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A Spanish probe into Russian mafia 'could change the narrative of Putin in the West'



NATASHA

One of Russia's largest organized-crime syndicates allegedly operated out of Spain for more than a decade with the help of close allies of Vladimir Putin, then the deputy mayor of St. Petersburg, Bloomberg reports.
Prosecutors in Madrid have filed a 488-page petition to charge 27 people with money laundering and fraud in connection to the St. Petersburg's Tambov crime syndicate setting up shop in Spain in 1996.
Vladislav Reznik, currently the deputy head of the finance committee in Russia's lower house of parliament and a member of the Putin-aligned United Russia Party, faces charges for allegedly giving allies of the criminal organization's alleged leader, Gennady Petrov, positions in the Russian government in exchange for a share of the organization's assets.
"The criminal organization headed by Petrov managed to achieve a clear penetration of the state structures in [Russia], not only with the lawmaker Reznik but with several ministers," the Spanish prosecutors stated.
Reznik denies the accusations, insisting his relationship with Petrov is "purely social."
Petrov himself is unlikely to face a trial - he fled to Russia when his villa on the Spanish island of Majorca was raided by police in 2008, and Russia does not extradite its citizens.
Russian Gennadi Petrov (L) arrives at Palma's court accompanied by police officers during an operation against Russian mafia on the Spanish island of Mallorca June 14, 2008.
US officials briefed by Spanish prosecutor Jose Grinda in 2010 concluded that Putin runs a "virtual mafia" state which extends to Spain, where criminal networks have been established to do things the Kremlin can not.
The Russian president's connection to Spain dates back to the 1990's, when he allegedly took no less than 37 secret boat rides to meet with several well-known Russian mafia leaders living in southern Spain - all while he was the head of the FSB (the successor to the KGB)
Putin reportedly entered Spain illegally, bypassing Spanish passport control by entering through Gibraltar, according to the book "Putin's Kleptocracy" by Karen Dawisha.
"This Petrov probe could change the narrative of Putin in the West - from being a Stalinist tyrant defending the interests of his country to being a product of gangster Petersburg who united authorities with organized crime," Stanislav Belkovsky, a Kremlin adviser during Putin's first term who consults at Moscow's Institute for National Strategy, told Bloomberg.
Russian President Vladimir Putin speaks during a session of the St. Petersburg International Economic Forum 2015 (SPIEF 2015) in St. Petersburg, Russia, June 19, 2015.
The network of Russian authorities with alleged ties to Petrov is vast: from former prime minister and current chairman of Gazprom Viktor Zubkov and his son-in-law, former Defense Minister Anatoly Serdyukov, to Deputy Prime Minister Dmitry Kozak and longtime communications minister/Kremlin adviser Leonid Reiman.

Russian law-enforcement official, Nikolai Aulov - deputy of Viktor Ivanov, who runs the Federal Narcotics Service - was also one of Petrov's "most important" contacts in Moscow, according to the criminal complaint.


Putin Allies Aided Russian Mafia in Spain, Prosecutors Say


by Esteban DuarteHenry Meyer

Some of Vladimir Putin’s closest allies, including the chairman of OAO Gazprom, a deputy premier and two former ministers, helped one of Russia’s largest criminal groups operate out of Spain for more than a decade, prosecutors in Madrid say.
Members of St. Petersburg’s Tambov crime syndicate moved into Spain in 1996, when Putin was deputy mayor of the former czarist capital, to launder proceeds from their illicit activities, Juan Carrau and Jose Grinda wrote in a petition to the Central Court on May 29, a copy of which was obtained by Bloomberg News.
The 488-page complaint, the product of a decade of investigations into the spread of Russian organized crime during the Putin era, portrays links between the criminal enterprise and top law-enforcement officials and policy makers in Moscow. The petition, based on thousands of wiretaps, bank transfers and property transactions, is a formal request to charge 27 people with money laundering, fraud and other crimes. Approval by a judge would clear the way for a trial, but Spain doesn’t try people in absentia.
The only Russian official facing possible charges is Vladislav Reznik, a member of Putin’s ruling United Russia party and the deputy head of the finance committee in the lower house of parliament. The complaint, earlier reported by Spain’s El Mundo and ABC newspapers, says Reznik helped the alleged leader of the enterprise, Gennady Petrov, get his associates appointed to key posts in Russia in exchange for assets in Spain. Prosecutors are seeking to confiscate a property they say Reznik owns on the resort island of Majorca.
‘Clear Penetration’
“The criminal organization headed by Petrov managed to achieve a clear penetration of the state structures in his country, not only with the lawmaker Reznik but with several ministers,” the prosecutors say in the petition.
Putin himself is mentioned by name three times in the document, including in a partial transcript of a call between two alleged Tambov operatives in 2007. The men are discussing an issue with a hotel in the Alicante region and one refers to a house that he says Putin owns in nearby Torrevieja.
Putin himself is mentioned by name three times in the document
 “This is total nonsense,” Putin’s spokesman, Dmitry Peskov, said of the Spanish allegations. “It’s beyond the realm of reason.”
Reznik, in an interview in Moscow, denied any wrongdoing. He said his relationship with Petrov is “purely social” and that he would welcome the opportunity to travel to Spain and clear his name if a trial takes place.
Bank Rossiya
While accusations of graft are not uncommon in Russia, which is tied with Nigeria in Transparency International’s corruption perception ranking, few investigations have identified so many senior officials by name. The highest-ranking person publicly sanctioned under the U.S. Magnitsky Act, enacted in 2012 to punish Russians deemed complicit in the prison death of an accountant who alleged large-scale theft by officials, is a deputy general prosecutor.
Petrov was an early shareholder in Bank Rossiya, the St. Petersburg lender set up by some of Putin’s oldest allies and the first company sanctioned by the U.S. after Russia annexed Crimea from Ukraine. Spanish police arrested Petrov during a raid on his Majorca villa in 2008. He was later allowed to travel to Russia but never returned. Russia doesn’t allow the extradition of its citizens.
A lawyer for Petrov, Roberto Mazorriaga, said by e-mail that prosecutors haven’t provided any evidence to support their allegations.
‘Mafia’ State
Investigators in Spain have been at the vanguard of the fight against Russian organized crime, warning fellow NATO members for years of the dangers posed by what they call state-sanctioned syndicates, an issue that’s become more acute since the conflict in Ukraine rekindled Cold War distrust.
"This is total nonsense. It’s beyond the realm of reason"
After a briefing by Grinda, one of the prosecutors, in Madrid in 2010, U.S. officials concluded that Putin runs a “virtual mafia” state where the activities of criminal networks are indistinguishable from those of the government, according to a classifiedcable from the U.S. embassy in the Spanish capital that was published by WikiLeaks.
Russian security services control criminal groups and use them to do things the government “cannot acceptably do,” Grinda was cited as telling U.S. officials at the time. One mafia leader in Spain was actually a Russian intelligence officer tasked with “selling weapons to the Kurds to destabilize Turkey,” the embassy said in the cable.
Litvinenko Murder
A lawyer for the widow of dissident Russian agent Alexander Litvinenko, who died of radioactive poisoning in London in 2006, in January accused senior officials in Moscow of ordering Litvinenko’s death in part to prevent him from helping Spain root out Russian criminal networks.
The Kremlin has repeatedly denied having anything to do with Litvinenko’s murder. In March, Putin awarded a medal to the chief suspect in the ongoing U.K. probe, fellow KGB veteran Andrei Lugovoi, who’s now a member of parliament, for “services to the fatherland.”
Petrov used Spain as a base to carry out criminal activities mainly in Russia, including murder, arms trafficking, drug smuggling, extortion and fraud, the prosecutors say, repeating some of the accusations that led to his 2008 arrest. Political and judicial contacts in Russia offered him help, including advice on his personal safety; inside information about business dealings; the threat posed by other criminal groups; planned actions against organized crime; and the amount of influence he needed to exert, they say.
Gazprom, Defense
His network in Moscow, according to the document, includes Viktor Zubkov, the chairman of gas exporter Gazprom who was prime minister and first deputy premier from 2007 to 2012, and Zubkov’s son-in-law, former Defense Minister Anatoly Serdyukov.
Serdyukov “does business with Petrov” and Zubkov, who worked for Putin in the St. Petersburg government in the early 1990s, “favored Petrov’s organization with some political decisions,” the prosecutors say, without elaborating. Serdyukov’s lawyer, Genrikh Padva, declined to comment and Zubkov didn’t respond to a request for comment sent through Gazprom’s press service. Neither man is facing indictment.
Other officials mentioned as being “directly related” to Petrov’s group include Deputy Prime Minister Dmitry Kozak and Alexander Bastrykin, who runs the powerful Investigative Committee that oversees major criminal inquiries. Bastrykin and Putin both earned their law degrees from Leningrad State University in 1975. Kozak graduated from the same law school a decade later and worked in City Hall at the same time as Putin.
Post-Soviet Chaos
Kozak -- about whom no detail is provided in the complaint -- said he only knows of Petrov through media reports, according to his spokesman, Ilya Djous. Bastrykin’s committee said in a statement that it didn’t have any information corroborating the reported information of Spanish prosecutors.
Another senior Russian official at the time, Leonid Reiman, who was communications minister and a Kremlin adviser from 1999 to 2010, was a business partner of Petrov’s, the prosecutors say. Reiman has “no ties” to Petrov, OAO Angstrem, a technology company in Moscow that Reiman is chairman of, said by e-mail.
Petrov, 67, was an influential figure in St. Petersburg during the chaos that followed the collapse of the Soviet Union in 1991 and knew many of the city’s political elite, including Zubkov, Bastrykin and Kozak, two people who knew him at the time said on condition of anonymity.
78 Calls
Petrov proved to be influential in Moscow under President Putin, too, the Spanish prosecutors say. When Putin created the Investigative Committee as a counterweight to the Prosecutor General’s Office in 2007, Petrov helped secure Bastrykin’s appointment as its first chairman, they say, citing wire taps of calls between Petrov and one of Bastrykin’s future deputies.
Another law-enforcement official, Nikolai Aulov, is “one of the most important persons for Petrov” in Russia, according to the document. Aulov is a deputy of Viktor Ivanov, who runs the Federal Narcotics Service and is a former KGB colleague of Putin’s in Leningrad and later St. Petersburg.
Investigators logged 78 phone calls between Aulov and Petrov. In March 2008, according to the complaint, Petrov asked an associate to get Aulov to pressure Russia’s new customs chief to facilitate port shipments for his group.
The drug agency’s press service referred requests for comment from Aulov and Ivanov to an interview Ivanov gave to the Kommersant newspaper this month. In it, Ivanov said he doesn’t know what “dirty political games” the Spanish are playing because Aulov helped bust a criminal gang led by Petrov in St. Petersburg in the early 1990s.
“This Petrov probe could change the narrative of Putin in the West -- from being a Stalinist tyrant defending the interests of his country to being a product of gangster Petersburg who united authorities with organized crime,” said Stanislav Belkovsky, a Kremlin adviser during Putin’s first term who consults at Moscow’s Institute for National Strategy.


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Controversial Russian bankers target Crimea


by OCCRP

Editor's Note: This investigation was done by the Washington, D.C.-based Organized Crime and Corruption Reporting Project, a Kyiv Post partner.

This story and others in the Russian Laundromat series can be read on OCCRP's website here.
Some of the first banks that streamed into Crimea after Russia wrested control of the region from Ukraine in 2014 were better known for laundering money than banking.
Five of the banks have questionable histories, including ties to the $20 billion money laundering scandal known as the Russian Laundromat revealed last year by the Organized Crime and Corruption Reporting Project. Although most of these banks were small and barely known in Russia, they have grown significantly since arriving in Crimea.
Their presence raises questions about Russia’s commitment to eliminate money laundering, amid concerns that Crimea could become another major international money laundering and organized crime zone like Transnistria, Ossetia and other disputed territories on the Russian border.
Financial meltdown
It’s been more than a year since Crimean voters chose to leave Ukraine and join Russia in a disputed referendum. That quick decision led to a wholesale meltdown of the region’s banking industry.
Ukrainian banks operating in Crimea rushed to close almost 1,000 branches in Crimea, following a ban imposed by the National Bank of Ukraine on financial operations in the contested territory. As they left, they may have taken with them the assets and deposits of some local account holders although how much is not clear. They also left with loans they gave out often unpaid.
At the time, Ukraine’s Dnipropetrovsk-based Privatbank was the largest network with 337 branches followed by the Ukrainian state-owned Oshchadbank, with more than 250 branches. Ukraine’s banking regulator refused to cooperate with the Russian occupation authority as relations deteriorated.
Trade with neighboring Ukraine screeched to a halt. Then waves of international sanctions hit the region. Mastercard and Visa suspended operations making life even harder for consumers as suddenly their credit cards became useless plastic.
The Black Sea Bank for Reconstruction and Development and the Morskoy Bank, two local Crimean banks, stayed behind but they couldn’t handle the overwhelming customer demand. People were forced to stand in queues for days to pay fees, taxes and duties of vital importance to their businesses; some fainted from the strain.
The new rulers of the Crimean Federal District attempted to establish a new financial system even as they were hit with a sharp drop in the ruble and a severe shortage of ruble reserves. They quickly passed a law to create a new financial infrastructure and a brand-new financial institution, the Fund for Depositor Protection. The FDP’s role was to handle compensation payouts to Ukrainian banks’ depositors and to administer the 'nationalized' property of the Ukrainian banks.
Closely following Kremlin troops into this chaos came a few small Russian banks with controversial pasts and good connections. They were the first to benefit from the nationalization of property. They would be followed by more respected banks later – there are now 28 different Russian banks on the peninsula – but the first benefited the most.
From a U.S. prison to Crimean shores
On April 4, 2014, Genbank became the first Russian bank to open its doors in Sevastopol just two weeks after the peninsula became part of the Russian Federation. At the time, Genbank was unknown to most Russians, having branches only in Omsk and Rostov-on-Don.
The small bank was ranked 315th place among Russian banks in terms of total assets managed. But, since the annexation of Crimea, Genbank has shown tremendous growth. According to its website , the bank operates more than 90 offices in Crimea and is the second largest banking network on the peninsula.
The FDP leased to Genbank real estate and other property previously owned by Ukrainian banks, including ATMs, terminals and infrastructure. Genbank moved into the offices of Ukrainian banks that had pulled out including JCB Pivdennyi, JSC Kredobank and JSB Brokbusinessbank.
Genbank offers its clients Russian Unistream and CONTACT wire transfer services and issues credit cards, with the restriction that they cannot be used for internet payments. The bank is connected to the international payment system via Rosbank, a Moscow-based subsidiary of Societe Generale.
Genbank is partially owned by the controversial Russian banker, Evgeny Dvoskin, who controls 4.8 per cent of the share capital; his wife heads the bank’s board. Dvoskin has been investigated several times by various branches of Russian law enforcement for alleged involvement in money laundering, but has yet to face charges.
Instead, those who have investigated Dvoskin have found themselves in trouble and even sentenced to jail.
Tackling money laundering
In 2006 a group of operatives from the Russian Ministry of Interior started an investigation into a group of Russian banks involved in large-scale money laundering operations. Their effort, they say, was among the largest financial investigation ever started in Russia. Officers of the group, most of them retired today, told OCCRP that the turnover of the money-laundering operations they tracked during the three-year investigation exceeded 1 trillion rubles.
The enforcement effort was led by Dmitry Tselyakov, then a major in the Department to Combat Organized Crime and Terrorism. Tselyakov told OCCRP reporters that his group was able to identify a number of organized crime gangs that controlled dozens of small Russian banks. These banks, according to Tselyakov, didn’t conduct any real banking activities, but instead received huge amounts of illegal money in their accounts and then wired the money offshore or turned it into cash.
According to Tselyakov, Evgeny Dvoskin was one of the main characters in their investigation.
“Dvoskin, together with his ex-partner Ivan Myazin, controlled a number of Russian banks through (front men). Later, the Central Bank of Russia revoked the licenses of these banks for laundering criminal proceeds. During just several years these banks laundered and sent to offshore companies dozens of billions of dollars,” Tselyakov said.
Dvoskin’s checkered past is documented in a criminal case file which was put together by Tselyakov’s group with the help of the American FBI.
According to the file, Dvoskin was born 1966 in Odessa and, in 1977, moved to the United States with his parents. At the time he used the surname, Slusker. But in 2001, he was deported from the US after a long history of criminal charges for using forged documentation and, after coming back to Ukraine, took his mother’s surname Dvoskin.
According to the FBI files obtained by OCCRP reporters, while in the US Dvoskin was involved in a number of criminal activities. He was arrested for the first time in December 1989 for robbery and for possession of illegal drugs. The following year, Dvoskin was again arrested for theft.
Over the next 10 years Dvoskin was arrested and sentenced to jail numerous times. At various times he was accused of charges typical of a member of an organized crime gang including illegal possession of a firearm, robbery, bribery of public officials, possession of stolen property and stock fraud.
In a letter to the Russian Ministry of Interior, the FBI claimed that Dvoskin shared a cell in a US prison with Vyacheslav Ivankov, also known as “Yaponchik”, a Russian vor v zakon or “thief-in-law” who was one of the best-known leaders in the ranks of the Russian organized crime. Ivankov was shot by a sniper in 2009 in Moscow and died several months later in the hospital.
The FBI warned Russian police that Dvoskin was likely a close associate of Ivankov.
After coming back to Russia and changing his surname, Dvoskin entered the banking business. In an interrogation with the Russian police, Dvoskin explained his role in the banking sector as “providing safety and stability of financial flows for my clients. These flows go to different banks that I recommend as a financial advisor. I have a broker’s license, got an … education in America, and have great experience in this sphere. I am well known in the banking system. Thus my clients are different banks and companies. The list is very long.”
According to documents from the case file, Dvoskin and his ex-partner Myazin cooperated with scores of Russian banks. Many of those banks were later charged by Russian authorities with money-laundering.
For example, Dvoskin and Myazin worked with Migros bank, Siberian Bank of Development and Falcon bank. All three banks lost their licenses in 2006 and 2007 for violation of anti-money laundering regulations. The amount of money laundered just in these banks totaled about $3 billion.
Tselyakov claims that once his team started to investigate Dvoskin’s banks, they faced unprecedented pressure. “We wiretapped Dvoskin and his partners and found that his group had influential friends in the Russian secret services. They tried to fire me many times. One day the file cabinet of our investigator who led the case against Dvoskin was searched by officers of the Ministry of Interior and Russian FSB security service. They seized all the important documents from the criminal case,” claimed Tselyakov.
In 2008, Tselyakov, together with his partner, were arrested by law enforcement for attempting to defraud another banker of €1 million euros from another banker. That banker was another controversial Russian businessman, German Gorbuntsov, known in the media as “the black banker”. Dvoskin and Gorbuntsov knew each other Gorbuntsov would later testify. Tselyakov said the charges were false and designed to get rid of him.
Gorbuntsov and his partners have faced multiple charges of money laundering and fraud and a business partner of Gorbuntsov’s was arrested for murdering the country’s top banking regulator. Gorbuntsov is currently charged with money laundering in the Republic of Moldova and is wanted by Russian oligarchs who allege he stole hundreds of millions of dollars from them. Tselyakov was found guilty of fraud and spent more than four years in jail. The criminal case against Dvoskin was stopped and the banker got legal protection from the FSB as a witness.
Meanwhile, the Russian business daily Kommersant is reporting that Dvoskin’s bank in Crimea will merge with the state owned Crimean bank, ChBRR, although the report could not be confirmed and no details are available.
Users of the 'Laundromat'
Genbank was not the only bank to open. Some have connections to a very large money laundering scandal.
In 2014, OCCRP identified what is believed to be the biggest money-laundering operation in Eastern Europe, called the “Russian Laundromat.”
Between 2011 and 2014, organized criminals and corrupt politicians moved $20 billion in dirty funds from Russia to Moldova and then to the European Union.
The complex scheme included dozens of Russian banks including some controlled by Russian President Vladimir Putin’s cousin, Igor Putin. The money transfers were supported by fake contracts between phantom offshore companies run by proxies who hid the real owners.
The bogus transfers were then legitimized in court decisions by Moldovan judges, many of whom are now under investigation for bribery. Moldovan authorities have launched a criminal investigation into the “Laundromat” scheme but so far Russian law enforcement has not cooperated with Moldovan authorities.
Meanwhile, some of the Russian bankers involved in the “Laundromat” operations are now doing business in Crimea. According to documents seen by OCCRP reporters, Baltica, a bank from St. Petersburg, was one of the most active users of the “Laundromat.” Moldovan authorities claimed that bogus companies with accounts in Baltica moved more than US$ 2 billion to Moldova from 2011 till 2014.
The director of Baltica, Oksana Chernyak, denied any wrongdoing in a letter to OCCRP.
Businessman Oleg Vlasov is Baltica’s largest shareholder, owning 20 percent of the bank. Vlasov was also mentioned in a number of documents generated by Tselyakov’s anti-money laundering group. “According to wiretaps, Vlasov was connected to the biggest money launderers in Russia. We even interrogated him, but didn’t manage to bring any charges against him. The whole investigation was stopped and I was arrested,” says Tselyakov.
Vlasov, together with some partners from Baltica, controls the Verhnevolzhskiy bank. Verhnevolzhskiy was established in 1990 but before coming to Crimea it mainly operated in the Yaroslavskiy region of Russia, where it had a number of subsidiaries in small regional towns.
Verhnevolzhskiy entered Crimea in 2014 and now operates 26 offices. In December 2014, the Central Bank of Russia fined Verhnevolzhskiy for violating anti-money laundering regulations. The Central Bank didn’t disclose any details of the violation.
Another Russian bank which was involved in the "Laundromat" is Tempbank. Today it also operates two offices in Crimea. Tempbank was established in 1989 and in 2014 was included in a US sanctions list made in response to events in Syria and not Crimea.
According to a U.S. Department of the Treasury press release, the American government took these actions to put pressure on the Syrian regime and its supporters.
“The Treasury Department designated Moscow-based Tempbank and Mikhail Gagloev, a senior executive of the bank, for providing material support and services to the Government of Syria, including the Central Bank of Syria and SYTROL, Syria’s state oil marketing firm,” said the U.S. Department of Treasury in its statement.
More money laundering connections
K2 is a small bank from the Northern Caucasus republic of Karachay-Cherkessia and is ranked the 471th largest bank in Russia based on assets under its management. The bank was established in 1994 in Vladikavkaz, Northern Ossetia.
Since then, the bank has changed its name and headquarters a few times. After the annexation of Crimea, K2 opened six offices in Sevastopol, Simferopol, Feodosia and Evpatoria. The bank doesn't operate any of the basic tools used by commercial banks nowadays such as ATMs or pay terminals -- kiosks operated by banks to allow customers to pay their bills easily.
The share capital of the bank is divided between 14 people, with each of them controlling a stake of up to 10 percent. These shareholders are not well known in banking circles in Russia, but OCCRP found that some of them were connected with other financial organizations shut down by authorities for money laundering.
One of the main shareholders of K2 with 10 percent is Margarita Chukanova. According to the Russian commercial register, in 2006 Chukanova was a minority shareholder in the nonbanking credit organization, RK-Center. The operating license of RK-Center was revoked by the Central Bank of Russia in 2006 for money-laundering violations. The Central Bank claimed that clients of the RK-Center made fake payments in excess of 25 billion rubles or about US$ 1 billion at the time to foreign companies.
Another small Moscow-based bank which has opened in Crimea is Adelantbank. The bank was established in 1992 as Lesopromishlenniy bank and in 2012 changed its name to the current one. Adelantbank ranks 561th among Russian banks based on assets under its management. . Adelantbank operates three offices in Crimea, one in Evpatoria and two in Simferopol. The bank has no ATMs or pay terminals and one of its branches in Simferopol is located in the office previously occupied by the Kyiv-based Finance and Credit bank.
The share capital of the bank is divided between 11 persons, all of them controlling small stakes.
One of owners of Adelantbank is Maxim Lipskiy. According to the Russian Central Bank, in 2014, Lipskiy through a UK company, Brys Worldwide Ltd, held a significant stake (9.8 per cent) in another Moscow bank, Sovinkom. In 2014, the Central Bank revoked the license of Sovinkom for violation of various banking laws including anti-money-laundering. The regulator claimed that in 2013 clients of Sovinkom made dubious financial transactions worth more than 6.8 billion rubles (about US$ 207 million).
Another owner is Anna Lyga who, in 2013, through a set of Russian companies, was an owner of 6,6 % of Genbank, the bank with the second largest network in Crimea.




Bosnia and Herzegovina: Organized Crime Arrests at Country's Leading Pharma Firm


WRITTEN BY IGOR

Bosnian authorities have arrested seven people suspected of involvement in organized crime offences while working for, or doing business with, the country's largest pharmaceutical company, Bosnalijek.
 Investigators are still working to confirm the total cost of the criminal activities to official budgets, but prosecutors say it amounts to many millions of Bosnian marks over the course of a decade.
After an extensive investigation lasting many months, during which investigators say they documented irregularities in Bosnalijek's business dealings, authorities launched a police operation codenamed "Buyer".
The first five arrests took place on Wednesday, when state police raided nine locations in Sarajevo and reportedly detained Sefik Handzic, Amar Arslanagic, Aida Selvic, Izet Arslanagic and Jasmin Sepo.
Two more suspects, named in local press as Hasan Sepo and Telibecirevic Samir, were arrested the next day.
An arrest warrant for Edin Arslanagic, who is currently abroad, was also issued. According to Slobodna Bosna, Arslanagic contacted his lawyers and said he will arrive in Bosnia on Sunday. 
Police are still seeking Bojan Kebo, for whom they also have an arrest warrant.
The suspects are accused of organizing a criminal group that commited tax fraud, abuse of power, forgery of official documents, and signed contracts that damage Bosnalijek between 2002 and 2012.
Edin Arslanagic and his son Amar are both former directors of Bosnalijek, and Šefik Handžićis the former director of Bosnalijek's finance department. The other suspects hold positions at Bosnalijek, as well as the Sarajevo-based companies Brstanica and Carpe Diem.
Federal TV reported on one of the alleged offences, involving fraudulent practices in the cooperation between Bosnalijek and Brstanica. According to the report, employees of Bosnalijek were not paid a stipend for meals, but instead went to eat at a restaurant where Brstanica, owned by Hasan Sepo, provided them with meals.
Finance police reportedly found that Brstanica billed Bosnalijek for 346,428 more meals than was necessary, thereby creaming off an illegal profit of more than US$ 1.9 million.
All suspects were ordered to pre-trial detention lasting 30 days.






Controversial Russian Bankers Target Crimea


WRITTEN BY EVGENY ZHURAVLEV

Evgeny DvoskinSome of the first banks that streamed into Crimea after Russia wrested control of the region from Ukraine in 2014 were better known for laundering money than banking.
Five of the banks have questionable histories, including ties to the US$ 20 billion money laundering scandal known as the Russian Laundromat revealed last year by OCCRP.  Although most of these banks were small and barely known in Russia, they have grown significantly since arriving in Crimea.
Their presence raises questions about Russia’s commitment to eliminate money laundering, amid concerns that Crimea could become another major international money laundering and organized crime zone like Transnistria, Ossetia and other disputed territories on the Russian border.
 The Financial Meltdown
It’s been over a year since Crimean voters chose to leave Ukraine and join Russia in a disputed referendum. That quick decision led to a wholesale meltdown of the region’s banking industry.
Ukrainian banks operating in Crimea rushed to close almost 1000 branches in Crimea, following a ban imposed by the National Bank of Ukraine on financial operations in the contested territory. As they left, they may have taken with them the assets and deposits of some local account holders although how much is not clear. They also left with loans they gave out often unpaid.
At the time, Ukraine’s Dnipropetrovsk-based Privatbank was the largest network with 337 branches followed by the Ukrainian state-owned Oshchadbank, with more than 250 branches. Ukraine’s banking regulatorrefused to cooperate with the Russian occupation authority as relations deteriorated.
Trade with neighboring Ukraine screeched to a halt.  Then waves of international sanctions hit the region. Mastercard and Visa suspended operations making life even harder for consumers as suddenly their credit cards became useless plastic.
The Black Sea Bank for Reconstruction and Development and the Morskoy Bank, two local Crimean banks, stayed behind but they couldn’t handle the overwhelming customer demand. People were forced to stand in queues for days to pay fees, taxes and duties of vital importance to their businesses; some fainted from the strain.
The new rulers of the Crimean Federal District attempted to establish a new financial system even as they were hit with a sharp drop in the ruble and a severe shortage of ruble reserves. They quickly passed a law to create a new financial infrastructure and a brand-new financial institution, the Fund for Depositor Protection(FDP).
The FDP’s role was to handle compensation payouts to Ukrainian banks’ depositors and to administer the 'nationalized' property of the Ukrainian banks.
Closely following Kremlin troops into this chaos came a few small Russian banks with controversial pasts and good connections.  They were the first to benefit from the nationalization of property. They would be followed by more respected banks later – there are now 28 different Russian banks on the peninsula – but the first benefited the most.
 From a US prison cell to Crimean shores
 On April 4, 2014, Genbank became the first Russian bank to open its doors in Sevastopol  just two weeks after the peninsula became part of the Russian Federation. At the time, Genbank was unknown to most Russians, having branches only in Omsk and Rostov-on-Don.
The small bank was ranked 315th place among Russian banks in terms of total assets managed.  But, since the annexation of Crimea, Genbank has shown tremendous growth. According to its website , the bank operates more than 90 offices in Crimea and is the second largest banking network on the peninsula.
The FDP leased to Genbank real estate and other property previously owned by Ukrainian banks,  including ATMs, terminals and infrastructure. Genbank moved into the offices of Ukrainian banks that had pulled out including JCB Pivdennyi, JSC Kredobank and JSB Brokbusinessbank.
Genbank offers its clients Russian Unistream and CONTACT wire transfer services and issues credit cards, with the restriction that they cannot be used for internet payments. The bank is connected to the international payment system via Rosbank, a Moscow-based subsidiary of Societe Generale.
Genbank is partially owned by the controversial Russian banker, Evgeny Dvoskin, who controls 4.8 per cent of the share capital; his wife heads the bank’s board. Dvoskin has been investigated several times by various branches of Russian law enforcement for alleged involvement in money laundering, but has yet to face charges.
Instead, those who have investigated Dvoskin have found themselves in trouble and even sentenced to jail.
  Tackling Money Laundering
In 2006 a group of operatives from the Russian Ministry of Interior started an investigation into a group of Russian banks involved in large-scale money laundering operations. Their effort, they say, was among the largest financial investigation ever started in Russia. Officers of the group, most of them retired today, told OCCRP that the turnover of the money-laundering operations they tracked during the three-year investigation exceeded 1 trillion rubles.
The enforcement effort was led by Dmitry Tselyakov, then a major in the Department to Combat Organized Crime and Terrorism. Tselyakov told OCCRP reporters that his group was able to identify a number of organized crime gangs that controlled dozens of small Russian banks. These banks, according to Tselyakov, didn’t conduct any real banking activities, but instead received huge amounts of illegal money in their accounts and then wired the money offshore or turned it into cash.
According to Tselyakov, Evgeny Dvoskin was one of the main characters in their investigation.
“Dvoskin, together with his ex-partner Ivan Myazin, controlled a number of Russian banks through (front men). Later, the Central Bank of Russia revoked the licenses of these banks for laundering criminal proceeds. During just several years these banks laundered and sent to offshore companies dozens of billions of dollars,” Tselyakov said.
Dvoskin’s checkered past is documented in a criminal case file which was put together by Tselyakov’s group with the help of the American FBI.
According to the file, Dvoskin was born 1966 in Odessa and, in 1977, moved to the United States with his parents. At the time he used the surname, Slusker. But in 2001, he was deported from the US after a long history of criminal charges for using forged documentation and, after coming back to Ukraine, took his mother’s surname Dvoskin.
According to the FBI files obtained by OCCRP reporters, while in the US Dvoskin was involved in a number of criminal activities. He was arrested for the first time in December 1989 for robbery and for possession of illegal drugs. The following year, Dvoskin was again arrested for theft.
Over the next 10 years Dvoskin was arrested and sentenced to jail numerous times. At various times he was accused of charges typical of a member of an organized crime gang including illegal possession of a firearm, robbery, bribery of public officials, possession of stolen property and stock fraud.
In a letter to the Russian Ministry of Interior, the FBI claimed that Dvoskin shared a cell in a US prison with Vyacheslav Ivankov, also known as “Yaponchik”, a Russian vor v zakon or “thief-in-law” who was one of the best-known leaders in the ranks of the Russian organized crime.  Ivankov was shot by a sniper in 2009 in Moscow and died several months later in the hospital.
The FBI warned Russian police that Dvoskin was likely a close associate of Ivankov.
After coming back to Russia and changing his surname, Dvoskin entered the banking business. In an interrogation with the Russian police, Dvoskin explained his role in the banking sector as “providing safety and stability of financial flows for my clients. These flows go to different banks that I recommend as a financial advisor. I have a broker’s license, got an … education in America, and have great experience in this sphere. I am well known in the banking system. Thus my clients are different banks and companies. The list is very long.”
According to documents from the case file, Dvoskin and his ex-partner Myazin cooperated with scores of Russian banks. Many of those banks were later charged by Russian authorities with money-laundering.
For example, Dvoskin and Myazin worked with Migros bank, Siberian Bank of Development and Falcon bank. All three banks lost their licenses in 2006 and 2007 for violation of anti-money laundering regulations. The amount of money laundered just in these banks totaled about US$ 3 billion.
Tselyakov claims that once his team started to investigate Dvoskin’s banks, they faced unprecedented pressure. “We wiretapped Dvoskin and his partners and found that his group had influential friends in the Russian secret services. They tried to fire me many times. One day the file cabinet of our investigator who led the case against Dvoskin was searched by officers of the Ministry of Interior and Russian security service (FSB). They seized all the important documents from the criminal case,” claimed Tselyakov.
In 2008, Tselyakov, together with his partner, were arrested by law enforcement for attempting to defraud another banker of €1 million euros from another banker. That banker was another controversial Russian businessman, German Gorbuntsov, known in the media as “the black banker”.  Dvoskin and Gorbuntsov knew each other Gorbuntsov would later testify. Tselyakov said the charges were false and designed to get rid of him.
Gorbuntsov and his partners have faced multiple charges of money laundering and fraud and a business partner of Gorbuntsov’s was arrested for murdering the country’s top banking regulator.  Gorbuntsov is currently charged with money laundering in the Republic of Moldova and is wanted by Russian oligarchs who allege he stole hundreds of millions of dollars from them.
Tselyakov was found guilty of fraud and spent more than four years in jail. The criminal case against Dvoskin was stopped and the banker got legal protection from the FSB as a witness.
Meanwhile, the Russian business daily Kommersant is reporting that Dvoskin’s bank in Crimea will merge with the state owned Crimean bank, ChBRR, although the report could not be confirmed and no details are available.
 Users of the “Laundromat”
Genbank was not the only bank to open. Some have connections to a very large money laundering scandal.
 In 2014, OCCRP identified what is believed to be the biggest money-laundering operation in Eastern Europe, called the “Russian Laundromat”. Between 2011 and 2014, organized criminals and corrupt politicians moved US$ 20 billion in dirty funds from Russia to Moldova and then to the European Union.
The complex scheme included dozens of Russian banks including some controlled by Russian President Vladimir Putin’s cousin, Igor Putin.  The money transfers were supported by fake contracts between phantom offshore companies run by proxies who hid the real owners.
The bogus transfers were then legitimized in court decisions by Moldovan judges, many of whom are now under investigation for bribery.  Moldovan authorities have launched a criminal investigation into the “Laundromat” scheme but so far Russian law enforcement has not cooperated with Moldovan authorities.
Meanwhile, some of the Russian bankers involved in the “Laundromat” operations are now doing business in Crimea. According to documents seen by OCCRP reporters, Baltica, a bank from St. Petersburg, was one of the most active users of the “Laundromat.” Moldovan authorities claimed that bogus companies with accounts in Baltica moved more than US$ 2 billion to Moldova from 2011 till 2014.
The director of Baltica, Oksana Chernyak, denied any wrongdoing in a letter to OCCRP.
Businessman Oleg Vlasov is Baltica’s largest shareholder, owning 20 percent of the bank.  Vlasov was also mentioned in a number of documents generated by Tselyakov’s anti-money laundering group. “According  to wiretaps, Vlasov was connected to the biggest money launderers in Russia. We even interrogated him, but didn’t manage to bring any charges against him. The whole investigation was stopped and I was arrested,” says Tselyakov.
Vlasov, together with some partners from Baltica, controls the Verhnevolzhskiy bank. Verhnevolzhskiy was established in 1990  but before coming to Crimea it mainly operated in the Yaroslavskiy region of Russia, where it had a number of subsidiaries in small regional towns.
Verhnevolzhskiy entered Crimea in 2014 and now operates 26 offices. In December 2014, the Central Bank ofRussia fined Verhnevolzhskiy for violating anti-money laundering regulations.  The Central Bank didn’t disclose any details of the violation.
Another Russian bank which was involved in the "Laundromat" is Tempbank. Today it also operates two offices in Crimea. Tempbank was established in 1989  and in 2014 was included in a US sanctions list made in response to events in Syria and not Crimea.
According to a U.S. Department of the Treasury press release, the American government took these actions to put pressure on the Syrian regime and its supporters. “The Treasury Department designated Moscow-based Tempbank and Mikhail Gagloev, a senior executive of the bank, for providing material support and services to the Government of Syria, including the Central Bank of Syria and SYTROL, Syria’s state oil marketing firm”, said the U.S. Department of Treasury in its statement.
 More Money Laundering Connections
K2 is a small bank from the Northern Caucasus republic of Karachay-Cherkessia and is ranked the 471th largest bank in Russia based on assets under its management.  The bank was established in 1994 in Vladikavkaz, Northern Ossetia.
Since then, the bank has changed its name and headquarters a few times. After the annexation of Crimea, K2 opened six offices in Sevastopol, Simferopol, Feodosia and Evpatoria. The bank doesn't operate any of the basic tools used by commercial banks nowadays such as ATMs or pay terminals -- kiosks operated by banks to allow customers to pay their bills easily.
The share capital of the bank is divided between 14 people, with each of them controlling a stake of up to 10 percent. These shareholders are not well known in banking circles in Russia, but OCCRP found that some of them were connected with other financial organizations shut down by authorities for money laundering.
One of the main shareholders of K2 with 10 percent is Margarita Chukanova. According to the Russian commercial register, in 2006 Chukanova was a minority shareholder in the nonbanking credit organization, RK-Center. The operating license of RK-Center was revoked by the Central Bank of Russia in 2006 for money-laundering violations. The Central Bank claimed that clients of the RK-Center made fake payments in excess of 25 billion rubles or about US$ 1 billion at the time to foreign companies.
Another small Moscow-based bank which has opened in Crimea is Adelantbank. The bank was established in 1992 as Lesopromishlenniy bank and in 2012 changed its name to the current one.  Adelantbank ranks 561th among Russian banks based on assets under its management. . Adelantbank operates three offices in Crimea, one in Evpatoria and two in Simferopol. The bank has no ATMs or pay terminals and one of its branches in Simferopol is located in the office previously occupied by the Kyiv-based Finance and Credit bank.
The share capital of the bank is divided between 11 persons, all of them controlling small stakes.
One of owners of Adelantbank is Maxim Lipskiy. According to the Russian Central Bank, in 2014, Lipskiy through a UK company, Brys Worldwide Ltd, held a significant stake (9.8 per cent) in another Moscow bank,Sovinkom. In 2014, the Central Bank revoked the license of Sovinkom for violation of various banking laws including anti-money-laundering. The regulator claimed that in 2013 clients of Sovinkom made dubious financial transactions worth more than 6.8 billion rubles (about US$ 207 million).

Another owner is Anna Lyga who, in 2013, through a set of Russian companies, was an owner of  6,6 % of Genbank, the bank with the second largest network in Crimea.