Wednesday, October 28, 2020

Spanish real estate new focus in major European money laundering scheme

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Spanish real estate has become the focus of the probe into the money laundering case linked to the death of Russian attorney Sergei Magnitsky.

A portion of the $230 million at the heart of the scheme, which started in Russia and moved through bank accounts in other European countries, was eventually poured into Spanish real estate, state prosecutors wrote in a complaint filed in a Madrid Court, Bloomberg reported.

The Spanish authorities allege that since 2008 a money-laundering ring funneled 35 million euros (about $39 million) through bank accounts in Ukraine, Lithuania and Moldova. The funds ended up in Estonia before finally being sent to Spain to purchase various properties, according to the report. Other funds under investigation were used to purchase car parts, construction equipment and other goods.

Prosecutors’ belief that at least part of the money ended up in real estate in Spain hinges, at least in part, on two claims: that 65 people in Estonia received 10 million euros of the 35 million euros under investigation and transferred the funds to acquire Spanish property; and that a company based in the British Virgin Islands moved 5.1 million euros between 2008 and 2009 to a Spanish bank account for a “loan to buy real estate property.”

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The $230 million at the heart of the fraud is known as the “Magnitsky money” for the lawyer, Sergei Magnitsky, who died in Russian prison in 2009 while trying to expose the scheme for his employer, American-born investor Bill Browder.

The $230 million funds allegedly came from taxes Browder’s investment firm, Hermitage Capital, paid to the Russian government and were then misappropriated by Russian officials. Congress passed the Magnitsky Act in 2012 to allow the US to sanction officials believed to be responsible.

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