During 2010-2014, US $ 71 billion was laundered by Russian banks through Moldovan courts and banks, using unlawful court decisions on false debts. The information was presented in the study “The Russian Laundromat  – a $70 billion money-laundering scheme facilitated by Moldovan political elites,” done by Transparency International Moldova and the Watchdog.md Community.

According to the study, cleared funds were further transferred to a group of offshore companies with accounts in Western banks. Although investigating officers from Moldova claim to have detected US $ 20 billion of suspicious funds, publicly available evidence shows that the actual amount of money laundered amounted to US $ 71 billion. Though a money laundering investigation was published in 2014, no person from the Moldovan supervisory and prosecution authorities has been held accountable so far. Transparency and Watchdog’s study summarizes the proof on how supervisors and prosecutors, subordinated to political elites, knowingly ignored suspicious activities, while the Parliament and the Constitutional Court approved legislative  amendments and decisions to facilitate the money laundering scheme. In May 2010, a law on capping the 3% state tax for the examination of claims recovery was approved. According to experts in money laundering prevention policies, organizers of such operations charge a 3-4% tax for the legalization and transfer of dirty money. In June 2010, PDM deputy Valeriu Guma submitted a bill, later approved in April 2011, on amending the Law on the prevention and combating money laundering (CSB). The approval of this law has allowed courts to suspend decisions of the Office for Prevention and Fight against Money Laundering (SPCSB) on blocking suspicious transactions. Later, in July 2014, this was canceled by an amendment. The informative note states that the amendments approved by the Parliament in 2011 allowed large-scale money laundering involving Russian economic units and off-shore companies.

Relevant state institutions, aware of the money laundering scheme

 Civic activist Sergiu Tofilat said in a conference presenting the study that the evidence shows that all state institutions were aware of the money laundering scheme but did not take action to prevent it. Tofilat claims that this well-coordinated activity could not have taken place without the political protection of the parties in power. “Under the law on the prevention and combating money laundering, banks are required to report all suspicious transactions within 24 hours of receipt of payment documents. All of this information reaches the CNA’s  Office for Prevention and Fight against Money Laundering. Former Governor of the National Bank in Moldova, Dorin Dragutanu pointed that in 2010-2014, Moldincombank reported all suspicious transactions to the CNA, respectively CNA and the Office for Prevention and Fight against Money Laundering knew about all suspicious transactions that started in 2010,” said the activist. The study also shows that the so-called “pro-European coalition” that ruled the country during the period 2010-2014 signed a coalition agreement in December 2010. According to the secret annex to the agreement, coalition members shared control over supervisory institutions and criminal prosecution, which should be independent. Thus, the Democratic Party (PDM) headed by Vladimir Plahotniuc, allegedly gained control over the National Anticorruption Center and the Prosecutor General’s Office. Evidence shows that the National Bank of Moldova (NBM) was also under the control of PDM. Civic activists sent information requests to the National Bank and the Office for Prevention and Fight against Money Laundering, which are responsible for monitoring the banking sector and for carrying out activities of prevention and combating money laundering. “The National Bank replied that the US $ 71 billion were interbank operations, placements and financial derivative transactions. The Office for Prevention and Fight against Money Laundering sent a simple reply- “it is part of the Russian Laundromat.” But there are also interbank placements that Ilan Şor made during the year, which are related to the theft of the billion – money that was placed in the Russian banks and which was transferred back, but these are much smaller sums, “says Sergiu Tofilat.

The political control over the supervisory bodies was not the only involvement of Moldovan political elites that protected the money laundering scheme. During 2010-2011, the Parliament and the Constitutional Court approved several acts to amend the legal framework to facilitate money laundering schemes. “This process was possible due to the complicity of the Prosecutor General’s Office, the SPCSB of the National Anticorruption Center and the Superior Council of Magistracy. The report very clearly shows who and what obligations they had and how they failed. These people must be held accountable and give explanations to an independent investigating body and to an independent parliamentary committee on their actions. You have the entire state apparatus that has covered and facilitated money laundering in Moldova. Then,  the banking system had 2 parallel operations: money laundering and taking control of the national banking system in order to prepare the legislative change and control for the organization of the bank robbery from the reserves of the National Bank”, says public policy expert Ştefan Gligor. To date, no person has been convicted for money laundering.

Reaction of the Office for Prevention and Fight against Money Laundering 

After the publication of the study, the SPCSB came forward with a reaction. “Under the national legislation on the prevention and fight against money laundering and terrorism financing, the SPCSB receives alerts on suspicious money laundering and terrorist financing transactions by transfer or cash from certain limits. Transactions between banks, between banks and BNM, between banks and the State Treasury, between BNM and the State Treasury are exempt from reporting to SPCSB”, reads the institution’s statement. According to the SPCSB, the amount of financial flows from the CIS states (especially from the Russian Federation) indicated in the BNM statistical data and taken over by the authors of the study does not coincide with the information held by the Office.” According to the data collected and analyzed by the Office and confirmed by official documents, the total value of legalized money means in the context of the” Global Laundromat «typology, based on court orders, using the correspondent accounts of the Russian banks opened at BC MOLDINDCONBANK SA, is estimated at about  $ 22,013,152,564,” SPCSB representatives said. The representatives of the SPCB say they will provide with complex information on the deployment of the “Laundromat” money laundering typology, the investigations carried out, external cooperation issues and the results achieved by the institution specialized in the prevention and fight against money laundering.

The study “The Russian Laundromat  – a $70 billion money-laundering scheme facilitated by Moldovan political elites,” can be read in full here.

Daniela Calmis