Illicit finance and money laundering trends in Eurasia

Published date07 May 2019
Date07 May 2019
Pages388-399
DOIhttps://doi.org/10.1108/JMLC-01-2018-0003
AuthorStefan Cassella
Illicit nance and money
laundering trends in Eurasia
Stefan Cassella
Asset Forfeiture Law, LLC, LAUREL, Maryland, USA
Abstract
Purpose The purpose of this paper is to review recent examples of sophisticated money laundering
operations involving nancialinstitutions in Eurasia, including Russia and Moldova, and the resulting ow
of licit and illicitcapital from that part of the world to the UK, the USA, and otherWestern countries.
Design/methodology/approach Relying on materials frompublicly available sources, the study uses
several case studiesto illustrate various money laundering methodswith a view toward identifying common
elementsand aspects of the schemes that might be considered new or innovative.
Findings In particular, the study examines the roles that lax anti-money laundering compliance by
nancial institutions and the use of shell corporations designed to conceal the benecial ownership of the
companiesand their assets have played in virtually allof the money laundering schemes.
Originality/value The paper discussesthe risks that these emerging money launderingmethods pose to
Western countries and their nancial institutions and the approaches that governments might take to
minimizethose risks and raise the barriers for the laundering of illicitfunds within their jurisdictions.
Keywords Moldova, Mirror trading, Prevezon Holdings, Russian Laundromat
Paper type Case study
1. Introduction
This paper reviews recent examples of sophisticated money laundering operations
involving nancial institutionsin Eurasia, including Russia and Moldova, and the resulting
ow of licit and illicit capital from that part of the world to the UK, the USA and other
Western countries. Relying on materials from publicly available sources, the study uses
several case studies to illustrate various money laundering methods with a view toward
identifying common elements and aspects of the schemes that might be considered new or
innovative.
In particular, the paper examines the roles that lax anti-money laundering (AML)
compliance by nancialinstitutions and the use of shell corporations designed to concealthe
benecial ownership of the companies and their assets have played in virtually all of the
money launderingschemes.
The paper then discusses the risksthat these emerging money laundering methods pose
to Western countries and their nancial institutions and the approaches that governments
might take to minimize those risks and raise the barriers for the laundering of illicit funds
within their jurisdictions.
2. Case studies
2.1 The Russian Laundromat
The Russian Laundromatis the term given by the media to a scheme for laundering the
proceeds of Russian criminal activity via shell corporations and European banks that
ourished from 2010 to 2014. While the operation has been shut down, it serves as an
JMLC
22,2
388
Journalof Money Laundering
Control
Vol.22 No. 2, 2019
pp. 388-399
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-01-2018-0003
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1368-5201.htm

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