An almost $9 billion global money-laundering scheme allegedly set up and run by Russia's largest private investment bank and having close ties to the country's ruling elite has been uncovered by the Sarajevo-based Organized Crime and Corruption Reporting Project (OCCRP).
An OCCRP investigation published on March 4 alleges that the $8.89 billion scheme, dubbed the Troika Laundromat, allowed corrupt politicians and organized-crime figures to launder funds, evade taxes, hide assets abroad, and carry out other illegal activities.
The investigation singles out Sergei Roldugin, the Russian cellist who is one of Russian President Vladimir Putin's oldest friends, as one of the main beneficiaries of the scheme.
The OCCRP, a group that has previously exposed two other such schemes, known as the Russian and the Azerbaijani laundromats, says the investigation was made possible by one of the largest leaks of banking transactions ever, obtained together with Lithuanian news site 15min.lt.
The leak, which was compiled from multiple sources, involved more than $470 billion sent in 1.3 million transactions from over 238,000 companies and people.
Paul Radu, OCCRP co-founder and project coordinator, told RFE/RL via Skype from Bucharest that the scheme was just the "tip of the iceberg."
"The reality is that there are many 'laundromats' out there, and these are not just 'laundromats' that help the elite in Azerbaijan and in Russia, and in these former Soviet countries. There are 'laundromats' that serve criminal groups -- large criminal groups, like drug groups from Mexico."
Your browser doesn’t support HTML5
Journalist: Russia-Based Money-Laundering Scheme Is 'Tip Of The Iceberg'
The OCCRP says that together with its 22 partners from around the world, it was able not only to identify the Troika Laundromat's beneficiaries, but also to expose the entity responsible for establishing and operating it.
The entity was identified as private investment bank Troika Dialog, once Russia's largest, run by Russian-Armenian investment banker Ruben Vardanyan.
The OCCRP says that the Troika Laundromat, which functioned from 2006 to early 2013, was formed by at least 75 interconnected offshore companies, with at least 35 of them opening accounts at Ukio Bankas, a troubled Lithuanian bank that closed in 2013.
"Under the direction of Troika Dialog, billions of dollars from Russia flowed into these Ukio accounts," the OCCRP investigation says.
"The money was broken up and transferred among the Laundromat companies before being sent onward to various recipients, known and unknown. The transactions were mostly bogus, supported by fake paperwork describing the trade of nonexistent goods. On its way out of the system, the money passed through correspondent bank accounts in the West, typically through Austrian and German banks."
At the time, Vardanyan, considered by many a pro-Western, progressive figure, was Troika Dialog's president and chief executive officer.
But the OCCRP says that whether he knew of the scheme is "not clear," adding, "There is no definitive evidence that he did."
The group quoted Vardanyan as saying in an interview that his bank did nothing wrong and that it acted as other investment banks did at the time.
Vardanyan also said that he couldn't have known about every deal his bank facilitated for his clients.
The investigation says Roldugin obtained $69 million through the Troika Laundromat.
It is not the first time that Roldugin's name has been connected with a money-laundering investigation. In 2016 his name was mentioned in the so-called Panama Papers, where he appears as as owning a network of offshore firms that have handled billions of dollars and have had business ties to wealthy tycoons seen as close to Putin. Roldugin has denied any wrongdoing.
According to the OCCRP investigation, the Troika Laundromat was more than just a money-laundering scheme, being used also as "a hidden investment vehicle, a slush fund, a tax-evasion scheme, and much more."
The investigation discovered that portions of the money came from high-level financial frauds, such as the Magnitsky case, which led to the death in 2009 of financial-fraud lawyer Sergei Magnitsky in a Russian jail after he exposed a scheme in which officials allegedly defrauded the Russian state of $230 million.
It also cites the Sheremetyevo Airport fuel fraud of 2012, when a network of ghost firms and proxies sold fuel to Moscow's main airport at inflated prices.
The Troika Laundromat allowed members of Russia's business and political elite to secretly acquire shares in state-owned companies, or to buy real estate both in Russia and abroad, while in the official documents, the owners of the offshore companies that made this possible were Armenian farmers living in rural areas, the OCCRP investigation has found.
In a statement, Transparency International said that the OCCRP investigation showed the "glaring shortcomings" in anti-money-laundering systems in Europe, and made the case for an EU-wide anti-money-laundering supervisory authority.
"The European banking system should be a firewall that stops corrupt money from Russia and elsewhere being siphoned out of these countries' economies. Instead, we see time and again how easy it is to launder and hide the proceeds of corruption, tax evasion, or other criminal activities in Europe," the Berlin-based corruption watchdog said.