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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.
Indonesia
argues about corruption and money laundering
- 26 August 2010
Indonesian anti-corruption
campaigners have criticised the country’s senior lawyers for
refusing an article in a money laundering bill aimed to give
more authority to the Corruption Eradication Commission (KPK).
The bill – currently being deliberated in the House of
Representatives – proposes to give the KPK authority to
investigate money laundering cases, but lawyers from the
Golkar Party, the Indonesian Democratic Party of Struggle
and the United Development Party argue that giving the KPK
new powers would reduce public trust in the police and the
Attorney General’s Office and cause overlapping of
authorities among law enforcement agencies. But Febri
Diansyah, an activist with Indonesia Corruption Watch (ICW),
said: “It’s fishy that lawmakers object to empowering the
KPK. It should have been potential looters of public funds
raising the issue.” He commented that it would be useless
to retain the authority to investigate money laundering with
the police and prosecutors because they had failed to do the
job for the past seven years.
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Sussex
policeman jailed for sixteen months for money laundering
- 25 August 2010
In a
follow-up to a story dated 26 July 2010, a former police
constable has been jailed for sixteen months for money
laundering. Darren Graysmark had served with Sussex Police
for 23 years and was arrested in April 2009 after officers
from his own force found cocaine with an estimated street
value of £148,000 in his car, which was being driven by
Graysmark’s boyfriend Darren Simpson. Searches of the men’s
home revealed a quantity of financial correspondence and
£12,000 in cash. Graysmark pleaded guilty last month to
laundering a total of £80,921 over a five-year period up to
April 2009, and resigned from the police. Simpson has
pleaded guilty to possession with intent to supply and is
awaiting sentence.
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Latest
laundering conviction in New Jersey synagogue sting
- 24 August 2010
In the
latest trial following a massive FBI sting last year on
synagogues in New Jersey, Samuel Cohen of Brooklyn has
pleaded guilty to money laundering and been sentenced to
eighteen months in prison. He admitted illegally supplying
hundreds of thousands of dollars to Rabbi Eliahu Ben Haim,
who has since pleaded guilty to using religious charities to
launder US$1.5 million [about £975,000] for a government
informant. Ben Haim was among five rabbis charged in July
2009. The probe hinged on a former rabbinical student,
Solomon Dwek, who began secretly recording conversations for
prosecutors after being charged with bank fraud in 2006.
His work ensnared 46 people, including politicians charged
with taking bribes and rabbis accused of laundering money.
Cohen said he worked with a contact in Israel to supply Ben
Haim with cash, which authorities say the rabbi used to
launder cheques for Dwek, the informant. In some cases,
Dwek claimed he needed to hide the money from a bankruptcy
proceeding. At other times, he said the cheques came from
criminal schemes, including the sale of counterfeit Gucci
and Prada handbags. Dwek pleaded guilty in October 2009 to
charges in connection with a $50 million bank fraud, and has
been in hiding since his role as an informant became public.
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Drug-dealer's
girlfriend sent to prison for money laundering
- 18 August 2010
Chanell Cunningham, whose
testimony helped convict her drug-dealing boyfriend, has
been sentenced in Philadelphia to twelve years in prison for
drug offences and money laundering. US District Judge
Curtis Joyner told Cunningham that, were it not for her
co-operation, he would have sentenced her to more than
thirty years in prison. He described the mother of two as a
“major officer and vice president of personnel” for the
multimillion-dollar cocaine-distribution network set up by
her lover Maurice Phillips (who was sentenced last week to
five consecutive life terms for murder, drug dealing,
conspiracy and money laundering). But the judge said that
Cunningham’s co-operation in the conviction of Phillips had
to be balanced against the major role she played in helping
him distribute thousands of kilograms of cocaine over an
eight-year period beginning in 1999: “You hung out with the
bad guys . . . lived with the bad guys . . . played with the
bad guys”. Cunningham admitted making major drug pickups,
setting up deals with local drug traffickers, and helping
Phillips count and launder millions of dollars. Authorities
have placed a value of US$30 million [about £19 million] on
the operation, and the couple drove expensive cars, lived in
lavish homes, attended major sporting events, and took
extravagant vacations on the proceeds. Cunningham was one
of two girlfriends to testify against Phillips, who was
living in Maryland with his wife at the time of his arrest
three years ago.
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Hollywood
couple jailed for bribery and money laundering
- 13 August 2010
In a follow-up to
a story dated 14 September 2009 (see
Old news 2009 page),
married Hollywood film-makers Gerald and Patricia Green have
been jailed for six months in Los Angeles for bribing Thai
officials so that
they could run the Bangkok International Film Festival and
land other projects, and for money laundering. A
jury found that they had paid a former Thai tourism official
US$1.8 million [about £1.1 million] to secure the film
festival rights and other tourism-related deals between 2002
and 2007; the deals were said to have earned the Greens more
than $13 million [about £8 million].
They are the first
entertainment industry figures to be convicted under the
Foreign Corrupt Practices Act, which prohibits corrupt
payments to foreign officials for business purposes.
Veteran film star
Kirk Douglas had sent a letter of support to the court,
saying that the couple “were extremely honest and fair in
all of their dealings with me”, but as well as a prison
sentence, the Greens were also ordered to serve six months
of home detention after their jail sentence and pay $250,000
[about £150,000].
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RBS Group
fined £5.6 million for sanctions failings
- 3 August 2010
The Financial Services
Authority (FSA) has fined members of the Royal Bank of
Scotland Group (RBSG) £5.6 million for failing to have in
place adequate systems and controls to prevent breaches of
UK financial sanctions. (As RBSG agreed to settle at an
early stage of the FSA investigation, it qualified for a 30%
reduction in penalty – which would otherwise have been £8
million.) Between 15 December 2007 and 31 December 2008,
RBS Plc, NatWest, Ulster Bank and Coutts and Co, which are
all members of RBSG, failed to adequately screen both their
customers, and the payments they made and received, against
the HM Treasury sanctions list. This resulted in an
unacceptable risk that RBSG could have facilitated
transactions involving sanctions targets, including
terrorist financing.
The FSA
considers that RBSG’s failings in relation to its screening
procedures were particularly serious because of the risk
they posed to the integrity of the UK financial services
sector – in 2007, RBSG processed the largest volume of
foreign payments of any UK financial institution. This is
the biggest fine imposed by the FSA to date in pursuit of
its financial crime objective, and is also the first fine
imposed by the FSA under the Money Laundering Regulations
2007.
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Police officer
pleads guilty to money laundering
- 26 July 2010
PC Darren
Graysmark, who served with Sussex Police for 23 years, has
pleaded guilty to laundering more than £80,000. He was
arrested when fellow officers found cocaine with an
estimated street value of £148,000 in his car in April last
year, when it was being driven by Graysmark’s boyfriend. A
search of the men’s home uncovered £12,000 in cash and a
quantity of financial correspondence. Deputy Chief
Constable of Sussex Police Giles York said: “Darren
Graysmark let himself, his colleagues and the public down,
in knowingly benefiting from organised crime. He took money
which was the proceeds of crime and used to it support his
own lifestyle.” Graysmark has resigned from the police. He
is on bail and will be sentenced at a date yet to be fixed;
meanwhile Sussex Police will seek a confiscation order to
seize his assets.
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Lancashire
commodities broker jailed for eight years for money
laundering
- 15 July 2010
Commodities trader Andrew Beveridge has been sentenced to
eight years in prison for laundering more than £24 million
for a gang of fraudsters. Beveridge was working for XFP
Solutions in Blackpool in December 2007 when he was
approached by Robert Hulme and asked to help launder money
for a 5% commission. Beveridge was an undisclosed bankrupt
and strapped for cash, so he agreed and successfully
laundered £372,000 stolen from two Lloyds TSB customers by
moving the money through an unsuspecting money services
bureau to a series of front accounts. Suspicions were
raised when he tried to repeat the trick with the proceeds
of a £72 million theft from HSBC, which Hulme’s gang had
pulled off using an inside man at the bank. (Bank clerk
Jagmeet Channa was jailed for nine years in 2008.)
Beveridge tried to transfer £24 million through the same
money services bureau, but investigators moved in.
Beveridge denied the charges and said he believed that the
money was legitimate, but Judge Anthony Leonard, QC, told
him: “Without money launderers like you, the theft carried
out by others would be less easy to undertake. You took
every step possible to make sure that [the transfer] went
through. I do not accept that this is any different from,
for example, drug money. This was a large scale fraud on
the banking system.” Hulme faces sentencing at a date yet
to be fixed.
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US seeks to
seize properties from former Taiwanese first family
- 14 July 2010
The US
government has filed a civil forfeiture claim on two
properties owned by former Taiwanese president Chen
Shui-bian and his wife, allegedly bought with bribes the
couple received while in power. The complaint states that
former first lady Wu Shu-chen was paid six million dollars
to prevent her husband’s government from interfering with a
company’s takeover bid for a rival firm in Taiwan, and then
laundered the money using shell companies and Swiss bank
accounts controlled by her son and his wife. Some of the
money was allegedly transferred to the US to buy an
apartment in Manhattan and a house in Virginia. The
move by the US has been welcomed by the authorities in
Taiwan.
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Russia
proposes changes to its law on white collar crime
- 9 July 2010
As their country seeks to
attract foreign investors, Russian legislators have
announced that they plan to overhaul the law on economic
crimes, resulting in the early release of as many as 100,000
imprisoned executives and entrepreneurs. On 30 June, Andrei
Nazarov, deputy head of the committee that handles civil and
criminal legislation in the lower house of the parliament,
introduced amendments to the Criminal Code, saying “We are
taking economic amnesty not as one law but as a series of
legal changes. At least 100,000 businessmen will be
released from prison or will have to spend less time in
jail. This will happen within the next year and a half.”
About a quarter of the
900,000 people in Russian jails are accountants,
entrepreneurs, legal advisers or mid-level managers. Yana
Yakovleva, co-owner of Moscow chemical distributor Sofex
spent seven months in jail awaiting trial in 2007 before she
was acquitted of trafficking in dangerous substances, and
has spoken out about the “predatory” culture of police,
prosecutors and judges: “The current environment is like
swimming with crocodiles in a pool of sulphuric acid.
There’s a war on business people in Russia, and it’s purely
business for officials: they can charge you with any crime
and incarcerate you to extort money.” The proposed changes
will reduce penalties for white collar crimes, end pre-trial
detention for those charged with economic crimes, and expand
the use of bail.
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Panama drops
money laundering charges against Aleman
- 9 July 2010
A
Panamanian court has dropped money laundering charges
against former Nicaraguan president Arnoldo Aleman. The
court ruled that the case against Aleman violated his right
to be tried for a crime only once, as the charges against
him were similar to charges he has already faced in
Nicaragua. Aleman had been accused of using bank accounts
in Panama to launder US$58 million [about £38.5 million]
allegedly stolen from the Nicaraguan government, but denied
all charges. In January 2010, Nicaragua’s Supreme Court
overturned Aleman’s conviction for money laundering, but an
appeals court later reopened three cases against him.
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Noriega found
guilty of laundering and sentenced to seven years
- 7 July 2010
Panama’s former military
ruler Manuel Noriega has been found guilty by a French court
of money laundering, and been sentenced to seven years in
prison. Noriega denied taking payments from Colombian drug
lords in the 1980s and laundering the money in France. In
1999, a French court sentenced him to ten years in prison in
his absence, but in April 2010 he was extradited from the US
(after spending twenty years in prison for drug trafficking)
and a fresh trial was held. The money was allegedly used by
his wife, Felicidad, and a shell company to buy three luxury
apartments in Paris, which have since been seized by the
French state. The judge also ordered the seizure of 2.3
million euros [about £1.9 million] of Noriega’s other
assets.
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Son of
Bangladeshi ex-PM charged with money laundering
- 6 July 2010
Tarique Rahman, the
eldest son of Bangladeshi former prime minister Khaleda Zia,
and one of his aides have been charged with money
laundering. Bangladesh’s Anti-Corruption Commission says
that Rahman and his business associate Giasuddin al-Mamun
siphoned off US$3.5 million [about £2.3 million] in the
proceeds of corruption to Singapore between 2003 and 2006. Rahman,
the senior vice chairman of the opposition Bangladesh
Nationalist Party, has been charged with corruption on
fourteen occasions, and has been staying in London to
receive medical treatment since his release on bail in 2008.
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Kent/Bournemouth/Wales drug gang sentenced to eighty years
- 2 July 2010
Eight out of ten members of a gang who “peddled misery” by
supplying up to 75% of the cocaine sold in the Swansea
Valley have been sentenced to a total of 80 years in prison
for drug offences and money laundering; the two remaining
gang members will be sentenced in a few days’ time. The
sentences are the culmination of a two-year investigation
into cocaine trafficking on the south coast of England and
the Swansea Valley launched by the Serious Organised Crime
Agency (SOCA) in September 2007 and involving the Dorset and
South Wales police forces. They discovered that the crime
network had three regional hubs in Bournemouth, Kent and the
Swansea Valley – the Swansea group was buying up to 8kg of
pure heroin per week from the Kent organisation, with the
Bournemouth gang acting as the go-between. Gang members
owned large houses and expensive cars both home and abroad –
until police raided seven properties in the quiet town of
Pontardawe near Swansea last year.
Darren Blake (gang leader in Kent) and Craig Blake (gang
leader in Bournemouth) had previously collaborated in the
export of cocaine to Australia. With the help of the
Australian Federal Police, evidence was obtained of both the
drug trafficking and associated money laundering through a
Panamanian-registered company and bank accounts in the US
and Cyprus, which resulted in additional charges against the
pair.
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South African
former police chief found guilty of corruption
- 2 July 2010
Jackie Selebi, former chief
of the South African Police Service (SAPS) and a former
president of Interpol, has been found guilty of corruption.
Selebi was a political appointee and had no previous
policing experience when he became the first black SAPS
chief in 2000. In 2008 he was suspended after being accused
of having links to organised crime – specifically convicted
drug smuggler Glen Agliotti – and accepting bribes worth 1.2
million rand [about £103,000]. The prosecution alleged that
Agliotti, who was also a police informant, made gifts to
Selebi so that the policeman would turn a blind eye to drug
trafficking. At Selebi’s trial, Agilotti told the court,
“When the accused and I met, I enjoyed shopping and so did
he. Him being my friend, I would instruct shop attendants to
put all the clothes on my account.”
Selebi denied both charges
as malicious, claiming that they were down to political
intrigue and conspiracy – he is a close friend of former
president Thabo Mbeki, who is a bitter rival to current
president Jacob Zuma. But Judge Meyer Joffe found that
Selebi had shown “complete contempt for the truth” and had
“low moral fibre and could be relied upon”. He will be
sentenced on 15 July – facing up to fifteen years in prison
– and plans to appeal.
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DJ Randy
sentenced to thirty months for drug sales and money
laundering
- 1 July 2010
Randy Russell, a
disc jockey from Burlington, Vermont, has been sentenced to
thirty months in prison for selling marijuana and laundering
the proceeds. Russell – known professionally as DJ Randy –
distributed over 100kg of marijuana. He invested US$90,000
[about £60,000] of his drug proceeds in the defunct Justin
Cruz Hairdressing Salon in Burlington, and deposited more
than $100,000 in cash in two bank accounts during 2006 and
2007. Russell argued that he used much of the proceeds to
care for his family, including a disabled uncle, but
prosecutors said that on the contrary Russell lived a
“high-spending, high-rolling lifestyle that included
extensive travelling, nightclubbing and snowboarding and
renting two houses”.
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