Latvian authorities have seized another property in Riga belonging to a Russian crime group behind one of the best-known money-laundering schemes in Europe.
“The investigation has established that foreign citizens, using criminally-obtained funds, purchased exclusive real estate in Latvia,” Latvian police said in a statement.
“Proceeds of crime were injected from a Russian bank into a recipient company in Cyprus, which was effectively controlled by an organised-crime leader … these funds were [then] transferred to Latvia”, it noted.
“The value of this property is estimated at about €250,000 and it belonged to the partner of the leader of the criminal group identified in the investigation,” it also said.
The funds had originated in a complex, €200m tax-fraud in 2008 involving a UK hedge fund, Hermitage Capital, and its lawyer, Sergei Magnitsky, who died in a Russian prison after testifying that high-ranking Russian officials were in on the scam.
The leader of the Russian crime-group, Dmitry Klyuev, is already under US, Canadian, UK, Estonian, Lithuanian, and Latvian sanctions.
His associate and the owner of the confiscated property, Artem Zuev, is less well known.
The EU, last year, also created special sanctions for human-rights abusers following a years-long campaign by Hermitage chief Bill Browder.
The ‘EU Global Human Rights Sanctions Regime’ is known informally as a ‘European Magnitsky Act’, but none of the people involved in the fraud he uncovered have yet been blacklisted at EU-level.
Latvia, earlier this year, also seized a €230,000 flat in Riga bought by the Klyuev group, while Belgium seized some €400,000 from the proceeds of an apartment sale in Antwerp connected to the fraud.
Authorities in Estonia, France, the Netherlands, Switzerland, and the US have also frozen assets amounting to more than €40m over the years, according to Hermitage Capital.
And investigations are ongoing in Denmark and Spain, it said.
“Latvia is transforming from a money-laundering asylum into a strong system in which the police work competently, investigating money laundering and creating significant consequences for those involved in the crime committed against Sergei Magnitsky,” Browder said.
“The progress made by Latvian authorities is impressive and should be an example for other EU countries which are still struggling with building a proper mechanism of combatting money laundering” he added.