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Old news is
still good news: 2005
This page contains news stories from
2005.
News from October - December
2005
News from July - September
2005
News from April - June 2005
News from January - March 2005
Nigerian ex-governer charged with money laundering - 24 December 2005
Nigeria's Economic and Financial
Crimes Commission (EFCC) has formally arraigned Diepreye
Alamieyeseigha, the former governor of Bayelsa state on a
40-count charge. The defence had sought to stall the
trial by arguing that Alamieyeseigha remained the governor
and was therefore entitled to a constitutional immunity
from arrest and prosecution, since he had challenged his
impeachment in court. Alamieyeseigha, who was
arraigned with seven co-defendants, faces 40 charges
including money laundering and operation of illegal
foreign bank accounts. He pleaded not guilty to all
the charges.
Alamieyeseigha, who was facing
charges of laundering £1.8 million in London, was removed
from office earlier this month, after jumping bail and
escaping to Nigeria. The removal from office stripped
him of his constitutional immunity and paved the way for his
arrest in Nigeria.
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ABN AMRO fined for laundering regulatory lapses in
the US - 19 December 2005
ABN AMRO Bank NV is required by various US bodies to
undertake remedial action in its worldwide banking
operations and to pay US$ 80 million in penalties.
The Federal Reserve System, the New York State Banking
Department and the Illinois Department of Financial and
Professional Regulation announced the issuance, together
with De Nederlandsche Bank NV (the regulator of Dutch
banks), of a consent Cease and Desist Order against ABN
AMRO and its branches in New York and Chicago.
The Order requires ABN AMRO to make improvements to its
global compliance and risk management systems to ensure
adequate oversight, effective risk management and full
compliance with applicable US laws and regulations.
The penalties were assessed on the basis of findings of:
 |
unsafe and unsound practices
|
|
systemic defects in ABN AMRO’s internal controls to ensure
compliance with US anti-money laundering laws and
regulations, which resulted in failures to identify,
analyse and report suspicious activity
|
|
ABN AMRO's participation in transactions that violated US
sanctions laws.
|
Specifically, FinCEN charged that "serious, long-standing,
systemic" problems at the bank enabled an estimated US$
3.2 billion to be moved to US shell companies from its
origins in Russia and other former Soviet countries for a
period of 13 months, starting in August 2002.
To read the FinCEN and other press releases and findings,
click here.
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President Bush speaks out against DeLay laundering
charges - 14 December 2005
In an interview with Fox News, President George W Bush
said that he is confident that former House majority
leader Tom DeLay is innocent of money laundering charges.
He also stated that he hopes that DeLay will be cleared of charges
that he illegally steered corporate money into campaigns
for the Texas legislature and will reclaim his powerful
leadership position in Congress. Taking the highly
unusual step for a president of expressing an opinion on a
pending legal case, Bush said, "I hope that he will [be
cleared], 'cause I like him, and plus, when he's over
there, we get our votes through the House."
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Nigeria looks likely to return governor accused of
laundering to the UK - 12 December 2005
President Olusegun Obasanjo of Nigeria has said that
his country is planning to comply with UK authorities and
hand over Diepreye Alamieyeseigha, the governor of Bayelsa
state, who escaped while on bail in London. "As a
member of Interpol, Nigeria will take the appropriate
action as required by the British authorities, " Obasanjo
declared on 10 December.
Nigerian police arrested Alamieyeseigha at his office
on 9 December after state legislators in Bayelsa voted by
a two-thirds majority to oust him for corruption and abuse
of position. His impeachment means that he can no
longer claim diplomatic immunity from the laundering
charges.
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European Commission publishes money laundering
questionnaire for lawyers -
5 December 2005
The European Commission has published an online
questionnaire on how individual legal professionals and
law firms apply anti-money laundering obligations.
The information gathered will be used for the preparation
of a report on implementation of the Second Money
Laundering Directive to be submitted to the European
Parliament and the Council in 2006. Respondents are
invited to give their views on questions related to the
effectiveness of the reporting obligation, compliance
costs and the impact of the Directive on the demand for
legal services, among others, and the questionnaire can be
filled in anonymously.
Internal Market and Services Commissioner Charlie
McCreevy said, "We want to know how lawyers and notaries
deal with the new requirements on money laundering. We
are interested to hear more about any difficulties they face
when applying these obligations and about any related impact
on their business. I encourage legal professionals
with direct involvement in the area to reply. Your
views are important to us."
To download the questionnaire,
click here. The deadline for the submission of
responses is 31 January 2006.
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Third EU Directive published in Official Journal -
28 November 2005
The final text of Directive 2005/60/EC of the European
Parliament and of the Council of 26 October 2005 on the
Prevention of the Use of the Financial System for the
Purpose of Money Laundering and Terrorist Financing (known
as the Third Directive on Money Laundering) was
published in the Official Journal on 26 October.
Twenty days have since passed and so it is now fully official - and EU member states have until 15
December 2007 to make the required changes to their
domestic legislation, regulation and administrative
procedures.
To download the full text of the Third Directive,
click here.
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Draft money laundering amendment laid before UK
Parliament -
22 November 2005
A draft of the Proceeds of Crime Act
2002 and Money Laundering Regulations (Amendment) Order 2005
has been laid before parliament. It is the result of a
consultation exercise conducted by the Home Office to
determine whether section 330 of the Proceeds of Crime Act
2002 (which provides for the defence to the "failure to
disclose" offence and currently applies only to professional
legal advisers) should be extended to accountants, auditors
and tax advisers.
The draft amendment does indeed
extend the section to those accountants, auditors and tax
advisers, but only if:
| they are members of a
professional body which requires a test of competence as a
condition of membership and the maintenance of
professional standards (and sanctions for non-compliance
with those standards), and |
| in the limited circumstances
where they are carrying out effectively the same functions
as lawyers in relation to legal advice. |
To download the full text of the draft statutory
instrument,
click here.
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Nigerian governor skips bail to escape UK laundering
charges -
21 November 2005
Diepreye Alamieyeseigha, governor of the oil-rich
Nigerian state of Bayelsa, is back at home after escaping
from the UK while on bail. He was arrested at
Heathrow Airport in September and charged with three
counts of laundering a total of GBP 1.8 million, half of
which was found in cash in one of his four London homes
(allegedly bought with the proceeds of corruption).
Investigators then discovered that he had assets of GBP 10
million in the UK.
Against the advice of the Metropolitan Police, Mr
Alamieyeseigha was released from Brixton prison on strict
bail conditions in October: he was not allowed to go
within three miles of a port and had to report daily to
his local police station. But on 18 November he
failed to report, and on 21 November he showed up in his
state capital - where he enjoys local immunity from
prosecution until his term as governor ends in 2007.
He has since denied reports that he made his getaway
dressed as a woman, and says that the charges against him
are politically motivated.
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JMLSG speaks about its new Guidance Notes -
15 November 2005
At the recent Annual Financial Crime Conference hosted
by the Financial Services Authority in London, the
chairman of the Joint Money Laundering Steering Group
(JMLSG) Ian Mullen spoke about the revised Guidance
Notes for the Financial Sector. He touched on
the seven "key pillars" of the revised Guidance Notes:
| senior management responsibility |
| a risk-based approach |
| a reaffirmation of the vital role of the MLRO |
| customer identification |
| a more balanced approach between initial ID and
ongoing checks |
| recognition of the importance of training, and |
| sectoral guidance. |
With regard to a date for publication, Mr Mullen said,
"The JMLSG is
aiming to sign off a final version of the Guidance at its
meeting in December, with publication on the JMLSG website
as soon as possible thereafter. The JMLSG, and the
FSA, do not wish this process to be delayed as a
consequence of the FSA's review of its Handbook pertaining
to the Money Laundering Sourcebook. The aim of early
publication is to facilitate the Treasury's MLAC
Committee's recommendation that a Treasury minister should
approve the Guidance. The JMLSG will be discussing
issues of particular interest with MLAC members.
Treasury ministerial approval will give the industry some
assurance that the Guidance will not be subject in the
near term to further significant amendment.
"Firms are
unlikely to start implementing changes if there is a risk
that Guidance will be changed in the near-term. Our
initial view is that firms will need 6 months after
Treasury ministerial approval before they should be
expected to apply the revised guidance within their
businesses. Apart from assessing risk and reviewing
existing systems to mitigate them, communicating changes
to staff, workshops, writing manuals, training staff and
new IT systems (particularly for ID procedures in mass
retail operations) will be needed. But a risk assessment
will be needed anyway, and work on this should start now."
To read the
full text of Mr Mullen's speech,
click here.
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UK MD personally fined £30,000 for money laundering
regulatory lapses -
9 November 2005
The Financial Services Authority
(FSA) has fined Investment Services UK Limited (ISUK)
£175,000 for conducting its business without due skill,
care and diligence and for failing to control its business
effectively in relation to anti-money laundering (AML)
systems and controls. The firm's Managing Director,
Ram Melwani, has been fined £30,000. He is the first
approved person to be fined for AML-related breaches.
He failed to act with due care, skill and diligence,
failed to ensure his firm complied with AML requirements
and was knowingly concerned in the actions taken by ISUK.
ISUK is an emerging market bond broker; its clients are
corporate vehicles established for trading purposes,
incorporated in offshore jurisdictions and operated by
non-resident, wealthy individuals - and therefore seen as
having a high risk money laundering profile. ISUK
helped its clients to open accounts with a particular bank
but failed to provide the bank with the appropriate
information about the account users to assess the risks to
which it was exposed. As a result of ISUK's actions, a
small number of individuals were able to operate anonymous
accounts and over £8 million entered the UK financial system
without the bank knowing the identity of its customers or
the source of their funds. In addition, for some
accounts ISUK used introduction certificates which are
intended to demonstrate that all necessary customer due
diligence had been conducted. However, some certificates
contained misleading information. Most of ISUK's
clients were either acquaintances or members of Mr Melwani's
family and although he knew them by name, ISUK did not have
adequate procedures to verify their identity or the source
of their funds.
The FSA also found that between December 2001 and
December 2004, the firm did not have formal procedures for
identifying individuals, did not provide AML training for
its staff and did not apply to the FSA for approval of its
Money Laundering Reporting Officer.
Philip Robinson, Financial Crime Sector Leader at the
FSA, said: "Senior managers are ultimately responsible for
managing their firm's risks. Where a firm fails to
mitigate a high money laundering risk, sanctions against
senior management may follow."
To read the full text of the FSA's final notice on this
matter,
click here.
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Isle of Man FIU detective jailed for fraud -
8 November 2005
Raymond Forbes, a detective constable in the Financial
Crime Unit (the Financial Intelligence Unit in the Isle of
Man) has been jailed for six months for a £112,000 fraud.
Forbes persuaded financial firms (including Barclays Bank)
to lend him the money to fund a law degree course, but
instead used the money on a flamboyant lifestyle.
According to evidence submitted in court, he wined and
dined his many girlfriends, travelled extensively, dressed
in designer clothes and threw lavish parties.
Forbes, who was a policeman for fifteen years, has been
suspended from the force without pay. Commenting on
the case, Superintendent Gary Roberts said, "He was a
Walter Mitty character. He lived beyond his means
and was almost living a fantasy life."
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Bank of New York pays US$38 million in penalty for
laundering -
8 November 2005
The Bank of New York has agreed to pay US$38 million in
penalties to resolve investigations into fraud and money
laundering surrounding fund transfers to and from Russia
in the 1990s. In return, the bank will not be
prosecuted. It "has admitted its criminal conduct"
and will forfeit US$26 million to the government and pay
US$12 million in restitution to its victims. The
bank also has agreed to internal reforms and to be
monitored by an independent examiner.
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Mediaset laundering investigation gathers pace -
4 November 2005
An inquiry into alleged money
laundering has been launched in Switzerland against Mediaset
SpA, Italy's dominant media group owned by Prime Minister
Silvio Berlusconi. Mr Berlusconi and several Mediaset
officials are already under investigation in Italy for
alleged fraud in the purchasing of television rights during
the 1990s. The lead prosecutor in Milan has said that
by using offshore companies Mediaset artificially inflated
the cost of purchasing rights to broadcast American films,
and also paid less tax in Italy.
The Swiss investigation began
officially on 3 October, when Swiss judge Jacques Rayround
sent a letter to the Italian judges who are in charge of the
Mediaset investigation. On 3 November,
Swiss judicial authorities reported
that they had frozen about SFr 3 million [£1.3 million] in
ten accounts they believe to be linked to Mediaset; an
eleventh suspect account is domiciled in Liechenstein.
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Manchester police inspector arrested on suspicion of
money laundering -
1 November 2005
Inspector Bal Singh of the Greater Manchester Police (GMP)
has been arrested at his home in Heald Green, a suburb of
Stockport, on suspicion of money laundering. The
arrest followed an investigation by GMP's internal
investigations unit. Two other men and a woman were
arrested at other Manchester addresses as part of the same
investigation.
Inspector Singh was based until recently at Wythenshawe
and is now the local authority liaison officer for the city
of Manchester, based at the town hall. Police officers
working on the investigation searched his £300,000 detached
house and towed away his BMW 8-series car.
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FinCEN issues AM rules for insurance companies -
31 October 2005
The Financial Crimes Enforcement Network (FinCEN
- the American FIU) has issued two final rules that
require certain US insurance companies to both establish
anti-money laundering programmes and file Suspicious
Activity Reports. They are given 180 days to
implement these changes.
The final rules apply to insurance companies
that issue or underwrite certain products that present a
high degree of risk for money laundering or the financing of
terrorism or other illicit activity, such as:
| permanent life insurance policies, other than group
life insurance policies |
| annuity contracts, other than group annuity contracts |
| any other insurance products with features of cash
value or investment features. |
The anti-money laundering programme
implemented must comprise at least these four basic
elements:
-
a compliance officer who is responsible
for ensuring that the program is implemented effectively
-
written policies, procedures and internal
controls designed to control the risks of money
laundering, terrorist financing, and other financial crime
associated with its business
-
ongoing training of appropriate persons
concerning their responsibilities under the programme, and
-
independent testing to monitor and
maintain an adequate programe.
To see the FinCEN press release,
click here.
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TI publishes Corruption Perceptions Index 2005 -
18 October 2005
Transparency International, the anti-corruption body, has
published its Corruption Perceptions Index (CPI) for 2005.
More than two-thirds of the 159 nations surveyed scored less
than 5 out of a clean score of 10, indicating serious levels
of corruption in a majority of the countries surveyed.
"Corruption is a major cause of poverty as well as a barrier
to overcoming it," said Transparency International Chairman
Peter Eigen. "The two scourges feed off each other,
locking their populations in a cycle of misery.
Corruption must be vigorously addressed if aid is to make a
real difference in freeing people from poverty."
Despite progress on many fronts, including the imminent
entry into force of the United Nations Convention against
Corruption, seventy countries – nearly half of those
included in the Index – scored less than 3 on the CPI,
indicating a severe corruption problem. Among the
countries included in the Index, corruption is perceived as
most rampant in Chad, Bangladesh, Turkmenistan, Myanmar and
Haiti – which are also among the poorest countries in the
world.
To download the complete CPI 2005,
click here.
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European Commission reports France and Greece for ML
directive failings -
17 October 2005
The European Commission has decided to refer France and
Greece to the European Court of Justice for
non-communication of national implementation measures
concerning the second money laundering directive. The
Commission had already sent the two countries formal
requests – known as reasoned opinions – in February 2004,
asking them to bring their national laws in line with the
second directive.
Although completion of implementation in France had been
anticipated for the first half of 2005, the Commission has
not received to date any communication from France that
would suggest that the last missing piece of implementation
has in fact been put in place. Greece has changed its
calendar of implementation several times and, given the lack
of communication of these measures to the Commission, the
final date of adoption of all the implementing measures
remains uncertain.
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FATF removes Nauru from NCCT list -
15 October 2005
At its plenary meeting held in Paris on
12-14 October, the Financial Action Task Force (FATF)
announced that it had removed Nauru from its list of
non-cooperative countries and territories (NCCTs). The
move was made after Nauru abolished its 400 shell banks,
thus removing the major money laundering risk. Myanmar
and Nigeria are the only two countries now on the list of
NCCTs.
The FATF also launched an ambitious project,
in partnership with the Asia/Pacific Group on Money
Laundering (APG), to explore the symbiotic relationship
between corruption, money laundering and terrorist
financing.
Finally, the FATF published the third-round
mutual evaluations of the anti-money laundering and
counter-terrorist financing systems of Australia, Italy and
Switzerland.
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FATF to hold plenary meeting in Paris -
11 October 2005
The Financial Action Task Force will hold a
plenary meeting in Paris on 12–14 October. The meeting
(the first under the South African presidency of the FATF)
will discuss the links between corruption and money
laundering/terrorist financing. In particular, meeting
participants will look at how the proceeds of corruption are
likely to be laundered while corrupt institutions are liable
to impede efforts to stop money laundering or to counter
terrorist financing. The meeting will also issue
country-specific reports evaluating the anti-money
laundering and counter terrorism financing legislation and
enforcement of Australia, Italy and Switzerland.
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Thousands of documents reveal IRA laundering
techniques -
6 October 2005
Accountants and other financial experts are being used
to unravel thousands of documents seized in Manchester and
Dundalk (County Louth) on 6 October in a joint operation
between the UK's Assets Recovery Agency and the Criminal
Assets Bureau in Eire. The documents detail money
laundering techniques used by the IRA, including a
portfolio of 250 properties with a total value of more
than £30 million.
Security sources believe the paperwork could provide a
trail leading back to alleged IRA chief of staff Thomas
'Slab' Murphy. The seizure of the documents followed a
three-year investigation, which so far has concentrated on
holdings associated solely with Murphy. However,
tracing any leads from the paperwork seized will take
months.
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UDA's "Doris Day" murdered while on bail on money
laundering charges -
5 October 2005
Jim Gray, former leader of
the Ulster Defence Association in east Belfast, was shot
and killed outside his father's house today. He had
recently been released on bail on charges of money
laundering and was living at his father's home while
awaiting his court appearance. Six people have
already been arrested in connection with the murder;
police said that Gray had been warned that he was in
danger.
Gray was nicknamed "Doris Day" thanks to his bleached
blond hair, heavy gold jewellery, year-round tan and
lavish lifestyle. He was once one of six so-called
"brigadiers" on the inner council of Northern Ireland’s
largest loyalist terror grouping.
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Bush ally now charged with money laundering as well -
4 October 2005
Tom DeLay, a US Congressional leader in Texas, now faces
charges of money laundering and conspiracy to launder as
well as those of conspiracy laid against him last week.
Mr DeLay is leader of the Republicans in the House of
Representatives (the lower house) but has temporarily
stepped down in order to answer the charges. He
protests his innocence, saying that the charges are the
result of a smear campaign waged against him and calling
them "fiction and innuendo" and "an abomination of justice".
Mr DeLay is a key fundraiser for President George W Bush and
thus has great political influence.
Mr DeLay is accused of conspiring with colleagues to
get around a Texas state ban on corporate funding for
political campaigns.
He is alleged to have laundered money for
use in an election campaign for the Texas legislature in
2002. If found guilty, he could face up to 20 years
for conspiracy and life imprisonment for money laundering.
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New research released into UK law enforcement use of
SARs -
30 September 2005
A new piece of research - commissioned by the
Association of Chief Police Officers, funded by the Home
Office and supported by NCIS - has been published.
The report is entitled "UK Law Enforcement Agency Use and
Management of Suspicious Activity Reports: Towards
Determining the Value of the Regime" and was written by
Matthew Fleming of University College London.
The report's main findings are:
| Despite evidence of some important SARs-related
successes, SARs appear to be under-utilised by most LEAs
[Law Enforcement Agencies, not Local Education
Authorities!] |
| Systematic information maintained by LEAs on their use
of SARs is limited and often of poor quality |
| Feedback provided to NCIS by LEAs is under-utilised by
NCIS and subsequently by industry and the larger policy
community |
| Communication between and within LEAs, NCIS, ACPO,
government and industry is suboptimal |
| Change is a-foot in the SARs regime, with the rollout
of the ELMER database and the creation of SOCA. |
To download the full 94-page report,
click here.
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Interpol adopts new money laundering resolution -
22 September 2005
At a meeting of its General Assembly in Berlin in
September, Interpol adopted Resolution No AG-2005-RES-12
on money laundering. The resolution recognises that
money laundering is a global problem, and encourages
national bureaux of Interpol to encourage the sharing of
information on money laundering cases.
To read the full text of the resolution,
click here.
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Nigeria launches new surveillance team to tackle
placement -
26 September 2005
In a bid to escape from the FATF's list of
Non-Cooperative Countries and Territories, the Nigerian
government has decided to set up a special department
within its Ministry of Commerce to tackle money
laundering through the surveillance of non-financial
institutions – specifically jewellery shops, hotels, car
dealerships, boutiques and casinos. The aim is to
make it difficult for criminals to spirit their illicit
earnings away to overseas banks.
The Minister of Information and National Orientation, Mr
Frank Nweke Jr, said, "If you go and buy jewellery, there is
some jewellery worth more than 10 to 20 million dollars.
There are some watches you have that are valued at 10
million dollars. Some people go to gamble in casinos.
The government is interested in knowing where the money they
use in gambling comes from, and why they are gambling with
10 to 20 million dollars."
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UK Treasury releases costing estimates for
implementation of Third European Directive -
16 September 2005
The Third European Directive on Money Laundering was
agreed on 7 June 2005. The UK Treasury has published
a Regulatory Impact Assessment that provides an estimate
of the costs and benefits of the Third Directive.
The RIA identifies the main changes that will need to be
made to the UK's Money Laundering Regulations as:
|
Adding more detail to regulations on the
customer due diligence requirements |
|
Providing a fit and proper test as part of
the licensing or registration for trust and company
service providers and money service businesses |
|
Licensing or registration of trust and
company service providers |
|
Providing a supervisory/monitoring regime
for estate agents and trust and company service providers. |
As for costs, the RIA states that "the
total cost of the Third Directive is between £5 million
and £46 million per year depending on the extent to which
firms already comply with guidance and already take a the
risk based approach".
To download the 79-page Regulatory Impact Assessment,
click here.
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Bhutto laundering case hits the headlines again -
16 September 2005
Former Prime Minister and Pakistan People’s Party
chairwoman Benazir Bhutto has arrived in Geneva to appear
in court on 19 September to defend herself and her husband
Asif Zardari against money laundering charges. Ms
Bhutto appeared before the Swiss magistrate in June 2004
in the same case and also accused the government of
Pakistan of exploiting a foreign judicial system.
Meanwhile, an anti-corruption court in Pakistan has
ordered the re-arrest of Zardari, who is in the US
receiving treatment for a heart condition. The court
in Rawalpindi issued the warrant because Mr Zardari had
failed to attend trial hearings. He was freed on
bail in November 2004 after spending eight years in prison
on charges ranging from corruption to murder - his release
is believed by many to be the result of a deal between the
PPP and the government. Since then he has resumed a
high-profile political career, with a number of cases
against him still pending in the courts.
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Reported Russian money laundering increases
five-fold -
12 September 2005
Reported cases of suspected money laundering have
involved a total of 200 billion roubles (about £3.9
billion) since January - a five-fold increase over 2004.
Viktor Zubkov, head of the Federal Service for Fiscal
Monitoring, said that the hike could be because of his
agency's more intensive activities rather than an increase
in actual laundering. The FSFM's database now
contains more than four million reports on suspicious
financial transactions in Russia, 80% of them submitted by
banks. Over 1,400 suspected money laundering cases
have been handed over to law enforcement bodies since the
beginning of 2005; of these, 463 are being processed as
criminal enquiries.
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Former mayor of Sao Paolo faces laundering charges -
10 September 2005
Paulo Maluf, who was mayor of Brazilian mega-city Sao
Paolo in the early 1990s, has turned himself in to police
to face charges of money laundering - which he denies.
Brazilian prosecutors allege that Mr Maluf illegally
transferred £87 million to the US and then tried to
intimidate a key witness in the case. This witness
is a black market currency trader who told the police he
transferred the money on behalf of Mr Maluf.
Prosecutors claim that Mr Maluf actually has a fortune of
nearly half a billion dollars, skimmed from public work
contracts and then moved to offshore tax havens.
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Swiss return £158 million of Abacha money to Nigeria -
9 September 2005
Swiss banks have returned £158 million found in
accounts linked to General Sani Abacha, the late military
dictator of Nigeria. A further £93 million will also
be sent back once the assets have been converted into
cash. Once this second payment has been made,
Switzerland will have returned all the Abacha money it has
found.
The funds were originally frozen by the Swiss authorities
in 1999 but they refused to return the money to Nigeria
until they had received guarantees about how it would be
spent. Legal battles launched by the Abacha family
also slowed things down. Now, however, the World Bank
has intervened and promised to ensure that the money is
spent on health, education and infrastructure projects.
"The transfer became possible with the signing of an
agreement with the World Bank to monitor Nigeria's use of
the funds," said Livio Zanolari, a spokesman for the Swiss
Justice Ministry. The money was paid to the Bank for
International Settlements in Basel, and then will be
transferred to Nigeria's central bank.
During his time in power, from 1993 to 1998, General
Abacha is suspected to have plundered over US$4 billion from
his country and deposited it in personal accounts around the
world. As well as in Switzerland, Abacha money has
already been located in the UK, Luxembourg, Liechtenstein
and Austria.
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Second Russian UN official charged with money
laundering -
2 September 2005
Vladimir Kuznetsov, a senior Russian foreign ministry
official and chairman of the committee that oversees the
United Nations budget, has been arrested in New York on
money laundering charges. He was taken into custody
after his diplomatic immunity was revoked by UN
Secretary-General Kofi Annan.
Mr Kuznetsov is alleged to have set up an offshore
company in 2000 to hide criminal proceeds from an
unidentified UN procurement officer. In a statement,
the prosecutors said when Mr Kuznetsov learned of the
procurement officer's activities, he agreed to take a share
of the proceeds rather than inform law enforcement
authorities.
Mr Kuznetsov is the second Russian UN official to be
arrested on money laundering charges in recent weeks.
Alexander Yakovlev, from the UN's procurement office, was
arrested on 8 August and charged with soliciting a bribe
(from a firm seeking a lucrative contract through the Iraq
oil-for-food program), wire fraud and money laundering.
He pleaded guilty and now faces a prison term of up to 20
years for each of the three charges.
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UEFA concerned about the beautiful game becoming a
beautiful laundrette -
25 August 2005
UEFA, the governing body of European football, is so
concerned about possible money laundering that it has asked
the EU's money laundering task force to investigate.
Speaking just before the draw for this season's Champions'
League, UEFA President Lennart Johansson said, "It is
alarming. We must do something about it." "It"
is the hundreds of millions of pounds that is pouring into
football, much of it perhaps the proceeds of crime.
At a recent meeting, UEFA officials expressed concern
both at the enormous sums involved, and at the fact that
much of the money crosses borders on its way to football
clubs and is being invested by anonymous individuals.
Lars Christer-Olsson, UEFA's Chief Executive, said, "For
money launderers football is very attractive. They can
afford to invest large amounts, lose even 15% of their black
money in football just to get the opportunity to make it
clean."
As well as asking for external
investigations, UEFA is also looking at tightening up its
own rules, which could have an impact on Roman Abramovich,
the owner of Chelsea, who, through his company Sibnet, is
the main sponsor of UEFA champions CSKA Moscow.
Lennart Johansson said, "We are concerned about one person
owning or controlling more than one club. It is not
just about Abramovich. I don't blame him. He is
within existing rules. We have to change that."
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New ruler of Monaco speaks out against money
laundering -
12 July 2005
Prince Albert was today enthroned as His Serene Highness
of Monaco at an elaborate ceremony in Monaco's cathedral.
Prince Albert, 47, takes the throne
after 56 years of his father's rule and becomes the first
bachelor ruler of the principality (although he has promised
his subjects that he will marry in order to produce a
legitimate heir).
He has also promised to modernise the government of
Monaco, which has been accused of allowing the wealthy
principality to become a centre for money laundering and
gambling. "We must absolutely free ourselves of this
equation that Monaco equals laundering," he told French
television the day before his coronation. ""I
will take this on and devote all my strength to it so that
we are irreproachable in this area."
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City of London Police launches new Money Laundering
Investigation Unit -
12 June 2005
The Corporation of London has agreed to fund a new Money
Laundering Investigation Unit (MLIU) to track the proceeds
of serious crime routed through the financial markets and
city financial institutions. The new team of ten will
form part of the City of London Police Economic Crime
Department and will primarily focus on tracking and
recovering funds derived from fraud. It will also
provide an enhanced service to the financial services
industry in providing rapid feedback in relation to
suspicious activity reports passed in the first instance to
the National Criminal Intelligence Service.
James Hart, Commissioner of the City of London Police,
said, “The MLIU, in the same way as our expanded Fraud
Squad, will be financed by the City’s Business Rate Premium,
introduced in 2003. The premium also finances an
additional 48 City of London Police officers and an
extension to the western extension of the Traffic and
Environment Zone, often referred to as the Ring of Steel.”
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Egmont Group now numbers more than 100 FIUs -
29 June 2005
At its annual meeting on 29 June 2005, the Egmont Group
announced that it now has 101 member FIUs. The
admission of seven new members - the FIUs of Bosnia &
Herzegovina, Honduras, Montenegro, Peru, the Philippines,
Qatar and San Marino - took them over the century. The
annual meeting also marked the Group's tenth birthday, as it
was founded in 1995 at the Egmont-Arenberg Palace in
Brussels.
In order to be admitted to the Egmont Group, an FIU must
conform to the Egmont definition of an FIU: a central office
that obtains financial report information, analyses it in
some way and then discloses it to appropriate governmental
authorities and other FIUs.
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Nottinghamshire launderers jailed for a total of 50
years -
13 May 2005
A gang of three men and one woman has been found guilty
of drug offences and of laundering millions of pounds of
drug money from a base in Nottinghamshire, after a nine-week
trial at Nottingham Crown Court. John Dawes was the
ringleader and was sentenced to 24 years in prison, while
his father Arthur Dawes and friend Ryan Smith were also
involved and were sentenced to eight and fourteen years
respectively. His father's girlfriend Rebecca Bridge
acted as bookkeeper for the operation and was sentenced to
four years. The laundering offences took place over six
years up to September 2003, and in one seven-month period
over £5 million was laundered around the UK and abroad. The
scheme was uncovered when one of their drug dealers became
so fearful for his life, given John Dawes's reputation for
extreme violence, that he turned himself in to the police
and gave evidence.
Sue Fish, Assistant Chief Constable of Nottinghamshire
Police, said of the four that "they are incredibly violent,
dangerous people and the threat they posed to prosecution
witnesses, both civil and professional, should not be
underestimated. The gang controlled a vast drug-dealing
network and was responsible for the importation of huge
quantities of drugs sold on the streets of Nottinghamshire,
Derbyshire and other parts of the UK." She said the trial
detailed money laundering to the value of £8 million, but
police believe that was only the "tip of the iceberg".
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Guernsey issues new introduction certificate -
4 May 2005
Following its statement published on 27 April, the
Guernsey Financial Services Commission (GFSC) has issued a
new introduction certificate. This certificate is
intended specifically to be used for business introduced to
banks by licensed fiduciaries.
To read the GFSC press release and link to the
certificate, click
here.
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Council of Europe publishes new money laundering
Convention -
3 May 2005
The Council of Europe has published a new "Convention on
Laundering, Search, Seizure and Confiscation of the Proceeds
from Crime and on the Financing of Terrorism", which
replaces the 1990 Strasbourg Convention. This new
Convention takes into account the fact that terrorism can be
funded not only through money laundering from criminal
activity but also through legitimate activities. It
also notes that quick access to financial information or
information on assets held by criminal organisations,
including terrorist groups, is the key to successful
preventive and repressive measures and ultimately is the
best way to stop them.
The new Convention will be opened for signature by
Council of Europe member states at the Summit of Heads of
State and Government to be held in Warsaw on 16 and 17 May
2005, and will soon be available via
this link.
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Spain's "Costa del Crime" hit by investigations -
2 May 2005
Thousands of British and Irish expatriates living on the
coast between Marbella and Gibraltar are facing financial
ruin as a trio of investigations is launched. The
first (Operation White Whale) is looking at a 239 million
euro building scam involving money allegedly stolen from a
Russian oil company, the second is a major crackdown on
illegal building, the the third is a mis-selling dispute
involving one of Spain's biggest developers of holiday
homes.
Operation White Whale hit the headlines last month when
police raided the offices of Fernando del Valle, the head of
a law firm in Marbella. He is alleged to have helped
clients invest money from dubious sources (including perhaps
some illegally siphoned from Yukos) in holiday home
developments through anonymous trusts in Gibraltar. As
part of the investigation, ownership of 251 properties has
been declared "frozen" by the courts, and buyers fear their
homes may be sold to repay Yukos creditors.
Also in April, the Andalusian government, based in
Seville, said it planned to demolish up to 1,600 homes that
had been ruled by the Andalusian high court to have been
built illegally - officials had approved dozens of
developments on greenbelt land. Lawyers trying to
prevent demolition say 500 Britons have been caught up in
the planning clampdown.
In the third scandal, thousands of people have invested in
developments that may never be built by Aifos, one of
Spain's biggest developers, which has offices in London,
Manchester and Dublin (and is promoted by the singer Julio
Iglesias). Aifos admits that it has thirteen large
developments awaiting planning permission and has offered to
return deposits to disgruntled buyers with interest but many
have declined, saying it would leave them out of pocket as
property prices have since risen sharply.
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Swiss Banking Institute publishes money laundering
survey -
28 April 2005
The Association of Swiss Commercial and Investment Banks
(VHV) commissioned the Swiss Banking Institute (part of the
University of Zurich) to conduct a study on the impact of
Swiss and foreign anti-money laundering regulation on the
competitive position of banks with private banking business
in Switzerland. The results show that the Swiss AML
ordinance is considered very effective and serves its
purpose. However, compared with the AML regulation in
other jurisdictions, the Swiss rules are more burdensome,
imposing a considerable competitive disadvantage on Swiss
banks. In addition, small players are penalised by
economies of scale in the area of AML related costs.
To download more
details,
click here.
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FSSC publishes MLRO standards for consultation -
21 April 2005
The Financial Services Skills Council, in partnership
with the International Compliance Association and industry
firms and practitioners, has published draft performance
standards for compliance and anti-money laundering
professionals. There are two sets of standards – one
for compliance professionals and one for MLROs. They
apply across the financial services sector, reflecting the
way in which these responsibilities are allocated and
discharged.
The draft standards are offered to the financial services
sector and other interested parties (such as professional
trainers) for consultation, and comments are to be submitted
by 31 May 2005. The FSSC response to those comments
will be issued in June, and the plan is to publish the final
standards in September. According to the authors of
the standards, the objectives of the consultation process
are:
- To test the accuracy and credibility of the new draft
standards
- To establish the acceptability of industry standards
for compliance and money laundering prevention to
employers
- To identify the uses to which firms intend to put the
final national occupational standards
- To assess the demand for qualifications for compliance
and money laundering prevention
- To develop a qualifications framework.
To download the
consultation document and the two sets of standards,
click here.
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Four charged with murder of Roberto Calvi -
18 April 2005
Giuseppe (Pippo) Calo, Flavio Carboni, Manuela
Kleinszig and Ernesto Diotallevi have been charged in Rome
with the 1982 murder of Roberto Calvi. Calvi, who
was found hanging under Blackfriars Bridge with his
pockets stuffed with bricks, was known as "God's Banker"
because of his close ties to the Vatican. A UK
coroner originally ruled that the death was suicide, but
in 2003 the City of London Police reopened the
investigation and Italian prosecutors concluded that it
was murder. Calvi's family have always believed that
it was murder, and prosecutors are expected to claim Calvi
was killed to prevent him revealing explosive secrets
about Italy's political and religious establishment.
The four accused will stand trial in October.
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Nick Leeson gets a job -
17 April 2005
Nick Leeson, the former investment banker whom many
blame for the collapse of Barings in 1995, has found a job
after ten years of imprisonment and unemployment. Mr
Leeson applied to a newspaper advertisement and has just
been appointed as commercial manager of Galway United
football club in the west of Ireland, where he lives with
his family. "Life has moved on for everyone since
the happenings of ten years ago," said club chairman John
Fallon. "It is impossible to ignore the events which
have made Nick Leeson known worldwide. But long
after the fanfare about his appointment has passed, Nick
Leeson will be tasked with the demanding job of
implementing a series of commercial initiatives aimed at
developing Galway United FC." Mr Leeson said, "I am
a very keen football fan and am looking forward to working
with Galway United".
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AUSTRAC launches AML e-learning package -
13 April 2005
The Australian
Transaction Reports and Analysis Centre (AUSTRAC -
Australia's FIU) has launched an online anti-money
laundering e-learning package. It consists of
fifteen modules plus a study guide, pre- and
post-assessments and a glossary. As far as I can
tell from my own exploration, it is free to use, and comes
in Flash and plainer HTML versions. It of course
refers to Australian legislation, but could serve as a
useful model for other jurisdictions.
At the launch in
Sydney, AUSTRAC said they hoped that the package would
be a user-friendly resource for industry and the
general public. Justice Minister Chris Ellison said
it was part of ongoing efforts to fight organised crime:
"Money laundering is the lifeblood of organised criminals,
terrorists, and it is a fact of the modern age that we can
transport money very quickly through electronic means.
Of course criminals are going to use more sophisticated
methods to launder money. If you can get to the
money, you can get to the Mr Bigs."
To read more about the
AUSTRAC AML e-learning package,
click here. Click on the "Modules" tab to get
into the package itself.
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UDA's "Doris Day" accused of money laundering -
9 April 2005
Jim Gray, formerly of
the Ulster Defence Association, was arrested last week and
charged with possession of criminal property and
concealment of criminal property under the Proceeds of
Crime Act 2002. When he was arrested, Gray had in
his possession a Northern Bank bankers draft to the value
of 10,000 euro and sterling notes totalling more than £2,700. Gray
denied all charges, saying that the money was from the
sale of two pubs, but the prosecution contended that it
represented "unjustifiable earnings". Gray was refused bail and ordered to
appear again before Banbridge Magistrates Court by video
link on 14 April. Meanwhile, investigators are
expected to apply on Monday for a court order to freeze
Gray's assets as part of the laundering investigation.
Gray was nicknamed "Doris Day" thanks to his bleached
blond hair, heavy gold jewellery, year-round tan and
lavish lifestyle. He was once one of six so-called
"brigadiers" on the inner council of Northern Ireland’s
largest loyalist terror grouping but was removed from
office last week by his own east Belfast faction of the UDA, which
has long been accused of drug-dealing and mafia-style
crimes.
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National Hi-Tech Crime Unit launches new website -
5 April 2005
The UK's National Hi-Tech Crime Unit (NHTCU, which is
part of the the National Crime Squad) has launched a new
website. The website addresses the NHTCU's three main
markets (business and industry; general public; and media)
and explains how the NHTCU works and also provides links to
other UK and overseas agencies that cover hi-tech crime
issues. The aim is for the website to become a single
source for information about serious and organised hi-tech
crime.
Commenting on the launch, Detective Superintendent Mick
Deats, Deputy Head of the NHTCU, said, "Hi-tech crime has
become a rapidly growing phenomenon over recent years.
Computers, in particular the Internet, provide great
benefits for society. However, there is real evidence
and a continued threat that criminals will exploit these
mediums, turning a tool designed to benefit society into a
tool to help them commit crime. This new website is
designed to help people understand the issues of hi-tech
crime and provide pointers to further information."
The website can be found at
www.nhtcu.org.
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Switzerland announces sharp increase in money
laundering investigations -
31 March 2005
The Swiss Money Laundering Control Authority (MLCA) has
announced that the number of money laundering investigations
rose sharply in 2004, partly because financial
intermediaries are becoming more willing to submit to
inspection. The MLCA (whose investigations target
asset managers, trustees and lawyers among others) reported
that it had investigated 452 financial institutions in 2004,
up from 259 in 2003. The MLCA said that it had been
able to step up its work because the new Money Laundering
Act, which came into force in 1998, was now fully
operational and requires all financial institutions (not
just banks) to report suspicious transactions.
An MLCA spokesperson said, "The MLCA's practice of taking
more stringent action against illegally active financial
intermediaries is also sending a clear signal. For the
first time the finance ministry issued a fine of 40,000
Swiss francs [£17,700] based on a complaint by the MLCA."
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Abacha defence lawyer dies -
30 March 2005
Johnnie Cochran, the American lawyer who made his name as part
of the team which successfully defended OJ Simpson in 1994/5
when he was accused of murdering his ex-wife and her friend,
has died of a brain tumour at the age of 67. Los
Angeles-based Cochran
was particularly known for getting involved in cases with a
racial element - often defending black people against what
were perceived to be injustices perpetrated by white people.
In recent years Mr Cochran was hired by the
Abacha family to defend dictator Sani Abacha's son Mohammed
against a murder charge and then to defend Sani's widow
Maryam against charges of embezzlement and human rights
abuses.
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JMLSG issues new Guidance Notes for consultation -
14 March 2005
The Joint Money Laundering Steering Group
has issued its new "Guidance Notes for the UK on Prevention
of Money Laundering and Combating the Financing of
Terrorism". The consultation process and the main
changes are outlined in a consultation document, while the
Guidance Notes themselves are issued in two volumes (one
containing the main text and the other containing sectoral
guidance). The deadline for submission of comments is
30 June 2005.
To download the three documents,
click here.
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JMLSG updates website - 8 March 2005
The Joint Money Laundering Steering Group
has published three new documents on its website:
|
Case studies on money laundering and
terrorist financing (drawn from FATF typologies reports) |
|
Notes on money laundering and terrorist
financing activities (a beginners' guide) |
|
A suggested MLRO good practice framework
(originally published at N2). |
To download the three documents,
click here.
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Israel's largest bank involved in massive laundering
investigation - 6 March 2005
Over twenty employees of Bank Hapoalim -
Israel's largest bank - have been questioned in what
appears to be Israel's largest money laundering case.
The laundering scheme involves hundreds of millions of
dollars in the past year alone and has been connected with
leading Russian oligarchs who have business interests in
Israel. In some cases, large sums of money would
flow into an account and immediately flow out in smaller
amounts to shell companies around the world, while in
other cases large sums of money were broken down into
smaller amounts and deposited into separate accounts in
the bank, thus evading the rule requiring the bank to
report cash transfers of more than NIS 1 million if it
involves money from overseas or NIS 50,000 (just over
US$10,000) if it is money from inside Israel.
Police sources, who have been working
undercover on the case for a year, have said that they have
evidence that senior officials in the bank knew about the
laundering and chose not to report it, and investigations
are now focussing on senior executives at national level.
Meanwhile police have frozen US$376 million and "have 45
customers of whom we have very serious suspicions of
wrongdoing".
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US publishes INCSR 2005 - 4 March 2005
The US Department of State has published its
"International Narcotics Control Strategy Report" for 2005.
This annual report is published in two volumes - one on drug
and chemical control and the other on money laundering and
financial crime - and has established itself as a core
reference work for those in the AML field. In
particular, its analyses of specific countries and their
money laundering vulnerabilities are required reading.
To download the full report,
click here.
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FinCEN publishes updated Strategic Plan - 28 February 2005
The Financial Crimes Enforcement Network (or
FinCEN, the American FIU) has published an update to its
"Strategic Plan for Fiscal Years 2003-2008". This
update reflects FinCEN's growing role in detecting terrorist
financing, and outlines four strategic goals for the FIU:
|
Protect the financial system through
effective administration of the Bank Secrecy Act |
|
Combat terrorism, money laundering and
other financial crime through analysis of Bank Secrecy Act
data and other relevant information |
|
Intensify international anti-money
laundering collaboration through the global network of
financial intelligence units |
|
Facilitate regulatory compliance, data
management, and information sharing through E-government. |
To read the full 24-page document,
click here.
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IRA may have tried to buy Bulgarian bank for
laundering - 21 February 2005
An Irish detective, working to establish whether the
IRA were involved in the Northern Bank theft in December
has said that investigators have evidence that the IRA was
working with a Bulgarian crime gang to acquire a bank in
Sofia, Bulgaria's capital, in order to process IRA funds.
In another Bulgarian connection, Irish police recently
spotted a Bulgarian arms dealer in Ireland and followed him,
leading to the recovery of more than $5 million of the
stolen bank money.
"If the scheme had worked, this supposedly legitimate
bank would have ended up investing funds in various
properties and businesses back in Ireland," the detective
said, adding that the IRA targeted had Bulgaria because its
financial sector suffers from corruption and poor controls.
Apparently the IRA planned to use the bank until 2007, when
Bulgaria joins the European Union and thus becomes subject
to stricter financial controls.
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Council of Europe prepares new convention to fight
money laundering and financing of terrorism - 18
February 2005
The committee of experts in charge of reviewing the
1990 Council of Europe anti-money laundering convention
has finalised a new draft convention to fight more
effectively against money laundering and the financing of
terrorism. The new Convention on Laundering, Search,
Seizure and Confiscation of the Proceeds from Crime and on
the Financing on Terrorism updates the Council’s 1990
anti-money laundering convention, and contains new
provisions concerning Financial intelligence Units, a more
effective system for international co-operation, and
investigative techniques for requesting information on
bank accounts.
This draft convention has been submitted to the
European Committee on crime problems and to the Committee
of Ministers for adoption in March 2005 and will be ready
in time for the Summit of Heads of State and Government
taking place in Warsaw on 16-17 May 2005.
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Cook Islands, Indonesia and Philippines removed from
NCCT list, China given FATF observer status -
11 February 2005
The Financial Action Task Force announced at its recent
meeting in Paris that the Cook Islands, Indonesia and the
Philippines have now been removed from its list of
non-cooperative countries and territories (NCCTs).
In its press release, the FATF said that "recent
FATF visits to those countries confirmed that they are
effectively implementing anti-money laundering (AML)
measures to remedy deficiencies that were identified by
the FATF. The Cook Islands, Indonesia, and the
Philippines have AML systems that include strict customer
identification, suspicious transaction reporting, bank
examinations, and legal capacities to investigate and
prosecute money laundering. All three countries have
developed financial intelligence units (FIUs)." The
FATF now plans to monitor the implementation of these
measures in the three countries.
At the same meeting, the People's
Republic of China was welcomed for the first time as an
observer. Once it has completed a successful mutual
evaluation of its AML/CFT regime, China will become
eligible for full FATF membership.
To read the FATF press release,
click here.
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Norfolk gangmaster jailed for seven years for money
laundering -
11 February 2005
Ukrainian Victor Solomka has been sentenced to seven
years in prison for laundering the proceeds of his
criminal activities. Solomka, who came to the UK as
an asylum seeker four years ago and settled in Kings Lynn,
ran one of the largest gangmaster operations in the UK,
supplying illegal workers mainly to Scottish fish
factories. He provided his workers (from Russia, the
Ukraine, Latvia, Moldova and Lithuania) with false
documents, rented out rooms to them and even charged them
for travel to and from the factories where they worked.
While more than 700 workers were living in cramped
conditions under Solomka's control, Solomka himself was
living in a £250,000 house and driving Mercedes cars.
Solomka laundered his massive profits via a number of
sham companies set up by his accomplices Lawrence Dell and
Andris Cerins. Dell, who pleaded guilty to eight
counts of false accounting, claimed he thought he was
involved in a VAT scam and had no idea he was supplying
Solomka with false invoices to launder the proceeds of
crime. He had originally agreed to provide Solomka
with false invoices through his company Trace Consultancy in
order to pay off a £25,000 debt he owed Solomka. After
six months, the debt was paid off but the rewards were so
high that Dell continued in the enterprise, and introduced
Solomka to Cerins. Cerins, who himself came to England
as an asylum seeker in 1998, allowed Solomka to pass £91,000
through the accounts of his company Eel Limited and took
£12,000 in commission. Cerins was jailed for 18 months
and Dell will be sentenced at a later date.
Meanwhile, Solomka is now being targeted by confiscation
activities. Peter Tidey, Chief Crown Prosecutor for
Norfolk, said, "The law is there for us to
hit criminals hard twice over – once with a prison sentence
and once by taking their ill-gotten gains. By
confiscating the assets this man made from his illegal
businesses, we intend to hit him where it really hurts – in
his pocket. Before the trial, we applied for, and were
granted, restraint orders to stop the money being moved and
now he has been convicted, we will be looking for
confiscation orders to relieve him of his ill-gotten gains.
The Crown Prosecution Service is determined to show
criminals that crime does not pay and we will put a stop to
their extravagant lifestyles which are funded at the expense
of their victims."
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Council of Europe publishes report on organised
crime -
24 January 2005
The Council of Europe has published its "Organised
Crime Situation Report 2004", looking at the state of
organised crime in its 46 member states. According
to the report, economic crime, the production and
trafficking of drugs, trafficking in human beings and
people smuggling are the main threats currently posed by
organised crime in Europe.
The report states that economic crime has become a major
issue in many central and eastern European countries.
Fraud, corruption and other forms of economic crime
represent either the main type of, or a large proportion of,
organised crime detected in countries such as Bulgaria,
Estonia, Moldova, Serbia and Montenegro and Slovakia, and
also in Belgium and the Netherlands. Both the proceeds
from, and the material damage caused by economic crime far
exceed those of other forms of crime.
The growing importance of economic crime is echoed in the
money laundering statistics contained in the report.
For instance, more than 80% of money laundering
investigations undertaken in Romania in 2002 and 2003
related to embezzlement and tax evasion, while only 8%
concerned drug trafficking or people trafficking.
To download the full 191-page report,
click here.
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Riggs Bank to be fined US$16 million for money laundering -
27 January 2005
Back in July 2004, US Senator Carl Levin (one of the prime movers behind
the USA PATRIOT Act and the author of many of the money
laundering provisions contained within it) accused Riggs
Bank of laundering money for Chilean former dictator Augusto Pinochet and Equatorial Guinean dictator Teodoro
Obiang Nguema. Now the Washington-based bank has
admitted failing to report suspicious activity relating to
accounts belonging to both men and has agreed to pay a
fine of US$16 million (about £9 million). This is on
top of the US$25 million fine the bank paid last year for
failing to prevent money laundering.
A US Senate investigation has revealed that Riggs Bank
set up several accounts for General Pinochet while he was
under house arrest in the UK in 1998. The report
also showed that between 1995 and 2004, the bank
administered more than sixty accounts for members of the
Equatorial Guinean government and their families and
established offshore corporations for President Nguema and
his sons.
Federal judge Ricardo Urbina must approve the proposed
fine before it can be paid. "The bank regrets what
has occurred and has co-operated fully," its lawyer said.
Riggs has already sold its diplomatic and international
businesses and is itself currently up for sale.
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EU thinks hard about "organised crime" -
27 January 2005
Franco
Frattini, EU Commissioner responsible for Justice, Freedom
and Security has declared that "if criminal gangs think that
the EU has a soft touch on crime than they make a big
mistake". He was presenting a Commission proposal to
severely punish members of organised crime groups wherever
they operate in the EU, and a strategy to ensure exchange of
criminal records between Member States and mutual
recognition of criminal convictions within the territory of
the EU. The Commissioner noted that such proposals would
guarantee "that criminals are brought to justice regardless
in which Member State they committed their crimes or fled to
afterwards". This will mean an enormous step forward in
ensuring that criminals can no longer benefit from legal
loopholes and differences between Member States’ national
rules.
The proposal also aims to harmonise the definition of
what constitutes a criminal organisation. Such an
organisation is understood to be a structured association of
at least two persons who, for material gain, commit serious
crimes punishable with at least four years of imprisonment,
such as trafficking in weapons, drugs or human beings,
economic crimes or money laundering. According to Europol,
3,000 criminal organisations were identified within the EU
in 2002, implicating 40,000 criminals.
The proposal suggests punishing leaders of such
organisation with an imprisonment of at least ten years and
participation, including supportive activities for the
organisation, with five years of imprisonment. The
proposal further envisages lowering of the sentence of those
members of criminal organisation who cooperate with the
authorities with a view to avoiding criminal activities to
take place or assist in identifying and bringing to justice
other offenders. The proposal also stipulates that Member
States must cooperate and consult each other to coordinate
their action and decide which Member State will prosecute
the alleged offenders .
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Thinking about Crime nominated for
compliance award -
27 January 2005
Thinking about Crime
Limited was nominated in the category "Most practical
consulting firm" at the Complinet Inaugural Compliance
Awards held in London on 26 January. We did not
win the award but are proud to have been nominated,
especially as the practical nature of our approach is
the very thing we try to stress.
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French film stars questioned about
money laundering -
7 January 2005
France's two biggest movie stars, Catherine Deneuve and
Gerard Depardieu, are being questioned over their links
to a failed Algerian tycoon who is wanted for suspected
money laundering. Deneuve spent nearly five hours
on 5 January being interrogated by a special Paris
police unit investigating embezzlement claims against
the fugitive businessman, Abdelmou-nene Rafik Khalifa.
In particular, she was asked about 50,000 euros in cash
she received from Khalifa in 2003 to promote the launch
of his short-lived Khalifa TV satellite channel based in
Paris. Depardieu will be questioned next week,
because he attended several receptions thrown by Khalifa.
He has previously fiercely defended Khalifa from
accusations that the businessman had raised his money
from dealings with Algeria's powerful army generals who
are believed to tap their country's oil wealth; in
September 2002, an angry Depardieu accused one
politician levelling the charges, Noel Mamere, of being
"racist".
Khalifa saw his group of
companies collapse in 2003 under debts and claims of
embezzlement. He has never explained the source of
the estimated one billion euros that enabled him to
build seemingly from nothing an empire that included an
airline, catering, car rentals, graphic design,
construction, a bank and two television channels.
The group started unravelling in February 2002, when
three Khalifa Bank managers were arrested at Algiers
airport with two million euros in undeclared cash
stuffed into suitcases. Days later Algerian
authorities placed the bank under the control of state
auditors. France - where Khalifa conducted much of
his business - soon opened a preliminary criminal
investigation into suspected money laundering.
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Record terrorism confiscation under
PoCA -
7 January 2005
£240,000 in cash has
been forfeited under the Proceeds of Crime Act 2002 from
an American Muslim activist jailed in the US for illegal
financial dealings. The cash was taken from Abdurahman
Alamoudi at Heathrow Airport in August 2003 and the
Metropolitan Police say it is the largest single seizure
by UK officers of cash intended to fund terrorism.
Alamoudi, who was born
in Eritrea, is currently serving 23 years for dealings
linked to an alleged plot to assassinate a Saudi
leader. A prominent figure in American politics, he was
passing through Heathrow on a connecting flight to Syria
from his home in the US when security staff noticed a
large amount of cash in his luggage and alerted
police. The suitcase was searched and £180,000 was
seized under PoCA but Alamoudi himself was released by
police, who did not realise the full significance of the
discovery. A further GBP £37,100 was later seized from
a property in north London.
After the Heathrow
seizure, investigations by the UK's National Terrorist
Financial Investigations Unit (NTFIU) uncovered a chain
of connections between Alamoudi and various Middle East
and Libyan-based front organisations suspected of having
links with terrorism. US police then arrested Alamoudi
at Dulles International Airport in Washington DC when he
returned to America in September 2003; he later admitted
offences relating to terror fundraising and was jailed
in October 2004.
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