Turkey-UK: Gambling Web site linked to money laundering

An investigation into an England-based Web site, whose owners work from within Turkey targeting Turkish gamblers, has revealed that 600,000 Turks have lost money on the Web site, which has laundered the money to several Swiss bank accounts.

The Web site, superbahis.com, has a YTL 20 membership fee. Computers with the Web site's member database were seized by police from a building that is home to "Shopping TV."
Once the Financial Crimes Investigation Board (MASAK) noticed that the Web site launders money from Turkey through online betting via an England-based Web site, the office of the chief public prosecution in İstanbul took action. An operation was begun on May 27, 2008 by İstanbul police in İstanbul, Ankara, İzmir, Mersin and Trabzon simultaneously. Thirty-nine people, two of them women, were taken into custody. Among the detainees are Aydın A. and his brother, Turgay A., owners of superbahis.com and "Shopping TV." The police have reportedly confiscated 70 computers, seven hard drives, 1,115 DVDs and CDs, 33 memory sticks, 134 credit cards and many documents found in the course of a search of the detainees' houses and workplaces. The police also confiscated one kilogram of gold, TRY 368,800, $10,371 and 4,550 euros.

Eleven of the suspects were released following interrogation while 28 suspects were transferred to the İstanbul Court of Justice and stand accused of establishing a criminal organization, being intermediaries in betting and gambling, and laundering money.

The suspects allegedly illegally collected TRY 7 million. A report drafted by MASAK claims the money acquired through gambling was first transferred to England and then to the suspects' bank accounts in Switzerland or to "Shopping TV" in payment for its services in an attempt to launder the money. MASAK is continuing to account for all the funds.

In connection with this case is that of Barış Kum, who had had reportedly won up to TRY 2,750,000 through online gambling on superbahis.com with money he collected from family and friends. He allegedly committed suicide on Nov. 6, 2006 after losing all his earnings. His family has sued the Web site over his death.

Source: Zaman

Money laundering or fiscal terrorism - 1

by Ismat Sabir

The State Bank of Pakistan has frozen almost 90 to 100 accounts of the directors of Khanani and Kalia and closed relatives of owners. Another report shows that details of about 18,000 accounts were also found in the 20 computers seized from the offices and franchises of the company. Presently, the top brass of Khanani and Kalia are under the remand of FIA on illegally remitting the money outside the Pakistan.

But the notable point is that the actual culprits, i.e., the persons who have given the money to the money changers to transfer it abroad are yet to be identified. While the seized computers have complete addresses and whereabouts of the clients who used services of the company, so it would not be difficult to find out the actual responsible personalities.

Officials say Javed Kalia has named influential people whose money has been sent abroad but the problem is that these people are very influential, therefore, advisor to PM, Rehman Malik, had to state in the Senate that no lists was prepared that included names of certain politicians, businessmen or bureaucrats involved in the scandal neither any name had been put on the exit control list.

Instead of appreciating government's efforts, several opposition senators asked under which law, action was taken by FIA against the accused and why were they manhandled. A joint meeting of Forex Association of Pakistan (FAP) and Exchange Companies Association of Pakistan (ECAP) criticised the FIA's Lahore Circle for presenting some of the KKI directors handcuffed in Lahore Sessions Court.

Director FIA Crime Circle also had to assure that in future FIA would take the exchange companies' association into confidence before taking action against any exchange company and would be raided in the presence of SBP officials. Earlier the advisor stated that those indulged in this criminal activity are too powerful and influential, however, a green signal was given and action proceeded against them. He said the investigation was being carried out against seven money changing firms, but yet no action has taken against any other company.

The advisor also explained that the action was taken under Foreign Exchange Regulations Act 1947, as the accused had committed criminal acts and they could seek bail. It is to be noted that earlier certain powers transferred to the NAB, had been again given to FIA a week back, which was given a signal to its cyber crime wing to go after certain elements who were indulging the illegal activity.

According to the details, Lahore FIA officials prepared a special report about the flight of dollars from the country in April 2008, fearing that a forex crisis would hit the country in the near future. The report also recommended strong and instant action against persons involved in the Hundi and Havala business.

Lahore, Gujranwala, Karachi and Peshawar are the main cities where a majority of money changers were running the Hundi and Havala business and anyone could send any amounts any where in the world without any check.

A special team of the FIA's Crime Circle was constituted to take action. The agency has been ordered to collect more intelligence and that the crackdown against the Hundi and Havala business. This malpractice in foreign exchange dealing was going on for the last 5 to 6 years. The Government blamed that the money changers have developed a parallel internet banking system. Actually money changers never transferred the dollars or other currencies expatriate Pakistanis deposited with them.

Officials of the SBP and the government were expressing apprehension for quite some time about involvement of some money changers in the smuggling of dollars. It was estimated that money exchangers have transferred around $10 billion during the last five years from the country. On an average, they were transferring about $10 million every day through the Havala and Hundi system.

The accused also accepted that this smuggling had caused the slump in the shares business at local bourses. Since April 2008, the Karachi Stock Exchange has witnessed a 41 percent fall in its 100-Index. Moreover, the value of rupee against dollar was continuously going down, due to dollarization and open smuggling of dollars.

The money was being smuggled in big quantity, for instance, a Rs10 million bag was being sold for Rs1.10 million in Afghanistan in October. A probe was launched, which led to interception of $32 million at Lahore Airport. Such detections were also carried out in Peshawar and Karachi too.

The main currency market of Peshawar is at Chowk Yadgar where hundreds of Afghan refugees have also joined the activity with the locals. Any person, having cash amount of even Rs5, 000 to Rs 10,000 were also purchasing dollar to earn a little amount.

Currency dealers having agents in Jalalabad, Afghanistan, fixed price of the currency. Millions of dollars were being smuggled to Afghanistan daily, as there is no check on the movement of the currency from and into Pakistan. Rupee against dollar was sold at Rs90 in Peshawar on 28th October 2008.

The Afghan refugees traveling across the border at Torkham are the main source of currency smuggling that was not checked by any official agency. Neither the government took timely action for arresting depreciation of rupee.

On May 9, 2008, the SBP issued a warning to cancel exchange companies' licenses that fail to bring remittances into the country and also will disallow the export of currency notes. They totally ignored all these warnings and rupee further weakened from Rs66.88 to Rs67.50/67.70 to a dollar on the same day. For a long time SBP kept the PKR-dollar parity stable at $1 to PKR 60 to 62 and the cash transactions were normally within 30 to 40 paisas band.

On the other hand, the market players said the government is responsible for the slide down. They feel that SBP/government, after the April meeting with the IMF, in Washington, might agreed to weaken the rupee in order to control the widening trade and current account deficit by at least equal to the inflation differential. Therefore, the SBP allowed the rupee to slide by 30 to 40 paisa on a daily basis. This has encouraged the trend of polarization. The investors have shifted their focus from equities to the currency trade. Even the small savers and housewives jumped on this bandwagon.

The money changers made Rs4 billion annually through this illegal trade while the forex reserves are depleting rapidly. Authorities have identified a cartel whose illegal transaction of foreign currencies is aggravating the devaluation of the rupee against dollar. At one time, one US dollar reached Rs84 in the open market while bank rate was Rs81. Later, dollar was sold for Rs88 in the open market while bank rate was Rs84. There were also rumours that the government and the State Bank have agreed with the foreign agencies to drop the value of rupee to the level of Rs100 per dollar.

The unstable rupee has also causing problems for importers as their imported goods were lying at ports and banks were not releasing them dollars, therefore, they have to purchase it from the open market where dollar price rates was increasing every day.

In November 2004, when SBP was trying not to let the forex reserves go down below $10 billion on orders of then Prime Minister, Shaukat Aziz, similar threats and various administrative measures such as exporting currency only through NBP exchange company to plug leakages taken by the SBP did not work. In spite of several warnings exchange companies bring in less than one billion dollars in home remittances while the currency export was over $4 to $5 billion a year.

The SBP told money changers that unlike the exchange companies need a minimum paid-up capital of Rs100 million they can start operating as mini exchange companies with a minimum capital of Rs25 million only. The Bank also said if less than 80 percent of them do not opt for establishing 'B' category exchange it would cancel the very scheme that gives them this option.

Representatives of exchange companies were not happy at these instructions they said they will have to undergo a loss since the rupee has weakened more than the agreed rate with SBP.

There are 378 licensed money changers across Pakistan 109 of them operating in Karachi. The SBP had set June 30, 2004 deadline for them to stop operating as money changers, they were given the option to transform their business into new exchange companies or get franchise from the existing ones. But money changers were a bit averse to this idea and wanted to keep their own identity.

So the central bank finally allowed them to form mini exchange companies instead of becoming a part of the existing exchange companies or establishing new ones.

It also told them that at least five money changers should join hands to form one mini exchange company. Central bank said that the purpose of this requirement was to ensure that the majority of licensed money changers transform their businesses into exchange companies.

(To be continued) The writer is a senior journalist and researcher

Source: The Post

Brazil President's Publicist Under Investigation

Publicist Joao Santana, who headed the publicity campaign for Brazilian President Luiz Inacio Lula da Silva during his 2006 re-election run, is being investigated for alleged irregularities in business contracts with political parties, O Estado de Sao Paulo newspaper reported Sunday.

Santana is the target for a stealthy investigation being carried out since 2006 by the Public Ministry and the Federal Police, according to government officials consulted by the daily.

The investigation, the paper added, concerns contracts that Santana's firm signed with the governing Workers Party, or PT, in 2004 to undertake the ad campaigns of three mayoral candidates being backed by the party.

According to the paper's version, prosecutors suspect that part of the income Santana received from the PT in 2004 was not reported to the authorities by the party, which would be a sign of money laundering and tax evasion.

The PT was founded by Lula in 1980 and came to power for the first time in 2003 when he won the presidency after several tries.

Santana took over Lula's publicity campaign during his re-election bid after the 2005 eruption of the corruption scandal within the PT wound up tainting publicist Duda Mendonca, who up to then had been in charge of crafting the president's image.

The corruption scandal, the worst faced by Lula so far and which politically wiped out the entire PT leadership, forced the party to admit that it illegally used certain resources to finance its various election campaigns.

Santana's defense attorney, Dora Cavalcanti Cordani, admitted to O Estado de Sao Paulo that her client is the target of an investigation, but she added that he is not suspected of money laundering or alleged tax evasion.

She said that the accusations are unfounded and that all the money Santana received from the PT in 2004 was legally declared.

Source: Herald Tribune

Cyprus: The inside track on money laundering

By Jean Christou

WHO better to teach you about money laundering than a reformed money launderer?

Cypriot banks, lawyers and financial crime officers are to be given the inside scoop on the ‘tricks of the trade’ tomorrow and on Tuesday in Nicosia and Limassol respectively.

Miami-based Kenneth Rijock, 59, a decorated Vietnam vet, is a former lawyer who spent the best part of the eighties engaged in money laundering, but was jailed in 1990 for two years.

When he was released, he put what he learned to better use and now acts as a consultant on financial crime.

This week, he will give presentations to representatives from the Cyprus Financial Intelligence Unit (MOKAS), the International Bankers’ Association, the Law Association, the Cyprus Bar Association and the Association of Cyprus Banks.

“Mr Rijock’s presentation will… feature money laundering tradecraft and insider tips of the trade to assist Money Laundering Reporting officers in their daily activities,” said Marion Willson Corporate Communications Manager of World-Check, an informational organisation for financial institutions.

World-Check says Rijock is believed to be the only former banking lawyer-turned career money launderer who actively consults with law enforcement and the financial community.

While serving a federal prison sentence for racketeering and money laundering, he assisted with the first joint Swiss-American money laundering investigation of bankers and lawyers, which resulted in a major seizure of the proceeds of crime.

Since 1992, Rijock has provided extensive professional anti-money laundering services, including testifying three times, in 1999 and 2000, before committees of the US Congress in favour of anti-money legislation that was later included in the Patriot Act of 2001.

Rijock introduced himself to Congress saying: “My name is Kenneth Rijock, and I am a veteran of over one hundred domestic and international bulk cash smuggling operations, all of them successfully completed. These activities were conducted by me in direct support of narcotics smuggling and trafficking operations that distributed most of their drugs in the New York-New Jersey metropolitan area.”

He said his trips involved sums of currency ranging from several hundred thousand dollars to six million, although he did not keep a personal record for obvious reasons.

Rijock also said the ever-expanding web of bank reporting requirements had caused many criminals to avoid the domestic financial sector entirely, and to rely upon an underground pipeline to export their net cash profits.

“Cash smugglers are only limited by the scope of their imaginations in contriving unusual and complex techniques in practicing their trade,” he said to Congress.

Some of the tactics used hiding cash in new computers being shipped or inside the padding of a hockey shirt.

“My personal methods of preference included the use of business jets carrying millions of dollars of drug cash, small, twin-engine aircraft owned by an affiliated charter service, taking scheduled airline service, meaning that I carried the cash right past the noses of airport security staff, and even small boats and water taxis,” he said.

Since giving up his criminal career, Rijock has also trained undercover agents for the Royal Canadian Mounted Police, acting as a money launderer in an undercover role on behalf of law enforcement in Florida, and on behalf of network television in the tax havens of the Caribbean, and acting as consultant in money laundering tactics for a major Hollywood motion picture studio.

Source: Cyprus Mail

Frozen Assets: US Has Crimped Al Qaeda Funds

Posted GMT 10-30-2007

Washington -- For years the three Saudi men had worked as a loosely organized team, according to US intelligence. They'd funneled thousands of dollars in cash -- and non-monetary help such as Al Qaeda training manuals -- to Islamist militants in the Philippines.

At one point they'd even paid $18,000 for an operation to blow up the US or Australian embassies in Manila, allege US officials. But Philippine authorities disrupted the plot before it could be realized.

So this fall the US government took action against the trio: Abdul Rahim al-Talhi, Muhammad Abdallah Salih Sughayr, and Fahd Muhammad Abd al-Aziz al-Khashiban. On Oct. 10, the Treasury Department designated them as terrorist financiers -- freezing their assets and forbidding American citizens from doing business with them.

The move did not draw much notice at the time. But small actions such as this are a crucial part of what may be one of the most successful parts of the struggle against terrorism: the effort to curtail its financiers.

"All our evidence is, this is successful and actually a very important part of the war on terror," said John B. Taylor, former Treasury undersecretary for international affairs, at a Council on Foreign Relations seminar earlier this year.

It's also an effort that has some controversial aspects. Among them is whether the US government has too much power to punish alleged terrorist paymasters and funding groups via simple administrative actions.

In 2004, for instance, the US alleged that a Texas-based charity named the Holy Land Foundation had funneled about $12 million to the Palestinian militant group Hamas -- which the US has named a terrorist organization. The Bush administration ordered the foundation closed.

But on Oct. 22 a federal criminal prosecution of five officials from the now-defunct charity collapsed amidst legal confusion. It is unclear whether prosecutors will attempt to try the case again.

Some jurors had a hard time accepting the prosecution's contention that by sending money to Hamas-affiliated local charities named "zakat committees" the Holy Land Foundation was supporting terrorist actions.

"The fact that they couldn't get a single conviction suggests that we need to rethink the process by which [Holy Land] was shut down," says David Cole, a law professor at Georgetown University. "They were able to close it down, freeze its assets ... ultimately on the basis of secret evidence."

The US has issued sanctions against 44 different charitable organizations under authority derived from an executive order signed by President Bush, according to Chip Poncy, director of strategic policy at the Treasury's Office of Terrorist Financing and Financial Crimes.

All these groups were carrying out some legitimate charitable activities, said Mr. Poncy at a May 10 hearing of the Senate Homeland Security Committee. But they were also funding some activities that the US considered to be in support of terrorism.

"The view that we have always taken is that if any aspect of a charity's organization is engaged in terrorist support, then the charitable organization is a problem," said Poncy.

Overall, tackling the financial front of the struggle against terrorism appears to be successful, say experts. In part, this is due to the fact that the US is a center of world commerce, and many global business transactions are carried out in dollars.

Plus, even foreign banks generally do not want the taint of dealing with named terrorists. Thus the world's formal financial system is now generally closed to Al Qaeda and other well-known terrorist groups.

The CIA estimates that prior to Sept. 11, Al Qaeda was spending about $30 million per year. Since then, the US has seized some $265 million in assets linked to the group -- about nine years worth of operating expenses.

The US has also named some 460 individuals as terrorist supporters, and thus subject to sanctions. The Oct. 10 designation of the three men alleged to be paymasters of Southeast Asian militants was part of this aspect of the effort.

The 9/11 Commission gave an 'A-' to the war on terrorist financing in its 2004 public report.

"It is premature to assume that terrorist organizations are having difficulty funding their organizations and operations," concludes a monograph on the subject issued by the US Army Command and General Staff College. "What is important is that the global effort against terrorist financing has made it more expensive and more difficult to raise and move funds."

That can be seen in the fact that the most spectacular Al Qaeda-linked attacks in the West in recent years -- the Madrid bombings of 2004 and the London bombings of 2005 -- were low-tech affairs, cheap, and financed primarily through criminal activities carried out by the bomber groups themselves.

The future of terrorist financing may involve simple theft or the manipulation of stored-value cards, Internet banking, and online payment services.

"Our adversaries will either become more technologically savvy or they will regress to methods that don't leave a paper trail," said John Pistole, FBI deputy director, at an Oct. 22 American Bankers Association seminar on terrorist financing.

By Peter Grier
Christian Science Monitor

http://www.aina.org/news/20071030105517.htm

U.S. terror report cites Venezuela, Iran

WASHINGTON (CNN) -- Venezuela's associations with terror states, Iran's meddling in Iraq and the resurgence of al Qaeda in Afghanistan top the concerns in a new State Department report on terrorism threats in countries around the world.

Venezuelan President Hugo Chavez is not cooperating with U.S. anti-terror efforts and has "deepened Venezuelan relationships with state sponsors of terrorism Iran and Cuba," the annual report says.

The report notes Chavez's "ideological sympathy" for the Revolutionary Armed Forces of Colombia and the Colombian-based National Liberation Army, which "regularly crossed into Venezuelan territory to rest and regroup."

While the report says it "remained unclear to what extent the Venezuelan government provided support to Colombian terrorist organizations," it notes that Venezuelan weapons stocks have turned up in the hands of Colombian terrorist organizations.

It also notes that Iran and Venezuela began weekly flights between their capitals and the passengers were not subject to proper checks. Among the passengers was a suspect in the plot to bomb New York's John F. Kennedy International Airport.

"Venezuelan citizenship, identity, and travel documents remained easy to obtain, making Venezuela a potentially attractive way station for terrorists," the report says.

Once again, the report says, Iran "remained the most active state sponsor of terrorism."

"Elements of its Islamic Revolutionary Guard Corps were directly involved in the planning and support of terrorist acts throughout the region and continued to support a variety of groups in their use of terrorism to advance their common regional goals," it says, citing the group's support for Hezbollah, Hamas, Iraq-based militants, and Taliban fighters in Afghanistan.

The report says that despite promises to stabilize Iraq, Iran "continued to provide lethal support, including weapons, training, funding, and guidance, to some Iraqi militant groups that target coalition and Iraqi security forces and Iraqi civilians."

"In this way, Iranian government forces have been responsible for attacks on coalition forces. The Islamic Revolutionary Guard Corps-Quds Force continued to provide Iraqi militants with Iranian-produced advanced rockets, sniper rifles, automatic weapons (and) mortars that have killed thousands of coalition and Iraqi Forces," it says.

The report says that Iraq "remained at the center of the war on terror," with al Qaeda in Iraq and other insurgent groups battling coalition and Iraqi forces.

It also criticizes Syria, another U.S.-designated state sponsor of terrorism, for allowing foreign fighters into Iraq, citing U.S. government reports that found "nearly 90 percent of all foreign terrorists known to be in Iraq had used Syria as an entry point."

"The Syrian government could do more to stop known terror networks and foreign fighter facilitators from operating within its border," it adds.

Although it notes that no Syrian official has been implicated in bombing attacks in Lebanon, the report says that Damascus "continued to undermine Lebanon's sovereignty and security through its proxies," including Hezbollah.

Syria is also criticized for its weak treatment of terrorist financing and its continued support of Palestinian terror groups such as Hamas, including providing safe haven to its leader, Khalid Mishal. It notes that "Palestinian groups with leaders in Syria have claimed responsibility for anti-Israeli terrorist attacks."

The report notes that the Sudan, North Korea and Cuba, all designated as state sponsors of terror, had not actively supported terrorist groups inside their countries over the past year.

The report once again found al Qaeda and its affiliated networks "remained the greatest terrorist threat to the United States and its partners" last year, reconstituting some of its pre-9/11 operational capabilities in Pakistan's tribal areas. It also found a resurgence of the Taliban in Afghanistan and voiced concern about a rash of bombings by militants, including the one that killed former Prime Minister Benazir Bhutto last year.

"Despite the efforts of both Afghan and Pakistani security forces, instability, coupled with the Islamabad brokered cease-fire agreement in effect for the first half of 2007 along the Pakistan-Afghanistan frontier, appeared to have provided AQ leadership greater mobility and ability to conduct training and operational planning, particularly that targeting Western Europe and the United States," the report says.

The report again notes that al Qaeda continued to exploit local grievances for larger terrorist purposes and "seeks weapons of mass destruction in order to inflict the maximum possible damage on anyone who stands in its way, including other Muslims and/or elders, women, and children."

Al Qaeda operatives in East Africa and al-Shabaab militants in Somalia once again posed "the most serious threat to American and allied interests in the region," the report says.

Somalia's weak central government and the lack of rule of law "make Somalia a permissive operating environment and a potential safe haven for both Somali and foreign terrorists already in the region," it found.

"Somalia remains a concern, as its unsecured borders and continued political instability provide opportunities for terrorist transit and/or organization. AQ is likely to keep making common cause with cells of Somali extremists in an attempt to disrupt international peacemaking efforts in Somalia," it adds.

The report also voices concern about insurgent terror tactics in Algeria over the last year and calls Yemen's counterterrorism efforts last year "mixed" with "significant setbacks," including releasing all returned Guantanamo detainees and instituting a surrender program for terrorists with "lenient requirements." It also criticizes Yemen's weak counterterrorism laws and an "ineffective" justice system.

The report notes that human rights organizations have accused China of using counterterrorism in the run-up to the Olympics as a pretext to suppress ethnic Uighurs in the Xinjiang Autonomous Region. Although the Chinese have claimed they are terrorists, the report found no concrete evidence of that.

It also notes a spread of radical Islam in Europe, where several "significant terrorist plots" were foiled.

US: Bulgaria’s Financial Intelligence remained vigilant against terrorist financing

FOCUS News - Bulgaria’s Financial Intelligence Agency (FIA) remained vigilant against terrorist financing and cooperated with the United States on identifying and investigating terrorist assets, a report on terrorism, issued by the US Department of state reads. The report continues:

‘The FIA regularly distributed lists of individuals and organizations linked to terrorism to all banks in Bulgaria, the Ministry of Interior, Customs, and the Border Police. The FIA was active in efforts against all mandated UNSCR-designated terrorists and terrorist organizations, and cooperated on USG-designated individuals and organizations. The FIA advised the banking sector to use the Department of Treasury’s Office of Foreign Assets Control (OFAC) website as a reliable information resource for individuals and organizations associated with terrorism. The FIA provided feedback, including information on the response level of Bulgaria's banks, to the U.S. Treasury Department's Financial Crimes Enforcement Network (FINCEN).’

‘In 2006, the Bulgarian Parliament passed amendments that further strengthened the FIA's investigative powers, enabling it to obtain bank information without a court order or a Suspicious Transaction Report (STR). In late 2007, as part of legislation creating the new State Agency for National Security (DANS), the FIA was transferred from the Finance Ministry to DANS. The legislation lacked clarity on the independent and investigatory powers of the FIA, potentially complicating its Egmont compliance and undermining its ability to execute its mission and uphold its international commitments. Aware of the issue, Bulgarian officials were considering additional legislative and regulatory measures at year’s end.’

‘In December, the Bulgarian parliament adopted the State Agency for National Security Act, under which DANS will consist of four chief directorates: Internal Security, Counterintelligence, Technical Operations, and Economic and Financial Security. It will split off the current National Security Service from the Interior Ministry, Military Counterintelligence from the Defense Ministry, and the Financial Intelligence Agency from the Finance Ministry. These services will be incorporated into DANS. The new agency will exercise control over the stay of foreigners in Bulgaria, which was previously handled by the National Security Service.

Bulgaria signed and ratified the Council of Europe’s new Convention on the Prevention of Terrorism in 2006, which entered into force on June 1, 2007. Bulgaria’s religious leaders, including leaders of the nation's Muslim community, spoke out strongly against terrorism.’, the report states.

http://www.amlosphere.com/america/cft/us-bulgaria-s-financial-intelligence-remained-vigilant-against-terrorist-financing.html