FBI agents in town help fight cross-border crime

By Marie Magleby, Special to Gulf News

Published: May 31, 2008, 23:44

Abu Dhabi: Gary Price and Ernest Herbert carry FBI badges, but their job descriptions are significantly different here than in the US.

"I have no law enforcement authority here," Special Agent Price said.

Instead, the duo are go-betweens for local and US law enforcement. He said, "We work closely with UAE government officials to share information that protects the two countries."

They also offer training at the request of local authorities. The training involves many aspects of law enforcement, including ways to combat white-collar crime, violent crime, forensics and counter-terrorism.

In addition, the agents coordinate the Middle East Law Enforcement Training Centre in Dubai, which offers week-long courses for law enforcement personnel from around the Gulf.

Local authorities choose the topics and dates, and FBI specialists come from the US to teach the courses. Since its establishment in 2001, the centre, co-sponsored by the FBI and Dubai police, has conducted about 40 courses dealing with money laundering, computer crimes, intellectual property rights, kidnapping, auto theft, homicide, financial institution fraud, terrorist financing, hostage negotiations and more.

The globalisation of crime, especially financial and internet crime, places the agents in a pivotal position. "The UAE is an important crossroads for business and, as a result, also for crime," Price said of the potential for fraud or abuse in the banking system. With the help of local officials, they routinely seek to investigate bank records and track financial transactions linked to the US.

When internet crime is traced back to the US, the agents are also able to help. Just months ago, a prominent UAE citizen received a cyber threat from a location in the US.

Local law enforcement officials contacted Price and Herbert, who enlisted agents in the US to conduct an investigation. The man was arrested, charged and is now facing imprisonment.

About working with local authorities, Price said: "I truly enjoy working with the Emiratis. They are professional and very gracious." There are, however, obstacles. According to Price, a federal law that regulates "international judicial cooperation" is often misinterpreted to be a roadblock to investigations. "There is not a timely, quick way for law enforcement response because of the bureaucratic process," he said.

Law enforcement mechanisms do not always translate across cultures and borders, Herbert said in a similar vein. "Things are run differently here than in the US, so we have to do things differently."

When FBI agents are on international assignment, they assume the title of Legal Attaché in their respective embassies. Price and Herbert are successors to three other agents since the Abu Dhabi office opened in December 2003. They cover both the UAE and Oman. In the region, the FBI also has agents posted in Afghanistan, Egypt, Iraq, Israel, Jordan, Kuwait, Lebanon, Pakistan, Saudi Arabia and Yemen.

During his tenure, former FBI director Louis Freeh pushed to expand the bureau's international presence. It now has offices in 62 countries. This worldwide network of agents is a necessary countermeasure against the growing nexus of international crime. "Just as there are no borders for crime and terrorism, there can be no borders for justice and the rule of law," current director Robert Mueller told the US Senate in March.

Progress

"Twenty years ago, the idea of regularly communicating with our law enforcement counterparts around the world was as foreign as the internet or the mobile phone. Today, advances in technology, travel and communication have broken down walls between countries, continents and individuals," Mueller added. Price and Herbert embody this prog-ress.

Mueller became the dir-ector one week prior to the September 11, 2001 attacks.

The FBI began as a special agent force in 1908 and received its current title in 1935. Since its genesis, the FBI has seen its share of success and failure. Though it has successfully foiled numerous plots, conspiracies and espionage attempts, it has been criticised for shoddy investigation tactics and ignoring intelligence reports that could have prevented past attacks. Regardless, it has survived a century of challenges.

- The writer is a journalist based in Abu Dhabi.

Source: GulfNews

Foreign investors suspected of money laundering

Security services are investigating in one of most important money laundering cases, well informed sources told El Khabar, adding that many Algerian and foreign businessmen, in Annaba, Biskra, Oran, Chlef and Algiers, are being involved.
They are suspected of purchasing real estates in order to be used for laundering as much money as possible.

The same source said the abovementioned suspects have brought their money from abroad, while managing investing a large part of it in export activities, enabling them embezzling their money abroad with net profits.

The sources told El Khabar that security services are investigating on suspicious bank bonds being delivered by some foreign investors to Algerian Authorities enabling them investing huge money, by stages, during the few last years.
However, auctions were the safe heaven for those foreign businessmen while laundering their money, noting that they have brought their money from their country of origin, mostly Eastern Europe and Asia.

They tend to export goods being purchased previously in auctions, while injecting the profits in their capitals, adding to them the huge profits by hard currency which is usually transferred to their accounts in European banks.

The preliminary investigations concluded by discovering that a company based in Annaba, owned by an investor from an Arab country, has made only 5% profits.
Investigators concluded that the company’s manager is accused of tax evasion, while his company’s hard currency profits have been laundered in Algeria before being embezzled abroad under the cover of metal scraps’ exports.


http://www.elkhabar.com/quotidienFrEn/lire.php?idc=114&ida=112456

Corruption shadow casts Bhutto in a different light

That one shouldn't speak ill of the dead is conventional wisdom but conventional wisdom usually turns out to be an oxymoron. And so the dead Benazir Bhutto is now the "former prime minister of Pakistan" rather than "the fugitive facing corruption investigations in Spain, Britain and Switzerland" that she was a fortnight ago.

Corruption aside, Bhutto showed a remarkably cavalier disregard for the lives of even her own supporters. Guns of any make, either genuine or cheap local rip-offs, are freely available in Pakistan. The use of bombs has also become more widespread.

So when Bhutto arrived back in Pakistan in October, rather than being whisked by helicopter amid tight security from the airport to wherever she needed to be, she had her party organisers bus in 200,000 people to the route from the airport so the world's television cameras could record her glorious return. The route was lengthened to heighten the drama of the procession.

It all served to give those with murderous intent greater opportunity. Bhutto was safe inside her bombproof vehicle. But outside, almost 140 of her supporters were blown to bits by two bombs and another 450 injured. Bhutto directed the blame to anyone but herself.

This recklessness extended to herself last week when, having been provided with a bulletproof car, she stood up through its sunroof on leaving a political rally - with predictable results. But martyrdom is a wonderful way to launder one's reputation. If saintliness is what you're after, then it's certainly a good career move - you can emerge a saviour unhindered by the practicalities of having to deliver, leaving your supporters to wistfully imagine what might have been.

Except that Bhutto was twice put to the test. Twice she was prime minister of Pakistan, twice she was shown to be a poor administrator and twice her government was removed for corruption.

Bhutto did have her plusses. She was a democrat. But politics in most of Asia is about power: getting it and keeping it. Rarely is it about policy. Bhutto liked democracy because it was the only means by which she could get into power. Her family was not a military family so a coup was out of the question.

And although from the province of Sindh, she clearly sought to represent and govern all Pakistan - her interest was in transcending ethnic and regional divides. She was a Pakistani above all, something few politicians in Pakistan actually are, or are seen to be.

The trouble is, she was most probably corrupt and her husband, Asif Ali Zardari, definitely was. Bhutto made him a minister during her second term as prime minister. But once she was out of office, he was arrested on charges of organising the murder of Bhutto's brother, Murtaza, blackmail, the murder of a judge and his son, and corruption, for which he was jailed. He has always maintained that the charges were politically motivated, which undoubtedly they were. But the motivations of one's accusers do not change the facts of one's crimes.

A 1998 New York Times report claimed that Pakistani investigators had evidence that Zardari offered a contract to Dassault, a French aircraft maker, to replace the Pakistani Air Force's fighter jets, in exchange for a 5% commission to be paid to a Swiss corporation he controlled.

The same report also said Zardari had organised for a Dubai company to have the exclusive licence to import gold into Pakistan, for which he received more than $10 million in "fees". Other allegations relate to the purchase of 7000 tractors from a Polish company, for which the Bhuttos were allegedly paid a commission.

In 2003, a Swiss magistrate convicted Zardari and Bhutto, in their absence, of money laundering. They had accepted $US15 million in bribes from Swiss companies SGS and Cotecna to do customs inspections on goods imported into Pakistan. The couple had the Swiss companies pay 6% of the value of their contracts into Bomer Finance Inc and Nassam Overseas, two British Virgin Islands-registered companies with which they were linked. The two were sentenced to six months in prison and ordered to return almost $US12 million to the Government of Pakistan.

Bhutto appealed against the conviction on the basis that she had no knowledge of the payments despite having been shown to be a beneficiary of at least one of the BVI companies. The case is still under appeal. But why did Bhutto imagine she could be prime minister of a country of 160 million people if she could not even manage her husband? Either she was corrupt or incompetent, but probably both.

In 2004, Zardari admitted owning a £4.35 million estate in Surrey, England - that included a 20-room mansion - that the Pakistani authorities allege was probably bought with the proceeds of corruption in 1995. A British judge concurred.

In 2005, the Independent Inquiry Commission, led by former US Federal Reserve head Paul Volcker, named Petroline FZC among the companies to have breached UN sanctions by making illegal payments to Saddam Hussein's regime so it could trade in Iraqi oil. Documents suggest that Bhutto chaired the company. They might be fake but the company is connected to her associates. Spanish authorities are investigating the affairs of the company, which received $US2 million in illegal payments.

Anti-corruption officials with Pakistan's National Accountability Bureau claimed to have identified $US1.5 billion in the names of Zardari and Bhutto's mother - who has Alzheimer's disease - in Swiss bank accounts. And so, in 2006, Interpol issued a request for the arrest of Bhutto and her husband on corruption charges, on behalf of the Pakistani Government.

Did Pakistan really need a third Bhutto-Zardari prime ministership? Undoubtedly there will now be the movie and perhaps an Andrew Lloyd Webber musical (Don't Cry for me Pakistan). But at the end of the day, a thief in lipstick is still a thief.

The trouble is, she was most probably corrupt and her husband, Asif Ali Zardari, definitely was. Bhutto made him a minister during her second term as prime minister. But once she was out of office, he was arrested on charges of organising the murder of Bhutto's brother, Murtaza, blackmail, the murder of a judge and his son, and corruption, for which he was jailed. He has always maintained that the charges were politically motivated, which undoubtedly they were. But the motivations of one's accusers do not change the facts of one's crimes.

A 1998 New York Times report claimed that Pakistani investigators had evidence that Zardari offered a contract to Dassault, a French aircraft maker, to replace the Pakistani Air Force's fighter jets, in exchange for a 5% commission to be paid to a Swiss corporation he controlled.

The same report also said Zardari had organised for a Dubai company to have the exclusive licence to import gold into Pakistan, for which he received more than $10 million in "fees". Other allegations relate to the purchase of 7000 tractors from a Polish company, for which the Bhuttos were allegedly paid a commission.

In 2003, a Swiss magistrate convicted Zardari and Bhutto, in their absence, of money laundering. They had accepted $US15 million in bribes from Swiss companies SGS and Cotecna to do customs inspections on goods imported into Pakistan. The couple had the Swiss companies pay 6% of the value of their contracts into Bomer Finance Inc and Nassam Overseas, two British Virgin Islands-registered companies with which they were linked. The two were sentenced to six months in prison and ordered to return almost $US12 million to the Government of Pakistan.

Bhutto appealed against the conviction on the basis that she had no knowledge of the payments despite having been shown to be a beneficiary of at least one of the BVI companies. The case is still under appeal. But why did Bhutto imagine she could be prime minister of a country of 160 million people if she could not even manage her husband? Either she was corrupt or incompetent, but probably both.

In 2004, Zardari admitted owning a £4.35 million estate in Surrey, England - that included a 20-room mansion - that the Pakistani authorities allege was probably bought with the proceeds of corruption in 1995. A British judge concurred.

In 2005, the Independent Inquiry Commission, led by former US Federal Reserve head Paul Volcker, named Petroline FZC among the companies to have breached UN sanctions by making illegal payments to Saddam Hussein's regime so it could trade in Iraqi oil. Documents suggest that Bhutto chaired the company. They might be fake but the company is connected to her associates. Spanish authorities are investigating the affairs of the company, which received $US2 million in illegal payments.

Anti-corruption officials with Pakistan's National Accountability Bureau claimed to have identified $US1.5 billion in the names of Zardari and Bhutto's mother - who has Alzheimer's disease - in Swiss bank accounts. And so, in 2006, Interpol issued a request for the arrest of Bhutto and her husband on corruption charges, on behalf of the Pakistani Government.

Did Pakistan really need a third Bhutto-Zardari prime ministership? Undoubtedly there will now be the movie and perhaps an Andrew Lloyd Webber musical (Don't Cry for me Pakistan). But at the end of the day, a thief in lipstick is still a thief.

www.michaelbackman.com
http://business.theage.com.au/corruption-shadow-casts-bhutto-in-a-different-light/20071231-1jo3.html?page=2

Paraguay called financial hub for terror and crime

Ralph Nieves, a wiry ex-NYPD narcotics detective, lived through the aftermath of Sept. 11, 2001, in Manhattan. That is why what he discovered about a particular part of Paraguay during a recent assignment there has so disturbed him.

Working under a U.S. government contract to carry out polygraph examinations of public officials in the country, Nieves said he discovered evidence of pervasive corruption among some police and military units.

It is a situation other law enforcement officials believe has contributed to parts of Paraguay being a terrorist haven where al-Qaida, Hezbollah and allied groups have been for years.

As a result, Paraguay's borders with Brazil and Argentina -- an area called the "tri-border" -- are being increasingly viewed by investigators, as well as American diplomats, as the vulnerable underbelly of the U.S. Ciudad del Este, Paraguay's second largest city,which is suspected of being a financial hub for terror and organized crime groups.

Some American investigators also believe the area's porous borders make it an ideal springboard for terrorists to make their way to the U.S. circuitously through Mexico and the Caribbean by using a variety of smuggling venues.

"Every major criminal organization in the world has a criminal representation in Ciudad del Este," Nieves, 63, said in a recent interview.

The lawlessness of the region makes it a threat for future terrorist financing and action in New York, Nieves said. He isn't alone in his concerns.

"It is being watched," Rep. Peter King, the ranking Republican on the House's Homeland Security Committee, told Newsday recently when asked about the tri-border zone.

Hezbollah, an umbrella organization for Shia Muslims, which started in Lebanon, is believed to have laundered $10 million annually through the area, King said.

Martin Ficke, former head of Immigration and Customs Enforcement in New York and now director of operations for the Jericho-based investigative firm SES Resources Ltd., said the tri-border is a continuing concern for money laundering. Ficke, who worked with the El Dorado money laundering task force, said agents were looking to see how readily terrorists could rely on narcotics networks in Paraguay to move cash to support terror operations. He wouldn't comment further.

Officially, the U.S. Department of State says southern Paraguay has yet to sustain an "operational" presence for al-Qaida, Hezbollah and Hamas. King also doesn't believe al-Qaida is present in the area. But there are documented cases where members and sympathizers of Hamas, a militant Palestinian organization, and Hezbollah have engaged in money laundering, extortion, bombings and other crimes inside Ciudad del Este and surrounding areas. Back in the 1990s, suspects in the bombings of South America's Jewish communities were traced to the area.

Some U.S. officials also believe an al-Qaida ally, a shadowy terrorist group known as Lashkar-e-Taiba, which became active in Kashmir in the 1990s, is now operating in the region. Earlier this year, a Manhattan federal judge sentenced a Baltimore man to 15 years in prison for traveling to Pakistan for terrorism training at one of the group's camps.

A report prepared by the U.S. Embassy in Paraguay in April said the country doesn't have effective ways to deal with money laundering and terrorist financing but does try to cooperate in counterterrorism efforts. Judicial and police corruption were concerns, said the report.

In May, MSNBC ran a brief interview by correspondent Pablo Gato with a young Arab Muslim sympathizer of Hezbollah in Ciudad del Este who threatened to attack the U.S. if Iran was targeted.

"In two minutes, Bush is dead," the man told MSNBC of the threatened consequences of a U.S attack.

While those remarks seem like braggadocio, some U.S. officials have been wary of Hezbollah members infiltrating the United States through Mexico to carry out acts of terror. Washington has been pouring millions into Paraguay to try to strengthen its legal institutions, which is why Nieves, who is a private investigator in the Bronx, was working there.

Nieves took polygraph exams of nearly 80 cops, customs officials and military officers. They were applicants for positions in a special customs task force aimed at improving border controls in Paraguay that was to be funded by American aid dollars.

According to Nieves, one of a few U.S.-based Spanish-language polygraphers active in the business, the officials easily opened up to him. After Nieves assured them that admissions of participating in routine graft -- known locally as "la coima" -- wouldn't get them in trouble, the applicants said they believed criminals were tipped off to investigations by law enforcement officials. In some cases, local prosecutors warned smugglers of raids so they could dispose of contraband, Nieves said.

One customs officer said that some higher-ranked customs officials knew all of the organized crime leaders and provided them with information. Some national police also took part in executions on the border with Brazil near the town of Pedro Juan Caballero, said the official, adding that the killings involved disputes over smuggled goods.

The applicants painted a picture of a wild-west atmosphere where legitimate law enforcement was intimidated by criminals and corrupt higher officials.

"They mentioned terrorists, every organized crime group, al-Qaida, the Chinese," recalled Nieves of his debriefings.

One American law enforcement consultant who didn't want to be identified because he does a lot of business in Paraguay said the country's customs service is prone to corruption because of the low wages officials are paid. But even higher pay won't bring speedy reform, he said.

"They don't look at it as corruption. It is part of the culture," he said. "Everybody takes a piece of the government income."

"Most of those people who were coming forward were decent people. Unfortunately, the circumstances are overwhelming for them," Nieves said about the corruption.

Nieves thinks the United States could benefit by developing its own network of paid informants within Paraguay's customs and border police as an early warning system against terrorism.

"Everyone I met were people we could flip," he said.

http://www.newsday.com/news/nationworld/ny-nypara0101,0,7656260.story

Massachusetts Senator Faces Corruption Charges

Eight-term Massachusetts State Senator Dianne Wilkerson was arrested Tuesday morning on public corruption charges stemming from her acceptance of more than $20,000 in cash payments to introduce legislation in the State Senate.

Wilkerson, 53, of 74 Howland Street in Boston, was arrested on a federal complaint charging her with attempted extortion under color of official right and theft of honest services as a state senator.

The complaint alleges that law enforcement authorities were first alerted to Wilkerson’s acceptance of cash in connection with the use of her public office in the spring of 2007. The Federal Bureau of Investigation, in conjunction with the Boston Police Anti-Corruption Unit, undertook a long-term covert operation, which included audio and videotaped recordings, commencing in May 2007 aimed at exploring these allegations.

It is alleged that, between June 2007 and March 2008, Wilkerson took $8,500 in cash payments from an undercover agent, and a cooperating witness, to assist in obtaining a liquor license for a proposed nightclub in Roxbury. It is further alleged that, in exchange for these payments, Wilkerson pressured the Boston Licensing Board, the Mayor and the City Council, and also held-up pending legislation in the State Senate, including legislation increasing the salaries of the Boston Licensing Board.

The complaint alleges that in an effort to obtain a license for which she was obtaining unreported cash payments, Wilkerson ultimately introduced legislation to increase the number of liquor licenses available in Boston, and then manipulated the timing of that legislation at the request of undercover agents.

It is further alleged that in January 2008 Wilkerson proposed that an undercover agent, posing as out-of-state businessman, become involved in the development of a piece of state property in Roxbury. Wilkerson proposed that she introduce legislation which directly designated the property to a private entity for development in order to avoid the ordinary public bidding process.

In exchange for her assistance in the direct designation of the property, Wilkerson allegedly took a $5,000 payment in June 2008.

The complaint further alleges that, in September 2008, Wilkerson requested that another undercover agent, posing as an out of state businessman, pay her $10,000 in cash. According to the Complaint, in early October 2008, the undercover agent paid her $10,000 in cash, on her promise to file the direct designation legislation in the State Senate and to continue to advance the private interests of his business.

Wilkerson allegedly filed the legislation and was pressing their interests with the House of Representatives and the Boston Redevelopment Authority as recently as last week.

In total, Wilkerson allegedly accepted a total of $23,500 in cash payments, ranging in amounts from $500 to $10,000. Each of the eight payments was in connection with the use of her office as a state senator.

If convicted, she faces up to 20 years imprisonment, three years of supervised release and a $250,000 fine on each of the charges. 10-27-08

Source: North Country Gazette

Kenya losing war on corruption-report

Kenya is still losing the war on corruption.

This is according to a report released Thursday by the Africa Policy Institute.

Speaking during the launch of the corruption report the institute's president Dr. Peter Kagwanja said the Grand Coalition Government was not doing enough to fight graft as it had concentrated its efforts on other issues.

According to the report, the rate of corruption had risen in the period after last year's election compared to the same period after the 2002 general election that brought in the NARC government.

"Kenya has slipped into a democratic recession, unable to create strong legal and political institutions to stamp out corruption and promote a culture of accountability and probity", says Dr Kagwanja.

Research reveals that the anti-corruption system in the country is less vibrant than it was five years ago.

The institute's findings also indicate that the power sharing deal brokered after the 2007 general elections has not made it any easier for the government to fight against corruption.

"For all the euphoria around power sharing, the power arrangement signifies the failure of democratic consolidation, which has given impetus to a new wave of corruption", Dr Kagwanja says.

"In order to win the war against corruption, the country needs to recommit to the vision of a strong democracy and civic citizenship to and undertake far reaching political reforms, including constitutional reforms", he adds.

The report also recommends that the country needs to embark on building strong state institutions and citizen's lobbies.

"There is also need for coordination and strengthening of counter-corruption institutions and recommitment to international instruments on combating corruption including implementing the Africa Peer Review Mechanism Kenya report", the report says.

Source: KBC

Azerbaijani parliament adopts draft law on combat with money laundering and terrorism financing

The law envisions creation of a special structure to deal with the financial investigation and examination of the legality of income sources under banking transactions, exceeding AZN 20,000.

The draft law is aimed at creation of the legislative basis for revealing the law offenses, connected with money laundering and terrorism financing.

Speaking before the deputies, deputy chairman of the board of the National bank of Azerbaijan Rufat Aslanly explained that the persons or organizations to undergo monitoring will be considered suspected of the crime.

He said the monitoring by the financial inspection does not mean that they will check the activity of the banks, insurance companies and entrepreneurs on the spots.

"The financial inspection will get information about suspicious operations from the companies, engaged in financial transactions. Considering that the report on the financial operation between the two economic subjects is sent to the financial inspection, it does not mean that one of the establishments is suspected of the crime.

"The structure to deal with financial monitoring, is not empowered to hold inspections of the due economic establishments, interfere with the financial operations. For example, a body receives information about the financial transaction, exceeding AZN 20,000.

At the same time, the body is presented the opinion of the financial operator about his client. It means that the customer has a good reputation as to them. If the financial inspection has other questions, they appeal to the financial operator, not to the client, that holds the transaction", said Aslanly.

The deputies voted for this draft law after discussions.

Source: Today.Az

Charges still dog Benazir's husband

ISLAMABAD: Benazir Bhutto's husband, who took effective control of his slain wife's party yesterday, is a former cabinet minister who spent eight years in prison on corruption charges and is known as "Mr 10 Per Cent" for allegedly taking kickbacks.

In her will, read yesterday, Bhutto named Asif Ali Zardari as her successor as head of the Pakistan People's Party in case of her death. But Mr Zardari, who is viewed with suspicion by many Pakistanis, appointed his son, Bilawal Bhutto Zardari, as official chairman of the party that the 19-year-old's grandfather founded in 1967.

Mr Zardari, 54, who comes from a feudal family, shot to fame after his arranged marriage to Bhutto, who become prime minister for the first time in 1988, less than three months after giving birth to her son. Bhutto's husband is generally blamed for many of her political misfortunes, with her twice being forced out of the prime minister's office over allegations of corruption and misrule.

He was jailed for the first time in 1990 on charges ranging from murder to fraud when Bhutto's first government was dismissed. He was released in 1993 and acquitted of the charges, including the claim he tried to extort millions of dollars from a British man by attaching a bomb to his leg. Mr Zardari said the charges were politically motivated.

Mr Zardari became investment minister in Bhutto's second government, and was nicknamed "Mr 10 Per Cent" for allegedly skimming off commissions on government contracts.

He was jailed a second time in 1996 over corruption allegations and his alleged involvement in an attack on Bhutto's brother, Murtaza, who died in a shootout near his home in Karachi.

After years in prison Mr Zardari was freed in 2004 and left Pakistan to live with his family in the United Arab Emirates. He still faces charges at a Swiss court of money laundering. He is accused of siphoning off $US1.5 billion in kickbacks.

A Geneva magistrate convicted Bhutto and her husband in absentia of money laundering in 2003 under a Swiss law that empowers high-level investigators to impose penalties without a court hearing.

They received six-month suspended sentences and were ordered to pay $US11 million to the Pakistani Government, but the conviction was automatically thrown out when the pair contested it. They were then charged by another Swiss magistrate in 2004 and the case was reopened.

The Swiss investigation against Bhutto for alleged money-laundering was declared closed after her assassination last week, although the parallel investigation against her husband remains open.

Swiss authorities said in 1998 they found about 20 million Swiss francs in Swiss accounts belonging to Bhutto and her family. These accounts were frozen at Pakistan's request.

"Zardari is not very much liked in the party. He goes for big hotels, world's best addresses. He wants to live like a prince abroad," said Rafiq Safi, a longtime party activist.

Mr Zardari also has many critics in the West, which could further complicate US hopes that President Pervez Musharraf and the PPP might form a coalition that would unify moderate forces in Pakistan against extremism.

"The US is not going to be excited about working with Zardari," Daniel Markey, fellow at the Council on Foreign Relations, told The Washington Post.

AP

http://www.theaustralian.news.com.au/story/0,25197,22991942-2703,00.html

ISRAEL: Money changer guilty of laundering for funds transfer to Bishara

Jerusalem District Court on Sunday convicted Firas Asila, a 29-year-old money changer from East Jerusalem, of money laundering for transferring $390,000 from an unnamed Arab country to former Balad MK Azmi Bishara.

Bishara, who fled the country over six months ago, is suspected of financial and security-related crimes.

The conviction followed a plea agreement between Asila and the State Prosecutor's Office financial crimes department. According to the agreement, Asila Brothers Ltd., which is partly owned by Asila, was removed from the indictment and will not face legal action.

The prosecution will ask the court to sentence Asila to eight months in prison as well as a suspended term, while the defendant will ask for six months of community service and a suspended term. The state also confiscated several thousand skekels from Asila.

According to the indictment, in 2006, Bishara asked Asila to help him transfer funds from an Arab country through Jordan. Asila agreed and approached a money changer he knew in Amman.

Bishara asked Asila to conceal the fact that he was the recipient of the money, and therefore asked Asila to tell the Jordanian that the money was intended to him and not to ask the courier about the source of the funds.

At Bishara's request, Asila gave him the funds directly in bills. When Bishara wanted the money in shekels, they agreed he would tell Asila he wanted the "books in Hebrew."

A Balad statement said in response that the conviction constitutes a "dirty deal" meant to harm Bishara. "It shows how far the Shin Bet is willing to go when it comes to political persecution," party members said.

http://www.haaretz.com/hasen/spages/939796.html

Swiss deny Bhutto money laundering

Swiss officials have closed a probe into the late Benazir Bhutto for alleged money laundering and have denied charges against her.

The Pakistani opposition leader was killed Thursday in Rawalpindi by a suicide bomber who shot at her and than blew himself up.

A three-year investigation into allegations that Bhutto used Swiss banks to launder millions of dollars in kickbacks has been closed, lawyer Alec has said. He said the charges against Bhutto were steadfastly denied, calling the corruption claims politically motivated.

However, Reymond said a parallel probe would continue against Bhutto's husband, Asif Ali Zardari, and another unnamed individual.

In 1998, Swiss authorities said they found 20 million Swiss francs (then about US$13.8 million) in Swiss accounts belonging to Bhutto and her family.

The accounts were frozen at the request of Pakistan's government.

"Miss Bhutto has always said that this was not her money. The accounts were not in her name,'' Reymond told The Associated Press.

MMA/RA

http://www.presstv.ir/detail.aspx?id=36765§ionid=351020401

Money Laundering: When proceeds from fraud enter the financial system

“We have always tried to create better ways to curb crime, but criminals find alternative ways to beat the system: JAI BANDA of Dr Mtambo Law Firm investigated some of money laundering cases in 2007.

CONTRARY to the zero tolerance rhetoric by President Bingu wa Mutharika revelations from Transparency International indicated that the problem of corruption was getting worse in the country thereby increasing the possibility of laundering the proceeds of crime through the country’s financial systems.

There were many money laundering cases in Malawi from June to December last year that included fraud, drug trafficking, theft, robbery and tax evasion.


Fraud
Of significance during the period was insurance fraud. The Insurance Association on of Malawi warned the public to be on the look out as fraudulent acts were on the increase in the insurance industry. The Association went on to place flyers in the local dailies in which they stated that the fraud involved people of many disciplines which included lawyers, police officers and staff from insurance companies.

In the course of investigations one lawyer, who spoke on condition of anonymity, did reveal that it was true that there were indeed some lawyers who connived with hospital staff and police to issue false reports for processing by Insurance companies. The funds obtained from such kind of frauds are laundered as legitimate payments from insurers.

Chairman of the Insurance Association against fraud Eric Chapola further argued that the racket was manifested through fake documents issued by the professionals. Policemen would collude with fraudsters to issue fake police reports while medical officers would issue hospital reports and lawyers would push insurance companies to pay such fake claims.

The Medical Aid Society of Malawi (Masm) is another institution which during the period was hit by massive fraud. In the months of October and November the Society faced huge increases in dubious claims forcing the country’s health insurance provider to pay up to K80 million (US$ 571428.60). The Sales and Marketing Manager for MASM Andrew Ngomwa attributed the staggering figure to suspected high cases of fraud.

Health Insurance fraud ranges from doctors billing insurers service than the core performed (this is called “up coding”). The doctors provide services such as tests, surgeries and other procedures that are not necessary in order to get additional payment. Other fraudulent tactics include

Drug trafficking

An interview with the Officer In-Charge of the Police Station in the small town of Limbe revealed that Indian hemp in Malawi is mainly for export to the neighbouring countries. A 90 kilogramme bag is sold at K100, 000.00 (US$714.28) in Mozambique. Naturally the money realised from the sale of the indian hemp has to be injected into the formal system.

In July, police in Chileka impounded 80 bags of indian hemp weighing 90 kilogrammes and nine others weighing 50 kilogrammes each. The indian hemp was loaded in a three tonne lorry. The indian hemp was impounded in Lirangwe on its way to Blantyre from Nkhotakota .

In September, two men were arrested at Thabwa road block leading to the Southern Town of Nsanje which borders Mozambique with 16 cartons of indian hemp weighing a total of more than 100 kilogrammes and in November Blantyre police acting on a tip off impounded 23 bags of indian hemp weighing 90 kilogrammes each from a lodge situated on the outskirts of the City of Blantyre.

The above cases just show the magnitude of indian hemp being caught in transit in Malawi. The proceeds of the indian hemp are available to the drug trafficker for laundering. The police indicated that most of the indian hemp from Malawi is exported to the Republic of South Africa which gives rise to outgoing money laundering.

Theft and robbery

Money for laundering is at times derived from proceeds of robberies. In June armed men stole at gunpoint a Nissan Double Cabin vehicle. Mzuzu police confirmed that Mzuzu the capital city of the North had a spate of carjacking especially targeting twin cab vehicles. The vehicles are driven across the border using unchartered roots to Zambia and Tanzania and are sold. The monies realised are eventually laundered in these countries as proceeds of business.

In July in the central region of Malawi in Ntcheu two men were sentenced to fourteen years for motor vehicle theft. The two were arrested in Mozambique where they wanted to sell the car. It can be safely assumed the two in addition to bringing hard cash they could have brought goods from Mozambique. Favourite goods from Mozambique include liquor, macaroni and other food stuffs and a number of motor vehicles thieves are believed to indulge in cross border trade.

During the period it was not only motor vehicles which were robbed. In September armed robbers went away with K2,000,000.00 (US$14285.71) after raiding Metro Cash ‘n’ Carry depot in Blantyre. Similarly during the same month police arrested two security guards deployed at a construction company on allegations that they connived on the theft of K7,000,000.00 (US$50 000) meant for salaries. A visit was undertaken to the robbed premises in a town called Phalombe wherein the robbed company’s personnel indicated that they believed money realised from the robbery had been exported to Mozambique.

Tax evasion
On June 12, 2007 the Malawi Revenue Authority (MRA) held a press conference in Blantyre where it stated that they had uncovered three schemes some tax evaders used when importing cars and flat television screens. The tax authority revealed that they had seized three vehicles and 80 TFT LCT – TV Screens. MRA Deputy Director of Investigations and Audit Emmanuel Kaluluma said the evader marked the cartons “computer monitor” to evade tax. The scheme was exposed when MRA officials conducted a risk check. The tax evader took advantage of a policy government set that allows importation of computers duty free except for Value Added Tax. Had the scheme not been uncovered the evaders would have reaped off government K9 000 000.00 (US$ 64285.71) if they had been successful in the racket.

In another racket, a Malawian national only identified as Burton was on May 27 hired by a fellow Malawian based in South Africa, Deckerman Gumbi to drive a Toyota Fortunar into the country with fake a Malawian registration number CK 7618. What this tax evader did was to pretend as if the vehicle went out of Malawi and it was returning home through Mwanza border post. Investigations discovered that it was just a new vehicle being imported into the country. The tax collecting body was going to lose K3 400 000.00 (US$ 24285.71) in revenue in this racket which sum would have been laundered as legitimate funds.

Corruption
Corruption is another predicate offence which yields money for laundering. In the town of Mzuzu, the Mzuzu Chief Resident Magistrate convicted a policeman who sought money in order to release and drop criminal charges against three suspects. He solicited K6,000 (US$ 42.85) as an inducement to drop criminal charges.

In September President Bingu Wa Mutharika disclosed that government was investigating Minister of Information and Civic Education Patricia Kaliati on corruption allegations on the way she handled the Nyika-Vwaza conservation concession tender process when she was Minister of Tourism. The Member of Parliament for Mzimba West Loveness Gondwe had questioned the circumstances surrounding the Nyika-Vwaza Eco Tourism in Parliament accusing Kaliati of taking kickbacks from one of the bidders an investor from the United Arab Emirates.

The views expressed in this article are those of the author and not necessarily of Blantyre Newspapers Limited (BNL).

http://www.dailytimes.bppmw.com/article.asp?ArticleID=8146

Surinamese businessman sentenced in the Netherlands for money-laundering

Surinamese businessman Bidjai Parmessar, 43, was acquitted of all drug charges by a high court in The Hague, the Netherlands Monday, but he has been sentenced for money laundering.

Parmessar, who Surinamese and Dutch judicial authorities believed to be the biggest drug lord in Suriname, was arrested in 2005 in Paramaribo but, since the Surinamese-born businessman holds Dutch nationality, he was extradited to the Netherlands for prosecution.

In 2006 a court in Rotterdam sentenced him to a 10-year jail term for two cases of drug trafficking in 1995 and 2002. Parmessar was among others charged with allegedly leading a criminal organisation, drug trafficking, money-laundering and forgery.

The former owner of several casinos, liquor stores, car sales and money transfer offices in Paramaribo was accused of organising large cocaine shipments from Columbia to Suriname, which were eventually trafficked to Europe, especially to the Netherlands.

Over six years of investigations, including over 160,000 phone taps during the so-called ‘Ficus Operation’, which cost the Dutch judicial authorities around euros 7 million in 2005, have resulted in numerous arrests in Suriname and the Netherlands.

Owners and managers of the so-called Yokohama Group of Companies, which operates casinos, cambios, money transfer offices, car sales and liquor stores in Suriname, were suspected of belonging to a criminal organisation.

This organization allegedly smuggled enormous quantities of cocaine from Suriname to Holland and laundered the revenues through their companies in both countries. Several of the suspects were subsequently sentenced to serve time or community service.

In 2006, Parmessar appealed his sentence. The higher court dismissed the drug charges on Monday due to a lack of evidence, but stated that his involvement in the money-laundering scam has been established sufficiently and therefore sentenced him to a 4 year and 6 months prison term.

The accused, who was released in 2007 pending the hearing, has been ordered to report to the prison authorities to serve the remaining 8 months of the jail term.

Parmessar’s defence lawyers expressed satisfaction with the ruling, since the drug trafficking sentence by the lower court has now been dismissed. However, they said that the conviction related to money-laundering charges came about due to the scope and complexity of the case. They believe that the Court in the Hague does not understand the differences between the Surinamese and Dutch legal systems and as a result their client was sentenced to jail.

According to attorney Nico Meijering, his client would have never been sentenced in Suriname for his alleged involvement in the money-laundering scam.

The court has established that the businessman was involved in the laundering of euros 60,000 through a money transfer office in the Netherlands he had close ties with. Meijering also contends that even if Parmessar was the manager of the money transfer office in the Netherlands he could never have known about the illegal activities of his personnel since he was running his businesses from his offices in Paramaribo.

http://www.caribbeannetnews.com/news-5726--36-36--.html

Money-laundering suspect hits cleaning deadline

The high profile suspect in a $56.8 million money-laundering scheme has run out of time to clean up his debris-strewn home in a plush northeast Phoenix neighborhood.

Phoenix officials have hired a crew to clear off vegetation and garbage, fill up an excavation site, remove an unsound fence, and board up his house. The work is expected to be completed by Monday.

Bruce D. Love, a suspect in the money-laundering scheme, was to have done the work on his home by May.

"He is long past the 35-day notice," said Christy Blake, a code enforcement supervisor in Phoenix.

The slow place of the clean up has angered residents of the exclusive multi-million-dollar neighborhood at the base of the Phoenix Mountain Preserve. The front yard is ringed with a chain-link fence. But the easily accessible back yard is lined with two-feet-deep trenches.

The city is using a so-called abatement procedure to guarantee payment for the estimated $13,000 clean up work, Blake said.

The procedure allows the city to place an assessment, similar to a lien, against the property. If the property is sold, the city will be second in line to get its money after any unpaid taxes are settled, Blake said.

The $13,000 clean up is a break for Love. When he was cited in April with multiple violations, city officials estimated the cost of repairs at $45,000.

The assessment against his house is only one of Love's litany of troubles.

Love and two alleged partners have been indicted on multiple counts of money laundering, conspiracy and other charges for allegedly using their Western Union locations in Phoenix and Mesa to cater to human smugglers, also known as coyotes.

The smugglers allegedly told families awaiting undocumented relatives to wire money for their passage to the suspects' Western Union operations.

Those high volume transactions over the last four years increased their commissions, turning the scheme into a multi-million dollar operation.

The scheme was unveiled in a two-year investigation conducted by the Arizona Financial Crimes Task Force led by Phoenix police.

Love, a physician, also has been banned from direct contact with patients. In 1999, he was described by the Board of Medical Examiners (now Arizona Medical Board) as having a "mental impairment." As a result, the board banned him from personal contact with patients, and prescribing medications. They did not lift his license to practice, and Love operated an "MD by Phone" business for a short time.

http://www.azcentral.com/news/articles/0130sr-debris0131-ON.html

International Community: Successful against Terror Financing

By Jan Jun
LONDON, July 28, 2007 (RFE/RL) – Experts at a London conference say the international community is slowly winning the war against terrorist financing, despite the fact that funds can be moved around the world so easily in today’s globalized financial system.
Terrorists need money. They need money to acquire weapons and carry out attacks, to proselytize and to train recruits, to pay for accommodation, and to travel.

Stopping The Flow
They cannot operate without financing, and they have devised many ways to get the money they need and move it around between countries and continents.
Stopping the flow of money presents many obstacles.

Experts say most of the funds used by terrorists are legally acquired. Terrorist cells are hard to penetrate, there are fewer large donors these days and small donors are difficult to track.

This prompts the question of whether the international community is actually succeeding in fighting against terrorist financing. But the answer seems to be a qualified "yes."

Peter Romaniuk is an assistant professor at the John Jay College of Criminal Justice at the City University of New York. Romaniuk and others were the speakers at an international conference on fighting terrorism financing in London’s Royal United Services Institute for Defence and Security Studies this week.

Progress Noted
The conference was held in association with the Home Office and the City of London.
"There have been significant achievements made, but there are significant challenges that still face the international community in their efforts to suppress terrorist financing,"

Romaniuk said. "The important question, I think, we need to be asking in the future is whether the costs of money laundering and terrorist financing regulation exceed the benefits."

Romaniuk explains that law enforcement agencies are discovering that the financing of terrorism correlates with the social organization of terrorist groups. Today’s more decentralized network-structured terrorism has different patterns of recruiting, of radicalization and of financing.

One area of concern is that in recent years, several fake Islamic charities were found to be channeling funds to terrorists. However, given the number of overall registered charities in Britain, the share is very small, says Andrew Hind, the chief executive of Britain's top regulatory body.

"We have 190,000 registered charities in England and Wales," he said. "At the moment across all of those 190,000 charities we have 120 cases in our compliance division, where we have serious concerns about things going wrong in charities. Forty of those are subject to a formal inquiry, where we can use our powers to freeze bank accounts and so on, and seven of those forty relate to allegations of terrorist links."

'Hawala' System
Hind explains that following the discoveries of irregularities, the Charity Commission in Britain is currently working on raising awareness that aid money or goods could be used to reach terrorists.

Some experts also initially suspected that terrorists could benefit from an informal money transfer system known in the Middle East and Asia as "hawala." This has been disproved, however, by a 2005 World Bank study of the system in Afghanistan, showing regulated NGOs using it to transfer in at least $400 million.

This is about one-fifth to one-tenth of the total aid and reconstruction money reaching the country, says Gibril Faal, a director of GK Partners and RemitAid in London. He stresses that only a very small part of this total could be terrorist money.

"A miniscule amount, if anything, and interestingly -- to cut that story short -- the Taliban is accepted as a terrorist group; the United Nations designated it as such," he said.

"Remittances and hawala money to Afghanistan increased after the Taliban fell. And that is also in that [World Bank] story, so remittance money is not for terrorism. It is for reconstruction, welfare, and subsistence."

Many experts on international financial regulation at the conference have praised the decisive guidance governments and financial institutions have been getting from the United Nations in the form of mandatory resolutions. Richard Barrett is a coordinator of the Al-Qaeda and Taliban Monitoring Team at the UN in New York.

United Nations Help
"Yes, indeed the United Nations has been very active on the issue of terrorist financing, which is what this conference is about, since well before the attacks in 2001," he said. "Indeed, the Convention on the Financing of Terrorism was passed in December of 1999, and that was the result, of course, of a great deal of negotiation between member states."
Barrett explains that faster measures have been agreed by the Security Council, such as resolution 1373 after the terror attacks of September 11, 2001, to combat the flow of money to terrorists.

The UN has drawn up lists of suspicious companies, charities, and individuals to address the issue.

Barrett concludes that his positive assessment of the growing success in fighting terrorist financing stems from the fact that his department has been in action for a long time, since after the terrorist attacks in East Africa in 1998.

http://newswax.com/2007/07/29/world-international-community-said-successful-against-terror-financing/

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

Former Nigerian state governor sentenced on corruption charges

The Associated Press
Thursday, July 26, 2007

LAGOS, Nigeria: A court in Nigeria sentenced a former state governor to two years in jail Thursday and ordered him to forfeit properties and cash worth millions.

Dieprieye Alamieyeseigha, former governor of oil-rich Bayelsa state, pleaded guilty to six counts of corruption and money laundering before Judge Mohammed Shuaibu of the Lagos High Court. The judge sentenced him to two years jail on each count, but ruled the jail terms be served concurrently from the time of his arrest in Nigeria two years ago.

The former governor will forfeit to the government housing estates in different parts of the country, stocks worth US$7.9 million (€5.76 million) and cash in different currencies estimated to be worth several million dollars (euros).

Alamieyeseigha was first arrested and charged with money laundering in London in September 2005. He escaped from Britain while out on bail, allegedly disguised as a woman, and returned to Nigeria where he was immune from prosecution as a state governor. Within weeks, he was removed from office by his state's lawmakers and subsequently arrested and charged by Nigeria's Economic and Financial Crimes Commission.

Having spent nearly two years in jail prior to his trial, Alamieyeseigha will be eligible to be released within about a year.

Armed militants who have attacked oil installations in Nigeria's southern oil region and kidnapped foreign oil workers had listed freedom for Alamieyeseigha among their demands, saying he was singled out by former president Olusegun Obasanjo over political differences.

Since President Umaru Yar'Adua succeeded Obasanjo at the end of May, Nigeria's financial crimes agency has stepped up efforts to try several former state governors for stealing public funds while in office. At least six former governors are currently under arrest and four of them have been charged to court.

Nigeria is regularly rated one of the most corrupt countries in the world by Berlin-based anti-graft watchdog, Transparency International.

Yar'Adua on taking office pledged to fight corruption, largely blamed for widespread poverty and lack of development in Nigeria despite its oil riches.

http://www.iht.com/articles/ap/2007/07/26/africa/AF-GEN-Nigeria-Corruption.php

UK Government Strengthens Money Laundering Regulations

30 July 2007


The UK Treasury has published new regulations to strengthen its fight against money laundering and terrorist financing, both at home and abroad. The Money Laundering Regulations, which will take effect on December 15, are the result of extensive consultation with both the private sector and law enforcement, including two written consultation documents.

Kitty Ussher, the economic secretary to the UK Treasury says that these new regulations are in line with the government’s financial crime strategy and that they introduce tough and targeted new measures where the risks are greatest. She adds that the new regulations are also intended to reduce regulatory burdens for businesses and consumers in low-risk situations.

The main changes to the current regime include the following measures: extending supervision to all businesses in the regulated sector, such as estate agents, trust and company service providers and consumer credit businesses, in order to secure greater compliance with anti-money laundering controls; administering strict tests to guarantee that money services business and firms that help set up and manage trusts and companies are legitimate and not run for criminal purposes; requiring extra checks on customers that pose a higher risk of money laundering, such as foreign heads of state and non-face-to-face customers.

For low-risk businesses, under the new regulations, firms will be expected to perform fewer identity checks. There will also be greater flexibility to record-keeping rules so that firms need only keep the details that are important to them instead of whole documents.

http://www.diamondintelligence.com/magazine/magazine.asp?id=5292

UK: Businesses urged to be vigilant over money laundering

30th July 2007 17:17

Firms are being advised to exercise vigilance over money laundering and be aware of the risks of falling victim, in order to avoid considerable financial repercussions in the future.

Experts at AIS Claims and Investigation Solutions state that particular businesses should take the necessary steps to prevent money laundering from taking place, one of which should be ensuring there is a good knowledge of the client base.

According to the Money Laundering Regulations 2007 measures must be taken to prevent laundering and "compensate for higher risk", suggesting that business owners are under obligation to prevent themselves from falling victim.

"Certain businesses certainly need to pay attention to it and every business should be aware of the Money Laundering and Compliance regulations," commented Paul Champion, managing director of AIS.

Mr Champion also states that staff should be made aware of their obligations regarding money laundering regulations.

A survey from Lexis Nexis revealed that many law firms agree that new money laundering regulations will lead to increased red tape for businesses, reports the Times.

http://www.londonstockexchange.com/en-gb/pricesnews/investnews/article.htm?wbc_purpose=basic&WBCMODE=presentationunpublished?ArticleID=18228405

EFCC: Nigeria Not Suspended from Egmont Group

Economic and Financial Crimes Commission (EFCC) has debunked a media report suggesting that the Nigeria Financial Intelligence Unit, NFIU had been suspended from the Egmont Group.

A statement digned by EFCC's Head of Media and Publicity, Mr. Femi Babafemi, said that the report is misleading and embedded in falsehood, adding that Nigeria has not been suspended from the Egmont group.

The statement said further: "What might have been misinterpreted, albeit mischievously, by the reporter is a routine development in Financial Intelligence Units, (FIUs) across the world whenever there is a change of leadership at the FIU.

In the case of Nigeria Financial Intelligence Unit, (NFIU), the Unit was not suspended from the membership of Egmont Group.
Instead a precautionary step was taken to deny the former Head of the NFIU access to the anti-money laundering site while the new boss of the NFIU completes his documentation with the global body.

It should be noted that the site is a secured one where sensitive information on on-going investigations is made available to the NFIU and as such cannot be left unprotected.

The Egmont Group is a global body whose relationship with member countries is institution based and not built around individuals.

In the last one year, at least four countries which had faced a similar transition had also experienced the same development. This misleading report further underscores the need for the media to always crosscheck and confirm information especially on technical issues like this before going to press.

Source: This Day Online

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