Spanish police have arrested a man they say is one of Europe’s biggest money launderers, the associate of a notorious Irish gang who used a sham vodka brand and underground banking to process up to €350,000 a day of dirty funds.
The suspect, who was detained in Málaga this week, oversaw an operation that collected large amounts of cash from criminal organisations and then “delivered” it with no transaction records to criminal groups in other countries, Europol said.
He was arrested along with two associates in Spain and one in the UK while 11 related property searches were carried out in an operation involving Spain’s Guardia Civil, the UK’s National Crime Agency and the Dutch and Irish police as well as Europol.
The authorities did not name the ringleader who was detained, but Europol said he had been designated by the US Treasury’s Office of Foreign Assets Control in April for providing support to Ireland’s Kinahan clan, one of Europe’s most notorious crime syndicates.
He was the first person to be arrested since the US measures were announced. They targeted seven individuals, including cartel boss the “Dapper Don” Christy Kinahan, and his sons Daniel and Christopher Jr, who are based in Dubai.
The US accused the Kinahans of smuggling narcotics into Europe and engaging in money laundering, frequently using Dubai as “a facilitation hub for its illicit activities”. It offered a reward of $5mn for information that could disrupt the clan’s activities.
The arrest of the “European element” to an illicit business alleged to have trafficked Colombian cocaine through west Africa was another nail in the clan’s coffin, said Nicola Tallant, investigations editor at the Sunday World and an expert on organised crime in Ireland, following a move by the United Arab Emirates earlier this year to freeze its assets. The Kinahans also have deep ties to boxers and promoters at the highest level of the sport. “It’s over for them,” Tallant said. “There’s no doubt about it.”
The money-laundering operation had processed more than €200mn during the 18 months it was being investigated by law enforcement, police said.
To disguise the source of the money, the gang created a luxury vodka brand that was promoted at parties and events in the nightclubs and restaurants of Spain’s Costa del Sol to create the impression of a successful business.
But data from Spain’s tax agency showed that the company in reality did not generate enough profit to support the plush lifestyles of the people arrested, according to the Guardia Civil.
Another person arrested ran a car dealership and provided the criminal gang with specially adapted vehicles containing concealed apartments to transport large amounts of cash.
Police said the criminals used a “hawala” underground banking system — an informal way of transferring money without physically moving funds that involves handing cash to a “hawaladar” in one place and then having a colleague of theirs hand out the same sum elsewhere.
Although the system has existed in various forms for centuries, the Guardia Civil said the money launderers used a sophisticated version that involved encrypted codes that were usually the serial number of a legal banknote and meant only the carrier of that banknote could receive the funds.
“No legal record or customer identification is kept of these transactions, and the origin of the funds and their destination are unknown, making them totally opaque to the legal financial system,” said the Guardia Civil. “For this reason, they are used by criminal organisations all over the world, as well as by terrorist groups, to hide ill-gotten gains or to send them to tax havens.”