Mexican drug lord ‘La Barbie’ captured in Mexico

Major drug trafficker Edgar "La Barbie" Valdez is presented during a news conference at the federal police center in Mexico City

It has been reported that the drug kingpin, Edgar Valdez-Villarreal, also known as La Barbie, has been captured by the Mexican police.

Due to drug laundering and smuggling activities across Mexico, La Barbie was wanted in Laredo and Mexico.

A Laredo native, La Barbie got captured on Monday after a shootout with Mexican authorities.

Although, the exact location of his arrest is unknown, according to some sources, La Barbie got captured in Mexico.

The former United High School football star, La Barbie was considered as a hero by many in Mexico. For information leading to capture La Barbie, U.S. authorities had offered a prize money of $2 million.

During Atlanta trial, in 2008, powerful evidences were shown against La Barbie to prove him as a major person in moving kilos of cocaine through Laredo.

Along with drug smuggling, La Barbie was also accused of murder and money laundering.

Source: AllVoices

Cocaine trade exacerbates money laundering in West Africa – UN Chief

The global cocaine trade, which is estimated at $85 million, is exacerbating money laundering in West Africa, Mr. Ban Ki Moon, United Nations Secretary-General has indicated.

Whiles every $1 billion of pure cocaine trafficked through West Africa earns more than ten times as much when sold on the streets of Europe, the trade is also fuelling political instability threatens the sub-region’s security, Mr Ban said.

In addition, the 61 billion dollars annual markets for Afghan opiates are used in funding insurgency, international terrorism and wider destabilization.

These were contained in a message read on behalf of the UN Chief at a ceremony held on Tuesday at Wa in the Upper West Region to mark this year’s international day against drug abuse and illicit trafficking.

Mr Ban said because the threat was so urgent, the UN had established a task force to develop a system-wide strategy to coordinate and strengthen the responses to illicit drugs and organized crime by building them into all UN peacekeeping, peace building, security development and disarmament activities.

In that way, the UN could integrate the fight against drug trafficking and other forms of organized crime into the global security and development agenda, he explained.

He said this year’s international day against drug abuse and illicit trafficking was an opportunity to highlight the importance of addressing the threats through the rule of law in the provision of health service.

“Drugs use at its core is a health issue while drug dependence is a disease and not a crime. The real criminals are the drug traffickers.

“But the supply is only half of the equation and unless we reduce the demand for illicit drugs we can never fully tackle cultivation, production or trafficking”, Mr Ban said.

In a speech read on his behalf, Naval Captain Rtd Asase Gyimah, Board Chairman of Narcotics Control Board said the Board was collaborating more with other agencies for drug law enforcement and advocated the reduction of the drug trade by exchanging ideas and sharing intelligence.

Alhaji Issahaque Salia, Upper West Regional Minister said the government was more determined now than ever to put drug traffickers and users out of business, while at the same time reducing drug related crimes.

Government was also committed to resourcing not only the Narcotic Control Board but also all security agencies to fight the drug menace.

Source: GNA

NZ firms linked to money laundering

by MICHAEL FIELD

Criminals are using shell companies set up under New Zealand's lax company laws to launder money.

Companies created by an Auckland firm operating out of Queen St have been linked to Russian crime, a Mexican drug cartel and Romanian extortion.

A 16-month Fairfax Media investigation has also tied companies created by Geoffrey Taylor and his sons Ian and Michael, who work out of 363 Queen St, to a company that smuggled arms out of North Korea.

The government admits there is a problem but says it has had other priorities.

The Taylor operation is not illegal, but the companies they create are connected to serious crimes in a number of countries.

They set up a shell company, Bristoll Export Ltd, that helped move part of the proceeds of a $245 million Russian tax fraud out of Moscow and into Swiss bank accounts. London-based Hermitage Capital Management hired a lawyer to find out what happened, but he died in a Moscow jail.

Hermitage chief executive Bill Browder told the Sunday Star-Times he was "highly motivated to make sure all aspects of this story see the light of day", and that he had a "treasure trove of information" about New Zealand companies' ties to the scandal.

The Taylors set up complex webs of companies, and one of them, linked to Russians in Cyprus, is administered out of a home in Albany near Auckland.

A United States Justice Department investigation into the banking giant Wachovia, also tied Taylor-linked companies to the movement of drug money. Wachovia was fined more than $202m for helping disguise the illegal origins of up to $479 billion for Mexican drug lords, predominantly the murderous Sinaloa cartel. Four Taylor companies "filtered" $50m in drug money through banks in Latvia and on to Wachovia. Each of the companies had just one director – Stella Port-Louis, 32, of the Seychelles, until recently a director of around 300 New Zealand companies.

Canada's Financial Transactions and Reports Analysis Centre, which assessed Wachovia, identified the "exploitation of New Zealand's weak company registration laws" as a problem.

International expert Martin Woods said shell companies were "ideal vehicles for money launderers, tax evaders and arms traffickers".

In 2009, a Georgia-registered cargo plane flew from North Korea to Bangkok and was found to have 35 tonnes of arms on it. The plane was chartered by SP Trading Ltd, a company set up by the Taylors.

The company's director was a Burger King cook named Lu Zhang, 29, who was later convicted of 75 breaches of the Companies Act for giving false addresses on registration forms, something she described in court as "one little mistake".

She is also a director of companies linked to Romanian Lorenzo Kiss, who is under arrest over an alleged $14.5m embezzlement.

Ian Taylor told the Sunday Star-Times media reports connected dots that weren't there.

PricewaterhouseCoopers Auckland's forensic services director Alex Tan said using company service providers had become common here.

"The money-laundering and even terrorist financing risks associated with them are high, particularly considering they can be set up over the internet."

Source: Sunday Star Times

Publication: Illicit money: how much is out there?

Criminals, especially drug traffickers, may have laundered around $1.6 trillion, or 2.7 per cent of global GDP, in 2009, according to a new report by UNODC. This figure is consistent with the 2 to 5 per cent range previously established by the International Monetary Fund to estimate the scale of money-laundering.

Less than 1 per cent of global illicit financial flows is currently being seized and frozen, according to the report Estimating illicit financial flows resulting from drug trafficking and other transnational organized crime. "Tracking the flows of illicit funds generated by drug trafficking and organized crime and analysing how they are laundered through the world's financial systems remain daunting tasks," acknowledged Yury Fedotov, Executive Director of UNODC.

Launching the report in Marrakech, Morocco, during the fourth session of the Conference of the States Parties to the United Nations Convention on Corruption, Mr. Fedotov said that the Conference served as an apt reminder that corruption could play a major role in facilitating the entry of illicit funds into legitimate global financial flows, adding that investments of "dirty money" could distort the economy and hamper investment and economic growth. The aim of the study is to shed light on the total amounts probably laundered across the globe and to advance research on the topic. "But as with all such reports, we will continue to refine the figures to provide the truest possible estimates," said Mr. Fedotov.

The UNODC report estimates that the total amount of criminal proceeds generated in 2009, excluding those derived from tax evasion, may have been approximately $2.1 trillion, or 3.6 per cent of GDP in that year (2.3 to 5.5 per cent). Of that total, the proceeds of transnational organized crime - such as drug trafficking, counterfeiting, human trafficking and small arms smuggling - may have amounted to 1.5 per cent of global GDP, and 70 per cent of those proceeds are likely to have been laundered through the financial system.

The illicit drug trade - accounting for half of all proceeds of transnational organized crime and a fifth of all crime proceeds - is the most profitable sector. The study paid particular attention to the market for cocaine, probably the most lucrative illicit drug trafficked across borders. Traffickers' gross profits from the cocaine trade stood at around $84 billion in 2009. While Andean coca bush farmers earned about $1 billion, the bulk of the income generated from cocaine was concentrated in North America ($35 billion), followed by West and Central Europe ($26 billion). Approximately two-thirds of that total may have been laundered in 2009. The findings suggest that most profits from the cocaine trade are laundered in North America and in Europe, whereas illicit income from other subregions is probably laundered in the Caribbean.

Once illegal money has entered the global and financial markets, it becomes much harder to trace its origins, and the laundering of ill-gotten gains may perpetuate a cycle of crime and drug trafficking. "UNODC's challenge is to work within the United Nations system and with Member States to help to build the capacity to track and prevent money-laundering, strengthen the rule of law and prevent these funds from creating further suffering," said Mr. Fedotov.

Source: UNODC

Download the FULL REPORT 

Feds charge university founder with money laundering, fraud

Federal court documents show Susan Xiao-Ping Su, the founder of Tri-Valley University and owner of two homes in Pleasanton, has been charged with money laundering, mail fraud and wire fraud.

The university -- apparently operated out of a small, two-story office space on Boulder Court -- and the two houses were part of a raid last week by federal officials from ICE, the Immigrations and Customs Enforcement division of Homeland Security.

Court documents claim that Su ran an "elaborate fraud scheme" that netted millions of dollars from foreign nationals who hoped to become legal immigrants.

Su "made false statements and misrepresentations in petitions to DHS (the Department of Homeland Security) to obtain student visas from the government," according to charges filed earlier this month in U.S. District Court in Oakland. "Su and Tri-Valley University have made millions of dollars in tuition fees for issuing these visa related documents which enable foreign nationals (to) obtain illegal student immigrant status."

The document says Su used profits from her scam to buy five properties, including the two homes in Pleasanton raided by ICE last week -- at 2890 Victoria Ridge Court and 1371 Germano Way.

Although on its website the university claims faculty members from prominent businesses and other universities, Tri-Valley University was never an accredited university, according to federal documents.

Doors at Tri-Valley University remain locked, and calls to its single phone number remain unanswered; black plastic bags shroud the second-story windows of the office suite.

A search of the school's online catalog -- with a long list of spelling and grammatical errors -- shows the university claims to offer bachelor's, master's and doctorate degrees in everything from engineering to law to medicine.

The college catalog claims the campus "feature a state-of-art library, faculty-student lodge administrative offices and classrooms (and) research labs."

The school's catalog, however, shows many of its classes being held in the same rooms and at the same time.

Questions about the university have been circulating since at least last September, when a comment was posted on a consumer website that the school was not accredited.

A message from Su on the Tri-Valley University website says "programs at Tri-Valley University are designated with the key of integration: integration of Christian faith with academics, academic principles with industry practical application, integration of career pursuit with spiritual growth."

A hearing has been set for April.

Source: Danville Express

Ex-president's son found guilty of money laundering in retrial

The Taiwan High Court on Friday upheld previous sentences meted out to the son and daughter-in-law of former President Chen Shui-bian in a money laundering case but reduced their fines.

The court found that Chen Chih-chung and Huang Jui-ching had helped Chen Shui-bian and his wife Wu Shu-jen launder, hide and transfer abroad funds obtained illicitly, but that they did not benefit financially from those transactions.

It therefore decided to cut the NT$30 million (US$1.03 million) Chen was fined in his most recent trial to NT$4.5 million and slash Huang's fine from NT$20 million to NT$4 million.

The court, however, upheld Chen's 14-month prison sentence and Huang's one-year sentence, but still allowed Huang the option of paying NT$10 million to national coffers to have the one-year sentence commuted to a four-year suspended sentence.

Both Chen and Huang can still appeal the ruling.

The two were first convicted by the Taipei District Court in September 2009 for having engaged in money laundering during Chen Shui-bian's presidency from 2000-2008.

Chen was given a 30-month jail sentence and fined NT$150 million. Huang was also fined NT$150 million and sentenced to 20 months in prison, but she was given the option to pay NT$200 million to commute the jail time to a five-year suspended sentence.

In a second trial, the Taiwan High Court ruled on June 11, 2010 to cut Chen's sentence to 14 months and reduce his fine to NT$30 million.

Huang's fine was cut to NT$20 million, and she was given a one-year sentence that could be commuted to a four-year suspended sentence with a payment of NT$10 million.

The rulings were appealed to Taiwan's Supreme Court, which sent the case back to the Taiwan High Court Nov. 11, 2010 for retrial, resulting in Friday's rulings.

The case has not been Chen Chih-chung's only legal entanglement. In a final verdict rendered by the Supreme Court on Aug. 18, the former president's son was sentenced to three months in jail without probation for committing perjury in a corruption case involving his parents.

The verdict prompted the Executive Yuan to strip him of his seat in the Kaohsiung City Council. Chen has vowed to fight the Executive Yuan's order. 

Source: Focus Taiwan

Russian Police Bust Money-Laundering Ring, Detain Bank Manager, Adviser

Russian police detained an adviser and manager at two Moscow banks suspected of laundering more than 2 billion rubles ($65 million) a month, according to the Interior Ministry’s Economic Security Department.

The “organized group” charged companies a commission of 3 percent to 9 percent and state entities 12 percent to 17 percent to launder funds, the department said on its website today. Albert Istomin, a department spokesman, declined to say how long the group had been active.

Investigators raided the offices of three banks -- OOO Bank Imperia, OAO Tempbank and Basmanny -- and seized financial documents, 120 registration stamps from shell companies and “electronic keys” to a bank account-management system, the department said.

The ringleaders were an adviser to the chairman of Tempbank and the head of client services at Imperia and her daughter, according to the department. Investigators seized $100,000 found in a car belonging to one of the suspects.

Mikhail Gagloyev, chairman of Tempbank, said today that the bank was searched on Aug. 16, though “no documents (stamps, financial documents, cash) that could compromise OAO Tempbank were discovered.”

‘No Relation’

The suspects mentioned in media reports on the money- laundering ring aren’t Tempbank employees “and have no relation to the bank,” Gagloyev said in a statement on the bank’s website.

Ivan Kuleshov, chairman of Imperia, said the woman identified as a client-services manager by the Interior Ministry hadn’t worked in that capacity. She had worked at the bank on a trial period for less than a month, Kuleshov said on the bank’s website today.

The seizure of stamps, money and bank account-management access keys “have no relation to Imperia,” Kuleshov said.

No one was immediately available to comment at Basmanny.

To contact the reporter on this story: Anastasia Ustinova in St. Petersburg at austinova@bloomberg.net.

Source: Bloomberg

Austrian bank "laundered drug money"

Austrian Hypo Alpe-Adria-Bank, the dealings of which are being investigated, "laundered drug lord Darko Šarić money".

The amount is said to be EUR 100mn, and the allegation was made by Austrian daily Osterreich.

Šarić is a fugitive from justice, wanted in Serbia in connection to a massive cocaine smuggling operation uncovered last year.

Quoting Serbian authorities, the daily writes that Šarić used off-shore companies "to invest" EUR 100mn in the bank’s accounts, primarily in Lichtenstein.

At the same time, between 2007 and 2009, the bank’s branches in the Netherlands approved two loans worth EUR 100mn to Block 67 Associates, a company which was in charge of building the Belville apartment block in New Belgrade.

According to the Austrian daily, the loan payment stopped very soon and only EUR 8.5mn out of both loans have been paid back. The bank them moved to settle the debt internally from the EUR 100mn account belonging to Šarić.

The investigators believe that this sequence of events was "possible in principle, if the bank's management was aware of it", said the report.

Former Hypo Alpe-Adria-Bank chief Tilo Berlin, who was in office when the bankwas owned by Germany's Bayern LB, stated that he did not know Šarić.

Berlin was at the helm of the bank from 2007 until 2009, when major embezzlement and money laundering took in Croatia under former Executive Board President Wolfgang Kulterer, who is currently in custody.

Source: B92

Drug trafficking and the black economy

by Huzaima Bukhari and Dr Ikramul Haq

June 26 is the International Day against Drug Abuse and Illicit Trafficking. It is being marked since the United Nations General Assembly decided upon it in 1987 to raise awareness global about the dangers of drug abuse, to prevent its spread and to encourage efforts to combat the menace at international level.

Successive governments in Pakistan have been providing money-laundering schemes, termed as economic measures, to bring black money into the mainstream. These schemes have proved highly beneficial to tax evaders, drug barons, extortionists and corrupt businessmen-turned-politicians. Even today, if anybody brings any amount of money (earned from drug trade, tax evasion or any other criminal activity) in a bank account through remittance, the tax authorities cannot question its source.

The criminals just go to a money exchanger, give him money in Pakistani rupees, and he arranges “remittance” (sic) by charging a small premium. All the criminal needs is a fake CNIC (Computerised National Identity Card); we have 30 million such cards, as has been admitted before Supreme Court. In this way, millions of rupees are recycled as white money.

Section 111(4) of the Income Tax Ordinance, 2001, actually facilitates money launderers to remit their ill-gotten money through banking channels and surrender the foreign currency to the State Bank and receive Pakistani rupees in return. In this way they can escape not only taxation but also any query from the FBR. This scheme presumably aimed at bringing huge foreign currency to Pakistan has succeeded immensely as foreign remittances coming close to $11 billion this year. Although this scheme has greatly increased inflow of foreign currency (which is just recycled untaxed money) but our tax-to-GDP ratio has nosedived. The criminals say that in the presence of this lucrative scheme – where one can whiten money by just paying 2 percent premium – only a “stupid” person would pay income tax. Section 111(4) of the Income Tax Ordinance has been widely abused by tax dodgers, drug syndicates and other criminals,including terrorists.

Due to such schemes having complete State patronage, the parallel economy is growing at an alarming rate of 22.93 percent per annum. It is estimated that every fifth rupee transacted in Pakistan is “black.” The volume of black money generated in 2009-10 was estimated at Rs3 trillion. A conservative estimate is that between Rs2 to 3 trillion is generated every year by the parallel economy, the share of illicit drug and arms trade in it is not less than Rs400 to Rs500 billion.

At the economic level, Pakistan, in addition, to rehabilitating drug addicts, also needs to spend more on anti-narcotic drives and monitoring. In 1998, the Drug Abuse Control Master Plan (1998-2003) was launched with the assistance of the United Nations Office on Drugs and Crime (UNODC) at an expenditure of Rs2.8 billion, out of which Rs1,920 million were for law enforcement and Rs912 million for drug demand reduction. However, out of the total estimated budget, only Rs185.837 million were actually spent. As usual, the plan was only partially implemented and the objectives too could not be fully realised. A revised Drug Abuse Control Master Plan (2007-2011) is now underway with the assistance of the UNODC. The master plan has two components: law enforcement and drug demand reduction.

In 2010, Pakistan had 4.6 million drug addicts. Drug dealers and addicts are also involved in smuggling and prostitution. Black economy has resulted in organised crime, which is different from normal criminal activities. How much drug money is channelled through and kept in Pakistani banks is a question which has yet not drawn the attention of law-enforcement agencies, especially the military-controlled Anti-Narcotics Force (ANF). Drug money has clear linkage with terrorists, but so far no effort has been made by any intelligence apparatus to unearth such connections. In the United States and many Western countries, comprehensive studies have been made to determine the quantum of laundered money and stringent laws have been enforced by governments to check this menace.

John Reed of Citigroup, said in his testimony before the Senate: “I am John Reed, chairman and co-chief executive officer of Citigroup. I appear today with Todd Thomson, who became the head of our Private Bank about ten days ago, and Mark Musi, the head of the Private Bank’s Compliance and Control Department. Unfortunately, Shaukat Aziz, who ran the Private Bank for the last two years and under whose leadership many of the improvements in our Private Bank’s anti-money laundering programmes took place, cannot participate in these hearings. Mr Aziz would really have been the most appropriate witness today, given his experience and knowledge, but as you know, he was called home to serve his country, Pakistan, as minister of finance. He left the bank on Oct 29. He asked me to submit his statement for the record, and it is attached to my own all financial institutions...whether banks, securities firms, or other types of financial intermediaries are potentially vulnerable to money-laundering.

“Private banks are just one subset of the potentially vulnerable institutions. Our Private Bank, for example, is a very small part of Citigroup, accounting for about 2.5 percent of Citigroup’s business. Private banks in general are no more and no less vulnerable to abuse by the unscrupulous and the dishonest than the much larger parts of most financial institutions.”

Most of the offshore banks are laundering billions of black money. All the big banks specialising in international fund transfer are called money centre banks, some of the biggest process up to $1 trillion in wire transfers a day. The most recent estimates (2010) are that 60 offshore jurisdictions around the world licensed about 4,000 offshore banks that control approximately $65 trillion in assets.

Money laundering and drugs-for-arms trades are ground realities. We daily hear from the official quarters in the US and elsewhere tall claims about war against drugs and terrorism. This is all eyewash. In reality all the financial institutions and state structures are subservient to these billionaires, the ruthless drug barons and arms suppliers, who know how to move money from one part of the world to another, buy government functionaries, control politicians, law-enforcement officials and get the profits they want from the drug trade – deals of death for many innocent people around the world.

---

The writers specialise in studying global heroin economy and authors of Pakistan: From Hash to Heroin and Pakistan: Drug-trap to Debt-trap.

Source: The News

ED may file money laundering case against Jagan

The Enforcement Directorate (ED) may file a money laundering case against YS Jagan Mohan Reddy and some of his associates, days after the CBI searched various premises belonging to the Kadapa MP.

The Directorate is understood to have made a discreet probe trailing the funds pumped by the MP and son of former Andhra Pradesh chief minister YS Rajasekhara Reddy and his associates into the companies owned by them.

The agency, according to sources, has gone through some official documents of transactions as part of its investigation under the provisions of the Prevention of Money laundering Act (PMLA).

The CBI has already registered a case against Reddy on the instructions of Andhra Pradesh High Court under relevant sections of the IPC pertaining to cheating, criminal conspiracy, criminal breach of trust and under provisions of Prevention of Corruption Act.

The CBI said searches were conducted at Hyderabad, Bangalore, Chennai, Kolkata, Rajkot, Delhi and Mumbai in this connection.

"The CBI has registered a case...against a Member of Parliament from Andhra Pradesh, and others, on the orders of High Court of Andhra Pradesh...on the allegation that the investors invested in the companies owned and promoted by the MP at very high premiums as a quid-pro-quo for the favours doled out by the then chief minister of Andhra Pradesh," a CBI spokesperson had said.

Source: IBN

How Drug Cartels Move Cash Across The U.S.-Mexico Border

by MICHEL MARIZCO

The cartels make billions of dollars on the drug trade. But they have to work out complicated schemes to get those dollars they make from addicts in the United States back into Mexico and convert them into usable pesos.

It's a lot of money. And money can overcome lots of challenges.

A recent investigation by U.S. authorities found that between 2004 and 2007, one large U.S. bank allowed nearly $500 billion of drug money to be wired through its systems, no questions asked.

Many of the wire transfers ended up in Culiacán, Sinaloa, the place to go to cash out American greenbacks for pesos in Mexico's organized crime capital. Experts describe it as a violent city along the Pacific Coast with a long history of drug trafficking.

Parasols line the streets of El Mercadito, the little market. The setup is the same at nearly every parasol. A woman sits in its shade, surrounded by 2 or 3 young, well built men.

A car approaches. Somebody was paid in American dollars and needs to convert that to Mexican pesos but doesn't want to report where the money came from. A negotiation. Then the cash transaction and money exchangers simply walks the dollars over to the money exchange house – “casas de cambia” – and cashes it out. The money exchange houses have reporting limits. So, if it's too much cash, and it often is, the money is divided up among more people to cash out.

One of the money exchangers speaks freely, his partners walking away when this reporter approaches. He said he has no idea where the money came from. He knows it started in the United States, but doesn't know how it got to this street in Culiacán.

The money exchanger said business was slow. There are some days here where he alone changes out $10,000 to $20,000, he said. There's at least ten parasol stations on this block. And there's enough work for everyone, he said.

The money exchanged on this street is small time. The big money transfers – the billions and billions of dollars – that involves the money exchange houses and big banks in the United States.

The biggest money laundering case has been that of North Carolina-based Wachovia Bank.

Investigators found that the bank had allowed $378 billion to flow unhindered from “casas de cambio” right into its bank accounts in the United States.

Michael McDonald is a retired IRS investigator. He laid the groundwork for much of the organized crime and bank investigations done today. Now he's an anti-money laundering specialist who works with banks.

"The value of those currency deposits exceeded normal transaction activity from these accounts. At that point, Wachovia, and any other institution, must be diligent, must pick up on those spikes and must answer the simple question of what's causing this,” McDonald said. “And it appears Wachovia never followed up on that."

The way the money was laundered was fairly simple: The drug traffickers used the Mexican “casas de cambio” as their middlemen. The money was smuggled into Mexico and deposited into the houses. Then, when the traffickers needed to buy items in the United States, the money house would transfer the funds into their own accounts at Wachovia.

Criminal proceedings were brought against Wachovia but nobody was ever arrested. Instead, Wachovia paid a fine – $160 million. Or, about 5 percent of the money laundered.

"This was an outrageous situation and I'm surprised that there were no criminal prosecutions in this case,” McDonald said.

Wells Fargo bought Wachovia in 2008. Executives declined to comment, but released a statement saying they've spent $40 million in the past four years to keep their banks compliant with anti-money laundering laws.

The “casas de cambio” here have a long history of shady dealings.

Elmer Mendoza, a crime novelist in Culiacán, said the black market for money has been a part of the city since the opium days in the 1940's.

Authorities said the Wachovia case is not the end of their work. There are other cases against other banks pending. The U.S. branch of London-based HSBC Holdings is now under investigation for the same types of dealings with money exchange houses.

Source: KPBS

Chinese Gang Laundering Money at Laundries

Spanish police say they arrested 34 Chinese citizens as they smashed a family-run crime gang suspected of importing fake goods and laundering the profits, with the help of a chain of laundries.

The raids in Madrid, Barcelona, Valencia, Cadiz, Seville and Huelva overnight broke up the largest Chinese-linked criminal gang based in Spain, operating since the 1990s, said the Civil Guard overnight.

Police detained 34 Chinese nationals and seized assets worth 11 million euros ($15 million), it said.

The gang may have earned more than 40 million euros ($54.64 million) a year, importing four-to-six containers a month through Valencia packed with fake tobacco, clothes and other goods bound for sale in Spain, Britain, France, Italy and Portugal, they said.

The Chinese family-run gang laundered the proceeds by moving the money around with couriers, making bank transfers of less than 20,000 ($27,318) and by extending high-interest loans to compatriots based in Spain, police said.

The gang recruited Chinese people it had helped to enter Spain, often taking away their passports after they arrived or opening bank accounts in their names to launder illicit gains, they said.

According to police, the organisation had a branch in China, which controlled more than 30 companies including a chain of nearly 1,000 laundries and was used to conceal the source of the profits.

Source: Herald Sun

Russia Raids Bank in Laundering Inquiry

The police raided a leading bank tonight as a Russian investigation into possible money laundering through the Bank of New York appeared to be gathering momentum.


The raid was at the Sobin Bank, one of the most politically well-connected banks, whose owners include some of the most powerful businesses.

The raid created an uproar when scenes of police officers prowling through the flashy glass-and-chrome headquarters of the bank were broadcast on television as bank employees gathered on the sidewalk.

When a crew from the state-owned network, ORT, arrived, they were almost immediately taken into custody. The crew said the authorities had been trying to open safe-deposit boxes.

The crew continued to film as they were taken away, on charges of entering the site of an investigation and filming against police instructions.

Tax and law-enforcement officials in Russia, who have been under pressure from United States authorties, have begun to investigate Russian banks linked to a huge money-transfering operation that involved billions of dollars that moved from Russia to the United States and then to other countries.

At the center of the United States inquiry, led by the Federal Bureau of Investigation, is the Bank of New York and a group of accounts at the bank controlled by the Benex International Company. The bank, which is cooperating with the Federal investigation, has said $7.5 billion moved through the Benex accounts over three years. The bank has not been accused of wrongdoing.

In New York, a Federal grand jury has indicted Benex and two other companies on charges of having illegally taken deposits and transmitting money without proper licenses, a violation of state and Federal laws.

The F.B.I. said it had been asking the Russian Government to examine banks in Russia that used Benex accounts. An American law-enforcement official said the F.B.I. had recently asked for information about the Sobin Bank and its links to money movement through the Bank of New York.

Russian officials contend that the United States is providing no information. ''We are compelled to check all these banks, because the Americans do not give us any information,'' the head of the State Tax Service, Aleksandr Pochinok, complained to the Russian newspaper Vedomosti. ''That does not mean all of these banks are bad. All of our banks worked with the Bank of New York.''

A member of the Sobin board, Mikhail Solovyov, declined to comment on the investigation.

Sobin has had a cozy and lucrative relationship with the Government. It handles the accounts of the State Customs Committee and has lent money to state agricultural enterprises. According to Banker magazine, it has been among the 1,000 largest banks in the world.

The main shareholders in the bank include Manezh Square, a fancy shopping center owned by the City of Moscow and Energiya, a manufactuer of rocket boosters, according to the AK&M, a Russian business-information agency.

Other major shareholders include the National Reserve Bank, a major bank with ties to the oil and gas industry, and SBS Agro, a once-powerful bank that has fallen on hard times.

The nation's leading oil company, Lukoil, is also said to be a major shareholder. And there have been reports that powerful executives with close relations to the Kremlin are also involved.

Last week, Russian prosecutors opened a separate criminal investigation into the Flamingo Bank, a small bank here that is one of several suspected of funnelling under-the-table payments from Russian importers through foreign banks.

Russian authorities said they had found $430,000 in cash at Flamingo with no official documentation to indicate its origin. That raised concerns about possible money laundering, according to Vladimir Minayev, director of the investigative unit for the prosecutor.

Source: The NY Times

'Hot Money' from China Escalates House Prices in Hong Kong

Hong Kong stock and real estate markets have recently soared simultaneously. Experts believe it was caused by an influx of “hot money” from mainland China, and worry that it will lead to economic bubbles.


"Hot money" refers to funds that are controlled by investors who actively seek short-term returns. Often, hot money is laundered to “cool” it down, or make it appear legitimate.

The luxury housing market in Hong Kong has risen to as high as 712,800 Hong Kong dollars (US$91,930) per square meter. According to statistics from an intermediary organization, prices for luxury housing in Hong Kong this year have been restored to the level before the financial crisis, and have even exceeded the peak price before the 1997 Asian financial crisis.

An influx of hot money is one of the reasons causing high real estate prices, according to associate Professor Li Kui-Wai from the Department of Economics and Finance of the City University of Hong Kong.

”Many people say that the money came into Hong Kong from mainland China,” Li said. “Though China imposes control over foreign currency, many people are able to bring money [with them] when they come to Hong Kong. Some people say they basically bring money in bags. When someone buys a luxury house, they do not even need to consider a mortgage from a bank, as they would pay in full, in cash.”

Joseph Y.S. Cheng, a professor of political science at the City University of Hong Kong says a significant amount of the money comes from “disgraceful” sources.

“Hence, they want to seek a way out, and hope to transfer money out of China,” he said. “Under such circumstances, we see the wealthiest class in China sending their families to reside abroad, and then try to get a foreign passport, even multiple foreign passports. They also purchase real estate abroad as a way of retreat, and a kind of insurance.”

Cheng also described it as money laundering; “transferring money to somewhere where the Chinese regime does not have jurisdiction.”

“So we have indeed seen such people come to buy luxury housing in Hong Kong,” he said. “Their way of purchase is mostly paying by cash, or paying in one lump sum, unlike ordinary residents, who would buy through a long-term, ten- or twenty-year mortgage.”

The latest data shows that since the beginning of the financial crisis, the total amount of money flowing into Hong Kong has reached 532.6 billion Hong Kong dollars (US$68.69 billion), and is mostly traced to mainland China.

Sung Lap-kung, a program coordinator of the School of Continuing and Professional Education at the City University of Hong Kong, said that much of this hot money has entered Hong Kong from the Pearl River Delta area.

“Much of the hot money is from the 4,000 billion yuan (US$ 585.82 billion) stimulus fund, handed out from the Chinese government, at the end of last year and the beginning of this year,” Sung said. “Much of it has been released from the banks.”

Financial expert Lew Mon-hung said that mainland China’s total credit provided this year is close to 10 trillion yuan (US$1.46 trillion)—more than double the target set by the authorities.

“Some large state-owned enterprises are not short of money,” Lew said. “However, in order to fulfill their credit quota, the banks give many large state-owned corporations excessive amounts of money. They then invest them into the real estate market and the stock market; hence the inflow of hot money.”

Lew suggested that this sudden influx of hot money into Hong Kong is mainly due to distrust of the communist dictatorship.

“Though they used many capitalist ways to develop the economy, it is still under the banner of Marxism,” Lew said. “So people have concerns about this. Mainland China has a market economy that is distorted by power, particularly from the perspective of rule of law. Its law and rule of law do not match international standards.”

Lew said corruption was also a big problem. “Many links provide opportunities for these corrupt officials,” Lew said. “That is, they are eager for high credit quota, the higher the better for them. So as far as the politics is concerned: the GDP has increased; as far as individuals are concerned: they have more opportunities to seek money.”

“Of course there will be money laundering, which is a method of covering up one’s own economic crime,” Lew added.

Many financial experts and scholars are concerned whether such soaring prices in the real estate market will cause an economic bubble.

Once a large-scale outflow of capital occurs, it will impact Hong Kong's dollar interest rate and exchange rate, and the real estate price will drop accordingly. It is estimated that the pressure for lowering the real estate price will be greater and greater after December.

Source: The Epoch Times

College Park lawyer convicted of money laundering

A lawyer who operated out of College Park was convicted on federal money laundering charges Tuesday at the U.S. District Court in Greenbelt.


Walter L. Blair, 57, of Brookville, was convicted on nine counts of money laundering, two counts of failure to file a tax return, and single counts of witness tampering, obstruction of justice and making a false statement to an Internal Revenue Service agent.

Prosecutors argued that Blair, who had law offices in College Park and Washington, D.C., accepted $170,000 in 2003 from the relative of a Richmond, Va., drug dealer and used the money to purchase real estate and pay lawyers representing the drug dealer's acquaintances.

The relative had initially approached Blair for legal advice on how to handle the money, after the drug dealer had gone missing. The drug dealer was later found murdered.

"This verdict sends a clear message that no one is above the law, and attorneys who assist criminals with laundering their illegal income will be criminally prosecuted," C. Andre Martin, an IRS criminal investigator, said in a statement.

Federal Bureau of Investigation officials also testified that Blair told the relative not to tell investigators about the money and to lie if she was questioned on the topic. Evidence also showed that he failed to file tax returns in 2003 and 2004.

Blair faces a maximum 20-year sentence for each of the nine money laundering counts, 10 years for obstruction of justice, 10 years for witness tampering, five years for a false statement to an IRS agent and one year for each of the two counts of failing to file a tax return.

He will be sentenced by U.S. District Judge Peter J. Messitte at 9:30 a.m. March 10. Messitte will decide whether the sentences for each crime will be served concurrently or consecutively, said U.S. Attorney's Office spokeswoman Marcia Murphy.

E-mail David Hill at dhill@gazette.net.

Source: Gazette.NET

Foreign students used as front to launder money

A Wellington businessman was today sentenced to nine months' home detention for tax evasion, fraud and money-laundering using foreign students as a front and involving more than 350,000.

Walter Law, also known as Xu Liu, 45, had earlier pleaded guilty in Wellington District Court to five charges of tax evasion, six charges of providing false income tax returns, 21 charges of aiding a company to file false GST returns, one charge of aiding a company to file false income tax returns and five charges of aiding a company to evade tax.

Law also pleaded guilty to one charge of money laundering under the Crimes Act.

Tony Morris, Inland Revenue's assurance manager investigations, said Law conducted his activities using separate companies and unregistered entities which he owned or controlled.

"Our initial investigation into one of Mr Law's companies, Holiday KTV Entertainment Limited, revealed that significant amounts of cash were unaccounted for and the company had only reported its Eftpos transactions to Inland Revenue. Our subsequent analysis showed the company had evaded GST amounting to just over $68,000, PAYE of over $41,000 and Income Tax amounting to over $29,000," Mr Morris said in a statement.

Inland Revenue's investigation into Law's foreign exchange and travel businesses found he deposited $2.5 million into bank accounts in the name of two overseas home-stay students. The students said Law had control of these accounts and they had no knowledge that the funds were used to repay loans on properties owned or controlled by Law.

"Mr Law's foreign exchange and travel businesses made a surplus of $540,000 between 2004 and 2010," Mr Morris said.

"These entities not only failed to return around $170,000 in income tax to Inland Revenue but these funds were deposited into the students' bank accounts and recharacterised as loans from a private trust in China. This money was the undeclared income from the business transactions and this action amounted to money laundering," Mr Morris said.

Law's offending resulted in a loss to Inland Revenue of just over $350,000, which had since been recovered.

"Mr Laws deliberately tried to evade his tax obligations by not declaring his income and hiding cash in other people's bank accounts. This case is a further reminder that Inland Revenue is using increasingly sophisticated analysis to detect those trading in the hidden economy," Mr Morris said.

"Businesses and individuals doing the right thing can be confident that Inland Revenue will detect those evading their obligations and those cheating on their taxes should be aware that we will take action when we detect deliberate non-compliance."

Law was also sentenced to 200 hours' community service.

Source: NZ HERALD

Mexico limit cash transactions to fight money laundering

The Mexican government, under fire for not doing enough to starve powerful drug dealers of billions in cash, said Tuesday it would limit cash transactions in U.S. dollars as a way to fight money laundering that helps to feed Mexico's spiraling violence.

Mexico's Finance Minister Ernesto Cordero said new rules, to be published Wednesday, will limit dollar bank deposits, the payment of loans and services as well as well as foreign-exchange transactions in cash to between $1,500 and $7,000 a month.

The tightening of banking rules comes as Mexico's government finds itself in an increasingly bloody struggle with the country's powerful and ever more daring drug lords who exert control over large parts of the country. Violence escalated Tuesday as 15 gunmen were killed in a battle with Mexican soldiers in Taxco, a popular tourist town that has become a battleground for rival gangs, and where authorities last month discovered a mass grave in an abandoned silver mine.

On Monday, twelve federal police were killed in an ambush by suspected drug traffickers in the western state of Michoacán who blocked the highway with buses to stop help from reaching the embattled policemen.

More than 23,000 people have been killed in drug-related violence since President Felipe Calderón ordered the military and federal police to battle drug traffickers shortly after assuming the presidency in December of 2006. Since then, Mr. Calderón has come under increasing fire from critics who say his military approach hasn't worked, and should be supplemented by more measures to strip drug traffickers of their financial assets.

"We are protecting our banking system from dollars that might be from illegal sources," Mr. Cordero said at a news conference. "The measures are designed so they don't affect formal, legal economic activity."

Mexican banks receive more than $10 billion a year in suspicious dollar flows in cash that can't be explained by legitimate economic activity, Mr. Cordero said. U.S. analysts say the amount of drug-related cash coming into Mexico from the U.S. could be as high as $29 billion.

Some analysts welcomed the measures as a necessary first step, but others said they were not enough.

Edgardo Buscaglia, who teaches law and economics at Mexico City's ITAM University, said the measures would increase costs to bank clients while doing little to fight money laundering.

He urged the Mexican government to conduct audits on thousands of companies that the U.S. and the European Union have identified as having connections to organized crime.

Under the new rules, individuals can make deposits or payments for up to $4,000 a month through their bank, while those same transactions are limited to $1,500 in the case of foreigners and Mexicans who don't have bank accounts. Cash dollar deposits and payments by businesses will be restricted to those operating in tourist and northern border areas, and limited to $7,000 a month.

Banks will be allowed to continue to sell dollars to the public, Mr. Cordero said. In recent months, a number of banks have restricted or stopped providing cash dollar transactions, including the sale of dollars to the public. The government said it does not expect the new measures to disrupt Mexico's second and third most important sources of foreign currency—remittances and international tourism, Mr. Cordero said.

Mr. Cordero said the rules affecting businesses will take effect after 90 days.

The government also plans to eventually restrict and regulate local currency transactions related to the purchase and sale of real estate and other goods and services in Mexico as part of a broad push against money laundering, Mr. Cordero said.

"Until real-estate purchases are channeled through the financial system, Mexican drug dealers will continue to launder money as was done in Miami during the 1980s," said Alberto Islas, president of Risk Evaluation Ltd., a Mexico City security consulting firm. Mr. Islas said that about 45% of real estate transactions in Mexico are done in cash. "The measures taken are timid."

Douglas Farah, senior fellow at the Washington-based International Assessment and Strategy Center said the Mexican measures would likely be difficult to enforce. "I think it will add a temporary layer of difficulty to attempts to launder dollars in Mexico, but one that will soon likely be circumvented by corruption or narco adaptation," Mr. Farah said.

Mr. Cordero said that Mexico's banks have agreed to expand the number of ATMs in Mexico by 12% this year and provide more credit card and debit card terminals to retail concerns operating in tourism and border areas, reducing the need for cash transactions. Hotels and other retailers will also have to obtain authorization to operate as banking agents to provide foreign exchange services, Mr. Cordero said.

Banking agents are third parties hired by a bank to perform basic financial transactions.

Write to Ken Parks at ken.parks@wsj.com and José de Córdoba at josedecordoba@wsj.com

Source: Wall Street Journal

Spanish Police Bust Bank-Card Fraud Ring

An international organization engaged in duplicating bank cards has been dismantled in an operation involving the arrest of 178 people in 14 countries, Spanish police said Tuesday. The ring, which made off with more than 20 million euros ($24.5 million), also committed other crimes including robbery, extortion, sexual trafficking and money laundering.

The investigation, directed by Spain’s National Court, was launched two years ago in the Mediterranean city of Valencia, where police detected several people forging bank cards to withdraw money from automatic teller machines or to make purchases.

Police discovered that the ring had subgroups based in 14 different countries, each led by an individual who alone had contact with the kingpins.

In Spain, 76 people have been arrested, 120,000 card numbers were made inoperative and 5,000 duplicated cards were seized, while police dismantled six workshops where cards were being copied.

In Romania, 23 searches resulted in 16 arrests, while in France the operation was carried out in three phases that led to 30 arrests and nine searches.

In Italy, two searches ended with seven people under arrest and 3,100 duplicated cards seized.

Another 16 people were taken into custody in Germany, including a man suspected of being one of the most important technicians for creating card-duplicating devices.

Three members of the gang were nabbed in a three-step operation in Ireland, while in the United States another eight people were arrested.

And thanks to information provided by the Spanish police, two suspects were arrested in Australia, another two in Sweden and Greece, three in Finland and four in Hungary.

Source: Latin American Herald Tribune

Hollywood executives jailed for Thai film festival bribery

Two married Hollywood movie executives have been jailed for six months in Los Angeles for bribing Thai officials so they could run the Bangkok International Film Festival.

Gerald Green, 78, and Patricia Green 55, were sentenced to prison despite a supportive letter to the court from the veteran film star Kirk Douglas.

Mr Douglas said the couple “were extremely honest and fair in all of their dealings with me.”

The Greens were convicted of conspiracy and money laundering after a jury found they had paid a former Thai tourism official $1.8 million (£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 them more than $13 million (£8 million.)

Prosecutors said they created shell companies to pay off Juthamas Siriwan, former governor of the Tourism Authority of Thailand.

They then transferred money into bank accounts of Juthamas’ daughter and a friend so they would be awarded business contracts.

Juthamas has denied any wrongdoing and has not been charged in Thailand. She and her daughter have been charged with conspiracy in Los Angeles.

The Greens helped transform the Bangkok Film Festival, attracting stars including Jeremy Irons and director Oliver Stone to Thailand for the event.

Gerald Green’s career in Hollywood spans more than 30 years. He worked with Stone on the Oscar-nominated “Salvador” and was executive producer on the 2006 film “Rescue Dawn” which starred Christian Bale.

Patricia Green produced the 1999 comedy “Diamonds” starring Kirk Douglas and Lauren Bacall.

The Greens were also ordered to serve six months of home detention after their jail sentence and pay $250,000 (£150,000.)

Source: Telegraph

Drugs money 'saved the banks from collapse' during global crisis

Drugs money saved some banks from collapse at the height of the global crisis the United Nations' drugs and crime chief claimed today.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, told the Observer that there were signs that some banks were rescued by billions of dollars that 'originated from the drugs trade and other illegal activities.'

Speaking from his office in Vienna, Costa explained that in the second half of 2008, lending was the banking system's main problem.

'The system was basically paralysed because of the unwillingness of banks to lend money to one another,' he told the newspaper.

He said he had seen evidence that the proceeds of organised crime were the 'only liquid investment capital' available to some banks on the verge of collapse last year.

Costa said that as a result, a majority of the $352bn (£216bn) of drugs profits was absorbed into the economics system, effectively laundering it.

The UNs' drugs and crime chief said that he was first made aware of evidence that illegal money was being absorbed into the financial system around 18 months ago, although he would not name countries or banks that may have received drugs money.

A British Bankers' Association spokesman told the newspaper: 'We have not been party to any regulatory dialogue that would support a theory of this kind.

'There was a clear lack of liquidity in the system and to a large degree this was filled by the intervention of central banks.'

Costa's claim comes as police launch a new anti-drugs campaign that aims to appeal environmentally-minded cocaine users with the message that snorting cocaine destroys the rainforest.

The campaign warns that for every gram of cocaine made, four square metres of rainforest are destroyed.

The campaign, headed by the police and Greenpeace, comes amid evidence that cocaine use is on the increase among young people in the UK.

It has been suggested that lower prices have contributed to the prevalence of the drug

Source: Daily Mail