As reported by LSM's Russian-language service, the names of the Riga-based Regional Investment Bank and the Baltic International Bank appear in evidential documents produced by the Federal Bureau of Investigation in its probe of illegal download site Kickass Torrents (KAT).
KAT's founder, Ukrainian citizen Artem Vaulin was arrested Wednesday in Poland, with the US demanding his extradition.
The US alleges that KAT - whose servers have now been shut down - was the world's biggest illegal file sharing site and are charging Vaulin with copyright infringement to the tune of more than one billion dollars, citing numerous examples of movies available for download via Kickass even while they were still playing in movie theaters.
Huge sums of money were involved, with KAT's size allowing it to charge sky-high advertising fees.
A sting operation by investigators revealed KAT was charging $300 a day for a small button advertisement on its site, or $3,200 per day for a banner ad and its annual advertising revenues alone were estimated at more than $16 million, with the site itself, which was established in 2008, worth more than $54 million.
An affidavit submitted by DHS (Department of Homeland Security) special agent Jared Der-Yeghiayan says:
"This affidavit... is submitted in support of a seizure warrant for the funds currently contained in Regionala Investiciju Banka account number LV32RIBR00185170N0000JSC, held under the name GA Star Trading Ltd. (Subject Account), on the grounds that there exists probable cause that such account contains property derived from proceeds traceable to the Subject Offenses."
The same document explains the scale of the operation, saying:
"KAT is estimated to be the 69th most frequently visited website on the entire Internet, receiving over 50 million unique visitors per month. KAT’s immense popularity enables its operators to earn millions of dollars a year in online advertising revenue, which is directed to overseas bank accounts held in the name of other corporate entities."
That includes accounts at both Regional Investment Bank and Estonia's Krediidipank.
Transactions extend over several years, but as recently as December last year, KAT was instructing advertisers to make payments to its Latvian account, the DHS report states:
"During one of the exchanges, on or about December 9, 2015, a representative of KAT... provided UC-1 [undercover agent] with banking information for payment to advertise on KAT’s website—a Latvian-based account held at Regionala Investiciju Banka, account #LV32RIBR00185170N0000JSC, in the name of “GA Star Trading Ltd, 9 Barrack Road Belize City, Belize” (the Subject Account).
"After providing the banking information, the KAT representative instructed UC-1, “Could you please make sure that you don’t mention KAT anywhere?” in connection with payment to the bank for advertising."
In February this year, the KAT was apparently still using the same account:
"On or about February 8, 2016, UC-1 reinitiated contact with the KAT representative. On or about February 19, 2016, the KAT representative responded with the same banking information for the Subject Account," the DHS said.
"The investigation obtained bank records from Latvia pursuant to a request under the Mutual Legal Assistance Treaty. Those records reflect that the Subject Account received a total of approximately €28,411,357 in deposits between on or about August 28, 2015, and on or about March 10, 2016. The account balance as of March 10, 2016, was €14,656. A sizable portion of the funds appear to be related to advertising revenue," the DHS said.
The small amount remaining in the account suggests the funds had been successfully transferred offshore.
However in May this year, payments were being sent instead to Estonia's Eesti Krediidipank.
But Regional Investment Bank is not the only Latvian bank with a link to Vaulin. The documents say he also held a personal account at Baltic International Bank:
"The review of Vaulin’s Baltic International Bank (Latvia) statement for an account ending in *5001 revealed several deposits from Castleton Trading LP. The April 2015 deposits totaled approximately €65,250 and identified the transactions as “payments for software development.”
The aforementioned Castleton Trading was making even bigger payments to the account at Regional Investment Bank, with the investigation suggesting these were connected to a stake held in the controversial Bitcoin international payments company:
"In or about February 2016, the GA Star Trading account received deposits totaling approximately €600,000 from Castleton Trading. Based on corporate records found in Vaulin’s email account, it appears that Vaulin has a controlling interest in Bitcoin Innovations Ltd."