“Operation Destabilise” – money laundering in Jersey, London, Moscow, Dubai and elsewhere.

The UK-NCA-led “Operation Destabilise” uncovered a multibillion-dollar money laundering scheme that enabled Russian spies and European drug traffickers to evade sanctions using cryptocurrency. The operation involved the US FBI, DEA, and French and Irish police.

The illicit network, operating across more than 30 countries, illustrates the growing interaction between hostile states and organised criminals. The case also shows:-

• How economic sanctions have forced countries such as Russia to find new ways of operating in the West and
• The increasing use of cryptocurrencies by those cut off from the global banking system.

Over just four months, the network collected cash in 55 locations in England, Scotland, Wales, and Jersey in the Channel Islands. At least 22 suspected crime groups used the network.

• https://www.nationalcrimeagency.gov.uk/?view=article&id=3685:operation-destabilise-case-studies

Rob Jones, director-general of operations at the NCA, said:-

• The investigation “is the most significant money laundering operation” that the NCA had ever undertaken.
• “It targets . . . a laundromat that brings together at scale street cash and cryptocurrency,”   
• It “takes you from McMafia, through to Narcos, through to le Carré, where you have espionage, where you have transnational organised crime, and you have elite Russian-speaking money launderers and cyber criminals”.

As part of the investigation:-

• The NCA arrested 84 people, many of whom are in prison,
• Seized £20mn in cash and cryptocurrency.
• Five people linked to the network and several companies have been put under economic sanctions by the US Treasury.

SMART AND TGR

“Operation Destabilise” investigation centred on two companies — SMART AND TGR — that acted as a financial hub for cash-rich global criminals and sanctioned individuals relying on cryptocurrency outside the banking system.

The NCA said the network from late 2022 to summer 2023 had been used by clients, including-

• The Kinahan cartel, Irish cocaine traffickers linked to numerous contract killings,
• As well as funding ransomware groups, and
• “Russian espionage operations”

The network used couriers to

• Collect physical cash from criminals in one country, such as the UK, in exchange for cryptocurrency, with Tether being the most favoured.
• The cash would then be laundered through companies and
• The equivalent value made available in other countries.

This two-way, mutually beneficial trade meant that cash-rich cocaine kingpins simultaneously helped Russian cyber criminals and elites to launder stolen crypto and access cash while evading Western sanctions.

The NCA said

• TGR is run by George Rossi, his second-in-command Elena Chirkinyan and Andrejs Bradens - The US Treasury sanctioned all three TGR executives 
• Smart owner Ekaterina Zhdanova collaborated with TGR to move over £2mn for a Russian client, helping them bypass checks to purchase British properties  
• TGR, which has offices near London’s Oxford Circus and in Dubai, collaborated with Smart by receiving large amounts of physical cash on behalf of its owner, Ekaterina Zhdanova.
• Zhdanova, a 38-year-old based in Moscow, has graced the covers of business magazines in Russia and was accused by the US Treasury of moving more than $100mn to the United Arab Emirates on behalf of an unnamed sanctioned oligarch.
• The US sanctioned Zhdanova last year and is currently in custody in France.
• Smart and Zhdanova collaborated with TGR to move more than £2mn for a Russian client, helping them bypass “know your customer” checks to purchase British properties.
• Smart and TGR’s crypto wallet addresses showed regular exposure to Garantex, a crypto exchange sanctioned by the UK and US in 2022, linked “to payments to companies for components of weapons used by Russia in its invasion of Ukraine”.

Bradley T Smith, the US acting under-secretary for terrorism and financial intelligence, said.

• “Through the TGR Group, Russian elites sought to exploit digital assets — particularly US dollar-backed stablecoins — to evade US and international sanctions, further enriching themselves and the Kremlin.”

Wally Adeyemo, US deputy secretary of the Treasury, earlier this year said that:-

• “Terrorist groups and other malign actors” were “using cryptocurrencies to try and circumvent our sanctions”.

In October, MI5 director-general Ken McCallum said:-

• That Russia and Iran were making “extensive use of criminals as proxies — from international drug traffickers to low-level crooks” to carry out sabotage, espionage and murder operations in the UK.

SOURCES

• https://www.nationalcrimeagency.gov.uk/?view=article&id=3685:operation-destabilise-case-studies
• Money laundering illustration by Cleve Jones
• https://www.ft.com/content/31b9053f-343e-4c47-ace9-2b0080ec8799