NH Lawmaker Says State Liquor Commission Aiding Cross-Border ‘Money Laundering’

In New England, New Hampshire is well known for tax-free liquor sales, which makes the Granite State a popular destination for out-of-staters looking to stock up on alcohol.

State-run liquor outlets dot highways near the state’s borders.

But now, a politician is accusing the New Hampshire State Liquor Commission, which regulates alcohol sales, of skirting federal law.

With few exceptions, the IRS requires businesses to document when someone spends more than $10,000 in cash on a single purchase. State liquor rules also require employees to fill out this IRS documentation anytime someone is “purchasing a volume of product totaling $10,000 or more in cash, either through one or multiple related transactions.”

New Hampshire Executive Councilor Andru Volinsky alleges the agency is turning a blind eye to illegal cash transactions involving out-of-state purchasers. Volinsky claims the commission may be allowing bulk liquor buyers to evade IRS reporting requirements, or steering staffers away from documenting smaller purchases that are, in fact, part of larger buying sprees.

He says the issues were brought to his attention by liquor store employees, and he also observed some of them firsthand.

With the help of an employee who was acting as a whistleblower, Volinsky said he recently witnessed two people spend $24,000 in a series of bulk purchases— all in increments under the $10,000+ limit — paid for using “a very large wad of cash” and a credit card.

“What I personally observed on February 3, 2018 confirmed what I had been told; that is, that cash bulk sales transactions appear to be done openly, are widespread and the practice is long running,” Volinsky wrote in a letter to the New Hampshire Governor and Attorney General.

Large, illicit purchases by out-of-state residents at New Hampshire liquor stores are well-documented in recent years.

In December, a New York City man was arrested with 757 liters of liquor in his vehicle. The driver of the vehicle drove to New Hampshire, where he made purchases at five different liquor outlets in the state, according to law enforcement officials there. He was arrested in New York, and pleaded not guilty to two counts of felony tax evasion, which carry up to a four year prison sentence.

“It is clear that our state is profiting from cash bulk transactions where at least some of the cash is coming from illegal trafficking, whether in drugs, guns or humans,” Volinsky wrote in his letter. “The stories are widespread of customers arriving at stores in out-of-state trucks and SUVs with wads of cash stuffed into their pockets, money belts and socks.”

And Volinsky alleges the Liquor Commission is disregarding the practice. He points to a memo from liquor commission leadership discouraging store employees from reporting cash liquor purchases to the IRS unless they have a definitive reason to believe a customer is making a series of purchases that add up to $10,000 or more.

Volinsky claims he’s been told that state liquor store employees have been instructed not to look closely at the cars of people buying bulk liquor in cash, “to avoid learning that the customer has purchased cases of liquor at other [New Hampshire Liquor and Wine Outlet] stores.” He also claims that the liquor commission has installed cash counting machines in some of its stores, which he interprets as a further indication that the state is at some level aware of the problem.

Separately, State Employees’ Association President Rich Gulla said that liquor store employees have voiced concerns about the same issues, but fear speaking up publicly would put them at risk for retaliation from the Commission.

“They are starting to feel like a drug dealer,” Gulla said. “Because it is not common for folks to come in and drop $9,000 all on Hennessy products, and then leave and go to another store and do the same thing.”

Volinsky is now calling for an outside investigation.

The State Liquor Commission, which reported record-breaking $698.2 million in sales last year, acknowledges no such wrongdoing. In turn, the agency accuses Volinsky of conducting a “sting operation” in an attempt to turn the commission into a “political football.”

The liquor commission says “there’s nothing illegal or unscrupulous about making large sales to out of state customers as long as our employees follow the policies in place set forth by the State and federal government.”

They say the memo discouraging employees from some reporting was framed as a response to what liquor commissioners described as excessive filing patterns and potentially discriminatory practices at some of their stores. Commissioners wrote that some staff were allegedly “profiling customers” and reporting cash transactions that fell under the IRS threshold “without providing any proof of illegal activity.”

And they claim Volinsky is the one who may have broken state rules.

“Among those infractions included violating policies set to protect the security of our store, privacy of our customers and integrity of our inventory,” the liquor commission wrote in a statement. “More awkward and alarming was the three hours of video footage of the Councilor lurking around the interior, exterior and backroom of the store, and curious attempts to conceal his [sic] identity during his ‘sting operation.’ ”

The Commission also suggests that Volinsky and Gulla “allowed or pressured a long-tenured manager to continue with the sale, when they knew of the potential personnel actions that could be taken against an employee in violation of these policies.”

In Vermont, local law enforcement were notified by New York State officials to be on the lookout for vehicles carrying large quantities of liquor purchased at New Hampshire liquor stores during promotional periods.

In the last six months, Vermont Commissioner of Liquor Control Patrick Delaney says his enforcement officers made two arrests — one with an estimated $40,000 worth of New Hampshire purchased liquor in the back of an SUV, the other with an estimated $28,000 worth.

In each of those cases, Delaney believes the defendants made all-cash and reward-card based bulk purchases at multiple liquor store locations.

“By using cash, there is obviously no paper trail, if an authority were to investigate it,” says Delaney. “The activity itself is basically tax evasion.”

The two drivers allegedly violated Vermont state law, which prohibits anyone from carrying more than nine liters of distilled spirits across its state line.

Delaney adds that his agency’s focus is not on transactions taking place between New Hampshire liquor stores and their customers, but does note that the IRS did contact him about all-cash transactions in the Granite State.

The IRS would not confirm any active investigation into all-cash bulk transactions.

“While we will not discuss a particular taxpayer’s situation,” writes a spokesperson for the IRS, “we are aware of this and similar schemes being used in a variety of different forms in order to evade certain reporting requirements.”

Neither of these cases confirm Volinsky’s allegations that the New Hampshire Liquor Commission is facilitating money laundering activities, or turning a blind eye to potentially illegal bulk cash transactions. And the councilor acknowledges as much.

But ruling that out, he says, requires some kind of independent investigation.

“I don’t know that anyone has committed a crime; I don’t know that anyone is doing anything illegal,” Volinsky said on Thursday. “But there is enough here that this needs to be looked at, and you can’t count on the agency that’s being looked at to provide you the answers.”

This report comes from the New England News Collaborative, eight public media companies, including Rhode Island Public Radio, joining together to tell stories of a changing region with support from the Corporation for Public Broadcasting.

Money Laundering Via Author Impersonation on Amazon?

By: krebsonsecurity.com

https://krebsonsecurity.com/2018/02/money-laundering-via-author-impersonation-on-amazon/

Patrick Reames had no idea why Amazon.com sent him a 1099 form saying he’d made almost $24,000 selling books via Createspace, the company’s on-demand publishing arm. That is, until he searched the site for his name and discovered someone has been using it to peddle a $555 book that’s full of nothing but gibberish.

Reames is a credited author on Amazon by way of several commodity industry books, although none of them made anywhere near the amount Amazon is reporting to the Internal Revenue Service. Nor does he have a personal account with Createspace.

But that didn’t stop someone from publishing a “novel” under his name. That word is in quotations because the publication appears to be little more than computer-generated text, almost like the gibberish one might find in a spam email.

“Based on what I could see from the ‘sneak peak’ function, the book was nothing more than a computer generated ‘story’ with no structure, chapters or paragraphs — only lines of text with a carriage return after each sentence,” Reames said in an interview with KrebsOnSecurity.

The impersonator priced the book at $555 and it was posted to multiple Amazon sites in different countries. The book — which as been removed from most Amazon country pages as of a few days ago — is titled “Lower Days Ahead,” and was published on Oct 7, 2017.

Reames said he suspects someone has been buying the book using stolen credit and/or debit cards, and pocketing the 60 percent that Amazon gives to authors. At $555 a pop, it would only take approximately 70 sales over three months to rack up the earnings that Amazon said he made.

“This book is very unlikely to ever sell on its own, much less sell enough copies in 12 weeks to generate that level of revenue,” Reames said. “As such, I assume it was used for money laundering, in addition to tax fraud/evasion by using my Social Security number. Amazon refuses to issue a corrected 1099 or provide me with any information I can use to determine where or how they were remitting the royalties.”

Reames said the books he has sold on Amazon under his name were done through his publisher, not directly via a personal account (the royalties for those books accrue to his former employer) so he’d never given Amazon his Social Security number. But the fraudster evidently had, and that was apparently enough to convince Amazon that the imposter was him.

Reames said after learning of the impersonation, he got curious enough to start looking for other examples of author oddities on Amazon’s Createspace platform.

“I have reviewed numerous Createspace titles and its clear to me that there may be hundreds if not thousands of similar fraudulent books on their site,” Reames said. “These books contain no real content, only dozens of pages of gibberish or computer generated text.”

For example, searching Amazon for the name Vyacheslav Grzhibovskiy turns up dozens of Kindle “books” that appear to be similar gibberish works — most of which have the words “quadrillion,” “trillion” or a similar word in their titles. Some retail for just one or two dollars, while others are inexplicably priced between $220 and $320.

“Its not hard to imagine how these books could be used to launder money using stolen credit cards or facilitating transactions for illicit materials or funding of illegal activities,” Reames said. “I can not believe Amazon is unaware of this and is unwilling to intercede to stop it. I also believe they are not properly vetting their new accounts to limit tax fraud via stolen identities.”

Reames said Amazon refuses to send him a corrected 1099, or to discuss anything about the identity thief.

“They say all they can do at this point is send me a letter acknowledging than I’m disputing ever having received the funds, because they said they couldn’t prove I didn’t receive the funds. So I told them, ‘If you’re saying you can’t say whether I did receive the funds, tell me where they went?’ And they said, “Oh, no, we can’t do that.’ So I can’t clear myself and they won’t clear me.”

Amazon said in a statement that the security of customer accounts is one of its highest priorities.

“We have policies and security measures in place to help protect them. Whenever we become aware of actions like the ones you describe, we take steps to stop them. If you’re concerned about your account, please contact Amazon customer service immediately using the help section on our website.”

Beware, however, if you plan to contact Amazon customer support via phone. Performing a simple online search for Amazon customer support phone numbers can turn up some dubious and outright fraudulent results.

Earlier this month, KrebsOnSecurity heard from a fraud investigator for a mid-sized bank who’d recently had several customers who got suckered into scams after searching for the customer support line for Amazon. She said most of these customers were seeking to cancel an Amazon Prime membership after the trial period ended and they were charged a $99 fee.

The fraud investigator said her customers ended up calling fake Amazon support numbers, which were answered by people with a foreign accent who proceeded to request all manner of personal data, including bank account and credit card information. In short order, the customers’ accounts were used to set up new Amazon accounts as well as accounts at Coinbase.com, a service that facilitates the purchase of virtual currencies like Bitcoin.

This Web site does a good job documenting the dozens of phony Amazon customer support numbers that are hoodwinking unsuspecting customers. Amazingly, many of these numbers seem to be heavily promoted using Amazon’s own online customer support discussion forums, in addition to third-party sites like Facebook.com.

Interestingly, clicking on the Customer Help Forum link link from the Amazon Support Options and Contact Us page currently sends visitors to the page pictured below, which displays a “Sorry, We Couldn’t Find That Page” error. Perhaps the company is simply cleaning things up after being notified last week by KrebsOnSecurity about the bogus phone numbers being promoted on the forum.

 

U.S. Bank Cited by Federal Authorities for Lapses on Money Laundering

U.S. Bank, the fifth-largest commercial bank by assets in the United States, was charged by the federal authorities on Thursday with failing to guard against illegal activity and, in at least one instance, even abetting it.

The Justice Department accused U.S. Bank, which is based in Minneapolis, of severely neglecting anti-money laundering rules, helping a payday lender operate an illegal business and lying to a regulator about its plans for tracking potential criminal activity by bank customers.

Federal prosecutors in Manhattan reached an agreement with U.S. Bank to defer prosecution as long as the bank could show it had improved its monitoring of customer transactions. To settle the Justice Department charges and cases brought by other regulators, the bank agreed to pay various fines and penalties totaling $613 million.

In a statement, the bank’s chief executive, Andy Cecere, said that U.S. Bank had already made “significant investments” toward improving its program for combating money-laundering.

“Our culture of ethics and integrity demands that we do better,” he said.

The action against U.S. Bank was modest compared with cases involving banking giants like HSBC and Standard Chartered that the authorities found had done business with drug gangs and countries like Cuba and Iran that had been barred from the United States financial system under international sanctions. In 2012, for instance, federal prosecutors settled a money-laundering case against HSBC for $1.9 billion.

Unlike the earlier cases, the one involving U.S. Bank focused mainly on warning signs that the bank was ignoring.

For about five years, senior bank employees tried to balance their security system’s constant alerts about suspicious customer activity against internal staffing limitations, the authorities said. In a late-2009 memo, court documents show, U.S. Bank’s anti-money-laundering officer warned the chief compliance officer that employees responsible for investigating the alerts were “stretched dangerously thin.”

But senior bank officials knew they should not be curtailing money-laundering inquiries just because they did not have enough employees, so they hid the practice from federal bank examiners, according to prosecutors. One U.S. Bank employee left references to the staffing problem out of the minutes of internal meetings, fearful of what regulators would think, the Justice Department said. Tests of the alert system were halted after they showed that the bank had failed to report suspicious customer activity to regulators.

Dana Ripley, a U.S. Bank spokesman, said that most of the senior employees involved in the practices at issue had left by 2014, when the bank overhauled its anti-money laundering program.

Jeffrey Alberts, a former federal prosecutor who specializes in issues related to white-collar crime and bank regulation, said that scrutinizing potential criminal activity was a challenge for banks. “There’s no level of monitoring you can impose that will catch every single suspicious transaction,” he said.

Mr. Alberts, a partner in the law firm Pryor Cashman, said that banks often struggled to determine how precisely they needed to monitor customer transactions to satisfy regulators. Nonetheless, he said after reviewing the charges, “there are some things that are alleged here that sound clearly wrong.”

For example, prosecutors said the bank had failed to report strange behavior by one longtime customer, Scott Tucker, who was convicted in federal court in October of charges stemming from an illegal payday lending business he operated.

According to the charges announced on Thursday, the bank kept open numerous accounts controlled by Mr. Tucker even after it received a subpoena from regulators for information about him. Mr. Tucker was using corporate accounts whose ownership he misrepresented to pay for millions of dollars spent on personal items like a vacation home in Aspen, Colo., and a Ferrari racing team.

The Justice Department did not identify individual U.S. Bank employees in connection with the case.

Indian authorities are probing a bank fraud case for potential money laundering

India’s Enforcement Directorate, a government agency that fights financial crime, will probe the possibility of money laundering in a $1.77 billion fraud case at the state-run Punjab National Bank (PNB), a finance ministry official said on Thursday.

PNB, the country’s second-largest state-run lender with assets of $120 billion, said in a regulatory filing that the fraud benefited “a few select account holders,” and that it has reported the matter to law enforcement agencies.

This was an isolated case of banking fraud and would be investigated by federal agencies, the finance official told Reuters. He declined to be named as he was not authorized to speak to media.

Separately, India’s Axis Bank said on Thursday that it had dealt in transactions that had been guaranteed with letters of undertaking from Punjab National Bank, but has since sold those transactions.

Shares in PNB, which fell 10 percent on Wednesday, were down more than 5 percent in early trading on Thursday.

Latvian Bank Faces U.S. Ban Over Money-Laundering Concerns

The U.S. Treasury Department took the severe step Tuesday of proposing to ban Latvia’s third-biggest bank from the American financial system, saying it helped process illicit transactions, including for entities with alleged ties to North Korea’s ballistic missile program.

Financial institutions in the U.S. would be barred from maintaining correspondent accounts for ABLV Bank AS, effectively ending its ability to transact in U.S. dollars, according to the Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN. ABLV had allowed transactions on behalf of blacklisted entities tied to North Korea’s effort to develop nuclear weapons, as well as corruption in Russia and the Ukraine, the department said.
“ABLV has institutionalized money laundering as a pillar of the bank’s business practices,” Sigal Mandelker, the Treasury Department’s undersecretary for terrorism and financial intelligence, said in a speech Tuesday to compliance executives at a conference in New York. “We are resolved to use our economic authorities to take action against foreign banks that disregard anti-money-laundering safeguards and become conduits for widespread illicit activity.”
The U.S. Treasury relied on “unfounded and misleading information” in reaching its findings and didn’t take into account advances ABLV has made to prevent money laundering and terrorism financing, the bank said in a statement posted on its website.
The bank “shall make every care to rebut this outrageous defamatory information,” it said.

ABLV has 60 days to submit written objections to the finding. U.S. Treasury Secretary Steven Mnuchin has the final say on the imposition of the ban.

Latvia’s bank regulator said it’s cooperating with the European Central Bank, which directly supervises ABLV, and called on the bank to actively communicate with its clients.

ABLV is the 18th financial institution to be designated as a primary money-laundering concern by the Treasury Department since a law giving it authority to do so was passed in 2001. The most recent designation before ABLV was China’s Bank of Dandong in July. It was named for allegedly providing a gateway for North Korea to access the U.S. and international financial systems.

The U.S. made broad-based allegations about ABLV’s lack of anti-money-laundering controls and highlighted its recent transactions on behalf of entities related to North Korea. “ABLV facilitated transactions related to North Korea after the bank’s summer 2017 announcement of a North Korea ‘No Tolerance’ policy,” FinCEN wrote in a notice of proposed rulemaking.

Global Bank Pullback

As global banks have cut international services amid tighter regulations, steeper fines and declining profitability, Latvian banks as a group have seen access to the U.S. dollar tighten. JPMorgan Chase and Co. ceased offering dollar-clearing services in 2013 and Deutsche Bank stopped dealing with Latvian lenders last year. As a result, banks like ABLV have had to rely on other institutions that have accounts with New York-based lenders to transfer U.S. dollars.

Latvia’s banking regulator has also imposed tighter rules, record fines and annual checks for those working with foreign clients as part of an effort to shake off a reputation that the country’s institutions hold wealth with questionable origins.

The tighter dollar-clearing services have coincided with a series of money-laundering allegations. The Latvian regulator fined three banks a total of 5.5 million euros ($6.8 million) for handling accounts that were involved in a $1 billion Moldovan fraud in 2014, equivalent to about an eighth of that nation’s economic output at the time.

Five Latvian banks agreed last year to fines totaling 3.5 million euros for failing to perform adequate due diligence and gather sufficient information on transactions and beneficiaries of deals linked to North Korea.

ABLV, like the rest of the bank sector that primarily serves foreigners, has lost deposits due to the stricter enforcement regime.

The Latvian lender opened a subsidiary in Luxembourg in 2012, and ABLV Advisory Services opened an office in the U.S. in 2016. It also has representative offices in Moscow, St. Petersburg, Russia; Kiev, Ukraine; Odessa, Ukraine; central Asia, and Hong Kong.

Former Venezuelan Officials Charged With Money Laundering at PDVSA​​​​​​​

The U.S. Justice Department charged several former Venezuelan officials with participating in a money-laundering scheme at state oil company Petroleos de Venezuela SA.

The five include Nervis Villalobos, the country’s former deputy energy minister, and Luis De Leon, a dual citizen of Venezuela and the U.S. who is a former financial director of a PDVSA affiliate, according to an indictment from August that was unsealed Monday. De Leon and Villalobos are also each charged with one count of conspiracy to violate the Foreign Corrupt Practices Act.
The charges are part of the Justice Department’s wide-ranging investigation of allegations of corruption in Venezuela. The scheme began amid the nation’s boom years under socialist President Hugo Chavez and continued after his death in 2013, when Nicolas Maduro took over.
Four of the defendants, De Leon, 41, Villalobos, 50, Cesar Rincon, 50, and Rafael Ernesto Reiter, 39, were arrested in Spain in October 2017 on warrants based on the 20-count indictment filed in Houston on Aug. 23.
Cesar Rincon was extradited from Spain on Feb. 9, and made his initial appearance Monday before U.S. Magistrate Judge Stephen Smith. De Leon, Villalobos and Reiter remain in Spanish custody pending extradition. A fifth defendant, Alejandro Isturiz, 33, remains at large.

Brazilian man is jailed for three years for stashing $20MILLION laundered through a billion-dollar pyramid scheme in a BOX SPRING

A Brazilian money launderer who stashed nearly $20 million in cash in a box spring has been sentenced to almost three years in a federal prison.

Cleber Rene Rizerio Rocha, 28, was sentenced Thursday in a Boston federal court after pleading guilty in October to money laundering and conspiracy charges.

The money was found in Westborough in January 2017 during an investigation into TelexFree Inc., a defunct internet telecom company claiming to sell voice-over-internet telephone service that prosecutors say was actually a billion-dollar pyramid scheme.

TelexFree made little to no money selling its service while taking in millions of dollars from thousands of people who paid to sign up to be ‘promoters’ and post ads online for it, prosecutors said.

The company, which was founded by U.S. citizen James Merrill and Brazilian national Carlos Wanzeler, collapsed in 2014.

It inflicted more than $3billion in losses on nearly 1.89million people worldwide,

Merrill was arrested in 2014. He was sentenced in March to six years in prison after pleading guilty to conspiracy and fraud charges.

Wanzeler fled to Brazil in 2014, where he cannot be extradited from, leaving behind tens of millions of dollars he laundered from TelexFree accounts, prosecutors said.

Rocha was a courier for a fugitive TelexFree executive who came to retrieve the money to move it out of the U.S., authorities said.

In 2015, Leonardo Casula Francisco, Wanzeler’s nephew, asked someone who became a cooperating witness to help transfer cash generated from the scheme that Wanzeler had hidden in the greater Boston area out of the United States, prosecutors said.

The pair agreed someone would be sent to the United States to deliver the money in increments to the witness, who would send it to accounts in Hong Kong where it would be transferred to Brazil, prosecutors said.

In December, Casula sent Rocha to the United States to deliver money to the witness, an indictment said.

This witness was in fact cooperating with authorities working on the case, Telegram.com notes.

After a January 4 meeting in a parking lot where Rocha gave the cooperating witness $2.2million in a suitcase, federal agents followed Rocha to a Westborough, Massachusetts, apartment complex, prosecutors said.

They said that after Rocha was arrested, he helped agents locate the apartment, where they found roughly $20million hidden under a mattress.

His charges each carried up to 20 years in prison, but prosecutors previously agreed to recommend a 40-month term based on his cooperation in the case.

His sentence ended up being 33 months in prison followed by a year of supervised release.

 

Rabobank Will Pay $369 Million Over Drug Money Laundering On Mexican Border

SAN DIEGO (AP) – Dutch lender Rabobank’s California unit agreed Wednesday to pay $369 million to settle allegations that it lied to regulators investigating allegations of laundering money from Mexican drug sales and organized crime through branches in small towns on the Mexico border.

The subsidiary, Rabobank National Association, said it doesn’t dispute that it accepted at least $369 million in illegal proceeds from drug trafficking and other activity from 2009 to 2012.

It pleaded guilty to one count of conspiracy to defraud the United States for participating in a cover-up when regulators began asking questions in 2013.

The penalty is one of the largest U.S. settlements involving the laundering of Mexican drug money, though it’s still only a fraction of the $1.9 billion that Britain’s HSBC agreed to pay in 2012.

It surpasses the $160 million that Wachovia Bank agreed to pay in 2010.

Under the agreement, the company will cooperate with investigators.

The settlement describes how three unnamed executives ignored a whistleblower’s warnings and orchestrated the cover-up. Two of the executives were fired in 2015 and one retired that year.

The federal government agreed not to seek additional criminal charges against the company or recommend special oversight.

“Settling these matters is important for the bank’s mission here in California,” said Mark Borrecco, the subsidiary’s chief executive.

In 2010, Mexico imposed new limits on cash deposits at the country’s banks, prompting tainted deposits at Rabobank branches in Calexico and Tecate, according to the plea agreement.

Accounts in the two border towns soared more than 20 percent after Mexico’s crackdown, and bank officials knew the money was likely tied to drug trafficking and organized crime, authorities said.

Risky customers escaped scrutiny, including one in Calexico who funneled more than $100 million in suspicious transactions. Customers in Tecate withdrew more than $1 million in cash a year from 2009 to 2012, often in amounts just under federal reporting requirements.

“The cartels probably thought these were sleepy towns, no one’s going to notice,” said Dave Shaw, head of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in San Diego. “When you bring in $400 million, someone is going to notice. The bank should have known and they just chose not to report any suspicious activity.”

Heather Lowe, legal counsel and government affairs director at research and advocacy group Global Financial Integrity, said the illegal activity bore similarities to what happened with HSBC and Wachovia.

But those banks were charged with laundering Mexican drug proceeds, while Rabobank only acknowledged covering it up.

“It seems in this case we have the bank taking the hit for lying but not for the violations themselves,” said Lowe, who anticipates the three unnamed executives will be prosecuted.

The government has a cooperating witness in former compliance officer George M. Martin, who agreed in December to cooperate with authorities in a deal that delayed prosecution for two years.

Martin, a vice president and anti-money laundering investigations manager, acknowledged he oversaw policies and practices that blocked or stymied probes into suspicious transactions and said he acted at the direction of supervisors, or at least with their knowledge.

Martin told investigators that he and others allowed millions of dollars to pass through the bank.

Rabobank, based in Utrecht, Netherlands, said last month that it set aside about 310 million euros ($384 million) to settled allegations against its subsidiary. Sentencing is scheduled May 18.

Rabobank to pay $369 million in money-laundering case

Dutch lender Rabobank’s California unit agreed Wednesday to pay $369 million to settle allegations that it lied to regulators investigating allegations of laundering money from Mexican drug sales and organized crime through branches in small towns on the Mexico border.

The subsidiary, Rabobank National Association, said it doesn’t dispute that it accepted at least $369 million in illegal proceeds from drug trafficking and other activity from 2009 to 2012. It pleaded guilty to one count of conspiracy to defraud the United States for participating in a cover-up when regulators began asking questions in 2013.

The penalty is one of the largest U.S. settlements involving the laundering of Mexican drug money, though it’s still only a fraction of the $1.9 billion that Britain’s HSBC agreed to pay in 2012. It surpasses the $160 million that Wachovia Bank agreed to pay in 2010.

Under the agreement, the company will cooperate with investigators. The federal government agreed not to seek additional criminal charges against the company or recommend special oversight.

The settlement describes how three unnamed executives ignored a whistleblower’s warnings and orchestrated the cover-up. Two of the executives were fired in 2015 and one retired that year.

“Settling these matters is important for the bank’s mission here in California,” said Mark Borrecco, the subsidiary’s chief executive.

In 2010, Mexico proposed new limits on cash deposits at the country’s banks, resulting in more tainted deposits at Rabobank branches in Calexico and Tecate, according to the plea agreement. Accounts in the two border towns soared more than 20 percent after Mexico’s crackdown, and bank officials knew the money was likely tied to drug trafficking and organized crime.

Risky customers escaped scrutiny, including one in Calexico who funneled more than $100 million in suspicious transactions. Customers in Tecate withdrew more than $1 million in cash a year from 2009 to 2012, often in amounts just under federal reporting requirements.

“The cartels probably thought these were sleepy towns, no one’s going to notice,” said Dave Shaw, head of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in San Diego. “When you bring in $400 million, someone is going to notice. The bank should have known and they just chose not to report any suspicious activity.”

Heather Lowe, legal counsel and government affairs director at research and advocacy group Global Financial Integrity, said the illegal activity bore similarities to what happened with HSBC and Wachovia.

But those banks were charged with laundering Mexican drug proceeds, while Rabobank only acknowledged covering it up.

“It seems in this case we have the bank taking the hit for lying but not for the violations themselves,” said Lowe, who anticipates the three unnamed executives will be prosecuted.

A whistleblower executive alerted two of the three executives to suspicious activity in 2012 and shared her concerns with the bank’s “executive management group,” according to the plea agreement. She also spoke with regulators amid concerns in the company that the government scrutiny could endanger a pending merger. She was fired in July 2013.

The government has a cooperating witness in former compliance officer George M. Martin, who agreed in December to cooperate with authorities in a deal that delayed prosecution for two years.

Martin, a vice president and anti-money laundering investigations manager, acknowledged he oversaw policies and practices that blocked or stymied probes into suspicious transactions and said he acted at the direction of supervisors, or at least with their knowledge.

Martin told investigators that he and others allowed millions of dollars to pass through the bank.

Rabobank, based in Utrecht, Netherlands, said last month that it set aside about 310 million euros ($384 million) to settled allegations against its subsidiary. Sentencing is scheduled May 18.

Former attorney sentenced to 7 years in prison for money laundering

ALEXANDRIA, Va. – A former attorney was sentenced Friday to seven years in prison for conspiring to launder more than $2 million dollars derived from a business email compromise scheme and for attempting to launder funds he believed to be proceeds from alien smuggling and firearms trafficking. This case was investigated by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C.

According to court documents, from at least March 2013 to February 2017, Raymond Juiwen Ho, 48, of Vienna, engaged in a large-scale money laundering scheme that resulted in millions of dollars being moved through bank accounts (some of which were attorney trust accounts) that Ho or his co-conspirators controlled. Specifically, between July and November 2014, Ho participated in a conspiracy in which co-conspirators sent emails from compromised or imitation accounts that duped victims into transferring money to accounts controlled by Ho and others. Ho then laundered these stolen funds, moving them through and to accounts located in the United States and abroad. Ho, who recruited others to aid his laundering activities, laundered more than $2 million in unlawfully obtained funds.

Ho engaged in his money laundering business despite multiple instances of banks closing his accounts due to fraud and inquiries by law enforcement. Eventually, in November 2015, HSI initiated an operation in which undercover HSI special agents sought Ho’s assistance in moving the proceeds of human smuggling and firearms trafficking between bank accounts located in the United States and overseas. Ho engaged in four such transactions between December 2015 and June 2016, involving more than $175,000 he believed to be the proceeds of illegal smuggling and trafficking activity.

Throughout the criminal conduct described above, Ho was a practicing attorney for an intellectual property law firm based in Washington, D.C. As part of this case, he has surrendered his bar licenses from Georgia and the District of Columbia.

https://www.ice.gov/news/releases/former-attorney-sentenced-7-years-prison-money-laundering