Laundromat

Danske Bank signage is dismantled in Tallinn, Estonia, after the bank’s unit there was shut down in the aftermath of a money
laundering scandal. Credit: Andres Putting/Ekspress Media
by Holger Roonemaa (OCCRP), Simon Bowers (ICIJ), Dragana Peco (KRIK), Elena Loginova (Slidstvo.Info), Graham Stack (OCCRP)
21 September 2020

A decade ago, Regina Marcenkiene was a broke university graduate scrounging up work where she could get it, so when a
friend introduced her to a woman named Anastassia who needed a logo and branding materials for a new company, she
jumped at the opportunity.

Anastassia briefed her in a short email on March 6, 2010: “Named Beta Consulting, the company provides consulting services
on taxation, as well as on savings and investment. Target audience - businessmen, wealthy individuals. Mostly Russian
speakers from different countries.”

Nothing seemed amiss with the request, and Regina delivered in a week, even adding her own name to the invoice templates to
make the design look more realistic — a small decision that would come back to haunt her. Anastassia was satisfied with the
work and paid her the agreed fee, 64 euros.

Credit: OCCRPA business card designed by Regina Marcenkiene for Beta Consult.

Regina thought that was the end of the assignment — until her 64-euro commission earned her a place in one of the world‟s
biggest-ever money laundering cases.

What she didn‟t know, until police got in touch with her last autumn, was that Anastassia was the wife of Juri Kidjajev, head of
a unit at Danske Bank Estonia that catered to foreign customers, and that Beta wasn‟t just an Estonian tax consultant.

In fact, there is no indication that the firm ever did tax consulting. Instead, it was registered in the Marshall Islands and served
as one of the main shell companies used by the bankers of Kidjajev‟s unit to help their clients launder money.

Danske Bank was hit by one of largest ever money laundering scandals in 2017, when a team led by Danish newspaper
Berlingske and OCCRP first uncovered how billions of dollars of dirty money were funneled through the institution‟s Estonian
branch.

A report ordered by the bank found that it had handled $234 billion in offshore transactions, many of them suspicious. Much
of this was enabled by the division in Estonia that dealt with foreign clients from countries like Russia, Azerbaijan, and
Ukraine.

After being approached by reporters for comment in 2017, the bank publicly apologized for allowing the illicit payments,
describing the affair as “unfortunately yet another example showing that we failed to prevent our being exploited for money
laundering.”
�About This Investigation:

The FinCEN Files is a 16-month-long investigation by the International Consortium of

Investigative Journalists, BuzzFeed News and more than 400 international journalists in 88
countries, including those from OCCRP and its network of member centers.

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But now, a leak of criminal investigation documents, obtained by Italian news magazine L‟Espresso and shared with ICIJ and
OCCRP, shows the bank was far more than merely negligent. A team of 11 bankers at Danske‟s Estonian branch were actively
helping their elite clients skirt anti-money laundering regulations by running offshore companies for them.

In turn, the bankers — or “relationship managers,” as they were known within the unit — were leading lavish lifestyles: driving
sports cars paid for in cash, collecting luxury jewelry, and receiving large personal loans from clients that never came due.

Taken as a whole, the new leak of emails shows how the corruption of a small team was enough to turn a large Western bank
into a laundromat that cleaned dirty money from Eastern European countries.

Danske Bank declined to reply to specific questions on this story, but sent a general statement admitting that it was clear that
the bank should have never had its portfolio of non-resident customers.

“It is also clear that we were too slow in realising the extent of the issues and to close it down,” the statement said.

‘Collusion to launder money’

Beta Consult Corp, run by the bankers on the team using private email addresses and sometimes working through family
members, was central to the effort. It was registered in the Marshall Islands but held an account at Danske Bank Estonia, with
many different shell companies paying in.

The company was nominally owned by a Ukrainian man, but he told OCCRP that he had never heard of it. Instead, the leaked
emails show, it was Juri Kidjajev who received monthly reports on Beta Consult‟s revenue, including which companies paid it
and which of his team members had facilitated the transactions.

Although OCCRP only managed to obtain fragmentary information on how much money passed through the company‟s
accounts, one report sent to Kidjajev‟s personal email address indicates that Beta took in over $150,000 in a single month,
September 2012, from customers including AvroMed Company LLP, a British company that was a major recipient of
Azerbaijani Laundromat funds.

Credit: OCCRPAn overview of services provided by Beta Consult in September 2012, as seen in an email sent to Juri Kidjajev's private
address.

ICIJ and OCCRP found additional evidence of Beta Consult having received $128,635 in payments, most of it from three
companies at the heart of the Azerbaijani Laundromat: Inmaxo Capital Corp, LCM Alliance LLP, and Metastar Invest LLP.

Although OCCRP has written extensively about how these companies operated, the newly leaked material reveals that
Metastar Invest was, in fact, sold by the bankers of Kidjajev‟s unit to their clients.

Metastar seems to have been established through Swiss Registry Consulting, a formation agent operating in several European
countries that specialized in creating and selling offshore companies to clients around the world. Emails between Swiss
Registry Consulting and the Danske Bank staff — all using private addresses — show how they sold around a dozen offshore
companies in a three-month period in 2009.

In one email, Kidjajev referred to his bankers as a team that worked together to sell companies off the “shelf,” as he put it.

“Aleks, hi!” he wrote in Russian to the formation agent. “As far as I understand, we (our shelf) sold 13 companies over the last
three months. Or is that not so?”
Graham Barrow, an expert in anti-money laundering issues who has worked for banks such as HSBC and Deutsche Bank, told
OCCRP that bankers selling their clients offshore companies is a major red flag.

“That is effectively collusion to launder money,” he said.

“In order for a bank to conduct effective and robust due diligence, it needs to maintain independence from its customers.
Enabling them to create complex and secretive ownership structures runs counter to that requirement and could prejudice any
future suspicions as the bank itself would, by extension, be implicated.”

In another email, sent in January 2010, a Swiss Registry representative sent Kidjajev a new price list for company formation
services. Most options were for companies in offshore jurisdictions such as the British Virgin Islands, Belize, and Marshall
Islands. But the most expensive item on the list, at 4,750 euros, was closer to home: the formation of a Danish limited
partnership, known as a “K/S.”

“A comfortable jurisdiction to open a bank account at Danske Bank,” read a comment next to the offering.

price list sent by Swiss Registry Consulting to Juri Kidjajev, the head of Danske Bank Estonia’s offshore unit, explaining
Credit: OCCRPA
how much it cost to buy different types of companies.

A leaked email sent by another banker now under criminal investigation, Jelena Makarova, provides a glimpse into how the
team operated.

Makarova explained that each relationship manager would be assigned a personal code number that they could add to the
invoice numbers submitted by Beta Consult to Azeri Laundromat companies and other “customers.”
Credit: OCCRPAn
email from Danske Bank Estonia relationship manager Jelena Makarova laying out the code numbers for each member
of the team could use when making a “sale” via Beta Consult.

They included Goldcraft Universal, a firm that investigators believe was used to launder embezzled money from Georgia.

�The Goldcraft Saga

In 2008, the man who headed Danske Estonia’s non-resident unit at the time, Erik Lidmets,
personally approved the documents to open an account for a company called Goldcraft
Universal LLP, supposedly based in Odessa, Ukraine. An elderly Serbian man, Zivojin Nikolic,
was marked in the bank’s database as the beneficial owner.

A decade later, Estonian police received an alarming request from colleagues in Georgia asking for help in a case in which millions
had been embezzled from the government‟s National Investment Fund Agency.

Around $2 million of the stolen funds had been laundered through Goldcraft Universal‟s bank account at Danske between March
2011 and September 2012.

When police investigated further, they found that Nikolic never entered Estonia that year, and the address in Odessa where the
company was supposedly based did not exist.

The investigators soon also discovered that, during the same period Goldcraft was receiving embezzled funds from Georgia, it paid
out $500,000 in four installments to an Estonian company called Eridan DVL. The money was supposedly a loan, but an OCCRP
analysis of the company‟s financial statements could not find evidence that Eridan ever repaid it.

Police concluded there was “basis to suspect that the transactions to the benefit of Eridan DVL were as a matter of fact covert
payments to Erik Lidmets for opening the bank account [of Goldcraft Universal] and to conceal its real beneficiary and the
suspicious transactions on the bank account.”

Nikolic, 74, who hails from the small town of Smederevo in northeastern Serbia, told OCCRP he had never heard of Goldcraft
Universal or signed the documents for it. He speculated that his identity might have been stolen in the early 2000s when he lost his
passport while traveling in Ukraine for work.

“I don‟t know who was opening [the bank accounts], how it was opened. That has nothing to do with me. If I had done anything on
that topic, I would not be living on retirement now,” he said.

Lidmets was fired from the bank in April 2010 after an internal audit found that his IP address had been used to log in to bank
accounts connected to Nikolic. Danske Bank declined to comment on the audit or Lidmets‟ apparent collusion with his clients in the
money laundering scheme.
Credit: KRIKA
buzzer on the run-down building in Serbia where Zivojin Nikolic keeps an apartment. He was supposedly the owner of
multiple companies that banked with Danske Bank Estonia — and extended large loans that a banker benefitted from. But he told
OCCRP that his identity had been stolen and he knew nothing of any of these companies.

This system of assigning personal code numbers to use on invoices would allow the unit to easily keep track of which banker
sold which services to whom.

Mihhail Murnikov, one of the bankers in the unit, is now under investigation in both Estonia and Latvia, where officials have
seized more than $2 million euros from a bank account he opened.

He told Estonian investigators that Juri Kidjajev and another colleague, Anna Kurilenko, were considered Danske Bank
Estonia‟s “gateway” for nonresident clients. Kurilenko had Beta Consult Corp — the Marshall Islands-registered firm at the
center of the money laundering scheme — in her own portfolio, though she told investigators she didn‟t remember how it
became her client.

Danske agents would scout for new clients in Ukraine, Azerbaijan, Russia, and Kazakhstan, then send the information to
Kidjajev and Kurilenko.

“Anna and Juri forwarded the info to us [relationship managers], [asking] who wanted the client. If anyone wanted them, then
relationship managers contacted the new client and took things over,” Murnikov said, according to a transcript of his interview
with Estonian investigators.

Then, the banker would help the client prepare documents needed to pass the bank‟s anti-money laundering checks. The final
go-ahead to accept a new foreign client was given by a committee whose members included Danske Estonia‟s CEO, the bank‟s
head of compliance — and Juri Kidjajev himself.

In an email sent on March 19, 2010, right after Marcenkiene had finished her graphic design work, Kidjajev sent the bankers
the fruits of her labor: new Beta Consult business cards, templates for PowerPoint presentations, and an updated invoice
template that featured Beta‟s new logo.

“I ask you to use the new forms with Beta insignia when invoicing,” Kidjajev advised the recipients.
In early January 2014, a woman named Anna wrote from a general Beta Consult email address to the Danske bankers‟ private
email addresses saying that “starting from January 8 all offshore related matters will be curated by Olga.”

Credit: OCCRPAn invoice issued by Beta Consulting, purporting to show that college student Regina Marcenkiene had sold another shell
company, Solidstar Worldwide, on behalf of Beta for $2,800. Marcenkiene told Estonian investigators and OCCRP journalists that her name was
used without her knowledge or consent.
When OCCRP called the phone number given in the email, the call was answered by Olga Tšetverikova, another Danske
banker from the same division who is now under suspicion in the criminal case. She claimed she didn‟t know anything about
Beta Consult and found an excuse to end the call.
“Let‟s take a look out of the window to see what‟s the weather today. It is beautiful, everything is okay. Excuse me, I need to
go,” she said.

Beta Consult was also used by the Danske bankers as a conduit for selling offshore companies to clients.

One of these new offshores, Solidstar Worldwide LLP, transferred a total of around $23 million into the Azerbaijani
Laundromat after being sold by the bankers. It was registered in the UK as a partnership of two companies from Belize,
making it almost impossible to determine who was behind it.

Internal documents name the salesperson as Marcenkiene, the student who was paid 64 euros to create Beta‟s branding
materials.

“No, no, no,” Marcenkiene answered when asked by OCCRP if she had actually been involved in selling offshores through Beta.
She said she had never heard of Solidstar Worldwide and never worked for Beta Consult.

There were other invoices bearing her name, too, making it look like she had sold multiple companies to offshore clients.

“Why would they use my name without even asking me about it?”

Cars, Watches, and Gold

The banker who actually did sell Solidstar Worldwide was Jevgeni Agnevštšikov, one of the most successful “relationship
managers” making cash flow into Beta Consult‟s accounts, an analysis of the invoice codes reveals.

When Estonian investigators questioned Agnevštšikov in January 2019 about his involvement in alleged money laundering, he
blamed Danske Bank for overloading the relationship managers with work and having poor technical systems, making it hard
for him to keep track of everything.

“At times my client portfolio might have even had 350-400 clients when normally bank employees with such functions have
roughly 100 clients,” he said.

But the leaked Estonian police files suggest he was not just a passive victim of overwork.

In 2015, shortly after leaving Danske Bank, he made two large cash deposits into his accounts. The first one was 23,850 euros,
followed by 120,000 euros seven months later. Agnevštšikov claimed the funds were a loan from a Ukrainian man named Igor
Kolosnitsyn, which he used to buy an apartment in Tallinn and to start a new company.

Credit: OCCRP
A man named Igor Kolosnitsyn was also the beneficial owner of three companies in Agnevštšikov‟s portfolio of accounts.

�Who Is Igor Kolosnitsyn?

Kolosnitsyn’s father, Aleksandr, was once the CEO of St. Petersburg’s major seaport,
Petrolesport. The younger Kolosnitsyn is the owner of Bank Portal, one of Ukraine’s newest
banks, founded in 2013. In March 2020, Ukraine’s Supreme Court upheld a 2017 decision to
fine Bank Portal for “high-risk behavior regarding financial monitoring.”

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“That is a massive conflict of interest. You can‟t have a financial relationship with a customer,” said Barrow, the anti-money
laundering expert. “Your first responsibility should be to the bank and its legal requirements.”

Even accepting a loan from a client after leaving a bank usually constitutes a breach of ethics, Barrow said.

Credit: OCCRP
“When a relationship manager leaves a bank, there are often „handcuff‟ clauses that prevent them from approaching or doing
business with former clients,” he said. “Whilst we simply don‟t know if this is the case here, it looks bad when you see a former
employee receiving a loan from an individual who used to be a client.”

Credit: OCCRPWatches and Swiss gold found in Jevgeni Agnevštšikov’s house by Estonian authorities after he came under suspicion of money
laundering.
A transcript of a police interview with Agnevštšikov, obtained by l‟Espresso, reveals that the banker led a lavish lifestyle that
did not seem commensurate with his income.

At the time, take-home pay for a relationship manager at a bank like Danske would have averaged around 2,000 euros per
month, the former CEO of a Scandinavian bank‟s Estonian branch told OCCRP.
But Agnevštšikov drove a 50,000-euro Range Rover Sport that he paid for in cash. He said he had received this money from
Russia, but declined to reveal who sent it. His wife also bought a BMW x5 in cash, a purchase Agnevštšikov struggled to
explain to investigators. He claimed that another car registered in his name, a Mercedes Benz GL 320 worth around 20,000
euros, had been collateral for a 500-euro loan to a friend.

Police also found a trove of jewellery and watches at his home from luxury brands including Tag Heuer, Longines, Tissot, and
Tiffany‟s, as well as Swiss gold plates. He also could not explain where he had obtained the money to buy these.

When the Estonian Financial Supervisory Authority forced Danske Bank to close its non-resident unit in 2015, Agnevštšikov
set up a private investment consultancy firm together with two other ex-Danske bankers from the unit. All are now being
investigated for money laundering.

Fast Cars and Big Loans

Agnevštšikov was not the only banker at Danske‟s Estonia branch to have been inappropriately entwined with his customers —
or to have prospered from his association with the bank.

Kidjajev‟s predecessor as head of the international and private banking unit was Erik Lidmets, a round-faced man nearing 50
with a passion for vintage cars. His collection has included a 1953 Jaguar and a Porsche 911 built in 1972. In 2013, an Estonian
business daily estimated that his net worth was 9.6 million euros.

He was also the lucky shareholder of an Estonian firm, Eridan, which received huge loans from his own Danske Bank clients
over the years — including one company, Goldcraft, that was receiving millions of dollars in embezzled funds from
Georgia during the same period.

Estonian police suspect these payments were made to reward Lidmets for opening a bank account for Goldcraft and covering
up its true beneficiary.

�Passing Around Eridan

Although the ownership of OÜ Eridan DVL was buried under layers of offshore secrecy, those who ultimately benefited
from it were all connected to the Danske Bank offshore team.

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Eridan received a total of $500,000 from Goldcraft in four installments. The transaction descriptions claim the money was
being paid out for a credit agreement, but OCCRP could find no evidence in Eridan‟s financial statements that it ever repaid
the loan.

By 2009, Eridan had also received over 1.7 million euros in loans from Korberg LP, another company that banked with Danske
and supposedly belonged to Zivojin Nikolic, the same elderly Serb who was nominally the beneficiary of Goldcraft.

According to an OCCRP analysis of Eridan‟s accounts, these loans were used to buy and renovate two houses in Tallinn. One of
them, in a hip district of the Estonian capital, was rented out the following month at a bargain-basement price to a gym and
wellness center belonging to the wife of Lidmets, the man who had headed Danske‟s international and private banking unit
before being fired.

Credit: Priit Simson/Ekspress Media

Eridan received just over 10,000 euros a year in rental fees from both buildings, meaning the gym would have been paying
rent far below the normal market rate.

“There are so many red flags here that should make every seasoned financial crime investigator really attentive,” said Norman
Aas, an Estonian lawyer who served as the country‟s prosecutor general from 2005 to 2014, after OCCRP asked him to review
the documents.

Credit: Priit Simson/Ekspress MediaProperties owned by OÜ Eridan DVL in Tallinn. One was rented out at an inexpensive rate to a gym and wellness
center belonging to the wife of a Danske banker.
Extending loans and never asking for repayment “is not a usual practice,” Aas said.

Even more unusually, in 2010 Korberg LP cancelled nearly 350,000 euros‟ worth of its loan to Eridan. Although records show
that Korberg was dissolved in 2010, Eridan reported that the company had cancelled another 1 million euros of loans in 2011
and 2012.

Lidmets hung up on an OCCRP reporter and did not answer subsequent calls and an email with specific questions. “Thank you
for your letter. Unfortunately, due to an ongoing criminal investigation, I can‟t give any comments,” he replied to a text
message.
His successor, Juri Kidjajev, was also living well — even after he was detained for questioning in 2018 over the Danske Bank
scandal.

He had taken up a similar post at another bank, Citadele, a successor to Latvia‟s Parex Banka, after Danske was forced to shut
down. When news broke out that he had been detained for questioning in the Danske criminal investigation, Citadele fired
him.

Still, he and his wife live in a home that is expensive by Tallinn standards, with 300 square meters of floor space, a wine cellar,
a sauna, and a private cinema in the basement, worth around 480,000 euros. Estonian investigators are looking into whether
the house was purchased using the proceeds of a bribe he received during his time at Citadele.

Credit: ReMaxThe
house in Tallinn where Juri Kidjajev and his family live. The property was purchased through a shell company owned
by another former Danske Bank employee, who is now accused of funnelling a bribe to Kidjajev.

Kidjajev didn‟t reply to phone calls and emails from OCCRP journalists seeking comment.

Kurilenko, the banker on Kidjajev‟s team who allegedly served as a “gateway” for nonresident clients, was also questioned by
Estonian investigators over the large amount of wealth she had accumulated during her time at the bank, including 338,686
euros in cash she deposited into a bank account between 2011 and 2018, a BMW 525D XDRIVE, and a large amount of
jewelry.

When Estonian investigators asked Kurilenko where the cash had come from, she said she could not remember, as it had been
such a long time since she received it.

“But definitely the money is not from crimes,” she said.