Cypriot Broker Executives Arrested in Moscow over Alleged RUB 7 Billion Fraud

The Federal Security Service of the Russian Federation has “stopped the illegal activities” of the executives of a Cyprus-based broker and their accomplices over an alleged fraud involving more than 7 billion rubles, the Russian version of Finance Magnates first reported.

Three of the suspects have been remanded in custody, while two have been placed under house arrest.

Raid on the Broker’s Russian Premises

The Russian authorities conducted searches of the accused's residences and offices in Moscow and St Petersburg. This also led to the seizure of communications equipment, documents, seals of Russian and foreign legal entities, digital media containing cryptocurrency wallets, and cash totalling more than 100 million rubles.

According to a press release from the FSB Public Relations Centre, the accused were involved in a fraud involving shares of Russian telecommunications and fuel and energy companies worth more than 7 billion rubles.

They have been accused of violating anti-sanctions laws, which prohibit the issuance and circulation of foreign depositary receipts representing shares in Russian issuers.

The broker allegedly obtained rights to shares in public Russian companies that had been traded on foreign stock markets prior to the ban.

The Russian authorities further alleged that the suspects “conspired” with the management of another company and used “forged documents, exchanged frozen American depositary receipts for shares in Russian companies, thereby causing significant damage.”

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Are There Criminal Links in Cyprus?

Separately, a shooting incident recently occurred at an office building in Limassol housing multiple CFD brokers. The target of the early-morning shooting remains unknown, but local police confirmed that “the offices of a specific company have indeed been shot at.”

Paphos Mayor Phedonas Phedonos also alleged last year that Cyprus had become part of an international money laundering network involving Latin American drug cartels. He further claimed that some forex firms based on the island were being used to launder drug money through complex shell company networks in Latin America.

Moreover, recent local reports revealed that Cypriot authorities detained three individuals, including a police officer, as part of an investigation into an alleged criminal organisation linked to money laundering, tax evasion, and extortion targeting businesses such as forex firms.