Latvian State Police last week seized nearly $ 280,000 worth of real estate believed to have been criminally acquired through a major international money laundering program that was uncovered, according to a press release from late Russian attorney Sergei Magnitsky.
Magnitsky died in prison after uncovering massive tax fraud by Russian tax officials, well-connected business people and criminals.
Latvian police traced illicit funds from a Russian bank via Cyprus and into Latvia via companies that were effectively controlled by an organized crime ring. According to the press release, these transactions were disguised as legitimate civil law transactions to quietly move funds away from their source.
The seized property belonged to a Russian citizen who bought the property with money acquired through ties to the Klyuev organized crime group Bill Browder, an international financier told OCCRP. Browder is a co-founder of the Hermitage Capital Management Foundation, which Magnitsky had hired.
“We know exactly how the illegal funds arrived in Latvia because we passed this information on to the Latvian authorities,” said Browder. “After they reviewed this information and conducted their own investigation, the decision to confiscate them was made, which the court approved.”
Browder said the Russian national who owned the property in Latvia has not been credibly identified as a member of the Klyuev group and that evidence shows that the group decided to “donate” the person the money needed to buy the property Property was used.
“Usually these types of ‘gifts’ reflect corrupt relationships,” Browder said.
Over a decade ago, Magnitsky exposed the $ 230 million tax fraud program that was apparently funded by the state and which ultimately led to his death. Years later, investigators are still uncovering hidden funds.
“We found the illegal funds in more than 20 countries and 16 of them have launched criminal investigations into money laundering,” said Browder.
“After 12 years of investigation, we learned that Western societies and financial systems are completely unprepared to export Russian corruption in the form of laundered money.
These illegal funds are used to buy luxury real estate, cars, yachts, jewelry, securities on behalf of corrupt officials, payments to politicians, to cover wasteful travel expenses, and many other purposes, “he said.
Twelve countries and the European Union have passed so-called Magnitsky laws, which aim to sanction corrupt officials and freeze assets that hide criminal funds.