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Stop Press
Part of the work of Thinking
about Crime Limited is keeping up with developments
and changes in legislation, regulation and guidance in the
global world of money laundering.
This page highlights money
laundering (and connected) stories, issues and
developments that may be of concern to you.
Please note that this is for
information only: you should seek your own legal and
compliance advice before taking action based on anything
you read on this page.
For older news items, please visit
the Old news page - this
contains stories dating back to January 2002.
Indian
businessman guilty of laundering nearly £30 million
through Jersey
- 8 March 2010
In a follow-up to a story dated 26 January 2010, Indian
businessman Raj Arjandas Bhojwani has been found guilty of
“greed and corruption on a massive scale” in Jersey’s Royal
Court. For five weeks, in one of Jersey’s largest ever
money laundering cases, the Royal Court heard how Bhojwani
laundered US$43.9 million [about £29.1 million] – the
proceeds of corrupt Nigerian vehicle deals – through Jersey
bank accounts. Since Bhojwani’s arrest in 2007, a surety of
around $50 million has been lodged with Jersey’s Viscount
and the prosecution will now move to permanently confiscate
those funds.
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Gang smuggles
£62 million of skunk cannabis in flower boxes
- 5 March 2010
A gang of twelve men has
been found guilty of smuggling skunk cannabis worth £62
million into the UK hidden in boxes of flowers from the
Netherlands. The drugs were smuggled through the ports of
Harwich and Hull, and were then unpacked and stored in
lock-up garages in south-west London and Surrey. The gang
was the subject of a 14-month undercover police operation.
In two years, they smuggled in 88 shipments; at the peak of
their operation, they were bringing in 250kg of the highly
potent cannabis strain every week, enough for 225,000 street
deals. They ended up with so much cash they forgot £60,000,
which went mouldy in an underground safe in a garage in
Kingston. They also used a bureau de change in east London
to launder money, and police believe much of the laundered
money was wired to accounts in Pakistan and Dubai. The gang
leader, Terrence Bowler, and five other men pleaded guilty
to conspiracy to import controlled drugs and laundering the
proceeds of crime. Four other men admitted drug-related
offences, while two more pleaded guilty to money
laundering. All twelve will be sentenced later this month.
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Former
Lancashire councillor jailed for money
laundering
- 3 March 2010
In a follow-up to a story dated 25 February 2010,
Frank McGrath, the former deputy leader of Preston Council
in Lancashire, has been jailed for four-and-a-half years for
laundering money for a drug trafficker. McGrath laundered more than £300,000 for Silvano Turchet, who is currently serving 15 years for the
importation of Class A drugs. Sentencing Judge Robert
Atherton told McGrath: "You deceived those who you did
business with and you deceived people who trusted you."
Turchet was sentenced to another six years in prison, to run
concurrently.
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Underpants cash smuggler jailed for money
laundering -
3 March 2010
John
Maurice, a semi-retired property salesman who tried to
smuggle cash out of the UK in his underpants, has been
jailed for four years for laundering almost £4 million. A
sniffer dog showed an interest in Maurice as he waited to
board a ferry from Dover to France in June 2008, and when
challenged he (Maurice, not the dog) removed 63,000 euros
and £2,600 from his underwear. The authorities had been
monitoring Maurice as he regularly took large amounts of
sterling cash – between £25,000 and £50,000 – to a bureau de
change in Worthing in West Sussex and changed them into
euros. He used the bureau de change 180 times between April
2005 and June 2008. Maurice claimed that he was dealing
with the money on behalf of clients who wanted to buy
furniture for Spanish properties – although investigations
revealed that once the exchange had taken place, he would
return the cash to his clients. He has never revealed the
true nature of the criminal activity he was involved in, but
by his plea to money laundering Maurice admitted that the
money had come from a illicit source. Sentencing
Maurice at Canterbury Crown Court, Judge Adele Williams told
him: “You have been living a double life of Jekyll and Hyde,
respectable on the surface and dishonest conduct underneath.
You must have engaged in serious criminality. Were it not
for your age [68], previous good character and health, your
sentence would have been much longer.” Confiscation of
Maurice’s assets is now being sought.
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Essex mortgage fraudsters jailed for money
laundering -
1 March 2010
Khawar Khan and brothers
Imran and Nadeem Mirza have been jailed for carrying out an
£8 million mortgage fraud in Essex. The three set up 33
fraudulent mortgages with the Abbey National and Birmingham
Midshires building societies for properties across the south
east of England, and 32 of the applications were signed by
Mahmood Ali, of Montague Mason Solicitors, who allegedly
falsified the paperwork. The money from the mortgages was
sent to the law firm’s account from where it was dispersed
to various bank accounts. Ali is still being sought by the
police.
Between June and December
2008, Khan laundered £1.3 million using more than 150 bank
accounts, while the Mirza brothers laundered £1.6 million
between them. The fraudsters were traced by the IP
addresses of their computers as they used internet banking
systems. Police officers seized gold ingots worth £65,000,
and £13,000 in cash from a property linked to Khan in
Nottingham. They also seized credit card readers,
computers, false passports and credit cards, jewellery and
mobile phones from his home in Barking, while about £100,000
in cash was seized from the Mirza brothers’ home in Ilford.
Khan was jailed for five years, and the Mirza brothers for
four years each, for conspiracy to launder criminal
property, conspiracy to acquire criminal property and
offences related to the possession of false identity
documents and other articles for use in fraud.
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Major Russian money laundering scheme uncovered -
1 March 2010
Reports are still sketchy,
but apparently the Russian Interior Ministry has announced
that investigators have uncovered an international money
laundering operation that has been active in Russia since
2007. A statement from the Ministry said that the group has
laundered more than 30 billion roubles [about £700 million],
US$440 million [about £295 million] and 123 million euros
[about £111 million]. Three commercial banks, 72 Russian
and seven foreign commercial institutions were allegedly
involved in the money laundering, and three people have
apparently already been charged with illegal banking
activities and money laundering. Investigations continue
into the group, which the Ministry says opened bank accounts
for shell companies, provided cash services to private and
corporate investors, and bought and sold foreign currencies.
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Family members of jailed US Congressman also plead
guilty to money
laundering - 25 February 2010
In a follow-up to a story dated 14 November 2009, when former US Congressman
William Jefferson was jailed
for thirteen years for bribery and money
laundering, Jefferson's sister and niece have pleaded guilty
to fraud and money laundering. Betty Jefferson,
Jefferson’s sister and an elected tax assessor in New
Orleans, and her daughter Angela Coleman have pleaded guilty
to charges of conspiracy to commit mail fraud, aggravated
identity theft, money laundering and tax evasion. The women
admitted that between 1999 and 2006 they participated in a
conspiracy to obtain money and property for their financial
and political benefit through various public and private
organisations. The pleas were part of a plea agreement, and
come about a month before the two were to go to trial along
with Jefferson’s brother Mose, and Renee Pratt, a former
city councillor and state representative. Defence attorney
Chick Foret said: “The Jefferson family is clearly
splintered. The two folks who pleaded guilty today… will
testify against the two remaining defendants.” Betty
Jefferson and Coleman will be sentenced on 26 May 2010; they
face up to five years in prison and a $250,000 fine.
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Former
Lancashire councillor found guilty of drug money
laundering
- 25 February 2010
Frank McGrath, the former deputy leader of Preston Council
in Lancashire, has been found guilty of money laundering for
a drug trafficker. McGrath laundered more than £300,000 for
Silvano Turchet, who is currently serving 15 years for the
importation of Class A drugs. The money was used to
purchase a house in Wrexham, a hangar where Turchet stored
an aeroplane used to import drugs, and a £17,000 designer
watch. McGrath also transferred £154,000 to an Italian bank
account. McGrath has been remanded in custody for
sentencing on 3 March 2010.
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Former
Guatemalan president goes to hospital
- 20 February 2010
In a follow-up to a story
dated 25 January 2010, Alfonso Portillo, the former
president of Guatemala who faces money laundering charges in
the US, has been taken to a military hospital. Portillo was
arrested on 22 January 2010 at the request of the US, which
is seeking his extradition, and was originally detained in a
maximum security prison. On 19 February he was moved to a
pre-trial detention facility. According to his lawyer,
Portillo has contracted bronchitis thanks to the low
temperatures at the prison.
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FATF issues
new list of jurisdictions of concern
- 18 February 2010
At its plenary meeting taking
place in Abu Dhabi, the Financial Action Task Force has
issued a list of jurisdictions that have "strategic
deficiencies" in their AML/CFT regimes. The FATF has
called on its members to apply countermeasures to Iran.
It has announced that four jurisdictions have "not committed
to an action plan to address key deficiencies": Angola, the
Democratic People's Republic of Korea, Ecuador and Ethiopia.
And it has said that three further jurisdictions have
previously been identified as having deficiencies and have
yet to address them: Pakistan, Turkmenistan, and São
Tomé
and Príncipe.
The FATF has also issued a
statement on the progress in improving AML/CFT compliance in
the following jurisdictions: Antigua and Barbuda,
Azerbaijan, Bolivia, Greece, Indonesia, Kenya, Morocco,
Myanmar, Nepal, Nigeria, Paraguay, Qatar, Sri Lanka, Sudan,
Syria, Trinidad and Tobago, Thailand, Turkey, Ukraine and
Yemen.
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"Merchant of
Death" Bout now wanted for money laundering
- 17 February 2010
Russian
Viktor Bout (the so-called “Merchant of Death”) is to be
charged in the US with money laundering and fraud. The
charges relate to alleged attempts by Bout and Richard Ammar
Chichakli to buy two aircraft from US-based companies in
violation of economic sanctions. Bout has already been
charged with arms trafficking to Colombia’s Marxist FARC
guerrilla group, which the US considers a terrorist group.
Bout was arrested in Thailand in March 2008 and has been
held since without bail, although the Thai authorities have
refused US requests for his extradition – FARC is not
considered a terrorist organisation under Thai legislation.
Chichakli is a US citizen, and Interpol has been asked to
help find and arrest him.
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Former broker
charged with theft and money laundering
- 16 February 2010
Steven Mandala, a former Merrill Lynch & Co broker in
Manhattan, has been arrested and charged with various
offences including money laundering. The offences relate to
his alleged theft of US$780,000 [about £495,000] from the
company, some of which was used to buy a Ferrari.
Prosecutors accuse Steven Mandala of overstating his
employment history in persuading Merrill to hire him in
April 2009: he falsely claimed to be a partner with Maxim
Group who oversaw $300 million of client assets, generated
$1.5 million of annual revenue, and was paid $765,000.
Mandala then obtained a $780,000 loan from Merrill, and used
$245,580 to buy a Ferrari in his father’s (identical) name.
Mandala then rarely showed up for work, and brought in only
a handful of clients with about $20,000 of assets. He
resigned from Merrill in June 2009. Mandala is charged with
grand larceny, money laundering, identity theft, criminal
possession of a forged instrument and falsifying business
records. He has pleaded not guilty and is being held in
custody pending a hearing on 10 March 2010. If found guilty
on all charges, he faces up to 78 years in prison.
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Thai Airways
employee jailed for laundering proceeds from prostitution
- 12 February 2010
Oranong Biscoe of Harrow in
Middlesex has been jailed for four years after being found
guilty of money laundering and running an unlicensed bank.
Biscoe sent £1.3 million, much of it from prostitution in
the UK, to her native Thailand and made thousands of pounds
charging commission on illegal transfers. A nationwide
police investigation was launched in 2007 after a Plymouth
prostitute was rescued by a client who took pity on her.
When a brothel was raided in Aberdeen, police found bank
receipts paid into Biscoe’s accounts. Biscoe, who was a
credit controller for Thai Airways in London, was making a
2% commission on the illegal transfers and was also taking a
profit from the currency conversions. She banked £18,000
from one brothel keeper on one day alone and used a network
of couriers to take cash out of Britain to Bangkok on Thai
Airways flights.
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Largest-ever
marijuana cash seizure in New York
- 8 February 2010
Investigators in New York
have seized US$1.1 million [about £704,000] in cash from an
apartment in
Little Italy. Prosecutors believe the cash –
packaged in shrink-wrap and heat-sealed – is profit from a
large-scale hydroponic marijuana operation. Some of the
money was on its way to California to fund a Mexican cocaine
purchase, while the rest was to be shipped north to
Canada. Officials also are investigating whether
the mob gets a cut of the lucrative business, as the
apartment is located on the turf of the Bonanno crime
family.
Last month, detectives
arrested Daniel McGehean, the apartment’s tenant, and
Canadian national Richard Doyon. Investigators also seized
records of drug sales, and a photo of McGehean standing in a
marijuana field. Two other suspected members of the ring,
Dehran Duckworth (drummer with “auditory kaleidoscope” band
Narhed) and real estate agent Richard Burke, were arrested
last month with a duffel bag containing five pounds of
marijuana hidden in Burke’s BMW. McGehean and Doyon have
been charged with illegal money transmitting, while
Duckworth and Burke have been charged with criminal sale and
possession of marijuana.
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Arts patron
sent to prison for fraud and money laundering
- 5 February 2010
In a
follow-up to a story dated 19 November 2008 (see
Old news page), Manhattan investment adviser Alberto Vilar has been sentenced to nine years in prison for 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. Vilar and Gary
Tanaka, his business partner in Amerindo Investment
Advisors, had spent clients’ money on volatile technology
stocks instead of the more stable investments they had
promised. After losing millions, Vilar turned to fraud in
an effort to pay expenses and to satisfy investors asking
for money.
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Jamaican
"labour broker" sent to prison for money laundering
- 1 February 2010
Clover May Robinson-Gordon
of Montego Bay, Jamaica has been sentenced by a court in the
US to 45 months in prison for conspiracy and money
laundering in connection with immigration fraud.
Robinson-Gordon operated her own labour brokerage business
based in Florida, and conspired with an organisation run by
a Belarusian man called Viktar Krus to bring in workers who
were then sent to jobs for which they were not authorised.
For example, Robinson-Gordon would request work visas for
immigrants to be placed at hotels and restaurants in
Virginia, but when the workers arrived they would illegally
be diverted to jobs in other states. The money laundering
charges stemmed from about US$50,000 [about £31,000] in
payments that Robinson-Gordon sent to Jamaica to secure the
workers.
Viktar Krus and 21 other
people were indicted in January 2009 as part of a massive
immigration-related fraud case. Federal agents from the
Internal Revenue Service, Homeland Security, Immigration and
Customs Enforcement and other agencies have spent years
dismantling the ring, which is thought to have ties to
Eastern European organised crime. Krus was sentenced in
July 2009 to more than seven years in prison for conspiracy,
visa fraud and tax evasion.
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Corner shop
owners charged with money laundering
- 29 January 2010
Anthony Bailey and
Jane George, owners of a convenience store in Daytona Beach,
Florida have been charged with grand theft and money
laundering after they had millions of dollars deposited into
their account by mistake. From October 2007 to November
2008, each time someone used a credit card at their 7-Eleven
store, the 7-Eleven company would deposit a small
transaction fee into their company bank account. It
totalled US$4.9 million [about £3 million], but the couple
did not tell 7-Eleven and the company noticed the error only
after a software upgrade. Bailey and George withdrew the
money and paid it into 25 personal accounts at banks all
over Florida; they also bought a half-million dollar luxury
home and two Mercedes cars. They have both been released on
bail.
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More money
laundering by US Army staff in Iraq
- 28 January 2010
Theresa Russell, a
former staff sergeant in the US Army, has pleaded guilty to
money laundering. From January to
October 2004, Russell was serving near Balad in
Iraq. From April 2004 to
February 2005, she received
more than US$30,000 [about
£18,500] in cash from John Rivard,
a former major in the US Army Reserves, and has admitted
that she knew the money she received from Rivard was the
proceeds of bribery.
In July 2007, Rivard pleaded
guilty to bribery and other offences in connection with his
service as an Army contracting officer in Iraq. From
April 2004 to
August 2005, he conspired with
a government contractor to steer federally-funded contracts
to the contractor’s company in exchange for hundreds of
thousands of dollars in illicit bribe payments. Rivard
instructed Russell to divide the payments she received from
him into several smaller monetary bank deposits to avoid the
detection of law enforcement authorities. Russell used the
criminal proceeds to pay for a car, cosmetic surgery and
household goods. She will be sentenced on 21 May 2010.
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Sussex "very
dangerous individual" jailed for money laundering
- 28 January 2010
Robert
Brett-Deans, from West Sussex, has been jailed for money
laundering. On 17 March 2007, police stopped a Ferrari
being driven by Brett-Deans and found £20,000 in euros and
sterling. A search of his hotel room revealed three bin
liners containing £351,125 in sterling and 30,284.59 in
euros. And a sports holdall containing £70,985.70 in
sterling and 50,000 in euros was found in a Porsche parked
at his parents’ home. Brett-Deans said that he was looking
after the money for a friend whom he would not name. He was
sentenced to seven years, five years and four years in
prison for three counts of possession of criminal property;
five years for transferring criminal property; and four
years for converting criminal property. The sentences will
be served concurrently. Police are now seeking to
confiscate the money and any other assets deemed to be the
proceeds of crime.
Detective Sergeant
James Hallums said after the hearing: “Brett-Deans was
entrusted with a large amount of money to be used in
criminal activity linked to drug trafficking. He is a very
dangerous individual who would have used his connections
with organised criminals to use the money to commit further
criminal offences.”
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Indian
businessman charged with laundering £27 million in Jersey
- 26 January 2010
Raj Arjandas Bhojwani, an Indian
businessman, has appeared in the Royal Court in Jersey to be
charged with three counts of money laundering relating to
US$43.9 million [about £27 million] which is alleged to be
the proceeds of corrupt vehicle deals in Nigeria. Bhojwani
was arrested in London on 21 January 2010 and brought to
Jersey, as the money is alleged to have come from the sale
of hundreds of military vehicles to Nigeria at hugely
inflated prices and the movement of millions of dollars from
the Nigerian public purse into the Jersey banking system in
October 2000. A former Nigerian president and two other
high-profile Nigerian officials are also alleged to be
involved. Bhojwani reserved his plea to all three charges.
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US seeks to
extradite former Guatemalan president on money laundering
charges
- 25 January 2010
The United States has
requested the extradition of Guatemalan former president
Alfonso Portillo to face charges of money laundering.
Portillo was elected in 2000 after promising to redistribute
wealth, but fled the country shortly after his four-year
presidential term ended in 2004 and spent the next four
years in Mexico. In 2008 he was extradited from Mexico to
Guatemala to face charges that he had embezzled millions of
dollars of public money during his presidency. The
extradition request from the US was approved by a Guatemalan
court on 22 January 2010, but police and
representatives of the UN-sponsored Commission Against
Impunity in Guatemala have
been unable to locate Portillo at any of his numerous
properties.
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Iranian banks
limit cash withdrawals
- 21 January 2010
Iran has restricted cash
withdrawals from banks as part of its efforts to battle
money laundering. From 21 January 2010, individual
account-holders will no longer be allowed to withdraw more
than 15 million rials [about £940] in cash per day, although
they can still write cheques and make electronic transfers
for larger amounts. This measure was first introduced in a
law which was passed in January 2008 and finalised in April
2009. Some analysts, however, claim that although the move
is touted as an anti-money laundering measure, it is really
aimed at cutting inflation by limiting liquidity in the
market. Iran has been dealing with high inflation and its
economy is in disarray, in part because of sanctions.
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Panamanian
former president put under house arrest
- 14 January 2010
Panamanian former president
Ernesto Perez Balladares has been put under house arrest
while authorities investigate allegations that he laundered
money received from a casino called Lucky Games SA. During
his 1994-1999 term, Perez’s government granted the casino an
operating licence. Perez was voted into office in 1994, in
what is considered Panama’s first democratic election after
the toppling of Manuel Noriega in 1989, and his Democratic
Revolutionary Party says that the current allegations are
politically motivated. Opponents accuse Perez of living
lavishly from the proceeds of illegal dealings during his
time in office but Perez (who owns several luxury homes, a
plane, a yacht and luxury cars) says that he earned his
wealth legally.
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Former US Army
captain jailed for theft and money laundering
- 13 January 2010
In a
follow-up to a story dated 13 August 2009, David Gilliam, a
former captain in the US army, has been jailed for four
years and two months for theft and money laundering.
Gilliam pleaded guilty to stealing US$400,000 [about
£242,000] in cash between April 2004 and April 2005, while
serving at Kandahar Air Base in Afghanistan; he worked as a
disbursing officer and took the money while disbursing funds
to pay for projects in Afghanistan. He also pleaded guilty
to money laundering (by smuggling the cash to Hawaii and
South Carolina) and to filing a false tax return (by not
listing the stolen money as income). Gilliam must also pay
the US Government $450,000 in restitution.
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Carbon traders
charged with money laundering
- 12 January 2010
Three carbon
traders from Britain and one from the Netherlands have been
charged with money laundering by the Belgian authorities.
Officials suspect that the traders have avoided €3 million
[about £2.7 million] in VAT payments on carbon permits –
which must be bought by heavy industry to cover the cost of
their emissions. The British traders were allegedly
operating from Tournai, in Belgium, to take advantage of the
country’s 21% VAT on carbon permits. They deny the claims
that they were buying permits in Britain, and selling them
on to banks via intermediaries without paying tax – a
version of the classic carousel fraud (where goods are
imported tax-free from other countries then sold to one or
more buyers without charging the tax, and the trader then
disappears, pocketing the VAT).
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Florida
ex-judge goes to prison for fraud and money laundering
- 9 January 2010
Disgraced Florida judge
Phillip Davis has been sentenced to 20 years in prison for
stealing US$82,825.30 [about £51,400] of county and state
grants given to his Miami social services agency and
intended to help the poor. Davis and his former assistant
Joan Headley were found guilty in November 2009 on nine
charges of fraud and money laundering; Headley has been
given ten years in prison.
Miami-Dade Circuit Judge
Beatrice Butchko told Davis, “You’ve been blessed in this
life with gifts that you’ve thrown away on more than one
occasion – shame on you.” She was referring to 1991, when
Davis was arrested following an infamous FBI sting (known as
Operation Court Broom) during which agents recorded him
arranging a $20,000 payoff from a lawyer. At trial in 1993,
Davis admitted snorting cocaine in his chambers and
tearfully blamed the bribes on his obsession with the
Hollywood maxim “I could have been somebody!”. In a
stunning verdict, jurors acquitted him. Davis was disbarred
but rebounded in the late 1990s by establishing Miami-Dade
Resident College, a grant-funded program intended to teach
impoverished inner-city residents job and life skills.
Prosecutors said that Davis and Headley inflated salaries
and submitted fake bills to the program to steal the money.
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Former
McKinsey consultant charged with running illegal Hawala
business
- 7 January 2010
The Manhattan US Attorney’s Office has charged Mahmoud Reza
Banki, a former senior associate at management consultancy
McKinsey & Company, with violating the International
Emergency Economic Powers Act (IEEPA) and running an
unlicensed money transfer business to transfer nearly US$5
million [about £3 million] between Iran and the United
States from January 2006 to September 2009. In order to
circumvent US sanctions on Iran, Banki and an unnamed
co-conspirator in Iran operated a Hawala network – an
informal network that facilitates money transfers via
individuals.
Banki, who faces up to 20 years in prison if convicted,
received the funds via wire transfers to his Bank of America
personal account from companies and individuals in Saudi
Arabia, Kuwait, Latvia, Slovenia, Russia and other countries
to settle transactions tied to Iran. He and his
co-conspirator used the profits from the scheme to buy a
$2.4 million condominium in Manhattan, to fund credit card
purchases and to invest in securities.
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Concert
promoter charged with money laundering
- 7 January 2010
Miko Wady, an Arizona
concert promoter accused of making more than US$25 million
[about £15.5 million] by booking fake concerts, has been
charged with 37 counts of wire fraud and money laundering.
He claimed to be staging concerts for the likes of Mariah
Carey, Mary J Blige, 50 Cent, Jamie Foxx, U2 and the Rolling
Stones, and over 140 people invested their money. Wady
spent $3 million on a home, a boat and at least 30 cars. He
faces up to 20 years in prison on the wire fraud charges
alone.
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Colombian
pyramid scammer is extradited to the US for trial
- 5 January 2010
In a follow-up to a story dated
16 December 2009, David
Murcia Guzman, whose pyramid investment scheme cheated fellow
Colombians out of hundreds of millions of dollars, has been
extradited to the US to stand trial for money laundering.
He was accompanied on his flight to New York by agents from
the US Drug Enforcement Agency. If convicted in the
US, he faces up to 20 years in prison, which he will serve
before being sent back to Colombia to sit out his 30-year
jail term in La Picota prison in Bogotà.
Murcia used the proceeds from his fraudulent scheme to live
a life of luxury in Panama, which included renting out the
entire floor of a top-class hotel. He was extradited
to Colombia in 2008 and jailed there in December 2009.
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India signs
MoUs - 3 January 2010
India has signed
Memoranda of Understanding (MoUs) with Russia, Malaysia and
Brazil. The MoUs will enable India's Financial Intelligence
Unit (FIU) – a government agency to investigate and
disseminate information between financial and law
enforcement agencies for identification of suspicious money
laundering – to share information with foreign FIUs whenever
considered necessary and reciprocally obtain information
from them on money laundering activities. India has already
signed MoUs with Mauritius and the Philippines, and
negotiations are underway to sign similar agreements with
another thirty countries.
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Kenya passes
new AML legislation - 1 January
2010
President Mwai
Kibaki of Kenya has signed into law the Proceeds of Crime
and Anti-Money Laundering Act. This Act provides for the
offence of money laundering (with penalties of up to seven
years in prison), and introduces measures to identify,
trace, freeze and seize the proceeds of crime. It also
provides that any person who knows or ought to have
reasonably known or suspected that any property is part of
the proceeds of crime but conceals or disguises the nature
or source of the same commits an offence. Finally, it
provides for the establishment of a Financial Reporting
Centre.
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China
announces plan for AML plan - 30 December 2009
The People’s Bank of China (PBOC
– China’s central bank) has published the country’s first
plan to tackle money laundering. In 2010 China will develop
its own anti-money laundering system by providing for
harsher punishment under law, building anti-terrorism
networks, improving supervision of the financial sector,
setting up systems for the supervision of non-financial
institutions, strengthening cooperation between government
departments, cultivating experts, actively cooperating with
international agencies to track money movements overseas.
PBOC Vice governor Su Ning said, “Our work is gradually
expanding from financial institutions to non-financial
institutions. Lotteries and clearing institutions are not
financial institutions, but they may become channels for
money laundering.” China passed its first AML law in 2006,
and in 2009 over 500 financial institutions were punished
for violating AML rules.
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Madoff
admitted to prison hospital - 23 December 2009
Convicted fraudster and money launderer Bernard Madoff, who
is serving a 150-year sentence in Butner, North Carolina,
has been taken to the prison medical centre. The Bureau of
Prisons has denied reports that Madoff is suffering from
cancer, but said that his symptoms included dizziness and
high blood pressure and would remain there for observation.
The Butner complex is renowned for its advanced medical
centre, and houses a number of older white collar criminals.
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GFSC publishes
public statement about Pippa Marie Harbour - 22 December 2009
Following an investigation into
false statements made to them by her about her identity and
qualifications, the Guernsey Financial Services Commission
has issued a public statement about Pippa Marie Harbour.
The statement prohibits Ms Harbour from acting as a
“director,
controller, partner, manager, general representative or
authorised insurance representative”
in various regulated sectors. The statement further
comments that:
“It
is important for regulated financial services businesses and
individuals working within them to be aware that false
statements about qualifications or other matters that
demonstrate a lack of integrity will be investigated and
acted upon by the Commission. The case also underlines
the practical importance of financial services businesses
meeting their employee screening obligations under the
Bailiwick’s anti-money laundering and countering the
financing of terrorism framework.”
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New York rabbi
jailed for money laundering - 21 December 2009
In a follow-up
to a story dated 19 December 2007 (see
Old news page),
Rabbi Naftali Tzvi Weisz,
the Brooklyn-based Grand Rabbi of the Spinka sect, has been
sentenced to two years in prison for his part in a
decade-long fraud and money laundering scheme. Weisz and
six associates in Los Angeles, Brooklyn and Israel pleaded
guilty in August to participating in a fraudulent kickback
scheme in which donors to Spinka charities were refunded up
to 95% of their donations, while claiming the full amounts
as deductions on their income tax. In 2006, Spinka
charities received nearly US$8.5 million [about £5.3
million] in donations, and made $744,596 in “profit” after
deducting the amounts paid back to contributors.
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Guernsey
director charged with money laundering -
17 December 2009
Roger Taylor, a Guernsey
company director, has been charged with money laundering.
The investigation, codenamed Operation Arboria, involves the
Guernsey police and customs service and the UK's Serious
Fraud Office, and concerns a UK High Court confiscation
order aimed at seizing proceeds of crime totalling £4
million. Prosecutors allege that Taylor enabled UK
resident Michael Summers to retain proceeds of crime worth
£750,000. Taylor was granted conditional bail and the
case was adjourned until 21 January 2010.
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Colombian
pyramid scammer goes to jail for laundering -
16 December 2009
David
Murcia, whose pyramid investment scheme cheated fellow
Colombians out of hundreds of millions of dollars, has been
sentenced by a court in Bogotá
to 30 years and eight months in prison for money laundering,
and been fined US$12.5 million [about £7.75 million]. He is
also expected to be extradited to the US to face further
money laundering charges. Murcia’s business, DMG Group
Holdings, drew in investors with promises of fantastic
interest rates then collapsed in late 2008: Murcia took in
$2 billion and returned only $100 million to investors.
Judge Jose de los Reyes said that Murcia had been
“inebriated by wealth”, and police suspect that Murcia was
in fact laundering the proceeds of drug trafficking.
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Students save
money laundering teacher from jail -
15 December 2009
Teacher Susan
Ross, of Utah in the US, has been saved from going to prison
for money laundering by pleas from former students. Ross
was director of federal programs for the Davis School
District, and she and her husband created a fraudulent book
scheme that cost the district more than US$4 million [about
£2.5 million] over twenty years: she never divulged to
district officials that she owned Notable Educational
Writing Services, which copied books and sold those books to
the district. Prosecutors asked for a jail sentence after
Ross pleaded guilty to money laundering, but Judge Clark
Waddoups said that a number of Ross’s former students had
written to him to say that without her help they would not
have graduated from high school. He sentenced Ross to three
years’ probation and 3,000 hours of community service, and
ordered her to pay $350,115 in restitution to the Davis
School District.
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Florida
politician pleads guilty to money laundering -
10 December 2009
In a follow-up to a story
dated 24 September 2009, suspended Florida politician
Josephus
Eggelletion has pleaded guilty to money laundering in a
federal corruption case and resigned from office, ending his
two-decade political career. Last month Eggelletion pleaded
not guilty, but changed his plea in a bid to reduce his
prison sentence. He was arrested in September as part of a
federal corruption investigation, but the case against him
began building in 2006 when an undercover agent donated
US$5,000 to Eggelletion’s golf foundation in exchange for
partnering on what Eggelletion thought were business deals.
He laundered money through bank accounts in the Bahamas and
evaded federal taxes on about $18,200 in cash payments, and
will be sentenced on 17 February 2010.
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“Hawala King”
arrested in India - 7 December 2009
Naresh Jain,
described as the “Hawala King” for his alleged dominance of
the secret informal banking system used by terrorists and
gangsters to bypass legitimate channels, has been arrested
in India after investigations by police in the UK, the US,
Italy and Dubai. They described Jain as one of the world’s
biggest money lenders who, along with his associates, is
believed to operate a £1.3 billion money laundering scheme.
A raid of the Jain family home in Delhi revealed details of
electronic bank transfers to beneficiaries in Afghanistan
and Pakistan, records of phone calls to crime figures in
those countries, records of 35 companies established by Jain
and his two Delhi-based brothers, and around £75,000 in
cash. Jain has been charged with laundering the proceeds of
drugs trafficking.
Detectives allege
that Jain’s involvement in hawala banking is just one aspect
of his money laundering empire, and that his network has
been active for over twenty years in five continents.
Italian police mounted a sting operation in 2006 and netted
many of his key contacts in that country but failed to land
Jain himself. He was arrested in Dubai in 2007 for breaking
their foreign exchange laws, but was released the following
year and returned to India.
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Vatican Bank allegedly under investigation for money
laundering - 4 December 2009
Italian weekly
investigative magazine “Panorama” has claimed in its 4
December issue that the Vatican Bank is under investigation
for suspected money laundering via accounts held at one of
Italy’s largest banks, the UniCredit Group. The magazine
claims that prosecutors are probing transactions totalling
180 million euros [about £162 million] handled between 2006
and 2008 by Vatican Bank accounts held at Unicredit’s branch
near the Vatican in Rome's Via della Conciliazione. Some of
the funds allegedly came from the sale and purchase of real
estate, and the banking operations allegedly break money
laundering laws. Prosecutors told the magazine that they
would soon question Unicredit’s senior management over the
suspect operations, and that they are also investigating
deposits made at other Italian banks. Prosecutor Nello
Rossi is heading the investigation, which is being carried
out in conjunction with financial specialists from the
Italian tax police.
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Curtis Warren sentenced to thirteen years for drug
trafficking in Jersey - 3 December 2009
In a follow-up to a story
dated 7 October 2009, Jersey’s Royal Court has handed out
stiff sentences to six men found guilty of attempting to
import cannabis with a street value of a million pounds.
Curtis Warren – the ring-leader and once Britain’s biggest
drugs baron and Interpol’s most wanted man – was sentenced
to 13 years. He will serve it in the UK, probably at
high-security Belmarsh Prison. His local lieutenant, John
Welsh, was sentenced to 12 years, while the man who was
going to bring the drugs into Jersey by speedboat, James
O’Brien, was sentenced to ten years. The three other
members of the gang – Paul Hunt, Jason Woodward and Oliver
Lucas – were to act as financiers and couriers, and were
each sentenced to five years. These sentences mark the end
of a complex police operation, which has involved officers
from the States of Jersey Police, the UK’s Serious Organised
Crime Agency (SOCA), Merseyside Police, and the police
forces of France, the Netherlands and Belgium.
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Bulgarians sentenced in US for "eBay" laundering -
2 December 2009
Bulgarian
nationals Ivaylo Pletnyov and Nikolay Minchev have been
sentenced in Washington DC for an online money laundering
scheme that bilked about US$1.2 million from US residents
and transferred it to criminals in eastern Europe. Between
July 2005 and May 2006, the pair used eBay and other
websites to advertise expensive vehicles and boats they did
not own. When victims expressed interest in the vehicles or
boats, they were emailed by the purported seller and
instructed to wire transfer payments through eBay Secure
Traders, an entity with no affiliation to eBay. The money
was then wired directly into bank accounts controlled by
Pletnyov and Minchev in Hungary, Slovakia, the Czech
Republic and Greece. Pletnyov was sentenced to four years
in prison for money laundering and ordered to pay $306,502
in restitution. Minchev was sentenced to 30 months in
prison for conspiracy to commit wire fraud and ordered to
pay $270,444 in restitution.
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US Army officer and family imprisoned for bribery
and laundering - 2 December 2009
John Cockerham, a former US Army contracting officer, has
been sentenced to 210 months in prison for taking bribes and
laundering the proceeds. He also was ordered to serve three
years of supervised release following the prison term and to
pay US$9.6 million [about £5.8 million] in restitution. His
wife Melissa, sister Carolyn Blake, and niece Nyree Pettaway
were also sentenced for their parts in the scheme.
Cockerham pleaded guilty in February 2008 to conspiracy,
bribery and money laundering relating to his time serving as
an Army contracting officer in Kuwait in 2004 and 2005. Cockerham
was responsible for awarding contracts for services to be
delivered to troops in Iraq, including bottled water, and
admitted that in return for awarding contracts, he received
more than US$9 million in bribes. He then directed the
contractors to pay his wife and sister, among others, in
order to conceal the receipt of bribe payments. His wife
Melissa accepted $1.4 million on her husband’s behalf and
stored the money in safe deposit boxes at banks in Kuwait
and Dubai. Carolyn Blake accepted more than $3 million and
stored the money in safe deposit boxes at banks in Kuwait,
taking 10% of the money as her fee. Nyree Pettaway helped
devise cover stories for the money, and also travelled to
Kuwait in January 2007, received the cash from Blake, and
gave it to others to hold for Cockerham.
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Bulgaria tries to crack down on fraud and money
laundering - 1 December 2009
The
Sofia City Court in Bulgaria has sentenced Peter Petrov to
five years in jail for laundering 99 million levs [about £46
million], and fined him 25,000 levs. Petrov was found
guilty of setting up a criminal group involved in laundering
funds from cigarette smuggling between 1997 and 2002. The
court also gave a three-year suspended sentence in absentia
to Tsveta Manavska, a member of Petrov’s group, and fined
her 10,000 levs. Petrov and Manavska worked with Ivan “The
Doctor” Todorov, who was gunned down in broad daylight in
Sofia in 2006 and was known as Bulgaria’s biggest cigarette
smuggler.
Bulgaria is under growing pressure from the European Union
to prove that it can put organised crime bosses and
high-level corrupt officials behind bars. The new
centre-right government, which came into power in July 2009,
has until July next year to win back EU trust and prevent
further sanctions from hitting more than 11 billion euros in
aid that Sofia can receive until 2013; in 2008, Brussels cut
the access of Bulgaria – the EU’s poorest nation – to other
EU aid over concerns about fraud. Since August 2009,
Bulgarian prosecutors have charged the defence and
agriculture ministers of the former Socialist government
with abuse of power and fraud. Former Prime Minister Sergei
Stanishev has been accused of losing classified reports on
crime, and ex-labour minister Emilia Maslarova has been
accused of large-scale embezzlement.
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Spanish judge chases Pinochet money - 30 November 2009
Campaigning Spanish High
Court judge Baltazar Garzon has threatened to seize up to
US$100 million [about £60 million] from Banco de Chile and
individuals suspected of laundering funds for Augusto
Pinochet – including the former Chilean dictator’s widow
Lucia Hiriart. Judge Garzon also ordered the Banco de
Chile, Hiriart and three Chilean bankers to pay $77 million
as a bond while his investigation proceeds. Garzon, who has
been investigating Hiriart and the bankers since 2004 and
tried to extradite Pinochet in 1998 for human rights abuses,
said that if they did not pay up in ten days, he would order
the seizure of $100 million from their bank accounts. In
2005, Garzon secured an $8 million settlement for victims of
Pinochet’s 1973-1990 dictatorship from Riggs National Corp,
which admitted helping Pinochet to launder money.
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Loyalist hands over assets to SOCA - 27 November 2009
Loyalist Thomas Matthews, a
former associate of murdered Ulster Defence Association
leader Jim Grey, has agreed to hand over a house and the
contents of eight bank accounts to the Serious Organised
Crime Agency (SOCA). SOCA had claimed that Matthews and his
wife Lucinda had derived the majority of their assets
“through money laundering and false accounting”, and that
Matthews had been involved in extortion and blackmail. The
case was originally sent to the Assets Recovery Agency in
2007, and later that year property and bank accounts
belonging to the couple, valued at £336,000, were frozen by
the High Court. These will now be handed over to SOCA.
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FSA warns of tough approach to financial crime,
including bribery - 19 November 2009
Margaret Cole, Director of
Enforcement at the Financial Services Authority, has given a
speech to the British Bankers' Association on the theme of
"The FSA's agenda for fighting financial crime". In her
speech, she said:
“Senior
management should take clear responsibility for managing
financial crime risks. These risks should be treated like
any other risk faced by the business - they should be
understood, assessed and monitored, and judgements should be
made about how best to mitigate them. We expect to see
senior management demonstrating leadership on financial
crime issues. We look for evidence that senior management
understand and are shaping their firm’s approach to
financial crime risks. And we want to see suitably senior
and independently-minded staff with sufficient resources
taking responsibility for mitigating financial crime risks…
We will treat very seriously the discovery that a regulated
firm is itself involved in financial crime... We
envisage that supervisors may in the future be asking
whether a firm’s geographical reach, customer base, product
lines, or sales channels make it vulnerable to the risk that
staff pay or receive bribes. Firms that use go-betweens to
generate new business in jurisdictions associated with
systemic levels of corruption may receive particular
attention. I would expect firms in this position to be
actively implementing measures to mitigate the threat.”
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Transparency International releases latest
corruption index - 17 November 2009
Transparency
International has published its Corruption Perceptions Index
2009 (CPI). The CPI measures the perceived levels of public
sector corruption in a given country and is a composite
index, drawing on 13 different expert and business surveys.
The 2009 edition scores 180 countries (the same number as
in 2008) and the vast majority of the 180 countries score
below five on a scale from 0 (perceived to be highly
corrupt) to 10 (perceived to have low levels of
corruption). The least corrupt country in the world is
perceived to be New Zealand, while the most corrupt is
perceived to be Somalia.
It is clear from
the CPI that no region of the world is immune to the perils
of corruption. “At a time when massive stimulus packages,
fast-track disbursements of public funds and attempts to
secure peace are being implemented around the world, it is
essential to identify where corruption blocks good
governance and accountability, in order to break its
corrosive cycle,” said Huguette Labelle, Chair of
Transparency International.
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Spain signs tax convention - 16 November 2009
Spain
has joined sixteen other countries that have signed the
OECD/Council of Europe
Convention on Mutual Administrative Assistance in Tax
Matters. The Convention provides for exchange of
information, multilateral simultaneous tax examinations and
cross-border assistance in tax collection, while imposing
extensive safeguards to protect the confidentiality of the
information exchanged. Existing parties to the Convention
are Azerbaijan, Belgium, Denmark, Finland, France, Iceland,
Italy, the Netherlands, Norway, Poland, Sweden, the Ukraine,
the United Kingdom and the United States; Canada and Germany
have signed the Convention and are awaiting ratification.
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Former US Congressman jailed for bribery and
laundering - 14 November 2009
In a follow-up to a story dated 5 August 2009, former US Congressman
William Jefferson (Republican, Louisiana) has been jailed
for thirteen years for bribery and money
laundering. He was found guilty in August of soliciting millions
of dollars in bribes from a dozen companies while using his
political position to broker business deals in Africa. FBI
agents found US$90,000 [about £53,000] in a freezer at
Jefferson’s home, wrapped in foil and hidden in boxes of pie
crust.
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Isle of Man businessman jailed for money laundering
- 12 November 2009
In a follow-up to a story dated 13 October 2009, Isle of
Man tycoon Trevor Baines has been sentenced to six years
in prison for false accounting and money laundering.
He will serve his time at Jurby prison on the Isle of
Man. His wife Wendy was also found guilty of false
accounting, and has been sentenced to nine months in
prison, suspended for two years. Baines ran a financial
services business from the couple’s Africa House home in
Douglas. In summer 2001, he arranged the transfer of
US$175 million from four Swiss banks to accounts in
Douglas – but the money had been acquired dishonestly by Roys Poyiadjis, the former senior executive of American
software firm AremisSoft, who had orchestrated a complex
Wall Street investor scam. Poyiadjis has admitted
securities fraud, and will be sentenced in New York in
January 2010.
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Former British MEP jailed for fraud and money laundering
- 11 November 2009
In a follow-up to a
story dated 5 November 2009, Tom Wise, a former
British MEP for the East, has been jailed for two years
for false
accounting and money laundering. Judge
Geoffrey Rivlin QC told Wise:
“The position
which you held as an elected representative was one of
high privilege and trust and this offence involved a
prolonged breach of that trust. It is no
exaggeration to say that you had hardly got your feet
beneath your desk as an MEP before you were planning to
defraud the parliament to which you were elected and the
people you were elected to serve.”
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HM Treasury supports recent FATF warning about high
risk jurisdictions - 10 November 2009
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Former British MEP admits fraud and money laundering
- 5 November 2009
Tom Wise, a former
British MEP for the East, has pleased guilty to false
accounting and money laundering after switching his plea
at his trial. Wise fiddled £36,000 of expenses between
14 December 2004 and 24 December 2005, channelled the
money into a bank account he secretly controlled, and
spent it on cars and wine. He pretended that the £3,000
“secretarial assistance allowance” he received every
month was for his researcher but he paid her just £500 a
month and kept the rest for himself. Wise, a former
policeman, represented the UK Independence Party before
he had the party whip withdrawn in 2007 over the
scandal. He will be sentenced on 11 November.
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Michel conviction quashed in Jersey - 4 November 2009
Commissioner Sir
Geoffrey Nice, a Royal Court judge in Jersey, has been
strongly criticised by the Privy Council for his unfair
handling of the trial of St Helier-based accountant
Peter Michel. Mr Michel was jailed in 2007 for six
years after being convicted of ten counts of money
laundering, after it was alleged that he had used his
financial expertise to launder money for criminals.
However, the council – the most senior court that
Islanders can appeal to – has quashed the conviction
against him in a judgment which said that Sir Geoffrey
had been snide and sarcastic and that his actions had
rendered the trial unfair. The judgment concludes: “In
the result the Board will humbly advise Her Majesty that
this appeal should be allowed and the conviction
quashed...and that the case should be remitted to the
Court of Appeal of Jersey for that Court to decide
whether or not to order a fresh trial.”
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Bank computer technician charged with identity theft
and money laundering - 3 November 2009
Adeniyi Adeyemi has been
charged with using his position as a
computer technician to steal the identities
of over 150 employees of the Bank of New York Mellon and
then defraud charities and other organisations of more
than US$1.1 million over an eight-year period. Adeyemi
worked as a computer technician at the Bank of New York
on 1 Wall Street and at other bank locations around
Manhattan. He stole the identities of dozens of bank
employees, and used those identities to open brokerage
accounts at various institutions, including E*Trade,
Fidelity, Citi, Wachovia, and Washington Mutual. He
then used those accounts to store and transfer money
stolen from charities (often by hacking into the bank
accounts publicised by those charities on their donation
websites). Adeyemi also allegedly stole $128,000 from
the employees whose identities he’d stolen, by hijacking
their bank accounts and wiring money out to the
brokerage accounts. He also bought about $100,000 in US
Postal Service money orders, which he used to pay living
expenses and to send money overseas, primarily to
Nigeria. Adeyemi was placed under Secret Service
surveillance when suspicious Internet activity was
traced back to
wireless connections in his apartment
building, then a search of his apartment and a storage
locker revealed credit reports belonging to dozens of
Bank of New York employees on his computer, along with
other documents containing personal information on bank
employees, and $30,000 in cash.
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EC to take action against Spain for lack of wire
transfer legislation - 29 October 2009
The European Commission has decided to refer Spain to
the European Court of Justice over its failure to lay
down effective, proportionate and dissuasive penalties
in national law in relation to the EU Regulation on
payer information accompanying transfers of funds.
The Regulation to tighten controls of
money transfers in order to cut off funding sources for
terrorists and other criminals was adopted in 2006.
In order to ensure the
traceability of money transfers, the Regulation requires
that money transfers be accompanied by the identity of
the sender including the name, address and account
number, and that information will be immediately
available to the appropriate law enforcement authorities
to assist them in detecting, investigating and
prosecuting terrorists and other criminals and tracing
their assets. Although the Regulation is
directly applicable in Member States, it requires Member
States to lay down and notify to the Commission
effective, proportionate and dissuasive penalties in
national law for failure to comply with the provisions
of the Regulation, applicable from 15 December 2007.
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Foot report on British offshore financial centres
published - 29 October 2009
The final report of Michael Foot’s Review of the
opportunities and challenges facing the British Crown
Dependencies (Guernsey, the Isle of Man and Jersey) and
six Overseas Territories (Anguilla, Bermuda, the British
Virgin Islands, the Cayman Islands, Gibraltar and the
Turks and Caicos Islands) has been published. The
recommendations cover: the quality and extent of
economic planning; meeting international standards on
tax transparency, financial sector regulation, and
tackling financial crime; ensuring that deposit
protection schemes can be understood by depositors;
considering whether an Ombudsman scheme is justified;
and crisis prevention and resolution measures.
These recommendations provide benchmark standards
against which each of the jurisdictions can assess their
performance and consider what action may be necessary to
ensure a sustainable future. The report suggests
that the jurisdictions should periodically publish
reports on how the benchmark standards are being met, or
on how and when they will be met.
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Bangladeshi PEP charged with money laundering - 28 October 2009
The Anti-Corruption
Commission (ACC) of Bangladesh has charged Tareque Rahman
(the eldest son of ex-prime minister Khaleda Zia) and his
friend Giasuddin Al Mamum with laundering 204 million taka
[about £1.8 million] through bank accounts in Singapore.
Mohamed Ibrahim, the ACC’s lead investigator, said that the
money had been received by Mamum from a construction company
in exchange for awarding a state power plant contract. The
money has already been recovered from Singapore.
This is the second case the
ACC has filed against Zia, long considered his mother’s
political heir apparent and already a senior joint secretary
general of her Bangladesh Nationalist Party (BNP). He was
arrested by an army-backed emergency government, which ruled
for two years from January 2007, as part of a nationwide
crackdown on corruption. He is now abroad seeking medical
treatment and alleges he was tortured in custody. His
youngest brother, Arafat Rahman Koko, also faces corruption
charges and is accused of laundering a similar amount
through bank accounts in Singapore, and is also abroad for
medical treatment.
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Gaydamak, Falcone, Mitterand and Pasque receive
their sentences - 27 October 2009
Russian-Israeli businessman
Arkadi Gaydamak has been sentenced in absentia by a French
court to six years in prison for arms trafficking and money
laundering. Gaydamak is currently living in Moscow, but is
rumoured to be considering returning to Israel to stand
trial there for fraud and money laundering. French arms
dealer Pierre Falcone, Gaydamak’s business partner, was also
given a six-year sentence. Jean-Cristophe Mitterand, son of
the late French president Francois Mitterand, was given a
suspended two-year sentence and a large fine, while former
French interior minister Charles Pasque was fined €100,000
and given a one-year jail sentence.
The trafficking deal – “Angola-gate” – illegally supplied
US$790 million worth
of
military equipment to Angolan President José Eduardo de
Santos during his country’s civil war, which ended in 2002
after causing 500,000 casualties, displacing millions and
spawning a humanitarian disaster. Gaydamak and Falcone
were charged with forging connections with politicians in
Angola in the early 1990s and going on to commit bribery,
tax evasion, fraud and embezzlement; it is rumoured that
they agreed to the weapons deals in exchange for Santos’s
permission to drill for oil in the area.
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Bond fraudsters jailed for money laundering - 23 October 2009
In a follow-up to a story dated 27 June 2009,
two men have
been jailed in Oklahoma for their part in a fraud and money
laundering scheme involving 19th century railroad
bonds and 100-year-old Chinese bonds. Joseph Thornburgh was
jailed for 24 years and four months, while Steven Fishman
was given a sentence of 21 years and ten months. Both men
were charged in November 2007 with promoting fraudulent
investments involving bonds, including those issued in the
1850s by the GH&H Railroad and some issued in China in the
early 1900s. They told investors that hundreds of millions
of dollars in interest had accrued since the bonds were
issued and that payment was still due, and that Amtrak and
the US government backed the interest payments due on the
railroad bonds. About US$4 million was lost by hundreds of
investors in the US, Australia and New Zealand between 2000
and 2004. Both men were also ordered to contribute towards
restitution for the victims.
Also charged
in connection with the same scheme in November 2007 were
Robert Searles (who handled the finances) and Wayne
Davidson. Searles pleaded guilty in April 2009 to money
laundering conspiracy, and agreed
to pay a judgment of $260,288; he is to be sentenced on 24
November. Davidson, originally from New Zealand, is a
fugitive and is thought to be in the United Arab Emirates.
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Bookkeeper launders money through breasts and
basketball - 22 October 2009
Tamarom In, a bookkeeper for a small air-conditioning
equipment company in Arizona, has been charged with
embezzlement, fraud and money laundering. She is accused of
stealing more than US$228,000 from her employer over a
period of 20 months: she was the only employee handling the
books, and applied for a credit card in the name of her
employer. She then forged cheques to herself and altered
the company records to cover up the theft. She used the
money to pay for breast enlargement surgery, and also
founded the Arizona Warriors basketball team for children as
a mechanism for laundering the money.
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English communities benefit from criminal cashback
- 15 October 2009
Communities throughout
England are today benefiting as ill-gotten gains confiscated
from criminals are used to fund worthwhile community
projects. The £4 million community cashback scheme, funded
by cash and assets seized from criminals, gives local people
a direct say on how criminal assets are spent in the fight
against crime and antisocial behaviour. More than 45,000
votes were received from members of the public for 1,225
community projects via a dedicated website, neighbourhood
policing meetings and through citizens’ panels. A total of
269 projects will receive a share of the fund, including:
 |
renovating a burnt out
skate park near Brighton |
 |
funding for the 'Young
people against knife crime' project to visit schools in
Merseyside |
 |
renovating a derelict BMX
track in Rochdale |
 |
opening a cricket club for
young people in Newcastle |
 |
restoring a derelict
churchyard around a community centre in an industrial area
of Sheffield. |
Until now money recovered
from criminals has been split between frontline services,
such as the police, and government departments involved with
the criminal justice system. This is the first time
communities can influence how that money is spent. Home
Office figures show that the value of assets recovered from
criminals in 2008/09 rose to an all-time high of £148
million (up from £136 million in 2007/08).
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Korea joins the FATF - 14 October 2009
The Republic of Korea has been
made the 35th member of the Financial Action Task
Force (FATF). Paul Vlaanderen, President of the FATF, said:
“As an Observer to the FATF for the past three years, Korea
contributed to the work of the task force. As full-fledged
member, Korea will be involved in the whole range of FATF
activities, giving the task force the benefit of its
expertise and experience.” Dong-Soo Chin, Chairman of
Korea’s Financial Services Commission, said: “We will
earnestly contribute to safeguarding the world from the
threat of money laundering and terrorist financing. We will
also work in close collaboration with other FATF members to
better implement the tasks mandated to the FATF.” Korea was
a founding member of the Asia/Pacific Group on money
laundering.
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Manx businessman guilty of money laundering - 13 October 2009
Trevor Baines, a Isle of Man
businessman, has been found guilty of money laundering.
Baines, who had several Manx firms, knew that an American
client had obtained US$175 million [about £110 million]
dishonestly, yet still passed that money through one of his
companies. He and his wife Wendy were also found guilty of
false accounting, after a five-week trial. Baines has been
remanded in custody and his wife released on bail; both will
be sentenced on 12 November.
Detective Chief Inspector
John Mitchell, head of the Isle of Man Constabulary’s
Financial Crime Unit, said: “This was a very lengthy and
complex investigation involving multiple jurisdictions
around the world. Serious criminal offences such as money
laundering can affect the island’s standing in the
international community which, in the current global
financial climate and period of scrutiny, is of the utmost
importance to our island community.”
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Kent drug gang imprisoned for money laundering - 7 October 2009
Darren Quick of Kent has been jailed for 7½ years for
laundering at least £1 million in proceeds from drug sales,
while his associate Norrie Hyde was jailed for two years. A
third member of the gang, Stephen Jarrett, has pleaded
guilty to laundering and will be sentenced on 4 November.
All three men were arrested in a Maidstone pub car-park in
December 2008 and large amounts of drug-contaminated cash
found in their cars. The court was told that Quick had
played a “pivotal part” in the money laundering and had
notched up personal profits in the region of £2 million,
with available assets of about £350,000. To date, Kent
Police has seized more than £320,000 in cash and assets in
the region of £2 million from the three, and further
financial investigations are underway.
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Warren found guilty of drug trafficking in Jersey
- 7 October 2009
Curtis Warren, the notorious
drug baron, has been found guilty in Jersey of conspiring to
import £1 million of cannabis into the island by boat from
Amsterdam in 2007. During his two-week trial, the court was
told that Warren planned to flood the drugs market in
Jersey. Five accomplices (John Welsh, James O'Brien, Jason
Woodward, Paul Hunt and Oliver Lucas) were also found
guilty. All six men will be sentenced on 4 December
2009.
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Ticket tout imprisoned for fraud and money
laundering - 5 October 2009
Ticket tout Suhail Patel has
been sentenced to eight months in prison for fraud and money
laundering. Patel was arrested at Wembley Stadium in
October 2007 and seventeen England v Estonia tickets were
found on him, along with a number of ticket stubs as well as
ledgers indicating that Patel was using false names to
obtain large numbers of tickets from the Football
Association and various UK football clubs. An investigation
was launched by the Metropolitan Police Public Order Crime
Team, funded by the UK Football Policing Unit. Patel was
arrested in March 2008, and a search of his home address in
Blackburn uncovered 70 Manchester United membership cards
and £10,000 in cash. Subsequent financial disclosure has
established that Patel criminally obtained more than
£44,000, which he has been ordered to pay back. Detective
Sergeant Will Hodgson said: “Ticket touting is an illegal
business run by people to gain financially through the
exploitation of football clubs and their fans. Genuine fans
need to be aware they are not only fuelling criminal
activity when they buy from a ticket tout, but also putting
themselves at risk as they could find themselves amongst
opposing supporters, being ejected from grounds or not
receiving their tickets at all.”
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