LONDON, Dec 12 (Reuters) - British investigators have frozen a bank account linked to a multi-billion dollar Azerbaijani money-laundering scheme that a network of investigative reporters has alleged rinsed dirty money mainly through four, UK-registered shell companies.
The National Crime Agency (NCA) said on Wednesday that the Account Freezing Order (AFO), part of a new toolbox to allow investigators to freeze suspected proceeds of crime quickly, was the first “in relation to the Azerbaijani Laundromat”.
The NCA declined to give further details or divulge whether the frozen account was also linked to Danske Bank, the Copenhagen-based lender at the centre of a 200-billion-euro ($227 billion) money laundering scandal.
The “Azerbaijani Laundromat” is a term coined last year by the Organized Crime and Corruption Reporting Project (OCCRP), a network of investigative journalists, after an investigation with Denmark’s Berlinske newspaper and others.
It alleged that Danske’s Estonian branch handled the accounts of four UK-registered firms that were used by the Azerbaijani elite to pay European politicians, buy luxury goods and launder money.
Danske said in September its Estonian branch helped funnel a wave of largely suspicious transfers from countries such as Russia from 2007 to at least 2015 - and that some “non-resident” clients used corporate vehicles such as UK Limited Liability Partnerships (LLPs) and Danish shell companies.
Danske’s internal report into the scandal, published in September, said six customers of the Estonian branch “could potentially relate to the ‘Azerbaijani Laundromat’”. All were UK-incorporated LPs (Limited Partnerships) or LLPs, it said.
According to that report, Danske’s Estonian branch shared an analysis with other bank departments in April 2017 about four companies, which had the same ultimate beneficial owner from Azerbaijan and which made 3.0 billion euros of transactions.
British whistleblower Howard Wilkinson, who worked for Danske in Estonia until 2014 and alerted bosses to suspicious transactions, told the European Parliament last month that LLPs and Scottish Liability Partnerships (SLPs) had been abused for years and that Britain’s role in the scandal was a “disgrace”.
LLPs and Limited Partnerships (LPs) can allow beneficial owners to hide behind frontmen, turning them into anonymous companies with a UK wrapper.
The NCA has said it is investigating the use of UK-registered companies and a number of UK professional enablers connected with the Danske scandal.
Professional enablers, such as lawyers, company formation agents, bankers and accountants, offer administrative, advisory or managerial services. They can allow criminals to operate under the radar of authorities either unintentionally or deliberately.
$1 = 0.8813 euros Reporting by Kirstin Ridley Editing by Mark Heinrich