Transparency organization: ABLV bank self-liquidation comes with risk

Take note – story published 5 years ago

As Latvia's ABLV Bank undergoes self-liquidation, there's risk of losing evidence in a $102.3 million money laundering case, according to Delna, the Latvian office of Transparency International.

In particular, Delna told the press that Hermitage Capital Management (Hermitage) -- the former employer of lawyer Sergei Magnitsky, who died in custody in Russia after attempting to expose a huge fraud -- on June 21 asked Latvian authorities to investigate money laundering through ABLV Bank. 

Hermitage has turned to the Prosecutor General and Latvia's anti-money laundering office. The company seeks to identify ABLV Bank employees involved in the case. 

Delna says that the case is related to the $230 million fraud discovered by Magnitsky ten years ago. 

According to Hermitage, from 2008 to 2013 ABLV employees willfully allowed laundering $19 million in the interests of Dmitry Klyuev and Andrei Pavlov, in total facilitating the transfer of $102.3 million through ABLV accounts.

The United States Department of the Treasury has already sanctioned both Klyuev and Pavlov over their involvement in the so-called "Magnitsky case".

Delna claim it's all but impossible illegal activities of such scale could have happened without the knowledge of high-level management at ABLV.

"ABLV officials purposely allowed shell companies to set up accounts and carry out multi-million dollar deals with similar partners in other countries, despite clear indications of money laundering, such as contradictory and insufficiently described transfer goals and the lack of a business rationale [for the transfers]. Hermitage think that all the involved companies are part of an international money laundering network, which also involves banks in Moldova, Cyprus, Lithuania, and Estonia," Delna say. 

The organization ask for a thorough and careful investigation over money laundering through ABLV.

"If the authorities want to act according to public interest, they should freeze assets and provide all the necessary proof, including electronic databases, internet banking data and email exchanges, including those between ABLV and its former and current employees. Liquidators, bank employees and shareholders should be informed that it's their duty to preserve and provide evidence, and that they may be held legally responsible," Delna said on its Facebook page

Latvia's financial regulator, the Financial and Capital Market Commission (FKTK) announced June 12 it had decided to allow ABLV bank to undergo a process of self-liquidation.

The decision came three months after ABLV made an application to do so in the wake of money-laundering allegations by the U.S. financial authorities and a week after FKTK postponed a decision on the matter while hinting that self-liquidation was not the most likely course of action, as previously reported by LSM.

The Magnitsky cause has famously been taken up by former Hermitage CEO Bill Browder

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