Capital Markets Crypto Cybercrime Espionage Money Laundering

Buzzfeed Set to Report on 36 SARs Linked to Rogue Russian Crypto Exchange BTC-e, Hopefully Doesn’t Steele-Job it

Buzzfeed and Czech media outlet Investigace.cz are planning to report on 36 suspicious activity reports linked to a key payment processor for rogue Russian crypto-exchange BTC-e as early as this Sunday. This scoop marks the most geopolitically significant crypto thread in the financial-intelligence fiasco destined to be enshrined in history as ‘FinCENgate.’

According to Sergey Mayzus, a 45-year-old Russian national who is the majority owner of Mayzus Financial Services, which processed roughly $119 million in fiat flows from BTC-e customers to the now-seized exchange via two online MFS remitter subsidiaries, his company is the subject of these SARs.

“I’m surprised it was only 36 (SARs),” said Mayzus. He also said the SARs were filed by eight different banks. Mayzus said Buzzfeed reporter John Templon contacted his company on September 1st. Investigace.cz’s Jakub Simak pinged him about a month earlier on August 4th.

As the reader can see from the texts above, the SARs in question were filed from October 2013 until April 2017, just 3-and-a-half months before alleged BTC-e operator Alexander Vinnik was arrested in Greece.

This corresponds to a period when MFS transaction records suggest the exchange started wiring tens of millions of dollars to FXOpen, an online forex-trading platform registered in the Caribbean island of Nevis. The Guardian has called Nevis “the world’s most secretive offshore haven.”

Shadow Banker obtained a spreadsheet of BTC-e transactions that were routed through MFS remitters. Transaction records show the movement of some $119 million dollars back and forth from MFS’ Deutsche Bank account in Prague, through BTC-e managing shell company, Canton Business Corporation, to FXOpen’s bank account at the Sydney branch of Commonwealth Bank (CBA).

The majority of these funds, some $105 million, were processed by MFS from December 2013 through May of 2014. During this period, 29 fund transfers were sent between Canton Business Corporation and FXOpen that were structured just below the $3-million threshold.

It is unclear if wire transfers over $3 million trigger certain automatic flags in the international financial system. But odds are, those particular MFS transactions and others of similar value triggered the SARs.

Aussie Thomson Reuters Regulatory Intelligence reporter Nathan Lynch, who broke the scoop of ICIJ’s involvement in the FinCEN leaks, called Commonwealth Bank “the launderer’s bank of choice in Australia prior to its AML enforcement action in 2017.”

In the wake of a massive narco-laundering scandal tied to Hong Kong’s drug gangs, meaning the Sam Gor leviathan‘s money was certainly in play, CBA was forced to pay $700-million to Australian financial regulators in 2018 – “the biggest fine in Australian corporate history” to date.

Reached for comment over a secure messaging application, Templon told Shadow Banker,I can’t say anything at this time, but thanks for reaching out.”

As an aside, a highly placed financial-intelligence source in DC, who requested anonymity, noted that they had heard about morally grandstanding, but oblivious, journalists approaching various financial institutions with SARs related to Eurasian oligarchs and pressing them on why they would bank clients so dodgy that they might – (gasp) – engage in something as diabolical as a ‘suspicious’ transaction.

Because front-line risk personnel at Standard Chartered, Bank of America, and apparently other institutions assessed all the known data points from a wide universe of regulatory technology, open-source intelligence, and web-intelligence founts and determined that the regulatory pitfalls of onboarding these ultra-high-net-worth clients were sustainable enough to bank within existing legal parameters, you dopes.

Furthermore, SAR filings, in and of themselves, indicate that institutions were trying to comply with the Bank Secrecy Act.

Meanwhile, Simak also declined to comment further about his story on SARs filed against MFS, citing legal threats being made by Mayzus. Mayzus confirmed the legal threats alleged by Simak to Shadow Banker.

 “We sent him a notice that he is prohibited from publishing something about me, my family, about my friends’ relations, about my business profile and/or about my lifestyle. We prohibited him from publishing a recent photo of me, my family members, and/or my property. I consider it a serious violation of my privacy and security,” he said.

High Stakes

Mayzus’s abundance of caution is not unwarranted. In 2018, a Czech criminal group involved in a string of arsons burned down a 350-year old castle he purchased 11 years ago in Horni Marsov, just two hours outside of the capital city of Prague. He has also been involved in other legal conflicts in the Czech Republic and abroad and fears violent retaliation.

Sergey Mayzus explains the stakes of the BTC-e case to Shadow Banker in 2019; source: Sergey Mayzus

In the BTC-e caper specifically, unknown actors have threatened the lives of Mayzus and his family members, said the MFS owner. Furthermore, a key figure in the probe has already died under mysterious circumstances. Vinnik’s first Russian defense attorney, Timofey Musatov, died suddenly and unexpectedly in April.

According to the late attorney’s partner at UK-based law firm FJM International Solicitors & Lawyers, Roman Filatov, Musatov fell down the stairs while leaving a Moscow speakeasy after a night of drinking with friends. But Musatov’s assistant and driver were the only witnesses to the accident.

Timofey Musatov’s speedy Russian Orthodox funeral last April, just days after his death; source: The Vors

Meanwhile, Shadow Banker’s Russian underworld-adjacent sources maintain that Vinnik’s former lawyer got whacked by the Kremlin’s Federal Security Service (FSB) because he was about to sing to American intelligence agencies about BTC-e-related dirty dealings at Neklis Bank.

Shadow Banker will never forget the last words the lawyer ever emailed him, in reference to the Neklis allegations made by Mayzus in the hyperlinked thread above. “I see you’re relying on useless sources spreading false information to prepare yours. Sources you refer to cannot be trusted. You have a good day.”

As for the motivation behind the Financial Crimes Enforcement Network’s latest data leak, “the first thought I had was the election,” said Mayzus, in reference to concurrent elections in the U.S., and in the Czech Republic. While the presidency is at stake in the U.S., the Czech race concerns the Senate and regional councils.  

Hand of Soros (LOLz)?

This is where Mayzus’s conspiracy theory – one that will resonate with more right-wing elements of U.S. political discourse – begins.

“A simple visit to these organizations’ websites indicates they are ICIJ members, which in turn is funded by George Soros,” wrote Mayzus in a Facebook post authored earlier this week.

“Yeah, Grandpa Soros seems to be completely bad though,” continues Mayzus. “He always didn’t give a damn about everyone – money comes first. Nothing personal.”

As many readers already know, Soros, a nonagenarian hedge-fund-billionaire-cum-philanthropist, is a favorite target of the American right, frequently portrayed as a globalist liberal boogeyman and as an anti-Semitic trope.

But Mayzus identifies as Jewish on his father’s side, so unfortunately for everybody who might accuse Shadow Banker of entertaining such toxic sources and influences, no soup for you.

George Soros looking friendly in 2013; source: Open Society Foundations

Since 1984, Soros has given $32 billion, of his personal fortune, to a global network of foundations, partners, and projects known as the Open Society Foundations, of which he is the founder and chair, according to the organization’s webpage.

Mayzus said he has already been targeted by Soros’s political agenda due to an unflattering article authored about him and his relationship with BTC-e by OSF-funded and London-based transparency organization Global Witness.

Out of more than $9 million in income it generates largely from trusts and foundations every year, according to GW’s 2019 annual report, OSF accounted for a total $5.3 million via a two-year grant.

“In 2019, our support for Global Witness totaled three-million dollars, or about 20 percent of their total funding for the year,” said OSF lead communications officer Jonathan Birchall.

“They are trying to use my name for their dirty games,” reasoned Mayzus. “Why should I accept this?”

Louis Goddard, the GW data investigations adviser who authored the report, said “no comment,” in response to Mayzus’s allegations. Disclosure: Shadow Banker, in a previous and less Shadow Bankery life, was consulted by Goddard on the preparation of this report.

Moreover, the Washington DC-based International Consortium of Investigative Journalists, which is coordinating the publication of the massive FinCEN data leak, counts OSF as one of its higher-profile foundation donors.

While none of the links to the ICIJ’s annual reports or tax filings over the last three years were functional on their website at the time of this publication, due to XML errors, OSF’s Birchall, told Shadow Banker that the consortium is currently tapping the last tranche of a $1.5-million, three-year grant that started in 2018.

Furthermore, in 2017, the year after the Panama Papers leak, the ICIJ received $400 thousand in OSF funds. Fortunately, a European law enforcement source came through in the clutch and provided Shadow Banker with the ICIJ’s 2018 annual report.

The ICIJ’s 2018 report lists OSF as a “Major funder.” Foundation grants accounted for over $6.5 million of roughly $6.8 million of the ICIJ’s total revenues. So, $500 k out of a roughly seven-million-dollar annual budget isn’t exactly chump change.

The ICIJ did not respond to Shadow Banker’s request for comment and who can blame them.

But Birchall said, “the Open Society Foundation’s Program on Independent Journalism places a high priority on respecting the editorial independence of any of our grantees.”

OSF also funds the Organized Crime and Corruption Project, which is an ICIJ member, and which published Shadow Banker’s USC Master’s thesis on BTC-e. Despite Soros’s magnanimous philanthropy, it should be noted that Shadow Banker only received $750, a nervous breakdown, and complete disavowal from the USC Annenberg intelligentsia for his Atlantean efforts.

And mind you, Shadow Banker’s BTC-e insights, unlike Jake Adelstein’s, who called Vinnik, a “legendary figure” and “Keyser Söze,” in this journalistic handjob published by the Daily Beast, have probably reached the highest levels of the U.S. intelligence complex, but whatever.

OCCRP, an ICIJ partner organization, also announced via Twitter on September 18 that it is “has been working on a major financial investigation, and we are set to reveal the findings this Sunday.”

Back on the Soros front: While proving a clear-cut link between the financier and rogue FinCEN insiders may be as nebulous as finding documentary evidence of a satanic, ‘spirit-cooking’ pedophile ring operating out of Comet Ping Pong pizzeria in DC, please allow Shadow Banker to play Devil’s advocate for just another 1,000 words or so.

Politicization of Financial Intelligence?

After seven months of a pandemic response reminiscent of the mid-aughts movie, “Idiocracy”, and not just from the bleach-injection-touting GOP incumbent, but by the Democrats, who crusaded for the arrest of parents playing catch with their kids in wide-open fields – where no other human beings were present – during the lockdown, it has become clear that absolutely nothing in this country is beyond politicization.

Thus, if public health is fair game for asinine partisan circle jerks, why should the American people reasonably expect financial intelligence to be some sacred and inviolable exception?

Let’s start with the ICIJ’s groundbreaking Panama Papers exposé. The searchable database of leaked files from now-defunct Panamanian law firm Mossack Fonseca (MossFon) is already marked by some glaring omissions.

Take the intellectual author of the Magnitsky Act sanctions regime, William Browder, a former hedge-fund investor who reinvented himself as an esteemed champion of global financial integrity, even though he learned the whole game from notorious frauds and money launderers like Robert Maxwell and Edmond Safra, as an example.

The late Maxwell has most recently been linked as a likely source of seed funding for Jeffrey Epstein’s star-crossed, pedo-rape pyramid scheme, which was in all likelihood an intelligence dragnet, given the tradecraft established some six decades prior by legendary spy Eli Cohen in Argentina. Epstein just liked to go younger. Way, way younger.

Regardless, Berkeley Advisors Inc, a legal entity incorporated by MossFon on behalf of Browder in the British Virgin Islands, and the lead control structure that interlinked a network of offshore vehicles connected to the financier’s former Russian hedge fund, Hermitage Capital Management, is nowhere to be found in the Panama Papers dump, unless Shadow Banker is missing something.

Browder’s Berkeley Advisors Inc, registered by MossFon; source: The Komisar Scoop

Additionally, a trusted, Asia-Pacific financial intelligence source told Shadow Banker that MLRO contacts in their orbit, who banked several MossFon clients back in the day, were shocked by other high-profile clients omitted by the searchable Panama Papers database.

Perhaps, the ICIJ and their donors decided those people and their suspicious financial dealings were not in the “public interest.”

However, OSF’s Birchall noted, “we play no part in a journalism organization’s selection of topics for investigation, nor do we vet their stories. In fact, most of our investigative journalism grantees have their own charters and codes of ethics that bind them to accepting donor funding only on condition that they retain complete editorial independence.”

While the emerging Russian threads in Buzzfeed’s and Investigace’s imminent reports strongly suggest that these leaks will prove adversarial to President Trump’s bid for reelection, the most recently adjudicated FinCEN leak is something of a paradox.

Former FinCEN senior adviser Natalie Mayflower Sours Edwards, who illegally leaked various SARs exposing transactions linked to multiple Trump-connected entities to Jason Leopold, another Buzzfeed reporter, is surprisingly a Trump supporter, according to a 2018 Wall Street Journal report.

“Ms. Edwards, as well as a supervisor identified in court papers as a “co-conspirator,” regularly shared social-media posts critical of liberals and sympathetic to Mr. Trump,” wrote the WSJ.

Edwards’s alleged co-conspirator is Kip Brailey, FinCEN’s associate director for intelligence. Brailey’s attorney denied these accusations to the Journal. Edwards reportedly cited “record keeping” as her motive for leaking SARs to Buzzfeed.    

Sours Edwards’s defense attorney Peter Greenspun did not immediately respond to Shadow Banker‘s request for comment.

Back to Soros – the Hungarian-born financier was a major backer of former Presidential candidate Hillary Clinton. He personally contributed over $18 million from 2011 to March 2016 to Super PACs, Hybrid PACs, and historical soft money party accounts aligned with left-leaning causes in the U.S., according to political tracking service Ballotpedia.

Soros, like a lot of people, has also been candid about his disdain for U.S. President Donald Trump. At his annual dinner at the World Economic Forum in Davos, Switzerland this past January, Soros reportedly said Trump “is a con man and a narcissist, who wants the world to revolve around him.” To be fair, even Shadow Banker must admit it’s pretty hard to argue that point.

Still, just a day before Trump took office in 2017, Soros again in Davos said that “people like me would like him to fail.” In the current election cycle, Soros has definitely not been shy about putting his moolah where his mouth is.

As of last April, Soros has pumped more than $28 million into Democratic groups in advance of the 2020 election, according to Politico. Roughly a third of these funds have been earmarked for ‘Win Justice,’ a PAC that mobilizes people of color and other irregular voters who could be disenfranchised this Fall, as states battle over whether to hold in-person voting in November.

Additionally, Soros has been aggressive in his efforts to influence the results of lower-profile state and municipal elections. According to a Los Angeles Times article from March 2018, the wily megadonor headlined a “consortium of private funders, the American Civil Liberties Union and other social justice groups and Democratic activists,” that targeted four district attorney races in June of that year.

From 2014 until the date that article was published, the L.A. Times found that Soros has poured over $16 million in 17 county races in other states. Soros’s preferred candidates won in 13 of those elections. Through March 2018, Soros had spent at least $19.27 million in all on county races, according to the L.A. Times.

OSF in the Czech

Meanwhile, in the Czech Republic, and Central Europe in general, Soros’s influence operations have been similarly kinetic. Last December, Transparency International, an OSF-funded non-government organization called for the resignation of Czech Prime Minister Andrej Babiš.

Birchall noted that OSF’s support for TI amounts to less than three percent of its annual funding. Per the terms of TI’s 2018 funding agreement with the OSF, its Czech Repulic branch only received roughly $99,000 over 22 months.

Regardless, TI has been pushing to remove Babiš from power due to a conflict of interest scandal, regarding millions of Euros paid to Agrofert food, a farming and chemicals conglomerate he owns. Babiš is a billionaire and happens to be the second richest man in the Czech Republic.

A political centrist, Babiš is also viewed as a close ally of the country’s pro-Russia president, Miloš Zeman, who has indicated he will support his PM’s bid for the Czech Republic’s highest office when his term expires in 2023.

Additionally, Babiš has been reluctant to open Czech borders to the wave of migrants flooding into the continent from Syria and other conflict zones.

“Migrants are still a big issue for the Czech Republic,” he told German news outlet Deutsche Welle . “This is what drives the movements advocating Czexit and criticizing Islam.”

Of course, this attitude flies in the face of OSF’s core ideology. According to Central European news outlet Visegrád Post, Soros’s OSF “bankrolls a number of coloured revolutions across the world and fiercely opposes the restrictive approach to immigration that is practised by the Central European countries (the Czech Republic, Poland, Slovakia and Hungary in particular).”

However, Visegrad’s Post‘s vantage point may have to be taken with a grain of salt, notes OSF’s Birchall. “The site describes itself in effect as a voice of the Orbán/PiS world view,” he said.

Birchall is referring to Hungary’s Prime Minister Viktor Orbán and Poland’s ruling Law and Justice party. Both Orbán’s party, Fidesz, and the PiS can be described as rightwing nationalist, Christian political organizations.

Both groups are also at odds with Soros over his pro-immigration world view and agenda. OSF accused Orbán’s regime of pushing them out of Hungary in 2018. In Poland last year, Soros-backed fund SFS Ventures ‘teamed up’ to buy the second-largest radio station to boost anti-PiS media ahead of a crucial election, according to Deutsche Welle.

Circling back to Birchall’s point, the Visegrad Post “defines itself has having conservative and Christian opinions and representing the view point of Central Europeans,” according to the news site’s “About us” page.

Birchall also directed Shadow Banker to a website that details the history of the OSF in the Czech Republic. The OSF opened its Czech branch in 1992 after the fall of communism. “George Soros’s support ended in 2012 and we left the Open Society Foundations network,” says the osf.cz page.

The OSF’s Czech page also says “the primary goal of the organization was to kick-start democratic principles in post-communist countries and contribute to the development of a free society.”

Regardless, with Czech Senate and regional council elections approaching on October 2, the question remains, are the FinCEN leaks timed to advance a broader political agenda globally?

The BTC-e link and the jurisdictions highlighted by an Investigace.cz piece published earlier this week that could be construed as a FinCENgate ‘teaser,’ covering Russian money laundering conduits through the Baltics into the Czech Republic, are suggestive of an investigative slant.

Similarly, Shadow Banker’s highly-placed fintel source in DC noted that banks have been receiving multiple inquiries from ICIJ-affiliated reporters asking them questions about their ties to Eurasian oligarchs.

Early on, it seems that there may be a predominant theme in these FinCEN leaks, but it’s important to remember that ICIJ-linked journalists are saying they have obtained thousands of SARs. So, in theory, a wide universe of targets are fair game. Still, if this is going to amount to another four years of Russiagate hysteria, God help us all.

Please Don’t Steele-Job it, Buzzfeed 💦 

On September 18, Buzzfeed’s global investigative editor Ariel Kaminer tweeted that “the biggest investigation @BuzzFeedNews has ever published” would be running on Sunday.

But after roughly two years of having acrid, high-class Russian prostitute urine pressure-hosed into our faces by Rachel Maddow, Don Lemon, Adam Schiff, and other very serious resistance types on a 24-7 marathon basis – a deluge that is owed entirely to Buzzfeed’s supple journalistic standards – the American public must prepare itself for Floyd-overdose quantities of financially illiterate media psyops this Fall.

How egregious was the failed publication of the Steele dossier? Even Jeffrey Goldberg’s Atlantic ran a story last year with a subhead that read: “The document’s publication has made every revelation about Trump since seem minor, and has tainted the press’s standing.” That’s rich.

On January 13, just three days after Buzzfeed published the opposition research document, “the FBI interviewed Steele’s only sub-source and determined his dossier on which the entire Russia collusion case was built was bogus,” wrote James Casey, former section chief of the Federal Bureau of Investigation’s Eurasian counterintelligence division, last May in an op-ed published by The Hill.

Casey doesn’t comment to the media, as a general rule, beyond his own writing via op-eds.

While Shadow Banker doesn’t believe that the revelations in BTC-e-linked SARs probably filed by Deutsche Bank’s Prague branch, along with other institutions, will rise to the level of a Russiagate debacle in and of themselves, your narrator is still skeptical of these muckrackers’ level of precision and overall grasp of fintel.

In closing, we can only pray that fetishized and phantasmagoric accounts of watersports with hot, Russian pros – stories that Maddow desperately wants to be true – will not subvert the analysis of financial intelligence, cyber-enabled or otherwise.

The ICIJ’s FinCENgate embargo will be lifted on September 20, according to reporter Will Fitzgibbon, with an accompanying TV special on BBC‘s ‘Panorama’ scheduled for 7:00 pm (BST) on the 21st.

Update: 9/21 7:50 AM (CST)

The FinCEN Files were published yesterday and as predicted $1.3 trillion, or 65 percent, of the suspicious-transaction volumes were linked to Deutsche Bank, which has loaned at least $2 billion to Trump, according to the New York Times.

Meanwhile, not a single money-laundering investigation revealed in the leaks has hitherto proven adversarial to the Biden’s or the Clinton’s. Furthermore, every single one of the major investigations ‘exposed’ by this leak has already been adjudicated in federal court. Buzzfeed was the first to get the leak too, so that says it all.

Frequent SARs filers, per the selective and politicized leak obtained and disseminated by Buzzfeed ; source: Buzzfeed

UPDATE: 9/21, 7:40 AM (CST)

This story was updated to amend Nathan Lynch’s quote and to cut the word abortion from the lede, because it might trigger more conservative bank types who are LOLz-challenged.

UPDATE: 9/20, 4:44 AM (CST)

This story was updated to include texts from Buzzfeed reporter John Templon to Mayzus, detailing the date ranges of the SARs filed. It also cut out Igot Semeev’s iconic LinkedIn screenshot. Shadow Banker also added juicy additional fintel about the movement of BTC-e-related funds through MFS remittance portals.

UPDATE: 9/19, 5:45 AM (CST)

Correction: Igor Semeev was incorrectly identified as MFS’ money laundering reporting officer in an earlier version of this story.

This story was updated to include a ‘sweat droplets’ emoji and tweets specifying the dates of publication for Buzzfeed’s, OCCRP’s, and the ICIJ’s investigations. Shadow Banker also deleted a disparaging sentence or two, so other media organizations won’t think he’s a complete asshole, because he doesn’t want an all-hands-on-deck, politicized investigation into his affairs one day.

UPDATE: 9/18, 1:30 PM (CST)

This story was updated to include comments from Birchall that Shadow Banker forgot to add because he was up writing from 5 AM until 6 PM yesterday and it slipped his mind.

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