Belgian and Latvian authorities have seized Russian assets in a notorious money-laundering affair that saw the killing of whistleblower Sergei Magnitsky.
A Belgian investigating judge, Bruno de Hous, seized some €400,000 from the income of an apartment sale in the Belgian city of Antwerp.
He also charged two Russians – Sergey Medvedev and Irina Terkina – with money laundering.
De Hous took the steps last year.
But his investigation is still confidential and the British hedge fund from which the money was originally embezzled, Hermitage Capital in London, only learned of the developments last week.
“Hermitage confirms that Belgian authorities seized the proceeds of sale of the property in Antwerp acquired by the Russian couple [Medvedev and Terkina],” a Hermitage spokesman told EUobserver.
“It’s unclear where the Russians are at present,” Karel De Meester, a lawyer acting for Hermitage on behalf of Belgian law firm Van Cauter Advocaten, also said.
“We requested the judge to conduct additional investigations. If additional proceeds of the money laundering can be found in Belgium, of course we’ll ask them to be seized as well,” De Meester said.
The flat in question was a chic duplex on Black Sister Street in Antwerp’s old town, which EUobserver revealed in a former article.
The Russians bought it in 2008 and sold it for a nice profit in 2019.
But the money was just part of €4m laundered by the minions of Russian officials and mobsters in Belgian banks, according to Hermitage.
And that was part of €200m laundered in multiple EU countries after the crime group embezzled it from Hermitage in Russia and put to death the firm’s lawyer, Magnitsky, when he spoke out.
Following the money led Hermitage to expose the biggest laundering scandal in EU history – the €200bn Danske Bank affair in 2018.
The EU and US have adopted landmark human-rights sanctions in Magnitsky’s name.
Authorities in Estonia, France, the Netherlands, Switzerland, and the US have also confiscated assets amounting to more than €40m over the years.
And Latvia, as well as Belgium, joined them last week, when authorities seized a flat worth €230,000 in a trendy part of Riga.
“Real estate was confiscated due to the discovery … it was acquired for money related to the Magnitsky case,” Pēteris Bauska, the head of the economic crime unit in Latvia’s police force, told EUobserver.
“The real estate was acquired by a citizen of the Russian Federation in return for a temporary residence permit,” Bauska said.
The Latvian modus operandi recalled the Belgian one – using unknown people to buy normal things in order to evade controls.
And the stolen funds, in both instances, flowed in via banks in Cyprus, Estonia, and Latvia in the name of dodgy shell-firms.
“Financing for the acquisition of the [Riga] property was received from a shell company in Cyprus, which was controlled by Dmitry Kluyev, a [Russian] person associated with an organised criminal group,” Bauska told this website.
Money laundering cases can take years to crack due to their complexity.
“The cash flow in offshore companies’ accounts was intense and merged with other money to make it more difficult to track,” Bauska said.
“This is a ‘Laundromat’ case involving hundreds of companies through whose accounts money flowed into at least six Latvian banks,” he added.
But the Magnitsky case has also dragged out because not everyone plays ball.
The Latvian police operation involved “at least 10 foreign law enforcement authorities”, Bauska noted.
He did not say if Cyprus helped Latvia.
But Cyprus, where Kluyev, the alleged Russian mob chief, owned property and bank accounts, has not seized anything or charged anybody.
Meanwhile, Russia has put pressure on Cyprus to shut down Hermitage’s lawyers in Nicosia.
And it has tried to mystify EU authorities with disinformation, for instance: that Hermitage owner Bill Browder was a US spy who murdered Magnitsky himself in a false-flag attack on Russia’s image.
“So far, no one has been indicted and no assets have been frozen [in Cyprus],” Browder told EUobserver.
“The only thing to happen in Cyprus is that authorities there have been trying to cooperate with a Russian prosecutor’s office in the Russians’ trumped up case against me”, he added.
Bauska, the Latvian police officer, said “there was no pressure [on Latvia] from the Russian Federation,” during his investigation.
“However, there were some problems with the execution of the MLA [Mutual Legal Assistance request], namely that the Russian side revealed facts and provided information from its point of view,” he added.
And all that left the lion’s share of the stolen €200m still circulating in the EU financial system.
The Kluyev group bought the flat in Antwerp for €260,000 in 2008 and sold it for over €400,000 some 10 years later.
And that’s why money laundering is deemed a “perpetual offence”, with no statute of limitations, in Belgian law.
“The money is always changing hands, acquiring more value, and with every subsequent transaction, a new crime is deemed to have been committed,” an official in Belgium’s financial crime unit, the CTIF-CFI, previously told this website.