International review

Latvian Bank Fined €80 million for Money Laundering, Will Appeal

This material belongs to: OCCRP.

One of the biggest Latvian banks has announced it will appeal last week’s French court ruling by which it has to pay €80 million (US$ 91 million) – almost the equivalent of its 2016 net profit – for being involved in a vast tax avoidance and money laundering scheme, media reported.

Rietumu Banka was sentenced by the Paris court for taking part in a scam designed to help French taxpayers and small businesses evade taxes and launder more than €200 million (US$ 232 million), according to the court.

However, investigators believe the suspect amount laundered was much higher, perhaps up to US$ 964 million.

France Offshore, owned by Nadav Bensoussanorchestrated between 2008 and 2012 a large-scale illegal scheme in which French clients were offered to relocate the company’s revenues through offshore companies located in tax havens.

As part of the financial scheme, the bank helped its clients open a bank account at Rietumu Banka in Latvia which was little bothered by the fraudulent origins of the funds.

According to media, 618 suspect bank accounts have been opened between 2008 and 2012.

Bensoussan – who had promised “tax haven for all” – was sentenced to serve two years in prison and to pay a US$ 3.4 million fine.

The Riga-based bank has been fined US$ 91 million and barred from operating in France for five years. Its chairman and president of the board, Alexander Pankov, was handed a suspended four-year prison sentence while the bank’s representative in France, Sergejs Scuka, got a suspended one-year prison sentence.

Most of the other defendants, among which six former employees of France Offshore, two lawyers and three clients, were given suspended prison sentences.

Prosecutor Ulrika Delaunay-Weiss denounced the flaws in the European regulations preventing French regulators to probe a bank located in another EU country, media reported.