Global sting uncovers alleged Russian money-laundering ring

London/Washington — The US and Britain announced on Wednesday they had disrupted what they described as a global money-laundering ring used by rich Russians to evade sanctions, and which London said laundered cash for drug traffickers, criminals and spies.

The UK’s National Crime Agency said the internationally co-ordinated law enforcement effort, code-named Operation Destabilise, had disrupted the network spanning 30 countries.

The operation also involved authorities in France, Ireland and the United Arab Emirates, the agency said. It had so far led to 84 arrests, and the seizure of more than £20m cash and cryptocurrency.

The network’s reach spanned Britain and Europe to the Middle East and South America, supporting serious and organised crime around the world, the crime agency said.

The US department of the treasury said it had imposed sanctions on members of the group, which it said helped elite Russians use cryptocurrency to evade sanctions imposed after the February 2022 invasion of Ukraine.

Five individuals and four entities tied to “a sprawling international network of businesses and employees that have facilitated significant sanctions circumvention”, known as the TGR Group, were hit with treasury sanctions.

“Through the TGR Group, Russian elites sought to exploit digital assets — in particular dollar-backed stablecoins — to evade US and international sanctions, further enriching themselves and the Kremlin,” Bradley Smith, the acting under-secretary for terrorism and financial intelligence, said in a statement.

The National Crime Agency said the TGR group operated alongside another network, known as Smart, helping Russians under sanctions access the financial system.

“For the first time, we have been able to map out a link between Russian elites, crypto-rich cybercriminals, and drugs gangs on the streets of the UK,” said Rob Jones, director-general of operations at the agency.

“The thread that tied them together — the combined force of Smart and TGR — was invisible until now.”

Cash exchange

The US treasury statement said Smart was headed by Ekaterina Zhdanova, already sanctioned by the US Office for Foreign Assets Control for helping a Russian client transfer cash into Western Europe through a fraudulently opened investment account and real estate purchases. Her whereabouts weren’t known, it said.

The treasury said it was also targeting George Rossi, a Ukrainian national born in Russia, who it said was believed to control the TGR Group.

The National Crime Agency said the Smart network was used to fund Russian espionage operations in the past.

Smart and TGR were heavily enabled by the use of cryptocurrency, the agency said. As an example, it said criminal groups in Russia with cryptocurrency would connect with drugs gangs with the same amount of money in cash elsewhere.

The networks would then arrange for the gangs to be paid in virtual currency in exchange for their cash, which would then be laundered out of the country through cash-rich businesses, such as construction companies.

After the exchange, the gangs could use the cryptocurrency to buy more drugs or firearms without the need to move any physical money across borders, the crime agency said.

US treasury sanctions generally prohibit any US citizens or entities from conducting any transactions with sanctioned targets and freeze any US-held assets belonging to the sanctioned individuals or entities.

Reuters