Tbilisi City Court sentenced Kakha Kotorashvili, a 49-year-old currency exchange office owner, to 11 years in prison after finding him guilty of laundering an amount prosecutors described as unprecedented — nearly $700 million in 2022–2024.
Judge Demetre Jinjolia delivered the verdict on 11 June. Kotorashvili exercised his right to remain silent throughout the proceedings, according to reports from the hearing.
What prosecutors alleged
Authorities said Kotorashvili was arrested in September 2025 in connection with a scheme involving about USD 624 million and EUR 35 million in funds of unexplained origin.
Prosecutors alleged he operated under the cover of a National Bank of Georgia–authorized currency exchange office, organizing a criminal network that collected cash, converted it through commercial banks to alter its apparent source, and introduced it into the legal economy while presenting the flows as legitimate earnings from exchange activity.
Members of the group were accused of regularly smuggling especially large amounts of foreign currency from neighbouring countries, concealing the cash in vehicles to evade customs controls, and delivering it to the exchange office for processing.
The scale of the case drew attention from financial regulators as well as law enforcement. Months before the verdict, the National Bank of Georgia fined currency exchange and lending companies linked to Kotorashvili a total of GEL 210,000 — around USD 79,000 — for multiple violations related to internal control rules, registration requirements, and documentation, according to BM.ge.
Court outcome and next steps
Defense lawyer Edisher Karchava told RFE/RL’s Georgian Service that his client disagrees with the ruling and plans to appeal. Karchava also confirmed that the defence had been prepared to negotiate a plea agreement but failed to reach terms with the prosecution.
The sentence marks one of the largest money-laundering convictions publicly reported in Georgia in recent years. It follows separate high-profile enforcement action in June 2026, when prosecutors announced arrests in a major cryptocurrency laundering investigation carried out with U.S. and Polish authorities.
Regulatory backdrop
Licensed currency exchange offices in Georgia operate under National Bank supervision, with rules on customer identification, record-keeping, and reporting suspicious transactions. The Kotorashvili case centred on allegations that a licensed storefront was used as cover for converting and legitimising illicit cash flows rather than routine retail exchange business.
Court filings and regulator actions cited in local media pointed to gaps in internal controls at companies tied to the defendant. The fines imposed by the National Bank were administrative and separate from the criminal sentence handed down by Tbilisi City Court.
For residents and businesses that use exchange offices for everyday currency conversion, the case underscores how regulators and prosecutors scrutinise large or unexplained cash movements. Officials have not announced systemic changes to exchange licensing rules in connection with the verdict.
Investigators described the 2022–2024 period as the core window for the alleged laundering activity, a timeframe that overlaps with heightened international attention to illicit finance routes in the wider region. Georgian authorities have cooperated with foreign counterparts on other laundering cases, though the Kotorashvili prosecution was presented primarily as a domestic criminal matter built on bank records, customs data, and surveillance of cash movements.
Local media coverage of the trial focused on the volume of funds involved rather than the day-to-day operations of the exchange office visible to customers. Prosecutors did not, in public summaries reviewed by the court, characterise ordinary retail clients as participants in the scheme.
Broader enforcement context
The verdict lands in a month when Georgia’s prosecutors also publicised a separate cross-border cryptocurrency laundering investigation involving U.S. and Polish agencies. The two cases differ in method — cash and bank conversion versus digital assets — but both involved sums described by officials as exceptionally large by local standards.
Exchange-sector groups have generally treated the Kotorashvili sentence as an isolated criminal conviction rather than a signal of new sector-wide restrictions. The National Bank’s earlier fines addressed compliance paperwork and control systems at companies tied to the defendant, not the criminal standard applied at trial.
Analysts following Georgia’s financial crime caseload note that long prison terms in laundering cases remain relatively rare compared with fraud or organised theft prosecutions. An 11-year sentence therefore stands out even before any appeal, and the final outcome may hinge on whether higher courts accept the prosecution’s account of how funds moved from informal collection to bank accounts linked to licensed exchange activity.
The appeal process will determine whether the 11-year term stands. Under Georgian procedure, the defence can challenge both the conviction and the sentence before a higher court, and Karchava’s comments indicate that route will be pursued.
