German authorities have seized €50 million in connection with an investigation into the so-called ‘Russian laundromat’, a $22 billion scheme to launder Russian money in the EU via banks in Latvia and Moldova, according to the Attorney General in Munich and the Federal Criminal Police Office (BKA).
The investigation is directed at three suspects – one of whom lives in Munich, while the other two live abroad – who own four properties in the states of Bavaria and Hesse worth €40 million. No further details about the accused persons have been released by the authorities. “We are still investigating,” said a spokeswoman for the prosecutor.
The Russian laundromat is thought to be the one of the world’s largest money laundering operations. The scandal was publicised in 2014 by the Organized Crime and Corruption Reporting Project (OCCRP).
A central figure in the operation is said to have been a senior manager of the Latvian bank Trasta Komercbanka (TKB), which was wound up in 2016 by the banking supervision in Riga for facilitating criminal activities. The scandal has reached the highest political echelons: last year, the president of the Latvian central bank was put on suspended for accepting bribes, while in Russia, a relative of President Vladimir Putin is said to have been involved.
According to OCCRP, the fraud involved a “complex system involving dozens of offshore companies, banks, fake loans and proxy agents.”
A the centre of the system were Moldovan banks, which signed off on fictitious loans between shell companies designed to hide their real owners. From there, the funds were then transferred to Latvia and thus to the European Union. Once in the EU, the money was used to buy property, luxury goods and other things. According to OCCRP research, Russian black money flowed into more than 5,000 companies in almost 100 countries worldwide.
German investigators confiscated four properties in Nuremberg, Regensburg, Mühldorf am Inn and Schwalbach am Taunus. In addition, the investigators secured €6.7 million euros from two German property companies and another €1.2 million in a Latvian bank account.