Latvian bank linked to another Russian money-laundering operation

Take note – story published 8 years and 4 months ago

Latvia's financial crimes police force have raided a senior member of controversial Trasta Komercbanka (TKB) as part of a money laundering investigation, LTV's De Facto investigative journalism program said Sunday night.

According to De Facto, police swooped on TKB as part of an operation involving US authorities and Germany's Deutsche Bank what has laundered millions of rubles via Riga.

At the center of the probe is Trasta board member Viktors Ziemelis, whose property was also raided.

"TKB confirms the fact that a search was caried out at the bank's premises. As regards searches at the home of bank board member Viktors Ziemelis, the bank cannot confirm or comment on this," a TKB spokeswoman told De Facto.

Latvia's financial regulator the Financial and Capital Markets Commission (FKTK) will examine whether the bank's internal control system worked properly, FKTK chairman Kristaps Zakulis told De Facto.

If TKB did launder large amounts of dirty money with no-one noticing, it would be another embarrassment for FKTK, which is already under fire for failing to notice an alleged fraud that sucked a billion dollars out of Moldova via Latvian banks and subsequently disappeared into the murky world of offshore entities in obscure jurisdictions.

After years of rumors and denials about the role Latvia's many boutique banks specializing in providing services for non-resident clients might play in laundering huge sums of money from Russia and elsewhere, the Riga auythorities are finally getting serious as they see OECD membership slipping from their grasp.

The Organization for Economic Cooperation and Development has expressed concern about the activities of the banks and the large number of money laundering allegations with which they are linked.

That has led to a policy shift in Riga. After years of denying there was a problem at all, regulators have belatedly started handing out serious fines and police are intensifying their work to expose scams and schemes - but it might all be too late to keep the OECD bid on track with the likelihood that Latvia will have to stand on the sidelines until it can prove its banking system is not a back door into Europe for proceeds of crime.

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