueOrange. In June this year it was fined 35,500 euros by Latvia's financial regulator for "weaknesses in customer due diligence and transaction monitoring that led to the situation that [the] bank had been used to circumvent international sanctions imposed against North Korea."
As also previously reported by LSM, the Council of Europe said in April it would launch a probe into how an organization that is supposed to be one of the bastions against corruption and money laundering had become embroiled in the allegations via Volonte.
However, according to the latest information, the panel conducting the probe will hold its first hearings between 4 and 7 September - so now they should have plenty to chew on.
Details of the four companies at the center of the scam, published by OCCRP September 4 show another possible Latvian connection. Two of them list a company called Solberg Business Ltd of the British Virgin Islands as co-owners. The listed representative of Solberg has the Latvian-style name 'Maksims Kaposins'.
Kaposins is also listed as representative of Akron Resources Corp.
LSM searched UK company records and discovered that both Akron and Solberg are listed as owners of another company, Forotex Solutions. Here the Latvian connection gets stronger as Forotex was registered by another person with a Latvian-style name, one Dmitrijs Krasko of Riga.
Krasko in turn is director of Corporate Management and Consulting Limited, which shares a single postcode with more than 600 other companies, strongly suggesting a business registration service.
His involvement in the world of company creation and offshoring is backed up by this blog post which traces many of the Latvian links to such schemes.
A quick search reveals a Master's Thesis at the University of Latvia from 2007 written by Dmitrijs Krasko on the subject of "Development and introduction of modern tax planning, asset and information protection technologies in practice in Latvia and worldwide companies with the aim of optimizing tax payments".
Finally, Latvian bank Trasta Komercbanka is named among the bank accounts of another of the companies, LCM Alliance, with deposits of between 300,000 and 500,000 dollars indicated.
Trasta has since been wound up by the Latvian financial regulator and the European Central Bank for "a number of identified serious and sustained breaches of regulatory requirements by the Bank, existing for a long period."
Another of the four core companies, Pollux Management LP had an account listed at Latvia's ABLV bank, though there is no suggestion this was used as part of the laundromat system.