For example, a check of the Transnational Bank performed by the Central Bank discovered a “hole” in the bank's capital of 2.6 billion rubles
. We found out that $51,259,621 had passed through the bank in the last month before revocation of its license, while the last transaction took place just two days before the revocation. All four deals conducted by the bank through three shell companies in Russia and two companies in Latvia involved the same customs declarant. Three out of four deals were conducted through the Bagrationovsk customs post in Kaliningrad Oblast.
A similar situation happened with Metrobank. After its license was revoked on June 1, 2015, a 4.5 billion rubles hole was discovered
in the bank's capital. Two months before the bank's license was revoked, two tranches were used to siphon off $17,000,000 from the bank through the same shell company. The foreign partner functioning as a cushion was the same company from Cyprus in both cases, and both deals went through the Yamburg customs post in Leningrad Oblast.
Siphoning off of the money from the banks' capitals harmed not only their clients. The money to pay insurance payments to depositors was compensated from the state budget through the Deposit Insurance Agency of Russia. Basically, every citizen of Russia paid out of their own pocket for the money stolen from the banks and siphoned off from the country.
Seller companies also had accounts in eleven foreign banks: Lithuanian Latvijas pasta banka
(now called LPB bank) and A/S Norvik banka
, Austrian Meinl Bank
(now called Anglo Austrian AAB Bank AG), Danish Nordea Bank AS
, Polish mBank, Latvian AS Privatbank
, SEB Banka
, JSC Citadele Banka
and AS ABLV
(liquidated), Estonian Versobank AS
(liquidated) and a branch of Swedbank
. These banks were involved in scandals concerning negligence in the performance of anti-money laundering procedures and laundering money from ex-USSR countries.
- Journalists from SVT, a Swedish television channel, reported that $4.3 billion was laundered through Swedbank, or, to be precise, through its branches in Lithuania, Latvia and Estonia; part of this money, about $26 million, was connected with the case of Sergei Magnitsky, an auditor of Hermitage Capital.
- In late March 2018, the European Central Bank cancelled the license of the Estonian Versobank due to systematic violation of the money laundering legislation. It was owned by Ukrainian nationals: Vadim Ermolaev and Stanislav Vilensky.
- In 2017, A/S Norvik banka was fined by the Financial and Capital Market Commission for non-compliance with legal requirements for preventing the financing of terrorism and use of illicit funds, including working with clients who tried to bypass sanctions against North Korea.
Management's interest in money embezzlement is not the only reason for a financial organization to fail to answer the foreign trade transaction verification requirements. The discovered scheme involves small captive banks (belonging to financial industrial groups and providing for their interests). The ability of the top managers of such banks to pursue policies that are independent from the shareholders (owners) is minimal, and compliance with the KYC (Know Your Customer) policy and the regulator's requirement to identify dubious deals are treated as a pure formality by such banks, which opens a wide window of opportunity for abuses. Moreover, it's often difficult to bring the shareholders (the ultimate owners) of such banks to justice, as the banks are formally controlled by the board of directors.
We identified financial and industrial groups who, on one hand, owned the banks involved in money laundering and, on the other hand, were vendors for customs authorities supervising the customs posts that the suspicious transactions went through. Some bankers involved in the scheme were connected with representatives of customs authorities: they were both in the same legal entities' governing bodies.