Joseph Watts, long-time associate of the Gambino crime family in New York, has been charged with using an energy drink-making company called American Blast Limited to launder criminal proceeds.  Charges of money laundering and bribery were added to a racketeering indictment that accuses Watts and acting Gambino boss John D’Amico with conspiring in the 1989 murder of Staten Island businessman Fred Weiss.  D’Amico is accused of drawing a pay-check from the drinks company in exchange for hooking the company up with restaurants controlled by the Gambino crime family.  Prosecutors believe that D’Amico took over the company in order to give his associate John A. Gotti a distribution route while he was acting boss of the crime family once headed by his father. 

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Transparency International Sri Lanka (TISL) has announced that journalist Poddala Jayantha was abducted by an unidentified gang while on his way home on the evening of 1 June and later abandoned with severe injuries.  In 2004, TISL honoured Jayantha with its National Integrity Award for his courageous reporting and dedication to combating corruption.  This latest attack comes amid growing concern for the safety of independent journalists in Sri Lanka; in particular, many of the journalists who have been targeted have been active anti-corruption campaigners.  Jayantha is an outspoken media-freedom advocate and a relentless practitioner of investigative journalism, and his assault is a targeted threat to both these activities. 

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John Gleave, a BT engineer who stole more than £100,000 from phone booths across the North West, has been jailed for 14 months for theft and money laundering.  Gleave was employed to open faulty cash boxes, inspect them and report faults, but instead took the cash and replaced the empty container, reporting it had been stolen.  BT investigated after noticing a higher than average amount of thefts, and placed Gleave under surveillance.  After his arrest in May 2007, police found a coin-counting machine and £615 in coins in his home.  A proceeds of crime hearing will take place at a later date to recover the stolen money. 

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A plenary meeting of the Egmont Group (the "trade body" for financial intelligence units) has closed in Qatar with the announcement of many more Memoranda of Understanding (MoU) to be signed between member FIUs.  For instance, the UAE's Anti-Money Laundering and Suspicious Cases Unit agreed to sign MoUs with seventeen other FIUs, and started immediately by signing them with Fintrac of Canada, the MOT of the Netherlands, and FinCEN of the US. 

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Turkmenistan has adopted a new Law on Combating Criminal Money Laundering and the Financing of Terrorism.  The law, prepared by the Majlis (Turkmenistan’s lower house of parliament) on the instructions of the head of state, was signed by President Gurbanguly Berdimuhamedov at a government meeting on 28 May 2009.  The president then instructed the parliament, the Ministry of Justice and other law enforcement agencies to prepare regulations governing the activities of the relevant structures within the framework of the new law as soon as possible.

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Five defendants in the largest terrorism financing case in US history have been sentenced in Dallas for their roles in funnelling money to Hamas terrorists.  District Judge Jorge Solis told them that “Your function in life was raising money to support Hamas”, but Holy Land Foundation board chairman Ghassan Elashi, who was one of two men sentenced to 65 years in prison, said that they were merely feeding needy Palestinian people: “We gave the essentials of life – oil, rice, flour.  The [Israeli] occupation was providing them with death and destruction.  The Holy Land Foundation was to assist the Palestinians in their steadfastness against the brutal apartheid regime.  I would like to declare my innocence of all the charges.”  The other three men were given sentences ranging from 15 to 20 years.

In autumn 2008, all five men were convicted on 108 charges (including money laundering and supporting terrorism) relating to the donation of more than US$12 million to the Palestinian group Hamas after the Clinton administration in 1995 declared it a terrorist group for sponsoring suicide bombings targeting Israelis.  Their Holy Land Foundation was shut down and had its assets frozen in 2001.  The convictions were a major counter-terrorism victory for the Justice Department, which has failed to get guilty verdicts on the most serious charges in other similar trials around the country.  David Kris, assistant attorney general for national security, said that “These sentences should serve as a strong warning to anyone who knowingly provides financial support to terrorists under the guise of humanitarian relief.” 

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For the first time ever, Greece has responded to a request from Macedonia for provision of information relating to a money laundering investigation.  Macedonia’s FIU (the Office for Money-Laundering/Countering the Financing of Terrorism – OMLCFT) has previously sent about a dozen requests to Greece but received no response.  This was raised at the meeting of the Egmont Group that is currently underway in Qatar, and the Greek representatives at that meeting said that they had acted under direct instructions from the Greek Foreign Minister Dora Bakoyannis to ignore any correspondence mentioning the constitutional name of the Republic of Macedonia.  The sudden change of heart appears to be the result of pressure brought to bear at the Egmont Group meeting.

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The Ghanaian Attorney General and Minister of Justice, Betty Mould-Iddrisu, has announced a review of the Anti-Money Laundering Act and the Serious Fraud Office Act, and said that her country would establish a financial intelligence unit.  In response, Juliet Serwah Odei-Asare of the International Action Group Against Money Laundering (GIABA – an FATF-style regional body) said that following an onsite evaluation visit to Ghana in April 2009, GIABA acknowledged the work done so far by Ghana in the fight against money laundering and terrorist financing but feared that certain international standards could not be implemented because of Ghana’s cash-based economy.

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South Africa has appointed a relatively unknown police officer to head its new serious crimes agency.  Anwa Dramat, deputy police chief of the Western Cape province, will head the Directorate for Priority Crime Investigation (DPCI) when it is launched in July.  Mr Dramat was an underground resistance fighter against white minority rule and served time in Robben Island jail as a political prisoner.  He has worked in the crime-ridden suburbs outside Cape Town, but has little experience of tackling white-collar crime.

The predecessor of the DPCI was the Directorate of Special Operations – familiarly known as the Scorpions.  The Scorpions investigated and arrested several prominent politicians, including national police chief Jacki Selebi and Winnie Madikizela-Mandela, the former wife of ex-President Nelson Mandela, but may have pushed their luck too far when they pressed corruption charges against Mr Zuma.  The charges were dropped shortly before his election in April, and the Scorpions were disbanded by the African National Congress party in January 2009.  The DPCI will inherit more than 600 cases from the Scorpions.

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Huan Di Zhang and Hui Gao, who ran a BP petrol station in Rotorua in New Zealand, are believed to have fled to China after a banking error involving millions of dollars.  They applied to Westpac Bank for an overdraft of NZ$10,000 [about £3,900], and $10 million [about £3,900,000] was mistakenly paid into their account.  $4 million has already been recovered, and according to Westpac media relations manager Craig Dowling, “Westpac is pursuing vigorous criminal and civil action to recover a sum of money stolen”.  New Zealand police have asked Interpol to help them find the couple.  Banking Ombudsman Liz Brown confirmed that it is a criminal offence for someone to spend money accidentally put into their bank account if they know the money is not theirs, and Massey University banking lecturer Claire Matthews said that the pair would be hard pressed to argue they honestly believed they were entitled to such a huge sum of money. 

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Luxembourg has signed an agreement for the exchange of bank information on request in all tax matters with the US.  This is the first agreement by Luxembourg with an OECD country which meets the OECD standard for information exchange.  In an announcement, the two countries said that they have modified an existing bilateral tax treaty dating from 1996 by adding a protocol that updates the information exchange provision of Article 28 of the treaty in accordance with the exchange of information standard of the OECD Model Tax Convention.  In the past fortnight, Luxembourg has also signed  an agreement with Bahrain that provides for exchange of information to the OECD standard, and similar negotiations are under way with other countries to update the exchange of information provisions in Luxembourg’s bilateral treaties with them. 

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The US Congress has approved the final version of a bill intended to provide prosecutors with more tools to combat financial fraud.  The Fraud Enforcement and Recovery Act is now awaiting the signature of President Obama, whose administration has strongly supported the legislation.  The bill brings mortgage lenders under the same anti-fraud statutes that govern financial institutions, which gives prosecutors a powerful tool to seek forfeiture in mortgage fraud cases.  (Historically, prosecutors have needed to build a wire or mail fraud case in order to pursue forfeiture in the case of a non-bank lender.)

Additionally, the bill closes a loophole in US anti-money laundering laws that would have placed some of the proceeds of crime out of the reach of federal forfeiture statutes.  The bill will require federal prosecutors to seek approval from a US Attorney or other Department of Justice official before charging a suspect with money laundering in cases where the crime triggering the money laundering charge is already the basis for another criminal charge.  This comes in response to the Supreme Court decision in the case of United States v Santos last year.  In a ruling that dismayed prosecutors, the Court found that the “proceeds” of criminal activity referred only to the criminal’s net gain from illegal activity; the new bills changes the definition of “proceeds” to mean the “gross receipts” of a criminal enterprise. 

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Italian police have arrested 68 suspected members of the Naples mafia, the Camorra, and seized about 5 million euros.  Those detained are linked to a breakaway faction of the Camorra and are wanted on suspicion of murder, drug trafficking and money laundering.  This latest crackdown follows the arrest in Marbella at the weekend of the alleged head of the breakaway faction, Raffaele Amato.  In recent years the Camorra has been blamed for dozens of deaths, as rivals struggle for control of illegal drugs and weapons.  Their activities have sparked a public outcry; earlier this year, 100,000 people staged an anti-mafia march in Naples.  Amato himself is accused of eight murders between 1991 and 1993, and of being involved in importing cocaine into Italy.  He has been on the run since 2006, living under a false name.

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The UK’s Law Society has chosen 192business and Accuity as its preferred suppliers for anti-money laundering e-verification, and has negotiated preferred pricing for Law Society members.  In its press release the Law Society makes the points that “firms… should still take steps to ensure that they understand the services being offered and how those services can be used to meet their anti-money laundering obligations with respect to their particular firm and client demographic” and that “firms are not required to use the Law Society’s preferred suppliers for e-verification as part of their AML compliance, nor are they precluded from using other reputable e-verifiers”.  To the best of my knowledge, this is the first time in the UK that a trade body has made such a recommendation of specific commercial suppliers. 

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Michelle Davis, a former police detective from Newark, New Jersey has been sentenced to a year in prison then three years of supervised release for helping a drug dealer hide profits from his gambling operation.  The operation was run out of a Newark social club by Rasheem Small, who netted US$10,000 a day in gambling proceeds; he was also a partner in a $100,000-per-week heroin business.  David helped Small launder the proceeds of his crimes by, among other things, registering his $49,000 Range Rover in her name and accepting $6,000 in cash from him then writing cheques to pay his air-conditioning bills.  Small was sentenced in April 2009 to eight-and-a-half years in prison.  Davis began her career with the Newark Police Department in 1996 and was suspended without pay when she was arrested in October 2008. 

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Carlos Arturo Sanchez-Corovado is the first man ever to be extradited from Colombia, and he has pleaded guilty at Southwark Crown Court to the laundering of £250,000 and to using fake travel documents.  In 2004 and 2005, 31 members of a UK-based drug-trafficking gang, said to have links to the notorious Cali drugs cartel, were jailed for between one and 19 years, but shortly before the arrests, Sanchez-Corovado fled back to his native Colombia.  British officials cited an extradition treaty, dating back to 1889, to demand his return and after a two-and-a-half-year legal battle, led by the Crown Prosecution Service (CPS) and the Serious Organised Crime Agency (SOCA), a Colombian judge ruled that he should be sent back to Britain.  When he was arrested in May 2008, Sanchez-Corovado was working as a taxi driver.  He is due to be sentenced in June.

Although he was a relatively minor player in the gang, this prosecution sets a major precedent.  “A lot of the work was around the principle involved – now we have won that argument, other extraditions should be much more straightforward,” said a CPS source.  “The message is, ‘You can run, but you can’t hide’.”  Police sources say that they are already actively planning extraditions of other drugs fugitives in Colombia.

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Eight people, including several Jamaicans living in south-east London and a man from Cambridge [home of Thinking about Crime Limited], have been arrested during raids following an investigation into a £500,000 money laundering network.  All eight are now in custody in London police stations.  Operation Dasher involved a lengthy investigation by detectives from the Metropolitan Police’s financial investigation unit and colleagues in Jamaica and Miami.  It began after a criminal network was identified in south London sending regular sums of cash to associates in Jamaica via various money bureaux; it is believed that the cash was generated by street drug sales, and that some was invested in properties in Florida.

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Marc Dreier, a prominent Manhattan lawyer, has pleaded guilty to using impersonations and fake documents to defraud hedge funds out of more than US$400 million.  His plea to charges of conspiracy to commit securities and wire fraud, securities fraud, wire fraud and money laundering came with no plea agreement with prosecutors, so he faces up to 145 years in prison without the expectation of leniency.  Dreier once ran his own firm of 250 attorneys, Dreier LLP, and was arrested by Canadian authorities in early December 2008 on impersonation charges.  Freed on bail, he was arrested days later when he arrived in New York on a flight.

In a statement in court, Dreier said that between 2004 and 2008 he had cheated hedge funds, investment funds and several individual investors with the sale of fictitious securities.  He admitted arranging meetings in which impersonations of representatives of businesses purportedly handling the fictitious securities would fool clients into believing the transactions were not fraudulent.  He also admitted supplying fake financial statements to support the lies.  “I understood everything I was doing was illegal,” he concluded.  Prosecutors say Dreier spent much of the stolen money on a lavish lifestyle that included $39 million of artwork, beachfront homes on both US coasts and an $18.5 million yacht.  $100 million in assets have been identified that can be pursued on behalf of the fraud victims.  US District Judge Jed Rakoff permitted Dreier to remain free on bail until his sentencing on 13 July. 

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Five members of a County Durham family have been charged in connection with an alleged million-pound European funding fraud.  Thomas Farrier and his daughter Melissa have been charged with fraud and money laundering, while his wife Marie, their daughter Melanie and Melanie's husband James Tunney have been changed with money laundering.  The charges are the result of an investigation into two companies, Development and Research Initiatives Limited and Meteor Enterprises Limited, both with registered offices in Cornsay Colliery.  The companies have allegedly been paid a total of £986,031 from the European Social Fund, to fund a series of initiatives and training courses designed to help disadvantaged people find work. 

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After a two-year investigation, Dubai’s Attorney-General Essam Eisa Al Humaidan has referred four individuals and six companies to the Dubai Misdemeanours Court where they will be prosecuted for allegedly laundering Dh 830 million [about £150 million].  The four – an Emirati employee, a British executive, an Indian financial controller and a Pakistani general manager – have been charged with laundering money which they acquired from defrauding the UK’s Revenues and Customs Prosecution Office (RCPO) and the government of the Netherlands Antilles.  They are also charged with forging documents, including a contract and two digital transfer receipts, which they submitted to the UAE Central Bank in response to the bank’s questions about certain transactions.  The six companies are charged with aiding and abetting the money laundering operation through their representatives, the Emirati employee and the British executive.  All four individual accused have denied the charges and are on bail.

In a statement to the press, the Attorney General said, “In August 2006, the Anti-Organised Crime Department were tipped that the suspects’ and the companies’ bank accounts showed a suspicious cash flow of £150 million within the UAE, England and Netherlands.  Initial interrogations revealed that the cash resulted after coning and defrauding the RCPO and the Netherlands Antilles.  The suspects were importing goods to European countries, trading them for bogus purchase contracts to increase the market value and exporting them, then requesting the UK authorities to repay them 17.5% of the Value Added Tax.  They used to re-import the same goods from different inlets and through other companies.” 

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Two former Bank of China managers and their wives have been jailed in the US for stealing US$485 million [about £320 million] and laundering it through banks and casinos.  Xu Chaofan and Xu Guojun were sentenced to 25 and 22 years respectively while their wives Kuang Wan Fang and Yu Ying Yi were sentenced to eight years each.  The four were also been ordered by the Las Vegas court to pay back $482 million.  In 1991, the men devised a scheme to embezzle money from the Bank of China and then launder it through false corporations and personal accounts in Hong Kong, Canada and the US.  They gambled heavily at Las Vegas casinos, placing bets of up to $80,000.  They also obtained false identities and entered into sham marriages with US citizens to enable them to settle in the country.  They were arrested in 2004 and found guilty in August 2008.  A third manager, Yu Zhengdong, pleaded guilty and co-operated with investigators; he was later jailed in China. 

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A French magistrate, Françoise Desset, has decided to investigate claims that three African leaders invested millions of dollars in embezzled funds in property and other goods in France.  The three leaders in question are Omar Bongo of Gabon, Denis Sassou-Nguesso of the Democratic Republic of Congo and Teodoro Obiang of Equatorial Guinea.  The complaint against them was filed in December 2008 by anti-corruption agency Transparency International (TI); it is not the first complaint that has been made against them, but it is the first that investigating magistrate Madame Desset has decided to take up.  TI claims that the three African leaders invested millions of dollars in luxury property, cars and other goods in France, using money that rightfully belonged to their people.  However the case evolves, Daniel Lebegue, president of TI’s French chapter, says that the magistrate’s decision has given TI the legitimacy to pursue other claims against corrupt leaders elsewhere in the world.

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The Bank of Italy has taken steps against a savings bank in the tiny state of San Marino after several managers were arrested there on suspicion of money laundering.  Italy’s central bank has placed the Bologna-based Delta credit company and the Sedici bank, which are both controlled by the Cassa di Risparmio in San Marino, under trusteeship and has named special commissioners to manage the situation.  The Cassa di Risparmio has been stripped of its authority to own stakes in Delta and Sedici because of “deficiencies” in San Marino’s safeguards against money laundering, according to a statement issued by the Bank of Italy.  Italian police have arrested several top managers of the Cassa di Risparmio and Delta.  The San Marino government said that it was “deeply concerned”, and pledged to “adjust San Marino’s system to [international] transparency criteria”. 

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A former Suriname government minister has been sentenced to twelve years in prison for money laundering and bribing a witness.  Siegfried Gilds, a former trade minister, says that he is innocent and will appeal.  Gilds is the second ex-minister from the ruling New Front coalition led by President Ronald Venetiaan to be found guilty on criminal charges: in December 2008, former minister of public works Dewanand Balesar was imprisoned for two years for corruption.  Gilds was found guilty of laundering drug money on behalf of a relative in the Netherlands by purchasing houses and developing real estate properties in Suriname between 2000 and 2005.  The relative has been sentenced to two years in prison in the Netherlands.  During his tenure, Gilds strongly supported the anti-money laundering activities of his government and championed the anti-money laundering laws passed in September 2002.

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In a follow-up to a story dated 23 April, a long-awaited anti-money laundering law has been passed in Guyana after spending almost two years in a Special Select Committee.  The Anti-Money Laundering and Countering the Financing of Terrorism Bill provides for oversight of the export and insurance industries, real estate, and alternative remittance systems; establishes the Financial Intelligence Unit (FIU) as an independent body that answers only to the President; and covers freezing and forfeiture of suspected criminal assets.  Finance Minister Ashni Singh said that it is among the more modern pieces of money laundering legislation in the Caribbean, and “goes beyond the traditional pool of licensed financial institutions such as banks and provides for reporting entities to cover not only traditional licensed financial institutions but also insurance companies, money transfer agencies, cambios and credit unions among others”.

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The owner of Wonder Wok, a takeaway restaurant in Barrow-in-Furness, her boyfriend and two other takeaway shop owners are on trial for laundering more than a million pounds between May 2005 and April 2008.  The court has been told that Che Linshu and her boyfriend Wen Tai also implicated a young mother living on benefits, who became an innocent dupe Che asked her to transfer cash to a province of China.  The prosecution claims that the money is the proceeds of drug sales.  The situation was uncovered when a bank reported that a young woman, known to them to be unemployed and living on benefits, had attempted to send £24,000 to a bank account in China.  The young woman sometimes helped out at the Wonder Wok in exchange for meals, and Che had convinced her to take the cash to Barclays in Barrow rolled up in a plastic bag.  During their investigation, the police discovered some £121,562 was sent by Che and Wen to China over about a month – but £24,000 of that was intercepted.  The recipients were all residents of the Fuquing province in China.  The trial continues and is expected to last around five weeks. 

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The Isle of Man Gambling Supervision Commission (GSC) has issued a consultative draft of its proposed anti-money laundering guidance notes for the online gambling sector, as required by the Criminal Justice (Money Laundering — Online Gambling) (No. 2) Code 2008 which came into operation on 18 December 2008.  GSC Senior Inspector Paul Davenport said that the consultation is designed “to gather information, views and evidence from which the GSC can make an informed decision on the content of the proposed Guidance Notes, so that, when formally published, that content will reflect the most appropriate and helpful advice possible.”  The deadline for written responses is 15 May 2009. 

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Eugenio Montoya Sanchez, a Colombian who supervised money laundering for a cocaine cartel, has been sentenced to thirty years in prison in Miami.  Montoya pleaded guilty in January to drug trafficking and obstruction of justice charges, the latter involving his role in setting up the torture, killing and dismemberment of a cartel associate suspected of cooperating with authorities.  Montoya is the brother of Diego Montoya Sanchez, the purported mastermind of Colombia's North Valley cartel, who is also in custody in Miami but has pleaded not guilty to cocaine trafficking, money laundering, witness retaliation and obstruction of justice.  Another brother, Juan Carlos Montoya Sanchez, is already serving a 22-year prison sentence in the US for his role in the drug cartel.

Eugenio Montoya, who has been cooperating with US authorities, previously admitted his role as a top financial manager of the cartel.  Among his duties was handling a series of so-called “stash houses” in Colombia where about US$20 million in US currency was hidden.  Montoya also purchased real estate and ran a computer equipment business. 

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Former world boxing champion Kendall Holt has pleaded guilty to money laundering.  The charge relates to drug deals made by Holt’s manager Henry Cortes, who pleaded guilty in February 2009 to drug trafficking.  Holt admitted in court in New Jersey, US that several times in 2007 and early 2008 he picked up bags of money and delivered them to Cortes; he confirmed that he knew the money was from drug transactions.  Holt won the WBO light welterweight title in July 2008 and defended it once before losing it to Timothy Bradley on 4 April 2009.

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In a follow-up to a story dated 27 March 2009 (see Old news page), financial adviser Ted Cunningham has been sentenced to ten years in prison for money laundering.  He was found guilty in March of laundering more than £3 million in cash from the £26.5 million robbery of a Northern Bank cash centre in Belfast in December 2004.  At his trial, Cunningham claimed that the £2.3 million cash found in the basement of his home in February 2005 had come from the sale of a gravel pit in Offaly to Bulgarian businessmen.  Cunningham’s son Timothy pleaded guilty to one count of laundering, and has been given a three-year sentence suspended for three years.

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The South American country of Guyana has finally presented its anti-money laundering and countering the financing of terrorism bill to its national assembly, after it has spent almost two years at the parliament’s select committee.  The bill provides for the establishment of an FIU, for reporting requirements, and for powers to prosecute money laundering, terrorist financing and other financial crimes and the allow for the forfeiture of the proceeds of crime and terrorist property.  It will also pave the way for Guyana to establish an offshore banking facility.

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Vuyiswa Yoli, a South African working as a nurse in Guernsey, has been jailed for eight months for attempting to steal about US$45 million [£31 million] from a local exchange bureau.  She was arrested after she tried to convert counterfeit dollars into sterling at the Batif Bureau de Change.  Detectives said Yoli was part of a scam in which fraudsters offered her a share of money held in a bank in Nigeria; after sending much of her own money to the fraudsters, she ended up trying to convert the cash for them.  She will be deported from Guernsey after serving her sentence.

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Tom Wise, a British member of the European Parliament sitting as an Independent MEP for East Anglia, has been charged with false accounting and money laundering.  The Crown Prosecution Service (CPS) said the UK police inquiry followed a news report in 2005 concerning Mr Wise’s use of allowances, and similar charges have also been brought against Mr Wise’s then researcher Lindsay Jenkins.  The offences are alleged to have taken place between October 2004 and September 2005, and European Anti-Fraud Office (OLAF) began an investigation into Mr Wise’s use of allowances.  OLAF then passed the information to Bedfordshire Police Economic Crime Unit for investigation.  Mr Wise and Ms Jenkins are due to appear at Westminster Magistrates’ Court on 27 April. 

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Bermuda has signed eight new tax information exchange agreements (TIEAs), with seven Nordic economies (Denmark, Sweden, Finland, Greenland, Iceland, Norway and the Faroe Islands) and with New Zealand.  This brings to eleven the number of such agreements Bermuda has entered into: it has previously signed agreements with Australia, the UK and the US.

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A man on trial in Malta for money laundering has filed an appeal alleging that Malta’s money laundering law is not in line with the European Convention on Human Rights.  Morgan Ehi Egbomon, a Nigerian national, was charged with money laundering after being caught attempting to fly out through Malta International Airport with US$144,000 and €27,000 in cash.  The arresting officer testified that Egboman had failed to explain the money’s origin and so, according to Maltese law, could go to prison for fourteen years.  Egboman’s defence lawyer Joe Brincat has now said that according to Maltese law, money laundering is a criminal act only if it can be proven that the money involved was tied to criminal activity – and not if the criminal link cannot be proven.  The appeal claims that although the burden of proof was put on the prosecution in most cases, it was placed on the defendant on money laundering charges, contrary to European laws, and so the law is excessive and contrary to human rights.

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A US court of appeal in Atlanta, Georgia has ruled that the US can send former Panamanian dictator Manuel Noriega to France for trial on money laundering charges without violating his rights as a prisoner of war.  Noriega was captured in Panama in January 1990 after American troops invaded the country, and he was declared a prisoner of war during his subsequent drug trafficking trial in Miami.  He completed his US prison sentence in September 2007 but has remained in detention in Miami pending completion of his appeal.  He was convicted in absentia in France of laundering millions in cocaine profits through French banks and using drug money to buy three luxury apartments, but will get a new trial if he is extradited.  His lawyers had argued that extradition to France would violate his rights as a prisoner of war under the Geneva Conventions, and said that he should be repatriated to Panama.  One of his lawyers hinted that they would appeal to US Secretary of State Hillary Clinton, who has to sign off on Noriega’s extradition.

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In a follow-up to the list published by the OECD on 2 April 2009, commitments to the internationally agreed tax standard on exchange of information have been made by Costa Rica, Malaysia, Philippines and Uruguay.  These were the four jurisdictions surveyed by the OECD Global Forum which had not made commitments when the initial list was published.  They have now officially informed the OECD that they commit to co-operate in the fight against tax abuse, and that this year they will propose legislation to remove the impediments to the implementation of the standard and will incorporate the standard in their existing laws and treaties.  As a result, they have been moved to the category of “jurisdictions that have committed to the internationally agreed tax standard, but have not yet substantially implemented it” in the list.

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Henry Jones, a music executive from southern California, has been sentenced to twenty years in prison and ordered to pay US$28 million in restitution for money laundering and for his role in a fraud that cost investors $32 million.  The judge called Jones a “financial predator” who expressed no remorse for a scheme that cost some victims their homes.  Jones and two other men (already in prison for their crimes) convinced more than 500 people to invest in coal-mining and the supposedly “divinely inspired” sale of 20,000 tons of Middle East gold.  They spent most of the money on themselves – some of it on Jones’s music business.

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Following the G20 meeting and communiqué , the OECD Secretariat has provided a detailed report on progress by financial centres around the world towards implementation of an internationally agreed standard on exchange of information for tax purposes.  The report lists:

The Cayman Islands has signed bilateral Tax Information Exchange Agreements with seven Nordic economies (Denmark, Sweden, Finland, Greenland, Iceland, Norway and the Faroe Islands) to permit the exchange of information for tax purposes.  They bring to eight the number of such agreements entered into by the Cayman Islands, as it already has a tax information exchange agreement with the US.  In addition to these TIEAs, the Cayman Islands has also enacted legislation that allows it to exchange information unilaterally with countries that it chooses to identify.

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Four people dressed as smurfs have been arrested in Amsterdam and charged with money laundering.  The quartet were living up to their nickname within the laundering world, and worked for a local criminal gang by paying small amounts of cash into various banks in order to escape the notice of staff.  However, the blue and white costumes and large floppy hats (clearly visible on bank security camera tapes) drew attention, and the police were called.  The leader of the group, identified only as “Papa”, said to reporters gathered outside the police station in Keizerstraat, “We used to earn a good living as children’s entertainers, but with the economic downturn, parents are just hiring videos instead.  We’ve already got the bad reputation, so we might as well earn it.”  The four are due in court next week.

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Michelin, Adidas and Total subsidiary Elf are under suspicion of depositing cash in bank accounts in Liechtenstein.  French authorities say the money was earned through business dealings in France and is therefore liable for French taxes.  All three firms have denied being under investigation for money laundering, while oil giant Total and tyre manufacturer Michelin have formally denied holding banks account with LGT.  The preliminary enquiry gets underway later this week.

According to Budget Minister Eric Woerth, France’s finance ministry has been investigating 64 family-owned firms for suspected tax evasion; sixteen have since come clean and paid their overdue taxes and penalties.  The tax evasion was exposed in 2008, when Heinrich Kieber, an employee of LGT bank in Vaduz in Liechtenstein, sent a DVD with a list of his clients to the German secret service. 

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The Lebanese FIU, the Special Investigation Commission (SIC) has released a report covering its activities in 2008,  During the year, the SIC received a total of 226 reports of suspicious activity, and 67 of these were passed on to the judicial authorities.  Of the 226 cases investigated by the SIC, 77 involved cross-border cash, 37 counterfeiting and forgery, 14 terrorism and transfer of funds, 11 embezzlement of private funds, 6 drugs, 5 embezzlement of public funds, 2 organised crime and 74 were not classified.

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In a letter to the Organisation of Economic Co-operation and Development (OECD), the Republic of San Marino has announced its willingness to strengthen its participation in international efforts to combat non-compliance with other countries tax laws by entering into bilateral agreements to exchange information in all tax matters in accordance with the OECD standard.  San Marino is also prepared to amend its legislation, including legislation on bank secrecy, before the end of September 2009 in order to allow for the effective application of these agreements. 

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The UK government is introducing a National Fraud Strategy with the aim of addressing a crime that is estimated to cost the UK £14 billion a year.  The three-year initiative, being launched on 5 May 2009, will cover England and Wales and involves the establishment of a national fraud reporting centre and new legal powers for prosecutors and crown courts.  The new measures will also allow prosecutors to make deals with defendants that could avoid long and costly trials.  Currently there is no central reporting procedure for fraud in England and Wales but once the centre is up and running, individual victims of fraud as well as banks and businesses will be able to make contact with the new body by email or phone.

The strategy has been developed by the National Fraud Strategic Authority (NFSA), an executive agency of the Attorney General’s Office, which will co-ordinate counter-fraud activity.  According to NFSA chief executive, Sandra Quinn: “There is a lot of organised fraud out there and often it is reasonably small amounts of money but it’s being done thousands of times.”  Earlier this week, UK payment services association APACS reported that online banking fraud rose 132% during 2008, compared to a year earlier. 

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During the past week, new tax information exchange agreements (TIEAs) have been signed by all three of the UK’s Crown dependencies.  The Isle of Man signed an agreement with France (bringing its TIEA tally to 14), Jersey signed agreements with France and Ireland (13 in total), and Guernsey signed agreements with France, Germany and Ireland (again, 13 in total).  Commenting on the signings, Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, said: “At a time when many countries have been promising change, Guernsey, Jersey and the Isle of Man have been delivering.” 

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Lance Poulsen, founder of National Century Financial Enterprises Inc. (an Ohio-based health-care financing company that filed for bankruptcy in 2002), has been sentenced to 30 years in prison for a US$2.9 billion fraud.  Poulsen was convicted in October 2008 of fraud, conspiracy and money laundering.  This is (to date) the longest corporate fraud sentence in US history.  He is already serving ten years for a separate conviction for trying to bribe the main witness against him, and this new sentence will run concurrently.  Rebecca Parrett, a former National Century executive and Poulsen’s co-conspirator, is on the run and was sentenced in absentia to 25 years in prison.  They were each ordered to pay $2.38 million in restitution.

District Judge Algenon Marbley said, “Mr Poulsen is an architect of a fraud of such magnitude that it would make sophisticated financial analysts shudder.  It is considered the largest fraud at a private company in the United States.  Mr Poulsen perpetrated this fraud over a seven-year period and went to enormous lengths to conceal it.  [He] would have been a model American entrepreneur.  He was successful in business until avarice and greed took hold and clouded his judgment.”

After the initial conviction, Parrett was released on bail to her home in Carefree, Arizona in March 2008, and failed to report to be fitted with an electronic tagging device.  Her sixth husband, left behind in carefree, has no idea where she is. 

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Irish financial adviser Ted Cunningham has been found guilty of laundering more than £3 million in cash from the £26.5 million Northern Bank robbery.  A gang stole the money from the headquarters of the Northern Bank in Belfast in December 2004 in a raid blamed on the IRA.  Cunningham said that £2.3 million found in the basement of his home in February 2005 came from the sale of a gravel pit in Offaly to Bulgarian businessmen.  Cunningham’s son Timothy pleaded guilty, near the start of his father’s ten-week trial, to four charges of money laundering.  Father and son will be sentenced on 24 April 2009. 

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The Organisation for Economic Co-operation and Development (OECD) has welcomed an announcement by Monaco that it is prepared to enter into agreements for the exchange of information in all tax matters in accordance with international standards developed by the OECD and recognised by the United Nations.  In a recent letter to the OECD, the Principality of Monaco stated that it is prepared to expand the scope of an anti-fraud agreement that it is negotiating with the European Commission so that the agreement fully incorporates the OECD standards.  The letter expressed the hope that this agreement can be finalised by the end of 2009, so as to allow Monaco to exchange information in all tax matters with all EU member states that are signatories to the agreement.  In addition, Monaco announced that it is prepared to negotiate tax information exchange agreements with all countries that wish to do so, and in particular with those members of the G-20 that are not also members of the EU. 

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Guernsey has signed a Tax Information Exchange Agreement (TIEA) with France at a ceremony in Paris.  A similar agreement will be signed with Germany on 26 March, and one with Ireland by the end of the week.  Under the terms of these TIEAs, Guernsey and its co-signatories will, on request, exchange bank and other information relating to both criminal and civil tax matters.  The agreement with France will result in exemptions being available from certain French tax anti-abuse provisions, while that with Ireland will provide relief from double taxation in a number of specific areas.  This brings to thirteen the total number of TIEAs signed by Guernsey, and more are planned for the coming weeks.

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Indonesia and Bangladesh have signed an agreement to co-operate in the fight against money laundering and the funding of terrorism.  Wahyu Hidayat, deputy head of the Financial Transaction Reports Analysis Centrer (PPATK – Indonesia’s FIU) said that the agreement was signed by PPATK head Yunus Husein and MD Abdul Quasem, executive director and head of the FIU of Bangladesh’s Central Bank’s Anti-money Laundering Department.  Hidayat said that both countries would confidentially exchange financial intelligence information as part of efforts to reinforce international co-operation in fighting against money laundering and the financing of terrorism.  Corruption in particular is a big problem for both Indonesia and Bangladesh.  Indonesia has made similar agreements with 28 other countries.

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Property prices in Kenya have skyrocketed in the past few years, partly because more money may be finding its way there from pirate activities in neighbouring Somalia.  According to real estate agents in Nairobi, property prices in many neighbourhoods in the capital have doubled, and in some cases tripled, since 2006. And in the coastal city of Mombasa, new residential and commercial buildings are being sold for unprecedented prices, even before the buildings are completed.

An analyst on Kenyan economics and public policy, Robert Shaw, says a large chunk of the money used to buy property in Kenya these days is believed to be a part of the millions of dollars in ransom that ship owners have paid to Somali pirates.  In 2008 alone, pirates seized 42 vessels and their crew in the Gulf of Aden and the Indian Ocean, possibly earning as much as US$150 million [about £107 million].  The Somali community of Eastleigh in Nairobi is one of the fastest-growing communities in the capital, and law enforcement officials believe pirates are using Eastleigh’s cash-based money transfer network to launder at least a part of the ransom money there.  Officials also believe that drug traffickers, who launder an estimated US$100 million through Kenya’s financial system every year, have invested heavily in Kenya’s property market.  Shaw says that Kenya is a target for money laundering for two reasons: “Firstly, we still do not have in place anti-money laundering legislation.  And secondly, the government’s stand on corruption is very weak.”  In April 2008, Kenya’s parliament put forward a bill to combat money laundering, but it has yet to be enacted into law.

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The US Federal Reserve has announced that French bank Société Générale (SocGen) has agreed to tighten its money laundering oversight at its New York branch after “deficiencies” were found there.  Examiners “identified compliance and risk management deficiencies” in operations at the branch, including lapses of compliance with federal and state laws and regulations relating to anti money laundering and bank secrecy.  Under the terms of the agreement reached with SocGen on 17 February 2009, the French bank has 120 days from the date of the agreement to review its operations and report to the US central bank how it plans to ensure legally compliant operations.

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Israel Beiteinu leader Avigdor “Yvette” Lieberman will be interrogated by police over money laundering upon taking office as foreign minister.  Prosecutors told High Court judges that once Likud head Benjamin Netanyahu forms the new government, Lieberman will be summoned to respond to the charges brought against him.  He is suspected of using a bank account registered in his daughter’s name in Cyprus to launder money.  The investigation has been ongoing for a decade, and police suspect that the laundering is still happening.  However, High Court judges have criticised the investigation process and given prosecutors sixty days to deliver their response so that a final decision can be reached over an indictment.

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Switzerland has agreed to accept concessions on bank secrecy.  However, it will respond only to “concrete and justified” requests for data sharing, and will still protect banking customers from “unjustified watching from abroad”.  This is the first time that Switzerland has agreed to sign up to the rules set out by the Organisation for Economic Co-operation and Development (OECD), having previously stated that it would not compromise its long-standing banking secrecy principles.

In its statement, Switzerland said that any exchange of banking information with other countries would be done on a “case by case” basis, and that it would now respond to overseas requests for information in cases of suspected tax evasion, and not just tax fraud.  (Under Swiss law, tax evasion is the deliberate concealing of assets, while tax fraud also involves lying on official documentation.)  Unlike in most countries, tax evasion is a civil offence in Switzerland – only tax fraud is a criminal matter.  This change comes as UBS, Switzerland’s largest bank, is in dispute with US authorities, who are continuing to demand that UBS hands over the details of 52,000 American account holders they suspect of tax fraud.  While UBS has given the US details of 300 American account holders, it has so far rejected a request to hand over details of all 52,000.

Andorra, Liechtenstein, Austria and Luxembourg have also just agreed to sign up to the OECD rules – all had come under increasing pressure to reform their banking sectors.  The agreements were announced ahead of a meeting of finance ministers and central bank governors from the G20 group of industrialised nations being held near London.  UK Prime Minister Gordon Brown said the changes were “the beginning of the end of tax havens – tax evasion, which costs the global economy billions of pounds each year, will become more difficult in future”.

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US financier Bernard Madoff has been jailed after pleading guilty to all eleven charges surrounding an estimated $50 billion [about £35 billion] Ponzi fraud he had been running since the early 1990s.  The charges were four counts of fraud, three counts of money laundering, and one charge each of making false statements, perjury, making a false filing to the SEC, and theft from an employee benefit plan.  A former chairman of the Nasdaq stock market, Madoff has been a Wall Street figure for more than forty years.  He told the court, “I cannot adequately express how sorry I am for what I have done.”  He said that when he started the fraud, he had hoped it would only be for a limited time, but “I realised that my arrest and this day would inevitably come”.  While Madoff insists he acted alone, attention is now likely to switch to whether others at his company were involved.  Prior to having his bail revoked, Madoff had been under house arrest at his luxury Manhattan apartment.  He could receive up to 150 years in prison when he is sentenced in June, and the 70-year old will inevitably spend the rest of his life behind bars.

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The Serious Fraud Office (SFO) is considering charging Bernard Madoff‘s London operation under money laundering legislation.  Madoff, who has been accused of running a $50 billion [about £35.2 billion] Ponzi scheme by New York prosecutors, also had a small office in Mayfair.  The SFO launched a criminal investigation into his business in February and it is still unclear whether the SFO has actually discovered evidence of money laundering, but legal experts say it could be easier and quicker to prosecute on these grounds rather than, say, fraud.  “Proving fraud can be difficult when you’re dealing with complex structures and money flowing across different countries,” said SFO spokesman Sam Jaffa.  While the SFO acknowledges that Madoff had legitimate operations in London, it is examining whether money was obtained fraudulently in the US and transferred here. 

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The Revenue and Customs Prosecutions Office (RCPO) has secured the extradition from Switzerland of convicted £38 million ‘carousel’ fraudster Raymond Woolley.  In December 2002, Woolley was convicted of conspiring to cheat the public revenue and sentenced to nine years’ imprisonment, but he escaped from Sudbury Prison on 23 February 2005 and it is believed that he spent some time in Spain before being tracked to Switzerland.  A confiscation order in the sum of £9.5 million made against him remains unpaid.

The extradition is the result of over two years’ painstaking work by RCPO and HM Revenue & Customs (HMRC).  The extradition hinged on RCPO’s ability to demonstrate to the satisfaction of the Swiss authorities that Woolley was convicted of a deliberate and calculated theft from the public purse as opposed to simple tax evasion.  Convincing them of this distinction was vital as, under Swiss law, tax evasion is not an offence for which Woolley could have been extradited.  Woolley pursued a number of appeals against the decision to extradite him. However, on 26 February, the Federal Supreme Court of Switzerland dismissed his final appeal and his surrender to the UK was ordered.

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The father of racing driver Lewis Hamilton’s ex-girlfriend has been charged with fraud and money laundering.  Hong Kong tycoon Ma Bo-kee, who sponsored Hamilton when he was a struggling rookie, is accused of deceiving the creditors of his Hong Kong company, once the world’s third-biggest eyewear manufacturer.  The offences are alleged to have occurred between May 2004 and April 2005, while Ma’s daughter Jodia was dating Hamilton.  In his autobiography, Hamilton describes how Jodia offered to help with sponsorship in November 2004.  In 2005, when Hamilton was making a name for himself in Formula 3, Ma’s empire began to crumble after banks called in multi-million pound debts.  He and other directors were arrested as police began a fraud investigation.  Hamilton ended his relationship with Jodia soon afterwards, saying in his autobiography that he knew “her parents needed her back home”.  Ma and the other defendants are also accused of defrauding about fifteen different banks into giving credit of more than £78 million to the failing company by falsifying invoices, purchase orders and other supporting documents to make it appear that the firm was a going concern.

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A professional gambler, Jatinder “Micky Singh” Batth, has been sent to prison for eighteen months for money laundering.  Before becoming involved with crime, Batth had staked more than £100 million over a six-year period; he had his own chair at a prestigious casino in London popular with sheikhs, and owned a £1 million luxury apartment overlooking Lords cricket ground and a £1 million house in his home city of Birmingham.  Once organised crime bosses found out about Batth’s gambling success, they recruited him to launder the proceeds of counterfeiting, credit card fraud and VAT fraud for them.  Batth and two accomplices were given holdalls of cash which they gambled at top casinos in Birmingham and London on key horse races and football matches.  Batth then withdrew “clean” money and handed it back to the crime syndicates so that no one would know of their involvement.  According to a source at HM Revenue and Customs, “Micky Singh had a professional reputation across the underworld.  Major crime figures relied on him to clean cash so it could not be traced back to them.  When it came to money laundering through the gambling industry, there was no one with a bigger reputation.” 

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A Chilean man with a broken leg has been arrested at Barcelona airport after his “cast” was found to be made entirely of cocaine.  Spain is a key entry point into Europe for cocaine from South America and the country is one of the highest consumers of cocaine in Europe, so airport officials pay close attention to flights arriving from South America.  The ruse was discovered after police sprayed the cast with a chemical that turns bright blue when it comes into contact with cocaine.  The man was also carrying six cans of beer and two hollowed-out stools that contained cocaine, making a total (with the cast) of 4.85kgs of the drug.  X-rays had shown the man was suffering from an open fracture of the tibia and the fibula, and a police spokesman said that “investigators are examining the possibility that these injuries were brought about voluntarily... to facilitate trafficking through security checks”. 

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Ellen George, who ran a property and boat company called Crompton Marine in Lowestoft in Suffolk with her partner Richard Davison, has been given a two-year suspended prison sentence.  Her business made more than £20 million from selling high-speed boats to drugs cartels.  Crompton Marine adapted the £350,000 RIBs (rigid inflatable boats, which are difficult to detect by radar) to carry six tons of drugs at speeds of up to 60 knots.  The profits were put into 142 properties in Lowestoft and George lived off the rents, but did not declare them to HM Revenue and Customs.  When she was arrested at her home, customs officers found £1.2 million of cash in a safe and £250,000 stuffed into a holdall under the stairs.  It was the largest amount confiscated by customs in the UK, and the cash was so contaminated by drugs that it was taken out of circulation.  The case was so complicated HM Revenue and Customs took five years to investigate.  George pleaded guilty to trying to defraud the Inland Revenue, possession of criminal property and helping someone else to retain criminal property. Her partner Richard Davison is on the run. 

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Rodrigo Molina, a Brazilian national living in Miami, has been found guilty of laundering US$13.5 million [about £9.5 million].  Molina was one of nineteen Brazilians involved in a fraudulent telemarketing scheme, which offered to purchase nearly worthless stock from foreign investors by offering them much more than the stocks were worth.  However, shortly before the stock transactions were to take place, the victims were asked to pay various advance fees for taxes, escrow payments or other services not actually required in legitimate transactions.  The money was wired into bank accounts, mostly in Miami, before the defendants abandoned the transactions and the victims lost their money.  Molina faces a maximum sentence of 20 years in prison on five counts of money laundering, 10 years on an additional five counts of money laundering and 20 years on a conspiracy charge, in addition to possible fines and terms of supervised release. 

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The FBI and NASA are investigating a professor and his wife for allegedly defrauding NASA out of hundreds of thousands of taxpayer dollars for their own personal use.  Samim Anghaie is the Director of the Innovative Nuclear Space Power and Propulsion Institute at the University of Florida, while his wife Sousan is president of New Era Technology Inc.  Authorities say that the Anghaies persuaded NASA to award New Era Technology “several fully funded contracts”, including nearly US$600,000 [about £415,000] to develop and study a uranium-related technology.  But the couple allegedly used most of that money to buy personal luxuries, including homes and vehicles for themselves and various relatives.  After receiving invoices documenting how the money was to be used, NASA would deposit money directly into New Era Technology’s account, but that money would be “diverted” to the couple’s personal accounts.  Charges of stealing federal funds and money laundering are likely. 

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US Attorney General Eric Holder has announced the arrest of 755 people as part of a major campaign against a notorious cartel based in Mexico; they will be charged with a range of offences including racketeering, drug smuggling, illegal possession of weapons, and money laundering.  “Operation Xcellerator” has targeted the Sinaloa cartel, which ships illegal narcotics from Mexico to the US and Canada.  In addition to the arrests, federal agents and police confiscated 23 tons of illegal drugs (including marijuana, cocaine, methamphetamine and heroin), three aircraft, three maritime vessels, nearly 150 vehicles and 169 weapons.

The acting administrator of the US Drug Enforcement Administration, Michele Leonhart, said the Sinaloa cartel is feeling the pressure: “We know the impact of our enforcement is being felt.  Since the beginning of 2007, cocaine prices have more than doubled, while purity has dropped by more than a third.  With this operation, we have denied the Sinaloa cartel and its networks nearly $1 billion in drug revenue.”  The Sinaloa cartel is also suspected of laundering millions of dollars in criminal proceeds from illegal drug trafficking activities.

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Two siblings who worked at an electronic money transfer company have admitted using the business to help launder more than AUS$90 million [about £41 million] in cash between Australia and Asia.  Hang Thanh Huynh, her brother Phat Ba Huynh, and a third man, Tam Tran, were part of an international syndicate, and Ms Huynh was once described by police as “one of the most significant money launderers in Australia”.  The Huynhs ran Long Thanh Money Transfer in west Melbourne and used that business and another in Sydney to transfer money for organised crime syndicates.  The trio was bailed on strict conditions, and further details of their roles in the syndicate are expected to be revealed at a pre-sentence hearing later this year. 

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Authorities in Sarajevo say the Bosnian Serb prime minister Milorad Dodik and several of his aides are under investigation for money laundering and abuse of office.  The spokesman for the State Prosecution office, Boris Grubesic, said he has received a report about Dodik from the state police.  According to local media, the report claims Dodik and his aides made questionable deals with some construction companies involved in building a highway and a new Bosnian Serb government building in Banja Luka, and diverted 74 million euros earmarked for the projects to their own accounts.  Dodik has hit back at the allegations, claiming that his political enemies are fabricating a case against him. 

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In its submission to the House of Lords Inquiry into Money Laundering and the Financing of Terrorism, the Law Society has claimed that UK solicitors are unfairly burdened by anti-money laundering regulations compared with many of their European counterparts.  Three EU member states have so far failed to implement the latest EU legislation on anti-money laundering, while other member states have decided not to extend their anti-money laundering regimes to include lawyers.  In the UK, solicitors face criminal sanctions for failure to comply with anti-money laundering laws.  The Law Society says that firms in ‘strict compliance’ countries, such as the UK, are effectively subsidising efforts elsewhere, as their intelligence is disseminated to less strictly compliant countries, and that differing levels of implementation also harm the competitiveness of firms in strict compliance countries.

The Law Society’s submission also calls for a Europe-wide investigation into whether the benefits of the anti-money laundering regime outweigh the burdens.  Mark Stobbs, director of policy at the Law Society, said, “The big issue in the UK is the breadth of the offences and the use of criminal sanctions.  Most other countries have only civil sanctions.  The government, EU and Financial Action Task Force need to look at the issues of how anti-money laundering regulations meet the challenges they are meant to, and whether they are proportionate.”

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An Italian court has found British tax lawyer David Mills guilty of accepting a bribe of about £400,000 and sentenced him to four-and-a-half years in prison.  The prosecution claims the bribe was paid by the Italian Prime Minister, Silvio Berlusconi, who employed Mills as a consultant on offshore tax havens.  (Berlusconi denies paying the money, and was removed from the case after passing a law making himself immune from prosecution.)  Mills accepted the money in return for giving false testimony in two corruption trials involving Berlusconi; he initially admitted having received money from Berlusconi “in recognition” of the evidence he gave, but later said the money had come from someone else.  He used the money to help pay off a joint mortgage he held with his wife of the time, the British Olympics Minister Tessa Jowell.  Ms Jowell was cleared of any wrongdoing after an investigation by UK parliamentary officials.

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The Financial Services Commission (FSC) of the British Virgin Islands (BVI) has made significant changes to the Anti Money Laundering and Terrorist Financing Code of Practice, which came into effect on 5 February 2009.  There is now a list of “recognised jurisdictions” that the FSC considers to have AML regimes equivalent to that of the BVI.  The FSC now recognises that BVI funds may outsource AML compliance, including the MLRO function, to administrators or other functionaries in recognised jurisdictions, and considers that a non-BVI overseas administrator in a recognised jurisdiction observing its local AML/know your client (KYC) regime for a BVI fund is compatible with that fund’s own obligations under the code.  New obligations include the need for a BVI fund to have written outsourcing agreements in place with administrators setting out how a mutual fund’s AML compliance is to be achieved, an obligation on managers and administrators to ensure adequate staff training on AML compliance, and the requirement to have an independent audit function for KYC and AML compliance.  The FSC says that it intends to enforce actively the AML regime from 22 February 2009.

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A New York City policewoman has been arrested for allegedly laundering money for her boyfriend’s drug trafficking operation.  Authorities allege that Yaniris Balbuena, who has been with the New York Police Department (NYPD) for eight years, received thousands of dollars in drug proceeds from her boyfriend, who was a known narcotics trafficker in the Bronx.  She deposited over US$230,000 [about £162,000] in cash into nine bank accounts she controlled.  She has been charged with one count of conspiracy to commit money laundering; if convicted, she faces up to 20 years in federal prison and a fine of over $500,000.

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Wu Shu-chen, wife of former Taiwan president Chen Shui-bian, has pleaded guilty to charges of money laundering and forgery but refused to admit to charges of corruption at a pre-trial hearing in Taipei.  She told the court, “I am sorry and I shouldn’t have hidden from Chen that I had wired money abroad.”  Former president Chen resigned in August 2008 from the Democratic Progressive Party that he led to power in 2000, a day after he admitted failing to declare some funds contributed to his various election campaigns, and that his wife had wired US$21 million abroad without his knowledge.

His wife was indicted in November 2006 for embezzling NT$14.8 million [about £295,000] from a state affairs fund.  Paralysed from the waist down since a car accident in 1985, she fainted in court on the first day of her trial, 15 December 2006, and has since missed seventeen hearing summonses on the grounds of ill-health. 

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Kazutsugi Nami, chairman of Tokyo bedding retailer L&G has been arrested while eating breakfast in a restaurant near his office.  Nami and twenty of his employees are being investigated in an alleged 126 billion yen [about £928 million] investment fraud.  L&G [Ladies and Gentlemen] was set up in 1987, originally selling futons and health food, but began accepting investment money in 2001.  Nami and the other suspects told investors they would get a 36% annual return and their original investment back at the end of the year.  The investors were given company currency called Enten that could be used to buy jewellery and other items on an “Enten market” Internet site.  In February 2007, L&G dividends were distributed in Enten rather than in cash, which caused many lawsuits and cancellations of accounts.  The company declared bankruptcy in November 2007.  When he was arrested in front of television cameras, Nami said, “Time will tell if I’m a conman or a swindler.  I’m leading 50,000 people.  Can they charge a company this big with fraud?”

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A Chicago priest with a gambling addiction has been indicted for theft and money laundering.  Reverend John Regan allegedly stole more than US$300,000 [about £206,000] over two years, taking cash and cheques meant as church offerings and putting them into his own bank account.  He then used the money to pay off personal credit cards as well as make ATM cash withdrawals at riverboat casinos.  He was charged with nine counts of theft from a place of worship, one count of continuing financial crimes enterprise, seven counts of theft and four counts of money laundering.

Regan was ordained in 1989 and became pastor of St Walter Parish in 2006, with 3,000 parishioners.  He was send on administrative leave in July 2008, and has begun therapy for a gambling addiction. 

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Two friends of Taiwanese former first lady Wu Shu-jen have pleaded guilty to helping Wu launder the proceeds of crime.  Brothers Tsai Ming-che and Tsai Ming-chieh are two of a long list of intermediaries allegedly used by Wu to wire and secretly stash huge sums of money overseas.  Tsai Ming-che allegedly helped the former first family solicit bribes and lined his own pockets with a portion of the money in a land deal between the government-run Hsinchu Science Park and Dayu Development Corporation.  While the former first family allegedly received NT$300 million [about £6.2 million] in kickbacks from a total payoff of NT$400 million by Taiwan Cement Group Chairman Leslie C. Koo, Tsai Ming-che obtained NT$70 million.  The rest of the bribe allegedly went to James Lee, then chief of Hsinchu Science Park administration.  The case continues. 

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The European Commission has decided to refer France and Poland to the European Court of Justice over non-implementation of the Third Money Laundering Directive.  Reasoned opinions will also be sent to Poland and Spain for not laying down effective, proportionate and dissuasive penalties in national law as required by the Regulation on payer information accompanying transfers of funds.  The transposition deadline for the Directive and for notifying the penalties laid down in national law under the Regulation was 15 December 2007.  Internal Market and Services Commissioner Charlie McCreevy said: “Money laundering and terrorism financing are global threats which can only be defeated by joint and concerted efforts.  The fight against money laundering and terrorist financing remains a top priority of the EU and for the Member States.  The Third Money Laundering Directive aims at boosting this fight as well as preventing damage to the stability and reputation of the financial sector and the single market.  All Member States should ensure full transposition of the Directive as a matter of priority.”

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Authorities in Senegal have charged former prime minister Macky Sall with alleged money laundering.  This follows an investigation into an alleged money laundering ring involving the head of state from another African country, who has not been named.  Mr Sall has denied the charges, which his supporters say are politically motivated.  He left the post of prime minister in June 2007 and resigned from Senegal’s governing party in November 2008 to form a new opposition movement.  He has been widely tipped to stand for president at the next elections in 2012, when it is expected that his main rival will be the political advisor son of Abdoulaye Wade, the current president.

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Hong Kong police have been granted a court order to confiscate more than HK$6 million [about £560,000] in criminal proceeds from a money launderer.  Victims were contacted by a man through unsolicited emails and were induced by promises of handsome commission to help with the remittance of an inheritance out of a foreign country.  Victims were requested to pay him various administrative fees in advance to facilitate the remittance.  Commercial Crime Bureau officers arrested the man in October 2007 and his assets were restrained by court order in June 2008.  He was later convicted of three counts of money laundering and was sentenced to three years’ imprisonment in September 2008.  Under the confiscation and compensation orders now granted, an additional four years’ imprisonment will be imposed if he fails to comply with the orders.

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Four people have been jailed by Bournemouth Crown Court for illegally importing 1.5 tonnes of hand-rolling tobacco.  A joint investigation by UK and Guernsey customs officers found that some of their proceeds was laundered through Guernsey, and £200,000 has been seized.  Mark de Garis, Assistant Chief at Guernsey Customs, said that the case showed how cross-border crime like money-laundering can be effectively dealt with.

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Sohrab Tebyanian, the owner of Andriana Furs in Chicago, has pleaded guilty to money laundering.  The case was originally investigated in Iowa, where Mario Murray, his mother Jeanette and Chicago postal worker Tina Hollins pleaded guilty last year to running a US$3 million cocaine trafficking ring for over a decade.  Mario Murray first came to the attention of law enforcement in 1996, when Chicago police officers found crack cocaine and a gun in the home he shared with his parents.  In 2000, he was stopped with $35,000 in cash on the back seat of his car.  At that time he was working for Andriana Furs, and Tebyanian has now admitted that Murray did little if any work for the furrier and that it was part of a scheme to launder drug money.  Tebyanian will be sentenced on 16 April 2009.

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In a follow-up to a story dated 2 December 2008, the Brazilian Justice Ministry has frozen more than US$2 billion in accounts outside the country as part of a money-laundering investigation involving Brazilian investors, including banker Daniel Dantas.  About $500 million of the funds was blocked with the cooperation of the US government.  Dantas, the founder and managing director of Opportunity Capital Partners, was arrested in July 2008 as part of a broader money laundering investigation that also netted investor Naji Nahas and and former São Paulo Mayor Celso Pitta, and has since been jailed for attempting to bribe a police officer.

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Former Taiwanese President Chen Shui-bian's son, daughter-in-law and brother-in-law have pleaded guilty to money laundering in a pre-trial hearing.  They also made apologies to the public and agreed to surrender the money deposited abroad to prosecutors or donate the funds to charity.  The sum deposited at bank accounts overseas or under other people's names in Taiwan is estimated at NT$1.8 billion [about £38 million].  Chen's son, Chen Chih-chung, and his wife Huang Jui-ching acted as proxies and nominal holders of the former first family's controversial overseas bank accounts.  Wu Ching-mao, a brother of the former president's wife Wu Shu-chen, also played a similar role of helping his sister wire funds abroad.

Former President Chen and his wife were indicted in December 2008 on charges of embezzling NT$104 million [about £2.25 million] from a special presidential fund.  They were also accused of accepting bribes worth NT$100 million and US$6 million in connection with a land procurement deal, and another US$2.73 million in kickbacks to help a contractor win the bid for a government construction project.  They were also charged with laundering part of the funds by wiring the money to overseas bank accounts through a series of proxies. 

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Four Britons accused of trafficking the drug speed have been charged with money laundering offences in Spain.  Ronald O'Dea, James McDonald, Stephen Brown and Brian Rawlings were detained following police raids in November, in a joint operation with the Scottish Crime and Drug Enforcement Agency.  The four men are expected to spend several months in prison before facing trial at the National Criminal Court in Madrid.  A fifth man, Gerard Mooney, was arrested in October 2008: it is alleged that a truck that he was driving to Scotland contained 70kg of speed when it was stopped by police near Oxford.  The money laundering charges relate to the seizure of property in Spain along with luxury goods worth nearly £11 million, including a Ferrari F430 Spyder, a 599 Fiorano, two Hummers, a Porsche Cayenne turbo, an Audi Q7, a Mercedes 63 AMG, two BMWs and a luxury yacht.

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Guernsey and the United Kingdom have signed a bilateral agreement for exchange of information for tax purposes.  This brings to ten the number of such agreements entered into by Guernsey.  Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, said: “Guernsey has signed nine tax information agreements with other countries within the past year, making its commitment to international standards in these areas clear and strengthening its reputation as a legitimate financial centre.  Guernsey has shown that the standards can be implemented quickly where there is a real willingness to do so.”

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A financial adviser and his son charged with laundering over £3 million admitted to gardaí [Irish police] during questioning that they knew the cash was part of the proceeds of the Northern Bank robbery, the prosecution claimed yesterday as the men went on trial.  Ted Cunningham denies 20 charges of money laundering, while his son, Timothy Cunningham denies four charges of money laundering, all between December 20th, 2004 and February 16th, 2005.  The robbery at the Northern Bank Cash Centre took place on 20 December 2004, when an armed gang held bank employee Kevin McMullen and his wife Kyra captive and made off with £26.5 million. The Northern Bank Cash Centre was a sorting centre for the bank for all sterling notes circulated in Northern Ireland: £17.65 million of the stolen cash was in new, easily traceable notes, and £8.85 million was in used notes.

Ted Cunningham was a director of an unregulated money lending firm called Chesterton Finance and therefore – claims the prosecution – ideally placed to launder money.  It is alleged that £4,924,900 passed through Ted Cunningham’s hands, and that gardaí recovered £2,405,060 of this when they searched Mr Cunningham’s house in February 2005; £1.5 million was “disposed of in a moment of panic” while a further £1,019,840 was dispersed by Ted Cunningham. 

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The Nicaraguan Supreme Court has overturned former President Arnoldo Aleman’s conviction and 20-year prison sentence for money laundering.  The ruling cannot be appealed and definitively frees Aleman, who has been under house arrest since being convicted of embezzlement and money laundering in 2003.

The four Supreme Court justices who voted to absolve Aleman of the charges are all linked to his Liberal Constitutionalist Party.  (An illustration of Aleman’s continuing power is the fact that his brother, Antonio Aleman, is also a judge – albeit one who did not vote on the ruling.)  The two judges aligned with the governing Sandinista party, Rafael Solis and Armengol Cuadra, heatedly opposed overturning the conviction.  Solis issued a statement saying, “Today is a sad day, because US$45 million in government funds has been embezzled.  I want a public record of my vote, because I have fought for justice.”  The ruling was justified on the grounds of a lack of evidence against Aleman, and because Nicaragua’s anti-money laundering law, enacted last year, restricts the definition of the crime to transactions made with drug money, which was never part of the accusations against Aleman.  Legal changes benefit defendants retroactively in Nicaragua.

Aleman, who governed Nicaragua from 1997 to 2001, issued a statement praising the ruling and bitterly complaining of the years he spent under various forms of parole and conditioned release because of his purported health problems.  Aleman had been accused of using 60 bank accounts in Panama to launder about US$58 million allegedly stolen from Nicaraguan government coffers. He denied the charges. 

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A Singaporean man who was involved in an investment fraud has been jailed in Hong Kong for two years and eight months.  A securities investment fraud syndicate duped over a hundred investors from 32 countries into transferring about US$4.6 million [about £3.15 million] into bank accounts in Hong Kong.  The victims were lured by fraudsters claiming to be investment brokers into investing in high yield securities, and were told to remit their money into Hong Kong bank accounts.  They were then persuaded to switch into different securities after their initial investment had yielded some purported profits, but when some people refused and tried to withdraw their investment and the purported profits, they were unable to do so.  Hong Kong’s Commercial Crime Bureau launched an investigation after receiving a complaint from a victim in Croatia in April 2008.  They arrested the Singaporean man, who admitted that he was rewarded for opening the bank accounts for two expatriates, and he was charged with money laundering.

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The Guernsey Financial Services Commission (GFSC) and the International Monetary Fund (IMF) have agreed to postpone the IMF assessment of Guernsey until late 2009.  In postponing the assessment, which was scheduled to take place this month, the IMF took into account the severe effects of the current global crisis, including the problems experienced at Northern Rock Guernsey and Landsbanki Guernsey.  The GFSC believes that postponing the visit will enable all parties to “gain perspective on the crisis, policy responses in Guernsey and elsewhere, and subsequent developments”.  The areas to be covered by the assessment will be unchanged.  A significant aspect will be to do with the stability of Guernsey’s financial sector, but it will also cover banking, insurance and investment sector supervisory legislation and practice, together with anti-money laundering and counter terrorist financing legislation and its implementation. 

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The Financial Services Authority (FSA) has fined Aon Limited £5.25 million for failing to take reasonable care to establish and maintain effective systems and controls to counter the risks of bribery and corruption associated with making payments to overseas firms and individuals.  Between 14 January 2005 and 30 September 2007, Aon Limited failed to properly assess the risks involved in its dealings with overseas firms and individuals who helped it win business and failed to implement effective controls to mitigate those risks.  As a result of Aon Limited’s weak control environment, the firm made various suspicious payments, amounting to approximately US$7 million, to a number of overseas firms and individuals.  Margaret Cole, director of enforcement at the FSA, said: "This is the largest financial crime related fine imposed by the FSA to date. It sends a clear message to the UK financial services industry that it is completely unacceptable for firms to conduct business overseas without having in place appropriate anti-bribery and corruption systems and controls."

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Anthony Whale, Yaqiong Zhao, Ke Qu and Bo Li have gone on trial at Birmingham Crown Court.  All four are charged with money laundering offences, which relate to a network allegedly linked to the Morecambe Bay cockling disaster which saw twenty-one Chinese cockle-pickers die after being caught in rising waters in February 2004.  The trial is expected to last for four weeks.

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Bulgarian prosecutors have admitted that they are investigating a money laundering scheme allegedly involving more than a billion euros of Russian cash being moved through financial transactions in Bulgaria and Estonia.  According to newspaper reports, the dirty Russian money was first transferred to Optima Ca, a Bulgarian real estate and financial services company.  That firm then wired half of the money to the Estonian financial firm AS Tavid, which sent the cash back to Russia.  The rest of the money was transferred to accounts in Cyprus, Dubai, Hong Kong and elsewhere.  Optima Ca’s owner Elisabeth Elena Von Messing (a Russian woman with a Finnish passport) said that the billion euros was her company’s turnover, but a Sofia court spokeswoman confirmed that Von Messing and Optima Ca’s executive director Dmitri Abramkin had been arrested.  Von Messing was released on bail on 23 December 2008 but forbidden from leaving Bulgaria while Abramkin remains in detention.  Von Messing was convicted of tax fraud in Finland more than ten years ago.

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In a follow-up to a story dated 10 December 2008, former American football star Mark Ingram has been arrested in a hotel in Michigan, nearly a month after he disappeared on the day he was scheduled to begin serving a prison sentence in Kentucky for bank fraud and money laundering.  Ingram, who has been in and out of jail since his playing career ended in 1996, pleaded guilty in 2005 to cashing counterfeit cheques and laundering money he believed to be proceeds from narcotics deals.  He is scheduled to appear in a federal court in Michigan on 5 January, and will then travel to New York, where he was originally prosecuted, to face charges related to his flight from justice. 

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The Home Office has announced that criminal assets confiscated by police forces and other asset recovery agencies between July and September 2008 totalled £33.5 million, and half of it is to be shared between police, prosecutors and courts.  Since the Proceeds of Crime Act came into effect in 2003, £530.5 million has been seized, and an incentive scheme introduced in 2006 allows the police and recovery agencies to retain half of all cash they seize from criminals.  £5.4 million  will be given to police forces in England and Wales (compared with £3.7 million paid out in the same quarter in 2007).  The force receiving the most is the Met (£1,300,219.98), while the force with the smallest handout is the British Transport Police (£7,325).  HM Revenue and Customs will receive £2.56 million, the Crown Prosecution Service £2.89 million, HM Revenue and Customs £2.65 million, and SOCA £1.4 million.  Police, prosecutors and courts receive a share of the receipts on an 18.75%/18.75%/12.5% basis. 

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E*Trade Securities LLC and E*Trade Clearing LLC have been fined US$1 million by the US Financial Industry Regulatory Authority (FINRA) for failing to have proper anti-money laundering procedures to detect suspicious trades.  The brokerage regulator said that between January 2003 and May 2007, the two related companies failed to provide necessary automated tools to detect suspicious trading activity.  It also said that the New York-based online brokerage relied too heavily on employees to manually monitor for such problems, while processing more than 110,000 trades a day with “little or no” human intervention, and that “such an approach to suspicious activity detection was unreasonable given E*Trade's business model”. 

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