In Brief

Hungarian Bank Denies Money Laundering Claims

Hungary could be involved in a money laundering scandal involving EU funds. A Hungarian citizen is currently living in the US under the FBI’s witness protection programme as he could lead the authorities to almost 4 billion euros which were moved from Hungary to Arab and Asian countries.

The money probably represents the “constitutional cost” of helping certain businesses win EU public procurements, then redeployed to Hungarian politicians. The FBI suspects the funds were re-distributed through MKB, a bank owned by Lőrinc Mészáros, and other financial institutions owned by the Hungarian government. According to the newspaper Magyar Nemzet, the transactions would start with the withdrawal of a relatively smaller amount of money (several million euros), which couriers would then move to the Arab world and Singapore in the form of diamonds.

A portion of the illicitly obtained funds was then returned to Hungary in the form of Arab investments to purchase “luxury hotels, castles, and other real estate.” American authorities are concerned that this form of unlawful money movement is one of the ways in which international terrorism is financed, but the Hungarians claim they have found no reason to suspect that a crime has been committed.

According to a press release, MKB has said that it is working under the European directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and the bank has accused the Hungarian press of defamation, confirming that it is not involved in any illegal activities.