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Ceturtdiena 20.02.2020 | Name days: Smuidra, Vitauts, Smuidris

Belarusian citizen arrested in ABLV Bank money laundering case

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ABLV Bank, money laundering, investigation, Belarus, fraud, EU, scheme, investigation, KNABOn Saturday, 1 February, Riga City Latgale Suburb Court ruled on arresting one of the four foreign suspects in the criminal case regarding the laundering of EUR 50 million of illegally obtained funds at ABLV Bank. This person is a citizen of the Republic of Belarus.

According to lawyer Artūrs Zvejsalnieks, the arrested person has not ties to ABLV Bank and has ended up in this case because he was «in the wrong place at the wrong time».

Zvejsalnieks says his client is not a publicly well-known person and his name «is unlikely to tell much» to most people. At the same time, he did not clearly say what his association with ABLV Bank is.

«It’s all a misunderstanding – this person’s association with criminal activities. I believe he has no relation to those EUR 50 million and the investigation will soon understand he has little connection to all of this,» says the lawyer.

The suspect also denies guilt.

The Belarusian citizen is accused of committing crimes outlined in Part 3 of Section 195 of the Criminal Law – laundering of large amounts illegally obtained funds in an organized group.

Meanwhile, ABLV Bank co-owner and once the chairman of the bank’s board Ernests Bernis says ABLB Bank has actively cooperated with law enforcers in the criminal case regarding the laundering of EUR 50 million since 2018.

«As part of the aforementioned case the bank has been cooperating with law enforcement institutions since 2018. The bank has also provided all the necessary information over the course of this period of time, which is why the Tuesday’s [28 January] raid came as a surprise. It seems some institutions believe this measure was necessary,» said Bernis.

At the same time, he hopes the so-called EUR 50 million criminal case will be investigated quickly and professionally. «We do not doubt it will happen because we understand enormous resources have been organized, including foreign consultants paid considerable compensations. The professionalism is affirmed by this week’s search even though there were some unnecessary elements of theatrics,» he added.

He also mentioned that he takes full responsibility for ABLV Bank’s operations. «The bank, especially in the last several years, has adopted stricter rules for both money laundering prevention and in relation to employee ethics and compliance with the law. If illegalities truly have been committed, they have to be investigated. At the same time, however, we should not mark everyone as guilty before the court of justice has announced its verdict. If someone is held suspect, this does not mean suspicions are already confirmed,» Bernis stresses.

Prosecutor Dainis Šteinbergs had previously explained that the criminal process was initiated over large scale money laundering performed in a group. He says the criminal process was launched in accordance with information from the Finance Intelligence Service (FID).

According to information from the office of the prosecutor, members of the criminal group mostly laundered funds that were illegally obtained in Russia and Belarus. This money was obtained by not paying taxes and as a result of fraud.

Money was laundered by this group using the EU finance system. Initially funds were transferred to accounts of companies registered outside the EU. After that, members of the group registered multiple companies in the EU and opened accounts in ABLV Bank. Most of the time companies were registered in the UK and Cyprus.

Once money was transferred to ABLV Bank accounts, some employees of the bank had assisted with advice how it is best to legalize the money and avoid being arrested. The office of the prosecutor believes bank employees had assisted in transferring money to other banks in Latvia and outside of the country.

Šteinbergs notes it was later investigated if the company itself had been involved in illegalities.

Investigation focused not only on private bankers’ and bank officials’ behaviour.

He added that the office of the prosecutor has arrested finances worth no less than one and a half million euros. Additionally, a large number of documents, offshore registration documents, stamps and code calculators have been confiscated in 30 searches.

12 persons involved in the process have rights for defence. Six persons are considered suspects. Among those suspects are also four foreigners that are not currently in Latvia. Seven persons with rights for defence are former ABLV Bank employees, including one former board member.

The court had previously arrested businessman Andris Ovsjaņņikovs and lawyer Andris Putniņš.

As previously reported, KNAB, Organized Crime and Other Sectors Specialized Office of the Prosecutor, State Police Organized Crime Enforcement Office, State Revenue Service’s Tax and Customs Office and Finance and Capital Market Commission officers performed investigative activities, including 20 sanctioned searches on 28 January.

To ensure maximum protection of customers’ and creditors’ interests and, considering the decision of the European Central Bank regarding commencement of the bank’s liquidation process, ABLV Bank shareholders made the decision at their 26 February 2018 meeting to self-liquidate the bank. Latvian Finance and Capital Market Commission’s council permitted ABLV Bank to commence the self-liquidation process on 12 June 2018. On 12 June 2018 European Central Bank annulled ABLV Bank’s license.

Problems for ABLV Bank started when US Department of Treasury Financial Crimes Enforcement Network announced in February 2018 its plans to establish sanctions against ABLV Bank for money laundering schemes that had assisted with North Korea’s nuclear arms programme, as well as illegal activities in Azerbaijan, Russia and Ukraine.

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