https://gutzy.asia/2024/04/22/russian-national-pleads-guilty-in-us-to-laundering-us65-million-through-singapore-gold-exchange/

UNITED STATES: A Russian man, identified as Feliks Medvedev, has admitted to purchasing over US$65 million worth of gold bullion from Singapore Precious Metals Exchange (SGPMX) as part of a money laundering conspiracy, as stated in a press release from U.S. Attorney’s Office, Northern District of Georgia on 22 February.

The funds, intended to support the Russian military’s activities in Ukraine, were transacted through unlicensed operations based in the United States.

Medvedev, 42, who resides in Georgia, USA, pleaded guilty on 22 February 2023 to multiple charges, including operating an unlicensed money-transmitting business and 39 counts of money laundering. He managed over US$150 million through more than 1,300 transactions, directing over US$65 million to purchase in gold bullion from the SGPMX.

The scheme also involved Alexey Chubarov, 42, and Lev Solyannikov, 31, who are alleged to have assisted Medvedev in managing the illicit funds. Both individuals, alongside the Moscow-based KSK Group where they are employed, were indicted by a federal grand jury in Georgia on 13 February 2024 for their roles in the conspiracy and money laundering activities.

The U.S. Attorney’s Office for the Northern District of Georgia reported that the involved companies, though registered in Georgia, did not engage in typical business operations and were primarily used to facilitate illegal financial transactions.

“America’s financial institutions provide critical stability to our economic and national security. Thus, these corporations are rightly the envy of the world. They are not, however, a tool to be exploited for the illegal transfer and laundering of illicit Russian money,” said U.S. Attorney Ryan K. Buchanan.

“After fraudulently transferring and partly laundering over $150 million, Feliks Medvedev has pleaded guilty and will face severe consequences for his crimes. The indictment of others involved in his offenses demonstrates our resolve to pursue individuals in the Northern District of Georgia and across the world who seek to facilitate the illegal transfer of Russian money.”

The Straits Times reported that the Singapore Police Force is aware of the case, highlighting the complexities of international financial crimes and the need for cooperation across borders to effectively address such issues.

ST also quoted SGPMX saying it could not provide details on the matter due to privacy laws.

The U.S. Department of the Treasury added Chubarov and KSK Group to its list of sanctioned entities on 14 September 2023.

In response, U.S. Attorney-General Merrick B. Garland and Deputy Attorney-General Lisa Monaco emphasized the commitment of the U.S. Justice Department to disrupt financial networks supporting Russian military efforts against Ukraine.

This case is part of a broader initiative by Task Force KleptoCapture, a unit of the United States Department of Justice established in March 2022. The task force aims to enforce sanctions against Russian oligarchs and, since its inception, has seized nearly US$700 million and charged over 70 individuals for violating sanctions against Russia.

Medvedev is scheduled for sentencing on 7 May 2024.

SGPMX, a privately run trading and storage company headquartered in Singapore and touted as the world’s first precious metal exchange that is fully backed by physical precious metals, facilitates the trading of actual gold via an online global exchange, similar to stock exchange operations.

The company, located at Le Freeport, a high-security logistics hub in Changi North Crescent, prides itself on providing clients with the ability to physically verify their investments at any time, promising high standards of due diligence and confidentiality in compliance with local regulations.

The 2016 mutual evaluation report on anti-money laundering and counter-terrorist financing measures by the Financial Action Task Force (FATF) highlighted Le Freeport as an emerging risk. The report cited it as presenting “a medium to high” money-laundering and terrorist-financing risk, with authorities showing a lack of comprehensive understanding of the activities within the Freeport.