The $20 Billion Bank in the Country of the Poor

Law enforcement reports obtained by OCCRP indicate that one of the oldest and biggest banks in the Republic of Moldova, Moldindconbank, has been used in the biggest money laundering operation in Eastern Europe in recent years.

The operation, dubbed the Laundromat, involved about US$ 20 billion moving from Russia through the bank’s accounts over the past three years.

The staggering amounts of money pouring through Moldindconbank and other Moldovan banks seem to contradict the United Nation’s characterization of Moldova as the poorest country in Europe.

It is not the first time that Moldovan banks have been used in large-scale money laundering originating in Russia.

Riddled with corruption and situated at the eastern border of the European Union, the former Soviet country is the ideal stopover for dirty Russian money on its way to the European Union or Switzerland. Another Moldovan bank, Banca de Economii a Moldovei (BEM), was involved in another prominent money-laundering case investigated by OCCRP, the Sergey Magnitsky case.

Moldindconbank Headquarters Credit: OCCRP

Moldindconbank’s origins go back to Stroibank, a bank established in 1959 in what was then the Union of Soviet Socialist Republics (USSR). The Moldovan subsidiary of Stroibank became Moldindconbank in October 1991. It was meant to primarily finance the country’s industries and construction businesses.

Under Communism, all banks in Eastern Europe were state-owned. After the fall of the USSR, things got a lot murkier. Moldinconbank’s current ownership is difficult to discern, with offshore companies owning a good chunk of the bank.

Moldindconbank was also named in a previous money laundering case. In December 2008, the bank received a US$ 180,000 fine for non-compliance with the anti-money laundering regulations.

The bank denies any involvement in money laundering operations.

Related stories

Bombardier’s Azerbaijani Partner Has Chickens and Cows. Who Got the Millions?

Trans-Signal-Rabita, an Azerbaijani company, came out of nowhere to score a huge deal: A US$ 56.8 million share of a larger project with Swedish engineering giant Bombardier Transportation to install signaling equipment for Azerbaijan’s state-owned railway company. But when OCCRP reporters tracked down its owner, they found only a rural electrician living in a remote village near the Iranian border.

The Russian Laundromat Exposed

Three years after the “Laundromat” was exposed as a criminal financial vehicle to move vast sums of money out of Russia, journalists now know how the complex scheme worked -- including who ended up with the $20.8 billion and how, despite warnings, banks failed for years to shut it down.