Four Africans arrested in Japan for money-laundering

Police in Japan acting on an FBI request have arrested six people -- three Nigerians, one Ghanaian and two Japanese nationals -- in a money-laundering case, officials said Thursday.

The six are suspected of having received funds that were the proceeds of a crime, wired to them from a New York Citibank account in the name of the National Bank of Ethiopia, Japan's Metropolitan Police Department said.

Police said they had arrested a Nigerian citizen, Nyeche Obeneme, 36, living in Saitama, north of Tokyo, and two other Nigerian men as well as a Ghanaian man, and a Japanese man and woman.

Police suspect the six between them received up to 200 million yen (2.4 million dollars) in October 2008, allowing the money to be wired into their bank accounts in return for commissions.

The money is believed to be part of roughly 33 million dollars that were wired to accounts in seven countries, also including China, South Korea and Australia, Kyodo News reported.

"With the help of the FBI, we made the arrests on alleged violations of the organised crime law," the police spokesman said, referring to the US Federal Bureau of Investigation.

Source: Daily Notion

U.S. Expands N.Korea Sanctions

The Obama administration has stepped up sanctions against North Korea by freezing the assets of individuals, companies and organizations allegedly linked to support for Pyongyang's nuclear program.

According to an executive order posted on the U.S. Treasury Department's website on Monday, the U.S. will freeze the assets of four North Koreans, three of the country's companies and five government agencies suspected of "illicit and deceptive activities."

The move includes a new executive order issued by President Barack Obama as well as sanctions against a North Korean intelligence agency and an office of the North Korean Workers' Party which the Treasury says is involved in the trade of methamphetamine and heroin.

The Treasury added that those on the blacklist have bought luxury goods on behalf of the regime and are suspected of drug trafficking, money laundering and currency counterfeiting.

Source: The Chosun Ilbo

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

Mexico targets money laundering with plan to limit cash transactions

President Felipe Calderon proposed sweeping new measures Thursday to crack down on the cash smuggling and money laundering that allow Mexican cartels to use billions in U.S. drug profits to enrich their criminal organizations.

Legislation introduced by the Calderon administration would make it illegal to buy real estate in cash.

The new laws would also limit the purchase of vehicles, boats, airplanes and luxury goods to 100,000 pesos in cash, or about $7,700. Violators could be sentenced to five to 15 years in prison.

Criminals here are increasingly using cash transactions to launder their vast profits, according to a senior Mexican official who investigates financial crimes but spoke on the condition of anonymity because of security protocols.

The Mexican official and his counterparts in U.S. law enforcement say that billions of dollars in cash are used to buy airplanes, ranches and businesses to circumvent new Mexican laws that require banks to report large cash movements.

"This illicit money is vital for the criminal. That is what they seek, this money. It is also vital to finance their activities," said Calderon, who called the new money-laundering laws "unprecedented."

Mexican drug cartels and their Colombian suppliers generate, launder and remove from the United States $18 billion to $39 billion each year, according to the National Drug Intelligence Center. Most of this money crosses the Southwest border in plastic-wrapped bundles of $20 or $100 U.S. bank notes, stashed in tires and engine compartments of cars and trucks.

"In the criminal world, cash is king, and in Mexico you have to go after the cash if you want to disrupt their operations," said Jerry Robinette, a special agent in charge of the U.S. Immigrations and Customs Enforcement agency in San Antonio.

A recent report by Douglas Farah, a consultant for the Woodrow Wilson International Center for Scholars, concluded that "very little is effectively being done to either impede the movement of drug money into the formal economy or significantly reduce the flow of bulk cash across the U.S.-Mexico border."

U.S. and Mexican agents seize no more than 1 percent of this southbound cash, according to an analysis by The Washington Post, based on figures provided by both governments.

If passed by the legislature, Calderon's new money-laundering laws would upend common practice in Mexico, where many legitimate buyers and sellers prefer cash transactions to skirt tax bills.

As part of the $1.4 billion Merida aid initiative to Mexico, U.S. agents have trained their Mexican counterparts to detect and disrupt money-laundering operations.

The Mexican government in June announced strict restrictions on cash deposits and withdrawals made in U.S. dollars. Mexicans with bank accounts can deposit as much as $4,000 in cash per month, but Mexicans without accounts can exchange only $300 a day up to $1,500 a month Businesses can move larger amounts of U.S. dollars but the new restrictions have faced tough opposition.

Source: The Washington Post

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

US banks fight plan to share details abroad

A US financial crime agency’s plan to let foreign police seek information from American banks is drawing opposition from groups representing US financial institutions.


The proposed rule by the Financial Crimes Enforcement Network, a division of the treasury department, would also permit US state and local law enforcement authorities to make similar information-sharing requests of banks.

Regulations adopted after the 9/11 attacks in 2001 allow only federal law enforcement agencies, through FinCEN, to request such information.

FinCEN can require US financial institutions to search their records to determine whether they have done business with individuals suspected, based on credible evidence, of terrorism or money laundering.

Written comments on the proposed expansion of the rule were due on December 16, and more than half a dozen organisations, including the American Bankers Association and the Credit Union National Association, said the plan is intrusive.

In a 13-page letter, ABA vice-president Robert Rowe called the proposal “premature and unfounded” and said it represented a “dangerous broadening” of the information-sharing process.

“There is absolutely no indication that the extraordinary power available under the 314(a) data-match programme was ever intended by Congress to be put at the service of foreign countries,” he wrote.

The Credit Union National Association, a trade organisation that represents thousands of state and federal credit unions, said it was worried about the burden the rule would impose on its members.

FinCEN has estimated that information requests under the rule would require no more than 72 additional hours per year per institution to process. The association said many of its small members cannot afford to automate their processes.

Source: The Financial Express

The last two years have not been successful for FinCEN

The Annual Report of Financial Crime Enforcement Network for Fiscal Year 2009 has been released. A first look at the report shows the number of all reports received by FinCEN fell. About 16.7 million reports were filed pursuant to BSA requirement in 2009. It means there were over 1 million fewer reports in 2009 than 2008. From all the reports that FincEN receives, only the Suspicious Activity Reports (SARs) saw a very slight increase from 2008. There were 1.3 million SARs filed in 2009. SARs are reports that are filed in connection with transactions that financial institutions know, suspect, or have reason to believe may be related to illicit activity. On the other hands, the largest decrease was in the Currency Transaction Reports (CTRs). There were only 14.9 million CTRs in 2009, compared to about 16 million in 2008. CTRs are reports are that are filed for currency transactions exceeding $ 10,000.


FinCEN may consider these figures a success. However, the failures of the financial system during 2008 and 2009 tell a different story. Has FinCEN done the job according to its mission? FinCEN is an institution whose job is to enhance U.S national security, deter and detect criminal activity, and safeguard financial systems from abuse by promoting transparency in the U.S and international financial systems. The failures of 2009 and 2008 show that FinCEN has not performed well. It has not lived up to its mission. Is 2010 going to be different?

by Arben KOLA

Source: The Examiner

Two Lebanese currency traders deny U.S. charges of criminal links

Two firms designated by the U.S. Treasury for their alleged roles in an international drug trafficking and money laundering ring denied Thursday involvement in illegal activities.

The U.S. government took the decision Wednesday to label Ayman Joumaa, as well as nine people and 19 companies connected with him as Specially Designated Narcotics Traffickers in a racket which reportedly netted as much as $200 million a month.

Two Lebanese currency traders, Hassan Ayash Exchange and Elissa Exchange, which were both named in the Treasury’s designation, denied knowledge of Joumaa’s activities.

“We are terribly shocked by this news. I don’t know how our company’s name got involved in this work and the reports,” Iman Kharoubi, of Elissa Exchange, told The Daily Star.

“We work in Lebanon [and The Democratic Republic of] Congo and Benin in Africa. But we do not know who Ayman Joumaa is; we don’t have anything to do with him.”

Hassan Ayash, the owner of the exchange firm, denied any wrongdoing, but did admit to knowing Joumaa, who the U.S. designated under the Kingpin Act and will now struggle to access international financial transactions.

“For us it was a surprise today to hear about this story,” Ayash told The Daily Star. “We have no knowledge of where Ayman Joumaa is currently and we have no contact with him. But we know him in person.”

Beirut’s Caesar’s Park Hotel was also designated by the Treasury after it was alleged Joumaa, the manager and CEO, “uses [the hotel] as a location to broker drug trafficking and money laundering activities.” The hotel declined to comment on the accusation.

Both exchange companies have contacted Lebanon’s Central Bank for advice following financial sanctions, but Ayash was not unduly worried about the potential negative effect U.S. punitive measures could have on business.

“Actually there would be no consequences whatsoever on our work, since our work is transparent and we work with several banks in the U.S.,” he said.

Kharoubi was less optimistic. “Our transactions are clear and transparent, but our work would be terribly affected,” he said. “Our transactions go through several U.S. banks and car companies all over the United States. Under U.S. government supervision, our products and cargos are monitored within the United States.”

Washington has said it would reconsider its financial support for Lebanese institutions if a cabinet blessed by Hezbollah is formed by Prime Minister-designate Najib Mikati.

Both firms said the financial measures taken against them were unlikely to be linked to cabinet uncertainty.

“We are not affiliated with any party in the country. I do not think that this is related to regional politics,” Kharoubi said.

“It is too early yet, since the news just came in, to actually know if there are any political and economic indications in the American reports,” Ayash added. “We cannot say whether this action is related to the recent developments in Lebanon.”

The United States has already blacklisted several Lebanese companies for their suspected links to Hezbollah. – Additional reporting by Van Megeurditchian

Source: The Daily Star

US offers assistance to India in dealing with money laundering

The US today offered assistance to India to deal with money laundering and fake currency menace, besides cooperation in issues related to cross-border terrorism.

The visiting Secretary of the US Department of Homeland Security (DHS) Janet Napolitano called on Finance Minister Pranab Mukherjee here and the two leaders explored the areas of bilateral cooperation.

"Napolitano sought cooperation and offered assistance in money laundering, counterfeiting of currency, cross-border terrorism, cyber security, secured cargo...," a Finance Ministry statement said.

In the meeting, Mukherjee stressed on the need for cooperation in investigations relating to money laundering, drug-money flow, stashing of black money abroad and transfer-pricing mechanism.

The two sides also decided to establish a new chapter in US-India cooperation in various areas relating to Finance Ministry with particular emphasis on Customs issues.

"[The two also] noted the excellent cooperation between Indian Customs and US Customs and agreed to explore new areas of mutual interest to safeguard the security of the global supply chain," the release said.

Black money has become a big political issue in the country, with the opposition accusing the government of not doing enough to bring back the illegal money stashed abroad.

Source: Press Trust of India

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

U.S. targets Lebanon-based drug smuggling network

The U.S. Treasury Department said on Wednesday it was targeting a Lebanon-based drug trafficking and money laundering network suspected of doing as much as $200 million a month in business.

The Treasury's Office of Foreign Assets Control said it was labeling Ayman Joumaa, as well as nine people and 19 entities connected with his organization, as Specially Designated Narcotics Traffickers.

The action means U.S. citizens are prohibited from any commercial or financial dealings with the people or entities and that any of their assets found in the United States can be seized.

The Treasury said Joumaa coordinated the transportation, distribution and sale of shipments of cocaine from South America, laundering the money in Europe and the Middle East.

It said the group operated in Lebanon, West Africa, Panama and Colombia and had laundered as much as $200 million per month through various channels.

The Treasury's action was taken under the so-called Kingpin Act that aims to disrupt foreign narcotics traffickers by preventing them from gaining access to the international financial system. (Reporting by Glenn Somerville; Editing by John O'Callaghan)

Source: Reuters

JP Morgan pays $88.5m to settle sanction violations

JP Morgan Chase has agreed with the US Treasury Department to pay $88.3m (£54.2m) to avoid liability for "apparent violations" of sanctions against Cuba, Sudan, Liberia and Iran.

The Treasury said such violations, which took place between March 2005 and March 2011, were "egregious".

These included processing 1,711 transfers totalling $178.5m to Cubans in contravention of US regulations.

JP Morgan said there had been no intention to violate regulations.

"The firm screens hundreds of millions of transaction and customer records per day, and annual error rates are a tiny fraction of 1%," said Jennifer Zuccarelli, a spokeswoman for the bank.

"We are pleased to have resolved these matters and to move forward with enhancements to our [foreign assets] compliance programme."

JP Morgan reported net profits of $5.4bn for the three months to 30 June, up from $4.8bn a year earlier.

Source: BBC

HSBC faces money laundering inquiry

HSBC executives face the prospect of being called to appear before a US congressional hearing this year as part of a Senate investigation into allegations the bank was involved in money-laundering.

The Senate Permanent Subcommittee on Investigations is looking into HSBC's involvement in the movement of money linked to illegal groups as part of a long-running inquiry into global banks and money-laundering.

No time frame has been given for the Committee's work, but a full report and a hearing could come later this year, according to reports.

A spokesman for HSBC said: "We support US efforts to strengthen anti-money laundering defences and protect the integrity of the financial system through our rigorous new internal processes and close working partnership with regulators."

HSBC has already disclosed it is in discussions with the US authorities and has said it is "co-operating" with all the inquiries. This month, the bank hired Stuart Levey, a former US Treasury Department official, as its chief legal officer.

Source: The Telegraph

Lawyers arrested for evading limits on bank deposits

Two New Jersey lawyers have been arrested and charged with circumventing bank reporting requirements by breaking down $354,000 in client funds into attorney trust account deposits of less than $10,000 each.

Goldie Sommer and Edward Engelhart of Fairfield's Sommer & Engelhart surrendered Wednesday to Internal Revenue Service agents. Magistrate Judge Joseph Dickson in Newark set each one's bail at $100,000.

The partners in the two-lawyer firm face identical charges of conspiring to violate and violating a federal law that prohibits "structuring" — slicing bank deposits into amounts of less than $10,000, the threshold for triggering a requirement that the bank file a currency transaction report with the IRS.

The prohibition is meant to prevent people involved in illegal activities such as drug trafficking, money laundering and tax evasion from evading the reporting requirement.

The criminal complaint filed on Nov. 4 alleges that during a six-week period between Aug. 13 and Sept. 22, 2010, $118,000 in U.S. currency was deposited into the firm's trust account with TD Bank.

All the deposits were allegedly for large, even-dollar amounts of less than $10,000, with multiple deposits made on some days adding up to more than $10,000.

During that same time, an unspecified amount also was put into the trust account using several cashier's checks, according to the complaint.

In addition, currency deposits similar to those that went into the trust account allegedly went into the personal accounts of Sommer, Engelhart and "other individuals associated with [them]."

Checks written on those accounts went into the trust account, bringing the total of the allegedly structured funds to $354,000.

The complaint, signed by IRS Task Force Officer Keith Cregan, describes a June 16 meeting with Sommer and Engelhart, during which they allegedly admitted that "they had agreed with each other to structure U.S. currency into the Trust Account for the purpose of evading the filing of any forms with the Internal Revenue Service."

They also allegedly admitted that the source of the money was a client and that they "inferred that the client wished that the funds would be deposited into a bank without the filing of any forms" with the IRS.

Violation of the structuring law, 31 U.S.C. 5324, can carry up to five years in prison, and as much as a $250,000 fine plus forfeiture of the structured funds. The sentence and fine can be doubled in "aggravated cases" — where the structuring is done in conjunction with another crime or as part of a pattern of an illegal activity involving more than $100,000 in a 12-month period.

Sommer, of Montville, a Seton Hall School of Law graduate admitted to practice in 1975, is represented by Jack Arseneault of Arseneault, Whipple, Farmer, Fassett & Azzarello in Chatham.

Rockaway resident Engelhart, also a Seton Hall alumnus and a lawyer since 1979, has retained Howard Brownstein of Union City as defense counsel.

The Sommer & Engelhart website says the firm concentrates on real estate matters and short sales, residential tax appeals, personal injury and worker's compensation cases, family law and municipal law.

Sommer, Engelhart, Arsenealt and Brownstein did not return calls by press time.

The prosecutor handling the case is Assistant U.S. Attorney Evan Weitz in Newark.

U.S. Attorney's Office spokesman Matthew Reilly declines to provide the names of the other people whose accounts were allegedly used for the structuring or to disclose whether it was the Office of Attorney Ethics that discovered the deposits through its audits of attorney trust accounts.

In 2002, John Richardson, then a Superior Court judge in Somerset County, was charged with a similar but lesser offense — failing to report to the IRS $160,000 in cash fees he had received from a real estate client while in private practice in 1998.

He deposited the money into his trust account without complying with an Internal Revenue Code requirement to report the receipt of more than $10,000 in cash from a trade or business.

Richardson pleaded guilty to a single misdemeanor charge on Feb. 8, 2002, and was sentenced to one year of probation and a $2,500 fine. The deal also required him to resign from the bench, which he did a week before entering the plea. The state Supreme Court reprimanded him in July 2003.

Richardson, now the municipal judge in Hillsborough and of counsel with Nee Beacham & Gantner in that town, declines comment.

Source: Daily Business Review

by Mary Pat Gallagher

Obama Nominates David Cohen As Economic Sanctions Point Man

President Barack Obama has nominated David S. Cohen to replace Stuart Levey to lead the administration's financial wars on Iran, North Korea and al Qaeda, the White House said Monday.

Cohen, who works as an assistant at the Treasury Department on terrorist financing, will be taking on the new role just as the Obama administration is likely to ramp up economic sanctions against Iran.

Levey, who was a senior administration official under former President George W. Bush, told The Wall Street Journal he was taking time off before deciding what he would do next. The administration has said Levey's departure wouldn't affect U.S. policy.

Cohen, a former partner in the law firm WilmerHale, currently formulates and coordinates the counterterrorist financing and antimoney laundering efforts for the Treasury Department. He is taking on the new role just as global talks broke down in Turkey over the weekend regarding Iran's nuclear program. Cohen is a graduate of Yale Law School and Cornell University.

-By Jared A. Favole, Dow Jones Newswires; 202-862-9256; jared.favole@ dowjones.com

Source: NASDAQ

U.S. to allocate $29.3 million to Azerbaijan

The U.S. will allocate $29.3 million to Azerbaijan to develop democracy in 2011, the website foreignassistance.gov. reported.

U.S. assistance to Azerbaijan is aimed at promoting democratic reforma, strengthening governmental checks and balances, increasing public participation in state affairs, as well as combating domestic and transnational crime, including money laundering, terrorism financing, corruption, human and drug trafficking. U.S. assistance also helps to expand and diversify the country's economic growth by eliminating critical economic policy and institutional constraints to ensure stability and sustained growth in the sectors of the economy.

Georgia will receive $ 90.1 million in 2011, Armenia - $ 45.2 million, Russia $ 68.7 million, Turkey - $ 5.9 million.

Source: foreignassistance.gov

US couple pleads guilty to funding Hezbollah

By JPOST.COM STAFF

Report: Married couple with dual Lebanese, US citizenship admits they planned to provide terrorist group with up to $1 million.

Hor and Amera Akl, a married couple from the United States, pleaded guilty pleaded guilty on Monday to charges of planning to courier money to Hezbollah, the Associated Press reported. The couple had been planning to send up to $1 million to the US-classified "terrorist organization" throughout the year, federal prosecutors said.

The plea deal was was meant to save Hor and Amera Akl, parents of three children and dual American and Lebanese citizens, from life sentences.

An FBI agent reportedly gave the couple their first $200,000 shipment that was to be hidden in an SUV prior to their arrests last June, the Associated Press reported the US government as saying. Hor Akl had traveled to Lebanon in 2010 to arrange the transport, and when he returned claimed he had met with Hezbollah officials.

The Akls, who were expected to earn $200,000 in fees to ship the funds, pleaded guilty to conspiracy to provide material to a foreign "terrorist organization," and Hor pleaded guilty to money laundering, bankruptcy fraud and perjury charges as well.

In return, prosecutors dropped an arson charge against both individuals that would have landed them an obligatory 10-year sentence and a money laundering charge against Amera Akl. The couple could have faced 30-year sentences if they had been convicted of all charges.

Instead, Hor Akl faces seven years in prison while Amera faces up to four.

Amera Akl is set to be sentenced June 20, while her husband still lacks a sentencing date, the Associated Press said. They remained free on bail after their pleas.

Source: The Jerusalem post

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

OFAC Targets Colombian Drug Traffickers Linked To Sinaloa Cartel Leader

The U.S. Treasury Department said Wednesday it imposed Kingpin Act sanctions on four Colombian individuals and 12 companies tied to a Colombian national linked to the head of the Mexico-based Sinaloa drug cartel.


Announced by Treasury’s Office of Foreign Assets Control, Colombian nationals Mauricio Barcenas Rivera, Omar Mejia Zuluaga and Ana Maria Uribe Cifuentes, and dual Uruguayan/Ecuadorian national Jesus Maria Castro all had their U.S. assets frozen. The companies are spread across Colombia, Ecuador, Mexico, Panama and Uruguay.

The companies and individuals are all linked, according to the announcement (pdf), to Jorge Milton Cifuentes Villa, who was sanctioned by OFAC in February. Villa’s organization, OFAC said, is closely tied to Sinaloa Cartel leader Joaquin Guzman Loera, known as Chapo Guzman.

Both Guzman and Villa were indicted on drug-trafficking and money-laundering charges in Florida in November 2010, and Villa was separately indicted in New York in February 2011 on drug-trafficking charges, according to Treasury’s notice.

The full list of Wednesday’s designations is available here, and a chart diagramming Villa’s drug network is here (pdf).

Source: The Wall Street Journal by Samuel RUBENFELD

Treasury seeks brainy search engine to help follow terrorist money

BY ALIYA STERNSTEIN 06/20/2011

The Treasury Department is searching for a supersmart search engine to spot signs of terrorist-financing and money laundering among monetary transactions totaling 9 terabytes of data -- the equivalent of a stack of typewritten pages nearly 460 miles high.

Treasury's intelligence arm, the Financial Crimes Enforcement Network, or FinCEN, has a database to organize the 15 million reports it receives from financial institutions annually, but needs a better way to home in on what's in there, FinCEN officials said Monday. On June 17, FinCEN issued a request for information from contractors on technology to improve analytical queries into the repository.

The software must be able to work with FinCEN's existing fraud-detection application to probe the database, according to the notice.

Ray Bjorklund, chief knowledge officer at market research firm FedSources, said the cost of such technology could range from $20,000 to $2 million, depending on the pattern-matching features FinCEN wants and can afford.

"You need to be able to quickly pull pieces from many different sources," he said. "The ability to get to all of the relevant tables that are within that database and extract what they need, when they need it and be able to correlate four or five different pieces of information -- therein lies the trick."

Deploying the tool also will be a challenge, he said. "This is not something that can easily be shared in a networked environment" such as an online cloud that provides services remotely, Bjorklund said. "It is very tough to get these systems to tune to the database that that you have."

Complicating matters, he said, is the fact that FinCEN expects to switch databases in early fiscal 2012, as noted in the RFI. The agency needs an application that can work with its current Sybase database and then adapt to an Oracle framework it plans to install.

The market survey requires vendors to include prices and delivery schedules in their responses, along with a description of their technology's specifications, by July 5. FinCEN does not plan to pay for this information or commit to awarding a contract, according to the RFI. "Dependent upon the results of this market survey, FinCEN may subsequently issue a request for quotation (RFQ) to acquire the appropriate solution," states the notice.

There is no date set for issuing an RFQ yet, FinCEN spokesman Steven Hudak said Monday. He said he could not expand on the details of the RFI because of contracting rules.

Potential bidders who are concerned about disclosing business-sensitive information in their responses can note their models contain proprietary information. But, "If Treasury intends to take some of the clever ideas that come forward in the RFI and put them in the [request for proposals,] that may compromise the prospective offerors' business," Bjorklund noted.

Hudak said the agency asked for precise information because "we're on tight timelines and tight budgets." The potential enhancement is part of a four-year agencywide technology upgrade that is half complete, he said. "We're trying to find out what the best technology is," Hudak added.

Legislation passed after the Sept. 11 attacks expanded the jurisdiction of the 20-year-old agency. To find possible terrorist backers, the agency now collects records of large-transactions from hundreds of thousands of financial institutions, including banks, stock brokers, insurers, check cashing services, currency exchanges, casinos and gem dealers.

The 1970 Bank Secrecy Act and post-Sept. 11 amendments require these entities to keep records of cash transactions exceeding $10,000 and to report abnormal dealings.

"FinCEN has a huge amount of data that it gathers in suspicious activity reports and it needs to be able to manipulate that data and provide it to law enforcement," said Ernest Patrikis, an attorney with the bank and insurance regulatory practice at law firm White & Case and a 30-year veteran of the Federal Reserve Bank of New York. "The worst thing in the world for FinCEN would be to have that data and not be able to use it. This requires up-to-date systems."

Source: NextGov