Last week, the National Crime Agency (NCA) – the United Kingdom’s national law enforcement service acting against organized crime, human, drug and weapons trafficking, and malicious cyber activity – led an operation that disrupted and exposed a multi-billion dollar web of money laundering networks catering to Russian elites, organized criminals and international fraudsters. In a multi-faceted operation that saw collaboration with the United States Treasury Department’s Office of Foreign Assets Control (OFAC), the Federal Bureau of Investigation (FBI), and other foreign partners, the notorious money laundering networks known as “Smart” and “TGR” that had facilitated countless large-scale transfers of illicit funds on behalf of bad actors around the world were effectively shut down. The results of the effort coined “Operation Destabilise” are already eye-opening, with more ramifications expected to follow. To date, a total of 84 arrests of individuals acting in conjunction with or employed by businesses operating with the sole purpose of laundering ill-gotten funds for the aforementioned questionable individuals have already been made, with more than 20 million Euros worth of cash and cryptocurrency also being seized in the process.
The reach of these targeted networks has been felt globally for the better part of the last decade, with Russian oligarchs and politically-exposed individuals also utilizing these processes to evade international sanctions – many of which had been levied in response to Russia’s 2022 invasion of Ukraine. Smart and TGR were found to be particularly useful to UK-based criminals as well, though their operations had also established hubs in the Middle East, Russia, and South America. Russian clients were aided in illegally investing their money in the UK, and some of this cashflow was also discovered to have assisted in funding Russian espionage efforts against their international counterparts. One prominent criminal organization that directly benefitted from both Smart and TGR is known as the Kinahans. This crime syndicate, based in Ireland and operating under a family-run, mafia-style framework, was heavily involved in the trafficking of illegal drugs and firearms both locally and across international borders, landing them on OFAC’s sanctions list in 2022.1 As a result, the group turned to Smart and TGR to circumvent these sanctions to continue to fund their destabilizing activities while evading authorities.
During “Operation Destabilise”, investigators discovered that Smart and TGR would cycle money from cash to cryptocurrencies repeatedly while also transferring funds from country to country in an effort to obfuscate a paper trail. As part of the investigation, these criminal networks were found to utilize stablecoins like Tether (USDT) and other prominent crypto-currencies to facilitate their crimes. After being paid in crypto in exchange for their cash, criminal gangs would use the virtual currency to reinvest in their illicit business, buying more drugs or firearms without the need to move any physical money across borders, a cycle that allowed their respective operations to thrive. These money laundering networks would also take a small percentage from their facilitated transfers, which allowed their operations and global reach to continue to grow as well.
“For the first time, we have been able to map out a link between Russian elites, crypto-rich cyber criminals, and drugs gangs on the streets of the UK. The thread that tied them together – the combined force of Smart and TGR – was invisible until now. The NCA and partners have disrupted this criminal service at every level” said Rob Jones, Director General of Operations at the National Crime Agency. Jones continued, “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.”1
As the results of Operation Destabilise were revealed to the public, OFAC also announced expanded sanctioning for five related individuals and four entities discovered as part of the case. The most striking finding includes a sole entity incorporated in the United States. The group in its entirety is listed as follows follows:
- George Rossi (AKA Maksakov, Yury, Georgy Rossi, or Heorhii Rossi): A Ukrainian national who founded TGR Partners, is the director of TGR Corporate Concierge LTD, and likely controls the TGR Group.
- Elena Chirkinyan (AKA Yelena Norayrovna Chirkinyan or “Elle”): A Russian national who is Rossi’s direct subordinate, a partner at TGR Partners, the CEO of TGR Corporate Concierge LTD, and the manager of TGR DWC-LLC. 2
- Andrejs Bradens (AKA Andrejs Carenoks): A Latvian national associated with several TGR networks. 2
- Nikita Vladimirovich Krasnov (AKA “ACESCOM”): A Russian national who laundered cash and cryptocurrency on behalf of elite clients. 2
- Khadzhi Murat Dalgatovich Magomedov (AKA Magomedov or Murat): A Russian national who laundered cash and cryptocurrency on behalf of elite clients. 2
- TGR Partners: A Moscow-based organization founded by Rossi that provided services to a wide range of illicit actors, such as cryptocurrency trading, foreign exchange payments, and concierge services. 2
- TGR Corporate Concierge LTD: A U.K.-based network controlled by Bradens. Chirkinyan is its CEO. 2
- TGR DWC-LLC: A UAE-based network operated by Chirkinyan that provided services to help elites obscure the source of ill-gotten funds. 2
- Siam Expert Trading Company Limited: A Thailand-based network associated with Bradens. 2
- Pullman Global Solutions LLC (Pullman Global): A Wyoming-based organization owned by Bradens.2
As part of OFAC’s sanctions, all property and interests in property of the identified/blocked persons described above that are in the United States or in the possession or control of U.S. persons are now blocked and must be reported to OFAC.2 Also, any entities that are owned, either directly or indirectly, individually or in the aggregate, 50% or more (beneficial ownership) by one of the blocked persons are also blocked by association. All U.S. persons and U.S.-based entities are banned from doing business with the listed persons. In addition, any foreign persons who conspire with American persons to violate these sanctions will be held responsible for their actions.2
As part of the press release detailing their role in the developments, OFAC made clear that their goal is not simply to punish for wrongdoing, but more ideally influence the affected persons to change their ways, which would then allow for sanctions to be lifted. While this remains a pipe dream when considering many of the individuals involved are career criminals, stranger things have happened.
“The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons (SDN) List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior.”2
All told these developments signal a paradigm shift in the global anti-crime movement with respect to digital assets, this as an increase in coordinated operations between domestic and international law enforcement bodies to thwart the activities of criminal syndicates operating in this space are beginning to bear fruit. The truth of the matter is that where criminals and sanctioned individuals were once able to abuse the crypto market with no significant fear of detection by law enforcement, the growing increase in oversight on these markets coupled with a sharp increase in enforcement actions for criminal wrongdoing in the cyber-space seen in 2024 will continue to force bad actors to weigh the risk versus the reward for their activities in this realm.
Citations
- Team, Chainalysis. “NCA Disrupts Multi-Billion Dollar Russian Money Laundering Network.” Chainalysis, 4 Dec. 2024.
- “Treasury Exposes Money Laundering Network Using Digital Assets to Evade Sanctions.” U.S. Department of the Treasury, 4 Dec. 2024.
