Criminals That Used E-Money Institution As Front Taken Down In EU Cross-Border Case

February 29, 2024
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Judicial and law enforcement authorities in Italy, Latvia and Lithuania have taken action against a large-scale money laundering business, centring around Trustcom Financial, an e-money institution based in Lithuania.

Judicial and law enforcement authorities in Italy, Latvia, and Lithuania have taken action against a large-scale money laundering business, centring around Trustcom Financial, an e-money institution based in Lithuania. 

During an action day on February 27, approximately 250 judicial representatives and law enforcement officers were active in arresting 18 persons, including the three main suspects, in the money laundering sting.

Overall, 55 destinations were searched and more than €11.5m in assets and bank accounts frozen, according to authorities. 

Since 2017, an estimated €2bn has been laundered by two main suspects via a worldwide web of shell companies. 

The suspects, who now have been detained, offered money laundering online as a service to criminals.

A third main suspect, leading another organised crime group (OCG), was arrested in the same operation for defrauding the Italian authorities of €15m in public funds. 

These funds were laundered via the same myriad web of enterprises, centred around the e-money institution, which had already had its licence revoked in Lithuania.

The financial institution offered money laundering as a service to thousands of criminals across the EU, by making fictitious financial transactions via a web of enterprises. 

It advertised its alleged consultancy services online and was set up in Lithuania in 2016 by an Italian-based organised crime group. 

Those involved laundered the proceeds of a range of criminal activities, including tax evasion, cyber fraud, fake bankruptcy and organised crime such as drug trafficking. 

Meanwhile, part of the proceeds were injected into the Latvian and Lithuanian economies via the purchase of real estate and luxury vehicles.

Investigations into the organised crime group, which had obtained public funds in Italy, were initiated in 2021 by the Public Prosecutor’s Offices of Naples and Lecce, involving their counterparts in Latvia and Lithuania in 2022 via Eurojust.

“This collaboration really shows the importance of a well-coordinated and prepared approach across Europe,” said the authorities in a joint statement. “It is a clear example of the role Eurojust plays in transnational judicial cooperation and shows criminal networks, such as the one we tackled, that we know no borders either.” 

“We will continue to work closely together to get justice done and take on fraud involving public funds.”

The fact that the e-money institution was authorised in Lithuania shows the struggle that the jurisdiction has had as it becomes a fintech hub. 

One source previously described the jurisdiction as “the wild west” for e-money and payment firms. 

However, as Vixio readers likely know, the Bank of Lithuania has become an increasingly harsh regulator, fining, publicly shaming and even revoking the licences of various e-money and payment institutions in recent years. 

“After letting so many in, it is now needing to take control of the situation,” another source commented recently.

 

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