Russian criminals and UK drug gangs caught in multi-billion pound money laundering scheme

A multibillion-pound money laundering network between Russian cyber criminals, UK drug dealers and sanctioned oligarchs has been dismantled in an international operation.

The network, which used cryptocurrency to launder illicit funds, was uncovered in “Operation Destabilise”, the National Crime Agency’s (NCA) largest money-laundering investigation in a decade.

The system was run by two cryptocurrency networks, Smart and TGR, facilitating the exchange of dirty money for cryptocurrency, allowing criminals to conceal the origins of their funds.

The operation targeted Russian-speaking hackers and UK-based street gangs. The scheme is said to have been used by Russian oligarchs and sanctioned individuals to launder money and invest in properties in the UK. The Irish Kinahan cartel also reportedly used the network to exchange cryptocurrency for cash.

Ekaterina Zhdanova, a Russian national with strong financial ties in Moscow, headed the Smart network and has since been arrested in France. Zhdanova, previously sanctioned by the US in 2023, and her associate Georgy Rossi, who is still at large, are believed to have generated millions from the operation, charging up to three per cent for transactions involving billions. The network’s reach spanned over 30 countries, with funds routed through the Middle East, including the United Arab Emirates.

Rob Jones, NCA Director General of Operations, called the investigation “groundbreaking”, revealing how Russian elites, cybercriminals, and UK drug gangs were connected by a previously invisible laundering service. The operation has resulted in 84 arrests and £20 million in seized assets within the UK. The NCA estimates the network would need to launder £700 million to recoup that amount.

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The illicit system allowed UK drug dealers to swap physical cash for cryptocurrency, which they could use to purchase drugs from South American cartels. At the same time, Russian cybercriminals used it to convert cryptocurrency into physical assets, including real estate. Zhdanova’s Smart network also allegedly facilitated the activities of a Russian ransomware group responsible for attempting to extort at least £27 million from UK victims, including hospitals, schools, and businesses.

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Nik Adams, the National Police Chiefs’ Council lead for economic crime, said the network was “hidden in plain sight” and was moving vast sums linked to the drugs trade and violent crime in the UK. The NCA first uncovered the operation in November 2021, following the arrest of Fawad Saiedi in London, who was found with more than £250,000 in cash. Saiedi was later jailed for laundering over £15 million.

Additional arrests connected to the network included Semen Kuksov and Andrii Dzektsa, who between July 2022 and September 2023 oversaw the laundering of £12.3 million in just 74 days. In Ireland, Igor Logvinov, a courier associated with Kuksov’s network, was arrested and sentenced to three years in prison. Other parts of the operation saw individuals smuggling large sums of money across borders, including Ukrainian nationals stopped at the Channel Tunnel and Dover with over £1 million in cash.

The NCA collaborated with law enforcement agencies in the US, France, Ireland, and Jersey to dismantle the network, which operated across multiple countries. Sanctions were announced against Zhdanova’s associates, including Khadzi-Murat Dalgatovich Magomedov and Nikita Vladimirovich Krasnov, as well as key figures in the TGR network such as Rossi and his associate Andrejs Bradens.