EUR 35 mln embezzled from Ukraine laundered through Estonia

Estonia's Office of the Prosecutor General has filed a criminal case based on evidence suggesting that over 35 million euros obtained from a crime in Ukraine were laundered through an Estonian-registered company. Photo: Elmo Riig

Estonia's Office of the Prosecutor General has filed a criminal case based on evidence suggesting that over 35 million euros obtained from a crime in Ukraine were laundered through an Estonian-registered company and integrated into the legal financial system.

Priit Porila, Dmitri Fokin, and Aivar Riis have been charged with large-scale money laundering as part of a group, while Svetlana Kalinina has been charged with aiding and abetting money laundering.

According to the statement of charges, the accused provided money laundering services to Ukrainian citizen Maksym Volodymyr Stepanov, allowing him to conceal illicit proceeds and integrate them into the legitimate economy.

Stepanov was the director of Poligrafkombinat, the state-owned company that prints Ukrainian passports, ID cards and driver's licenses. According to Ukrainian law enforcement, he operated a scheme from September 2013 to April 2021 that enabled the unlawful extraction of at least 35,131,810 euros from the company. According to pre-trial evidence, this sum was funneled into the Estonian company Feature OÜ, managed by Dmitri Fokin.

The indictment states that the defendants created a supply chain in which the Estonian company was supposed to supply raw materials to the Ukrainian firm for document production. However, the actual cost of these materials was artificially inflated multiple times. The money transferred to the Estonian company's account was then funneled through various Estonian and foreign companies controlled by the defendants, passing through dozens of different accounts. Fake contracts were allegedly created to give transactions a legitimate appearance, fabricating debt relationships to obscure the true origin of the funds. According to the collected evidence, a significant portion of the money eventually returned to Stepanov or individuals closely associated with him.

Public prosecutor Jürgen Hüva stated that the evidence suggests the defendants deliberately attempted to cover their tracks.

«The charge sheet alleges that they varied their operational patterns, used an extensive network of businesses -- many registered in offshore jurisdictions -- to ensure anonymity, and appointed front men or intermediaries to head the companies involved in money laundering,» Hüva said.

«The evidence shows that the accused were aware the money originated from a crime committed against a Ukrainian state enterprise at a time when Ukraine has been defending itself against Russia's unlawful aggression since 2014. Despite this, they chose to conceal the illicit origin of the funds, exploited the Estonian banking system, and allegedly laundered nearly 35 million euros in criminal proceeds,» he added.

A Ukrainian court has already convicted one individual involved in the original crime in Ukraine, with the verdict having taken effect in January this year. Criminal proceedings continue in Ukraine to prosecute others suspected of embezzling the remaining funds.

«The indictment in Estonia was made possible thanks to excellent cooperation with Ukrainian and French law enforcement. We established a joint investigation team, which facilitated the efficient exchange of information and evidence. The Financial Intelligence Unit also played a key role in gathering evidence, while the economic crimes bureau of the Central Criminal Police collected the necessary proof for prosecution. At the request of the prosecutor's office, the court has seized properties linked to the defendants and over one million euros in cash found during searches. If convicted, the court may confiscate these assets,» Hüva said.

The pre-trial investigation was conducted by the Central Criminal Police, with support from the Financial Intelligence Unit, under the direction of the Office of the Prosecutor General.