Kyrgyzstan: Major Money Laundering Case Exposed

Kyrgyzstan
Kyrgyzstan

Anticorruption officials in Kyrgyzstan say they have exposed a $58 million money laundering operation — the largest ever seen in the country’s history.

The graft-fighting department at the State National Security Committee (GKNB) said on January 20 that the cash was laundered by a construction company called LLC Berkut Stroi, which they said was based in the southern city of Osh.

The GKNB say two employees of a commercial bank in Osh, Amanbank, registered the construction company in the name of Kanybek M. They then opened bank accounts in Amanbank and another bank, Rosinbank.

The next step was to sign bogus contracts for the purchase of construction materials from companies in China and Latvia, to which the 4.4 billion Kyrgyz som ($58 million) were transferred between January and October 2014. Meanwhile, tax records at Berkut Stroi reflected no economic activity.

The man identified as the founder of Berkt Stroi, whose name can only be given as Kanybek M., said he had no idea of what business was being done by the company he purportedly controlled.

“I was told [by a friend]: ‘Let’s start a company, we will take care of banking operations.’ I know nothing about banking operations,” he told the Kloop.kg news website.

Kanybek M. said anytime the alleged money-launderers need a document signed, they paid him an additional 500 soms ($7).

Another figure that Kloop.kg reported was linked to the case said that although he worked at the bank at the time of the alleged offense, he worked as the chief accountant and didn’t work directly with clients, so he couldn’t know who transferred the money.

Latvia has become a favored destination for laundered funds. In 2012, Latvia was at the center of a major scandal after reporters from Russian newspaper Novaya Gazeta and the Organized Crime and Corruption Reporting Project found that lenders in the Baltic nation were recipients of millions of dollars laundered from tax refunds from the Russian budget.

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