Laundromat scandal

The Laundromat scandal first surfaced in 2014, but received renewed attention in 2017, when the Organized Crime and Corruption Reporting Project (OCCRP) published a series of articles on a large-scale money laundering operation. The scheme operated from 2010-2014, and allegedly brought at least US$20 billion out of Russia and into banks around the world. According to the media reports, the money laundering in many cases involved shell companies registered in the UK with nominee directors concealing the real owner (see ‘Beneficial owner’ above). A core method in the scheme was for Russian ownership to guarantee large fake loans between two shell companies. When one shell company failed to repay the fake debt to the other, the loan would get authenticated by judges in Moldova, at which point the Russian company would be able to transfer money out of Russia under the pretence of covering unpaid debt. The scandal has among other things led to money laundering charges against a number of judges in Moldova for their alleged involvement in the scheme. It has also led to criticism of a number of international banks for their failure to detect suspicious transactions (source).

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