Aleksei Averson, an up-and-coming client manager with Swedbank Estonia, had just wrapped up a March 2013 meeting with potential new corporate customers when he got a playful message from a colleague: “What’s happening in the washing machine market?”
“Comrade money launderers with gold watches came to see me yesterday. They offered cooperation,” Averson wrote back. He added that the man who was then Swedbank Estonia’s head of corporate banking and its future CEO, Robert Kitt, was aware. “Kitt almost agreed, but I didn’t.”
“Kitt agreed?” the colleague asked incredulously. “Really? Doesn’t he see the risks?”
“He’s not in anti-money laundering, he’s in business. He’s one of us; let’s make him chairman of the committee :),” Averson responded, in an apparent reference to the circle of bank managers and board members tasked with green-lighting valuable new corporate clients.
(Kitt did not respond to reporters directly to the suggestion he ignored money laundering risks, and Averson did not provide detailed comments to reporters.)
These were so-called “HRNR” clients: high-risk, non-resident companies, many of which subsequent investigation found to be controlled by Russian oligarchs, that sought Swedbank Estonia’s assistance in establishing and managing accounts for intricate networks of offshore companies as they sought to move millions of dollars out of Russia.
HRNR clients were vital to the bank’s success, producing more than 100 billion euros in turnover between 2008 and 2018, according to media reports citing internal Swedbank data. That turnover contributed to making Swedbank the largest bank in Estonia.
But that boom ended in 2019, when an investigation by SVT, the Swedish national public TV channel, revealed that Swedbank and a second institution, Danske Bank, had been used to systematically funnel nearly $6 billion through suspect accounts in the Baltics.
A subsequent report by OCCRP and iStories found that Swedbank had helped one of its most profitable clients, Russian oligarch and former government minister Mikhail Abyzov, move hundreds of millions of dollars to a web of offshore accounts in Cyprus, the British Virgin Islands, Singapore, and Belize. This included more than $53 million of what a Russian court would eventually rule was illegal money embezzled by Abyzov from two Siberian power companies. (Abyzov could not be reached for comment because he is in prison. When OCCRP first reported on his accounts at Swedbank, his lawyer declined to comment on the findings.)
The media reports helped to trigger a multi-country investigation into allegations that Swedbank had effectively run a massive money-laundering operation on behalf of its wealthy corporate clients.
The investigation culminated in Sweden only this year, with the sentencing in September of former Swedbank chief Birgitte Bonnesen to 15 months in prison. Bonnesen, who served as CEO from 2016 to 2019 after three years in charge of the bank’s Baltic operations, was found to have misled the public and shareholders about money-laundering risks in Swedbank’s operations in Estonia.
Prosecutors in Estonia had hoped to achieve a similar outcome at the local level, bringing a case against top bank executives, board members, and staff. But the process hit a snag after it was determined the case could not proceed without input from Russian authorities. The case was closed in February 2024, casting doubt on the ability of courts worldwide to prosecute corruption cases that relied on information from Russia and other captured states.
Journalists were unable to gain access to the evidence while Swedbank was under investigation. But OCCRP partner Delfi Estonia has now obtained a tranche of case files that reveal how the bank’s staff routinely bypassed transparency protocols in an effort to help conceal the Russian oligarchs that were among their most important clients.
The 300 records, provided by the Estonian public prosecutor’s office following a freedom of information request, contain redacted police transcripts and dozens of Swedbank Estonia files, emails, chats, and memos. Many of the internal messages show that for client managers like Averson — who were often the first to meet with new customers and whose professional success relied on accommodating their needs — the topic of money laundering was openly discussed and the source of frequent jokes.
“I wouldn’t even have opened that account, but the guy brought a decent bottle of Hennessy XO,” Averson said in an email to a colleague in August 2014, referring to the high-end cognac. “I thought, screw it, at least it’s not for nothing.”
“They’re almost the most profitable ones in my portfolio,” another manager wrote about his clients. “They launder a lot, and brazenly.” One client manager described a former colleague as “up to his elbows in the washing machine.”
Swedbank Estonia declined to comment on the contents of the emails and other materials from the prosecutors’ evidence, but said the investigation had been closed because “there was no crime.” The bank also said it commissioned the law firm Clifford Chance in 2019 to look into possible money laundering at the bank, and that it published the report on its website.
Averson had cooperated with the criminal investigation, his representative told reporters, and now wishes to put the events of 10 years ago behind him.
Building the Business
Swedbank first entered the Baltic market in 1998 with the purchase of a majority stake in the Hansabank banking group. A decade later, Swedbank had fully absorbed Hansabank and was hungry for business — looking to its client managers, particularly Russian speakers like Averson, to drum up potential customers.
“Swedbank was looking for non-resident clients,” Averson told police investigators in September 2020. “It was said we needed to find hundreds or thousands of customers.”
Averson had inherited one non-resident client from the Hansabank days, the Russian coal company Kuzbassrazrezugol (KRU). It had an estimated net worth in the hundreds of millions and a corporate network of nearly 200 separate companies. KRU was controlled by Russian oligarchs Andrei Bokarev and Iskander Makhmudov, but not all of the KRU companies were in their names, according to a memo Averson drew up in 2011 to support an “emergency” request to open bank accounts for KRU’s expanding offshore network.
In the memo, Averson explained that KRU was an important customer, and that it needed additional offshore companies that would not be owned directly by Bokarev and Makhmudov to minimize its tax exposure in Russia.
In 2011, Averson’s portfolio expanded further, after KRU sold one of its entities to Abyzov, a multimillionaire and close ally of Dmitry Medvedev, the president of Russia at the time. Abyzov’s group Ru-Com was involved in a wide range of energy, engineering, agriculture, and construction projects.
Averson traveled to Moscow to personally prepare paperwork related to the KRU sale; months later, he was informed that Abyzov was also eager to open dozens of offshore accounts for his Ru-Com businesses. “The client offered to bring a considerable amount of deposits to Swedbank,” Averson wrote in a memo to bank colleagues.
Abyzov’s close affiliation with then-President Medvedev made him a politically exposed person at heightened risk of corruption, and subject to greater financial scrutiny and anti-laundering regulations.
But the bank’s HRNR committee agreed to bring Ru-Com and Abyzov, described in a memo as the “main beneficiary of the non-resident companies,” on board.
Averson later told police investigators that Swedbank placed few restrictions on which clients were appropriate. “The bank’s policy was to avoid gambling and alcohol companies, but for the rest of the companies there was no question about the origin of the assets,” he said.
In May 2012, Medvedev — who by then was serving as prime minister — appointed Abyzov to serve in a newly created cabinet position as minister for open government affairs.
Abyzov’s new government duties did not appear to slow his business activities. Ru-Com’s business empire continued to swell. A Swedbank memo from January 2014 noted that Swedbank had opened 53 bank accounts for Ru-Com. The bullish news was soon shared with the mother bank in Sweden, with Kitt forwarding Bonnesen a memo written by Averson calling Abyzov “one of the most innovative businessmen in Russia,” and noting deposits in the Ru-Com group’s accounts had reached 30 million euros.
Mounting Concerns
At their peak, KRU and Ru-Com were Swedbank Estonia’s top two non-resident clients — but by 2016, questions were being raised within the bank about whether they should be.
Andreas Hobbelin, a Norway-based compliance officer for the Swedbank Group, had started to question Estonian managers about KRU and to what degree affiliated entities like Carbo One — KRU’s coal sales vehicle, which was officially owned by two other businessmen — were actually controlled by Makhmudov and Bokarev.
By that time, Makhmudov had been reported in international media in connection with a money laundering scheme investigated as part of a Spanish police operation against alleged Russian organized crime figures, known as Operation Troika. (Makhmudov and Bokarev would later be sanctioned by the U.S. Treasury Department, which mentioned in its sanctioning notice that both had alleged links to organized crime.)
UKMK-Holding/Wikimedia
Iskander Makhmudov.
By the summer of that year, Hobbelin’s questions had reached Averson, who was sent to Cyprus to meet one of the on-paper owners of the company, an Uzbek man.
He reported back that “the gentleman seemed adequate enough and very calm and confident.” A Swedbank board member, Heiki Raadik, appeared optimistic that Carbo One’s low-profile owners meant the bank could keep the coal-sales company as a client.
In discussions about written materials the bank was preparing about Carbo One, Raadik sought to minimize the significance of the ties to the Russian oligarchs.
"I would remove this sentence — 'Makhmudov and Bokarev have influence over the company, however there is no documentary evidence proving that [the official owners] are front men.’ Would try to comment on these citizens as little/briefly as possible," Raadik wrote. He added that he hoped the issue would not “escalate” to the bank’s ethics committee.
Regardless, in 2017, Carbo One, Makhmudov, and Bokarev caught the attention of Swedbank’s chief anti-money laundering compliance officer in Estonia, Mari-Liis Kurg.
Kurg, who had previously led anti-money laundering efforts at another large Estonian bank, SEB, had been specially recruited by Swedbank to shore up transparency measures. But any attempts to enforce protocol were met with stiff resistance. “The difference in the compliance control cultures of the two banks came as a huge shock to me,” she told OCCRP.
Concerned by what she was seeing, she filed a suspicious activity report to the Estonian Financial Intelligence Unit (FIU), a government agency tasked with investigating money laundering and other financial crimes.
The report identified Makhmudov and Bokarev as the “real beneficiaries of more than 200 clients [companies] from regions with a low tax rate” handled by Swedbank.
“According to unofficial sources, the clients are involved in corrupt transactions and possible money laundering,” Kurg wrote in an email accompanying the report.
In an email exchange with her Swedbank supervisors around the time, Kurg expressed concern that by continuing to do business with a high-risk client like Carbo One, the bank would put itself in a difficult position.
Deutsche Bank, which processed some payments for Swedbank, had already said it would refuse to handle any outgoing payments from “politically exposed persons.” Kurg asked whether payments from Carbo One had passed through Deutsche Bank any time in the previous 18 months. “If so, we likely have a breach of contract,” she said.
“I haven’t been able to keep calm all weekend,” Kurg wrote.
After the suspicious activity report was filed, the FIU asked Kurg and Sven Kivvistik, who was then Swedbank’s chief anti-money laundering officer for the Baltic region, to come in for questioning.
Internal emails show that Swedbank managers were worried, with Kitt, the CEO, calling the situation “Painful. Painful. Painful.”
"We’re not dealing with some rookie cops," Kivvistik wrote, noting that one of the investigators had more than two decades of police and forensic experience. “He certainly shouldn’t be underestimated.”
Managers also strategized on how Kivvistik could best field FIU questions in order to minimize potentially damaging input from Kurg.
"The question will be how to neutralize an active and foolish person when meeting with experienced investigators,” Kitt wrote to Kivvistik, in an apparent reference to Kurg. “They’ll read your body language immediately if you try to talk around her.”
Shortly after the FIU interview, Kurg says, she was terminated. "It was a very difficult stage in my professional life,” she told reporters. “I couldn’t justify or explain the abrupt termination of my employment."
Kivvistik declined to comment.
Change in Fortunes
Swedbank Estonia apparently realized that a continued relationship with its biggest HRNRs was untenable and quietly offloaded the Ru-Com companies in late 2016. By the time Kurg filed her SAR, it was doing the same for the KRU client group.
As Swedbank detached itself from KRU and Ru-Com, Averson — the client manager who had played a vital role in supporting and building the portfolios — left the bank to work for a new employer: Abyzov. As director of one of the Russian businessman’s Cyprus-based companies, Averson’s tasks included the management of Il Tesoro, a luxury estate in Tuscany that included several villas, a tennis court, vineyards and olive groves, and a helipad.
Abyzov himself reportedly left Russia in 2018 after failing to secure a second term as a government minister. During a brief trip home the following year, he was arrested and accused of embezzling more than $53 million from his Siberian energy holdings and transferring the funds abroad. After a lengthy trial, he was sentenced to 12 years in prison in December 2023.
Estonian prosecutors officially initiated criminal proceedings against the bank in July 2019. Their focus included allegations that Swedbank had misled corresponding banks and investigators by repeatedly failing to identify Abyzov as the main beneficiary of Ru-Com entities, or otherwise evading requests for information.
In one case in 2015, Estonia’s Financial Intelligence Unit had asked for information on who owned several Ru-Com companies, but Swedbank Estonia provided the names of nominal owners — even though Averson’s memos show the bank was well aware that Abyzov actually controlled the companies.
After receiving another similar request two years later, the newly released emails show, a bank employee emailed a colleague for guidance: “I know that you had some kind of an agreement with Toomas” — Toomas Tuuling, Kurg’s predecessor as the bank’s anti-money laundering chief in Estonia — “that certain individuals will not be entered because they wanted to maintain their anonymity.”
(Contacted by OCCRP, Tuuling denied this, saying he had “not made any agreements with the aim of ensuring client anonymity or hiding information from the state.” He said the failure to fully inform the FIU about Abyzov occurred because the bank had an established practice of keeping beneficial owner forms separate from the general client database, which could be accessed by hundreds of bank employees, to protect important clients from data leaks.)
Abyzov’s conviction was significant for the prosecutors, who needed to prove that the money allegedly laundered by Swedbank had been the proceeds of a crime. (Under Estonian law, as in many countries, even significant evidence of money laundering does not constitute a crime without an established predicate crime.)
The law firm Clifford Chance, which had been hired by Swedbank following the 2019 scandal, determined that Swedbank Estonia had processed over 21 billion euros in potentially suspicious payments between 2014 and 2019.
But the Estonian criminal proceedings focused on only a small fraction of those transactions — the $53 million that prosecutors confirmed had traveled within Abyzov’s network of Swedbank accounts before being rerouted to Cyprus or back to Russia.
Using the Abyzov case as a predicate, however, provided Swedbank defense lawyers with a unique opportunity to argue that the jailed oligarch had been subjected to a politically motivated trial, since the judge in his case had also made rulings favoring the government in two notorious cases involving anti-corruption figures Abyzov, they argued, was potentially yet another victim of the Kremlin’s kangaroo courts.
The defense’s argument of potential bias left prosecutors in the challenging position of having to procure documentation from Abyzov’s Russia trial that could be entered as evidence in their own proceedings. With bilateral cooperation stalled by sanctions and the war in Ukraine, prosecutors said they deemed it impossible to make a request.
Despite substantial evidence of Swedbank’s history of suspicious transactions, poor documentation and monitoring, and incriminating internal communications, prosecutors ultimately conceded that they could not carry one of Estonia’s most important money-laundering cases past the finish line. The proceedings closed in February 2024.
When Money Is Laundered Out of a “Captured State”
Anti-corruption experts say the Swedbank Estonia case raises broader concerns about the ability to successfully prosecute any money-laundering cases linked to self-isolated or heavily sanctioned countries like Russia.
‘A Desire to Move On’
Many of the bankers charged in the Swedbank case have moved on to new professions. Former CEO Kitt now heads a heating company. Raadik, the former board member, serves as the CFO of the Tallinn University of Technology.
Both men declined to comment in depth on the case, citing privacy protections. “If the prosecutor’s office had had any objections to my actions over the course of the long process, the criminal proceedings wouldn’t have been closed,” Raadik told OCCRP. Kitt said the material released to reporters from the criminal file “is the version of one side, i.e. the prosecution.”
A representative for Averson said the former client manager had cooperated with law enforcement throughout the investigation. “Averson's desire is to move on with his life. He works permanently in Estonia, pays taxes, and takes care of his family,” the representative said.
A spokesperson for Swedbank Estonia said the bank “fully cooperated” with prosecutor’s offices in Estonia and Sweden. The spokesperson added that the bank is “constantly engaged” in money-laundering prevention protocols and technology.
“Swedbank is one of the banks with the lowest risk exposure in the local market and focuses on serving local customers,” she said.
Former Swedbank compliance officer Kurg, who now runs a private risk-management startup, said the case has stayed with her. “It’s important to remember that compliance control people don’t work against the company, but with the greater goal of protecting the business and mitigating risks, the impact of which, if realized, could be devastating to the entire business,” she said.
“Unfortunately, in the case of Swedbank, this risk materialized.”
