On October 19, the United States Department of Justice (DOJ) accused two Venezuelan citizens and five Russians of using cryptocurrencies to launder money for Russian oligarchs by selling oil barrels from sanctions-hit Venezuela.
According to the press release, the defendants smuggled millions of barrels of oil to Russia and China, laundering “tens of millions of dollars.” They used crypto to launder part of the funds .
Among the Russian defendants are Yury Orekhov, Artem Uss (son of the governor of the Russian region of Krasnoyarsk Krai), Svetlana Kuzurgasheva, Timofey Telegin, and Sergey Tulyakov. In addition to Venezuelans Juan Fernando Serrano Ponce, also known as “Juanfe Serrano” and Juan Carlos Soto, who acted as an intermediary between the illicit oil deals of the Venezuelan state-owned company “Petroleos de Venezuela S.A.” (PDVSA).
“Serrano Ponce and Soto brokered deals worth millions of dollars between PDVSA and NDA GmbH, which were routed through a complex group of shell companies and bank accounts to disguise the transactions.”
How Did The Criminal Network Operate?
According to the DOJ, Orekhov was listed as co-owner, managing director, and CEO of Nord-Deutsche Industrieanlagenbau GmbH (NDA GmbH), a privately held company engaged in the trading of industrial equipment and commodities located in Hamburg, Germany.
NDA GmbH served as a front for purchasing U.S. military technology used in combat aircraft, missile systems, radars, and satellites, among other military applications, which were then sold to other companies providing defense services in Russia.
According to the disclosed information, Orekhov openly admitted during a conversation with Ponce that he was acting on behalf of a sanctioned Russian oligarch, using his company (NDA GmbH) “as a front,” boasting that they will never be discovered because of the intermediaries used in the business.
“There were no worries…this is the shittiest bank in the Emirates…they pay for everything.”
In addition, the criminal network used couriers from Russia and Latin America to receive large amounts of cash, which were then exchanged into cryptocurrencies to launder their proceeds.
U.S. Authorities Expect to Extradite Defendants
Breon Peace, U.S. Attorney for the Eastern District of New York, said the defendants orchestrated “a complex scheme to unlawfully obtain U.S. military technology and Venezuelan sanctioned oil” through shell companies and cryptocurrencies.
For his part, Michael J. Driscoll, Assistant Director in charge of the New York Federal Bureau of Investigation and Field Office (FBI), appreciated the effort of the authorities to dismantle a “sophisticated network” created by at least five Russian and two Venezuelan nationals.
Orekhov and Uss are being held in Germany and Italy, respectively, while awaiting extradition proceedings at the request of the United States. If proven guilty, the defendants could face up to 30 years in prison in the United States.