Money Laundering

Russian Bank Lobby Says Crackdown on Illegal Activities and Money Laundering Brings Risks

2013-11-27T06:06:00.002-08:00

By Andrey Ostroukh
Wall Street Journal

Russia’s increased efforts to stamp out illegal banking activities could cause the country’s financial system to collapse, a lobby group representing Russian lenders said Tuesday.
The Bank of Russia recently stepped up efforts to clamp down on the country’s banks, revoking licenses and suspending bank operations where lenders were suspected of false accounting and money laundering.
The closure last week of the medium-sized Moscow-based Master Bank was the central bank’s highest-profile move since Elvira Nabiullina became the Bank of Russia chief in July, possibly indicating a renewed push against Russia’s shadow economy. So far this year the central bank has revoked the licenses of nearly two dozen banks.
Ms. Nabiullina’s predecessor, Sergei Ignatyev, had voiced concern earlier this year about massive money-laundering operations in Russia’s banking system but didn’t identify specific institutions.
The Moscow International Currency Association, a lobby representing around 100 domestic banks and Russian branches of international lenders, said in a statement on its website that it welcomes the idea of cleaning up Russia’s banking system, which comprises nearly one thousand lenders.
But it said the central bank should have come down hard on banks involved in illegal activities at an earlier stage, before they had time to amass deposits from households and businesses.
The association, which counts major lenders such as Alfa Bank and Raiffeisen Bank among its members, claimed that over-hasty moves taken now could cause a banking collapse similar to that of 2004.
Back then banks started closing and lowering mutual transaction limits amid fears of a widespread revoking of licenses, which paralyzed the interbank market for several months.
“The interbank market is an important tool used to support and manage liquidity for the majority of Russian banks. Its freeze is capable of creating problems in the whole banking system,” the statement said.
Following last week’s Master Bank closure the ruble dropped to its lowest level against the euro since late 2009. Market observers said some banks were buying foreign currencies in a bid to sidestep risks related to a deepening purge of the banking system.
The Russian central bank declined to comment.

Michael Hearns an Anti Money Laundering specialist with over 2& years of AML experience can also be found at: www.launderingmoney.com and on twitter at : http://twitter.com/#!/LaunderingMoney as well as his blog at: http://moneylaunderingworld.blogspot.com

Islamic group tied to Russian money laundering scheme

2013-11-26T10:03:00.001-08:00

Russian police said Monday they believe a black market financing ring may have helped support the Islamic political organization Hizb ut-Tahrir, banned since 2003.

Russian police said Monday they arrested seven members of a Central Asian criminal gang suspected of steering funds toward Hizb ut-Tahrir, a political organization banned in Russia since 2003. Russian state news agency RIA Novosti reports authorities seized more than $5 million from the members.

Hizb ut-Tahrir emerged in the 1950s as a Sunni group advocating strict Islamic law. Authorities in Kyrgyzstan told the BBC in 2010 the movement experienced a revival in Central Asia following the collapse of the Soviet Union in the 1990s.

Russian police were quoted by RIA Novosti as saying they suspected the financiers laundered money in Russian through financial channels "in the interests of natives of Central Asia illegally based in Russia."

Voice of Russia, in a separate report Monday, said the ring leaders transferred illegal funds to more than 120 different organizations, including offshore entities. They used so-called shadow bankers to transfer as much as $46 million per month through the illegal accounts.

Russian police provided few details about the arrest, which Voice of Russia said followed an 18-month probe.

Hizb ut-Tahrir claims to seek its objectives through peaceful methods

Michael Hearns an Anti Money Laundering specialist with over 27 years of AML experience can also be found at: www.launderingmoney.com and on twitter at : http://twitter.com/#!/LaunderingMoney as well as his blog at: http://moneylaunderingworld.blogspot.com

C.I.A. Collects Global Data on Transfers of Money

2013-11-15T09:54:00.000-08:00

By Charlie Savage and Mark Mazzetti

New York Times

The Central Intelligence Agency is secretly collecting bulk records of international money transfers handled by companies like Western Union — including transactions into and out of the United States — under the same law that the National Security Agency uses for its huge database of Americans’ phone records, according to current and former government officials.

The C.I.A. financial records program, which the officials said was authorized by provisions in the Patriot Act and overseen by the Foreign Intelligence Surveillance Court, offers evidence that the extent of government data collection programs is not fully known and that the national debate over privacy and security may be incomplete.

Some details of the C.I.A. program were not clear. But it was confirmed by several current and former officials, who spoke on the condition of anonymity because the matter is classified.

The data does not include purely domestic transfers or bank-to-bank transactions, several officials said. Another, while not acknowledging the program, suggested that the surveillance court had imposed rules withholding the identities of any Americans from the data the C.I.A. sees, requiring a tie to a terrorist organization before a search may be run, and mandating that the data be discarded after a certain number of years. The court has imposed several similar rules on the N.S.A. call logs program.

Several officials also said more than one other bulk collection program has yet to come to light.

“The intelligence community collects bulk data in a number of different ways under multiple authorities,” one intelligence official said.

Dean Boyd, a spokesman for the C.I.A., declined to confirm whether such a program exists, but said that the agency conducts lawful intelligence collection aimed at foreign — not domestic — activities and that it is subject to extensive oversight.

“The C.I.A. protects the nation and upholds the privacy rights of Americans by ensuring that its intelligence collection activities are focused on acquiring foreign intelligence and counterintelligence in accordance with U.S. laws,” he said.

Juan Zarate, a White House and Treasury official under President George W. Bush, said that unlike telecommunications information, there has generally been less sensitivity about the collection of financial data, in part because the government already collects information on large transactions under the Bank Secrecy Act.

“There is a longstanding legal baseline for the U.S. government to collect financial information,” said Mr. Zarate, who is also the author of “Treasury’s War,” about the crackdown on terrorist financing. He did not acknowledge the C.I.A. program.

Orders for business records from the surveillance court generally prohibit recipients from talking about them. A spokeswoman for one large company that handles money transfers abroad, Western Union, did not directly address a question about whether it had been ordered to turn over records in bulk, but said that the company complies with legal requirements to provide information.

“We collect consumer information to comply with the Bank Secrecy Act and other laws,” said the spokeswoman, Luella Chavez D’Angelo. “In doing so, we also protect our consumers’ privacy.”

In recent months, there have been hints in congressional testimony, declassified documents and litigation that the N.S.A. program — which was disclosed by Edward J. Snowden, a former N.S.A. contractor — is not unique in collecting records involving Americans.

For example, the American Civil Liberties Union is fighting a Freedom of Information Act lawsuit for documents related to Section 215 of the Patriot Act, the provision that allows the government to compel companies to turn over business records for counterterrorism purposes. After the government declassified the N.S.A. phone records program, it has released many documents about it in response to the suit.

But the government has notified the A.C.L.U. that it is withholding two Foreign Intelligence Surveillance Court rulings invoking Section 215 — one dated Aug. 20, 2008, and the other Nov. 23, 2010 — because they discuss matters that remain classified, according to Alexander Abdo, an A.C.L.U. lawyer. “It suggests very strongly that there are other programs of surveillance that the public has a right to know about,” Mr. Abdo said.

In addition, a Justice Department “white paper” on the N.S.A.’s call records program, released in August, said that communications logs are “a context” in which the “collection of a large volume of data” is necessary for investigators to be able to analyze links between terrorism suspects and their associates. It did not say that call records are the only context that meets the criteria for bulk gathering.

In hearings on Capitol Hill, government officials have repeatedly avoided saying that phone logs — which include date, duration and numbers of phone calls, but not their content — are the only type of data that would qualify for bulk collection under the Patriot Act provision. In a little-noticed exchange late in an Oct. 3 hearing before the Senate Judiciary Committee, Gen. Keith B. Alexander, the N.S.A. director, appeared to go further.

At the hearing, Senator Mazie K. Hirono, Democrat of Hawaii, asked General Alexander and James R. Clapper Jr., the director of national intelligence, a sweeping question: “So what are all of the programs run by the N.S.A. or other federal agencies” that used either Section 215 of the Patriot Act or another surveillance law that allows warrantless wiretapping of phone and emails?

General Alexander responded by describing, once again, the N.S.A.’s call records program, adding, “None of that is hid from you.” Mr. Clapper said nothing.

Then, moments later, General Alexander interjected that he was talking only about what the N.S.A. is doing under the Patriot Act provision and appearing to let slip that other agencies are operating their own programs.

“You know, that’s of course a global thing that others use as well, but for ours, it’s just that way,” General Alexander said.

In September, the Obama administration declassified and released a lengthy opinion by Judge Claire Eagan of the surveillance court, written a month earlier and explaining why the panel had given legal blessing to the call log program. A largely overlooked passage of her ruling suggested that the court has also issued orders for at least two other types of bulk data collection.

Specifically, Judge Eagan noted that the court had previously examined the issue of what records are relevant to an investigation for the purpose of “bulk collections,” plural. There followed more than six lines that were censored in the publicly released version of her opinion.

Lawmakers on the House and Senate Judiciary Committees have been trying to gain more information about other bulk collection programs.

In September, Representative Jim Sensenbrenner, Republican of Wisconsin and an author of the original Patriot Act, sent a letter to Attorney General Eric H. Holder Jr. asking if the administration was collecting bulk records aside from the phone data. An aide said he had yet to get a response. Even lawmakers on the Intelligence Committees have indicated that they are not sure they understand the entire landscape of what the government is doing in terms of bulk collection.

Senators Dianne Feinstein of California and Saxby Chambliss of Georgia, the top Democrat and Republican on the Senate Intelligence Committee, recently sent a classified letter to Mr. Clapper asking for a full accounting of every other national security program that involves bulk collection of data at home or abroad, according to government officials

Mexican Drug Cartels launder money through horse stables

2013-11-13T05:37:00.000-08:00

By George H Wittman
American Spectator

In recent weeks Mexican cartel money laundering operations in the United States have been exposed as imaginative and daring. In the two principal cases uncovered, very different devices were used by the drug trafficking managers. These cases are an introduction to the breadth of mechanisms available to turn dirty money clean.
Perhaps the operation that had the most elaborate cover, yet a still relatively simple financial structure, was the most forward-looking. One of the top figures in Mexico's Los Zetas drug organization, Miguel Angel Trevino Morales, had a younger brother who liked horses, needed a job, and was available to manage a ranch (bought through an intermediary with drug profits) south of Oklahoma City.

Along with his wife and three children, young José Treviño Morales set about to establish himself as an owner/breeder of quarter horses. He paid for everything in cash or by using false names and accounts of supposed partners. Treviño Morales and his considerable ranch staff of fourteen built a reputation of fair bargaining and quick payment. The 400-plus horse enterprise was the envy of many other breeders with less deep pockets, but any annoyance was quickly salved by the fair and generous business practices of the Treviño Morales operation.

Meanwhile millions of dollars in cash accrued by the drug trafficking operation of the Zetas was "cleansed" in the accounting for the high maintenance quarter horse breeding and racing business. The stable's reputation grew as it began to turn out serious winners on the track and at the auctions in Oklahoma, Texas, New Mexico, and California. The overall operation was incorporated since 2008 as Tremor Enterprises LLC -- and they paid all their bills on time.

The New York Times once again appears to have had an inside source within law enforcement, for when it broke the story on June 12 citing its "investigations lasting months" and anonymous sources, federal authorities, including FBI Special Agents, swooped in on the ranch the same day. They were able to arrest only 7 of the 14 indicted, including José Treviño Morales and his wife. Whether this was due to the Times's early publication has not been surfaced. At this point, however, the U.S. Government has seized 41 of the choicest horses and is arranging for the care of the other 384.

While the Treviño Morales horse breeding operation reportedly successfully "cleaned" tens of millions of dollars -- and won some very large racing purses on the side -- another less romantic money laundering and drug trafficking dance was in process in nearby Western and Midwestern states. Due to the United States' tightening of controls on the production of chemicals used in the making of methamphetamine, the manufacture and shipment of meth from Mexico has grown exponentially.

Many mid-sized American gangs purchase cargos of meth either directly from Mexican cartel producers or intermediaries who have illegally transported the product over the Mexican/U.S. border using both witting and unwitting truck drivers. The meth is then carried from border sites to middlemen in California, Colorado, and elsewhere central to the customer base. One such operation, according to the DEA, owned both a legitimate trucking company and an import/export firm. The latter carried licenses to import goods from China, thus allowing a legal route for money to flow to China and then return in goods or money transfers to Mexico -- and the cycle would begin again.

While there are several versions of the foregoing used in money laundering, one of the most reliable remains the utilization of the real estate market. Purchase and resale of high-end real estate properties (residential or commercial) has been a natural route for cleaning dirty money. Resale at an appropriate price to a bona fide entity creates a cleansed account and money that can be transferred anywhere in the world.

There are many mechanisms now employed by the drug cartels to clean up the cash they obtain through illicit drug sales in the United States and Canada. All that is needed is an intermediary that can maintain the appearance of a legitimate cash flow (such as service and import/export concerns), and careful accounting takes care of the rest. Casinos and high volume restaurants are always an attractive money laundering target. While new and different mechanisms always become available, funneling money into the American stock and commodity markets remains a high priority objective.

The establishment of a legitimate-appearing identity is the sole criterion for creating an investment account allowing considerable sums to be moved around domestically and internationally. Clean identities have evolved through repeated transfers of money from Mexico and other Latin American sources to the Gulf States of the Middle East, China, Southeast Asia and eventually to the usual small countries with discreet banking and taxation laws. It takes quite a bit of imaginative accounting, but it's worth the effort to cover the original sources.

Thus it is the establishment of an acceptable identity that is the key to all illegal money movement. It need not be as elaborate as horse breeding; it can be as simple as what the KGB used to call a "documented legend" that involves a birth certificate, Social Security number -- or equivalent -- and exclusive club membership plus well-distributed cash. This and a few other accoutrements and the money launderer is ready to have a respected friend call his local hard-charging broker with a new client. The securities business swears it's much harder than that, but the Bernie Madoff case showed how social connections and well-covered accounting make a swindle work. The laundering con works the same way

Michael Hearns an Anti Money Laundering specialist with over 27 years of AML experience can also be found at www.launderingmoney.com and on twitter at: http://twitter.com/#!/LaunderingMoney as well as http://moneylaunderingworld.blogspot.com

Regulators hit Miami Gardens credit union with cease and desist order

2013-09-19T07:24:00.000-07:00

By Brian Bandell

South Florida Business Journal

Federal regulators issued a cease and desist order against North Dade Community Development Credit Union for violations of anti-money laundering laws.
Such enforcement actions against credit unions are rare. This is the only cease and desist order issued by the National Credit Union Administration (NCUA) so far this year.
The credit union has only $5.8 million in assets. It was “well capitalized” on June 30, an improved from its “undercapitalized” status a year ago.
The NCUA order on Aug. 29 gave it 30 days to suspend all transactions for money services businesses that aren’t within its geographic area of membership. Credit unions are only allowed to deal with customers in pre-defined geographic areas. In the case of North Dade Community Development, the area is the north-central part of the county.
The regulatory order also told the credit union to stop all business with money service businesses until it implements adequate Bank Secrecy Act, anti-money laundering and Office of Foreign Asset Control (OFAC) compliance. This includes establishing criteria for identifying high-risk members, detecting when transactions involved prohibited countries or individuals, and timely filing suspicious activity reports and currency transaction reports.
It was given 30 days to find an employee responsible for this job, conditional upon approval by regulators

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at:

http://.launderingmoney.com and on twitter at: http://twitter.com/#!/LaunderingMoney also on http://moneylaunderingworld.blogspot.com

Anti-Money Laundering compliance a top priority for regulators

2013-09-02T06:12:00.001-07:00

By: Kenneth Corbin

Anti-money laundering policies were identified by both FINRA and the SEC as a top priority for examinations of broker-dealers in 2013. In its exam guidance, FINRA noted "an increase in foreign currency conversion transactions." It also stressed that there are no exemptions from the AML requirement for member firms, even if the company holds no customer funds.

What this means for advisors is clear. Although, by statute, an advisor isn't required to have his or her own individual AML policy, all advisors are covered by—and expected to uphold—their firm's AML policy. And FINRA is paying close attention to how well advisors execute the task.
"Anybody who works at a broker-dealer will have an obligation to implement the policies that the firm is under," says Sarah Greene, senior director of AML compliance with FINRA's enforcement division. "An employee of a firm cannot ignore their responsibilities under this rule. For a firm to comply, its people have to comply."
Broker-dealers came under the Bank Secrecy Act's AML framework under the provisions of the 2001 Patriot Act aimed at curbing money laundering and terrorist financing. The SEC's authority is limited to firms' reporting and record-keeping, while FINRA has a broader enforcement mandate that covers a complete AML program and generally operates as the lead regulator.
At a minimum, FINRA expects firms to set policies and procedures to detect and report suspicious transactions. They must also conduct independent testing of the program, designate an AML officer and provide advisors, broker-dealers and other personnel with ongoing training.
Although advisors aren't likely to be the focal point of an AML enforcement action by FINRA, it does happen. A recent case involving Raymond James Financial Services suggests that regulators are taking a broader view of money laundering cases and raising their expectations that financial firms establish a culture of vigilance.
The case, which Raymond James settled without admitting guilt, involved an investor who was moving large volumes of funds through his brokerage account and then writing checks for round dollar amounts from a money market account. It was a Ponzi scheme that amounted to losses of $17.8 million for investors, and the account holder received a prison sentence of 20 years.
FINRA cited Raymond James for failing to maintain an adequate AML policy, and while the company's AML officer and legal team were not exempt from blame, some of the sharpest criticism was leveled at staffers in an Ohio branch office. The letter described a string of inquiries from the AML officer asking about suspicious transactions that were not addressed by a registered representative and office manager. At one point late in the game, the investor told branch staffers that he had committed fraud and was headed to jail. No one relayed that information to Raymond James' AML officer.

Know Your Laundry
Experts stress that advisors' obligations under AML policies vary from firm to firm.Each company's policy must be tailored to the nature of the practice, accounting for the risks associated with clients, geographic footprint and business model.
For advisors, much of the risk involved with money laundering sits at the front end, in the process of onboarding new clients. Advisors must adhere to the procedures in their firm's customer identification program, a required element in FINRA's AML program template. Advisors should ask prospective clients for representations about their identity and assets and then do their own background checking based on the information provided.
Advisors should be checking prospective clients against the Treasury Department's Office of Foreign Assets Control list of foreign countries, terrorists, drug traffickers and others barred from trade with U.S. firms, as well as other relevant overseas databases. Commonly firms will engage a third-party vendor to perform those onboarding cross-checks.
Then, too, an AML program should aim to ensure the investor is not moving money through a shell bank, which can sometimes be verified by obtaining a foreign bank certificate. Likewise, advisors might probe investors' political connections to determine whether a prospective client may be deemed a "senior foreign political figure" under the Patriot Act.
Much of that monitoring can be automated, with reports of high-volume trades, large cash transfers and other exceptional activity routinely delivered to the firm's AML officer. But any effective AML program also counts a strong human element provided by advisors who often know their customers and their investment objectives best. This is a crucial line of defense in flagging suspicious activity.

Look for Danger Signs
Advisors have a fair amount of discretion in how they handle dubious activity, although experts note that some flags are redder than others. "If they are asked to facilitate sending a wire out of the account to an Iranian bank, that's clearly some suspicious activity," says Byron Bowman, general counsel at consulting firm fi360.
Other potential warning signs include investors who move large volumes of cash equivalents through their accounts and do so frequently.

Call for Backup
That's not to say that there aren't false positives. What if a customer puts in an order to liquidate all of his or her assets and arrange for a wire transfer to Costa Rica? Although this might appear to be an unusual transaction, it's not necessarily one to send the advisor running to the Feds. Often, the first call will be to compliance.
Compliance, in turn, might tell the advisor to get in touch with the client and find out what's going on. After all, the client requesting the wire transfer could have just bought a house in Costa Rica, where he or she plans to retire.
If an advisor can't obtain a reasonable explanation and concludes that the matter should be escalated—often a wrenching decision when a longstanding client is involved—the next stop will be back at the compliance department. At that point, compliance would determine whether the case warrants the firm filing a suspicious activity report with the Treasury Department's Financial Crimes Enforcement Network.
Once the matter is in the hands of compliance, the advisor is often shut out of the process due to the highly sensitive nature of filing a report. Then the firm must make the call, often in consultation with law-enforcement authorities, about whether to keep the account open or cut ties with the client.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney also http://moneylaunderingworld.blogspot.com/ and http://launderingmoney.com/

HSBC still in crosshairs of intrest group

2013-08-29T06:06:00.002-07:00

By The Huffington Post

Everett Stern didn't realize that becoming a whistleblower would change his life. Not only did he lose his job and career at HSBC, and become blacklisted from the banking industry, he now sleeps with a gun by his bed after receiving death threats on a regular basis. He can barely afford a ticket to New York City to speak at a press conference this Thursday Aug. 29, at noon on the steps of the New York Public Library. But he isn't worried. According to the former bank employee, he will stop at nothing to expose HSBC's continued actions of laundering money for terrorists groups. Although the bank paid a 1.9 billion penalty in 2009,Stern claims he has evidence that HSBC continued to launder money during his tenure after they admitted that they had stopped in 2010.

"The public needs to know that money is still being funneled through HSBC to directly buy guns and bullets to kill our soldiers. Fines are not acceptable. I want a criminal indictment of HSBC executives," he asserts. "And if I die because of this, my life will have been worthwhile."

A noble cause doesn't mean people will listen to you. During his employment with HSBC as an AML (Anti-Money Laundering officer), Stern found discrepancies and brought them to the attention of his supervisors. Through an Internet search, Stern found a Saudi fruit company was sending millions to a high-ranking figure in the Yemeni wing of the Muslim Brotherhood. Stern also uncovered that HSBC was allowing millions of dollars to be moved from the Karaiba chain of supermarkets in Africa to a firm called Tajco, a company that had been singled out by the US Treasury Department as major financiers of the Lebanese Shiite group, Hezbollah. Stern's supervisors, however, told him to not make waves and keep "clearing the quota of 72 alerts per week."

Stern then took his evidence further, notifying appropriate government agencies such as the FBI, CIA and SEC, about violations of US money laundering laws. All efforts fell on deaf ears -- the excuse being that prosecuting the Too Big To Fail bank would precipitate a financial collapse. Frustrated with the lack of action, Mr. Stern recently decided to take the case public, approaching various media outlets, in addition to Occupy Wall Street. By doing so, he has given up a multi-million dollar whistleblower award.

"This is not a Democrat or Republican issue," he said. "Banks financing drug cartels and terrorists affects every single American. I went to Occupy not because I am a major supporter of the movement. I went because they care enough to hit the streets, carry signs and send a message that I also believe in."

The OWS Alternative Banking Working Group, working in conjunction with Stern for tomorrow's protest, agrees. "Everett Stern is able to give us a mountain of information and point us in the right direction to apply effective pressure," says Cathy O'Neil, the Alternative Banking lead organizer. "In turn, we are able to give him an army of supporters and a populist megaphone with a proven ability to get the public's attention."

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at www.launderingmoney.com and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com http://launderingmoney.com

Money is Oxygen to Terrorism

2013-08-26T07:34:00.002-07:00

By bdnews24.com

The US Ambassador to Bangladesh, Dan Mozena, has stressed the need to cut off money supply to terrorists, saying it acts like oxygen for terrorism. “Money and terrorism can be two sides of the same coin. Money [is] the facilitator of terrorism. Money [is] the enabler of terrorism. Money [is] the oxygen of terrorism,” he said on Monday.Mozena was speaking at the inauguration of a three-day SAARC Regional Judicial Conference on ‘Money Laundering and Terrorist Financing’ being held in a hotel in capital Dhaka. The conference has been organised in collaboration with the Counter-terrorism Bureau of the US State Department.

“To defeat terrorism, we must cut off the oxygen supply. We must cut off the flow of money, and that is where you come in,” he told attending judges. He said, “You [are the] brave judges from across South Asia. Your critical task is to suffocate terrorism, to deprive terrorism of the money. It’s needed for the people, our societies and our countries. Nobody said this is easy, it is not. Nobody said this is without risk.”
But he emphasized the importance of attacking and stopping the flow of money to terrorists to enable “the people of our respective countries to live in peace, in harmony. So they can build better lives for themselves and for their children”.

The US Ambassador, however, said judges were not the only players in this battle against money laundering.

He said, “Parliament must enact robust laws targeting financial crimes and money laundering, and bringing these laws up to international standards.” He said the US and Bangladesh had partnered to craft powerful laws, providing the tools needed to put money launderers behind bars.

Parliament had enacted them, and they were now being enforced, he said.

“Parliament must provide law enforcing agencies and the judiciary the resources needed to defeat money laundering,” he observed. He said the police, other law-enforcing agencies, intelligence agencies, and the military must play their part in apprehending money launderers and in gathering evidence needed for conviction.
He said as money launderers and terrorists became more sophisticated, security agencies, too, were expected to develop new skills and adopt new technologies.

“Countries of the region and beyond must better cooperate with each other, must better share information, must better appreciate that while borders and questions of sovereignty have historically constrained nation’s ability to work together, criminal and terrorists are not limited by such thinking,” he emphasized.
He said the nations of the region and beyond, must commit themselves to deeper cooperation in fighting money laundering and terrorism. He felt it was important for prosecutors to be professionals of integrity, capable of effectively presenting their case in court.

“And that brings us full circle back to you,” he said, referring to the judges, whom he described as linchpins in bringing money launderers and terrorists to justice. “You may have the toughest role to play,” he said, pointing out that judges had to ensure fairness, prevent violation of rights, and make sure that anti-terrorism and money-laundering laws were not used a political tools. He appealed to judges to encourage international cooperation “in this battle and admit into court evidence from international partners, to the fullest extent of law”. Judges should also ensure that their sentences, aimed at protecting people and deter criminals, were properly executed, he added

Chinese-Canadian refugee admits laundering $12m in four years; He used three different passports to open bank accounts

2013-08-23T05:37:00.000-07:00

By Province News Services

A Chinese-Canadian man admitted laundering more than HK$95 million (about $12.8 million) over four years through bank accounts he had opened using three different passports. Xie Jing-feng, also known as David Chow, 56, pleaded guilty in the Hong Kong District Court to one count of money laundering, the South China Morning Post reported.
Prosecutor Leslie Parry told the court that Xie was born on the Chinese mainland. He entered Canada in 1997 as a refugee and was granted citizenship after five years. Xie and his wife, Zhu Li-chang, both hold Canadian passports, the paper said. Xie, who is not resident in Hong Kong, used a Canadian passport to open an integrated account at HSBC in June 2005, the court heard. The following year, he opened a savings account at Hang Seng Bank using a second Canadian passport that was also in his name but with a different number.
In May 2007, Xie produced a third Canadian passport to open two accounts at Standard Chartered Bank for his company, Civil Finance Limited. He stated that he was a director of the company. Between June 2005 and April 2009, the court heard, Xie used the four accounts — along with five others that were held by his companies or wife — to launder more than HK$95 million.
No tax returns were submitted to the Inland Revenue Department by either Xie or his companies during this period, The South China Morning Post said. Police began investigating Xie in 2008. He was jailed for eight months in November 2011 after being stopped at the mainland border for using a fake Malaysian passport. He pleaded guilty to the charge in Sha Tin Court. After further investigation, Xie was arrested for money laundering when he was released from jail on April 30 last year. Judge David Dufton adjourned sentencing until Thursday.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at www.launderingmoney.com and on twitter at: http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com and at http://launderingmoney.com

Armenian gets 6 years, 4 months for laundering money from phony Medicare claims

2013-08-21T06:24:00.000-07:00

By Terry Dickson

Florida Times Union

A Los Angeles man will serve six years, four months in prison for laundering money through a Brunswick storefront in a nationwide Medicare fraud scheme and will face deportation to Armenia when he is released.

Chief U.S. District Judge Lisa Godbey Wood also ordered Avetik Moskovian to pay nearly $309,000 in restitution and to serve three years on probation. Moskovian pleaded guilty in April to conspiring to launder money with Shahak Tumanyan and others in a scheme that was based in Los Angeles and operated shell corporations in Brunswick, Savannah, Buffalo, N.Y., Albuquerque and Chicago among other places.

Moskovian begged Wood for mercy.

“I plead with you not to destroy my family. I have children. This will have a great impact on their future,’’ he said.

But Wood went well above the 20-month sentence that Moskovian’s lawyer, George M. Mgdesyan asked for and said she went toward the top of the advisory sentencing guidelines. Wood noted Mgdesyen’s assertion that Moskovian had worked hard.

“He worked very hard at laundering money,’’ she said.

The mastermind of the scheme, Arthur Manasarian, is serving 14 years in prison and must repay $1.8 million of the more than $7 million that he and others gained by submitting and collecting on false Medicare claims for medical devices. The defendants stole the Medicare identities of patients and providing physicians and used them to bill the government for wheelchairs, canes, walkers and other devices that were never delivered to anyone. In Brunswick, the bills were submitted from a company called Brunswick Medical Supplies, which was nothing more than a storefront with a phone.

During Moskovian’s sentencing hearing Monday, FBI Special Agent Tony Alig testified that the FBI and Department of Health and Human Services investigators had identified 15 businesses that Moskovian had created solely to launder money. Mgdesyan, also of Los Angeles, said that Moskovian had come to the country in 1988 and had worked ever since to support his family. Moskovian told the court when he pleaded guilty in April that he had driven a cab and limousine and had owned a service station, a cell phone business and recycling business.

Wood said the government had trouble verifying some of his work history. It appeared that a lot of his employment was on a cash basis, she said. Mgdesyan said that unlike Tumanyan, who had fled from the government, Moskovian had admitted his guilt and that he was worried about supporting his wife and their three daughters, two of whom will be in college in a few days.

“He feels embarrassed he’s let them down,’’ Mgdesyan said.

Moskovian did not hide anything and laid out all he knew to investigators, Mgdesyan said. Although Moskovian’s admissions made the government’s case stronger, Assistant U.S. Attorney Brian Rafferty told Wood, the case resulted from five years of hard work by government agents.

“The truth is, we were going to be here anyway,’’ Rafferty said.

The money laundering scheme that Moskovian set up was very sophisticated with multiple bank accounts and shell businesses: Once the Medicare checks came in, Moskovian began moving the money between accounts until it came out as cash, Rafferty said. Mgdesyan asked that he be allowed to go home to Los Angeles for two weeks before reporting to the Bureau of Prisons, but Wood remanded him immediately to the U.S. Marshals Service.

It is predicted that digital currency will result in rise in cyber laundering

2013-07-22T05:57:00.000-07:00

By The Economist

The growing use of digital currency will result in rise in cyber laundering as hacking attacks and online scams take centre stage on Internet says a latest report. It said the Indian banks and authorities may wary as money laundering using online black-marketing route and other techniques will expand with the use of digital currency.

"This new techniques of money laundering (using digital currency) includes opening accounts with low cost and little known payment gateways, buying digital currencies, purchasing stolen data, setting up online shops with payment gateways, using the bank accounts of money mules to transfer so earned money to different countries," said the report by Pune-based 'Indiaforensic'. The firm, which conducts fraud examination and forensic accounting among others, has helped the country's investigating agencies like CBI in several high-profile cases including multi-crore Satyam scam.
Digital currency is the alternative to the traditional currency, which is used in online transactions. It is very similar to the operations of the loyalty points.

The report -- 'Laundering in Cyber World- The Digital Currency Way' -- cited a recent case in the US involving 'Liberty Reserve' -- a digital currency website which was used for laundering at least USD 6 billion by data thieves, drug dealers, child pornographers, identity thieves, hackers and other criminals.

"Traditional money laundering has often been a secondary process - preceded by an illegal activity, such as drug trafficking but the liberty reserve case shows that data thefts, hacking attacks and online scams are replacing the traditional crimes and the digital currency is now at the centre of the laundering operations," said Mayur Joshi, head of Indiaforensic.

According to the research conducted by Indiaforensic in 2011, the estimated size of money laundering in India was Rs 18.86 lakh crore for the 2000-2010.

"Now the money laundering is expected to grow even faster with the digital currencies," it said.

Currently, digital currencies are neither produced by government-endorsed central banks nor necessarily backed by the national currency. Digital currency is decentralised, controlled by its users rather than the governments.

"This means it is anonymous, and that, unlike credit cards and PayPal, which block payments from a number of countries, it enables instant payments to anyone, from anywhere in the world.

"That's why criminals along with some online retailers love it. It is money without any sort of safety net underneath. There's no legislation to protect your investment and you can't predict fraud," said the report. Ripple, Microcash, Litecoin, Bitcoin, BBQCoin, Novacoin, RuCoin, Terracoin are some of the popular forms of digital currencies used across the world wide web.

"Many Indians have just begin to hear the term digital currency but the growing international use of digital currency will pose a bigger challenge before the Indian law enforcement agencies and the regulators," the report said. Indian regulators and the law-enforcement agencies are unprepared to deal with the new reality of cyber-laundering and the sophisticated methods organised-crime groups use for money laundering.

"Extensive training and education at all levels are needed, including small-town and rural police departments," it added.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at www.launderingmoney.com and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com and http://launderingmoney.com

Clashes Reported in Tehran as Riot Police Target Money Changers

2012-10-03T10:34:00.001-07:00

By Thomas Frdbank

New York Times

Clashes erupted in the center of the Iranian capital on Wednesday between money changers and security forces after riot police on motorcycles used batons and tear gas to shut down a long-tolerated black-market for foreign currency, witnesses reported.

It was the first instance of a violent intervention over the money-changing business in Tehran since the national currency, the rial, which has been gradually losing value in recent years, dropped drastically over the past week, losing 40 percent of its worth against the dollar, to a record low. Economists have called the rial’s plunge a stark reflection of the economic pain in Iran caused in part by the Western sanctions on Iran’s disputed nuclear program.

Witnesses in and around Manoucheri Street, where the black-market money changers do business, described cat-and-mouse chases between motorized riot police and money changers. It was unclear whether there were injuries or arrests. It also was unclear whether the clashes had been confined to the immediate area or had spread.

The violence came a day after President Mahmoud Ahmadinejad, in a nationally televised news conference, asked Iranian citizens not to sell their rials for other currencies, suggesting the problem had been caused in part by speculators.

Mr. Ahmadinejad also warned that a “band of 22 people” with the power to manipulate exchange rates could face arrest, and he accused the United States and unspecified “domestic allies” of waging a psychological war on the country.

As the clashes erupted on Wednesday, garment and jewelry merchants in the city’s main bazaar, less than a mile away, closed their shops, apparently in protest. The semiofficial Mehr news agency said the bazaar, the heart of Tehran’s commercial center, had been closed for “security reasons.”

The secretary-general of the Tehran Bazaar and Trade Union, a powerful official close to the government, accused unspecified outside instigators of pressuring bazaar merchants to close their shops. The official, Ahmad Karimi Esfahani, was quoted by the Iranian Labor News Agency as saying that most merchants had wanted to remain open for business. “Those now present are trying to show the bazaar as closed,” he was quoted as saying. “They are guided by foreigners.”

Other bazaar traders hinted that the closure of the bazaar was organized by powerful opponents of Mr. Ahmadinejad, who were trying to make him look weak by closing down Tehran’s most popular shopping center.

Members of Parliament and Shiite Muslim clerics have been calling for an end to the black-market currency trade, accusing the money changers of driving down the rial’s value. Others have called upon the government to buy up rials and sell dollars and other foreign currencies warehoused in the central bank’s reserves to restore stability to the national currency.

In the last weeks, traders and regular citizens had gathered by the hundreds on Manoucheri Street in Tehran to buy foreign currencies in anticipation of further weakening in the rial.

During the past months some Iranian leaders and clerics have warned against social unrest over the worsening economic malaise in the country. The fall in the currency’s value has presented Iran with enormous economic risks, including the possibility of starting a severe bout of inflation, which is already high. A rising sense of economic crisis in Iran could also pose new political challenges for the country’s leaders

Scott Rothstein’s wife, others charged in money-laundering plot to sell jewelry

2012-09-06T12:26:00.001-07:00

By Jay Weaver
Miami Herald

The wife of imprisoned Ponzi schemer Scott Rothstein and two other people were charged Thursday with plotting to hide and sell more than $1 million worth of jewelry from the former Fort Lauderdale lawyer’s waterfront home before federal agents seized his assets three years ago.Kimberly W. Rothstein, her friend, Stacie Weisman, and the wife’s lawyer, Scott F. Saidel, were charged with money-laundering conspiracy, obstruction of justice and tampering with a witness in federal court.
Prosecutors said that by concealing the valuable jewelry, the three defendants prevented Internal Revenue Service agents from confiscating the property when they searched Rothstein’s home in November 2009. His wife and Weisman are accused of selling some of the jewelry to others, including Eddy Marin and jeweler Patrick Daoud, who were indicted on separate charges Thursday.
Among the jewelry items: a 12.08-carat diamong ring, according to federal prosecutors.
Kimberly Rothstein, Weisman and Saidel are also accused of seeking to have Scott Rothstein testify falsely during his deposition in a related civil bankruptcy proceeding involving his defunct law firm, Rothstein Rosenfeldt & Adler.
All five defendants are also accused of concealing the true location of certain items of jewelry during the bankruptcy proceeding to prevent the former law firm’s trustee from recovering them for victims of Rothstein’s $1.2 billion scheme. Marin and Daoud are separately accused of commiting perjury during depositions in the bankruptcy case.
“When a witness lies under oath or conspires to obstruct justice, the integrity of our system of justice is undermined,” U.S. Attorney Wifredo Ferrer said.
Rothstein is serving a 50-year sentence after pleading guilty to racketeering and other fraud charges involving the sale of purported legal settlements to investors from Florida to New York. Eight other people have been convicted on charges related to his scheme, among the largest in Florida history.
Kimberly Rothstein’s defense attorney, David Tucker, issuing a statement, saying while she claims she was not aware of her husband’s racketeering activities, “She takes full responsibility for her actions in regard to the charge filed today.”

Read more here: http://www.miamiherald.com/2012/09/06/v-print/2987970/scott-rothsteins-wife-others-charged.html#storylink=cp
y

Griselda Blanco Queen of Cocaine....hardly!

2012-09-05T05:20:00.001-07:00

By Michael Hearns
http://launderingmoney.com

The recent murder of Griselda Blanco in Medellin Colombia closes a sad a and tragic chapter on the brutality of the cocaine trade. At least that is what many would like for you to believe. Griselda Blanco's murder should be viewed for exactly what it is; another violent end to marginalized sociopath who has been given undeserved iconic status by the print and visual media.

Griselda Blanco was a sociopathic remorseless entrepreneur who slithered through a crevice in American law enforcement that was unprepared and without capable resources and foresight to recognize the tsunami of illicit dollars and power that was being ushered in through the cocaine trade of the 1980's and 90's. Griselda Blanco was an opportunistic individual who used her guile and sociopathology to insulate her as she trampled across the boundaries of decency in what we know to be an indecent business; drug trafficking. She has been given demigod status for her harsh, abrasive, quick tempered, ruthless, conniving ways and her fast penchant for ordering the execution of those she opposed by her spineless groveling minions. For all the bluster and for all the talk that that her hired henchmen now spout from the confines of this nation's penitentiaries they themselves had plenty of opportunity to dispatch Griselda Blanco but for either lack of conviction or lack of cerebral mass they continued to carry out her murderous ways helping to support the fallacy of Griselda Blanco as a Godmother of Cocaine.

Lets face facts. Griselda Blanco was an integral cocaine trafficker within the Medellin Cartel and she sanctioned, paid for, and demanded that many of her competitors, those who crossed her, and those who stood in the way of her ascension for wealth be murdered. Her distinction from her contemporaries was simply gender. Aside form that she is no different than many of the male drug traffickers who partook in their craft in the 1980's and 90's. As a society we lionize women villains because it grates against the American psyche of women being maternal, nurturing, and a source of comfort. Ma Barker, Bonnie Parker, Aileen Wournos, and Annie Palmer have all ascended to a folklore like status as queens or godmothers of crime and murder.

It is easy to view the life of Griselda Balnco from the viewfinder of a movie camera or the soft glow of a computer monitor and surmise she was the "Queen of Cocaine" or "The Godmother of Cocaine." Not having the privilege of either but being one of the few who actually had his feet on the ground in the cocaine world for a long time it is apparent to me that the reality is she was a large scale cocaine trafficker who clawed, cheated, and murderously existed in a business that rewards the victor regardless of the method.

Nothing more.
Nothing less.

The biggest current mistake being made is the assumption that Griselda Blanco was murdered to settle an old score or to appease a long time former adversary. More than likely it is because the criminal element of Medellin has been able to exist quietly in the shadow of the Mexican Cartel and Griselda Blanco's notoriety was becoming troublesome. Talks of more movies and books have filled the air. Crime and notoriety usually never mix well. In this case the celluloid film and the pen may have actually been stronger the sword.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney and http://moneylaunderingworld.blogspot.com/

Where the mob hides their money

2012-08-28T06:03:00.000-07:00

By Roberto Saviano

New York Times

The global financial crisis has been a blessing for organized crime. A series of recent scandals have exposed the connection between some of the biggest global banks and the seamy underworld of mobsters, smugglers, drug traffickers and arms dealers. American banks have profited from money laundering by Latin American drug cartels, while the European debt crisis has strengthened the grip of the loan sharks and speculators who control the vast underground economies in countries like Spain and Greece.

Mutually beneficial relationships between bankers and gangsters aren’t new, but what’s remarkable is their reach at the highest levels of global finance. In 2010, Wachovia admitted that it had essentially helped finance the murderous drug war in Mexico by failing to identify and stop illicit transactions. The bank, which was acquired by Wells Fargo during the financial crisis, agreed to pay $160 million in fines and penalties for tolerating the laundering, which occurred between 2004 and 2007.

Last month, Senate investigators found that HSBC had for a decade improperly facilitated transactions by Mexican drug traffickers, Saudi financiers with ties to Al Qaeda and Iranian bankers trying to circumvent United States sanctions. The bank set aside $700 million to cover fines, settlements and other expenses related to the inquiry, and its chief of compliance resigned.

ABN Amro, Barclays, Credit Suisse, Lloyds and ING have reached expensive settlements with regulators after admitting to executing the transactions of clients in disreputable countries like Cuba, Iran, Libya, Myanmar and Sudan.

Many of the illicit transactions preceded the 2008 crisis, but continuing turmoil in the banking industry created an opening for organized crime groups, enabling them to enrich themselves and grow in strength. In 2009, Antonio Maria Costa, an Italian economist who then led the United Nations Office on Drugs and Crime, told the British newspaper The Observer that “in many instances, the money from drugs was the only liquid investment capital” available to some banks at the height of the crisis. “Interbank loans were funded by money that originated from the drugs trade and other illegal activities,” he said. “There were signs that some banks were rescued that way.” The United Nations estimated that $1.6 trillion was laundered globally in 2009, of which about $580 billion was related to drug trafficking and other forms of organized crime.

A study last year by the Colombian economists Alejandro Gaviria and Daniel Mejía concluded that the vast majority of profits from drug trafficking in Colombia were reaped by criminal syndicates in rich countries and laundered by banks in global financial centers like New York and London. They found that bank secrecy and privacy laws in Western countries often impeded transparency and made it easier for criminals to launder their money.

At a Congressional hearing in February, Jennifer Shasky Calvery, a Justice Department official in charge of monitoring money laundering, said that “banks in the U.S. are used to funnel massive amounts of illicit funds.” The laundering, she explained, typically occurs in three stages. First, illicit funds are directly deposited in banks or deposited after being smuggled out of the United States and then back in. Then comes “layering,” the process of separating criminal profits from their origin. Finally comes “integration,” the use of seemingly legitimate transactions to hide ill-gotten gains. Unfortunately, investigators too often focus on the cultivation, production and trafficking of narcotics while missing the bigger, more sophisticated financial activities of crime rings.

Mob financing via banks has ebbed and flowed over the years. In the late 1970s and early 1980s organized crime, which had previously dealt mainly in cash, started working its way into the banking system. This led authorities in Europe and America to take measures to slow international money laundering, prompting a temporary return to cash.

Then the flow reversed again, partly because of the fall of the Soviet Union and the ensuing Russian financial crisis. As early as the mid-1980s, the K.G.B., with help from the Russian mafia, had started hiding Communist Party assets abroad, as the journalist Robert I. Friedman has documented. Perhaps $600 billion had left Russia by the mid-1990s, contributing to the country’s impoverishment. Russian mafia leaders also took advantage of post-Soviet privatization to buy up state property. Then, in 1998, the ruble sharply depreciated, prompting a default on Russia’s public debt.

Although the United States cracked down on terrorist financing after the 9/11 attacks, instability in the financial system, like the Argentine debt default in 2001, continued to give banks an incentive to look the other way. My reporting on the ’Ndrangheta, the powerful criminal syndicate based in Southern Italy, found that much of the money laundering over the last decade simply shifted from America to Europe. The European debt crisis, now three years old, has further emboldened the mob.

IN Greece, as conventional bank lending has gotten tighter, more and more Greeks are relying on usurers. A variety of sources told Reuters last year that the illegal lending business in Greece involved between 5 billion and 10 billion euros each year. The loan-shark business has perhaps quadrupled since 2009 — some of the extortionists charge annualized interest rates starting at 60 percent. In Thessaloniki, the second largest city, the police broke up a criminal ring that was lending money at a weekly interest rate of 5 percent to 15 percent, with punishments for whoever didn’t pay up. According to the Greek Ministry of Finance, much of the illegal loan activity in Greece is connected to gangs from the Balkans and Eastern Europe.

Organized crime also dominates the black market for oil in Greece; perhaps three billion euros (about $3.8 billion) a year of contraband fuel courses through the country. Shipping is Greece’s premier industry, and the price of shipping fuel is set by law at one-third the price of fuel for cars and homes. So traffickers turn shipping fuel into more expensive home and automobile fuel. It is estimated that 20 percent of the gasoline sold in Greece is from the black market. The trafficking not only results in higher prices but also deprives the government of desperately needed revenue.

Greece’s political system is a “parliamentary mafiocracy,” the political expert Panos Kostakos told the energy news agency Oilprice.com earlier this year. “Greece has one of the largest black markets in Europe and the highest corruption levels in Europe,” he said. “There is a sovereign debt that does not mirror the real wealth of the average Greek family. What more evidence do we need to conclude that this is Greek mafia?”

Spain’s crisis, like Greece’s, was prefaced by years of mafia power and money and a lack of effectively enforced rules and regulations. At the moment, Spain is colonized by local criminal groups as well as by Italian, Russian, Colombian and Mexican organizations. Historically, Spain has been a shelter for Italian fugitives, although the situation changed with the enforcement of pan-European arrest warrants. Spanish anti-mafia laws have also improved, but the country continues to offer laundering opportunities, which only increased with the current economic crisis in Europe.

The Spanish real estate boom, which lasted from 1997 to 2007, was a godsend for criminal organizations, which invested dirty money in Iberian construction. Then, when home sales slowed and the building bubble burst, the mafia profited again — by buying up at bargain prices houses that people put on the market or that otherwise would have gone unsold.

In 2006, Spain’s central bank investigated the vast number of 500-euro bills in circulation. Criminal organizations favor these notes because they don’t take up much room; a 45-centimeter safe deposit box can fit up to 10 million euros. In 2010, British currency exchange offices stopped accepting 500-euro bills after discovering that 90 percent of transactions involving them were connected to criminal activities. Yet 500-euro bills still account for 70 percent of the value of all bank notes in Spain.

And in Italy, the mafia can still count on 65 billion euros (about $82 billion) in liquid capital every year. Criminal organizations siphon 100 billion euros from the legal economy, a sum equivalent to 7 percent of G.D.P. — money that ends up in the hands of Mafiosi instead of sustaining the government or law-abiding Italians. “We will defeat the mafia by 2013,” Silvio Berlusconi, then the prime minister, declared in 2009. It was one of many unfulfilled promises. Mario Monti, the current prime minister, has stated that Italy’s dire financial situation is above all a consequence of tax evasion. He has said that even more drastic measures are needed to combat the underground economy generated by the mafia, which is destroying the legal economy.

Today’s mafias are global organizations. They operate everywhere, speak multiple languages, form overseas alliances and joint ventures, and make investments just like any other multinational company. You can’t take on multinational giants locally. Every country needs to do its part, for no country is immune. Organized crime must be hit in its economic engine, which all too often remains untouched because liquid capital is harder to trace and because in times of crisis, many, including the world’s major banks, find it too tempting to resist

Houston money laundering ring accused of moving $27 million

2012-08-20T07:09:00.002-07:00

By Dane Schille
Houston Chronicle
Federal authorities arrested at least three people as part of a $27 million scheme known as the "Black Market Peso Exchange," which provided professional money-laundering services to drug traffickers through Houston banks.
Specifically, the culprits are charged with using the various Houston accounts to mask drug proceeds as legitimately earned cash, federal prosecutors said.
The banks are not yet named, aside from one involved in a $90,000 wire transfer to buy an airplane later used to shuttle bulk cash.
Those charged so far include Enrique Morales, 42, who lived in Houston and Guadalajara, Mexico, and was arrested upon entering the United States at Laredo; Willie Whitehurst, 44, of Houston; and Sarah Combs, 48, of Dickinson.
The names of other defendants, both in the United States and Mexico, are being kept secret by prosecutors pending their arrests.
Prosecutors claim the ring picked up money from drugs sales in several cities, including Dallas and Charlotte, N.C., and also had that money dropped off at their headquarters in Houston, which they then deposited in banks.
"Professional money launderers are integral to criminal organizations," Assistant U.S. Attorney General Lanny Breuer said Friday in a statement from the U.S. Department of Justice.
"According to the indictment, the defendants enabled dangerous narcotics traffickers to access their ill-gotten gains and evade law enforcement."
Morales was a director for the conspiracy and apparently recruited clients who had large amounts of U.S. dollars they wanted converted to Mexican pesos. He is accused of instructing Whitehurst to travel to various cities to pick up the drug proceeds. Combs was an office manager for the organization at an office at 16215 Westheimer, Suite 107, in Houston.

Funds seized 4 times
None of them could be reached for comment.
The indictment describes four instances last year in which money was seized, including $364,810 by Houston police in April; $350,178 and $319,430 in June; $220,998 by police in North Carolina in August; and $319,430 by police in Georgia in November. It does not name anyone charged or convicted with drug trafficking, or point to any specific trafficking organization.
The $27 million would be a fortune to an individual, but considered small compared to the many billions of dollars a year generated by multinational drug cartels.
Money-laundering prosecutions are rare compared to the number of people charged with trafficking drugs, but they get to the heart of some of the biggest problems for traffickers: where to hide and how to spend their riches without drawing heat.

'Shell companies'
The money-transmitting business operated from October 2009 through September 2011, records show.
Money laundering often involves a complex series of moves aimed at making it difficult to know for sure where earnings originated, as well as make it tough for authorities to prove the funds were gained illegally.
The drug money supposedly was first tucked into bank accounts in the name of "shell companies," owned and controlled by those arrested. The money was then transferred to accounts owned by "retailers" in the United States and Mexico.
In exchange for this, pesos were transferred back into accounts for the defendants' clients.

.com

Miami’s international banking clients move money to protect financial privacy

2012-07-30T05:36:00.000-07:00

By Anna Edgerton
Miami Herald

Miami’s position as a hemispheric banking capital could be weakened as some foreign depositors close their accounts in U.S. banks to avoid new disclosure regulations.
The new rules, set to go into effect early next year, require U.S. banks to report interest information on accounts held by nonresident foreign nationals to the Internal Revenue Service, which could then share it with depositors’ home countries. To protect their financial privacy, some international clients have already moved their money to more discreet havens like Panama and the Cayman Islands. “Since April 19 [when the regulation was passed], we’ve heard that several hundred million dollars have left Florida for foreign jurisdictions,” said David Schwartz, executive director of the Florida International Bankers Association. “Customers have said ‘we’re aware of what’s going on, and we prefer to take our money overseas.’”
At play is more than $14 billion in South Florida banks that comes from offshore individuals according to a 2011 survey by the Florida Office of Financial Regulation. That breaks down to 41 percent of total deposits in Florida-chartered banks — generally community banks — plus 90 percent of total deposits in foreign-owned financial entities regulated by the state. Those numbers do not include foreign funds in nationally chartered or federally regulated institutions — a figure that likely would “substantially’’ exceed the $14 billion, according to the survey.
Banking and business groups have opposed the rule, continuing the fight this week by convincing lawmakers to include the tax rule in a Congressional bill that would freeze all “significant regulatory action’’ until the unemployment rate drops to 6 percent. Though the measure passed the House of Representatives Thursday, it is not expected to become law.
The stakes are especially high for South Florida banks because of the concentration of foreign deposits in the region. The Florida OFR survey indicates that 11 of 16 South Florida’s locally based banks could risk failure if faced with a deposit run-off. For 16 of the region’s 22 state-regulated foreign institutions, foreign deposits account for at least 90 percent of holdings. The survey does not name the institutions surveyed.
The impact could go beyond the institutions that are directly involved. Fewer deposits translates into less money to lend; the OFR study shows that a 20 percent decrease in foreign deposits would result in a $25 billion decrease in funds available for community lending.
And if withdrawals were to cause banks to fail, U.S. taxpayers would be stuck with at least part of the tab. The // taxpayer-funded Federal Deposit Insurance Corporation insures $250,000 for each account in a qualifying institutions, regardless of whether the depositor is a resident.
Local business people worry that if the foreign bank accounts go, other types of invetment could go too.
“I don’t see why we would want to make any of these offshore depositors nervous, because they bring tremendous value to us,” said Richard Dailey, president and CEO of Apollo Bank where about 40 percent of accounts are held by foreign nationals. “We use that money to make loans, and they buy real estate and make other investments here.”
Yet some local experts doubt the new disclosure rule will cause a massive outflow of cash from South Florida. Few banking systems are as secure as that of the U.S. Plus, the trend toward increased transparency isn’t limited to U.S. banks. Governments around the world are starting to crack down on tax evasion, which is responsible for up to $280 billion in uncollected income tax globally, according to a report from the Tax Justice Network.
“The effect of this regulation may not be as onerous as some people unfortunately fear,” said Miami-based banking lawyer Bowman Brown. Foreign depositors are “looking at the same thing world wide,” he said, so even those who who want to take their money out of the U.S. may have few alternatives.
Defenders of the new regulation say it’s a necessary gesture so the IRS can access information on accounts held by American nationals in other countries.
“The IRS is not just doing something because they want to penalize banks. They don’t want to waste their time and resources saying that the bankers are the bad guys,” said Ken Thomas, an economist and Miami banking expert. “They must believe that there’s a significant amount of lost revenue to pass something as controversial as this. The banking lobby is very strong.”
Bill Sharp, a tax lawyer with offices in Tampa, San Francisco and Zurich, has been watching what he calls the “mega-trend of global compliance” unfold for more than two decades, beginning in the late 1980s with a trickle of voluntary disclosure campaigns allowing Americans to declare offshore wealth without facing penalties. When authorities started cracking down on funding for terrorism after September 11, 2011, they also uncovered rampant tax evasion that had long gone unchecked.
A major shift came in February of 2009, when the U.S. Department of Justice reached an agreement with the Swiss government that breached the famous secrecy of Swiss banks. The catalyst was a federal case against banking giant UBS that alleged, among other things, that UBS bankers courted wealthy clients at Art Basel Miami Beach, pitching ideas for offshore accounts. UBS entered into a deferred prosecution agreement, agreeing to pay a $780 million penalty and to disclose information on hundreds of U.S. taxpayers who had accounts with the Zurich-based bank.
The IRS saw this case as “the poster child for why we need to attack bank secrecy,” said Sharp, not just for the penalty collected, but also for the thousands of Americans who voluntarily came forward to confess their offshore tax transgressions.
Critics of this recent IRS rule argue that while the new standard of transparency makes sense for countries in Europe and the Caribbean that harbor hidden accounts, few Americans keep their money in Pakistan or Portugal. In total, almost many of the 80 countries are included on the list of countries with which the IRS has promised to share information.
“What American has a banking account in Peru? In Chavez’s Venezuela?” asked Alex Sanchez, president and CEO of the Florida Bankers Association and an outspoken critic of the regulation. “You know what is the No. 1 extortion and kidnapping country in the world? Mexico. What American is going to keep their money there?”
Those dangers are one reason international clients want their finances to remain private. The regulation does include a clause that gives the IRS the option of withholding// financial information in certain situations, but Miami bankers say that this vague promise is not enough to reassure clients. worried about their financial privacy and physical safety.“[Reciprocity] is a great concept if authorities on both sides are reputable, adhere to standards of confidentiality and have a government structure that controls this information,” said Carlos Fernandez-Guzman, president of Miami-based Pacific National Bank, where more than 70 percent of depositors are foreigners. “But that is not necessarily the case in all these countries.
“I have Latin American customers who say ‘don’t send me any bank statements; keep them in the U.S. and I’ll pick them up when I come.’ All of that is for security reasons,” he said. “They don’t want people knowing the extent of their wealth, especially what’s in the U.S., because in their home country it’s a volatile political and criminal environment.”
At the very least, the new rules are causing jitters. His larger depositors, “especially the top 5 to 10 percent,” Fernandez-Guzman said, are “actively beginning to do due diligence.’’
One option for international clients is to put their money into noninterest-bearing accounts that are not subject to the disclosure requirements. Savings accounts are earning little interest at current low rates, and the full amount in checking accounts is insured under the FDIC’s Transaction Account Guarantee program. Though that is set to expire at the end of the year, observers say it could be extended.
The potential loss of foreign deposits comes at the same time that banks face higher capital reserve requirements and a slew of new regulations requiring extensive — and expensive — compliance efforts.
“All of this kind of adds up to the whole regulatory puzzle that we’re all trying to navigate,” said Raul Valdes-Fauli, president and CEO of Professional Bank in Miami. “There’s a lot of uncertainty, and it’s hard to make sure you’re getting your arms around it and implementing the necessary measures. This is a huge burden, especially on smaller banks.”
Still, Miami’s advantages of language and geography— factors that originally helped develop the city’s banking and business culture — will most likely continue to attract foreign depositors, especially from Latin America.
“Miami will continue to be Miami,” said Thomas, the banking expert. “Just at a greater cost.”

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at www.launderingmoney.com and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com http://launderingmoney.com

Treasury Targets Drug-Money Laundering Network, Hezbollah Fundraiser

2012-06-29T06:53:00.001-07:00

By Samuel Rubenfeld
Wall Street Journal

The U.S. Treasury Department said Wednesday it designated four individuals and three entities under the Kingpin Act for their role in laundering drug money for alleged international drug trafficker Ayman Joumaa.
The Treasury also designated a Colombia-based individual as a terrorist for directing the Americas fundraising activity of Hezbollah, a U.S. State Department-listed foreign terrorism organization.
“The Joumaa network is a sophisticated multinational money laundering ring, which launders the proceeds of drug trafficking for the benefit of criminals and the terrorist group Hezbollah,” said David S. Cohen, the undersecretary of Treasury for terrorism and financial intelligence, in astatment.
Abbas Hussein Harb and Ibrahim Chibli were designated for collaborating with Joumaa to move millions in drug-related money, Treasury said. Harb’s Colombia and Venezuela-based organization launders money for the network through the Lebanese financial sector, while Chibli used his position as manager of a branch of Fenicia Bank in Lebanon to help Joumaa and Harb, Treasury said.
Ali Mohamad Saleh, a Lebanese Colombian national, was designated as a global terrorist for acting as a Hezbollah facilitator, directing the group’s activity in Colombia, Treasury said. Saleh was the acting leader of a support cell in Maicao, Colombia,which raised funds for Hezbollah; he solicited donations and coordinated the transfer of checks and donations to the group in Lebanon via Venezula.
Saleh was placed under Kingpin Act sanctions in December 2011 for his role as a Maicao-based money launderer for a reputed criminal organization with links to the Joumaa network.
Also placed under sanctions Wednesday are Harb’s brother, Ali Houssein Harb, and Saleh’s brother, Kassem Mohamad Saleh, for their links to the Joumaa network. They control the three companies targeted in Wednesday’s action.
Joumaa, for his part, was designated in January 2011 under the Kingpin Act. He was charged in December 2011 with cocaine distribution and money laundering through, among other venues, the Lebanese Canadian Bank, whose untainted assets were bought—with American blessings—by a Beirut-based branch of Societe Generale after Treasury issued a finding against it as a “primary money-laundering concern.”
“The [Drug Enforcement Administration] investigation of Ayman Joumaa that helped lead to today’s Treasury actions is critical to protecting the U.S. financial system from illicit activity and is another tool used to disrupt and dismantle these drug and money laundering networks,” said John Arvanitis, DEA financial operations chief, in the statement

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at: http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney

U.S. bank looked other way to Mexican drug war money laundering, agent says

2012-06-26T05:42:00.002-07:00

A former compliance officer with the U.S. bank Wachovia, Martin Woods has seen the Mexican drug war and its illicit money unseen by even the most seasoned observers. Woods started asking questions about billions of dollars pouring into Wachovia accounts in the U.S. from Mexican currency exchanges back in 2006. "I guess what surprised me most was my own naïveté . I aggravated my own employers (by bringing forward evidence of laundering) and also the regulators themselves."

Wachovia, currently owned by Wells Fargo, settled out of court for the largest violation of the Bank Secrecy Act in U.S. history in 2010, paying a fine of $160 million for laundering a staggering $378.4 billion from Mexican currency exchange houses between the years 2004 and 2007. The majority of the cash is believed to be drug money, moved without proper documentation from Casa's de Cambio in Mexico to U.S. banks.

"There was no consequence for anyone dealing with that money. Some other compliance officers broke the rules and they kept their jobs. I obeyed all the rules, blew the whistle and lost my job," Woods says. This is a side of the Mexican drug war that few people see. Ever since Mexican President Felipe Calderon used his nation's military against the drug cartels, an estimated body count has soared past 50,000 people dead. Public beheadings have become commonplace and the cartels have brazenly gunned down unarmed civilians in public. Financial analysts, then say there is no exaggeration in accusing bankers of laundering blood money for international assassins.

"The whole point of being a drug dealer is money," Heather Lowe, a Washington-based lawyer with Global Financial Integrity says. "Identifying and stopping that money flow is crucial." The U.N. Organization on Drugs and Crime estimates that illegal narcotics represent the world's third-biggest export, after oil and the arms trade, worth more than $300 billion annually. "You have these horrendous crimes being committed, people being shot 10, 20 or 30 at a time," Walter MacKay, a former Canadian police officer who has trained Mexican security forces says. "This dirty money washing through economies just exacerbates everything," he told Al Jazeera.

Illicit drug sales in the United States generate annual revenues between $18 billion and $39 billion, according to the U.S. Justice Department's Federal Bureau of Investigation. The money in turn flows back into Mexico, where cartels use it to pay underlings, bribe politicians, invest in legitimate businesses and purchase raw product. Most tragically, the "war on drugs" doesn't seem likely to end anytime soon. Many analysts believe the military solution isn't working as violence is increasing. Some policy experts and forensic accountants believe tracking money earned by cartels, along with waging a PR campaign to tackle the demand side of the equation in the U.S., is the best in a series of bad options.

"In order to weaken organized crime, it is far safer and more effective in the long run to erode its financial base," Laura Carlsen, director of the Americas program of the International Relations Centre in Mexico City says. Currency exchange houses, like the ones used by Wachovia, are probably the most common way for cartels to launder funds. Traffickers normally "contract with money brokers to use their networks of bank accounts and business connections to structure large sums for transport across the border"; former Arizona Attorney General Terry Goddard told a gathering at Woodrow Wilson Center said.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at:
http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney

Ireland levies first fine under money laundering law

2012-06-22T10:34:00.000-07:00

The Central Bank of Ireland has reprimanded and fined the Dublin-based life assurance arm of Swiss bank UBS after it failed to comply in a timely manner with anti money-laundering legislation introduced in 2010.
The CBI said it had fined UBS International Life Limited (UBSIL) 65,000 euros ($81,900) for failing to instruct its staff on changes to the law embodied in the Criminal Justice Act 2010.
"This is the first fine we have issued under this anti money-laundering legislation," said CBI spokeswoman K atie Philpott.
The law, which came into force in July 2010, is designed to protect Ireland's financial system from exposure to money laundering and terrorist financing, the CBI said.
The CBI also said UBSIL had failed to show it was adequately checking information on policy holders provided by third parties, thus failing to comply fully with "know your customer" requirements.
UBSIL had also failed to adopt adequate written policies and procedures for identifying and reporting suspicious transactions, the CBI said.
"The breaches identified related to delays by UBSIL in implementing certain requirements of the act after it was implemented on 15 July, 2010," said UBS in a statement, adding that it had dealt with all the control weaknesses identified.
A spokesman for UBS said UBSIL had worked closely with the CBI to redress the control weaknesses, and had received a near 30 percent discount on the fine originally proposed as a result, adding that UBSIL had not committed any contraventions in doing business.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at www.launderingmoney.com and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com http://launderingmoney.com

Colorado Man Indicted for Human Trafficking, Money Laundering

2012-03-13T05:43:00.000-07:00

By Olvia Katradian

A Colorado CEO is accused of luring foreigners to the United States to work for a nonexistent university and then stealing portions of their salaries after setting them up with other jobs in what the government has called an "elaborate scheme."
Kizzy Kalu, 47, of Highlands Ranch, Colo., allegedly enticed foreign nurses to work as teachers at an Adam University in Denver, an institution that Kalu's alleged accomplice, Philip Langerman, 77, of McDonough, Ga., made up, according to a federal indictment.
Langerman was also indicted, but remains at large. Kalu is being held by U.S. Marshals, and phone calls to his companies were not returned.
Kalu promised a salary of between $68,000 and $72,000 annually for the fictional teaching positions through the Foreign Healthcare Professional Group (FHPG), a company he operated, according to the indictment. The fictional positions were considered to be "specialty occupations" under U.S. immigration regulations.
Langerman obtained state authorization in 2005 for Adam University to deliver degree programs in Colorado, based on false claims, according to the indictment. This status permits a university to submit an unlimited number of H-1B specialty occupation visas, which allow a foreign national to be employed while in the United States.
The foreign nationals had to pay fees to FHPG and Kalu in exchange for assistance in obtaining the visas, according to the indictment.
Once they were in the United States, Kalu informed them that the aforementioned positions were no longer available, and put them to work at various long-term care facilities, the indictment states.
The facilities paid the foreign nationals' salaries to Kalu's company, but Kalu allegedly passed on only 65 percent of the wages to his employees, which was 50 percent of the salary originally promised to them by FHPG and less than 50 percent of what Adam University told the United States they would be paid, according to the indictment.
Kalu was arrested without incident last Sunday and arraigned Thursday when a federal magistrate judge ordered that he be released on bond. The U.S. Attorney's Office immediately appealed to the District Court, which then ordered that Kalu not be released until the appeal is heard Thursday. Kalu is in federal custody, being held by the U.S. Marshals, despite other news reports that he is out on bond, according to the U.S. Attorney's Office.
"He was not let off on bond. Those stories are completely inaccurate," Jeff Dorschner, a spokesman for the U.S. Attorney's Office, told ABC News today.
Dorschner said the U.S. Attorney's Office believes Kalu is a flight risk. "The reason we don't want him released is we think he will flee the country and not return for future court appearances," said Dorschner.
Kalu faces 132 charges, including visa fraud, forced labor, money laundering, human trafficking, criminal forfeiture and mail fraud. If convicted, he could spend up to 20 years in prison.
Langerman is listed as a Ph.D and one of Adam University's directors, according to the indictment. Kalu is a graduate of the University of Jos in Nigeria, according to his online LinkedIn profile.
Kalu is the chairman and CEO of Global Energy Initiatives (GEI), which manufactures and deploys hydro-kinetic power generators to Brazil and other developing countries, according to its website. Photographs on Kalu's Facebook page Saturday showed Kalu with his wife, Nicole, at the White House for an energy briefing in September. The photos were taken down today and are no longer publically available.
Kalu also operates the Global Village Hope Foundation, an international voluntourism program whose motto is "You are the hope for the hopeless."
On the foundation's website, supporters are asked to send donations to 5630 Wickerdale Lane in Highlands Ranch, Colo., Kalu's residence.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney and http://moneylaunderingworld.blogspot.com/

Fresno California men indicted in money laundering case

2012-02-10T11:27:00.000-08:00

A federal grand jury returned an indictment against 41-year-old Joseph Edwin Gable, aka Mike Jones; 41-year-old Elgeron Graves; 52-year-old Vincent Graves; 45-year-old Herman Graves; 43-year-old Damone Kelley; 45-year-old Catatea James; all of Fresno, and 27-year-old Kevin Eugene Spencer Jr. of Roseville.
The indictment charges Gable, Elgeron Graves, Vincent Graves, and Kelley with conspiring to cultivate, distribute and possess with intent to distribute marijuana, distributing marijuana, and possessing marijuana with intent to distribute. Elgeron and Herman Graves are also charged with cultivating marijuana in Fresno County. Gable is charged with structuring cash derived from marijuana trafficking in order to evade currency transaction reporting requirements. Gable, Kelley, James and Spencer are charged with conspiring to launder the proceeds of marijuana trafficking and with several counts of money laundering.
According to court documents, Gable allegedly was in charge of a long-term interstate marijuana-trafficking conspiracy. Some of the marijuana was grown by Elgeron Graves and his brother, Herman Graves, on property leased by Elgeron Graves in Fresno County. The Graves brothers recruited people to obtain California medical recommendations from a local physician for the purpose of growing marijuana, which was in fact being shipped to Alabama, Michigan, Ohio, Georgia, Louisiana, Mississippi, Tennessee, and North Carolina. The Graves brothers also allegedly used a now defunct marijuana dispensary in Fresno as a front business for the interstate shipment of marijuana.
Kelley and Vincent Graves, who is unrelated to the Graves brothers, are alleged to have transported or assisted in the transportation of marijuana to Birmingham, Alabama for distribution through DK Transport, a trucking business owned by Kelley. DEA has already seized a DK Transport semi-tractor trailer valued at $25,000 and equipped with a hidden compartment used to conceal marijuana that was shipped outside of California.
During the course of the conspiracy, Gable allegedly obtained over $600,000 from the sale of marijuana in Alabama and directed the deposit of those funds into bank accounts of friends and relatives in California and Oregon in amounts less than $10,000 in order to avoid IRS reporting requirements. He directed his friends and relatives to withdraw the cash in amounts less than $10,000 and give the money back to him. According to court documents, most of the drug proceeds went through bank accounts maintained by James, an IRS employee and Gable’s half-sister, and Spencer, formerly of Fresno.
“The defendants in this case are alleged to have used California medical marijuana recommendations to camouflage a profitable interstate trafficking network,” said U.S. Attorney Wagner. “Unfortunately, the misuse of California laws on medical marijuana by those who seek to profit from the interstate sale of marijuana for non-medical purposes has become all too common.”
This case is the product of an investigation by the DEA and IRS Criminal Investigation with assistance from the Treasury Inspector General of Tax Administration (TIGTA), U.S. Postal Inspection Service in Birmingham, Ala., the California Highway Patrol, the Fresno County Sheriff’s Office, the Fresno Police Department, and the Madera County Narcotics Enforcement Team (MADNET). If convicted, each drug offense carries a statutory mandatory minimum prison term of five years and a maximum prison term of 40 years, along with a fine of up to $5 million. The money laundering charges carry a maximum prison term of 20 years and a fine of more than $1 million. The structuring charge carries a maximum prison term of 10 years and a fine of up to $250,000. The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt. The defendants are scheduled to appear in federal court in Fresno for arraignment on Tuesday, February 21, 2012 before U.S. Magistrate Judge Gary S. Austin.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com/ and http://launderingmoney.com/

Colombia says 8 Israelis involved in money laundering and drug trafficking

2012-02-07T11:45:00.000-08:00

Local media reports claim Israeli 'former military men' also suspected of money laundering, exploitation of minors. Suspects deny allegations: 'We're legit businessmen' Eight Israelis were arrested in Colombia on suspicion of drug trafficking, money laundering and exploitation of minors, the country's chief prosecutor told local media outlets on Tuesday.

The suspects, who were described in the reports as "former military men," reside in the city of Taganga. According to one of the reports, they are suspected of sexually exploiting teenage girls.

As part of a separate investigation, the suspects are also being questioned about their ties to a local drug trafficking ring. The chief prosecutor noted that the Israeli men were under surveillance during the past year, after arousing the suspicion of local police officers and community leaders. One of the reports claimed that police obtained tape recordings, some in Hebrew, which might incriminate the suspects.

The suspects denied the allegations, claiming that they were legitimate businessmen. In January 2011, Colombia asked Israel to extradite former Israeli army Lt. Col. Yair Klein, who was convicted by a Colombian court and sentenced in absentia to nearly 11 years in prison for training drug-traffickers' assassins in the late 1980s.Klein was convicted in Colombia of criminal conspiracy in 2001 for organizing training by Israeli mercenaries in "military tactics and techniques" including bomb-making for gunmen employed by ranchers and drug traffickers.

Some of the trainees would go on to commit some of Colombia's most heinous massacres. As well, US and British investigations determined two decades ago that Klein was also involved in smuggling 400 Galil assault rifles and 100 Uzi submachine guns bought from Israeli into Colombia in 1989 when his plans to create a mercenary-ran training camp on the Caribbean island of Antigua unraveled. Arrested in Moscow in 2007, Klein spent three years in a Moscow prison on a Colombian extradition request before being freed in November 2010 after the European Court of Human Rights ruled that Colombia could not guarantee his physical safety owing to his poor human rights record.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com/
http://launderingmoney.com/

U.S Levies Sanctions against Iran Central Bank

2012-02-06T10:51:00.000-08:00

By Julie Pace
St. Louis Tribune

In In a fresh swipe at Iran, President Barack Obama has ordered new sanctions on the Islamic republic, including its Central Bank, moving to enforce a law he signed in December.
In a letter to Congress Monday, Obama said more sanctions are warranted "particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks." He said the problems included the hiding transactions of sanctioned parties, the deficiencies of Iran's anti-money laundering regime and the unacceptably high risk posed to the entire international financial system posed by Iran's activities.
The Central Bank sanctions were included as an amendment in the wide-ranging defense bill Obama signed into law at the end of 2011. The White House said Obama signed the executive order approving the sanctions on Sunday.
The new measures come as the White House tries to both ratchet up pressure on Tehran to abandon its nuclear program and dissuade Israel from launching a unilateral strike on Iran, a move that could roil the Middle East and jolt the global economy.
Obama said Sunday that he does not believe Israel has yet decided whether to attack Iran. The president said he still believes a diplomatic solution is possible.
Iran insists its nuclear pursuit is for peaceful purposes, but the West accuses Iran of developing the know-how to build a nuclear bomb. Defense Secretary Leon Panetta last week would not dispute a report that he believes Israel may attack Iran this spring in an attempt to set back the Islamic republic's nuclear program.
In recent weeks, both the U.S. and European Union have imposed harsher sanctions on Iran's oil sector, the lifeblood of its economy.
In Washington, the Senate Banking Committee easily approved yet more penalties on Tehran last week. The sweeping measure, which is not yet law, would target Iran's Revolutionary Guard Corps, require companies that trade on the U.S. stock exchanges to disclose any Iran-related business to the Securities and Exchange Commission, and expand penalties for energy and uranium mining joint ventures with Tehrana fresh swipe at Iran, President Barack Obama has ordered new sanctions on the Islamic republic, including its Central Bank, moving to enforce a law he signed in December.
In a letter to Congress Monday, Obama said more sanctions are warranted "particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks." He said the problems included the hiding transactions of sanctioned parties, the deficiencies of Iran's anti-money laundering regime and the unacceptably high risk posed to the entire international financial system posed by Iran's activities.
The Central Bank sanctions were included as an amendment in the wide-ranging defense bill Obama signed into law at the end of 2011. The White House said Obama signed the executive order approving the sanctions on Sunday.
The new measures come as the White House tries to both ratchet up pressure on Tehran to abandon its nuclear program and dissuade Israel from launching a unilateral strike on Iran, a move that could roil the Middle East and jolt the global economy.
Obama said Sunday that he does not believe Israel has yet decided whether to attack Iran. The president said he still believes a diplomatic solution is possible.
Iran insists its nuclear pursuit is for peaceful purposes, but the West accuses Iran of developing the know-how to build a nuclear bomb. Defense Secretary Leon Panetta last week would not dispute a report that he believes Israel may attack Iran this spring in an attempt to set back the Islamic republic's nuclear program.
In recent weeks, both the U.S. and European Union have imposed harsher sanctions on Iran's oil sector, the lifeblood of its economy.
In Washington, the Senate Banking Committee easily approved yet more penalties on Tehran last week. The sweeping measure, which is not yet law, would target Iran's Revolutionary Guard Corps, require companies that trade on the U.S. stock exchanges to disclose any Iran-related business to the Securities and Exchange Commission, and expand penalties for energy and uranium mining joint ventures with Tehran

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com/ and http://launderingmoney.com/

Mexican drug kingpin Benjamin Arellano Felix pleads guilty to US charges in San Diego

2012-01-05T08:20:00.000-08:00

Mexican drug kingpin Benjamin Arellano Felix pleaded guilty Wednesday to racketeering and conspiracy to launder money, avoiding the spectacle of a trial for the leader of a cartel that once smuggled hundreds of tons of cocaine and marijuana into the United States and dissolved bodies of its rivals in vats of lye.
Under an agreement with federal prosecutors, Arellano Felix, 58, can be sentenced to no more than 25 years in prison — a lighter punishment than ordered for lower-ranking members of his once-mighty, Tijuana-based cartel.
Prosecutors agreed to dismiss other charges that could have brought 140 years in prison if he was convicted.
The half-hour hearing was an anticlimactic finish to the U.S. government’s pursuit of one of the world’s most powerful drug bosses during the 1990s. His cartel, with its iron-tight grip on the drug trade along California’s border with Mexico, was portrayed in the Steven Soderbergh film “Traffic” but has struggled in recent years as other cartels have become more ruthless than ever.
Laura Duffy, the U.S. attorney in San Diego who built much of her career on the case, said Arellano Felix will likely spend the rest of his life in U.S. prison but did not elaborate on the reasoning for the plea deal.
“Today’s guilty plea marks the end of his reign of murder, mayhem and corruption, and his historic admission of guilt sends a clear message to the Mexican cartel leaders operating today: The United States will spare no effort to investigate, extradite and prosecute you for your criminal activities,” Duffy said.
Arellano Felix stood attentively in court, acknowledging his guilt as U.S. District Judge Larry Burns recited parts of a 17-page plea agreement. He told the judge that he has been suffering migraine headaches almost daily but that the problem didn’t impair his judgment to accept the plea agreement.
Anthony Colombo Jr., Arellano Felix’s attorney, said his client could be released from U.S. prison in 20 years if credited for time served in this country and good behavior, assuming he gets the maximum 25-year sentence. As a Mexican citizen, he would then be deported to Mexico, where he still has nine years left on a sentence for related crimes.
Colombo said the government may have agreed to the deal to avoid having to bargain with 21 potential government witnesses for reduced sentences in exchange for their testimony. They also may have wanted to avoid a lengthy trial.
“They have to consider years and years of litigation, plus the expense, is avoided by this resolution,” Colombo told reporters.
John Kirby, a former federal prosecutor who co-wrote the 2003 indictment against Arellano Felix, said the case rested entirely on cooperating witnesses, instead of wiretaps or physical evidence. He said those cases weaken over time as witnesses die, get into more trouble or change their minds about testifying.
“This kind of case is based solely on witness testimony, and it slowly disintegrates,” Kirby said. “Maybe from the time when we put it together and now, it’s not such a great case anymore.”
The cost of a trial was unlikely to have influenced prosecutors, Kirby said.
“The government doesn’t care about the expense, the government cares about winning,” he said.
Francisco Javier Arellano Felix, a younger brother who led the cartel after Benjamin was arrested in Mexico in 2002, was sentenced in San Diego to life in prison in 2007, a year after he was captured by U.S. authorities in international waters off Mexico’s Baja California coast. Jesus Labra Aviles, a lieutenant under Benjamin Arellano Felix, was sentenced in San Diego to 40 years in prison in 2010.
Benjamin Arellano Felix was extradited from Mexico in April 2011 to face drug, money-laundering and racketeering charges, one of the highest-profile kingpins to face prosecution in the United States.
The U.S. indictment said Arellano Felix was the top leader of a cartel he led with his brothers, going back to 1986. It says the cartel tortured and killed rivals in the United States and Mexico as it smuggled Mexican marijuana and Colombian cocaine.
“He was the top of the chain,” Kirby said. “The brothers were at the top, and he was at the very top. He had the final say ... He was like the CEO of the operation.”
The cartel began to lose influence along California’s border with Mexico after Arellano Felix was arrested in 2002. A month earlier, his brother, Ramon, called the cartel’s top enforcer, died in a shootout with Mexican authorities.
Benjamin Arellano Felix was incarcerated in Mexico after his 2002 arrest and was later sentenced to 22 years in prison on drug trafficking and organized crime charges.
Arellano Felix also agreed to forfeit $100 million, a figure that will be difficult for the government to collect.
“Whether there is anything out there that (the government) can seize, I don’t know,” Colombo said.
Sentencing was set for April 2.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com/