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Operation Destabilise
Years active2021–present
Territory
  • Russia
  • Middle East
    • United Arab Emirates
  • Europe
    • United Kingdom
  • South America
  • United States
ActivitiesMoney laundering, assisting Russian nationals in avoiding sanction
Notable membersSmart
  • Ekaterina Zhdanova
  • Khadzi-Murat Magomedov
  • Nikita Krasnov

TGR Group

  • George Rossi
  • Elena Chirkinyan
  • Andrejs Bradens

Operation Destabilise was an international investigation led by the National Crime Agency which, over the course of three years, uncovered a money laundering ring with ties to criminal organisations in the UK, drug cartels in South America, the Kinahan Organised Crime Group, Russian espionage efforts and sanction avoidance.

Between 2021 and late 2024, the National Crime Agency, alongside law enforcement agencies in Ireland, France, the US and the United Arab Emirates, investigated the ring. The results of the investigation up to that point were announced on 4 December 2024, revealing that: 84 people had been arrested in connection with the ring, including 71 in the UK; six individuals, both major money laundering networks and several companies were sanctioned, while a seventh linked individual was arrested for the facilitation of money laundering; and £20 million had been seized out of an estimated £700 million in drugs sales.

Investigation

[edit]

The operation initially evolved from a National Crime Agency (NCA) investigation into the Russian ransomware group Ryuk. The group conducts ransomware across the world, including the US and the UK.[1][2] As of December 2024, Ryuk was believed to have raised at least £27 million from 149 organisations based in the UK.[1] During the investigation, the NCA discovered that payments made to Ryuk were being sent towards Ekaterina Zhdanova, a Russian national and head of Smart, a cryptocurrency exchange based in Moscow.[3] Around the same time frame, the NCA uncovered TGR Group. The NCA quickly linked the networks to global money laundering efforts and further ransomware groups like Conti and Trickbot. Up until that point, the investigation was focused on major money laundering abroad,[4] though the NCA soon began intercepting the first cash handovers relating to the group in the UK.[3] They didn't receive their first major breakthrough in this regard until the arrest of Fawad Saiedi.[1][5]

He was stopped by Metropolitan Police in November 2021 while driving southbound on the M1 towards London. A search of the vehicle found that he was transporting over £250,000 in cash. A search of his home discovered a further £24,500 and a currency-counting machine.[1][6] Upon further investigation into Saiedi, police found that he was a courier under a network that operated around the UK and the Channel Islands; said network was found to have participated in 55 cash handovers over a four month period, operating on behalf of 22 criminal groups in the UK.[5] In his role as a courier, it is known that he had transferred criminal property worth £15,667,720. He plead guilty to possessing and transferring criminal property on 3 May 2022 and was sentenced to 52 months imprisonment. Saiedi was found to have performed his role under the direction of Ekaterina and Nikita Krasnov, a coordinator for Russian-speaking couriers under Smart.[1][6][7] Krasnov then further connected to other courier networks.[4]

A month prior to Saiedi's arrest, Muhiddin Umurzokov, Anvarjon Eshonkulov and Batsukh Bataa were arrested in Jersey after they attempted to launder approximately £60,000 on the island. Evidence seized in searches of mobile phones, documents, receipts and lists revealed that they had been housing illegal immigrants in sub-let properties using money from drug trafficking and prostitution.[1][6][8] It was revealed that Umurzokov, Eshonkulov and Bataa all had large sums of money moving in and out of their bank accounts, primarily through a company called ISM Scaffolding Limited, which had approximately £4.31 million moving through its account over a ten month period in 2021/22. The group plead guilty to a combined total of 22 charges relating to money laundering and admitting to work for a UK based organised crime group and were sentenced a combined total of 10 years imprisonment.[6]

Smart and TGR networks

[edit]

Ekaterina Zhdanova was the head of Smart, a cryptocurrency exchange based in Moscow.[1][7] It is believed that she was raised in Siberia before moving to Moscow and working in the finance industry.[1][8] By July 2016, she had opened several hotels and leisure businesses in Moscow.[3] Zhdanova worked closely with Khadzi-Murat Magomedov and Nikita Krasnov to facilitate money laundering,[1][5][7] with many of the transactions being brokered by Zhdanova and Magomedov. Krasnov would then work with couriers in the UK to arrange for money to be collected and converted.[5]

George Rossi is a Russian-born Ukrainian national who was the head of the TGR Group, which has an office in Oxford Circus, London, and in Dubai, United Arab Emirates (UAE).[1][9] Evidence suggests that Rossi may have been a banker in Russia who moved to Europe temporarily before starting his network.[1] He primarily worked alongside two individuals: Elena Chirkinyan, a joint-Russian and Armenian national who is reportedly his second in command, and who stated she had studied in both Moscow and Caterham School, a private school in Surrey, then at a university in London, where she studied business and economics;[3][9][10] and Andrejs Bradens, a Latvian national.[3][9][11] Rossi was also the founder of TGR Partners, non-executive director of TGR Corporate Concierge LTD and linked to several other companies.[11]

Both networks are based in Federation Tower, Moscow.[4] According to the NCA, both networks had a "heavy exposure" to Garantex,[3] a Russian cryptocurrency exchange which has been sanctioned by the Office of Foreign Assets Control (OFAC) and the United Kingdom due to its connections to payments made by the Russian government for western components used in weaponry during the Russian invasion of Ukraine.[3][9][11]

Both networks worked together, operating in a combined 30 countries globally including in the Middle East (through which large sums of their money was trafficked), the West, the UK and Russia.[1][7] TGR Group received large sums of money on behalf of Zhdanova, converting the funds received into cryptocurrency.[5] From late-2022 until mid-2023, the Russian government used SMART to fund espionage operations. Upon this discovery, that aspect of the investigation was handed to MI5.[4] The Russian government also used both networks to assist sanctioned individuals in bypassing sanctions implemented both prior and due to the Russian invasion of Ukraine.[1]

Methods

[edit]
A statement from Ben Cowdock, a senior investigations lead at the UK branch of Transparency International[12]

There is growing evidence that Russia is embracing cryptocurrencies and other alternative payment systems in order to circumvent sanctions and transfer funds around the world [...] While the Kremlin’s been closed out of the conventional banking sector, this does not mean it can no longer make international payments.

Smart and TGR Group would swap physical money into cryptocurrency through Tether, a company that provides a form of cryptocurrency called "stablecoin", cryptocurrency backed by physical currency (in this case, the US dollar) to provide stability.[9] Tether was, as of December 2024, under investigation by the prosecutors in the Manhattan US Attorneys Office for its potential uses in money laundering and sanction avoidance,[3][12] which the company denied following a report in The Wall Street Journal.[3] The US Department of the Treasury was, in October that year, also considering implementing sanctions due to its "widespread" use by those sanctioned by the US, including Hamas, Russian arms dealers and several other major security threats.[12]

They would then provide this cryptocurrency to criminal organisations in the UK and the West upon receiving physical currency through Smart's system of couriers organised by Krasnov; these criminals would then pay South American cartels for drugs using this cryptocurrency, repeating the cycle.[1][7][9][13]

The physical money transported by the couriers would then be laundered through various means either in the UK or in Europe and either get transferred to cryptocurrency wallets in Zhdanova's name, or to TGR Group, who would either bank the money or transfer it to Russia or Russian individuals dodging sanctions in the West.[9][11] It is believed that some sanctioned individuals used the system to invest in property in the UK and other goods, with the networks concealing the original source of the funds.[1] According to the NCA, over £100 billion is laundered in or through the UK each year, with up to £5 billion being done using cryptocurrency.[9] Will Lyne, Head of Cyber Intelligence in the NCA, estimated that over £100 million was moved in the UK each year by the networks.[3]

The NCA's tactical lead for Operation Destabilise said that the groups were involved in transferring billions of dollars per year, though did say that the exact sum is difficult to calculate due to their methods. An NCA cryptocurrency investigator showed Wired some cryptocurrency wallets used by the groups, with one containing over £800 million and another containing approximately £169 million.[3]

Further investigation

[edit]

The UK was identified as a key hub in the international money laundering operation,[13] with the NCA identifying similar networks across the UK with links to drugs and cryptocurrency,[7] cartels in South America[14] and the Kinahan Organised Crime Group which, although originating in Dublin, Ireland, has a hub in Dubai.[5][7] The group is involved in trafficking drugs and firearms around the world, with links to Iran, Venezuela, Russia and Hezbollah.[5][14]

In late 2022, the NCA followed a van for 300 miles in a round trip from Kensington, London, to Oldham, Manchester. Surveillance footage showed that when the van returned to London, bags containing over £200,000 were removed from it. An apartment linked to the van was searched, revealing a cash counting machine and empty bags, while another property held approximately £400,000.[3]

NCA Operations Manager, Saju Sasikumar, speaking on the operation ran by Semen Kuksov and Andrii Dzektsa[14]

Semen Kuksov ran what was, in effect, a professional banking service for criminals around the world, who could not access the legitimate banking system due to the source of their funds [...] He arranged collection of cash from groups that wanted rid of it and delivered cash to groups that needed it.

This network was led by Semen Kuksov,[5][7] the son of a former Russian executive for AKROS Oilfield Services Company,[3][15] and Andrii Dzektsa. The network, which was formed in July 2022,[15] was coordinated by Krasnov and collected money from criminal organisations in the UK and smuggled it into Europe to be laundered and operated a cryptocurrency exchange.[14] Although subordinate to Kuksov, Dzektsa managed couriers, giving them directions as to where and when to collect money. Over a single 74 day period, the network helped to launder £12,329,460.[6] The NCA revealed that cryptocurrency wallets connected to Kuksov had received over £30 million.[3] Kuksov and Dzektsa were sentenced to 67 months and 60 months imprisonment respectively,[5][7] while police seized approximately £1.8 million in both physical funds and cryptocurrency.[16]

A courier linked to that network, Igor Logvinov, a Lithuanian national with property in the UK and a Russian visa, was arrested by the Garda Síochána in Ireland after he was seen in July 2023 by their National Drugs and Organised Crime Bureau taking part in a cash handover at a petrol station in south Dublin. After conducting a search of the rented property in Stepaside, Dublin, where he was staying, police discovered €57,000 and several digital devices. He was sentenced to 36 months imprisonment.[17]

Between late 2022 and mid-2023, the Russian government used the Smart network to fund espionage operations. TGR Group also allegedly transferred funds from RT, a state-controlled international television network, to Russian-speaking journalists in the UK.[1] In 2023, Chirkinyan was involved in transferring funds that allegedly originated from RT and was likely aimed at supporting a UK-sanctioned Russian-language media company in the UK.[7][11][13]

Two groups were stopped in March 2023; Andrejs Jasins,[8][18] a Latvian national who had travelled to the UK a day prior to his arrest,[6][18] was stopped at Frankley services on the southbound M5 while driving a Ford Transit. He informed police that there was money stored in a storage area beneath the front passenger seat. Upon searching it, police discovered that he had been transporting £357,730.95 stored in three bags.[6][8][18] He pleaded guilty in August 2023 and was sentenced to two years imprisonment.[6][18] Ruslan Kaziuk was stopped at Dover by UK Border Force when he tried to leave the UK in a van registered in Ukraine. Although he declared that he was travelling with £500, upon searching his van they found £2.1 million in taped-up packages of money in the door of the van, three cardboard boxes and two shopping bags; HM Revenue and Customs later stated that more than half of the seized money was in Scottish notes. He pleaded guilty to money laundering in September 2023 and was sentenced to 68 months imprisonment.[6][19]

Due to the investigation, between late 2022 and early 2023, members of the networks became wary of operating in the UK and in London. By mid-2024, the networks were charging higher commissions for the perceived difficulty of working in London following arrests and the rising risk of money laundering.[3][7]

A press release from the US Department of the Treasury on Ekaterina Zhdanova being sanctioned, 3 November 2023

Zhdanova relies on multiple methods of value transfer to move funds internationally. This includes the use of cash and leveraging connections to other international money laundering associates and organizations. Zhdanova also uses traditional businesses to maintain access to the international financial system, including through a luxury watch company that has offices around the world.

Zhdanova was sanctioned by the OFAC in November 2023 for money laundering on behalf of unnamed "Russian elites".[5][9] According to the OFAC, in March 2022 she assisted a Russian client in transferring $2.3 million to Western Europe through an investment account and property purchases. In another instance, a Russian oligarch asked Zhdanova to transfer over $100 million on their behalf to the UAE. She had also provided UAE tax residency, a UAE identity card and a bank account to Russians. Payments were allegedly made to bank accounts in Dubai using cryptocurrency, which would then be transferred upon request from a client.[2]

On 20 May 2024, a Mercedes Sprinter registered in Ukraine was stopped while trying to travel through the Channel Tunnel. The occupants in the vehicle were Taras Hirnyak and Andrii Trachuk, both Ukrainian nationals. Hirnyak claimed that they were taking items to Ukraine to support the war, Hirnyak claimed to be taking items to Ukraine for the war effort, however when police searched the vehicle they discovered multiple washing powder boxes which contained approximately £1 million.[6][8][18] Both men were arrested and investigated by the NCA, and later pleaded guilty, being sentenced to 24 months imprisonment each.[6]

Operation Destabilise, other than the NCA, involved agencies across the globe including the UK Border Force, the OFAC, the Drug Enforcement Administration, the Federal Bureau of Investigation, the Financial Crimes Enforcement Network, the Central Directorate of the Judicial Police (DCPJ) and the Garda Síochána.[5][7][11] The NCA also collaborated with authorities in the UAE to disrupt money laundering operations.[7]

Aftermath

[edit]

Rob Jones, the Director General of Operations at the NCA, described the operation as "the most significant money laundering operation that the NCA has undertaken in 10 years."[1] and that it had "exposed billion-dollar money laundering networks operating in a way previously unknown to international law enforcement".[20] Asked whether the operation had ended the money laundering ring, Jones said "Of course, there is always somebody in the wings. We really understand this system now. As people fill this void we’ll get after them."[21]

The NCA's strategic operational lead for the investigation, speaking to The Record anonymously, said of the investigation "It’s probably the first time that in my time we’ve seen the interconnection between global impacts and money laundering at the highest possible level, and its interconnection to street level organized crime, traditional organized crime, whether it be guns, drugs, whatever, and evolving in a new methodology of money exchanges, which is clearly changing. It’s probably the first time in 34 years I’ve seen such a variance of interconnection."[4]

As of 4 December 2024, 84 people have been arrested, as a result of the investigation, 71 of which were in the UK, while several more have received sanctions; the majority of those arrested were couriers. It was also revealed that approximately £20 million has been seized out of an estimated £700 million in drugs sales.[1][7] Magomedov, Krasnov, Rossi, Chirkinyan and Bradens have all been sanctioned by the OFAC,[5] while Zhdanova was, as of 4 December, held in pre-trial detention in France for separate unidentified charges.[3] A seventh individual linked to one of the networks was arrested by an international associate of the NCA as a facilitator of money laundering.[5][13]

Siam Expert Trading Company Ltd., a company based in Thailand and associated with Bradens, had previously facilitated the export of electronic components to Tornetcom, a Russian company sanctioned by the US that provides the Russian government with, among other things, data processing systems. Siam was subsequently sanctioned by the OFAC on 4 December 2024.[11][22]

Further developments

[edit]

Andrejs Bradens

[edit]

The Financial Times revealed that Andrejs Bradens also owned a Turkish company, Altair Lojistik Ve Ticaret.[22] In March 2024, said company was awarded a $23.4 million contract to supply Ukrhydroenergo with various lengths of 330kv and 150kv copper cables and associated equipment for a section of underground protection against Russian airstrikes for the Dnieper Hydroelectric Station.[22][23] Ukrhydroenergo confirmed that the contract existed, that the project "is being fulfilled in accordance with the terms specified in the contract" and that all work is expected to be completed by the end of 2024.[22]

Ukrhydroenergo stated that Bradens was not sanctioned during the preparation of the contract, and that "a thorough check of counterparties for links with [Russia]" was performed, though they said that they had "begun conducting additional checks, based on the results of which measures will be taken in accordance with the current contract and the legislation of Ukraine".[22]

Oracle Capital Group

[edit]

The Daily Mirror and the Good Law Project revealed that Elena Chirkinyan had, according to her LinkedIn profile as of December 2024, worked as a "business development specialist" at a company called Oracle Capital Group since 2019. This listing was subsequently removed after Operation Destabilise was revealed. Alon Gook, formerly Head of Human Resources and Compliance at Oracle Capital Group, was also the Director of TGR Solutions - a company linked to TGR Group - for a short time while it was part-owned by George Rossi.[10][24] Two other unnamed individuals were both found to have been employed by Oracle Capital Group and companies associated with TGR Group.[24]

Oracle Capital Group was founded in 2002 by Denis Koganovich-Korotkov, a wealth manager from Kazakhstan. The company supported wealthy emigres from Russia, Kazakhstan and China to the UK in investing in London real estate, reportedly having offices in London, Moscow, Kazakhstan and "a string of tax havens". During the Conservative Party's Spring Lunch fundraiser in 2012, the company donated £8,400 to the Conservative Party, while its founder, Denis Korotkov-Koganovich donated a further £16,450 in 2013.[10]

Semen Kuksov

[edit]
See also: Maltese passport § Investment-based citizenship scheme

Kuksov and his father gained Maltese citizenship in 2022 under the Citizenship by Investment Program, a scheme started in 2014 which allowed non-citizens to apply for Maltese citizenship by investing in Malta and contributing to its national development fund while living in Malta and passing background checks.[25][26] In the first year after its formation, 54% of applicants were Russian.[15] Known as a "golden passport scheme", as of 2024 it was the last in the European Union after Cyprus and Bulgaria ended their schemes in 2020 and 2022 respectively.[27] The Maltese program and those globally have been criticized for allowing organised criminals, money launderers and tax evaders to easily gain citizenship.[28]

Kuksov and his father received their citizenship "weeks" before Russians were excluded from the scheme after the Russian invasion of Ukraine. These passports can be revoked if, within seven years of receiving citizenship, a citizen is sentenced to a year or longer in prison. The Community Malta Agency, the organisation which oversees the scheme, began reviewing Kuksov's citizenship and,[15] on 15 December 2024, it was announced that proceedings had begun to revoke his citizenship.[29]

References

[edit]
  1. ^ a b c d e f g h i j k l m n o p q r Parker, Fiona (4 December 2024). "Multi-billion pound Russian money laundering network exposed in international sting". The Telegraph. ISSN 0307-1235. Archived from the original on 4 December 2024. Retrieved 4 December 2024.
  2. ^ a b "Treasury Designates Virtual Currency Money Launderer for Russian Elites and Cybercriminals". U.S. Department of the Treasury. 3 November 2023. Retrieved 4 December 2024.
  3. ^ a b c d e f g h i j k l m n o p Burgess, Matt (4 December 2024). "She Was a Russian Socialite and Influencer. Cops Say She's a Crypto Laundering Kingpin". Wired. ISSN 1059-1028. Retrieved 5 December 2024.
  4. ^ a b c d e Martin, Alexander (23 December 2024). "Inside Operation Destabilise: How a ransomware investigation linked Russian money laundering and street-level drug dealing". The Record. Retrieved 23 December 2024.
  5. ^ a b c d e f g h i j k l m Rae, Stephen (4 December 2024). "Launderers for Kremlin elite, Kinahans and UK gangs exposed in major operation across Europe, US, Middle East and South America". AML Intelligence. Retrieved 4 December 2024.
  6. ^ a b c d e f g h i j k "Operation Destabilise: Case studies". National Crime Agency. Retrieved 17 December 2024.
  7. ^ a b c d e f g h i j k l m n Casciani, Dominic (4 December 2024). "Russian crypto criminals helped UK drug gangs launder lockdown cash". BBC News. Retrieved 4 December 2024.
  8. ^ a b c d e Duggan, Joe (4 December 2024). "Everything we know about the Russian money-laundering gang operating in UK". The I Paper. Archived from the original on 4 December 2024. Retrieved 4 December 2024.
  9. ^ a b c d e f g h i Johnson, Miles; Ring, Suzi (4 December 2024). "UK uncovers vast crypto laundering scheme for gangsters and Russian spies". Financial Times. Archived from the original on 4 December 2024. Retrieved 4 December 2024.
  10. ^ a b c Sommerlad, Nick (11 December 2024). "Kingpin member of vast Russian money laundering network worked for Tory donor". The Daily Mirror. Retrieved 12 December 2024.
  11. ^ a b c d e f g "Treasury Exposes Money Laundering Network Using Digital Assets to Evade Sanctions". U.S. Department of the Treasury. 4 December 2024. Retrieved 4 December 2024.
  12. ^ a b c Berwick, Angus; Salama, Vivian; Foldy, Ben (25 October 2024). "Federal Investigators Probe Cryptocurrency Firm Tether". The Wall Street Journal. Archived from the original on 27 October 2024. Retrieved 5 December 2024.
  13. ^ a b c d "Operation Destabilise: NCA disrupts $multi-billion Russian money laundering networks with links to, drugs, ransomware and espionage, resulting in 84 arrests". National Crime Agency. 4 December 2024. Retrieved 5 December 2024.
  14. ^ a b c d Kirk, Tristan (4 December 2024). "'Cash for Crypto' gangs bankrolling UK crime smashed in crackdown". The Standard. Retrieved 4 December 2024.
  15. ^ a b c d Demarco, Joanna; Borg, Jacob (22 April 2024). "Malta May Revoke Passport from Russian Who Laundered Money in UK". Organised Crime and Corruption Reporting Project. Retrieved 15 December 2024.
  16. ^ Balzan, Jurgen (9 December 2024). "Russian man who bought Maltese citizenship ran money laundering bank for criminals". Newsbook Malta. Retrieved 15 December 2024.
  17. ^ Dillon, Eamon (8 December 2024). "Kinahans face exile in 'North Korea, Iraq or Iran' after Russian money-laundering network busted". Sunday World. Retrieved 8 December 2024.
  18. ^ a b c d e Heren, Kit (4 December 2024). "Russian socialite unmasked as boss of vast money laundering network used by British drug dealers". LBC. Retrieved 4 December 2024.
  19. ^ Pollock, Laura (5 December 2024). "Money launderer linked to multibillion-dollar network had £1m in Scottish notes". inkl. Archived from the original on 5 December 2024. Retrieved 5 December 2024.
  20. ^ Martin, Alexander (4 December 2024). "Russian money laundering networks uncovered linking narco traffickers, ransomware gangs and Kremlin spies". The Record. Retrieved 5 December 2024.
  21. ^ "Global investigation exposes alleged billion-dollar Russian money-laundering network". The Guardian. 4 December 2024. ISSN 0261-3077. Retrieved 5 December 2024.
  22. ^ a b c d e Miller, Christopher; Johnson, Miles (5 December 2024). "Money launderer for Russian spies won deal to help defend Ukraine power plant". Financial Times. Archived from the original on 5 December 2024. Retrieved 2024-12-07.
  23. ^ "ДК 021:2015 код 44320000-9 Кабелі та супутня продукція (Будівництво комплексної захисної споруди підземного типу для захисту основного електротехнічного обладнання об'єкту критичної інфраструктури паливно-енергетичного сектору критичної інфраструктури Дніпровської ГЕС (ДніпроГЕС-1), філія «Дніпровська ГЕС» ПрАТ «Укргідроенерго» Придбання кабелів 150 та 330 кВ)". prozorro.gov.ua (in Ukrainian). Retrieved 7 December 2024.
  24. ^ a b "Russian money launderer worked for Tory donor firm". Good Law Project. 11 December 2024. Retrieved 12 December 2024.
  25. ^ "Malta Individual Investor Programme". CSB Group. Retrieved 15 December 2024.
  26. ^ Clenfield, Jason (11 March 2015). "Passport King Christian Kalin Helps Nations Sell Citizenship – Bloomberg Business". Bloomberg.com.
  27. ^ Schickler, Jack (4 October 2024). "Malta's golden passport scheme can stay, EU court signals". euronews. Retrieved 15 December 2024.
  28. ^ Bagnoli, Lorenzo (5 March 2018). "Maltese Golden Visas: Thumbs Up? Thumbs Down? Who Knows?". Organised Crime and Corruption Reporting Project. Retrieved 15 December 2024.
  29. ^ Borg, Jacob (15 December 2024). "Russian 'banker for criminals' set to be stripped of Maltese passport". Times of Malta. Retrieved 15 December 2024.
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