Welcome to the second edition of perspicacity’s Crime and Corruption Update!
This newsletter brings you the most penetrating reports and investigations published in August 2024 on crime and corruption issues across the world.
Edition #2 includes: the trafficking of turtles in South America; the violent criminal takeover of Ecuadorian gold mines; controversial Russian exports of Ukrainian crops to Belarus; the role of Cyprus in evading sanctions on Russia and Belarus; the perils of urbanisation in the Global South; and new rules from the US government to help safeguard residential real estate from illicit finance.
perspicacity is committed to fact-based reporting that meets the highest standards of journalistic integrity. No content is AI-generated. To access the full stories summarised below, click on the headline.
BELARUS / CYPRUS
Murky Cypriot firm helps Belarus export potash in breach of EU sanctions
Organized Crime & Corruption Reporting Project (OCCRP), 8 August 2024
The state potash trade of Belarus is sanctioned by the EU. So why is a company registered in Cyprus being paid millions by the regime of strongman Belarusian president Alexander Lukashenko to help move the mineral through the Port of St Petersburg?
A mysterious Cyprus-based company is being paid millions by the Belarusian government to facilitate its trade in potash through Russia’s Port of St. Petersburg. The company, Dimicandum, doesn’t have a website or a public track record of working in logistics, but has been contracted to move potash exports the short distance from St. Petersburg’s train station to its port. Although on paper Dimicandum is owned by a Cyprus citizen, leaked documents show power of attorney for the company was held by a former Belarusian official who worked under Lukashenko’s right-hand-man, Viktor Sheiman. A leaked internal report from a Belarusian government agency flagged the fees being paid to Dimicandum as “unjustified.”
CHINA
Investigation identifies banned Nvidia chips in China
C4ADS, 5 August 2024
A C4ADS/New York Times investigation has identified 12 state-affiliated entities in China purchasing restricted chips manufactured by Nvidia, a US multinational technology company. This flies in the face of US-imposed export controls intended to curb China’s access to technology that enables mass surveillance campaigns and other potential human rights violations.
In support of a New York Times (NYT) article published on 4 August, C4ADS - a non-profit organisation targeting illicit networks that threaten global peace and security - identified 12 state-affiliated entities in China purchasing restricted Nvidia chips after the US Department of Commerce imposed export controls in October 2022. The chips, also known as graphics processing units, are known for their efficiency in training artificial intelligence models.
CYPRUS / UNITED KINGDOM
Associate of oligarch Petr Aven forfeits $1m at heart of UK sanctions evasion case
International Consortium of Investigative Journalists (ICIJ), 1 August 2024
As sanctions loomed amid Russia’s 2022 invasion of Ukraine, a Cyprus financial services firm transferred millions from an account it managed for Russian billionaire Petr Aven, ICIJ’s Cyprus Confidential has revealed. Aven’s estate manager has agreed to forfeit more than $1 million, ending a lengthy investigation by the UK’s National Crime Agency (NCA) into alleged dodging of sanctions imposed after the invasion. The NCA said it was the first time it had recovered money in a sanctions violation case. The agency alleged that efforts to move money held in multiple accounts for “the benefit of Petr Aven” - but not in Aven’s name - violated the sanctions. The transactions included the sale of a Bentley Bentayga for more than $200,000 and payments to staff at Ingliston House, Aven’s mansion outside London.
Aven is the former head of Russia’s largest privately-owned bank, Alfa-Bank. He became widely known after being named in the 2019 Mueller report into Russian interference in US elections as having offered himself as a conduit between Russian President Vladimir Putin and Donald Trump’s transition team shortly after the 2016 presidential election.
ECUADOR
The illegal gold zone that has become an epicenter of transnational crime
OjoPúblico, 18 August 2024
The town of Camilo Ponce Enríquez in Ecuador has become the scene of extreme violence over the control of gold mines. The criminal group Los Lobos, allied with the Venezuelan criminal organisation Tren de Aragua, Colombian gangs, and Peruvian arms traffickers, has taken control of the mines through extortion, kidnapping and murder. These transnational associations allow Los Lobos to control the extraction and export of gold, generating millions of dollars in revenue and a large laboratory for the criminal economy.
GEORGIA
Family of Georgian oligarch Bidzina Ivanishvili has unreported real estate in Russia
Organized Crime & Corruption Reporting Project (OCCRP), 9 August 2024
Georgian billionaire Bidzina Ivanishvili, often described as the country’s informal ruler, swore he would sell his Russian businesses and revoke his Russian passport when he created the political party Georgian Dream in 2011. But reporters have found that Ivanishvili’s wife has continued to expand her personal holdings in Russia, making a new acquisition as recently as this year. Her previously unreported assets consist of a second home and two adjacent plots of land near Peredelkino, an elite dacha settlement outside Moscow. A company linked to Ivanishvili owns another 2.7 hectares of adjacent land. Based on the prices of comparable properties, reporters estimate all of this real estate to be worth at least $14.7 million.
Related:
Georgia’s ruling party rejects and deflects OCCRP findings
OCCRP, 14 August 2024
GLOBAL SOUTH
The challenge to peace, security and human rights in the urban century
Global Initiative Against Transnational Organized Crime, 6 August 2024
Urbanisation is reshaping our world at an unprecedented pace, particularly in the Global South. From 2020 to 2070, the number of cities in low-income countries is projected to grow by 76%, with urban land area expected to expand by 141%. Rapid and unmanaged urban growth is creating fertile ground for organised crime, posing significant threats to global peace, security provision, and human rights.
The massive growth in urban areas, combined with weak governance, has already led to alarming rates of violence and human rights abuses. Currently, 56% of urban inhabitants in sub-Saharan Africa live in slums, amounting to over 230 million people vulnerable to predatory practices by organised crime groups. This report delves deep into these pressing issues and offers actionable insights for policymakers, governments, and international organisations.
PANAMA
Nordea to pay $35 million to end Panama Papers-linked money laundering probe
International Consortium of Investigative Journalists (ICIJ), 30 August 2024
European banking giant Nordea has agreed to pay $35 million to New York’s financial services watchdog following an investigation into the Helsinki-based bank’s alleged failure to prevent money laundering and other criminal activities, including some exposed in the Panama Papers leak. The New York State Department of Financial Services said the Finland-listed bank had been implicated in several global scandals, which showed Nordea helped hundreds of customers create offshore companies in tax havens.
PERU
The trafficking of the matamata turtle in South America
OjoPúblico, 16 August 2024
For years, Colombian authorities have been intercepting illegal shipments of thousands of matamata turtles. The trafficking routes for this species end up in Peru, the only country in the region that legally allows their export. Until 2015, a permit from the National Forestry and Wildlife Service was required to take them out of the country. Since 2015, when a law was passed eliminating this requirement, Peruvian zoos - alongside Colombian traffickers - have sent more than 60,000 matamatas to populate the aquariums and vanity projects of hobbyists around the world.
RUSSIA
The dealings of Dmitry Patrushev, a star of Russia's 'New Nobility' and a possible Putin successor
Radio Free Europe / Radio Liberty, Russian Investigative Unit (Systema), 5 August 2024
A study of a dacha in Russia’s Tver region, on the banks of the Volga River, has led investigative outfit Systema to uncover a number of apparent insider deals and manipulations leading from there to Cape Verde, off Africa’s Atlantic coast. All these deals were connected to Russian Agricultural Bank, which to this day remains within the purview of 46-year-old Russian deputy prime minister Dmitry Patrushev. Patrushev, the eldest son of presidential aide and former Security Council Secretary Nikolai Patrushev, has been earmarked by experts as a leading candidate to succeed President Vladimir Putin, 71.
UKRAINE
Ukraine condemns Russian rapeseed exports to Belarus as looting
Organized Crime & Corruption Reporting Project (OCCRP), 28 August 2024
Rapeseed from Ukraine’s Russian-occupied Kherson region is being shipped to Belarus, where it is processed into cooking oil. In Ukraine, the export is regarded as looting, and Kyiv is gathering evidence to prosecute. Part of the Kherson region has been under Russian occupation since the beginning of Russia’s invasion of Ukraine in 2022 and was officially annexed in September that year. The only country to recognise the annexation is North Korea.
UNITED STATES
FinCEN issues final rules to safeguard residential real estate, investment adviser sectors from illicit finance
US Treasury Financial Crimes Enforcement Network (FinCEN), 28 August 2024
On 28 August, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued two rules to help safeguard the residential real estate and investment adviser sectors from illicit finance.
The final residential real estate rule will require certain industry professionals to report information to FinCEN about non-financed transfers of residential real estate to a legal entity or trust, which present a high illicit finance risk. The final investment adviser rule will apply anti-money laundering / countering the financing of terrorism (AML/CFT) requirements, including AML/CFT compliance programs and suspicious activity reporting obligations, to certain investment advisers registered with the US Securities and Exchange Commission (SEC), as well as those that report to the SEC as exempt reporting advisers. The rule will help address the uneven application of AML/CFT requirements across this industry.
Related:
Long-awaited final rules represent dramatic improvements to US anti-money laundering framework
Financial Accountability & Corporate Transparency (FACT) Coalition, 28 August 2024ACDC welcomes new rules to combat money laundering in real estate and investment funds
Anti-Corruption Data Collective (ACDC), 28 August 2024
Diving deeper into commercial real estate: EB-5 Visas
Anti-Corruption Data Collective (ACDC), 16 August 2024