Museo Guggenheim Bilbao, Spain

Mountain village Malaga Spain

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

Terror arrests in Ireland are third highest in Europe

by Michael Freeman

There were more arrests over terrorism offences in Ireland than almost anywhere else in the EU last year, according to a new report.

Some 62 terror suspects were taken into custody in the Republic – more than ten per cent of the European total. They included 57 people suspected of republican paramilitary activity and five in relation to Islamic militancy, Europol’s EU Terrorism and Trend Report reveals. The five Islamic terrorism arrests came after an alleged plot to murder Swedish cartoonist Lars Vilks, who drew a controversial image of the prophet Muhammad, was uncovered in Ireland in March 2010.

Only Spain and France made more arrests in 2010, though the numbers there were far greater. France arrested 219 people and Spain 118, while in fourth place the UK figure was 45. Ireland’s figures were almost double the previous year, when only 33 suspects were taken into custody.

The main other findings of the report were:

• There were a total of 249 terrorist attacks carried out across the EU, with 40 perpetrated by terrorist groups based in Northern Ireland and the Republic.
• The Real IRA and Continuity IRA “continue to pose a threat” in the UK, and have grown in size and capability in recent years.
• Ireland has a mostly successful record for prosecuting terrorism offences, with 83 per cent of cases resulting in conviction. However, the average jail penalty of five years is below the EU average.
• The report noted that Ireland had successfully implement an EU directive on money laundering, designed to restrict financing of terrorism. 
• A total of 179 people were arrested in Europe on suspicion of Islamic terrorism. This was a 50 per cent increase on the previous year, and almost half the arrests were made over planned attacks on EU countries.
• The report warned that continued political unrest in North Africa could shake up al-Qaeda affiliates and lead to them establishing a greater presence in Europe. It also stated that most of the suspects arrested over alleged Islamic terrorism were acting alone or autonomously – meaning there is no single network or organisation which can be targeted.

Europol is the EU’s criminal intelligence agency, which works with law enforcement organisations across all member states.

Source: The Journal

Spain freezes assets of Mubarak associate

Spanish police said Friday they have frozen more than 30 million euros in bank accounts and properties valued at 10 million after arresting a close associate of ousted Egyptian president Hosni Mubarak on fraud charges.

Hussein Salem, detained along with his son and a suspected frontman, was accused of money laundering, fraud, bribery and corruption, police said in a statement.

Police said they froze suspected illicit gains of 32.5 million euros ($46 million) in bank accounts, two buildings in Madrid and seven in the southern resort of Marbella, a popular destination for wealthy people, worth a total of about 10 million euros, and five luxury cars.

A court in Madrid set bail for Salem at 12 million euros, six million for his son and 18 million for his associate.

An Egyptian security official said Salem was accused of corruption in a gas deal and of giving properties to Mubarak and his family in return for huge swathes of land in Sinai.

Spanish police alleged the suspect and his family had received more than 17 million euros in funds he had obtained illegally in Egypt.

Egypt's prosecutor general's office said Friday it had sent the foreign ministry a full dossier on the investigation of Hussein Salem.

The file must now be sent to Spanish police before they can hand Salem over to Egyptian authorities.

The prosecutor general's office said Salem had "acquired Spanish citizenship despite dual nationality being illegal under Spanish law".

Magdi al-Shafei, Interpol's Egyptian bureau chief, was quoted by Egyptian state television as saying Salem's dual nationality could make it "very complicated" to try him in Egypt.

Source: AFP

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

Spanish Judge Demands US$77 Million From Pinochet’s Wife And Advisers

Spanish judge Baltasar Garzon on Monday demanded that the widow and advisors of former Chilean Dictator Augusto Pinochet pay US$77 million to a Spanish charity for his regime’s victims within the next 10 days.


If the money is not paid, the dictator’s widow, Luicia Hiriart, and three associates, Oscar Aitken, Pablo Granifo and Hernan Donoso, will all face extradition to Spain on charges of embezzlement and money laundering and will have up to US$25 million worth of their assets frozen.

The judge intends to visit Chile with colleagues from the Spanish high court to oversee investigations against the four charged.

The money is sought by Spanish organization Foundación Salvador Allende to compensate the families of Spanish nationals killed during Pinochet's regime, which began after the 1973 military coup that toppled elected president Allende. This is the latest of Garzon’s charges against Pinochet and members of his inner circle.

Garzon arranged for the 1998 London arrest of the dictator on charges of genocide and terrorism. Pinochet was released after 16 months of extradition proceedings, but he was facing charges of tax evasion, embezzlement and money laundering until his death in 2006.

His family members and former legal advisor Aitken were acquitted of wrong-doing in previous cases and therefore cannot face retrial in Chile. However, evidence has emerged in recent years that Pinochet amassed a fortune in kick-backs from international arms deals and misappropriation of public funds. This wealth is apparently held in bank accounts all over the globe.

In 2005 the Salvador Allende charity received US$9 million after American-based Riggs bank was found guilty of holding illegal accounts for Pinochet. Following on from that case the organization petitioned Spanish courts to bring similar charges against Chilean Banco de Chile and two of its subsidiaries. Garzon postponed the case so that individuals at the bank could be identified and evidence collected against them.

Two of those charged yesterday are high-ranking officials at the Banco de Chile. Granifo is currently the firm’s president, while Dononso is a former head of the bank’s US operations. The bank was acquitted of wrongdoing in a 2006 US investigation into money laundering allegations against the bank's New York operations (ST. Oct 5, 2006).

Corruption charges also continue to emerge in Chile, with the arrest earlier this year of a former military aide to the dictator accused of misappropriating up to US$20 million in public funds. Human rights investigations against former secret police agents are also ongoing (ST. Sept 3).

In September 2008 the Chilean government announced that it would seek the return of US$26 million held in secret accounts for Pinochet from the Miami branches of four different banks including Banco de Chile and Spanish bank Santander (ST. Sept 30, 2008).

The Pinochet family has always denied corruption accusations made against the late dictator, insisting that their private wealth was accumulated thanks to financial prudence and wise investments.

SOURCE: El MERCURIO, LA TERCERA, EL PAIS.COM
By James Fowler ( editor@santiagotimes.cl )

Georgian crime boss sentenced in Spain for money laundering

A Spanish court on Tuesday convicted a top Georgian crime gang leader of money laundering and sentenced him to seven and a half years in jail.

Spain's top criminal court also slapped Zahar Kalashov, who was extradited to the country from Dubai in 2006, with a fine of 20 million euros (24.6 million dollars).

The court said he laundered money earned from criminal activities carried out in the former Soviet Union, such as kidnappings and the operation of illegal casinos, by investing in real estate and luxury cars in Spain.

It said he should be deported once he has served three-quarters of his sentence and will then be banned from entering Spain for a decade.

Public prosecutors had asked that Kalashov, who police suspect led the Georgian mafia in Spain, be sentenced to 12 years and two months behind bars.

Five other men who were detained as part of the same police investigation into the group were also convicted of money laundering at a separate trial last year and received prison sentences of between two and five years.

Kalashov fled Spain after police launched "Operation Wasp" in June 2005 which culminated in the arrests of 28 suspected members of his organisation from former Soviet states in Barcelona, Alicante and Malaga.

The swoop saw 800 bank accounts frozen and the impounding of luxury villas and vehicles along with the seizing of some 300,000 euros in cash.

Source: AFP

Syrians accused of money laundering for terrorists arrested in Spain

July 26, 2007

Two Syrians alleged to be laundering money for international terrorists were arrested in Spain's capital Madrid, Spanish police said Wednesday.

Bassan Dalati Satut, 48, and Samer Dabbas, 30, both from the Syrian city of Aleppo, said that they were channeling money from Arab investors into Spain's construction sector.

The two men are accused of creating front companies which operated in the real estate sector to launder money contributed by members or supporters of radical Islamic organizations, a police statement said.

Satut is alleged to have been given the money-laundering job from Mohamed Ghaleb Kalaje Zouaydi, who is serving a nine-year prison term in Spain for helping plan the Sept. 11 attacks in New York and Washington.

Police also seized 120,000 euros (165,000 U.S. dollars), mobile phones and newspapers clippings about terror activities in an operation on Tuesday, the statement said.

Spanish police have increased their vigilance against Islamic terrorists since the March 11, 2004 attacks which killed 192 people in Madrid.

Source: Xinhua

http://english.people.com.cn/90001/90777/6224664.html

Al-Qaeda Masters Terror On The Cheap, Avoiding Financial Dragnet

Since the Sept. 11, 2001, attacks, al-Qaeda has increasingly turned to local cells that run extremely low-cost operations and generate cash through criminal scams, bypassing the global financial dragnet set up by the United States and Europe.

Although al-Qaeda spent an estimated $500,000 to plan and execute the Sept. 11 attacks, many of the group's bombings and assaults since then in Europe, North Africa and Southeast Asia have cost one-tenth as much, or less.

The cheap plots are evidence that the U.S. government and its allies fundamentally miscalculated in assuming they could defeat the network by hunting for wealthy financiers and freezing bank accounts, according to many U.S. and European counterterrorism officials.

In an ongoing trial here of eight men accused of planning to blow up airliners bound for the United States two years ago, jurors have been told how the accused shopped at drugstores for ingredients to build bombs that would have cost $15 apiece to assemble.

Similarly, the cell responsible for the July 7, 2005, transit bombings in London needed only about $15,000 to finance the entire conspiracy, including the cost of airfare to Pakistan to consult with al-Qaeda supervisors, according to official British government probes.

Investigations into several plots in Europe have shown that operatives were often flush with cash, raising far more than necessary through common criminal rackets such as drug dealing and credit card theft.

Testimony in the trial of the accused airliner plotters has shown that the defendants had enough money to buy a northeast London apartment for $260,000 shortly before their arrest, allegedly so they would have a safe place to mix liquid explosives for their bombs.

One of the July 2005 suicide bombers, a 22-year-old part-time worker at a fish-and-chips shop, left an estate worth $240,000 after he blew up a subway train. Neither his family nor authorities have explained where he got the money.

In Spain, the cell responsible for the March 2004 train bombings in Madrid needed $80,000 to finance the plot, according to Spanish court documents. But they had access to more than $2.3 million worth of hashish and other illegal drugs that they could have sold to raise more money, the documents showed.

Even the 9/11 hijackers wired back about $26,000 in surplus funds to accounts in the Persian Gulf area a few days before the attacks.

Authorities said it is often impossible to monitor fundraising by such cells because they generally keep so little in the bank. Instead of receiving wire transfers or making large deposits that would trigger automatic alerts, they move cash in person and are discreet about how they spend it.

"The groups operating in Europe don't need a lot of money. The cost of operations is very low," said Jean-Louis Bruguiere, a former senior anti-terrorism judge in France who now works as an adviser to the European Union on terrorism financing. "But they are very skilled at obtaining money and using criminal systems to do it. They can collect thousands and thousands of dollars or euros in a few weeks. It is beyond our control."

Law enforcement officials in London said al-Qaeda cells are trained to plot and live on the cheap. Operatives lead ascetic lives, often keeping their day jobs or depending on their families to cover expenses. Above all, they are taught to build bombs that are lethal but crude and inexpensive. Almost every terrorist plot in Europe in recent years has followed a simple formula: homemade explosives stuffed into backpacks, shoes, suitcases or car trunks.
Outflanking the Laws

Thirteen days after the Sept. 11 hijackings, President Bush launched what the White House later described as the "first strike in the war on terrorism." He signed an executive order freezing the assets of 27 individuals and groups suspected of terrorism and forbidding anyone from doing business with them.

"Money is the lifeblood of terrorist operations," Bush said in the Rose Garden. "Today we're asking the world to stop payment."

A month later, Congress and Bush went further by adopting the USA Patriot Act, which required banks to report transactions larger than $10,000 to the Treasury and to check if any of their customers were on a database of suspected terrorists.

By December 2001, the government had frozen $33 million in assets and expanded its terrorism-financing blacklist to 153 names. In a report assessing its progress in the fight against al-Qaeda, the White House declared, "The United States and its allies have been winning the war on the financial front."

The measures, however, have failed to dry up the supply of money available to al-Qaeda and have had no discernible effect in preventing the network from carrying out attacks, according to several counterterrorism officials and experts in the United States and Europe.

Before Sept. 11, 2001, al-Qaeda and its affiliates rarely used the banking system in a manner that might arouse suspicion, officials and experts said. In response to the new anti-terrorism financing laws, the network has became even more cautious, relying on couriers to carry money across borders when necessary, authorities said.

Ibrahim Warde, an adjunct professor at Tufts University and an expert on financial systems in Islamic countries, said the Bush administration and its allies falsely assumed that al-Qaeda had stashed large sums in secret bank accounts.

"It got the entire financial bureaucracy started on a wild-goose chase," said Warde. "There's a complete disconnect between this approach and the underlying reality of how terrorism is funded."

Dennis M. Lormel, a former head of the FBI's Terrorist Financing Operations section, said the laws passed since 2001 have closed some gaps and addressed vulnerabilities that made it easy for al-Qaeda to raise and transfer money.

He said the network has responded quickly. Its cells in Europe and elsewhere now raise money on their own instead of relying on financial transfers from external sources that could be tracked by law enforcement officials.

"Clearly, when you're dealing with groups that are self-funded, you're dealing with a different set of circumstances from when they put these laws in place," said Lormel, now a senior vice president at Corporate Risk International, a Reston-based firm.

"The bad guys, after a while, they realize what we're doing, so they're going to alter how they do business," he added. "Obviously, you're not going to stop them from getting money, and they're going to be able to adapt."
Inventive Fundraising

Al-Qaeda's self-financing cells in Europe have become increasingly creative in their fundraising methods, officials said.

After the July 2005 London transit bombings, police knocked on the door of a sheep farmer in Scotland to inquire about a livestock deal gone sour. The farmer, Blair Duffton, confirmed that he had lost more than $200,000 when he sent several truckloads of sheep to a slaughterhouse in Leeds, England, but never received payment.

The slaughterhouse specialized in halal meat, or food prepared according to Islamic law. Detectives informed Duffton that the person who had stiffed him for the sheep was an associate of Shehzad Tanweer, one of three bombers who had lived in Leeds.

"I almost went bankrupt," Duffton recalled in a telephone interview. "I couldn't believe it when they told me that this might have been connected to terrorism."

British authorities have not commented publicly on the sheep scam or said if any of the proceeds were used to finance the attacks. Three men accused of providing support to the suicide bombers are currently on trial in London.

In Germany, three Arab men were convicted in December on charges of attempting to raise $6.3 million for al-Qaeda by faking a death to collect on nine life insurance policies. In Switzerland and Spain in 2006, authorities broke up a cell that had stolen $2 million worth of computers, cars and home furnishings. Police said the group sold the goods on the black market and had couriers carry the cash, in $2,000 increments, to an al-Qaeda-affiliated network in Algeria.

In Britain, an al-Qaeda operative, Omar Khyam, was caught on a surveillance tape urging some of the July 2005 London suicide bombers to defraud banks and hardware stores by defaulting on loans of less than $25,000.

Khyam said the goal was not just to raise money for operations but to "rip the country apart economically, as well," according to court testimony in April at the trial of the three men accused of providing support to the bombers.

Acting on Khyam's advice, one of the bombers obtained and then defaulted on a $20,000 loan from HSBC Bank. Another secured a $14,000 line of credit from a building supply company.

Given the small scale of such transactions, banks or police would have had little reason to suspect the involvement of terrorists, officials said.

"That's the cleverness of these schemes - to keep it under the radar," said Stephen Swain, former head of Scotland Yard's international counterterrorism unit. "By doing this, they can raise significant amounts of money, fairly quickly, and there's no real way to detect it."
Cracking Down After the Fact

A few weeks after the Sept. 11 attacks, Gordon Brown, then Britain's chancellor of the exchequer, or finance minister, announced a major effort to "crack the code" of terrorist financing. He said Britain would press the entire European Union to hunt for al-Qaeda by combing through the international banking system.

"If fanaticism is the heart of modern terrorism, then finance is its lifeblood," said Brown, who is now Britain's prime minister.

In response to the July 2005 London transit bombings, Brown said the government would freeze the suspects' bank accounts and place additional controls on international financial transfers, even though there was no evidence the cell had received any money from outside sources. "There will be no hiding place for those who finance terrorism," he promised.

Two months after authorities broke up what they said was the plot to bomb transatlantic airliners in August 2006, Brown reiterated that the key to fighting terrorism was to disrupt al-Qaeda's bank accounts. He said Britain would use classified intelligence to freeze assets of people suspected of having links to terrorist groups and would exercise greater control over Islamic charities.

"We will take any necessary steps and find all necessary resources to ensure whether in Iraq, Afghanistan or anywhere else there is no safe haven for terrorists and no hiding place for terrorist finance," Brown said, echoing his 2005 comments.

Britain has frozen assets belonging to 359 individuals and 126 organizations suspected of assisting al-Qaeda, according to a Treasury report released last year. All told, about $2 million has been seized, the Treasury reported.

Yet the government's efforts have had little practical effect, several current and former British counterterrorism officials said. For instance, Britain froze the accounts of 19 suspects in the 2006 transatlantic airliner plot - but only after they were arrested. Officials said most of the accounts contained negligible amounts.

As part of the same investigation, British officials announced an inquiry into the operations of a charity, Crescent Relief, saying that it was suspected of providing money to the cell. Officials with the charity, which was set up to aid earthquake survivors in Pakistan, denied wrongdoing.

Two years later, however, the trial has yielded no public evidence linking the defendants to Crescent Relief. A spokeswoman for Britain's Charity Commission, which regulates nonprofit organizations, said the investigation is continuing but declined to comment further.

Swain, the former Scotland Yard counterterrorism official, said politicians often announce stricter anti-terrorism financing laws after an attack as a public relations measure. He said they do little good in terms of actually preventing terrorism.

"I think there is a realization that they are not that effective," said Swain. "But they need to be seen as doing something to provide reassurance to the public that they're doing something. We're living in a false paradise if you think these things will stop it."
Needles in Haystacks

Some officials defended the anti-terrorism financing laws passed since 2001, saying that al-Qaeda would have a much easier time raising money if the measures weren't in place.

"We mustn't be wooed into the idea that because attacks are costing less and less, that there isn't a need for money, or that it isn't being provided," said Michael Chandler, who headed a United Nations panel that monitored financial sanctions against al-Qaeda and the Taliban from 2001 to 2004. "It's not just the money they need to make the explosive devices. It's the money they need for other things: to support the network, to recruit and to train."

Chandler also acknowledged that al-Qaeda and its affiliates have adapted and are having little difficulty financing their plots.

"Notwithstanding the successes we've had, groups associated or affiliated with al-Qaeda still appear to be able to carry out an attack, as and when they feel so inclined," said Chandler, a former British Army officer and U.N. diplomat, citing the Taliban and cells in Iraq and North Africa. "Either they had the money already when they needed it, or they have no problem getting it."

Law enforcement officials said terrorism-financing controls also make it easier to investigate cells that are under surveillance or after an attack. By retracing suspected plotters' financial footsteps, no matter how small, investigators can map their movements and develop new leads.

Cliff Knuckley, a former chief money-laundering investigator for Scotland Yard, said it's difficult to detect potential terrorist plots just by monitoring cash flows or bank transfers - the basis of many of the anti-terrorism financing laws in place today.

"You're looking for a needle in a haystack, and unfortunately you have a field full of haystacks," said Knuckley.

Source: Free Internet Press

Spain clears Syrians of terror financing

A Spanish court has cleared two Syrian-born men of indictments for alleged terrorist financing, according to court documents viewed by CNN on Monday.

The indictments, issued last year, were dropped last week against Bassam Dalati Satut and Mohamed Ghaleb Kalaje Zouaydi, although Kalaje is still serving a nine-year sentence for membership in a terrorist group, from a conviction in 2005 in Spain, court and prison officials told CNN.

A three-judge panel at the National Court, which hears terrorism cases, cleared the two of indictments issued in April 2007, that had accused Kalaje of membership in a terrorist group and accused Satut of the lesser charge of collaboration with a terrorist group.

Satut was acquitted in 2005 of belonging to a terrorist group, at a trial in which 18 of the 24 defendants, including Kalaje, were convicted of Islamic terrorist activities, court records show.

Spain's Supreme Court in 2006 overturned three of the lower court's convictions from that 2005 sentence, leaving 15 convicted, in what was one of Europe's largest trials involving operatives allegedly linked to al Qaeda.

In the latest case, the alleged crime of Satut and Kalaje, according to the indictments, was liquidating a company's accounts of thousands of dollars and allegedly diverting the funds to finance Islamic terrorist activities.

The National Court threw out the indictments on Thursday but the ruling did not became available to the media until Monday.

In clearing Satut and Kalaje, the court said the indictments were not backed by sufficient evidence to show that the two suspects, especially Kalaje - who was in prison on a prior terrorism conviction - had carried out terrorist financing.

Source: CNN

OSCE brings together social sectors in fight against terrorism

More than 250 State officials and representatives from civil society and business are in Vienna on Monday for an Organization for Security and Cooperation in Europe (OSCE) conference on public-private partnerships (PPPs) in combating terrorism.

The two-day conference organized by the OSCE Action against Terrorism Unit will focus on public-private co-operation, including with the media, to counter violent extremism, and on PPPs to protect critical infrastructures and major events against terrorist attacks, as well as to block channels for terrorist financing, according to an OSCE press release.

Ambassador Antti Turunen, the Permanent Representative of Finland to the OSCE, said: "Public-private partnerships can play an essential role in the fight against terrorism, and the OSCE is committed to promoting co-operation between states, the business community and civil society to suppress terrorist financing, protect against terrorist attack and curb radicalization and violent extremism that lead to terrorism."

Participants of the conference will exchange ideas and information, discuss and further explore the potential for concrete public-private co-operation in countering terrorism within the OSCE region.

The conference is organized with financing from Spain, the United States, and Russia. 　

Editor: Mu Xuequan

Source: Xinhua

Libya's Membership Application To MENAFATF Approved

Members of the anti-money laundering and anti-terrorist financing organization, the Middle East and North Africa Financial Action Task Force, or MENAFATF, approved Libya's membership application Tuesday, MENAFATF President Abdulrahim Al Awadi said.

"The plenary of 17 members approved the application of Libya to be a member and the application of the World Customs Organization to be an observer member," Al Awadi told reporters in Fujeirah, United Arab Emirates.

Libya will become the 18th member state of the organization, which was set up in November 2004 and includes Saudi Arabia, Bahrain, Oman, Sudan, Iraq and Egypt. The U.S., U.K., France and Spain are observer members, as well as the International Monetary Fund and the World Bank. The U.A.E. currently holds the presidency.

The U.A.E., which is keen to expand membership, also proposed that Djbouti, Comoros Islands, Seychelles and Maldives become members. The proposal is still being studied by member states.

Al Awadi added that the taskforce will meet next in Bahrain, which takes over the presidency of the organization in May 2009.

He also said that the global credit crisis won't draw attention away from fighting money laundering and terrorist financing.

"Members reiterate the financial crisis should not affect progress and, on the contrary, will add resolve to progress," Al Awadi said.

Source: Zawya

Romanian soccer investigated for tax evasion, embezzlement, money laundering

BUCHAREST, Romania (AP) - Anti-corruption prosecutors began an investigation Thursday into top soccer officials involving money laundering and tax evasion in the transfer of Romanian players to foreign clubs.

The prosecutors say the state should have received ¤1.7 million (US$2.5 million) in revenue and tax if the actual amounts of money received in the transfers
had been registered in the accounts of the clubs.

Romanian prosecutors pieced together information about finances related to soccer deals from countries such as the Netherlands, Spain, Italy, China and South Korea. They say 12 players were transferred to foreign clubs for bigger amounts of money than stated in the accounts.

Ten people are under investigation, including Rapid Bucharest chairman Gheorghe Copos and Dinamo chairman Cristi Borcea. The 10 are accused of diverting more than ¤10 million (US$14.6 million) to bank accounts of offshore companies from the Virgin Islands and the Netherlands to avoid paying the full tax.

Soccer is one of the most popular sports in Romania, but it has recently been marred by claims of corruption and match-fixing.

http://www.pr-inside.com/romanian-soccer-investigated-for-tax-r391755.htm

Cocaine trade fuels Euro laundering

A cocaine boom in Europe and the continent’s strong currency have combined to fuel a thriving industry: euro laundering.

With the euro approaching $1.50 and soaring demand for cocaine in countries like Spain and Italy, Europe has become a far more lucrative place to do business for Latin American drug cartels than in previous years.

To obscure the origins of the funds, and escape government scrutiny in the process, the cartels use a complex system to launder their proceeds – much of which is landing on U.S. shores.

In late March, U.S. authorities arrested a man carrying a leather duffel bag who had just landed at Los Angeles International Airport on a flight from Santiago, Chile. Inside the bag was more than $1.9 million in cash, mostly in bundles of 500 euro and 200 euro notes.

U.S. and Chilean law enforcement officials believe the man was at the end of a money–laundering trail that begins in Europe. Over a period of four and a half years, he and his associates flew to the U.S. from Latin America some 280 times, openly toting more than $244 million worth of euros into the country, according to documents in a case brought by federal authorities in U.S. District Court in New York.

The big bills have become so symbolic of the lush life that they have recently crept into pop culture: The rapper Jay–Z’s video for Blue Magic – the debut single from his new album ’’American Gangster’’ – features a suitcase full of 500 euro notes and someone thumbing through a stack of them as Jay–Z raps the words, ’’the kilo business.’’ Hype Williams, director of the music video, said that he and Jay–Z chose euros because they are ’’more valuable’’ and because they wanted to ’’one–up’’ their hip–hop competitors by showing ’’the things people are into now.’’

The wads of euros carried by people like the man arrested at LAX are often the spoils of Europe–bound cocaine shipments – many of which transit through Africa, law–enforcement officials say.

Consumption of the drug has soared in much of Western Europe, according to a report released last year by the U.N. Office on Drugs and Crime. In Italy, use of the drug rose to 2.1 percent of the general population in 2005 from 1.1 percent just four years earlier. In France, it tripled from 2000 to 2005, from 0.2 percent to 0.6 percent of the adult population. Cocaine use in England doubled from 1998 to 2006, according to Britain’s National Health Service, to 2.4 percent among adults.

Some narco–euros are laundered directly in Europe. But officials say the lion’s share is routed back to South America as cash and eventually ends up in the U.S.

’’This is still a cash business,’’ says Donald Semesky, the Drug Enforcement Administration’s head of financial–crimes investigations.

The first step is to convert small bills accumulated from thousands of street sales into 500 euro notes, which are easy to transport. Obtaining large quantities of these conspicuous notes, though, isn’t easy. So drug traffickers turn to specialized criminal rings – whose members are often involved in banking and real estate – to gain access to them, says Jose Manuel Alvarez Luna, chief of the money–laundering section of the Spanish police.

Spain is the center for such aggregation, according to authorities. A high–level Spanish banking official says a disproportionate share of the euro zone’s 500 euro notes, known as Bin Ladens for their scarcity, circulate in Spain.

The purpose of money–laundering is to disguise the criminal origins of ill–gotten gains so the funds appear legitimate. In most cases, laundering also helps criminals escape the notice of tax collectors and law–enforcement officials, boosting the value of their illegal proceeds.

Particularly since 9/11, tightened antilaundering regulations, known by banks as ’’know your customer’’ rules, have forced drug cartels to use more circuitous routes to circulate their funds around the globe.

For starters, the drug cartels do not themselves bring their narco–euros to the U.S. Instead, they usually sell their euros to South American black–market currency brokers or to foreign–exchange houses, known in Spanish as casas de cambio. The casas’ business as currency–exchange houses gives them a natural cover for moving large amounts of cash.

But in South America, there are few if any legitimate buyers for the huge sums of euros that the casas obtain – directly or indirectly – from the traffickers. So the casas funnel most of the narco–euros, sometimes via middlemen, through a chain of exchange houses in countries like Colombia, Peru, Brazil and Chile, says the DEA’s Mr. Semesky.

Often, the drug traffickers will sell their euros for Colombian pesos, and then the euros entering the U.S. no longer belong to the drug cartels but to the casa de cambio. In other cases, says Mr. Semesky, traffickers pay the casas to move funds into one of their U.S. bank accounts. These funds aren’t usually intended for withdrawal, but rather to pay various debts. This is achieved by wiring funds to the account of whomever the trafficker wishes to pay.

On a recent night at a bar on Madrid’s bustling Gran Via, a shirtless, tattooed waiter served tables and a buxom drag queen in a nurse’s uniform worked the crowd. In the trendy venue was a man in his 30s who talked by cellphone with his dealers. A few minutes later, he stepped outside, leaned into the window of a small car and handed over 60 euros, or about $90. For that sum, he received one gram of cocaine.

Such street sales have surged. Spain now has a larger percentage of its population (3 percent) using cocaine than the U.S. (2.3 percent), the previous top per–capita consumer, according to United Nations figures. In the first half of 2007, a kilo of cocaine sold for 33,000 euros, or about $43,900, in Madrid, more than triple the $12,500–$14,600 it fetched in Los Angeles and far more than the $13,000–$26,000 it sold for in New York, according to the Spanish police and the DEA.

Last year, seven European countries banded together to form the Maritime Analysis and Operations Center–Narcotics, or MAOC–N, an international agency dedicated to stopping drug traffic over the Atlantic. Already, the center is helping to make major busts.

In October, on the high seas off West Africa, Spanish authorities – acting on a tip from MAOC–N – seized an aging, cockroach–infested trawler. Called the Opnor, it allegedly had more than three metric tons of cocaine hidden below the floor of its cargo hold. Apparently registered in Panama, the vessel was captained by a grizzled Dutch man in his late 60s and is believed to have been heading toward Senegal.

The boat was following a typical pattern, authorities say. They surmise that, if it hadn’t been seized, its cocaine would have been warehoused in West Africa, where crushing poverty, weak law enforcement and, often, rampant corruption make for an ideal way station. The traffickers would have then sent the drugs to Europe by boat, either directly or via North Africa. Increasingly, say Spanish and American authorities, cocaine is also being flown from North Africa in small planes landing in Spain and Portugal on clandestine airstrips.

The traffickers were forced to take those routes because Spanish, Portuguese and British authorities were intercepting boats coming to Europe directly from South America.

Spain is a favorite entry point because of its proximity to Africa, its long coastline and its language, which it shares with Colombia and most other South American countries. Spanish officials say they seized almost 100 metric tons of cocaine in 2005 and 2006. According to United Nations statistics, Spain seized more cocaine than any European nation between 1999 and 2005.

Authorities suspect that Europe’s thriving cocaine business likely provided the euros in the duffel bag of Mauricio Mazza–Alaluf, the man arrested at LAX in March. Along with a cousin, Luis Mazza–Olmos, he ran an exchange house in downtown Santiago, Chile, according to U.S. and Chilean law–enforcement officials.

The probe into the Mazzas began in August 2004, says Christian Caamano, an investigator for the Investigative Police of Chile. The tip–off was a Peruvian passenger on a flight from Colombia who arrived at the Santiago airport carrying a backpack stuffed with 600,000 euros, according to Mr. Caamano. Alarmed, Chilean authorities began monitoring such couriers and noticed that they dropped off their bags full of euros at the Mazzas’ exchange house.

Later, the Mazzas’ routine evolved: A courier from Colombia, allegedly carrying European proceeds, would deliver cash at the Santiago airport to an armored–car service. Personnel would count the money in a parked truck and turn it over to the Mazzas or one of their associates, says Hernan Penafiel, the lead prosecutor in a parallel case brought in Chile against the Mazzas. One of the Mazzas or their associates would then board a U.S.–bound flight with the money, Mr. Penafiel says.

Once on U.S. soil, according to authorities, the Mazzas allegedly moved their euros with breathtaking openness. Their main tactic was to dutifully fill out paperwork at customs points and financial institutions, using real family and business names, according to law enforcement officials and court documents from the U.S. case.

After the Mazzas or their associates cleared customs at Los Angeles International Airport, they would transfer their cash to Associated Foreign Exchange Banknotes Inc., a currency–exchange firm headquartered in Encino, Calif. AFEX Banknotes then converted the euros into dollars and wired the dollars to U.S. bank accounts the Mazzas had opened, according to law–enforcement officials and two AFEX Banknotes employees.

The Mazzas had accounts with at least three banks in the U.S., according to the court documents from the New York case: Israel Discount Bank of New York; Harris Bank in Chicago; and J.P. Morgan Chase in Dearborn, Mich. In opening each account, the Mazzas gave their company’s real name and openly described it as a tourism and currency–exchange agency.

The Mazzas proceeded to move huge sums of money through these accounts, according to the court documents, often after receiving faxed instructions, intercepted by Chilean authorities, from people or entities with suspected ties to Colombian traffickers.

In a single year, according to court documents, the Mazzas wired $133 million into the Harris Bank account and $117 million out. At their J.P. Morgan Chase account, they wired $35.5 million in and $34 million out in less than three months, and their IDB checking account recorded more than 2,500 transactions totaling more than $29 million during 2003 and 2005, according to the court documents.

Asked to comment, Harris Bank said in a written statement that it ’’identified suspicious activity’’ after conducting its own investigation and ’’closed the account in accordance with banking regulations.’’ IDB said in a statement that the events outlined in the New York case ’’occurred under former management’’ and it no longer maintains accounts for unlicensed money transmitters, including the Mazzas’ casa de cambio. Chase declined to comment.

AFEX Banknotes compliance officer Andrew Scherer says his company is ’’mortified’’ that it may have helped facilitate illegal activity, but added that it has strong anti–money–laundering policies and has taken ’’substantive measures’’ to improve its anti–money–laundering policies in the wake of the Mazza case. He declined to be more specific, citing security concerns.

When Mr. Mazza–Alaluf landed at LAX on March 31, he didn’t attempt to conceal his money. Like he and his associates had done hundreds of times before, he filled out the standard declaration forms, a requirement for passengers entering the U.S. carrying more than $10,000 worth of currency. But this time, he was immediately arrested. The 55–year–old Chilean maintained his innocence.

Mr. Mazza–Alaluf has pleaded not guilty to federal felony charges of conspiracy and operating an unlicensed money–transmitting business. His attorney, Bernard Alan Seidler, calls the charges ’’a classic case of the government overreaching.’’

Chilean authorities nabbed members of the Mazza clan and their associates in a coordinated operation. They are now in jail in Santiago, facing money–laundering charges. Their lawyer, Yieninson Yapur, says they are all innocent. In an email sent via Mr. Yapur, Mr. Mazza–Olmos said he is a legitimate businessman and has done nothing illegal.

The U.S. investigation of the Mazza case was conducted by a multi–agency task force based in New York and led by the DEA and the Internal Revenue Service. Officials tout it as an important success. But it’s unlikely to significantly restrict the flow of narco–euros gushing out of Europe.

On a recent afternoon, far from the glitz of the night life on Gran Via, a homeless addict walked around in a northern Madrid shantytown with a syringe hanging out of his forearm.

Even as police tore down the surrounding shacks to make way for a new development, residents hammered away, rebuilding their wood and cardboard houses. ’’The demand for cocaine is huge, so knocking these shacks down does nothing,’’ says Gema Bautista, a social worker with Fundacion Atenea Grupo GID, which runs a mobile clinic and needle–exchange program. ’’The shacks just pop up again.’’

http://www.caycompass.com/cgi-bin/CFPnews.cgi?ID=1027901

EU to tighten screw on Tehran bank

By Daniel Dombey in Washington, Financial Times, 15 May 2008

Bank Melli, Iran's biggest commercial bank, is set to be banned from operating in the European Union under proposals in the final stages of discussion in Brussels.

At present, the bank operates branches in the City of London, France and Germany, so blunting American calls for other jurisdictions to break off ties with Iranian institutions, particularly in the Gulf.

"It is important for the EU to come to agreement on stepping up financial pressure on Iranian banks as a means of demonstrating to the Iranian regime how seriously we take their nuclear proliferation," said a European diplomat.

But the time and effort it has taken to get agreement on the move, which comes after a year-long push by the US and its allies, highlight the problems Washington may face in its quest to win international support for tougher sanctions and so convince Tehran to rein in its nuclear programme.

"Many people around the world are looking to Europe on this issue," Stuart Levey, US treasury undersecretary, told the FT. "What Europe does is quite important."

The US effort dates back to last summer, when negotiations began on a UN Security Council resolution that Washington and its allies wanted to prevent Melli and another Iranian bank, Bank Saderat, from doing business internationally.

In October, the Bush administration intensified its effort with unilateral sanctions against a number of Iranian institutions – including both Melli and Saderat – measures that Washington pushed other jurisdictions to emulate.

"We call on responsible banks and companies around the world to terminate any business with Bank Melli, Bank Mellat [another Iranian bank], Bank Saderat, and all companies and entities of [Iran's] Islamic Revolutionary Guards Corps," Hank Paulson, treasury secretary, said on that occasion.

However, Washington found itself caught in a "catch-22" when it pushed the UK, its closest ally, to close Melli and Saderat's operations in London. Britain said it could act only as part of a general EU decision and, within the EU, countries such as Germany, Austria, Spain and Italy called for a UN decision before they would proceed.

Seeking to break the impasse, the US, Britain and France finally won agreement on a UN Security Council resolution in March that merely called on member states to exercise "vigilance" over Iranian banks, especially Bank Melli and Bank Saderat, due to what it said was their link to proliferation and Iran's nuclear programme.

"It's pretty clear that the US had hoped that this would happen more quickly and perhaps be a little bit more robust," said Mr Levey.

Diplomats said the UN resolution was designed to "open the door" to an outright EU ban on the banks' subsidiaries in Europe. However, the EU has been reluctant to take action against Bank Saderat, which is principally faulted by the US for funnelling funds to Hizbollah, the Lebanese Shia movement. The Islamist organisation is not on the EU's list of proscribed terrorist organisations.

Throughout the past year, Iran has continued to expand its nuclear programme, announcing plans last month to install 6,000 new centrifuges to enrich uranium – although many western diplomats and analysts question their efficiency.

While Iran insists its programme is purely peaceful, the US and its allies accuse it of seeking to develop nuclear weapons.

US diplomats add that at present they are reluctant to embark on an attempt to pass another UN Security Council resolution because of the risk that it will provide meagre returns while highlighting differences with Russia and China, which are sceptical about further sanctions.

But Mr Levey said the financial sanctions, international warnings about the risk of money laundering and terror-financing in Iran, and related moves by international banks to scale down business with Tehran had had a big impact.

"It certainly has made the cost of financing [in Iran] to the extent that anyone has offered it at all, much more expensive," he said.

http://money.ninemsn.com.au/article.aspx?id=563862

EU sues 4 member states for failure to implement AML law

The European Commission has decided to refer Belgium, Ireland, Spain and Sweden to the European Court of Justice over non-implementation of an anti money laundering directive.

The 2005 legislation tightens the EU anti money laundering regime currently applicable to the financial sector as well as lawyers, notaries, accountants, real estate agents and casinos. The scope of the directive is broadened also to encompass trust and company service providers as well as all providers of goods, when payments are made in cash in excess of 15,000 euros.

In addition, the directive requires the application of the anti money laundering tools to the fight against terrorist financing.

European Union member states are required to transpose the legislation by Dec. 15, 2007.

Source: Xinhua

Spain wants Gibraltar to be placed on OECD black list

The Spanish authorities say there is scant cooperation coming from the Rock in money laundering investigations.
Spain is to ask that Gibraltar be placed back on the black list of financial havens, with the Spanish tax authority, Hacienda, considering that the Rock is not cooperating in the fight against money laundering.

Spain is to ask the OECD, the Organisation for Economic Cooperation and Development, to list Gibraltar as ‘uncooperative’, with a Hacienda spokesman saying that no advances have been made in collaboration over fiscal and tax matters, and that Gibraltar remains opaque, inaccessible and impenetrable.

El País carries a two page report today, Sunday, saying that the information received by the Agencia Tributaria is ‘scant and hardly useful’. For example, the Spanish Government claims that Gibraltar is not helping at all in the Ballena Blanca operation against money laundering based in nearby Marbella.

Hacienda says that other territories, such as Jersey, those based in the Caribbean and even Andorra, are supplying greater information to them in the fight against money laundering.

There are 28,000 active companies on the rock, in addition to an unknown number of foundations and trusts. 115 lawyers and 28 lawyers offices are based there, engaged, according to El País, in activities which are outside the control of the financial authorities. 19 banks and 10 branches of international banks have offices on the 6.5 square kilometres of the peñon.

The newspaper says the Gibraltar Government, led by First Minister, Peter Caruana, has declined to comment on a set of questions sent to him by the paper. Other bodies such as the FSC, Financial Services Commission, or the Gibraltar Financial Intelligence Unit, both referred the paper to ask the Government spokesman.

Meanwhile over the border on the Costa del Sol the whole subject of money laundering and the activities of the UDYCO specialist National Police unit has been highlighted in the news following the arrest of the four police chiefs from the unit who have been accused of corrupt activity themselves. Two of the four were remanded to prison without bail on Friday.

http://www.amlosphere.com/europe/legislation/spain-wants-gibraltar-to-be-placed-on-oecd-black-list.html

Spanish Police Breaks Major Russian Criminal Gang

6/13/2008 1:32 PM ET

(RTTNews) - Spanish police have broken up a large Russian mafia gang in a major crack down in southern Spain on Friday, said officials.

More than 400 police officers took part in the operation ordered by Judge Baltasar Garzon and arrested 18 people, including the gang leaders, reported AFP.

The Tambovskaya-Malyshevskay gang is the "largest criminal organization of Russian origin in the world" and has been "totally dismantled", police said in a statement after the raids.

The statement said that the gang members "planned their criminal activities in Russia, in several countries of the European Union and in the United States" from their base in southern Spain.

The gang was also involved money laundering through financial institutions in Switzerland, Cyprus and Latvia, and a network of companies," the statement added.

by RTT Staff Writer