The National Bank of Ukraine conducted an audit of the financial company FC Leogaming Pay LLC for 2019 and 2020, which owns the brand of the international payment system Leo, a non-bank financial institution licensed by the National Bank of Ukraine to transfer funds in national currency without opening accounts. According to the regulator, the company does not provide the NBU with reliable information on all financial transactions.
According to the audit results, in May-December 2020 alone, the participants of the international payment system “Leo” made financial transfers in the amount of over UAH 462 million for the “sports poker and e-sports tournament” service. The major share of these funds (56.6%) went to the accounts of Digispace LLC (on behalf of illegal online casino Cosmolot brand at the time of the inspection) and Redsin LLC (on behalf of the illegal online casino 1xbet brand).
Also, regulator detected miscoding: more than 90% of financial transactions using Visa and Mastercard initiated by payment cards holders on the resources of LLC FC “LEOGAMING PAY» are assigned as High-Risk Merchant Category Code 7994 – Video Games, that is used to legalize money from illegal gambling.
According to the State Register of Legal Entities, Digispace LLC and Redsin LLC have never organized sports poker and eSports tournaments. Instead, they entered a different business profile in their registration documents – “computer wholesale”.
Which companies received funds for the “sports poker and e-sports tournament” under the Leo payment system?
|Service provider||Amount of funds received, UAH million *||% of the total amount of funds|
|Neuron Gold LLC||0,0495||0,0001|
|Clarity Trade LLC||0,3441||0,0007|
* for the period from May 14, 2020 to December 10, 2020
However, according to the Ministry of Youth and Sports of Ukraine, in accordance with the rules of sports competitions in the sport of “sports poker”, online tournaments are not provided at all. And according to the Unified Plan of Physical Culture and Sports Activities of Ukraine for 2020, in the field of sports “sports poker”, poker tournaments were held only offline from January 26 to February 3.
At the same time, payments with the purpose of “sports poker and e-sports tournament” were received through FC Leogaming Pay throughout 2020.
The transfer of funds was carried out by six acquiring banks, which ought to control the prevention of the miscoding scheme (a separate type of fraud in the banking acquiring network, which consists in substituting the purpose of payment) during financial transactions.
According to the NBU, 89% of financial transactions for the transfer of funds carried out by FC FC “Leogaming Pay” from Visa and Mastercard cards were performed through the acquiring bank “Concord Bank”.
Acquiring banks that did not notice any violations on the part of FC Leogaming Pay LLC during financial transactions on the transfer of funds using Visa and Mastercard
|Acquire bank||Amount of transactions, UAH *||% of the total amount of transactions|
* for the period from December 1, 2019 to December 10, 2020
The owner of FC Leogaming Pay LLC is Alyona Shevtsova, who is wife of Deputy Chief of the Main Investigation Department of the National Police Yevhen Shevtsov. According to the SBU, Alyona Shevtsova’s companies are involved in a scheme to “launder criminal proceeds and transfer dirty money abroad to the accounts of offshore companies”. Criminal cases involving the Shevtsovs’ companies are still being investigated by Ukrainian law enforcement agencies.
They also work with companies in European Union through Georgian Max Express LTD (also controlled by Shevtsova, a non-banking financial institution of Georgia, licensed by the National Bank of Georgia as a payment service provider No. 0078-2904 dated August 3, 2018)
The company provides money transfer services for foreign and local clients. It’s account is opened in two EMI (Electronic money institutions), one of them is Paysend PLC – an authorized electronic money institution registered with the UK FCA.
Payment system Leo processes payments in favour of betting and illegal gambling as money transfers in favour of individuals through Max express LTD. Further, Max Express uses payment services agreement send money to the final recipients: casinos and betting projects.
Illegal business, or money laundering scheme, in Ukraine or any other country couldn’t exist in a vacuum. It requires circular blindness, or a conspiracy of all participants in the chain: payment systems, banks, regulators, and law enforcement which are interested and involved in developing illegal gambling.
Ukraine continues to lead ranks of corrupted countries and, furthermore, investigative journalist appeared under mud-slinging that fraught with threats and massive lawsuits. Author also has the supporting materials that such information attacks are organized by the beneficiary of the FC Leogaming Pay, LLC and co-owner of IBOX Bank Alena Shevtsova and her husband.