Russian-Led Money Laundering Network Launders UK Drug Gang Cash During Lockdown
A major international money laundering operation, involving Russian criminal networks and UK drug gangs, has been dismantled by the National Crime Agency (NCA). The multi-billion-dollar operation, active across 30 countries, has been described as the most significant success against money laundering in over a decade.
The network leveraged Moscow-based cryptocurrency services to help UK street drug gangs launder cash profits during the 2021 lockdown, converting illicit funds into untraceable digital assets. This sophisticated operation not only fueled organized crime but also allegedly supported Russian state espionage activities.
Unveiling the Network
The NCA, in collaboration with global partners, has arrested 84 individuals, including 71 in the UK. Security Minister Dan Jarvis called the operation a breakthrough, exposing “Russian kleptocrats, drug gangs, and cyber criminals” who relied on illicit cash flows.
The network was spearheaded by Ekaterina Zhdanova, the head of Moscow-based crypto exchange Smart, who was sanctioned by the U.S. Treasury for facilitating financial transactions for Russian elites.
Bradley Smith, Acting Under Secretary for Terrorism and Financial Intelligence at the U.S. Treasury, affirmed the U.S.’s commitment to combating Russia’s misuse of digital assets. “We remain steadfast in disrupting Russia’s attempts to accrue, store, and transfer ill-gotten gains through cryptocurrency.”
A Pandemic Discovery
The trail began during the 2021 pandemic lockdown, as UK drug gangs struggled to launder their cash profits. Traditional methods of moving funds were disrupted, leaving gangs unable to reinvest in new drug shipments, such as cocaine from South America.
The solution came from Moscow-based crypto networks Smart and TGR, which were flush with digital assets from ransomware attacks. These networks converted drug profits into cryptocurrency, bypassing traditional financial systems.
In exchange, the Russian network charged a commission and used couriers to transport cash into the legitimate economy through businesses like construction firms or by smuggling money to Dubai.
Crypto as a Laundering Tool
The crypto services mimicked traditional banking by offering seamless money transfers for a fee. Once couriers delivered cash to the laundering network, the equivalent value in cryptocurrency was transferred to drug gang accounts. These digital assets were then used to procure drugs directly from South American suppliers.
The NCA uncovered this pattern after arresting Fawad Saiedi in 2021, who was caught with £250,000 in his car. Saiedi, later jailed for over four years, had coordinated the movement of £15.6 million in dirty money, leading investigators to Zhdanova and the Smart network.
Further links emerged, tying the laundering scheme to the notorious Kinahan drugs cartel, which operates out of Dublin and the UAE. One courier network collected cash from 55 locations across the UK in just four months, servicing at least 22 gangs.
Semen Kuksov, the son of a Russian oil executive, led another UK-based courier ring, collecting £12 million in drug money over 10 weeks. He was jailed in February 2024 for nearly six years.
Impact on UK and Beyond
To date, the NCA has seized £20 million in cash connected to £700 million in drug sales. Most arrests have targeted couriers, but the disruption has sent a strong message to criminal organizations.
“If you’re moving drug money today, you’re taking a huge risk,” said Rob Jones, NCA Director General of Operations. “You don’t know if your courier has been compromised or if we’re tracking your proceeds. We’re anticipating where this trade will go next, and we’ll be ahead and waiting.”
Russian Espionage and Sanctions
The U.S. Treasury has also sanctioned key figures in the laundering operation. These include George Rossi (Georgy), a Russian-born Ukrainian who led the TGR network, and his deputy Elena Chirkinyan. Rossi, based in London, is accused of using cryptocurrency to launder millions, including funding Russian espionage efforts.
The NCA revealed that in 2022, the Russian government used the Smart and TGR exchanges to move funds for covert operations. The network also facilitated financial transfers for banned entities like Russia Today, enabling them to circumvent sanctions.
Future Outlook
The takedown of this laundering network marks a significant blow to organized crime and Russian financial operations. By cutting off key channels for moving illicit funds, authorities have created a deterrent for similar schemes in the future.
The operation highlights the evolving role of cryptocurrencies in global financial crime and underscores the need for vigilance as criminals and state actors adapt to new technologies.
For law enforcement, the challenge is clear: stay one step ahead of illicit networks leveraging digital assets. As the NCA’s Rob Jones noted, “The game has changed, and we’re changing with it.”
