DUBLLIN: Ireland has been included among a group of countries described as “known money laundering havens” by the US Department of Justice, according to court documents.
The comment was made in documents filed with the US District Court of New Jersey earlier this year, which have only now come to light.
The documents relate to a case in which the US government is attempting to reclaim money connected to an illegal shipment of electronic equipment, worth $65m (just under €58m), which later made its way into the hands of the Russian military, in violation of US export laws.
As part of the case, the US Department of Justice is seeking the forfeiture of $1.8m from a Russian bank through which vast sums of money were laundered, connected to the illegal sale of the goods, via shell companies registered in Ireland, Panama, and Belize among elsewhere.
The document mentions the countries in which the shell companies were based, and goes on to ask the Russian bank what steps it took to ensure the money entering the account was legal, given that the companies were from what the United States Department of Justice described as “known money laundering havens”.
RTÉ’s This Week contacted the US Department of Justice to inquire whether it intended to include Ireland among what it said was known ‘havens’ for money laundering, but the DOJ has so far not replied.
Man ships electronic equipment to Russian arms companies despite US ban
An American national, Alexander Brazhnikov Jnr, has already admitted to using the shell companies to conceal the true beneficiaries of a $65m illegal trade in military-use technology.
Brazhnikov Jnr used several US companies to buy the goods from American suppliers in good faith. He then had them shipped to Finland and Germany, before they were repackaged under different labelling and shipped to the Russian arms companies, all of whom were on a banned list by the US government. Some of the goods had the capacity to be used in nuclear weaponry.
The Russian companies concealed their involvement by paying him through the shell companies, and this money then entered one of his US-registered export firms.
Although Brazhnikov Jnr has consented to the forfeiture of millions of dollars in cash and property, one Russian bank, Sberbank, is disputing the seizure of $1.8m from several interbank accounts.
Supply of banned military equipment to Russia ‘undermines US national security’ FBI
The comment about the use of shell companies in known money laundering havens was made in a document filed on 13 January 2016, which was signed by a senior US Department of Justice official.
“We note the pattern in this case of the use of shell companies from known money laundering havens over six years as seeming to provide some notice to undertake heightened investigation”, the document stated.
The FBI, which investigated Alexander Brazhnikov jnr’s criminal network for six years, previously told RTÉ’s This Week that the New Jersey man’s criminal operation, involving the use of Irish and other shell companies, was one of the most extensive they had encountered.
The supply of banned military equipment to Russia had “undermined the national security of the United States” the FBI said.
Brazhnikov Jr, who lived in New Jersey, pleaded guilty last year to one count of conspiracy to commit money laundering, one count of conspiracy to smuggle electronics from the United States, and one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA).
Federal investigators credit the smuggling network with nearly 2,000 illegal shipments of regulated, sensitive electronics components, many of which wound up in the hands of Russian military and security forces.
The case has received little or no attention in the US and none this side of the Athlantic.
Neither the FBI nor the US Department of Commerce, which worked jointly on the case, would reveal the exact shell companies used by the smuggling network at this time, they said. Attempts to contact Mr Brazhnikov jr at the official New Jersey address listed on court documents were not successful. His lawyer, Jack Arseneault also declined to comment.
Speaking to RTÉ, John Devitt, chief executive of Transparency Ireland, said that it was important that the true beneficiaries of the Shell companies was made apparent.
He said that Ireland had earned a bad name over many years for how it dealt with money laundering. He said that access to companies office information should be free, as was planned in the UK.
Transparency Ireland was one of a number of NGOs, along with Christian Aid and others, to write to the Minister for Finance Michael Noonan recently, calling for greater transparency about the real owners behind shell companies, in the aftermath of the Panama Papers revelations about off-shore companies.
