Investigation into involvement by Dutch company in 1 billion dollar international money laundering construction
Last Tuesday, the Fiscal Information and Investigation Service (FIOD) arrested three former employees of a company from the Municipality of West-Betuwe. It is suspected that via their company they laundered around USD 1,200,000,000 for a client in India. The three arrested company officers will today be brought before the examining magistrate at the district court in Rotterdam.
The client in India is a company operating in the energy and petrochemical sectors. From 2006 onwards, the company was involved in the laying of a gas pipeline in India. The Dutch company acted as the purchase office. Via this Dutch company, materials and services for the gas pipeline project were purchased right across the globe. The costs for the supplied materials and services were charged on by the Indian company to gas customers and consumers, in India.
It is suspected that the Dutch company was used to increase the amounts on the invoices for the materials and services supplied by businesses. The company acted as a so-called ‘invoice duplicator’. As a result, the company in India was able to claim the costs for the materials and services from the gas customers, twice.
The ‘profits’ earned in this way were subsequently creamed off via the Dutch company. This is believed to have been achieved by taking out false insurance contracts. The insurance policies were allegedly taken out in order to cover the risks of materials purchased while in fact there are no indications that the Dutch company actually ran any risk, at all.
The creamed-off profits were then transferred via a web of businesses and structures – based among others in Dubai, Switzerland and the Caribbean – ending up with a business owned by the Indian client in Singapore.
Organised money laundering
The former company officers are accused of committing document forgery and organised money laundering. For their involvement in the international money laundering construction, these company officers are alleged to have received payments of around 10 million USD.
The investigation was launched following an examination of the books of the Dutch company, by the Dutch Tax and Customs Administration. In November 2017, the premises of the company of the officers arrested last Tuesday were searched by the FIOD. Administrative records were seized at that time.
Money laundering a serious matter
The facilitation of the laundering of billions of euros originating abroad by Dutch companies is a serious matter. The activities and recommendations of so-called facilitators are the focus of attention of the Dutch government. Assisting in money laundering enables criminals to spend money earned in the underworld ‘legally’ in legitimate society.
In this case, Dutch companies are suspected of assisting an Indian client to launder suspected illegal earnings. The losers were probably individual citizens in India. In India, the costs for the production of gas are passed on to the consumer. The higher the infrastructure construction costs, the more consumers have to pay for the gas supplied.