The investigation and prosecution of money laundering in Albania have failed. The responsible institutions for combating this criminal activity exhibit formalistic behavior, while the number of those who have been convicted is minimal. Despite demonstrative figures for detected cases and seized assets, the files that end up in court are few. The majority of the accused end up receiving suspended sentences, as they have managed to retain even the seized assets. For this reason, since February 2020, Moneyval, the mechanism of the European Commission against Money Laundering and Terrorist Financing, included Albania in the “gray” list, which consists of countries at high risk of money laundering.
Zylyftar Bregu
On the morning of February 9, 2021, the State Police issued a notice titled “Conclusion of the police operation codenamed ‘Wrong Transfer’,” according to which the Section for the Investigation of Money Laundering and Criminal Assets, in collaboration with the Tirana Prosecutor’s Office, had seized over 6 million euros in assets stemming from criminal activity.
According to the announcement, as a result of an investigation launched in 2016 (lasting for 5 years), 10 vehicles, 3 land plots, 1 apartment, 5 shops, 2 bar-restaurants, and several call center businesses were seized. The value of the assets, around 6 million euros, was suspected to have been obtained from drug trafficking.
A few minutes later, the Tirana Prosecutor’s Office released another more detailed statement, listing the seized assets and attributing the success to it. This pertained to the criminal case of Alban Xhepa. However, less than a year after the celebration of the seizure of 6 million euros in assets, on January 26, 2022, the Tirana Prosecutor’s Office, with the same prosecutor, suspended the investigation.
This time, neither the police nor the prosecutor’s office wrote a letter to inform that the 6-year investigation had failed, unjustly implicating an innocent citizen and even damaging his business.
A dossier with three files, around 1500 pages of facts, evidence, energy, and money spent for a futile investigation. Alban Xhepa regains his assets and continues his life as a businessman.
The tolerance that Brings about the formalism of money laundering investigation
INA has obtained a copy of the file related to Alban Xhepa. According to their report, Xhepa was arrested by the Italian police on October 30, 2006, with a quantity of cocaine and marijuana. He was sentenced to 2 years, 8 months, and 20 days of imprisonment and fined 14,000 euros. After his conviction, Alban Xhepa claimed in his testimony to the prosecutor that he had started studying law in Italy, but he transferred these studies to one of the private universities in Albania, where he graduated in 2009. According to his statement, he worked as a specialist in the file tracking sector of former political prisoners in the Ministry of Justice for a year (2009-2010). After two years of experience as an operator in several call center companies, he established his own company in 2015. Payments were registered shortly after. In a few months (2015), he received around 200,000 dollars in transfers from Saudi Arabia. Later, transfers from Israel and the Czech Republic followed. Just within the timeframe of 2015-2016, Xhepa claims that contracts brought him around 800,000 euros in revenue. He asserts that he started with 6 employees and eventually expanded to 60. Several companies were registered at the National Business Center with Alban Xhepa or his relatives as administrators, all sharing the same address.
Under these circumstances, the General Directorate for Preventing Money Laundering started suspecting money laundering. The Financial Intelligence Directorate immediately informed the General Police Directorate and seized the bank accounts of his companies. In 2016, the Prosecutor’s Office in Tirana initiated a criminal investigation against Alban Xhepa for money laundering.
For six years, the prosecutor investigating this case has taken only two procedural steps. Firstly, ordered the Judicial Police Officer to conduct a questioning session with Alban Xhepa and some of his close relatives, with very basic and general questions. Secondly, ordering an Expert Accounting Report to determine whether the funds in the accounts of Alban Xhepa’s company and other revenues are sufficient to justify his wealth. It turns out that a significant portion of his assets was acquired in the years 2018-2019, during the investigation.
INA passed this case to another prosecutor, part of the “core” investigating money laundering in the capital’s prosecutor’s office, to get his analysis and expert opinion on the investigation conducted. According to the prosecutor contacted by INA, despite formally following the procedure, the prosecutor handling the case left many investigative actions incomplete.
“The investigative and prosecution authorities have not investigated foreign companies that made payments to Alban Xhepa’s company. In the case file, the prosecutor writes that the contracts were unsigned by the parties. The contracts are not fully legal and formal. Despite these findings, he did not investigate them,” the prosecutor contacted by INA stated. According to him, the information about the companies cooperating with Alban Xhepa could have been obtained more quickly by the General Directorate for Preventing Money Laundering, which is part of the “EGMOND” system, the international system for exchanging information between Financial Intelligence Agencies, even though this information may not have been considered as evidence. According to the prosecutor, the prosecution and investigative authorities have not investigated either the activities of Alban Xhepa’s companies, whether these companies provided the services they claimed or the nature of the contracted services.
A former director of the General Directorate for Preventing Money Laundering, who was involved in this case, stated: “It’s laughable that the same prosecutor who seizes 6 million euros in assets after investigating for 5 years and 11 months seeks to suspend the investigation and return the assets to the person under investigation. At the very least, he should have brought this accusation to court and let the court decide on the absence of a penal fact.”
Institutions accuse each other
The case of Alban Xhepa is one of about 1600 suspicious cases that the General Directorate for the Prevention and Combating of Money Laundering has informed the Police and the Prosecutor’s Office about. However, this case demonstrates the pattern of behavior of institutions towards money laundering crime.
A former director of the General Directorate for the Prevention and Combating of Money Laundering, commenting on the “blind spots” where information about suspicions, which money laundering experts send to the prosecutor’s office or the police regarding cases of conviction in court, has an explanation. “I am not surprised by the fact that cases do not go to court. From my not-so-short experience at the helm of that directorate, I have understood that prosecutors who investigate this criminal act become advocates for the suspects or, to put it mildly, not advocates, but advisors to them.”
Following this stance, comes the reaction of one of the prosecutors of the Special Sector for the Investigation of Money Laundering. According to him, in fact, it is the General Directorate for the Prevention and Combating of Money Laundering that only conveys to the prosecutor’s office or the police “those who do not comply,” alluding that corruption starts from this institution.
Zef Preçi, an economic expert and director of the Center for Economic Research in Albania, ranks two reasons for this behavior of structures that are supposed to detect, prevent, and punish money laundering. “The first reason is the overall tolerant climate towards informal and criminal activities, stemming from the ambiguity of public policies. There is a tendency to gain sustainability in policies that are tolerant towards illegal and informal activities,” says Preçi, illustrating it with the attitude towards cannabis.
The ruling party came to power in 2013, trumpeting its anti-cannabis action in Lazarat. However, after a year, in November 2014, Koço Kokëdhima, one of its most vocal deputies and close to Prime Minister Rama, started a public campaign for the legalization of cannabis. The year 2016 registered the highest amount of cannabis on the illegal market; while in July 2023, the ruling party passed the Law on the Legalization of Medical Cannabis in the Albanian Parliament.
“The second element has to do with the limited capacities and inadequate harmonization between law enforcement agencies,” adds Preçi. According to him, the pyramid control or the centralization of political control over all state institutions, including the opposition, has diluted the reactive power of constitutional institutions, such as the Constitutional Court and regulatory entities, which guarantee market freedom.
“This phenomenon has created a terrain for almost unhindered penetration of informally and criminally obtained money into sectors perceived as more profitable or in which the origin of money can be easily concealed, such as construction, gambling, or investments in the coastline,” explains Preçi.
It seems that Preçi is not the only expert who thinks this way. With different tones, representatives of responsible institutions or structures accuse each other, deflecting blame away from themselves.
Despite the memorandums and agreements continually signed between money laundering structures, the lack of coordination among them is clear, exposing “in broad daylight” the hampered investigations and lack of professionalism in the investigation structures.
The need to “feed” public opinion with news to demonstrate the fight against organized crime turns this whole process into a spectacle. The consequence: Since 2020, Albania has been on the gray list of countries at high risk due to the “strategic weaknesses” found in its money laundering prevention regimes.
“The General Directorate for the Prevention and Combating of Money Laundering has continuous, institutional, and cooperative relationships with the State Police, the Prosecutor’s Office, etc., a process that is not limited to sending cases from GDPCML but also in responding to requests from these institutions, inter-institutional meetings, or exchanging other necessary data,” responds this institution after a request for information from INA, if GDPCML exchanges information or conducts analyses with the police or prosecutor’s office regarding the progress of the information it conveys to these two structures. After this general response, the fact is hidden that analyses of the progress of reported cases have never been carried out, claim sources from both institutions who, however, do not declare it officially.
According to the official report of the Prosecutor General’s Office for the year 2016, criminal offenses related to the production and cultivation of narcotics have increased by 38.7%, compared to the previous year.
Meanwhile, the General Directorate for the Prevention and Combating of Money Laundering (GDPCML), in an analysis conducted as part of identifying the phenomenon with a risk-based approach, writes that revenue from drug trafficking is the main source of dirty money laundering in our country.
Despite this known phenomenon, accepted by all parties, the figures for tackling the activity that follows drug trafficking, which is money laundering, show a decline.
Below is the number of information that the General Directorate for the Prevention and Combating of Money Laundering has sent to the Police and the Prosecutor’s Office over the past 6 years, starting from 2017. The figures are taken from the official reports of this institution, published on the internet page.
The General Directorate for the Prevention and Combating of Money Laundering has initiated the highest number of pieces of information to the police. However, according to the official information from the General Directorate of the State Police, this structure has only considered half of the information it received from the Money Laundering Directorate. Therefore, out of 1490 pieces of information about suspicions of money laundering sent during the years 2017-2022, the police have only converted the information into criminal cases with suspects and specific charges in 763 cases.
“From verifications carried out by the State Police with its field structures, in many cases, there is no basis for referral or initiation of a criminal investigation due to lack of evidence, facts, documents, and generally because the elements of the criminal act are missing. As a result, cases are archived by the State Police.” This is the reaction of the State Police in assessing the information from the General Directorate for the Prevention and Combating of Money Laundering, in a written response to INA.
The police claim that, in addition to cases originating from the information provided by the General Directorate for the Prevention and Combating of Money Laundering, they have also “produced” cases themselves as a result of their operational work or collaboration with international partners.
The State Police’s unit investigating money laundering had been modest until a few weeks ago. According to the response from the State Police, there is currently a sector for Money Laundering and Criminal Asset Investigation within the Department of Economic and Financial Crimes Investigation in the Criminal Police Department. There is also a section in the Tirana Police Directorate, while specialist units for Money Laundering and Criminal Asset Investigation exist in the directorates of the regions of Durrës, Shkodër, Lezhë, Fier, Vlorë, Gjirokastër, Korçë, Dibër, and Kukës.
In terms of formality, the Prosecutor’s Office has paid more attention to money laundering. In July 2020, the Chief Prosecutor requested the establishment of sectors against money laundering, terrorism financing, financial crimes, and asset investigations. Sectors with several prosecutors were established in the prosecutor’s offices of Tirana, Durrës, Elbasan, Shkodër, Fier, Vlorë, and Korçë, while in other prosecutor’s offices, at least one prosecutor investigates the aforementioned criminal acts. An instruction recommended the daily input of all information on these criminal acts into a special online program called the Electronic Tracking System, PRESTO. However, this program has never been utilized.
Regarding this matter, the General Prosecutor’s Office responded to INA by stating: “The system remained unfinished due to the fact that the EURALIUS V project, which supported the financing of this electronic system, concluded in December 2021.”
Despite the sources, the number of criminal reports for money laundering received by the country’s prosecutor’s offices is increasing. For instance, in 2017, the prosecutor’s offices received 459 reports, of which 328 were prepared by the State Police and 131 by the General Directorate for the Prevention of Money Laundering; of these, the prosecutor’s office only considered 309 cases, with no investigative action taken for the remaining 150.
In the majority of cases, the Prosecutor’s Office, when confirming the money laundering charges, has sought the suspension of the sentence. If we add to this behavior of the prosecution the fact that, in a significant portion of cases, it has also sought minimal sentencing, the expression “the chicken lowered its head to a feather” or “the mountain labored and brought forth a mouse” is perfectly fulfilled.
The international community forced the fight against money laundering.
In the 1995 Penal Code, the term “money laundering” did not exist. The title of Article 287 was “Misappropriation of Property” and had the following content: “Misappropriation of property, transfer, concealment, destruction of nature, source, ownership of property obtained from crimes is punishable by imprisonment from three to ten years.” Since that time, this article has been amended at least five times. In 2003, Article 287 also changed its title to “Money Laundering of the Proceeds of Criminal Activity.” In the same year, Article 287/a was added to address anonymous accounts. A year later, on September 16, 2004, this article was enriched once again in 2007 to accommodate the confiscation of stolen money or goods. The most significant amendment related to money laundering came in 2012. These changes, which the ruling majority at the time conveyed during parliamentary discussions as Moneyval requirements, facilitated the work of investigation and enforcement authorities.
“Until 2012, the investigation for money laundering was only conducted after a person had been convicted of the criminal offense from which these proceeds or assets originated; whereas after this year, the investigation for money laundering could commence even if the criminal offense, the proceeds of which are being laundered, was committed by a person who cannot be charged or sentenced,” explains a prosecutor from the Specialized Unit for Money Laundering. However, one year after these changes, in 2013, the General Prosecutor’s Office reported a decrease of 32% in the number of proceedings registered compared to 2012.”
In 2013, the Parliament once again amended the law, making the punishment more stringent. According to Law No. 144/2013, the minimum sentence with a fine is removed. Perpetrators of money laundering will now only be sentenced to imprisonment, ranging from 5 to 10 years. Apart from the Penal Code, there is also another specialized law for money laundering, the Law “On the Prevention of Money Laundering,” approved in May 2000, following repeated requests from the Council of Europe and the Moneyval Committee. Despite this law foreseeing the establishment of the Financial Intelligence Unit, the General Directorate for the Prevention of Money Laundering only started operating in August 2005, five years behind schedule. From the documentation analyzed within the framework of this investigation and from the initial cases targeted in this criminal activity, it appears that the Directorate for the Prevention of Money Laundering began functioning due to the demands of international partners.
The Law on Money Laundering also envisions the Committee for the Coordination of the Fight Against Money Laundering, an entity headed by the Prime Minister and composed of the Minister of Finance, the Minister of Foreign Affairs, the Minister of Defense, the Minister of Interior, the Minister of Justice, the General Prosecutor, the Governor of the Bank of Albania, the Director of SHISH (State Intelligence Service), and the General Inspector of the Financial Supervisory Authority.
According to Article 23 of the Law on the Prevention of Money Laundering and the Financing of Terrorism, the Committee for the Coordination of the Fight Against Money Laundering should convene at least once a year. However, the latest press release regarding the meeting of this committee was issued in 2017. INA submitted a request for information to the National Information Agency to clarify the last time this committee was convened and the reasons for its failure to meet annually, but as of the publication of this article, no response was received.
Ky shkrim është pjesë e projektit që mbështetet financiarisht nga Zyra e Mardhënieve me Publikun e Ambasadës së SH.B.A. në Tiranë. Opinionet, gjetjet, konkluzionet dhe rekomandimet e shprehura janë te autor-it/ve dhe nuk përfaqesojnë domosdoshmërisht ato të Departamentit të Shtetit. / This article is part of a project that is financially supported by the Public Relations Office of the US Embassy in Tirana. The opinions, findings, conclusions, and recommendations expressed are those of the author(s) and do not necessarily represent those of the Department of State.