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Latvijas firma iesaistīta desmitiem miljonu dolāru atmazgāšanā

U.S. Treasury sanctions Latvia-registered "mailbox" company over money-laundering allegations

A Latvian-based company that may have been used to launder tens of millions of dollars has had its operations suspended following its sanctioning by the United States, LTV reported.

The company in question is named 'Chatextech' and operates a currency exchange platform called Chatex. 

According to the US Department of the Treasury, Chatex "has facilitated transactions for multiple ransomware variants. Analysis of Chatex’s known transactions indicate that over half are directly traced to illicit or high-risk activities such as darknet markets, high-risk exchanges, and ransomware."

Furthermore, the Treasury says Chatex has direct ties with another previously-sanctioned entity named Suex which is also accused of "facilitating financial transactions for ransomware actors." Additionally, the Office of Foreign Assets Control (OFAC) has designated Estonia's IZIBITS OU, and the Virgin Islands offhsore entity Hightrade Finance Ltd for providing material support and assistance to Chatex.

Following an inspection by Latvia’s State Revenue Service (VID), Latvian government authorities have suspended with immediate effect the operations of Chatextech and placed former Chatextech board members, (all non-Latvian nationals) in Latvia’s registry of high-risk individuals. A fine of 100,000 euros has also been issued.

In addition, the Estonian Financial Intelligence Unit has revoked the license of Izibits OU. Suex and Chatex share a co-founder, Russian citizen Egor Petukhovsky, and both used to be subsidiaries of Izibits OU, according to TRM Labs.

Valius Adejemo, the US Undersecretary of the Treasury, said: "The Treasury has worked with Estonia and Latvia on this issue. We thank both partners for their work and encourage other countries to protect their financial systems in a similar way."

Agnese Rudzīte, Director of the SRS Anti-Money Laundering Department, said: "The company used Latvia only as a legal address. It did not have an office where anyone would be physically located, nor a bank account here in Latvia. So the Latvian financial system has been protected in this case."

SIA "Chatextech" was founded in Latvia by three Russian and one Belarusian citizen at the beginning of this year. The registered address is Ganibu dambis 26A, a "mailbox" address where more than 130 legal entities are registered without having a physical presence. The building belongs to the company "Valmieras 28", which in turn is half owned by "Wave Media", which is 98% owned by Saeima deputy Jūlija Stepanenko (currently representing the 'Latvia first' party, having formerly been part of 'Law and order' and before that both an independent and a 'Harmony' representative), though there is no suggestion she is involved in the activites of Chatex.

Stepanenko told LTV she did not know anything about the registration of Chatex in her part-owned property and became annoyed when asked if she should pay more attention to the companies registered at the address.

The deputy's husband Vyačeslavs Stepanenko, who owns the other 2% of Wave Media explained that he was not involved in the day-today management of the building, which was being handled by SIA "TIKSS". The company confirmed that Chatextech did not rent premises, just a mailbox.

Meanwhile, Chatex declined to comment on the allegations of money laundering to Latvian Television. A statement on the company's website said: "All customers’ funds are safe and secure, but restricted to be moved during the legal case proceeding. We are working to ensure that customers get access to their funds as soon as possible... Most likely, full access to funds will become possible after the sanctions are lifted."

It is very rare for the Treasury to lift sanctions once they have been imposed. Ironically, Chatex was recently boasting of its own "No more scams" abilities.

“The Latvian government is steadfast in its commitment to strengthen the integrity of the financial system and take protective measures in the interests of all members of society, including the most vulnerable ones, against harmful and dishonest activity. We will not tolerate activities carried out to launder criminal proceeds, including through malware and non-transparent transactions using virtual currencies,” said the Minister for Finance, Jānis Reirs.

For the full USA Treasury announcement of sanctions against the virtual currency trade provider “Chatextech” and related parties, see: https://home.treasury.gov/news/press-releases/jy0471

 

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