UK’s National Crime Agency (NCA) has dismantled a vast Russian money laundering operation that funnelled billions through drug gangs during the pandemic.
Dubbed as “Operation Destabilise,” the inquiry exposed a nexus between Russian elites, cybercriminals, and organized crimes spanning across 30 nations. It has been termed one of the most impactful result against money laundering in the last decade.
The NCA revealed the report on 4 December 2024.
Operation Destabilise: NCA disrupts $ multi-billion Russian money laundering networks with links to, drugs, ransomware and espionage, resulting in 84 arrests.
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https://t.co/24qU98Ld4e pic.twitter.com/ZjPmXuFvuZ
— National Crime Agency (NCA) (@NCA_UK) December 4, 2024
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A Pandemic-Fueled Network
During the 2021 lockdown, UK drug gangs faced a problem around moving massive amounts of street cash when traditional laundering methods were unavailable.
This is where Smart and TGR, both of which are Moscow-based cryptocurrency networks, came in. They offered a more sophisticated solution. The TGR networks assisted drug gangs in converting cash to illicit cryptocurrency, which served as a safe means of financing without a paper trail.
Throwing light on the previously invisible connections, Rob Jones, Director General of Operations, NCA said, “For the first time, we have been able to map out a link between Russian elites, crypto-rich cyber criminals, and drug gangs on the streets of the UK. The thread that tied them together – the combined force of Smart and TGR was invisible until now.”
Smart and TGR are estimated to have laundered cash worth about £700 million for drug gangs in the UK from 2021 to 2023, charging cut rates for as low as 3%.
All across the UK, the couriers directed cash to these networks, who almost immediately afterward, changed it into cryptocurrencies. This crypto was then used to purchase drugs directly from South American cartels, perpetuating a cycle of violence and addiction.
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How The Fraud Was Orchestrated, Key Figures And Arrests
The operation led to a total of 84 arrests globally, including 71 in the UK. Arrested persons were major couriers like Fawad Saiedi and Semen Kuksov, who transferred millions in drug earnings before their arrest and jail sentences.
At the top of the laundering hierarchy were Ekaterina Zhdanova, head of the Smart network, and George Rossi, who helmed TGR. Together with other high-profile individuals like Elena Chirkinyan and Andrejs Bradens, they laundered substantial funds.
In fact, in 2022, Smart operated on the outside to help Russian agents pay foreign operatives. By 2023, the funds were ready to be transferred into the UK for a sanctioned media outlet named ‘Russia Today’.
The setup was similar to real banking operations where cash collected from couriers based in the UK was passed through various shell companies or taken overseas to offshore hubs like Dubai.
After verification, corresponding sums of cryptocurrency were sent to drug gangs’ digital wallets located on obscure outposts of sanctioned exchanges like Garantex.
This laundering model also allowed ransomware groups and cyberspace criminals to cash out their incomes from the illicit activities.
The Smart network alone laundered $2.3 million in crypto ransoms from the Ryuk ransomware group, which extorted millions from UK institutions, including hospitals and schools, according to the NCA.
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NCA Confiscated £20 Million In Cash And Cryptocurrency
The NCA confiscated £20 million in cash and cryptocurrency and disrupted networks vital to laundering. “If you’re somebody now wanting to move money from a drug deal, which has been responsible for real harm in the UK, you’re going to think twice, because you don’t know whether that courier has been compromised,” said Jones.
International agencies like the FBI, DEA, and French and Irish law enforcement provided support which assisted the NCA’s efforts. Moreover, the UAE played an influential part in locating laundering activities within its borders.
Additionally, by imposing such sanctions, the US Treasury is seeking to deny financial resources to prominent figures.
Bradley Smith, Acting Under Secretary for Terrorism and Financial Intelligence at the US Treasury, said the country “remains committed to disrupting any effort by Russia to use digital assets or other illicit financial schemes to accrue, store, and transfer their ill-gotten gains”.
Nik Adams, Assistant Commissioner of City of London Police, pointed out that money laundering “deprives society of legitimate funds that pay for schools, hospitals, and social services.”
Meanwhile, high commission rates and targeted arrests in London have reportedly made the city an increasingly hostile environment for such networks.
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