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Large-scale action against a €2 billion money laundering network through a Lithuanian financial institution | Eurojust
During a day of action on 27 February, around 250 judicial representatives and law enforcement officers were active on the ground. In total, 18 people were arrested, including the three main suspects. In total, 55 locations were searched and more than 11.5 million euros in assets and bank accounts were frozen. Eurojust and Europol played key roles in facilitating and coordinating international activities.
The financial institution offered money laundering as a service to thousands of criminals across the EU, carrying out fictitious financial transactions through the network of companies, which were managed by straw men. It advertised its alleged consultancy services online and was established in Lithuania in 2016 by an Italian-based group group.
The financial institution was led by the two main suspects, who resided in Lithuania and Latvia. The GCO whitewashed prosecutions of a range of criminal activities, including tax evasion, cyber fraud, false bankruptcy and organized crime such as drug trafficking. Part of the revenue was injected into the Latvian and Lithuanian economies through the purchase of luxury properties and vehicles.
The laundered money included €15 million from so-called illegally obtained construction premiums provided by Italian national authorities. These awards were given for renovation and insulation work and other energy-saving measures of existing buildings. In reality, no repairs were carried out, the applicants were not the owners or the buildings did not even exist. The main perpetrator of this fraud was a practicing tax consultant, who arranged for bonuses to be awarded to 72 other people who were aware of the abuse.
Investigations into the GCO were initiated in 2021 by the Public Prosecutor’s Offices of Naples and Lecce, in Italy, involving their counterparts in Latvia and Lithuania in 2022 through Eurojust.
In 2022, Lithuanian financial and judicial authorities have already closed the electronic payment institution. Its banking license was revoked and bankruptcy proceedings were initiated due to non-compliance with anti-money laundering regulations. The rapid reaction of Latvian and Lithuanian authorities to reports of suspicious transactions led to the identification and freezing of millions of dollars in funds, real estate properties and luxury vehicles, which can now be confiscated.
During the same year, Eurojust supported the creation and funding of a joint investigation team between all national authorities involved. Eurojust also created a coordination center to support simultaneous actions in the three countries.
Furthermore, Eurojust organized eight coordination meetings to prepare the simultaneous actions of the Italian, Latvian and Lithuanian authorities. These preparations also avoided potential jurisdictional conflicts. Eurojust has also facilitated the return to Italy of more than 3 million euros of illegally obtained public funds that were frozen by the Lithuanian authorities.
Europol has been supporting the case since January 2022, working closely with national investigators to uncover the magnitude and complexity of the activities carried out by the GCO. During the action day, two Europol experts were deployed to Latvia to support the authorities in their investigative measures. A third Europol expert was seconded to the Eurojust coordination center, with an analyst available at Europol headquarters to handle contributions shared through Europol’s secure communication channels.
The operations against the GCO are the result of long-term intensive cooperation across Europe by the three countries involved. Eurojust Vice-President and National Member for Lithuania, Ms. Margarita Šniutytė-Daugėlienė, acting National Member for Italy, Mr. Aldo Ingangi, and National Member for Latvia, Ms. Dagmāra Skudra, jointly stated: This collaboration shows really the importance of well-coordinated cooperation. ready and prepared approach across Europe. It is a clear example of the role that Eurojust plays in transnational judicial cooperation and shows criminal networks, like the one we approached, that we also know no borders. We will continue to work closely to bring justice and combat fraud involving public funds.
The actions in the three countries were carried out at the request and by the following authorities:
- Italy: Public Prosecutor’s Office of Naples and Lecce; Guardia di Finanza of Naples and Lecce
- Latvia: General Prosecutor’s Office, Prosecutor’s Office of the Riga Judicial Region; 1st Unit of the Department of Repression of Economic Crimes of the Central Criminal Police Department of the State Police
- Lithuania: Vilnius Regional Prosecutor’s Office; Vilnius County Police Headquarters