Magnitsky Money tracked down in France

Photo: AP/Scanpix

On the hunt for «Magnitsky Money» as it has come to be called, French police used data from Office of Estonian Prosecutor General to trigger criminal case citing money laundering and arrested dozens of millions of euros that had arrived via Estonian banks, the former Sampo Bank being the dominant source. As assured by prosecutor general, Estonia has in all likelihood been but a transition nation for the money stolen from Russia and not its destination.

As told the international journalistic association writing about corruption and organised crime (the OCCRP, in cooperation with which Postimees is publishing this article) by the Hermitage Foundation which for years has been fighting Russian authorities over 5.4 billion roubles, preliminary investigations were launched in France this February as requested by prosecutor Ulrika Delaunay-Weiss.

The preliminary investigations are to find out about alleged money laundering and related activities in France, Luxemburg and Monaco pointing towards organised crime.

Based on data obtained by the OCCRP network, it may be claimed that the activity of the French prosecutor is based on data received from Estonian prosecutor’s office showing that, presumably in the winter and spring of 2008, at least €37m of suspicious money was transferred from Estonian Sampo Bank (Danske Bank’s branch in Estonia) and Hansapank (Swedbank Group’s subsidiary, since 2009 named Swedbank) such as is now being linked to the Magnitsky case (as the incident originating in Russia is known in international media). Now, a large part of these millions has been frozen in accounts of banks in France, Luxembourg and Monaco. Real estate has also been arrested, such as has been purchased for the selfsame suspicious money.

«Largely, the arrests in France happened thanks to the excellent job by Estonian prosecutors,» said Roman Anin, a reporter at the independent Novaya Gazeta weekly in Moscow who for has been dealing with the Magnitsky case for years.

All said frozen bank accounts belong to a businesswoman from Russia and firms linked to her. Postimees knows the name of the lady (who was briefly arrested at the beginning of the preliminary investigations) and her companies, but for the best interests of the investigation underway in France OCCRP deems it impossible to publish these. In Estonia, the commercial register reveals no links by said lady to any companies. After a short stop in Estonia, the money just moved to her accounts in Europe.

Under Magnitsky case we mean 5.4 billion roubles (€155m according to then rate) stolen from Russian state budget in 2007 under disguise of income tax returns. The theft was discovered by jurist Sergei Magnitsky then employed in a leading Russian investment fund Hermitage Capital who published the names of Russian law enforcement cadres he thought were involved.

Soon, the militiamen named by Mr Magnitsky arrested him under improvised charges. In 2009, Mr Magnitsky died in a preliminary investigation prison in Moscow.

That triggered a large political scandal leading USA and EU to blacklist Russian officials related to Mr Magnitsky’s death, in its turn bringing about a worsening of US-Russia relations.

Over four years ago, investigative journalists in several nations teamed up to track the Magnitsky money down. Employing the principle of «follow the money», OCCRP actually aims to find out the final beneficiaries of the remarkable tax theft in recent Russian history.

Among other things, the teamwork has produced evidence that the money moved to Estonia via banks in Moldova.

For instance: it has been verified that during a brief time period (one-two weeks) in February 2008 two Moldovan bank accounts were used to transfer $8.3m into Sampo bank, and via another account $5.6m to Hansapank. All in all, at least 19 bank transfers were made into Estonia, such as are associated by OCCRP to Magnitsky money.

Two and a half years ago, at the request of a person linked to Hermitage Foundation, Estonian Office of Prosecutor General investigated these bank transfers and arrived at two main conclusions.

Firstly: Estonia was not the destination of the Money sent from Moldova, as lion’s share of it was shortly sent on to third countries.

Secondly: all IP addresses used to make money transfers in Internet bank were located in Russia.

The only connection of Estonian banks to the money was that companies, mostly from various tax-free regions of the world and represented by foreign citizens, opened accounts in Estonian banks and these accounts were used to move the money of interest to Hermitage Foundation.