Hungarian Police Bust a Gang that Laundered Money via ‘Strawmen’
Hungarian authorities disrupted a criminal organization suspected of laundering millions of euros in illicit proceeds and perpetrating fraud using administrative papers, the European Union’s police - Europol, said in a statement.
The Budapest Metropolitan Police conducted searches of 24 homes, questioned 16 suspects and arrested five. During the operation funds were seized in 32 countries across Europe, Australia and South America, according to the statement.
The investigation revealed that the criminal organization has been operational since September 2020 and that its members formed a number of companies with no meaningful economic activities and acquired other firms using strawmen.
“The suspects opened bank accounts in the name of these companies to be used in a chain within a money laundering scheme. The bank accounts received transfers from other accounts based in different countries; these assets usually originated from invoice fraud or cryptocurrency-related swindling,” Europol explained.
The cash would subsequently be moved to other accounts in order to obscure the identity of the funds’ owners, read the statement.
The investigation identified 44 people participating in these illicit actions, 10 of whom were organizers and 34 were acting as strawmen. The strawmen mostly came from a low-income environment and gave their personal information in exchange for a small sum of money.
Some of them worked with members of the criminal network while withdrawing and moving assets for their own account. In contrast to the frauds performed outside of Hungary, the strawmen were only related to the scam through recruiters and were primarily involved in the money laundering process, according to the statement.
“More than 44 million euro (US$46.16 million) has been received on accounts linked to the criminal group, while the criminal origin of a further 5 million euro ($5.35 million) has already been identified,” according to Europol.
Police also seized “one high-end vehicle, large quantities of electronic equipment, mobile phones and sim cards, data storage devices, payment cards, weapons and ammunitions, jewelry, pledge ticket for a value of about 740 euro (US$792) and the equivalent of more than 120,000 euro ($128,612) cash in different currencies.