by the investigative journalist Shana Dovi
Money laundering and fraud in the companies Coinspaid and Alphapo.
By criminals Ivan Montik, Pavel Kashuba, Dmitry Yaikov (also known as Dzmitry Yaikau) from Belarus, Roland Isaev, Paata Gamgoneishvili from Russia and Max (Maksim) Krupyshev from Ukraine.
In this second article, we will delve into the various techniques put in place by CoinsPaid in order to defraud tax administrations through Europe. Despite being pretty naive and potentially construed as a beginner’s mistake due to the lack of knowledge of the authors, CoinsPaid’s CEO was nevertheless informed of the risks of those operations as soon as 2021. The proceeds of their tax fraud are then laundered via various channels including their own employees. In that context, we suspect the current local board member of Dream Finance OÜ (the legal structure operating in Estonia), Svetlana Prussova and her colleague Violaine Champetier de Ribes Christofle to have accepted dubious tax-free crypto payments directly from an offshore structure whereas the origin of those funds were clearly in a gray area.
This series of investigative articles describes how “Dream Finance OÜ”, an Estonia based company doing business as “CoinsPaid” and managed by the Berlin resident, Ukrainian Crypto Influencer, Maksim Krupyshev, is laundering hundreds of millions of euros per year with the help of a pan-european network of Belarussianexpatriates, working for offshore and (mostly) illegal gambling sites while hardly respecting local labor and tax regulations.
Each article will delve in one facet of this well structured criminal endeavor and explain the role of each key character spanning from an old French female aristocrat living in Tallinn and dealing with the company’s public relations to a mythomaniac Belarusian tennis fan based in Cyprus heading the finance department. We will also try to understand why the Estonian authorities, who are well aware of the activities conducted by CoinsPaid, are remaining passive.
In Spring 2020, Maksim Krupyshev was trying to solve a big problem: the Estonian regulation was about to change for local companies holding “crypto license” and “Dream Finance OÜ”, the legal structure operating CoinsPaid, was impacted. Every company holding such a license had to have a director based in Estonia as the local regulator was increasing the requirements in order to get rid of the hundreds of companies domiciled in Estonia and holding those licenses but not having anyone physically there.
Despite having more than 100 employees at the time, the company was run from a four person shared office in a Regus center located next to the Viru Keskus shopping center in Tallinn, Estonia.
We talked with an Estonian entrepreneur who briefly shared an office with “Dream Finance OÜ”: “We’ve never seen anyone until a guy showed up in summer 2020. As we were also active in the crypto industry, we started discussing and he told us he was the local board member for two companies. He was from Belgium and knew what he was talking about both in finance and crypto but that was weird when he just arrived out of nowhere especially when we discovered that one of the companies he was working for was employing dozens of people ! We were wondering where they were!”.
As Maksim Krupyshev didn’t want to leave his Berlin home and risk losing the possibility to become a German citizen, he could not move to Tallinn and had to find someone else. Through a fellow Ukrainian friend, he was introduced to Frédéric Hubin who moved to Estonia a couple of months earlier. Mr. Hubin was offered the position of local board member and accepted it. With that setup, Krupyshev was able to continue to manage CoinsPaid from the warmth of his Berlin home while complying with the new Estonian regulations. Simultaneously and still from Berlin, Krupyshev was managing “AlphaPo LLC”, the offshore crypto payment processor based in the Caribbean.
“CoinsPaid was domiciled in the Regus Metro Plaza center then moved to the fancier Spaces Rotermann. I worked in both of those places and the only time I’ve met Maksim was when the company was audited by the regulator during the winter 2021–2022 if I remember well. That’s also the only time I’ve seen Pavel Kashuba. Otherwise, I’ve never ever seen them in the office or in Estonia. I speak Russian and I could understand both of them. They hated being in Tallinn and could not wait to leave.” told us a former employee of Regus who was in regular contact with the people of CoinsPaid.
All the decisions related to the core business of CoinsPaid were taken by Krupyshev. He is the CEO after all. Hubin’s responsibilities were mostly liaising with local authorities and service providers in Estonia. He took a more important role from the end of 2021 until his demise but we’ll look into that in a future episode.
Remote First:
Being “Remote First”, which means working from home, is an important motto of CoinsPaid and a cornerstone of their recruitment strategy. It helps them seduce young professionals mostly from central europe (Belarus, Ukraine, Russia, Moldova, Poland, …) who are also keen on being paid with crypto currencies as they usually distrust their local currency. This is a key aspect of the money laundering activities of the company. Moreover, that distributed approach helps them create a sort of Lernaean Hydra which makes it very difficult for authorities to identify the doers in the organization as they are physically located amongst various countries.
Eins, zwei, Polizei …:
Following the financial crisis of 2008, most of the industrialized countries started to implement various regulations to progressively get rid of offshore tax havens and bank secrecy. One rule which was already pretty common amongst a lot of states got progressively generalized to the OECD countries : the seat of management rule. The idea was pretty straightforward and aimed at fighting the multiplication of legal structure based in lightly taxed countries but managed from elsewhere. Based onthat rule, a company is deemed domiciled in the country where it is managed and not where it is registered.
“In Germany (and in most if not all of the OECD countries), the tax residence of a company is determined by answering a simple question: is the company domiciled in Germany or managed from Germany? If the answer is yes to one of these two conditions, the company has to fill a tax declaration in Germany.” explained to us a German tax expert.
As CoinsPaid and AlphaPo are managed by Mr. Krupyshev from Berlin, both of these companies are therefore obliged to submit a tax declaration in Germany in order to be taxed there. Due to the opaqueness of the CoinsPaid and AlphaPo organizations, it is hard to determine how much profit was not declared but a conservative amount is in the range of 100 millions euros since their inception.
The German tax expert we discussed with added: “In Germany, tax fraud above 100.000 euro is punished with imprisonment of up to 10 years. I hope Mr. Krupyshev has a good story to tell the German tax office because if what you say to me is right, I cannot see how he will avoid that”.
Moreover, we’ve seen documents demonstrating that Mr. Krupyshev was warned as early as 2021 that CoinsPaid was not operating in a tax compliant way in Germany. The tax fraud was clearly part of his business model.
The money laundering:
Laundering money “(…) involves disguising financial assets so they can be used without detection of the illegal activity that produced them. Through money laundering, the criminal transforms the monetary proceeds derived from criminal activity into funds with an apparently legal source.” (in https://www.fincen.gov/what-money-laundering).
We already know that AlphaPo operates without a license from the Caribbean tax haven of Saint Vincent and the Grenadines. We also know that it is managed by Mr. Krupyshev from Berlin, Germany. The profits made within AlphaPo are clearly from illegal origins and contain tax fraud proceeds.
“Money laundering usually involves front businesses which are legitimate and which are profitable. The criminals are then making sure these businesses increase in value to be resold at some point for a perfectly legal profit. A classical technique to artificially increase the business value is to simply pay the providers with fraudulent funds therefore reducing the cost of goods and services and mechanically increasing the benefit and value of the company.” explains to us an international tax lawyer based in Geneva.
This is exactly the technique which has been used by CoinsPaid to launder the proceeds of the illegal activities of AlphaPo as most of the employees were paid in crypto currency directly from AlphaPo.
On the 2nd March 2023, the Ethereum address 0x7A0bE4ECBC1d2a37ed7FfE1BA6B89C74fc9bB16A transferred for 66.000 US Dollars (USDT) to 18 other addresses.
We’ve shown that list of addresses to a former employee of CoinsPaid: “Oh yes, here is my wallet address on your list. The amount transferred corresponds to my yearly bonus. All the employees had to write their wallet address in a Google Form to receive their bonus. It has been like that since the beginning of CoinsPaid. Some have also their salary paid via that channel too, especially the one based in Armenia, Ukraine, Georgia, etc. Hanna and Alex were taking care of the payments”. That became clear after the July 2023 hack that the address used to pay the CoinsPaid employees was actually receiving its funds from AlphaPo as shown in the transaction detailed here:
· https://etherscan.io/tx/0x8117febf826fcd98cb4ac2f8ad779137064ddd0da7b3d80594 c490078a836fab
“Violaine and Sveta both received 3 or 5.000 dollars, I don’t remember precisely. They were both very happy but we had to explain to them how to create a wallet. They had no clue.” a former employee of CoinsPaid told us.
The people taking care of the payments are Mrs. Hanna Drabysheuskaya and Mr. Aliaksei Kuzniatsou, respectively Head of Accounting and Head of Treasury. Considering their profiles, there is hardly any doubt that these people knew exactly what they were doing and therefore actively participated in an international money laundering operation.
Svetlana Prussova, who also received a bonus paid from AlphaPo, is a trained lawyer with compliance skills so she should also be aware of what was happening.
By analyzing the flow of funds from the addresses linked to AlphaPo, we can see that a lot of beneficiaries have been receiving funds for years via that channel. It is clearly a long lasting operation.