Real Knitting, a US company in Serbia, reported to US Treasury for money laundering

Real Knitting, a sock company from the US which opened a factory in Serbia, has laundered 1.2 million dollars, the KRIK (crime and corruption reporting network) (KRIK) writes.

KRIK goes on to say that since 2011, when Real Knitting opened its factory in Serbia and has been promoting itself as “a successful company based on Italian’ know-how’ (skills) and genuine entrepreneurial spirit”, has received almost two million euro in government subsidies from Serbia, including 1.4 hectares of state land.

At the same time, KRIK added the employees in the socks factory, in the village of Gajdobra in Vojvodina, which the Serbian government considers a good example of foreign investments Serbia, have been complaining about difficult working conditions and mobbing.

Both the ownership of the factory and the origin of the money that arrived in Serbia are suspicious, KRIK reports.

It adds that although it is presented in the media as an Italian-Russian investment, the offshore company Alpha Retail Group, based in Hong Kong and backed by an Armenian businessman, is the real owner of Real Knitting.

Alpha Retail Group has transferred large amounts of money to Serbia in previous years, and then returned it to its account in Singapore, KRIK reported.

One of those transactions, the payment of almost 1.2 million dollars to the Serbian sock factory, was marked by the New York-based bank BNI Mellon as possible money laundering and reported it to the US Treasury.

Discover the most important foreign investments in Serbia in 2019: click here!

This information came to light as a part of a months-long global journalistic survey FinCEN Files conducted by the International Consortium of Investigative Journalists (ICIJ), BuzzFeed News and the OCCRP journalist network, in which KRIK also participated and checked transactions concerning Serbia’s companies and businesspeople.

FinCEN, the US Treasury’s anti-money laundering and other financial crime agencies, have compiled a report naming 723 suspicious transactions in the total amount of 56.5 million dollars from twelve companies, including Alpha Retail Group, made from December 2012 to March 2013 worldwide.

Most of the transactions went through JSC Norvik Bank in Latvia, which was fined by the Financial and Capital Markets Commission (FCMC) in 2017 with about 1.3 million euro for weak internal control.

According to the FinCEN report, the analysis of transactions showed a phenomenon called ‘nesting’ – opening more bank accounts to hide the traces.

One of those suspicious payments of nearly 1.2 million dollars was made by Alpha Retail Group to the account of Real Knitting in Serbia, in the then Piraeus Bank (now Direct Bank) in 2013.

KRIK had access to the company’s documents and found out more similar transactions taking place outside the period analysed in the FinCEN report.

Alpha Retail Group from Hong Kong transferred another 7.5 million dollars and close to 18 million euros to Real Knitting in 49 transactions from June 2011 to April 2015. The money was then returned to Alpha Retail Group’s account in Singapore, according to the documents from the business register.

KRIK asked Serbia’s Anti-Money Laundering Administration if it was investigating ‘Real Knitting’ business, and the institution said that they were unable to answer the question as it might jeopardize the “establishment of a criminal offence”, but that it would inform KRIK about “progress in the case”.

Experts who reviewed the documents with KRIK reporters said the transactions were unusual, especially risky coming from Hong Kong, one of the world’s leading offshore zones.

Alpha Retail Group was founded by a Russian Alexander Viktorovich Efimenko, but the company changed owners several times. Since 2017, its owner is the Armenian businessman Korjun Chilingaryan, with residence in Lithuania, according to the documents of the Hong Kong business register.

When the sock factory was founded, the Agency for Foreign Investments and Export Promotion (SIEPA) allocated 825,000 euros to the company as government aid. The agreement was signed by Efimenko and former Minister of Economy and Regional Development Nebojsa Ciric.

Two years later, in 2013, SIEPA allocated another 275,000 euros to the factory. At that time, the government was led by the Serbian Progressive Party (SNS), and the agreement was signed by Mladjan Dinkic, the then Minister of Finance and Economy.

In 2014, the factory received more than 1.4 hectares of state land in Gajdobra from the State Property Directorate. Its value is estimated at about 12,000 Euros. Besides, KRIK reported, the factory received 750,000 Euros in state aid, paid in two instalments – in 2017 and 2018.

(N1, 21.09.2020)

This post is also available in: Italiano

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