Bitcoin Forum

More European banks are being drawn into money-laundering allegations centered on dirty Russian money, adding to the scandal in an industry still recovering from the financial crisis.

Initially centered on Danske Bank A/S in Denmark and Sweden’s Swedbank AB, allegations of suspicious transfers widened this week to include Raiffeisen Bank International AG in Austria and several Dutch institutions. Danske has lost half its market value since admitting its role in a money laundering scandal in 2016.

The disclosures describe a network of banking relationships that was used to export funds from criminals in the former Soviet Union to western nations, often via Estonia and Lithuania. Investigations are under way in the Baltic nations, the U.S., the U.K. and the Nordic countries, but almost daily revelations suggest there are more surprises to come on the scale of the misconduct.

Raiffeisen Bank International AG led declines in European banking shares on Tuesday -- slumping as much as 15 percent -- after Bill Browder’s Hermitage Fund said the bank ignored warning signs that would have helped stop the laundering of funds from Russian criminal activity. Dutch banks fell after a report that the three largest were used to move cash from Russia.

The fresh allegations are based on files obtained by the Organized Crime and Corruption Reporting Project, or OCCRP, and 15min.lt, a Lithuanian website. They were reported by a number of participating media outlets and nicknamed Troika Laundromat because many of the shell companies involved in the transactions allegedly had ties to Troika Dialog, a Russian investment bank that was bought by state-owned Sberbank PJSC in 2012.

Troika Dialog “acted in full compliance with the highest international standards of transparency and financial reporting” throughout its history, said the press office of Ruben Vardanyan, who led the firm for about two decades.

The Troika Laundromat is the fourth scheme the group has uncovered, the others being the Proxy Platform, the Russian Laundromat, and the Azerbaijani Laundromat. The Guardian reported that the latest documents show an estimated $4.6 billion was sent to Europe and the U.S. from a Russian-operated network of 70 offshore companies with Lithuanian accounts. The paper said there’s no suggestion that the end recipients of funds were aware of the source of the money. It’s not clear what share of the transfers was illegitimate.

Still, the new revelations and prior reports paint a picture of Nordic banks that, often via their Baltic units, became hubs for Russian criminals who channeled funds to the West. Nordea Bank Abp allegedly handled about 700 million euros ($793 million) in potentially dirty money, some of it linked to the death of Russian lawyer Sergei Magnitsky, according to Finnish broadcaster YLE on Monday.

Nordea Chief Risk Officer Julie Galbo said in an interview late on Monday that much of the allegations were already known publicly and the bank was trying to establish whether any were new. Any suspicious behavior would be reported to the authorities, she said.

Accounts at the three largest Dutch banks were used by the Troika Laundromat to move cash from Russia, according to Dutch magazine De Groene Amsterdammer. About 43 million euros were paid to the Rabobank account of Dutch yacht builder Heesen for construction of two boats, the newspaper said, while approximately 190 million euros went through bank accounts at an ABN Amro unit that later became part of Royal Bank of Scotland.

ABN, RBS
All assets, data and clients of the unit became the legal responsibility of RBS in February 2008, according to an ABN Amro spokesman. Though it has the same name, the current ABN Amro is a completely different legal entity than the one that sold the unit to RBS, the spokesman said.

ING Groep NV also fell in Tuesday trading after the newspaper said an ING branch in Moscow kept working until 2013 with a client who it suspected of involvement in money laundering. ING last year agreed to pay a record fine to settle charges related to failures in anti money-laundering checks.

Officials for Rabobank and ING declined to comment.

In Austria, Raiffeisen Bank International’s predecessor “ignored suspicions” that should have triggered reports to the authorities, thereby abetting the money laundering linked to the Magnitsky case, Hermitage said. The filing lists payments totaling $634 million that went from accounts at Lithuania’s Ukio Bankas and Danske Bank’s Estonian unit to accounts at Raiffeisen Zentralbank Oesterreich AG, then the main owner of Raiffeisen Bank International. The bank said it’s started an investigation into the matter.

Browder, an investor who has spent the past decade building cases against banks for laundering following the death in a Russian jail of Magnitsky, said more allegations will unfold.

A spokeswoman pointed to past allegations by Hermitage that had been found by authorities to be baseless. A probe of RZB by Austrian financial regulators in 2010 found no evidence that the firm was involved in money laundering.

Browder said by telephone that the new filing contains information that wasn’t available then.

More than $889 million went from accounts at Deutsche Bank to accounts of the Troika Laundromat between 2003 and 2017, German daily Süddeutsche Zeitung reported. Deutsche Bank, in written comments, said it always cooperates with authorities and regulators worldwide and that as a correspondent bank it only has limited access to information about the customers of the respondent bank.

https://www.bloomberg.com/news/articles/2019-03-05/dirty-money-scandal-widens-with-reports-on-nordea-and-lithuania

This just goes to show how easy it is for banking institutions to launder money without hitting some obvious red flags and still getting that great treatment from the government. I don't know why banks are only getting fined if they got caught facilitating money laundering and fraudulent schemes on their platforms, but when it comes to exchange operators and traders, it's almost immediate time behind bars and immediate closure and revocation of operating license in most countries. It should be the same for any institution that handles money!

If there's any contribution to society blockchain could make, it could be in the form of mandated public ledgers where all transactions are public knowledge and open to scrutiny.

Billions of dollars being laundered by the banks is no longer big news, it is something that has been going on since banks were built. Bitcoin laundering is just a fart in a hurricane compared to this

This just goes to show how easy it is for banking institutions to launder money without hitting some obvious red flags and still getting that great treatment from the government. I don't know why banks are only getting fined if they got caught facilitating money laundering and fraudulent schemes on their platforms, but when it comes to exchange operators and traders, it's almost immediate time behind bars and immediate closure and revocation of operating license in most countries. It should be the same for any institution that handles money!

I can only imagine how excited Jamie Dimon would be if all of this laundering had been done via bitcoin/crypto rather than our glorious and infallible banking institutions, which we all know are immune to money laundering due to them being "regulated".

If there's any contribution to society blockchain could make, it could be in the form of mandated public ledgers where all transactions are public knowledge and open to scrutiny. I have a faint feeling teenagers living in their parent's basements could do a better job identifying illicit transactions on a public ledger than federal regulators do with existing private databases.

Perhaps our next generation of payment processing software could link digital transactions to social media for purposes of comparison shopping on a public ledger utilizing a blockchain. That could raise the difficulty level for attempts at electronic money laundering. It could be an irrelevent point given how laundering may best be performed in a cash or precious metals format, leaving behind no paper or digital trail for investigators to follow.

Billions of dollars being laundered by the banks is no longer big news, it is something that has been going on since banks were built. Bitcoin laundering is just a fart in a hurricane compared to this

Dollars being laundered for a long time ago. I think it's not only dollars that being laundered but the other local fiat was also had the same things in every country. I think bitcoin is also being laundering in many ways too because we don't know for every transaction was made, and we only know when we check on the blockchain.

Sometimes the amount of bitcoin in the blockchain is too big for us, and we could only guess without knowing the truth.

Everything that's useful is being utilized by criminals to have it work in their favor, so Bitcoin being part of their toolset is not surprising here. I do however see Bitcoin's popularity as criminal tool decline steadily.

It really seems that the privacy coins such as XMR and ZCash have picked up in actual use because of that, and let's be honest here, these coins do serve a useful utility. People call them shitcoins, but they really aren't.

So? The amounts people transact with are not an indication of fraudulent activity. Most of the large amounts moving back and forth are OTC trades focusing on speculation.

I can only imagine how excited Jamie Dimon would be if all of this laundering had been done via bitcoin/crypto rather than our glorious and infallible banking institutions, which we all know are immune to money laundering due to them being "regulated".