The Guardian is reporting that British banks handled huge sums of money from a laundering operation based in Russia.

In a report, the newspaper says the banks processed nearly US$740 million from a scheme known as the Global Laundromat "run by Russian criminals with links to the Russian Government and the KGB".

It says the 17 banks include HSBC, the Royal Bank of Scotland and Lloyds but British-registered companies also had a role.

The Guardian says that at least US$20 billion was sent from Russia between 2010 and 2014 and at least 500 people are involved. A cousin of Russian President Vladimir Putin "sat on the board of a Moscow bank which held accounts involved in the fraud".

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The newspaper says banking records were obtained by the Organised Crime and Corruption Reporting Project and Novaya Gazeta from sources who wish to remain anonymous. OCCRP shared the data with the Guardian and media partners.

The Guardian quoted a senior figure involved in the investigation as saying the money from Russia was "obviously either stolen or with criminal origin".