In an investigation published August 22 and titled “The Russian Laundromat” OCCRP detailed “a complex system for laundering more than $20 billion in Russian money stolen from the government by corrupt politicians or earned through organized crime activity. It was designed to not only move money from Russian shell companies into EU banks through Latvia, it had the added feature of getting corrupt or uncaring judges in Moldova to legitimize the funds."
“The state-of-the-art system provided exceptionally clean money backed by a court ruling at a fraction of the cost of regular laundering schemes. It made up for the low costs by laundering huge volumes. The system used just one bank in Latvia and one bank in Moldova but 19 banks in Russia, some of them controlled by rich and powerful figures including the cousin of Russian President Vladimir Putin,” OCCRP said.
If the claims are accurate, the scale of the scam is vast: $20bn is equivalent to around three quarters of Latvia's entire annual GDP.
Yet OCCRP names the Latvian bank allegedly involved in the scheme as relatively small boutique bank Trasta Komercbanka, saying it was “the final destination for billions of dollars that left Russia in a massive money laundering scheme.”
According to banking industry figures, Trasta is only the 12th-largest of Latvia's 24 banks by assets.
Trasta's attraction was that it was part of the European Union's banking system, OCCRP said. Once the money was inside the EU, it was regarded as “clean”.
On its web page, the bank describes itself as "a unique business club".
"Our services are designed directly to suit you and we are happy to take up any non-standard task," the bank says.
Trasta Komercbanka previously made headlines when lawyers for Russian lawyer Sergei Magnitsky – murdered while he was investigating large-scale money laundering frauds – named it as one of six Latvian banks used to clean up dirty money. The bank denied any involvement.
“OCCRP sent Trasta a set of questions regarding the money-laundering operations but a bank spokesperson replied that the bank cannot comment on the case. It has not been charged with any illegal activities although it has been involved in other cases where money laundering was alleged,” the OCCRP report said.
The full report can be read here.