Latvia: Bank Fined For Role in Magnitsky Money Laundering Case

Published: 19 June 2013


Latvia’s financial market regulator fined a domestic bank $190,000 for its role in laundering $230 million stolen from the Russian government, according to a Hermitage Capital press release on Wednesday.

That fine is the maximum penalty that can be levied against a single bank under Latvian law.

The fine comes after a probe by the Financial and Capital Market Commission (FCMC) into six Latvian banks suspected of receiving money related to illegal tax refunds that were exposed by Sergei Magnitsky while working for Hermitage Capital. The FCMC did not release the name of the sanctioned bank. It said only that the bank had failed to adequately comply with banking standards, and that  the resulting fine reflected “deficiencies” in its anti-money laundering controls.

Magnitsky was the whistleblower who first identified a fraudulent $230 million tax refund granted to phantom companies in 2008. When he reported the crime to Russian authorities, he was imprisoned for tax evasion and framed for the very offenses he uncovered. Beaten and denied medical treatment while in prison, he died in 2009.

OCCRP has published a number of stories on the Magnitsky case.