Millions of Dollars Allegedly Laundered Through Canadian Banks and Companies by Russian Syndicates

A Russian crime syndicate that has been accused of laundering hundreds of millions of dollars has allegedly been routing millions into nearly 30 Canadian bank accounts, establishing the largest tax fraud in Russian history.

U.K.-based businessman Bill Browder, who was once regarded as the most successful foreign investor in Russia with his hedge fund Hermitage Capital, provided thousands of documents to CBC News which sparked this investigation. According to the documents that chronicle hundreds of wire transfers in and out of Canada between 2008 and 2013, a myriad of Canadian registered companies also sent $17.6 million out of Canada to foreign accounts associated with the crime syndicate.

Over the course of several months, CBC News tracked down some of the individuals and companies associated with those accounts and found that $2 million sent to Canada was spread among various recipients who were surprised to learn that the money originated from a money-laundering scheme.

In 2007, Browder claimed that an organized crime syndicate led by Russian crime boss Dmitry Klyuev stole his companies and used them to move a $227 million fraudulent Russian tax refund out of Russia and into other jurisdictions.

Klyuev is one of roughly a dozen Russians named on the Magnitsky Act (2012) in the U.S. which prevents them from entering the United States or holding assets there. The U.K. passed a similar legislation last month and in Canada, the House of Commons foreign affairs committee recently recommended that they do the same.

Through the documents, Browder believes he has discovered not just the laundering of $227 million, but the pipe the money runs through. Evidence shows money laundering activity from banks in Canada sending millions to banks in Lithuania.

The documents also show evidence of two routes through Canada and over $300,000 being moved directly from Russia. Dmitry Klyuev controlled two bank accounts in Cyprus where four Canadian companies were sent the money. Browder found that there was a much more complicated route that transacted about $1.6 million from Canada to a Lithuanian bank, UKIO, which is now closed.

Browder and his team have spent the past several years pushing for this legislation while meticulously tracking the money around the globe despite the frustration of finding that money launderers tend to change the location of their funds several times and combine them with money in other bank accounts, occasionally from other crimes as well, creating a complicated trail for investigators to unravel.

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