An international investigation has exposed an alleged Russian billion-dollar money laundering network whose reach is said to have spanned more than 30 countries.
The investigation, dubbed Operation Destabilise, seized almost 20 million British pounds ($40 million) in cash and cryptocurrency.
Authorities allege the ring was used by rich Russians to evade sanctions and laundered cash for drug traffickers, criminals and spies.
The United Kingdom's National Crime Agency (NCA) issued a statement saying 84 suspects were arrested.
It comes as the United States announced new sanctions against the individuals heading these networks and the businesses that have been linked to them.
"For the first time, we have been able to map out a link between Russian elites, crypto-rich cybercriminals and drug gangs on the streets of the UK," said Rob Jones, NCA director general of operations.
"We have identified and acted against the Russians pulling the strings at the very top, removing the air of legitimacy that enabled them to weave illicit funds into our economy."
How did these networks work?
According to the NCA statement, authorities allege the networks known as Smart Group and TGR Group allowed criminals and wealthy Russians to convert cash to cryptocurrency and vice versa.
Their influence stretched from the UK to the Middle East, Russia and South America.
It also allegedly helped them hide the illegal source of their funds or evade sanctions that were imposed after Russia invaded Ukraine in February 2022.
"Through the TGR Group, Russian elites sought to exploit digital assets — in particular, US dollar-backed stablecoins — to evade US and international sanctions, further enriching themselves and the Kremlin," US acting under-secretary for terrorism and financial intelligence Bradley Smith said.
It is also alleged that Smart and TGR used their international connections to launder money from groups such as the Kinahans, a family-run crime syndicate that was sanctioned by the US in 2022.
British authorities allege the group was responsible for the trafficking of drugs and firearms into the UK, and other parts of the world.
The Kinahans were also alleged to have helped Russian clients bypass financial restrictions illegally to invest money in the UK.
Between 2022 and 2023, the Smart network was used to fund Russian espionage operations, according to British authorities.
According to authorities, their operation has uncovered how these networks collect funds in one country, and transfer it to another, usually by converting cryptocurrency into cash.
"Operation Destabilise uncovered a complex scheme, whereby the networks collect funds in one country and make the equivalent value available in another, often by swapping cryptocurrency for cash," the NCA said.
"This provides a mutually beneficial service, streamlining the movement of cash generated by crime groups in the West.
"The UK was a key hub, and the NCA worked closely with partners across UK law enforcement to conduct a series of operations linked to Destabilise.
"Investigators witnessed exchanges taking place at scale across the country where street-level cash handovers were followed almost immediately by a movement of cryptocurrency of the same value."
According to the statement issued by the NCA, the leaders of the networks are Ekaterina Zhdanova, who runs Smart, and George Rossi, who leads TGR.
Russian national Ms Zhdanova has been arrested in France on unrelated charges, while the whereabouts of Russian-born Ukrainian Mr Rossi is unknown to authorities.
Both individuals, along with their close associates, have been sanctioned by the Office of Foreign Assets Control in the US.
The NCA alleges much of the money laundering transactions were brokered by Ms Zhdanova and her associates.
"TGR and Smart coordinated their activity, with members of the TGR group receiving large volumes of cash on behalf of Zhdanova and facilitating the conversion, making the equivalent value available in cryptocurrency," the NCA said in its statement.
What were the consequences of these networks' alleged criminal activities?
One of the outcomes of the network's alleged criminal activities, authorities have said, was its ability to provide a service to Russian elites and other individuals whose access to Western economies would be denied either through sanctions or other financial restrictions.
"In 2023, Elena Chirkinyan of the TGR Group was involved in concealing the transfer of funds out of Russia, most likely to support the activities of a Russian-language media organisation in the UK," the NCA said in a statement.
"These funds are alleged to have originated from Russia Today (RT), and the entity that owns RT is sanctioned by the UK."
The networks are alleged to have supported Russian cyber criminals to launder illicit profits.
The NCA statement said in 2021, the alleged leader of Smart, Ms Zhdanova, laundered more than $US2.3 million ($3 million) of suspected ransoms paid in crypto by victims of the Ryuk ransomware group.
The US cybersecurity company CrowdStrike said "Wizard Spider" — described as a sophisticated eCrimeGroup — had been operating Ryuk ransomware since 2018.
The NCA has said it assessed that the Ryuk ransomware group were responsible for extorting more than 27 million British pounds ($50 million) from 149 victims in the UK including hospitals, schools, businesses and local authorities.
The NCA said the impact of the group was likely to be much higher.
Another consequence, authorities said, was that Russian elites were able to utilise the alleged laundered money to buy property in the UK.
Authorities allege Russia used the network to "funnel funds to spies" who were operating in other countries.
"The networks took a 3 per cent cut of the billions they laundered, often routing the money through the Middle East, including the United Arab Emirates," the NCA said.
"This activity has also been extremely costly to the networks, who are assessed to operate on very low profit margins — often charging as little as 3 per cent commission for the amount laundered.
"Based on this figure, they would need to launder around 700 million British pounds for free to pay back the 20 million British pounds seized by the NCA and partners."
ABC/Wires
