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Here’s another asset‑stripping scheme from AKB Probusinessbank that barely surfaced in investigations—at best a passing mention in discussions.

In August 2016, Inside Paradeplatz, a Swiss finance‑industry site, published a piece on problems at the small private bank Falcon Private Bank. Unexpectedly, AKB Probusinessbank appeared there as yet another scandal connected to Falcon.

Link to the article: Inside Paradeplatz — Wädi Berchtold und seine risky Falcon

Who are Falcon Private Bank?

In the early 2010s the bank became a byword in the Russian banking industry. It actively marketed services for removing assets for shareholders of Russian banks—what was sometimes euphemistically called “fiduciary deals.”

The scheme was simple: a Russian bank placed a deposit with Falcon; the money then flowed through Falcon to offshore structures of the owners. Under the agreement, Falcon returned the deposit only if the owners’ companies that received the money repaid obligations to the bank. Everyone was satisfied: the risk to the owners’ companies didn’t show in the Russian bank’s reporting; the Falcon deposit supposedly existed and sat on the balance sheet as an interest‑bearing asset—but in reality the money had long been stolen. The owners received other people’s funds into their companies directly, with no obligation to return them.

By 2015 the Central Bank knew about such Falcon schemes. The regulator demanded that banks either fully provision the detected deposits at Falcon or close them and bring the money back.

How does this tie to Probusinessbank?

Exactly such a deposit was found by the Central Bank in Probusinessbank’s reporting. At a May 2015 supervisory meeting, the Banking Supervision Department asked management directly what they planned to do about it. The answer was evasive: allegedly the deposit would be closed in June 2015. That never happened.

After the license was revoked in August 2015, the bankruptcy administrator tried to recover funds from Falcon, but the bank refused. The damage was 3,224,885,000 rubles (around USD 50 million at the time).

Where did the money go?

Accounts placed by Probusinessbank at Falcon (and in fact stolen) were further routed to companies controlled by the shareholders. For example, tens of millions of dollars went to the Latvian account of Lankora Investments (Cyprus) Limited—this company appears in Trasta Komercbanka committee minutes as connected to the Life group shareholders. From there money was laundered through Leontiev’s offshore network—for instance, moving from Lakota to Vermenda, and further to the well‑known Wonderworks controlled by Leontiev.

What do all these schemes have in common?

It’s the familiar structure. A Russian bank passes money to a foreign financial institution, which then transfers it to offshores linked to the bank’s owners. Contracts are drafted so the money can be not returned with impunity.

Such schemes were often run for Russian bank owners by small foreign banks and brokers—either lax on reputational risk or willing to ignore it.

Examples of similar asset‑stripping schemes at Probusinessbank:

  • USD 213 million via Otkritie Capital International Limited and Ambika;
  • USD 153 million via DMBL and Vermenda;
  • USD 105 million via BCS Cyprus and Merrianol;
  • roughly USD 50 million via Mediobanca and Larienta (part was offset with Larienta’s Russian assets).

To this list we can add the Falcon Private Bank and Lankora scheme for roughly USD 50 million.

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How common were such schemes?

Unfortunately, not rare. In 2019 the Financial Times published a story on a similar operation involving Austria’s Winter bank. The story featured an offshore, Black Coast, effectively controlled by the bankers, a “Mr. Worsley” (a local version of “Maria Levina”), and USD 175 million siphoned from the Russian bank Trust in favor of its shareholders. The structure was practically identical to those used at AKB Probusinessbank.

Highly recommended reading—not only informative but beautifully written: An Austrian bank’s brush with hot Russian money

What became of Falcon Private Bank?

Beyond aiding Russian bankers in asset stripping, Falcon was entangled in the IMDB scandal, used to launder stolen funds. As with another Swiss bank, BSI, that took part in these operations, Falcon was liquidated. Not all reputational risks pass without consequence.

Requiescat in pace, Falcon Private Bank.