Hermitage Capital Management, led by prominent Kremlin critic Bill Browder, filed a report with Austrian prosecutors claiming their banks enabled Russian criminals to launder funds by continually failing to respond to warning signs.
Hermitage urged prosecutors to investigate US$967 million of suspicious transactions into Austrian bank accounts according to documents seen by OCCRP. The payments all came from the Lithuanian Ukio Bankas and the Estonian branch of Danske Bank.
The Troika Laundromat scheme, revealed in data obtained by OCCRP and its partner 15min.lt, exposed how Ukio operated the $6 billion financial system created by Russian investment bank Troika Dialog. Ukio was shut down by regulators in 2013.
Hermitage claims many of the accounts sending money were linked to an organized criminal group, whose members include Russian government officials. It was used to purchase property, as well as chartering yachts and private jets.
An Austrian account opened for a relative of a Moscow official received more than $4 million, later used to purchase a 344m2 apartment with a wine cellar in downtown Vienna, according to the report.
Hermitage places Raiffeisen Bank at the centre of its allegations, naming it as the recipient of more than $600 million from Ukio Bankas accounts.
The accusations, linked to the Troika Laundromat revelations, caused shares in Raiffeisen to fall by more than 12 per cent on Tuesday.
“Raiffeisen Bank International (RBI) is not familiar with the concrete allegations,” it said in an email, adding that some of the claims were proven to be unfounded in a previous review. Another investigation however has now been launched.
In its report to Austria’s Public Prosecutor’s Office, Hermitage claimed features of the accounts where the money originated “should have raised immediate red flags and reporting of money laundering suspicion by Austrian bank employees.”
Hermitage states the payments regularly came from unknown companies with no business activity, visibly operating as shell companies with opaque ownership.
“This illicit scheme would not have been possible without the gross negligence or acquiescence from the employees of Austrian banks,” Hermitage said.
Austrian prosecutors could not be reached for comment.
Money entering Austrian banks included $230 million allegedly stolen from the Russian treasury, according to Hermitage. The case, one of the biggest tax frauds in recent years, was exposed by Hermitage lawyer Sergei Magnitsky who subsequently died from ill treatment in prison.
Finland’s Nordea Bank and Germany’s Deutsche Bank have also been drawn into the widening fallout, as OCCRP partners revealed they received 700 million euros and $889 million respectively in potentially dirty money from Ukio.
Shares in European banks fell throughout Tuesday, signalling investor fears that Nordic banks in particular have been used as a hub for Russian criminals to channel their funds into Europe.
“Until banks come clean and reveal the full extent of what suspicious transactions they have been involved in, this looks set to run and run,” said Philip Richards, a Bloomberg analyst said on its website.
