The European Union Agency for Law Enforcement Cooperation, or Europol, has reportedly supported Spain in uncovering a recent financial crime involving “large-scale” cryptocurrency money laundering “services.”
According to a press release posted on May 8th, 2019 on Europol’s official website, the law enforcement agency has “dismantled a criminal organization” which has allegedly been involved in assisting various other criminal organizations in laundering large amounts of funds.
Converting From Fiat To Cryptocurrency, Hiding Funds
As detailed in the release, the criminals had reportedly orchestrated several money laundering “schemes” which involved the “transfer from fiat currency” to cryptocurrencies. These transactions were conducted in order to “hide the illegal origin of the proceeds,” Europol’s officials revealed.
In order to hide the transaction details, the criminals used several different crypto ATMs and “smurfing,” which is an illegal method used to “split illicit proceeds into smaller sums.” The smaller amounts are then “placed” into the financial system, in order to prevent authorities from detecting the illicit transactions.
The Spanish Civil Guard (Guardia Civil) has taken eight suspects into custody and it has “charged eight more for involvement in the crypto money laundering ring,” the release noted.
Moreover, authorities searched seven houses, including an indoor cannabis cultivation plant and a money exchange office.
As detailed in Europol’s announcement, “eleven vehicles, €16,800 [in cash], close to 200 cannabis plants, two crypto ATMs, computers, devices, jewels and relevant documents were seized” by authorities.
Authorities Freeze €9 Million In Cryptocurrency
Additionally, Spanish law enforcement officials “froze four ‘cold wallets’ and 20 ‘hot wallets’, to which €9 million was transferred, as well as several bank accounts.” According to the findings of the investigation, the criminal organization had been managing a cryptocurrency exchange business, which involved using two crypto ATMs.
"Cash Pick-Ups Transferred To Several Accounts, Exchanged Into Cryptocurrency"
These were mainly used to “deposit criminal cash and transform it into cryptocurrency for other criminal groups,” the investigation revealed. Some of the other “modi operandi” used to carry out the large-scale financial crimes have been described as follows:
Cash pick-ups carried out by cash-carriers followed by smurfing techniques to deposit the criminal cash in several bank accounts controlled by the organization. The funds were moved through several accounts in the process of layering. Afterwards, the money was exchanged into cryptocurrency.
There had also been “large transfers” made to several bank accounts which were allegedly controlled by members of the organization. Notably, the members included offenders from “corporate entities” who had reportedly been using the “criminal money laundering services.” In order to hide the transactions, “Immediate overseas transfers” were also made, after which the funds were “wired to crypto exchange platforms.”
According to Europol’s press release, the latest operation was a “follow-up of operation Guatuzo” which was “also supported by Europol.” Authorities had managed to arrest 23 suspects after cracking down on the Guatozo operation during the summer months of 2018 (in Spain and Colombia).
Cross-Checking Information In Real-Time With Europol’s Databases
As detailed in the release, Europol “supported the investigation” by “facilitating the exchange of information” during the investigation. Europol experts were also deployed to Spain to “allow for real-time exchange of information.” Additionally, cross-checks were performed of the data obtained in “the course of the action against Europol’s databases.”
Following the investigation, Europol confirmed that there has been an increase in the number of criminals now offering “Crime as a Service (CaaS).” As explained in the release:
The online trade in services enables individual criminals to operate their own criminal business without the need for the infrastructures maintained by ‘traditional’ organised crime groups.