Massive €2 Billion Money Laundering Scheme Unveiled: Lithuanian Institution at Center of International Operation

In a significant development in the crackdown on organized crime and money laundering, investigators have uncovered approximately €2 billion in illicit funds channeled through a Lithuanian financial institution offering money laundering services. The breakthrough came as a result of a meticulously coordinated effort involving law enforcement agencies in Italy, Latvia, and Lithuania, culminating in the arrest of 18 suspects, including three alleged ringleaders, during Tuesday's raids.

Prosecutors disclosed that over the course of seven years, the two primary suspects orchestrated the movement of these funds through an elaborate network of shell companies operating globally. The institution in question, identified as an Electronic Money Institution (EMI), purportedly provided online money laundering services catering to a range of criminal activities such as tax evasion, cyber fraud, and drug trafficking.

Eurojust, the EU Agency for Criminal Justice Cooperation, revealed that a portion of the laundered funds, including €15 million fraudulently obtained through building bonuses from Italian authorities, were injected into the economies of Latvia and Lithuania through investments in real estate and luxury vehicles. A spokesperson at Eurojust's headquarters in The Hague emphasized the fraudulent nature of these transactions, stating, "In reality, no repairs took place, the applicants were not the owners or the buildings did not even exist."

In addition to the arrests of key figures, another leader of an organized crime group (OCG) was detained for defrauding Italian authorities of €5 million in public funds, which were allegedly laundered through the same network of enterprises connected to the Lithuanian-based EMI.

"The laundered money included the EUR 15 million from unlawfully obtained so-called building bonuses, provided by the Italian national authorities. These bonuses were given for renovation and insulation works and other energy-saving measures of existing buildings," a spokesperson at Eurojust HQ in the Hague said.

"The financial institution offered money laundering as a service to thousands of criminals across the EU, by making fictitious financial transactions via the web of enterprises, which were run by strawmen. It advertised its alleged consultancy services online and was set up in Lithuania in 2016 by an Italian-based OCG," Eurojust explained.

The operation, which involved 250 judicial representatives and police across the three countries, resulted in the raiding of 55 properties and the freezing of assets totaling €11.5 million. The efforts of Eurojust and Europol were instrumental in facilitating and coordinating these international actions.

Eurojust highlighted the gravity of the situation, underscoring that the financial institution had offered money laundering services to thousands of criminals across the EU. Investigations into the OCG were initiated in 2021 in Italy, with collaboration from Latvian and Lithuanian authorities facilitated through Eurojust in 2022.

It is noteworthy that Lithuanian financial and judicial authorities had already taken measures in 2022, including the revocation of the institution's banking license and the initiation of bankruptcy proceedings due to non-compliance with anti-money laundering regulations.

Eurojust Vice-President Margarita Šniutytė-Daugėlienė, along with counterparts from Italy and Latvia, emphasized the pivotal role of coordinated efforts in combating transnational crime, highlighting Eurojust's facilitative role in fostering such cooperation.

The operations were carried out at the request of and by authorities including the Public Prosecutor’s Offices of Naples and Lecce in Italy, the Guardia di Finanza of Naples and Lecce, the Prosecutor General’s Office and the Rīga Judicial Region Prosecution Office in Latvia, and the Vilnius Regional Public Prosecutor’s Office and Vilnius County Police Headquarters in Lithuania.

By fLEXI tEAM