Romanian former state minister George Copos and twelve other people have been indicted on charges of money laundering and forgery.  According to the Anti-Corruption Department, Copos, the majority shareholder in FC Rapid Bucharest football club, is indicted for actions he took as chairman of the Ana Electronic company and as a major shareholder of Ana Grup.  Ana Electronic allegedly sold real estate to the National Lottery in 2004 at prices which differed from the ones the company declared to the fiscal authority, thereby cheating the state out of a million euros in taxes.  Former Communications Minister Sorin Pantis has been accused of shady market operations.

Back to top of page

Daniel Power of Swansea has admitted making nearly £360,000 illegally dealing in scrap at his home address, and money laundering, and has been told to pay almost £190,000 within six months by sale of his assets, or be jailed for a year.  Amongst the assets that must be sold are a BMW X3, a house worth £150,000, £11,627.87 in a bank account and a Lordship of Goldington title valued at £6,000.  It is the first time Environment Agency Wales has prosecuted an illegal waste operator for money laundering, having argued that Power knew he was making money from an illegal activity.  Officers began to investigate him after noticing a vehicle carrying scrap cars entering his property in September 2006, and started covert surveillance of the site in January 2007.

Speaking about the case, the agency’s Graham Hillier said: “Legal waste companies are having a tough time of it in the current financial climate.  It is even more important, as regulators of the waste industry, that we make sure everyone operates on a level playing field.  Those who choose to operate outside the law will now not only face prosecution and a criminal conviction, they now have to understand we have the power to take away any financial gain they may have made from their crimes.”

Back to top of page

The former owner of top Colombian football club Independiente Medellin has turned himself in to police on a warrant for drug money laundering and other alleged crimes.  Rodrigo Tamayo is the fourteenth current or former executive of the club to be arrested or surrender since last week – two more remain at large.  The team is among several Colombian clubs alleged to have close ties to drug traffickers.  Tamayo ran the club from 1988-1992 and 1998-2007, and prosecutors launched an investigation into him after a former club auditor, Juan Bautista Avalos, denounced him publicly as having converted the team into a money laundering mill.  Avalos claimed that in the last three decades Independiente Medellin has been used to launder at least US$150 million [about £100 million].  He alleged that Tamayo used the sale of players, among other methods, to launder money.  One of the sales was of Luis Amaranto Perea to Boca Juniors of Argentina in 2003; he now plays for Atletico Madrid.

Back to top of page

The House of Lords EU Committee has launched an inquiry into EU and international cooperation to prevent money laundering and the financing of terrorism.  The inquiry, which will be undertaken by the Lords EU Sub-Committee on Home Affairs, will look at the role of the EU and it member states in global efforts to prevent money laundering and terrorist financing.  They will consider the level of international cooperation in detecting and preventing money laundering operations.  The committee will consider what impact the ruling of the European Court of Justice in the Kadi case will have on EU efforts to tackle the problem.  (In the Kadi case the ECJ ruled that the EU could not implement a UN Security Council resolution to impose economic sanctions on Yassin Abdullah Kadi, an associate of Osama bin Laden, as Kadi had not had the opportunity to put forward his comments on the proposed sanction order.  The case reflects an assumption by the ECJ that it has jurisdiction to review sanctions already imposed by the UN Security Council.) 

Back to top of page

Taiwanese ex-President Chen Shui-bian and thirteen close relatives and associates have been indicted on charges of corruption and money laundering.  Chen and his wife Wu Shu-jen are alleged to have taken about NT$490 million [about £9,850,000].  According to the indictments, Chen and Wu embezzled NT$104,152,395 from the president’s special state affairs fund.  Chen, Wu, family friend Tsai Ming-cheh, and former Hsinchu Science Park administrator James Lee pocketed US$11.98 million in the purchase of a piece of land in Taiwan in 2004: Chen’s share was NT$100 million, while Wu accepted US$6 million.  Also in 2004, Wu accepted US$2,735,500 from Rich Development Company chairman Kuo Chuan-ching in return for then-Interior Minister Yu Cheng-hsien leaking the names of those judging bids for construction projects at the Taipei World Trade Center's Nangang Exhibition Hall to Kuo.  Yu, Kuo, and seven of the experts were indicted separately.  Wu is charged with laundering the money overseas with assistance from her son Chen Chih-chung and daughter-in-law Huang Jui-ching, her brother Wu Ching-mao and sister-in-law, three family friends, and Kuo.

The indictments came precisely a month to the day after the ex-president was officially taken into custody.  The investigation into Chen’s alleged corruption began the day after he left office on 20 May 2008.  Chen admitted at a news conference on 14 August that his wife had remitted US$21 million into overseas accounts, but insisted that he had done nothing illegal. 

Back to top of page

At a meeting in Strasbourg between 8 and 12 December 2008, the Council of Europe Committee of experts on the evaluation of anti-money laundering measures and the financing of terrorism (MONEYVAL) issued a public statement regarding the deficiencies in the AML/CFT regime in Azerbaijan:

"MONEYVAL [notes] that a draft AML/CFT law had passed a second reading on 31 October 2008.  This draft law does not comply in a comprehensive manner with key international standards.  MONEYVAL calls on Azerbaijan to further revise this draft law... MONEYVAL also calls on its member States and other countries to advise their financial institutions to pay special attention by applying enhanced due diligence to transactions with persons and financial institutions from or in Azerbaijan in order to address the ML/FT risks." 

Back to top of page

Theresa Williams, a chiropractic clinic owner from Houston, Texas, has been sentenced to 33 months in prison for laundering the proceeds of an insurance fraud.  Williams was also ordered to serve three years of supervised release upon completion of her prison sentence and to pay restitution of US$1,771,737 [about £1,185,000] to The Hartford Insurance Company.  From September 2005 to June 2006, Williams received cheques from the insurance company for treatment and services never actually provided.  She conspired with a friend, Sandra Johnson, who was employed by The Hartford Insurance Company as a claims adjuster.  Johnson will be sentenced in January 2009. 

Back to top of page

Société Générale and Barclays have been cleared of money laundering charges by a French court, while a French regional bank and a Pakistani bank were fined after being found guilty on some charges.  Barclays, Société Générale and the French lender's chairman, Daniel Bouton, were not part of a ring that funneled the equivalent of €82 million into Israel in the late 1990s, Judge Olivier Leurent said as he read a summary of the  decision.  Leurent did find National Bank of Pakistan guilty on some charges, imposing a fine of €200,000.  Two of the bank’s executives were cleared of all charges, while two others were found guilty on some charges, fined €20,000 each and given two-year suspended sentences.  Société Marseillaise de Crédit was fined €100,000.  The lenders were among four banks and about 150 companies and individuals tried for money laundering in the so-called Sentier Affair, named after the Paris garment district.  The case against the lenders revolved around their role as correspondent banks for Israeli financial institutions. 

Back to top of page

In a follow-up to a story dated 17 September 2008 (see Old news page), an arrest warrant has been issued for former New York GiantsNew York Giants  football star Mark Ingram after he failed to report to federal prison on money laundering and bank fraud charges.  Ingram, who pleaded guilty in November 2005, had been ordered to surrender to a prison in Kentucky on 5 December, but he never showed up.  A warrant was issued for his arrest on 9 December, but he is still on the run.  Ingram pleaded guilty to laundering money he believed to be the proceeds of drug sales, and to bank fraud for cashing counterfeit cheques.  He has sought to remain free until after the college football season (which ends in early December) so that he could watch his son's freshman season as a running back at the University of Alabama. 

Back to top of page

The US Department of the Treasury has withdrawn regulations it proposed in 2003 under the USA PATRIOT Act which would have required certain unregistered investment companies (e.g. most hedge funds), commodity trading advisers and investment advisers to establish anti-money laundering programmes.  When the initial proposals were made, many advisers and hedge funds established a basic AML program without waiting for adoption of formal regulations.  And although the proposed regulations have been withdrawn, those who already have an AML programme in place are advised to keep it.  Such a programme is now commonplace and consistent with best practice; the SEC in inspections has made it clear that it expects registered advisers to have an AML programme as a matter of sound policy; and the AML laws of other jurisdictions already require such programmes for funds registered there.  Finally, Treasury may propose new AML regulations in the future, as it has indicated that it will continue to consider the extent to which Bank Secrecy Act requirements, including AML programme requirements, should be imposed on unregistered investment companies, commodity trading advisors, and investment advisers.

Back to top of page

Transparency International, the anti-corruption agency, has issued its Bribe Payers Index (BPI) 2008.  The BPI ranks 22 leading international and regional exporting countries by the tendency of their firms to bribe abroad.  (The combined global exports of goods and services and outflows of foreign direct investment of these 22 countries represented 75% of the world total in 2006.) 

Back to top of page

On Shu Kio, the wife of the former chairman of Singapore’s National Kidney Foundation (NKF) Richard Yong, has pleaded guilty in Hong Kong to money laundering.  On admitted transferring S$2.8 million [about £1.28 million] out of Singapore (the proceeds from the sale of two properties there) into a bank account in Hong Kong.  Yong was jailed for fifteen months in September 2007 for conspiring with his wife to transfer the money and fail to disclose his assets in order to avoid paying the charity, which had sued him successfully for breach of duties as former chairman.  On was remanded in custody until her sentencing hearing next week; she faces up to fourteen years in jail and a fine of up to HK$5 million [about £435,000]. 

Back to top of page

Jonathan Krestin, the managing partner at Butcher Burns, a commercial and property firm of solicitors, has been fined £5,000 on one count of money laundering at Isleworth Crown Court.  He was convicted on 19 November 2008, after 2½-week re-trial, of using the firm’s client account to launder money belonging to Michel Namer, a French national and convicted fraudster.  An investigation by HM Revenue and Customs showed that Krestin transferred 14,000 euros from Namer to an Italian account in the name of Namer’s mistress and former lap dancer, Dzindzer Jeles, knowing or suspecting the monies to be criminal property. He was found not guilty in relation to three other counts.

This sum was part of the proceeds of a 35,000,000 euro Missing Trader Intra Community Fraud orchestrated by Namer.  The 14,000 euro transfer was made just days after Krestin had been served with a court order cataloguing the criminal offences of which Namer was suspected and in relation to which he was about to plead guilty.  Namer was introduced to Krestin by a qualified tax advisor, Neil Macpherson.  Macpherson was convicted at the first trial and sentenced to three years’ imprisonment in June 2008.  That jury could not agree on verdicts in relation to Krestin and so there was a re-trial.

Back to top of page

The Taipei District Court has sentenced retired Ministry of Justice Investigation Bureau chief Yeh Sheng-mao to ten years in prison for leaking information about a money laundering investigation into ex-president Chen Shui-bian.  Yeh was found guilty of corruption, concealing government documents and leaking confidential information, for which he received a sentence of eight years and six months.  He was also convicted to two years and six months for leaking confidential information to a lawmaker in a separate case of influence peddling.  The court merged the two periods into one ten-year sentence.

Yeh is the first suspect to be convicted in the numerous scandals involving corruption and money laundering surrounding the former first family of Taiwan.  His case started when a message was sent to his office by the Egmont Group in January 2008.  The message said there were suspicions that the former first family was laundering money through a Swiss account in then name of Chen Shui-bian’s daughter-in-law Huang Juei-ching.  Instead of passing the message on to the State Public Prosecutor General for further investigation, Yeh warned Chen about its contents.  The Taipei District Court also made the rare suggestion that prosecutors should launch further investigations into the ex-president’s alleged involvement in money laundering, revealing secrets and influence peddling, looking in particular at the activities of Chen, his wife Wu Shu-jen, their son Chen Chih-chung and their daughter-in-law Huang, as well as Wu Li-pei, a former presidential adviser.  Ex-president Chen  himself has been in custody 12 November; he says that the money in his accounts comes from past election campaigns. 

Back to top of page

One of Brazil’s leading bankers, Daniel Dantas, has been sentenced to ten years in prison for attempting to bribe police a million dollars to drop a money laundering investigation into him and other employees of his Opportunity financial group.  Dantas was also fined 1.4 million reals [about £400,000], but has been released pending his appeal against the ruling.  Dantas was originally arrested in July 2008, along with former São Paulo Mayor Celso Pitta, on charges of money laundering and tax evasion, as part of a wide-ranging investigation into corruption.  Prosecutors in São Paulo accuse Dantas of laundering the equivalent of £1.3 billion between 1993 and 2004 though Opportunity by using offshore fiscal havens.

Back to top of page

Botswana is considering new legislation which will allow for the creation of a financial intelligence unit (to be called the Financial Intelligence Agency – FIA) and provide for the reporting of suspicious transactions.  The FIA will be an independent body, “free from the control of any other authority”.  The bill also establishes a national coordinating committee on financial intelligence, made up of representatives from the Ministry of Finance and Development Planning, the Directorate on Corruption and Economic Crime, the police, the Attorney General's chambers, the Bank of Botswana, the Unified Revenue Services, the Ministry of Foreign Affairs and International Cooperation, the Department of Immigration, the Non Bank Financial Institution Regulatory Authority, the Directorate of Intelligence and Security and the Ministry of Defence, Justice and Security.  Among other duties, the committee “will assess the effectiveness of policies and measures to combat financial offences such as money laundering, financing of terrorism and the acquisition of property from the proceeds of any other offence”, and will meet quarterly. 

Back to top of page

Portuguese authorities have detained the former president of financially troubled small commercial bank Banco Portugal de Negocios (BPN) on charges including alleged tax fraud and money laundering.  Jose Oliveira e Costa, who headed BPN between 1997 and early 2008, has been sentenced to three months’ detention by the Central Criminal Tribunal in Lisbon.  The detention aims to prevent the suspect from escaping and destroying documents that may contain incriminating evidence, said court officials, and could be extended beyond three months.  The Portuguese government said earlier this month that BPN had suffered losses of about 700 million euros due to bad management and malpractice, and decided to nationalise the bank in a bid to prevent a financial crisis chain reaction in Portugal.  Following the government’s announcement, the media revealed that police investigations were already underway into BPN, which is suspected of being involved in money laundering. 

Back to top of page

Four men have been sentenced by Snaresbrook Crown Court to a total of 23½ years in prison for supplying cocaine and money laundering.  SOCA officers did not find any cocaine, but they did fine 15kg of boric acid, which is occasionally used as a 'cutting agent' mixed with cocaine to make street supplies go further.  Cocaine sold on the street is regularly adulterated in this way, so that the substance sold may contain up to 80% boric acid – a substance often used in household laundry and drain-cleaning.  Daniel Davis and Thomas Smith were found guilty of conspiracy to supply cocaine and money laundering, and Kevin Downes and Paul Leaper were found guilty of money laundering charges.  Davis was sentenced to 11 years, Smith to 6 years, Downes to 5 years and Leaper to 18 months.  A confiscation hearing will take place on 1 May 2009.

Serious Crime Prevention Orders were granted in respect of Davis and Downes.  These include the first imposition of restrictions on travel abroad and possession of substances which may be used as cutting agents, as well as the use of bank accounts, credit, mortgages and mobile phones.  Any breach of these orders may lead to an additional five years in prison.

Back to top of page

Conrad Black has asked for a pardon from President Bush.  The Canadian-born peer has been in prison in Florida since March 2008, when he began serving a 6½ year sentence for defrauding shareholders of Hollinger International.  US presidents are often swamped with appeals for clemency in their last days of office, but the current economic woes mean that Lord Black is likely to get short shrift.  And Mr Bush’s successor is unlikely to be very sympathetic either, having previously taken a fierce stand against white collar crime. 

Back to top of page

Four men and two women have been convicted in the largest money laundering operation ever carried out in Norfolk, bringing to an end a 22-month long investigation into cannabis factories.  Luan Van Phan and Phuong Thi Kim Nguyen from Norfolk and Bich Nga Le, Hoang Hoi Dao,  Ngoc Anh Dao and Jean Yves Nicolas Ephigene, all from London, were convicted of offences including conspiracy to produce a controlled drug, conspiracy to money launder and mortgage fraud.  Five properties were converted by the gang into cannabis factories: three in King’s Lynn, one in Sunbury on Thames and one in London.  Police raided the properties and seized numerous cannabis plants at different stages of development.  The six on trial laundered the proceeds from their crimes by buying property and luxury vehicles, and the police seized assets worth in excess of £1 million.  The six will be sentenced in January 2009.

Back to top of page

A Chicago dentist who pleaded guilty to money laundering in a scheme involving prostitutes, pimps and yuppie condominiums has been sent to prison for more than three years.  Gary Kimmel admitted to providing services to the prostitution ring by helping pimps lease expensive cars and renting his condos to them.  At least one of the condos owned by Kimmel was used for prostitution.  Kimmel also fixed the teeth of prostitutes, accepting cash from pimps to do so. Kimmel was arrested in 2005 and later gave up his dental licence.  US District Judge Blanche Manning called Kimmel’s offence “a terrible situation for many women”.

Back to top of page

A millionaire loan shark whose only legitimate business was a tanning salon in Surrey has been jailed after being extradited from Spain.  Scott Linegar had a £780,000 nest egg and his income “far exceeded” that from Perfection Tanning in Tadworth.  Linegar admitted to police that he ran a £28,000-a-week loan shark empire, after they found holdalls packed with more than £46,000 collected from customers in a Mercedes which Linegar abandoned after it crashed in south-east London.  After an initial appearance before magistrates, Linegar skipped bail and fled to Spain with his girlfriend Kelly Lawton, and it took police two years to track them down before they were extradited.  Linegar admitted his crimes but would not disclose the location of his money.  However, investigations revealed that the £53,000 (crashed) Mercedes had been bought for cash, and he paid a £50,000 cash deposit for a property in Orpington and a £40,000 cash deposit for a second home in Banstead.  At the time of his arrest, he was about to put down a £35,000 deposit for the Hop Inn pub in Paddock Wood, Kent.  Linegar admitted two counts of money laundering, three of possessing criminal property and one of unlicensed money lending and was jailed for three years and six months. 

Back to top of page

In a follow-up to a story dated 23 September 2008 (see Old news page), Manhattan investment adviser Alberto Vilar has been found guilty of fraud and money laundering.  Vilar, famed for his donations to opera companies worldwide, was found guilty of all twelve charges he faced, including conspiracy to commit securities fraud, securities fraud, money laundering, investment adviser fraud, mail fraud and wire fraud.  His business partner, Gary Tanaka, was found guilty of conspiracy to commit securities fraud and one count of securities fraud.  Both men are out on bail and now face a maximum prison sentence of up to 20 years.

The business partners founded Amerindo Investment Advisers Inc, which had offices in London, New York and San Francisco with US$10 billion under management at its height with investments in Microsoft, Cisco, Intel and other technology stocks.  Prosecutors argued that after the tech bubble burst in October 2002, the partners were deep in debt and stole money from clients to pay their bills.  These included paying an arts college to which Vilar had pledged money and to make mortgage payments on his New York apartment.  Vilar ranked high in the culture world for the millions he gave, but also fell short in promised donations to the Metropolitan Opera in New York, the Los Angeles Opera, the Washington National Opera and other groups. 

Back to top of page

The Home Office has announced that criminal assets confiscated by police forces and other asset recovery agencies between April and June 2008 totalled £28.6 million, and £14.3 million of it is to be shared between police, prosecutors and courts.  Since the Proceeds of Crime Act came into effect in 2003, £497 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.  £5.97 million  will be given to police forces in England and Wales (compared with £3.71 million paid out in the same quarter last year).  HM Revenue and Customs will receive £2.39 million, the Crown Prosecution Service £2.74 million, HM Revenue and Customs £1.56 million, and SOCA £400,000.  For the first time, police and prosecutors will receive more than the courts, in an 18.75%/18.75%/12.5% split of confiscation receipts. 

Back to top of page

Aleksei Frenkel, an executive at VIP Holding Bank in Moscow, has been sentenced to nineteen years in prison for hiring gunmen to kill a government regulator who had imposed sanctions on his bank.  Frenkel was arrested three months after the first deputy chairman of the central bank, Andrei Kozlov, and his driver were shot to death in a car-park on 13 September 2006.  Angry after the regulator sanctioned his bank, Frenkel persuaded a colleague to hire three Ukrainian taxi drivers to shoot Kozlov, who was at the time the country’s highest-ranking regulator of consumer banks.  Frenkel has maintained his innocence through the investigation and trial, and is planning to appeal.

Back to top of page

Antigua and Barbuda has passed the Money Laundering Prevention Act 2008.  The updated legislation makes provision for the licensing and regulation of the transmission of money or monetary value in any form.  It also makes it an offence for a person who knows or suspects that a financial institution is about to submit a suspicious activity report to divulge that fact to another.  Record-keeping and reporting requirements are also updated to bring them up to international standards.  On the same day, the parliament also approved the Prevention of Terrorism Act 2008.

Back to top of page

A British man, Jason Lee Dupuy, has been charged with money laundering in the Czech Republic.  He is one of two men running a Prague-based money exchange company called Aktiv Change, which has been under police scrutiny since 2005.  He is accused of laundering more than 5.3 billion crowns [about £173 million] of criminal proceeds by wiring the money overseas, mainly to accounts in China and Vietnam.  In early October 2008, police searched the company’s office and arrested Dupuy’s business partner Omar Mogheth, a Czech citizen of Egyptian origin.

Back to top of page

Saifullah Anjum Ranjha, a Pakistani citizen living in Washington in the US, has been sentenced to 110 months in prison for money laundering and concealing terrorist financing.  Ranjha pleaded guilty in August 2008 to operating a Washington money remittance business.  Cooperating witnesses posed as drug smugglers, cigarette smugglers and other criminals, and in one case as a terrorist who wanted to send money to al-Qaida.  From October 2003 to September 2007, the cooperating witness gave Ranjha and his associates more than US$2.2 million [about £1.4 million] in government money to transfer the funds abroad through an informal Hawala money transfer system.  US District Judge Marvin Garbis also ordered Ranjha to forfeit $2,208,000.

Back to top of page

The Netherlands plans to tighten controls over the property sector to combat fraud and money laundering.  Dutch Justice Minister Ernst Hirsch Ballin has announced that the ministries of justice, finance and home affairs will work out a set of measures to tackle the lack of both supervision and transparency that has so far made it difficult to prosecute those abusing the property sector.  Estate agents, property valuers and notaries will have to prove the integrity of their transactions, provide authorities with clearer information about their business methods, and help prevent mortgage fraud.  Notaries will also have to make their files available to authorities for scrutiny to curtail lawyer-client privileges.  A real estate intelligence centre will be established, allowing the department of public prosecutions, the tax authorities, financial investigators and the police to collaborate.  A new warning system will be set up under which the Land Registry will warn notaries of what are known as ABC transactions, where a property repeatedly changes hands in a short period of time with huge profits.

Back to top of page

Donald Birrell, who was jailed for ten years in August for money laundering and fraud, has become the first person in Scotland to be the subject of a financial reporting order.  Prosecutors made a case for the 7½ year order on the grounds that they feared he would direct criminal activities from inside prison.  Birrell must now: list all property, money and assets in which he has an interest; detail any spending or transfer of money over £500; explain all income by providing receipts or invoices; reveal any mortgages, loans, overdrafts, credit or store cards that he has applied for; and give details of involvement in any company.  He has to provide an initial report to the Scottish Crime and Drugs Enforcement Agency by 15 December 2008 and every six months thereafter. 

Back to top of page