An examination of the major scandal involving Danske Bank's Estonian operation includes the widespread use of UK-registered companies or Limited Liability Partnerships (LLPs) to provide "a patina of legitimacy" to international money-laundering schemes.
Here there are Latvia connections too, with Re:Baltica noting: "Aierken Saimaiti, one of the most successful money launderers in Kyrgyzstan, made extensive use of LLPs with bank accounts in Latvia. Kyrgyz authorities believe that he and associates channelled close to $1 billion in dirty funds out of the country between 2011 and 2016. He was shot dead outside a cafe in Istanbul in November 2019."
Nor is that the only link. Based on leaked FinCEN documents from the U.S. the International Consortium of Investigative Journalists (ICIJ) found that "The data show that while U.K. LLPs and LPs in the FinCEN Files made extensive use of Danske Estonia, they also used an array of other, mostly Baltic, banks, including scandal-ridden ABLV Bank, Trasta Komercbanka in Latvia and Stockholm-based Swedbank’s Estonian branch," said Re:Baltica.
Latvian company formation businesses also eased the path for anyone wanting to set up complex networks of businesses and bank accounts in various jurisdictions -- for whatever reason.
"One of the busier agencies found in ICIJ’s analysis is CMC, a network of companies in the Seychelles, the U.K. and Latvia, operated by Dmitrijs Krasko, a Russian-speaking entrepreneur who had started in the business after a spell as an intern at Latvia’s ABLV Bank. Some 112 U.K. companies established by Krasko and his team are named in the FinCEN Files. Krasko’s signature appears on hundreds of incorporation documents and annual financial statements for U.K. LLPs and LPs that claim to operate in industries as diverse as electronic equipment,coal purchasing, leather goods and freight shipping," reported Re:Baltica.
Another company formation agency, ComForm Solutions, with operations in the U.K. and Riga, is run by a British-based Latvian, Kirils Pestuns, according to U.K. and Latvian corporate records. ComForm created and maintained 380 U.K. LLPs and LPs mentioned in FinCEN Files suspicious activity reports, though Pestuns, like Krasko, said all the services offered by his company were legitimate.
A great deal more information is given outlining what was a booming industry in Baltic shadow banking over many years. Now the authorities in all three Baltic states say they have greatly improved the situation with tougher penalties and more stringent oversight, though the legacy and reputational damage of the last decade is likely to linger for years to come.
The full story and other in the series can be read at the Re:Baltica website. The story was written by the International Consortium of Investigative Journalists (ICIJ), which organized the FinCEN Files global investigation into the world of banks and money laundering and of which Re:Baltica is part.