The World's Biggest Money Laundering Scheme (condensed!)


One of the biggest money laundering schemes of all time, often referred to as the Russian Laundromat, involved moving more than $20 billion from shell companies in Russia to at least 732 banks in 96 countries between 2010 and 2014. These untraceable shell companies often received money from Russian corporations through fraud, rigging of contracts, and customs and tax evasion [1]. For instance, claims for false loans would lead Russian companies to transfer real money to the Moldovan bank Moldindconbank, which would then send money to Trasta Komercbanka in Latvia to distribute or conceal the large transactions. The money laundered was used on anything from private school tuition fees to diamonds and designer chandeliers to organizations supporting specific political agendas [2]. 


Records from the Organized Crime and Corruption Reporting Project (OCCRP) revealed that nearly $13 billion was sent to Trasta Komercbanka (Latvia), $738.1 million was sent to bank accounts in the UK, and over $63 million to banks in the US [2]. With such large payments of laundered money flowing into some of the biggest international banks — Bank of America, Bank of China, Danske Bank, Deutsche Bank, HSBC, and Emirates NBD Bank, to name a few — it is clear that the world’s banking system still needs to strengthen countermeasures to stop the flow of illicit money [1]. Though several banks were charged and shut down after the investigation of the Russian Laundromat, the issue of money laundering has not yet ceased. 


Should the UNODC take part in global bank regulation? How can the UNODC and banks around the world work together to better trace and report suspicions of money laundering? Should time and money be spent towards investigating shell companies, and if so, where do you start with these untraceable companies? 


[1] https://www.occrp.org/en/laundromat/the-russian-laundromat-exposed/

[2] https://www.theguardian.com/world/2017/mar/20/the-global-laundromat-how-did-it-work-and-who-benefited 

[3] photograph: https://minutehack.com/opinions/international-money-transfers-what-you-should-know-before-sending-money

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