‘How criminals hide their stolen millions’ – investigation

OCCRP talks to money laundering expert Louise Shelley on the Troika Laundromat, revealing truths that hit close to home in Malta.

The Prime Minister's former chief of staff, Keith Schembri.

Louise Shelley, an expert on money laundering and illicit financial flows at George Mason University in the US, has detailed how criminals, particularly Russians, launder money through the use of fake invoices, in an interview with OCCRP that hit close to home.

OCCRP, which investigated the Troika Laundromat money laundering leak, reported Shelly saying that the amounts of money being moved out of Russia was “more than could ever be spent in their lifetimes, or the lifetime of their children or grandchildren”.

She explained that those involved in organised crime were often actively involved in the legitimate economy, describing them as “movers and shakers”. Most of these individuals have a darker side where they are involved in illicit commerce and money laundering, with their legitimate activities shielding the illegitimate ones.

The Prime Minister’s chief of staff, Keith Schembri, has faced the same accusations. He is the subject of two magisterial inquiries on kickbacks. The inquiries have gone on for so long that people are doubting whether they will ever reach a conclusion, or the findings communicated in full.

Shelly said those involved in large scale financial crimes disguise their illegal activities used false invoices and shares to hide the true nature of the funds.

This trade-based system is one of the central parts of money laundering in the world today. Fake invoices are created that specify sums of money for goods or services that were never provided.

She added that banks should be aware of these scams, as Joseph Muscat continues to apply pressure on local banks to facilitate loan services to questionable investors and using taxpayers’ money to support loans and projects the banks deem too risky.

The impact of these large transfers of capital is devastating for the countries that it impacts. Those in the developing world suffer the most as the money that should be used for infrastructure, health, education and development is moved to other jurisdictions, usually in the west.

This results in stunted development as well as undermining human security and the quality of life of citizens, according to Shelley.

Support The Shift’s fight against SLAPP lawsuits intended to silence the press. The latest threat comes from the Russian banker at the centre of revelations. You can donate by clicking the banner below, or visiting our donate page.

Xi Jinping

Malta’s ally: Report on censorship, control by China beyond its borders

Daphne Caruana Galizia

Amnesty delivers 45,000 signatures calling for ‘justice for Daphne’