Raleigh couple, 3 others indicted for money laundering, murder-for-hire plot

By Ben Graham – Staff Writer, Triangle Business Journal

A Russian couple, whose north Raleigh mansion was raided by the FBI, and three others have been indicted on a slew of charges, including money laundering, immigration fraud and a murder-for-hire plot.

The charges from the U.S. Attorney’s Office in Raleigh allege that Leonid Teyf, 57, orchestrated a kickback scheme in which he funneled money from Russia Military Defense contracts, skimming more than $150 million.

The alleged kickbacks took place over a two-year period and were orchestrated through a company called Voentorg, where Teyf served as deputy director. Some of the money was paid off to others, while the rest was placed in bank accounts in the U.S. and abroad, investigators claim.

Along with his wife Tatyana Teyf, 41, and Alexsy Timofeev, 37, Teyf is alleged to have created businesses and opened a series of financial accounts to launder the money, including a company called CTK Transportation in Illinois.

At one unnamed American bank, Teyf and his co-conspirators received at least 294 wire transfers totaling $39.5 million, according to the U.S. Attorney’s Office. Foreign corporations and banks in countries known for money laundering were cited as the source of 293 of the wires.

Additional charges include conspiring to bring a foreign national in the U.S. illegally, an allegation that also includes 41-year-old Olesya Yuryevna Timofeeva, wife of Timofeev.

Teyf, along with associate Alexei Polyakov, is also accused of making false claims to obtain a U.S. visa.

In a separate scheme that was discovered during the investigation into the money laundering operation, Leonid Teyf is accused of paying $25,000 to have someone murder a man he believed was having an affair with his wife. Teyf also sought to have the man deported, allegedly paying $10,000 to a U.S. Department Homeland Security official to make that happen.

The charges come more than a week after multiple media outlets reported that the FBI was raiding the Teyfs’ north Raleigh mansion in North Ridge Country Club on Dec. 5. The couple bought the 16,856-square-foot estate in 2012 for $4.2 million, at the same time that the alleged money laundering scheme was taking place.

Since then, the Teyf’s have expanded their reach into Raleigh real estate, buying a 2-story historic building on East Hargett Street for nearly $1 million in May, with plans to potentially convert the space into a restaurant. The Teyfs also are partners with Blue Sky Services in the Wyndcrest Subdivision in north Raleigh.

US anti-money-laundering bill could reappear early next year

By Margaret Carrigan

The Illicit Art and Antiquities Trafficking Prevention Act (HR 5886), proposed in the US Congress in May, is now in limbo after the November mid-term elections. However, it could be reintroduced to the new Congress in January 2019, amid a recent rise in anti-money-laundering initiatives worldwide.

In the last month alone, German police raided Deutsche Bank’s headquarters in Frankfurt as part of an investigation into the lender’s association with criminals laundering money through offshore tax havens, stemming from information in the Panama Papers and Offshore Leaks documents. Last week, the UK parliament suddenly suspended the tier 1 (investor) visa category for new applications due to corruption fears, effective immediately. Known as the “golden visa”, the scheme provided fast-tracked settlement for people willing to invest millions in the UK but was criticised for providing the super-rich with an easy way to launder stolen wealth. New rules to be announced in 2019 will require applicants to provide comprehensive audits of their financial interests.

The initial introduction of HR 5886 in the US came on the heels of the European Parliament’s fifth Anti-Money-Laundering directive, adopted earlier this year, which applies to all businesses selling works of art with transactions of €10,000 or more, irrespective of the payment method. Similarly, HR 5886 would apply the Bank Secrecy Act (BSA) to the art and antiquities market in order to quash money laundering. Dealers would be required to report transactions exceeding $10,000.

The bill would also force those who sell at least $50,000 worth of goods in a year to submit their financial records to the US government. But whether money laundering is prevalent enough within the industry to justify the regulatory burden it could place on dealers has become a point of contention, with some in the trade questioning who the legislation ultimately benefits.

The challenge with regulating the art business, says Andrew Schoelkopf, the president of the Art Dealers Association of America (ADAA), is that “those who seek to regulate it have a poor understanding of how the business actually functions”. He argues that money laundering is “simply not something that’s pervasive” in the art market.

The United Nations Office on Drugs and Crime (UNODC) estimates laundered funds to account for 2%-5% of the global GDP ($800bn-$2tr) annually, but there is no clear data illustrating the scope of money laundering within the art market. Like many high-value assets, art can ostensibly be used to “wash” dirty money—that is, profits gained illegally, often via the sale of drugs or weapons but also through such activities as embezzlement, insider trading and illegal gambling. These assets can then be traded or used as collateral, effectively scrubbing the criminal stain from the ill-gotten cash.

The art industry is an attractive marketplace for such activity for two main reasons. First, it is growing at a rapid rate; the US is the world’s largest art market, valued at $26.6bn and accounting for 42% of the global total of $63.7bn in 2017. A study recently conducted by Deloitte predicts that art and collectible wealth held by ultra-high-net-worth individuals will grow from an estimated $1.62tr in 2016 to $2.7tr in 2026.

Second, the art market is notoriously inscrutable—the price of a work of art is more subjective, and therefore volatile, than that of many other commodities. James McAndrew, a former specialist at US Customs and the Department of Homeland Security (DHS) and a forensic specialist in international art trade at the New York-based law firm GDLSK, says it is for that same reason that money laundering is less of an issue in reality than it is in theory—art is highly illiquid and difficult to sell. When it comes to high-priced works of art, especially those sold through legitimate dealers and auction houses, it is even harder to fudge the funds. “It’s like buying a house. You want a clear title,” McAndrew says.

Within the last decade or more, there have only been a few instances in which works of art were used as an accessory to money laundering, including the high-profile case of Brazilian banker Edemar Cid Ferreira in 2005, who smuggled works of art out of the country to hide illegal profits. In March, as part of an FBI sting operation to bust a $50m international securities fraud and money laundering scheme, the London-based dealer Matthew Green was charged with being part of a plot to “clean-up” £6.7mthrough the sale of a Picasso. He is yet to plead.

The common trait of both cases is that money laundering through art was just a small part of a bigger criminal operation—there have been no convictions to date for pure money laundering in the art trade. “Increased AML [anti-money laundering] legislation for the art world just seems like an opportunistic measure for prosecutors in order to force guilty pleas for unrelated corruption-and-fraud type crimes,” says Peter Tompa, the director of the Global Heritage Alliance and of counsel at the Washington, DC-based law firm Bailey and Ehrenberg.

Yet when Congressman Luke Messer, a Republican from Indiana, introduced HR 5886 in the US House of Representatives in May, his chief stated aim was to counteract terrorist financing “and crack down on terrorist organisations like ISIS”. It represented the evolution of a bill that had died on the Senate floor in 2016—the Terrorism Art and Antiquity Revenue Prevention Act, which was specific to the sale of looted antiquities from countries such as Iraq and Syria.

“Money laundering is a very different issue for antiquities than it is for art at large,” Tompa says, adding that he agrees such legislation could help promote the repatriation of looted antiquities, though a recent US State Department-funded study found that the Islamic State (IS) probably made little more than $1m from the sale of such objects—a far cry from the previously stated estimate of anywhere from $4m to $7bn. There is little to no numeric evidence connecting US art sales with IS or other terrorist activities.

That has not dissuaded proponents of the bill. “It’s challenging to put a number to a trade that by its very nature is secretive,” says Deborah Lehr, the chairman and co-founder of the Antiquities Coalition, a private archaeological advocacy group with ties to Unesco, based in Washington, DC. For that reason alone, “this area clearly merits a closer evaluation by authorities”, she says. But opponents say it could put the art trade in a regulatory straitjacket; the ADAA’s Schoelkopf says: “Art dealers are unduly being swept up into the same ball of wax with a handful of sophisticated financial industry fraudsters who don’t abide by regulations like these anyway.”

Furthermore, the majority of US art purchases are by cheque, credit card or wire transfer, all of which pass through financial institutions already subject to the US Treasury’s Financial Crimes Enforcement Network’s (FinCEN) tracking and reporting requirements. “If you make the dealers take this kind of reporting on individually, they’re all going to make their own version of it. It’s not going to be consistent and that will cause more problems,” McAndrew says.

But John Byrne, the vice chairman of AML Rightsource, a professional services firm specialising in AML and BSA compliance, says the art world’s arguments against regulation “are neither compelling nor new”. He adds that, if the bill were enacted, dealers would have “ample opportunity to comment on any regulation so they could make the case on how different they are from traditional banks, so requirements could be tailored”.

Messer lost his bid for a Senate seat this year, so HR 5886 requires a new sponsor and, as such, will lapse at the end of December. But Tompa says the bill is likely to be re-introduced to the new Congress when it is back in session since it appears to still have some support from “certain AML contractors who presumably want to expand their compliance business”.

Tampa woman faces 20 years in prison for money laundering scheme

By Crystal Owens

A Tampa woman is facing 20 years in federal prison after she pleaded guilty Monday to conspiracy to commit money laundering.

As part of a plea agreement with federal prosecutors, Brenda Dozier, 54, agreed to pay approximately $225,000 in restitution to the victims of the money laundering conspiracy and to a forfeiture money judgment in the same amount.

A sentencing date has not been set.

Dozier laundered money from July 2015 through at least November 2015 that had been extorted from residents by conspirators residing in the states and overseas, according to U.S. Attorney Maria Chapa Lopez.

Her India-based conspirators extorted money by impersonating IRS officers and misleading victims to believe that they owed money and would be arrested and fined if they didn’t immediately pay their alleged back taxes. As part of the conspiracy, Dozier opened bank accounts, which she used to receive the fraud proceeds, typically via interstate wire transfers, according to U.S. Middle District of Florida court records. Once Dozier had retrieved the funds, she provided the money to her co-conspirators. Dozier was paid for opening the accounts and conducting the transactions.

Three of her co-conspirators, Nishitkumar PatelHemalkumar Shah and Sharvil Patel, were charged on Oct. 11 in a related case with conspiracy to commit wire fraud and extortion, and with individual counts alleging wire fraud, extortion, money laundering and aggravated identity theft for their roles in the scheme.

Their trials are scheduled to begin in April 2019 in U.S. Middle District Court in Tampa.

The case was investigated by the Treasury Inspector General for Tax Administration, the IRS–Criminal Investigation, the Florida Department of Law Enforcement and the Tampa Police Department. It is being prosecuted by Assistant U.S. Attorney Rachel K. Jones.

Israel becomes member of global body against money laundering, terror financing

By Sue Surkes

Israel on Monday became a full member of the Financial Action Task Force, an international body set up to combat money laundering, terrorist financing and other threats to the international financial system.

The Jewish state has now taken its place alongside 37 other members — including most of the G20, the world’s 20 leading industrialized and emerging economies — just 16 years after being blacklisted by the organization.

According to the Justice Ministry, a FATF compliance report on Israel — also issued Monday and based on a detailed compliance audit carried out in Israel earlier this year — ranked the country as one of three leading states, alongside the US and the UK, for the effectiveness of its anti-money laundering apparatus, its battle against terror financing, the work of its Money Laundering and Terror Financing Prohibition Authority, and its policy of seizing the financial proceeds of crime.

“Joining the organization is a national achievement on a political level, contributing to Israel’s ability to fight terrorist financing internationally, and strengthening the Israeli economy,” Justice Minister Ayelet Shaked told a press conference.

Membership also tags Israel as an attractive country for international investment and improve the status of the Israeli financial sector and its ability to operate in the global economy, Shaked added.

Shlomit Wagman-Ratner, head of the Israel Money Laundering and Terror Financing Authority, said, “The report reflects the decisive leap that Israel has taken over the past two decades in its perception of the need to protect the integrity and security of Israel’s financial system.”

FATF President Marshall Billingslea said, “In a comprehensive review of its anti-money laundering and terror financing regime, Israel successfully achieved good results in identifying and addressing the risks facing it.

“The review process is not the end point, but is Israel’s starting point for further strengthening the regime, and we are confident that in light of Israel’s commitment to protecting the integrity of its financial system, the county will act quickly to implement the recommended actions in the audit report.

“Membership in FATF opens a new chapter for Israel and will enrich FATF as an organization.”

Texas Trio accused of Money Laundering, ID Theft

By Nicholas Davis

WICHITA FALLS, TX (RNN Texoma) – Wichita County Sheriff Deputies say they have arrested three men after a traffic stop unveiled more than $75,000 in cash and “hundreds of names, credit card numbers, pin numbers and zip codes.”

According to a press release, a Highway Interdiction Deputy made a traffic stop on U.S. 287 near Electra at around 1:45 Monday afternoon.

The occupants consented to a search of the car.

During the search, the deputy discovered $75,215 cash, gift cards not under the names of the driver or passengers, and two flash drives containing names, credit card numbers and more.

The driver, 34 year old Osniel Ramirez along with two passengers have been arrested.

The Passengers have been identified as 25 year old Disney Avila and 27 year old Miguel Aguiler.

All three man face charges of Fraudulent Use/Possession of Identifying Information and Money Laundering.

All three men were under investigation by the Amarillo Police Department regarding a large number of identity theft cases that occurred in that city.

Panama Papers: US files first criminal charges over money laundering scheme

By Will Fitzgibbon

United States authorities have charged four men, including two former Mossack Fonseca employees, with money laundering and fraud, the Department of Justice announced today.

The charges are the first in the U.S. following the Panama Papers investigation, which was first published in 2016 by the International Consortium of Investigative Journalists, Süddeutsche Zeitung and more than 100 global media partners.

Ramses Owens and Dirk Brauer, two former senior employees of the Panama-headquartered law firm, were charged with a string of offenses “in connection with their alleged roles in a decades-long criminal scheme,” the DOJ said in a statement.

Authorities also charged Boston-based accountant Richard Gaffey, and former U.S. taxpayer Harald Joachim Von Der Goltz with tax evasion, wire fraud and money laundering.

A statement from the DOJ alleges that the four men “defrauded the U.S. government through a large scale, intercontinental money laundering and wire fraud scheme.”

“These defendants went to extraordinary lengths to circumvent U.S. tax laws in order to maintain their wealth and the wealth of their clients,” said U.S. Attorney Geoffrey S. Berman.

“For decades, the defendants, employees and a client of global law firm Mossack Fonseca, allegedly shuffled millions of dollars through offshore accounts and created shell companies to hide fortunes.”

U.S. authorities partnered with enforcement agencies around the world to arrest Brauer in Paris, France, and Von Der Goltz in London, United Kingdom. Gaffey was arrested in Boston on Tuesday. Panamanian citizen Owens remains at large.

“These efforts reflect the commitment of U.S. law enforcement to follow that trail and apprehend these criminals regardless of where they are in the world.”

The men are presumed innocent until proven guilty.

According to the DOJ, Mossack Fonseca employees deliberately created bank accounts in tax havens to hinder enforcement investigations and advised U.S. taxpayers to secretly repatriate money. The names of the real owners of shell companies “generally did not appear” on offshore company paperwork.

The Panama Papers investigation was based on a trove of 11.5 million files from inside Mossack Fonseca that were leaked to reporters Bastian Obermayer and Frederik Obermaier at German newspaper Süddeutsche Zeitung, and shared with ICIJ. The investigation, done in collaboration with more than 370 reportersworking for 100 media outlets, exposed the offshore holdings of world political leaders, links to global scandals, and details of the hidden financial dealings of fraudsters, drug traffickers, billionaires, celebrities, sports stars and more.

German-born Von Der Goltz, who lived in the U.S. from 1984, allegedly evaded taxes through shell companies and offshore bank accounts.

The DOJ alleged that Von Der Goltz falsely claimed his mother, who lived in Guatemala and is now 102, owned companies and bank accounts. Von Der Goltz denied wrongdoing, according to a 2016 report from ICIJ media partner The New York Times.

Gaffey allegedly helped Von Der Goltz and another unnamed U.S. taxpayer evade taxes, the DOJ alleged.

“The charges announced today demonstrate our commitment to prosecute professionals who facilitate financial crime across international borders and the tax cheats who utilize their services,” said Assistant Attorney General Brian A. Benczkowski.

4 men charged with fraud, money laundering in connection to Panama Papers investigation

By Doha Madani

The Department of Justice filed charges including fraud and money laundering against four individuals, one a U.S. citizen, in connection with their alleged roles in a decades long criminal scheme perpetrated by Mossack Fonseca & Co, a Panamanian global law firm.

The case is part of an investigation stemming from the Panama Papers, a massive leak of financial details about secret offshore accounts in 2016.

Richard Gaffey, a U.S. citizen; Ramses Owens, 50, of Panama; and Dirk Brauer, 54, and Harald Joachim Von Der Goltz, 81, both German citizens, were charged in an indictment unsealed on Tuesday, according to a Department of Justice press release.

“They had a playbook to repatriate untaxed money into the U.S. banking system. Now, their international tax scheme is over, and these defendants face years in prison for their crimes,” Berman said.

Prosecutors say Owens and Brauer, while working with Mossack Fonseca clients, marketed, created, and serviced sham foundations and shell companies in foreign countries to conceal U.S. taxpayers’ actual incomes from the IRS, the Justice Department said in a statement.

Von Der Goltz was allegedly one of those clients and was assisted by Gaffey, an accountant, the statement said.

Three of the four defendants named in the indictment have been arrested while Owens, a Panamanian attorney, remains at large.

Owens, Gaffey and Von Der Goltz were charged with one count each of wire fraud, money laundering conspiracy, and conspiracy to commit tax evasion. Owens and Brauer were also charged with one count each of conspiracy to defraud the United States and conspiracy to commit wire fraud.

In addition, Gaffey and Von Der Goltz were charged with four counts of willful failure to file an FBAR, a disclosure report for U.S. taxpayers who have foreign financial accounts or interests worth more than $10,000. Von Der Goltz is also facing two counts of making false statements.

Polk County detectives arrest 103 suspects in prostitution, trafficking bust

By Josh Cascio

The Polk County sheriff’s latest prostitution sting netted 103 arrests.  Sheriff Grady Judd made the announcement during an afternoon press conference Monday.

True to form, he had a prepared line for several of the suspects.

“This dude was excited to get there he was still wearing his hospital scrubs when we arrived,” he said of one of the men, an alleged john.

The six-day operation focused heavily on online and social media ads. Of the 103 arrests made, 54 were alleged prostitutes, 29 were alleged johns, 13 were alleged pimps and seven face drugs and other charges.

Among the most serious arrests is 27-year-old Anthony Camacho, accused of human trafficking.

“He brought a 17-year-old child to the operation to prostitute her,” Sheriff Judd said.

That 17-year-old is said to be a runaway from Virginia.  If convicted, Camacho, who has a violent past that includes attempted murder, will face up to 30 years in prison.

“Our victim of human trafficking referred to him as King…we threw a bunch of aces at King now he’s in the county jail,” Judd said.

Other notable arrests include Edwin Lopez of Kissimmee, who allegedly wanted to have sex with a 14-year-old girl, and William Welch, whom the sheriff says also planned on having sex with an underage teen girl.  Welch remains at large; there is a warrant out for his arrest.

 

Failed B.C. money-laundering case shows ‘snow-washing’ is thriving in Canada

By Barrie McKenna

When RCMP raided the offices of Silver International Investments Inc. in Richmond, B.C., they found a $2-million stash of $20 bills, along with records pointing to a much bigger operation. Law-enforcement officials would eventually conclude that the company was part of an alleged scheme to launder hundreds of millions of dollars a year in dirty money from China through various casinos in the province, including the nearby River Rock Casino.

Three years later – just as the case was set to go to trial – the Mounties and federal prosecutors abruptly stayed criminal charges against the company and its two principal operators, Caixuan Qin and Jain Jun Zhu. Officials acknowledged there was no “reasonable prospect” of getting a conviction.

Just like that, one of the largest money-laundering investigations in Canadian history, dubbed E-Pirate, hit a brick wall.

The case’s collapse suggests something went “terribly wrong,” B.C. Attorney-General David Eby lamented this week. “To have it fail is … very devastating for all of us who are trying to get dirty money out of our economy.”

Canada already enjoys an international reputation as a nice, peaceful country where it’s far too easy to hide and launder ill-gotten wealth. And this case’s demise is likely to enhance our allure in the murky world of dirty money.

“Canada has been famously named as the place where people come to ‘snow-wash’ their dirty money,” said Kevin Comeau, a Toronto lawyer and anti-money-laundering expert.

That’s unfortunate because authorities are only belatedly taking the problem seriously in Canada. Earlier this month, the House of Commons finance committee issued a long-awaited report, highlighted by a key recommendation to deal with the problem of beneficial ownership.

Unlike a legal owner, who typically holds the title to an asset, a beneficial owner may exercise influence through voting rights or other unseen forms of control. While the name of a legal owner is public, the beneficial owner’s name is often not.

Knowing who owns a property or a company is the missing link between the crime of laundering money and the illegal activities where that cash is generated, ranging from tax evasion to terrorism and drug smuggling. The ability of people to hide behind proxies and numbered companies – as they can now do in Canada – is the main obstacle to rooting out money laundering.

And so it was welcome news that the committee’s main recommendation is to “create a pan-Canadian beneficial ownership registry for all legal persons and entities” who have “significant control” over assets, such as real estate, stocks or companies.

The problem, experts say, is that other countries are moving much faster to create the legislative and regulatory structures to track, expose and prosecute money launderers. Putting the recommendations into law could take a year or more, given next year’s looming federal election.

“We are updating our laws, but not bringing them up to the standard of what other nations are doing,” Mr. Comeau explains. “We are very much the laggards now.”

And dirty money inevitably exploits weak links in the global financial system, especially in rich developed countries such as Canada where corruption is rare.

Unfortunately missing from the committee report is a nod to creating a new charge, punishable with prison time, for those who falsely claim to own laundered assets. Such false claims, Mr. Comeau says, is often the “rabbit hole” that thwarts law enforcement from linking cleansed assets to criminals.

Also lacking is a requirement that the new beneficial-ownership registry be publicly accessible, depriving officials of help from individual citizens and whistle-blowers.

Now maybe you think money laundering doesn’t affect you – that it’s an invisible and victimless crime. Well, consider the volume of illegal money that is likely flowing into Canada to be washed, and where it all ends up. Low-ball estimates put the figure at $40-billion to $100-billion a year.

Some might argue that foreign direct investment, dirty or not, is better than none at all. It drives real estate and construction activity, generates millions of dollars in revenues for government-run casinos, and no doubt creates hundreds of thousands of jobs.

But at what cost? Assume that much of this illicit money goes into real estate. It may explain why so many middle-class Canadians may never be able to afford a home in some of Canada’s largest cities, driving deep wedges between haves and have-nots.

That is a very steep price for the sale of a country.

https://www.theglobeandmail.com/business/commentary/article-failed-bc-money-laundering-case-shows-snow-washing-is-thriving-in/

Police raid Deutsche Bank headquarters as part of Panama Papers money laundering investigation

By David Rising & Frank Jordans

BERLIN (AP) — German authorities raided Deutsche Bank’s headquarters Thursday amid suspicions that its employees helped clients set up offshore companies that were used to launder hundreds of millions of euros.

About 170 police officers, investigators and prosecutors swooped in on the bank’s offices in Frankfurt and premises in nearby Eschborn and Gross-Umstadt at 10 a.m. (0900 GMT), seizing electronic and paper records.

The investigation emerged from an analysis of documents leaked from tax havens in recent years, including the 2016 “Panama Papers,” said Frankfurt prosecutors’ spokeswoman Nadja Niesen.

It is focused on two Deutsche Bank employees, aged 50 and 46, and possibly other still unidentified suspects, she said. At least one site raided was a suspect’s home.

Analysis of the Panama Papers and other documents “gave rise to suspicion that Deutsche Bank was helping clients set up so-called offshore companies in tax havens and the proceeds of crimes were transferred there from Deutsche Bank accounts” without the bank reporting it, Niesen said.

In 2016 alone, more than 900 customers are alleged to have transferred some 311 million euros ($351 million) to one such company set up in the British Virgin Islands, she said.

The suspects, both German citizens, are accused of failing to report the suspicious transactions even though there was “sufficient evidence” to have been aware of it.

Deutsche Bank confirmed the search and said “the investigation has to do with the Panama Papers case.”

“More details will be communicated as soon as these become known. We are cooperating fully with the authorities,” the bank said.

Money laundering has become a growing problem in Europe, where a series of scandals has exposed lax regulation.

And it’s not the first time Deutsche Bank has run into trouble over the flow of dirty money.

It was fined more than $600 million by U.S. and U.K. authorities in January 2017 for allowing customers to transfer $10 billion out of Russia in what regulators said was “highly suggestive of financial crime.”\

The Panama Papers are a trove of documents from a law firm that handled shell companies for thousands of rich and powerful clients around the world. While owning a shell company is not illegal, it is used to hide the beneficial owner of a company or transfer, making it important for the handling and laundering of dirty money.

Several other institutions besides Deutsche Bank have been fined by authorities in the U.S. and Europe for not properly checking up on the beneficial owners of shell companies that send money through their accounts.

Analysts say that because these transactions can be lucrative and punishments are lax, banks have few incentives to do more than the minimum required by law to check on the identity of a bank.

“Even in the most egregious cases, banks are often only required to pay a monetary penalty for engaging in criminal activity, which is merely the cost of doing business,” said Jimmy Gurule, a former undersecretary for enforcement for the U.S. Treasury Department.

“The failure to hold banks accountable for money laundering encourages such criminal activity, including laundering hundreds of millions of dollars in Panama and other money laundering havens,” said Gurule, now a professor at Notre Dame Law School.

Most recently, Denmark’s biggest bank, Danske Bank, admitted that some 200 billion euros ($235 billion) in suspicious money had flown through its Estonian branch from 2007 to 2015. Whistleblower and former employee Howard Wilkinson has indicated that Danske Bank’s management was aware of what was going on at the branch, which was among the bank’s most profitable units. He has also alleged that family members of Russian President Vladimir Putin and Russia’s spy agency were using the bank for money laundering. The bank’s CEO has since stepped down over the scandal.

Another Baltic state, Latvia, has also emerged as a major hub of money laundering, with a 2014 leak showing that tens of billions of dollars were funneled from Russia in 2010-14. Some of the money reportedly went through Deutsche Bank and ended up in major capitals like London, according to The Organized Crime and Corruption Reporting Project.

There was no indication that Thursday’s raid was linked to that scandal, though Deutsche Bank says that it has since stopped providing dollar transactions in some countries, including Latvia.