3 foreigners held in Riga for money laundering via shell bank

The Latvian economic police have detained three foreign nationals for money laundering via a shell bank they had been running in Riga, law enforcement authorities said.

Dairis Anucins, a representative of the Latvian State Police, said the three foreigners were held in June as part of an ongoing criminal investigation.

A shell bank is a credit institution that has no physical presence in any country and whose operations are not monitored by a supervisory body. Shell banks are banned in Latvia.

Investigators of the economic police established that such an illegal bank had probably been operating from a rented office in Riga. A probe revealed that several people had been involved in an illegal financial business, laundering large amounts of money through the shell bank.

Peteris Bauska, the head of the economic police, told reporters that the illegal bank had been catering mainly to various offshore firms.

The shell bank also had a number of technical staff tasked with drawing up sham contracts, carrying out transactions on the suspected criminal's orders and providing IT support. The shell bank used companies in Latvia, Estonia, Poland, Russia and other countries and their bank accounts to cover up the unlawful deals. The amount of transactions carried out by the shell bank could reach millions of euro a day.

The economic police, backed up by officers from Latvia's Omega counter-terrorism unit, raided the shell bank's office, seizing evidence like payment instruments, computers, money, documents and bookkeeping records, as well as arresting three foreign nationals.

The investigation into the money laundering case is ongoing, authorities said. Endit