Russian crypto criminals helped UK drug gangs launder lockdown cash | Global News Avenue

The National Crime Agency has uncovered an unprecedented multi-billion dollar money laundering operation that developed as British criminal gangs struggled to move cash during lockdown.

Investigators say the discovery of Russian-speaking networks operating in Britain’s street drug markets is the biggest success in the fight against money laundering in a decade.

The Moscow-based global agency has been charging fees to collect dirty money from criminal gangs and allowing them to exchange it for untraceable cryptocurrencies, thus shielding drug profits from detection. The network was also used by the Russian government to fund espionage.

Investigators from the UK’s National Crime Agency (NCA) and its partners said the network spanned 30 countries and 84 people had been arrested so far, 71 of them in the UK.

On Wednesday, the U.S. Treasury Department sanctioned key figures at the top of the network.

Rob Jones, director of operations at the National Crime Agency (NCA), said links between Russia’s elite, cryptocurrency-rich cybercriminals and British drug gangs had “so far been invisible”.

“We have identified and taken action against the Russians behind the scenes at the highest levels,” he continued, adding that the NCA was now making it “extremely difficult” for key players to operate.

Clues leading to this vast and complex network were uncovered during the 2021 pandemic lockdowns, as drug gangs across Europe struggled to move large amounts of cash from street sales into the legal economy.

This in turn makes it harder for them to buy more products, such as cocaine from South America.

The NCA said that two Moscow-based cryptocurrency networks, Smart and TGR, provided solutions.

Both men are sitting on large amounts of cryptocurrency from ransomware attacks. It is a form of online extortion in which criminal gangs disable an organization’s computer systems until it pays a fee to regain control.

TGR and Smart profited from these attacks and struck a deal with British drug networks that allowed them to turn dirty street money into usable assets almost immediately.

In return for taking on the risk of receiving cash, the Russian-led network charges a commission. Its courier network launders the money, shipping it through seemingly legitimate businesses such as construction companies in the UK and elsewhere, or using mules to fly it in luggage to Dubai.

Eventually, the cash reenters the economy and is deposited into bank accounts as seemingly legitimate profits.

In effect, Smart and TGR imitate legitimate banks, charging a small fee to provide network transfers from one country to another.

The first clue emerged in 2021 when police stopped drug profit courier Fawad Saiedi. He was carrying £250,000 in his car.

He later admitted co-ordinating the transfer of £15.6m of dirty money and was jailed for more than four years.

As the NCA investigated further, they discovered that he had been working for Ekaterina Zhdanova, head of the Smart cryptocurrency exchange service in Moscow.

The NCA subsequently discovered the same pattern of contacts across the country between people involved in drug dealing and those involved in cryptocurrency. They also uncovered further links to the notorious Kinahan drug cartel, which originated in Dublin and was based in the United Arab Emirates (UAE).

Drug profit couriers, who operate in the same way as Saiedi, collect cash from gangs after setting up a simple system to ensure they can trust each other and move quickly.

Once the cash is confirmed to be delivered to the courier, the equivalent in cryptocurrency provided by Russia’s Smart and TGR networks is sent to the drug gang’s secret online account. The cryptocurrency could then be used to buy cocaine in bulk from South American drug cartels.

Investigators found that a team of couriers collected cash from 55 different locations in the UK on behalf of at least 22 gangs over four months, and there were signs of similar schemes elsewhere in Europe.

Another UK-based express network is run by Semen Kuksov, the son of a Russian oil executive. He and his associates collected more than £12 million in drug cash in just 10 weeks, which was exchanged for virtual currency. He was jailed for nearly six years last February.

The NCA and its partners have so far seized £20m in cash linked to an estimated £700m in drug sales, and the vast majority of arrests and charges so far have been of couriers like Saiedi and Kuksov.

Rob Jones, of the NCA, said: “If you were looking to move money away from the drug trade now, and the drug trade is causing real harm to the UK, you would think twice about doing so because you don’t know whether it will impact Drug Deal.” Express has been leaked.

“You don’t know if we’re following them or where the proceeds of these crimes end up.

“We’re anticipating where this deal will go next and we’ll be ahead of the curve and wait.”

Wednesday’s U.S. sanctions are the final stage in unmasking the network and targeting senior figures.

The U.S. Office of Foreign Assets Control said it had imposed sanctions on TGR’s head, Russian-born Ukrainian George Rossi, also known as George Rossi, and his deputy, Russian Elena Chirkinyan. sanctioned.

Rossi claimed to be a legitimate businessman based in London, but his whereabouts were unknown.

Ekaterina Zhdanova, head of Smart, has also been appointed as a central figure in the business. She was initially sanctioned by US authorities in November 2023 for allegedly moving funds for the Russian elite.

The U.S. Treasury said Russian citizens and other members of the TGR network used cryptocurrencies and British financial services to transfer £2 million to the UK to purchase property for an undisclosed Russian. The NCA has not revealed whether it has taken action to seize the property.

However, the NCA said her role in assisting sanctioned individuals was only part of her ties to Moscow.

Investigators said that in 2022, the Russian government used Smart and TGR cryptocurrency exchange services to move funds for espionage operations.

Then, in 2023, the NCA said the scheme helped Russia Today, a state-controlled media platform banned in the UK, move cash into the country for one of its operations.