30 people suspected in Ukrainian money laundering through Austrian Meinl Bank

The Austrian Prosecutor’s Office has identified 30 suspects in the case of Ukrainian money being laundered through Meinl Bank, Deutsche Welle reports. The investigation did not name the suspects, but it is known that the list includes Ukrainian citizens. 

The case has to do with money disappearing from Ukrainian banks’ correspondent accounts in Austria. According to the Deposit Guarantee Fund, $385 million and €75 million were withdrawn illegally from the correspondent accounts at Meinl Bank. 

At the request of the owners or the senior managers of bankrupt banks, these funds were sent to offshore companies between 2014 and 2015, typically just before handing the problematic banks over to temporary administration. Thus Ukrainian investors’ deposits were stolen, and most of them were left with nothing after the banks declared bankruptcy. 

$38 million was withdrawn from Pivdenkombank through Meinl Bank, as well as $40 million from Terra Bank, $39.5 million from VAB Bank, €62 million from CityCommerce Bank and $44 million from Kyivska Rus Bank. 

The money withdrawal scheme worked as follows: at the request of the owners of a Ukrainian bank, the bank in Austria would issue loans to offshore companies controlled by the Ukrainians. The surety for these loans would be funds in the Ukrainian bank’s correspondent account at the foreign bank giving the loan, for example Meinl Bank. At the end of the day, the loan would not be repaid, and the surety funds would be transferred from the correspondent account to another offshore company in order to repay the debt. Such operations are not illegal in and of themselves, but they are often used for money laundering purposes. 

In addition to Austria, the money laundering case is being investigated by Liechtenstein. According to the Deposit Guarantee Fund, money was also withdrawn through Bank Frick & Co.

  Ukraine, Austria, Europe, Meinl Bank