$8.8 billion Internal Transactions Linking Major Banks in Money Laundering Scheme

Kathleen Jordan
By Kathleen Jordan
Posted on March 7, 2019
$8.8 billion Internal Transactions Linking Major Banks in Money Laundering Scheme

One of the largest release of banking information, the Organized Crime and Corruption Reporting Project published the report that mentioned 1.3 million leaked transactions from 238,000 companies, worth $470 billion. The report detailed a complex money laundering scheme “to channel billions of dollars out of Russia”.

OCCRP Executive Director Paul Radu elaborated:

Among the counterparties on these transactions were major Western banks such as Citigroup Inc., Raiffeisen, and Deutsche Bank. The dozens of companies in the system also generated $8.8 billion of internal transactions to obscure the origin of the cash.

He noted that Citigroup did not respond to a request for comment, Raiffeisen declined to comment, and Deutsche Bank refused to comment for legal reasons, claiming to have limited access to information on the transactions in question.

This money laundering scheme is referred to by the OCCRP as the Troika Laundromat. “The Laundromat wasn’t just a money laundering system. It was also a hidden investment vehicle, a slush fund, a tax evasion scheme, and much more,” Radu wrote. "The Troika Laundromat is unique among the Laundromats that have been uncovered in recent years in that it was created by a prestigious financial institution.”

He further explained that this scheme involved Russian private bank Troika Dialog between 2006 and early 2013. The bank was established in the early 1990s and became the country’s largest private investment bank. It was purchased in 2012 by Russia’s largest state-owned lender, Sberbank.

Following the Troika Laundromat reports, “Finland’s Nordea Bank and Germany’s Deutsche Bank have also been drawn into the widening fallout, as OCCRP partners revealed they received 700 million euros [~$791 million] and $889 million respectively in potentially dirty money,” OCCRP reporter Harry Holmes said in an article. As per the reports by Reuters, prosecutors in the Netherlands are evaluating signs of Dutch involvement. 

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