Eurojust aids cross-border crackdown on EUR 2 bln fraud scheme

Judicial and law enforcement authorities in Italy, Latvia, and Lithuania have taken concerted action against a large-scale money laundering business, centring around a Lithuanian financial institution. Since 2017, an estimated EUR 2 billion has been laundered by two main suspects via a worldwide web of shell companies. The suspects, who now have been detained, offered money laundering online as a service to criminals.

Crackdown results and findings

On February 27, 2024, a coordinated effort involving 250 judicial and law enforcement officials resulted in 18 arrests, including the main suspects. 55 locations were searched, leading to the freezing of over EUR 11.5 million. Eurojust and Europol played crucial roles in coordinating these international efforts.

The investigation targeted a financial institution in Lithuania, set up by an Italian-based organised criminal group (OCG) in 2016. Led by suspects in Lithuania and Latvia, the OCG facilitated money laundering services for various criminal activities across the EU, injecting proceeds into the economies of Latvia and Lithuania through real estate and luxury purchases.

The laundered money included the EUR 15 million from unlawfully obtained so-called building bonuses, provided by the Italian national authorities. These bonuses were given for renovation and insulation works and other energy-saving measures of existing buildings. In reality, no repairs took place, the applicants were not the owners, or the buildings did not even exist. The main perpetrator of this fraud was a practising tax consultant.

Investigations into the OCG were initiated in 2021 by the Public Prosecutor’s Offices of Naples and Lecce in Italy, involving their counterparts in Latvia and Lithuania in 2022 via Eurojust.

Cross-border cooperation and enforcement efforts

In 2022, the financial and judicial authorities in Lithuania already closed the electronic payment institution. Its banking licence was revoked and bankruptcy procedures were started for non-compliance with money laundering prevention regulations. A rapid reaction of Latvian and Lithuanian authorities to reports on suspicious transactions led to the identification and freezing of millions in funds, real estate properties and luxury vehicles, which now can be confiscated.

During the same year, Eurojust facilitated the establishment and funding of a joint investigation team among all national authorities involved, also establishing a coordination centre for simultaneous actions across the three countries. They organised eight coordination meetings to prevent jurisdictional conflicts and facilitated the restitution of over EUR 3 million of illegally obtained public funds frozen by Lithuanian authorities. Europol provided extensive support since January 2022, deploying experts to Latvia and coordinating closely with investigators. Eurojust's collaboration with national authorities demonstrates effective transnational judicial cooperation, emphasising their commitment to combating fraud and criminal networks across borders.

The actions in the three countries were carried out at the request of and by the following authorities:

• Latvia: Prosecutor General’s Office, Rīga Judicial Region Prosecution Office; 1st Unit of the Economic Crime Enforcement Department of the Central Criminal Police Department of the State Police;

• Italy: Public Prosecutor’s Offices of Naples and Lecce; Guardia di Finanza of Naples and Lecce;

• Lithuania: Vilnius Regional Public Prosecutor’s Office; Vilnius County Police Headquarters.