Latvian authorities have seized another property in Riga belonging to a Russian criminal group behind one of Europe’s best-known money laundering schemes.
“The investigation has established that foreign citizens, using funds obtained through criminal means, purchased exclusive real estate in Latvia,” Latvian police said in a statement.
“Proceeds of crime were injected from a Russian bank into a beneficiary company in Cyprus, which was effectively controlled by an organized crime boss…these funds were [then] transferred to Latvia,” he noted.
“The value of this property is estimated at around 250,000 euros and it belonged to the partner of the leader of the criminal group identified in the investigation,” he also said.
The funds came from a complex 200 million euro tax fraud in 2008 involving a British hedge fund, Hermitage Capital, and its lawyer, Sergei Magnitsky, who died in a Russian prison after testifying that senior Russian officials were involved in the scam. .
The leader of the Russian criminal group, Dmitry Klyuev, is already subject to American, Canadian, British, Estonian, Lithuanian and Latvian sanctions.
His associate and owner of the confiscated property, Artem Zuev, is less well known.
Last year, the EU also created special sanctions for human rights abusers following a years-long campaign led by Hermitage chief Bill Browder.
The ‘EU’s global human rights sanctions regime’ is informally known as the ‘European Magnitsky Law’, but none of those involved in the fraud it uncovered have yet been convicted. blacklisted at EU level.
Latvia earlier this year also seized a €230,000 apartment in Riga bought by the Klyuev group, while Belgium seized some €400,000 from the proceeds of an apartment sale in Antwerp linked to the fraud.
Authorities in Estonia, France, the Netherlands, Switzerland and the United States have also frozen assets amounting to more than 40 million euros over the years, according to Hermitage Capital.
And investigations are underway in Denmark and Spain, he added.
“Latvia is transforming from a money laundering haven into a robust system in which the police work competently, investigating money laundering and creating significant consequences for those involved in the crime against Sergei Magnitsky” , Browder said.
“The progress made by the Latvian authorities is impressive and should be an example for other EU countries that are still struggling to put in place an appropriate anti-money laundering mechanism,” he added.
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