Hiding in plain sight: Why Hong Kong is a preferred spot for North Korea’s money launderers

By Joshua Berlinger, CNN

http://www.cnn.com/2017/10/16/asia/hong-kong-north-korea/index.html

Hong Kong (CNN)Easey Commercial Building is an unassuming mid-rise office tower on Hennessy Road, an artery that runs through Hong Kong’s busy Wan Chai district. The structure sits among scenery that’s classic Hong Kong: bright lights, tall buildings, people rushing about.

But camouflaged in the normalcy is a business that seemingly exists in name only.
At least, Unaforte is supposed to be there. That is the address listed on its publicly available corporate filings provided to the Hong Kong government. When CNN visited the office, it found neither Unaforte nor its listed company secretary, Prolive Consultants Limited.
Instead, room 2103 was home to a seemingly unrelated company: Cheerful Best Company Services. Only one man was there when CNN stopped by, and he said a representative for Prolive Consultants only comes by every so often to pick up mail. He had not heard of Unaforte.
The United Nations Panel of Experts on North Korea — the body charged with monitoring sanctions enforcement on the hermit nation — said in two recent reports that Unaforte opened and owned a bank in the North Korean city of Rason. That is likely a violation of the latest UN Security Council resolution banning joint international ventures with North Korea, according to Christopher Wall, a lawyer who specializes in international trade law and a partner at Pillsbury Winthrop Shaw Pittman in Washington, DC.
Unaforte is not unique. It’s just one of a handful of front companies identified by the United Nations, nongovernmental analysts and US law enforcement that help North Korea access the global financial system.
Front companies — also known as shell companies — are legitimate corporations that do not possess significant assets or maintain active business operations. Some serve licit business purposes — helping foreign companies establish a foothold in overseas markets, for one, or reap foreign tax benefits. Others help to conceal the true ownership of a business or the parties involved in illicit transactions.
Here’s an example: say business A wants to sell business B something potentially unlawful, like military-grade hardware. If investigators were already monitoring business A, business B could pay a front company for the weapons instead of business A. Or business B could create its own front company to pay business A’s front company, making the network even bigger and more nebulous.
North Korea is believed to use these types of practices to cover up much of its trade, from selling coal and fuel to exporting weapons.
“The (North Korean) regime accesses the international financial system through front companies and other deceptive financial practices in order to buy goods and services abroad,” Sigal Mandelker, the undersecretary for terrorism and financial intelligence at the US Department of the Treasury, said in Senate testimony on September 28.
Hong Kong is one of two business jurisdictions (along with the British Virgin Islands) where the UN Panel of Experts on North Korea has seen the largest share of North Korean-controlled front companies operating, said Hugh Griffiths, the panel’s coordinator.
“You can just count them up in our reports — Hong Kong is the preponderance,” Griffiths told CNN.
The city is no stranger to those looking to make a quick buck by skirting the law, whether it was the pirates who roamed the South China Sea in the 16th century or the Triads who spread their tentacles following Chinese Civil War, while the city was still under British control.
Today, Hong Kong is governed as a special administrative region of China. When the British handed control of the city to Beijing in 1997, the agreement was to run Hong Kong according to a policy known as “one country, two systems.” It promised Hong Kongers their own political system — with more individual liberties, market freedoms and lax corporate oversight and reporting requirements — would in large part continue as is, but Hong Kong would become part of China.
“It should come as no surprise that Hong Kong is featured so prominently in our report,” Griffiths said. “It’s the closest major international financial center to North Korea. It’s the closest major offshore international financial center to North Korea. And historically, it’s been a center of global and regional trade … and with fewer questions asked and looser regulation than, say, Beijing.”
CNN reached out to both Hong Kong police and its Joint Financial Intelligence Unit for comment on the United Nations reports, Unaforte and shell companies in Hong Kong altogether and was told “police do not comment on individual case(s).”

A secretary and a director

When Unaforte’s company particulars show up in Hong Kong’s publicly available corporate records, the name of just one individual appears. He holds a passport from the small Caribbean island of Dominica. A passport number is there, but not a phone number.
Those details shed light on Hong Kong’s incorporation requirements. To start a company in Hong Kong, one needs at least one director (has to be an actual person) and a company secretary (which can either be a person or another company, but must be based in Hong Kong), according to the Companies Registry website.
Though the company’s registered office must be in Hong Kong, they are allowed to share an office with their company secretary and neither technically has to operate out of that address, an official with the Hong Kong Companies Registry told CNN on the phone. But doing that is considered a “red flag” for money laundering investigators.
“These practices, while legal, lend themselves to North Korean efforts to camouflage the real identity and nationality of those who stand behind these registered entities,” said Griffiths.
C4ADS, a Washington-based nonprofit firm which conducts data-driven analysis of security issues, identified 160 North Korean front companies in Hong Kong in a 2016 report. And Sayari Analytics, another firm that uses open data to monitor the connections between firms, has identified more than 100 entities in Hong Kong linked to sanctioned North Korean ones.
The system wasn’t designed for wrongdoing; rather, it makes Hong Kong an easy place for companies abroad do business, as they do not have to incur the cost of setting up a new shop, according to David Webb, a former investment banker who is now a Hong Kong-based activist investor.
“It’s common and it’s not a sign of wrongdoing itself,” Webb said.
To service offshore clients, there are plenty of secretarial services that provide company directors abroad with assistance. They often serve as company secretaries for their clients.
Prolive Consultants, the company secretary for Unaforte, appears to be one such company.
“As a company that offers secretarial services, we do not interfere with our clients’ business. What we do is just to help collect clients’ business registration certificates and forms, assist them,” said Amy Lam with Prolive Consultants, whose phone number CNN obtained after visiting the Easey Building office.
When asked by CNN what type of business Unaforte is engaged in, Lam said: “We do not interfere with what kind of business our client does. Whether they are successful or not, or whether their business is profitable or not, we don’t know.”

Ledgers and credits

The sale of about $6 million worth of refined sugar in 2009 helped bring another company doing business with Pyongyang to the attention of American authorities.
North Korea was ostensibly doing something simple: buying a food staple. But they did it through a complicated, labyrinthine transaction involving North Korea, Dandong Hongxiang Industrial Development (DHID), a bank and a Canadian company, according to a 2016 criminal complaint.
That’s because if companies like DHID or Unaforte are doing business in dollars, it means their transactions are likely to go through the United States at some point (unless they’re conducted in cash).
Companies that are sanctioned in most cases cannot easily conduct transactions in the dollar, as US banks have to back those deals and would filter and flag sanctioned entities, Anthony Ruggiero, an expert in the use of targeted financial measures at the Foundation for the Defense of Democracies, told CNN.
The DHID charges revealed that to get around US prying eyes, North Korea uses a complex ledger and credit scheme to hide North Korea’s involvement in dollar transactions, Ruggiero explained to Congress in September.
Thirteen of DHID’s front companies were located in Hong Kong. Eleven shared the same registered address in Wan Chai, less than a kilometer away from the Easey Commercial Building, the indictment said.

Weinstein Co. president linked to felon’s money laundering case

By Gene Maddaus, Variety

https://pagesix.com/2017/10/13/weinstein-co-president-linked-to-felons-money-laundering-case/

David Glasser has been Harvey Weinstein’s right-hand man for the better part of a decade. Now, after Weinstein’s spectacular downfall in a sex harassment scandal this week, Glasser has been put in charge of the mogul’s imploding entertainment company alongside Weinstein’s brother, Bob.

But Glasser, who serves as president and chief operating officer of the Weinstein Co., has long been dogged by legal issues that date back more than two decades. In the most serious case, Glasser’s former company was used to launder the proceeds of a massive stock manipulation scheme which, according to federal prosecutors, was connected to the Genovese crime family. The mastermind of the scheme, Roy Ageloff, pleaded guilty to securities fraud and was sentenced to eight years in prison. Ageloff also helped launch Glasser’s career as a producer, and even tried to produce a film with Glasser about his own life, to be titled “Sold Short.” Glasser was never charged with a crime.

Glasser’s legal problems have hindered his Hollywood career in the past. Two years ago, Glasser announced he would be leaving the Weinstein Co. to seek a “new opportunity.” A few weeks later, he reversed course and announced that he would stay on. According to sources familiar with the matter, Glasser was offered a top executive role at DreamWorks Animation. But after digging into his past, DreamWorks rescinded the offer. The sources say the board felt that Glasser’s legal troubles made it impossible for him to hold an executive job at a publicly traded company.

In a statement to Variety, Glasser says he was 24 when he met Ageloff and was unaware of his misconduct. He also denies that DreamWorks had rescinded the offer due to his legal issues. “This is simply not true, a rumor and you have no one on the record,” he says.

The revelations come as the Weinstein Co.’s future is teetering on the brink of collapse. Industry insiders are speculating about the company’s ability to produce projects, a possible sale or bankruptcy filing, and whether Glasser and Bob Weinstein may be the next to depart. Glasser tells Variety that he has not yet accepted the board’s offer to run the company, and is still weighing whether to stay.

A former child actor, Glasser broke into the producing business in the mid-1990s. In 1997, his company, Cutting Edge Entertainment, produced a film entitled “Fait Accompli.” One of the actors was Ageloff, who played the role of “Murt.” According to federal court filings, Ageloff invested $3.5 million in Cutting Edge in 1997 and 1998. He would go on to have a half dozen minor roles in films, all but one of which were produced by Glasser.

By 1997, Ageloff was already infamous on Wall Street for running high-pressure boiler rooms that touted obscure stock offerings. Ageloff and his partner, Robert Catoggio, ran the brokerage firm of Hanover Sterling, which employed more than 100 brokers in offices in Manhattan and Boca Raton, Florida. In July 1996, Fortune called Hanover a “lowlife brokerage firm,” and noted that the FBI was looking into questionable IPOs. Ageloff and his associates were indicted in June 1999, and accused of swindling investors out of $150 million in a series of “pump and dump” schemes. Prosecutors alleged that Catoggio funneled millions of dollars in proceeds to a captain in the Genovese crime family, whose stepson was one of the brokers who pleaded guilty. Ageloff pleaded guilty in 2000 and was sent to a medium-security prison in Florida in 2001.

At some point, Ageloff came up with an idea for a movie called “Sold Short,” about his career in the brokerage business. He turned to Glasser to produce it. According to a deal memo dated January 2002 — that is, a few months after Ageloff entered prison — Glasser agreed to make the film with a budget between $10 to $25 million. Glasser would pay Ageloff a producer fee of $500,000 upon commencement of principal photography. The film was never made.

According to Glasser, he produced only two films with Ageloff — “Fait Accompli” and “In the Shadows” — and did not become aware of Ageloff’s criminal conduct until much later.

“Years later we found out that he was being indicted for stock fraud on a old business that he had,” Glasser says. “Years later I was contacted by the team who prosecuted him, interviewed and they went through all my emails, correspondence and contracts. It was concluded that I had done nothing wrong other than got in business with the wrong guy and next time I should make sure I know where these investments are coming from. I was young and did nothing wrong here and in hindsight (I) learned a valuable lesson on vetting your investors.”

In September 2002, Glasser signed a note agreeing to pay $1.5 million by 2004 to the Ageloff Education Irrevocable Trust, which Ageloff set up to benefit his children. According to court records, Glasser put up 20% of his new company, Splendid Pictures, as collateral in the deal. A few months later, Glasser took a 20% equity stake in another company, a distributor named Syndicate Films International. Under a confidential agreement, he pledged to give Ageloff half of his proceeds from his stake in the company. The Ageloff trust later filed a federal suit against Glasser, alleging that he failed to pay the debt when it came due. Glasser did not contest the lawsuit, and a default judgment was entered in the amount of $1,622,821.

In 2008, shortly before Ageloff was to be released, federal prosecutors in Florida brought another case against him, alleging that he had hidden assets from the government and laundered money. The indictment does not name Glasser, but it does reference the $3.5 million investment of tainted money into “various movie productions” in 1997 and 1998.

Ageloff pleaded guilty to money laundering and was sentenced to an additional five years behind bars. According to the plea agreement, his brother, Michael, received $160,000 in “movie money” in August 2002 from “an unindicted co-conspirator,” who is not named. The plea also states that Michael Ageloff received a $500,000 payout in 2003 from the sale of Cutting Edge Entertainment. He received two checks, in the amounts of $300,000 and $200,000, which the government alleged was part of the money laundering scheme.

Ageloff’s attorney, Daniel Brodersen, addressed the $3.5 million in movie investments in a pre-sentencing memorandum, arguing that New York prosecutors were aware of it when Ageloff entered his original plea in 2000. “Not all of the monies that the Defendant invested constituted illegal proceeds,” Brodersen wrote. “Furthermore, this investment and the Defendant’s corresponding interest in Cutting Edge Entertainment was fully disclosed to the court, the probation office, and the prosecution in the Eastern District of New York.”

“There has never been any attempt on the part of the Defendant to conceal these monies, his interest in Cutting Edge Entertainment, and the fact that he was defrauded by David C. Glasser, with whom he invested those funds in 1997,” Brodersen wrote.

Under the plea deal, Ageloff forfeited the $1.6 million judgment to the U.S. government.

“The United States was able to identify funds that flowed from that Ageloff trust account to Glasser,” says Dan Eckhart, the former federal prosecutor who handled the case. “Ageloff admitted the trust contained proceeds from his criminal activity in his plea agreement, and we were able to forfeit those assets.”

Glasser was not prosecuted, nor were others who allegedly received tainted money from Ageloff in the laundering case.

“If these weren’t proceeds involved in money laundering, the government wouldn’t have been able to seize them and obtain a forfeiture judgment,” says Eckhart, who is now a criminal defense attorney in Orlando.

Since then, Glasser has been paying down the debt to the government.

Glasser has been sued many other times over the years. Alec Baldwin sued him in 2001, alleging that he and other talent on “The Devil and Daniel Webster” had not been paid. The suit was later withdrawn, and the film was released several years later under a different title. In a 2002 interview with Variety, Glasser said he had always paid up eventually. His motto, he said, was “Be guilty of being late. Don’t be guilty of screwing someone.”

Glasser’s career moved ahead in spite of these issues. He took a job at Yari Film Group, which would later produce the movie “Crash.”

In 2005, Glasser met an investor named Jeff Cooper. In a meeting at Yari Film Group, he urged Cooper to invest in a new film venture, called Hi-Def Entertainment, which would be run by Glasser’s younger brother Phillip, who lived in Tennessee.

“He put on a dog and pony show,” Cooper recalls. “It was one lie after the other.”

Cooper says that he put faith in Glasser’s connections in the industry, and says that Glasser said he could divert promising material from Yari to Hi-Def.

“David was the key man,” Cooper says. “I wouldn’t have done it if it wasn’t for David.”

The only thing that ever came out of the company was a forgettable Jamie Kennedy film, “Kickin’ It Old School.” In 2008, Glasser left Yari Film Group for the Weinstein Co.

“When the opportunity with Harvey came along, Hi-Def Entertainment and I were left sucking pond water,” Cooper says.

Cooper says the recent revelations about Weinstein helped him understand why Glasser fit in there. When the two were at the Cannes Film Festival in 2005, he remembers Glasser making numerous vulgar remarks to women.

“We’d be in a car going down the street, and he’d be shouting obscenities to every girl we passed,” Cooper says. “It was totally unprofessional,” he says, adding that he felt pressured not to raise objections. “I turned the other cheek to it — business is business.”

Cooper lost his entire $500,000 investment, and sued for fraud. The case ultimately settled for a confidential amount.

Glasser disputes Cooper’s account, saying he only met him once and never promised anything.

“[T]his was thrown out of court three times,” Glasser says. “I finally settled with him for a tiny amount as this was a nuisance.”

He also adamantly denies Cooper’s claim about harassing women at Cannes.

Bob Yari, the president of Yari Film Group, had fonder memories of Glasser, who ran foreign sales for him for several years.

“He’s a real go-getter,” Yari says. “He was made for this business, in my opinion.”

Yari says he was well aware of Glasser’s reputation for lawsuits when he hired him.

“I spent a lot of time analyzing it and actually working with him to change those past ways,” Yari says. “I don’t think he was a wrongdoer. He was a wheeler-dealer and got himself into a lot of trouble.”

Intel launches AI-enabled anti-money laundering adviser

http://www.zdnet.com/article/intel-launches-ai-enabled-anti-money-laundering-advisor/

Ben Fox Rubin/CNET

Leveraging the technology it gained via its 2015 acquisition of Saffron, Intel on Wednesday launched the Saffron anti-money laundering (AML) Advisor — the first product on the market, Intel says, to use “associative memory” AI for the financial services sector.

Intel Saffron’s associative memory AI mimics the way the human brain learns and creates new associations, and then recalls connected information. It can fuse together associated information from different data stores, surfacing similarities and anomalies that otherwise would’ve remained hidden.

Utilizing associative memory, the AML Advisor promises to detect financial crime by unifying structured and unstructured data from enterprise systems, email, web, and other data sources. It can surface patterns from that data and transparently explain how the connections were identified, helping organizations catch money launderers.

“The amount of data that banks and insurers collect is growing at massive scale, doubling every two years,” Gayle Sheppard, VP and GM of Saffron AI Group at Intel, said in a statement. “While the quantity of data is growing, so are the types and sources of data, which means today that much of the data isn’t queried for insights, because it’s simply not accessible with traditional tools at scale.”

Because AML Advisor surfaces patterns in a transparent way, it helps financial services organizations comply with regulatory standards by explaining the rationale behind recommendations.

Unlike traditional machine learning methods, the AML Advisor offers “continuous learning.” In other words, it doesn’t require domain-specific models or training and retraining. This helps surface insights more quickly and is especially useful in a dynamic landscape like financial services.

Intel on Wednesday also announced the Intel Saffron Early Adopter Program (EAP) for organizations that want “the first-mover advantage” in the use of associative memory AI. The Bank of New Zealand (BNZ) has joined the Intel Saffron EAP, expanding its existing relationship with Intel.

 

China Will Likely Resume Cryptocurrency Trading by Licensing Bitcoin Exchanges

Joseph Young

The Chinese government will likely resume cryptocurrency trading in the upcoming months with necessary Know Your Customer (KYC) and Anti-Money Laundering (AML) systems in place.

Earlier this week, Xinhua, the state-owned news publication of China, revealed that the Chinese government is concerned with criminal activities surrounding cryptocurrencies such as bitcoin. It emphasized that cryptocurrencies have become the “top choice” for underground economies and revealed that the government will take appropriate measures to regulate the market by implementing a licensing program and strict AML systems.

Why the Ban on Chinese Exchanges is Not Beneficial for the Government

Last month, the Chinese government, the People’s Bank of China (PBoC), and local financial regulators imposed a nationwide ban on cryptocurrency exchanges. Consequently, the price of bitcoin fell to $3,000 and the cryptocurrency market endured a major correction.

Since then, the global cryptocurrency exchange market has restructured as the majority of trading volumes from China moved to neighboring markets such as Japan and South Korea. More to that, the Japanese government officially authorized 11 cryptocurrency exchanges in the same month, providing an efficient and well-regulated ecosystem for Chinese traders. As a result, the bitcoin price has recovered and has remained above the $4,000 margin.

But, the Chinese government’s ban on cryptocurrency exchanges also led to the increasing trading volumes of over-the-counter (OTC) markets and peer-to-peer trading platforms such as LocalBitcoins. For the Chinese government, such trend is a major concern in terms of KYC and AML policies because traders are now able to exchange cryptocurrencies and trade the Chinese yuan without the control and the involvement of Chinese authorities.

Previously, when regulated Chinese cryptocurrency trading platforms such as BTCC, OKCoin, and Huobi were around, the overwhelming majority of cryptocurrency trades were overseen by the PBoC through KYC and AML systems adopted by businesses within the Chinese cryptocurrency exchange market. Today, it is not possible for the Chinese government to regulate cryptocurrency trades because they are being processed and settled in markets that are outside the reach of the local authorities.

Licensing Program Similar to That of Japan Likely

Xinhua noted that the government is considering the possibility of licensing and record-keeping cryptocurrency trades, as local sources including CnLedger have shared. CnLedger, a trusted source of cryptocurrency news in China, stated:

“Xinhua News, official press agency of CN: Virtual currencies have become the top choices of underground economies. We shall adopt ‘0-tolerance policies’ towards crimes hidden underneath and take measures such as record-keeping, licensing, AML processes, real-name, limiting large transactions.”

In order for the government to adopt a zero-tolerance policy on cryptocurrency-based criminal activities, it needs to have infrastructures in place that can allow the government to oversee payments and disclose the identities of cryptocurrency users. Without KYC and AML systems, as seen in trading platforms like LocalBitcoins and other OTC markets, it is virtually impossible to execute a zero-tolerance policy on cryptocurrency crimes.

As Xinhua suggested, it is definitely possible that the cryptocurrency exchange ban in China is only temporary until the Chinese government releases a stricter record-keeping, licensing, and AML policies for trading platforms.

Also, as experts and executives at overseas exchange markets such as Hong Kong revealed, the ban on cryptocurrency exchanges have not stopped Chinese investors from buying and investing in cryptocurrencies.

“The ban did not stop them [Chinese investors] from buying cryptocurrencies. In the last few weeks, we have seen a lot of mainland customers opening up accounts at TideBit. They still want to play the game. I see a growing need in that they will come to Hong Kong or Singapore to buy cryptocurrency,” said Terence Tsang, chief operating officer at TideiSun, the parent company of TideBit.

 

Bitcoin laundering suspect caught in US, Russia extradition spat

The two countries are fighting over where the Russian national should have his day in court.

By  for Zero Day

http://www.zdnet.com/article/bitcoin-launderer-suspect-caught-in-us-russia-extradition-spat/

Alexander Vinnik is a popular man, with both the United States and Russia fighting over which country has the right to charge the suspected Bitcoin laundering mastermind.

Vinnik, a 38-year-old Russian national, is at the heart of the fight as the suspected leader of a Bitcoin laundering scheme.

In July, Vinnik was arrested by US law enforcement for allegedly being involved in BTC-e, a cryptocurrency exchange platform which “washed” funds without taking customer information, allowing for laundering to take place.

According to US prosecutors, Vinnik owned a number of accounts on the platform and used them to launder cash — and may have also been involved in laundering Bitcoin received from the “hack” of now-defunct exchange platform Mt. Gox, as well as Tradehill, another dead exchange.

In total, the Bitcoin laundering scheme is believed to have laundered roughly $4 billion.

Mt. Gox was once a thriving Bitcoin exchange, but after its sudden collapse in 2014, investors lost roughly $375 million. Former CEO Mark Karpeles originally blamed the closure on unknown cyberattackers, but Japanese law enforcement is charging him with embezzlement.

It is believed that Vinnik not only funneled proceeds from Mt. Gox but has also been involved in identity theft and drug trafficking schemes.

US law enforcement wants to charge Vinnik on American soil with operating an unlicensed money service business, conspiracy to commit money laundering, money laundering, and engaging in unlawful monetary transactions.

If convicted, Vinnik could face up to 55 years behind bars.

The Russian national is currently being held in Greece, and a local court in Thessaloniki ruled on Wednesday that the United States is permitted to extradite him to face these charges.

However, the Russian government is not impressed with the Greek court’s decision.

On Friday, the Russian Ministry of Foreign Affairs said in a statement that the verdict was “unjust and a violation of international law.”

The ministry believes that as Vinnik is a Russian national, he should be prosecuted in his home country and this should overrule any other extradition requests. The Russian Prosecutor General’s Office requested an extradition order to Russia, but it appears this request has been ignored by the Greek authorities.

“Based on legal precedent, the Russian request should take priority as Mr. Vinnik is a citizen of Russia,” the ministry said. “The verdict is even more surprising in the context of the atmosphere of friendly relations between Russia and Greece.”

Vinnik has denied the charges but has agreed to be sent back to Russia, according to the Reuters news agency.

However, Vinnik’s legal team have appealed the ruling, and now the Russian national’s case will be considered by the Supreme Civil and Criminal Court of Greece, before being submitted to the Greek Minister of Justice for approval.

“We hope the Greek authorities will consider the Russian Prosecutor General’s Office request, and Russia’s reasoning, and act in strict compliance with international law,” the ministry says.

ZDNet has reached out to the US Department of Justice (DoJ) and Greek Ministry of Foreign Affairs and will update if we hear back.

Couple admits to stealing $1.2M from Amazon with elaborate scam

INDIANAPOLIS – An Indiana couple has admitted stealing more than $1.2 million in merchandise from Amazon in an elaborate scheme. Erin Joseph Finan, 38, and Leah Jeanette Finan, 37, pleaded guilty in federal court in Indianapolis to charges of mail fraud and money laundering in connection with the racket, the Star Press reports.

The duo bought hundreds of electronics such as Go Pro cameras, Samsung smartwatches, and Xboxes, then told Amazon the products weren’t working and requested replacements at no charge.

The couple created “hundreds” of false identities to conceal the scam. Prosecutors say the Finans sold the loot to Danijel Glumac, 28, who marked it up before reselling it to an unnamed New York outfit, Fox59 reported in May when the trio was busted.

Glumac, who was also charged, allegedly paid the Finans about $725,000. The merchandise was eventually resold on the black market. “Consumer fraud is absorbed by all of us through higher retail prices,” US Attorney John Minkler said at the time.

The Finans were ordered to repay Amazon $1.2 million, and they face up to 20 years in prison. Sentencing is set for Nov. 9. (A cashier managed to embezzle $13 million.)

This article originally appeared on Newser: Couple Admits Fleecing Amazon Out of $1.2M

Money launderers remain ahead of authorities by using ‘sophisticated methods’, US expert says

Money launderers are using more sophisticated methods to remain one step ahead of law enforcement, says one expert — so how do countries stop them?

What is money laundering?

  • Disguising original ownership and control of proceeds of crime by making it appear to have come from a legitimate source
  • The three stages of laundering money are first introducing dirty money into a financial system, washing it, and finally reintroducing it back into the legitimate economy

Allegations that the Commonwealth Bank breached anti-money laundering laws on almost 54,000 occasions have raised concerns that Australia’s financial system is exposed to criminal elements, including the likes of drug runners.

While the extent of the alleged breaches shocked the CBA and regulators, a former US Treasury official and undercover intelligence agent said he was not surprised.

John Cassara has come face-to-face with money launderers over a 26-year career, and he warned that both the US and Australia were losing the battle in enforcing money laundering laws.

Mr Cassara said the recent case of the Commonwealth Bank just proved how exposed Australia was to sophisticated money laundering gangs.

“[That] case is kind of like a microcosm of some of the challenges that we face combatting money laundering around the world,” Mr Cassara said.

“The allegations that the CBA was compromised simply demonstrated the vulnerabilities of the current financial system.

“I don’t think most people understand how very large the scale of money laundering is.”

Mr Cassara cited International Monetary Fund estimates that worldwide money laundering is 2 to 5 per cent of global GDP, which very roughly translates to about US$5 trillion a year.

“And it’s probably a lot higher than that,” Mr Cassara said.

He said tax evasion could also potentially be considered a form of money laundering, and would add trillions of dollars to the IMF’s estimate.

Mr Cassara said Australia, like many other modern developed countries, faces similar challenges to the US.

Some of those challenges include underground financial systems, trade-based money laundering, cyber and new payment methods — all of which are already found in both Australia and the US.

“Some countries do better than others, the United States does pretty well, Australia is getting a lot better — certainly better than they were say 10 years ago,” he said.

“I mean, to be a money launderer today you have to be either very, very stupid or very unlucky to get caught.”

Looking into the future and challenges faced by countries trying to reign in money launderers, Mr Cassara said what is being done right now “just isn’t working”.

“I can say that with certainty from the US perspective. If you look at the numbers, they’re not good. And I think that holds true for Australia as well.”

With ‘unlimited resources’, how do you stop them?

Just how sophisticated are money launderers? Extremely so, Mr Cassara said, and they are equipped with “almost unlimited resources”.

“That’s something that governments, law enforcement, intelligence agencies, customer services — they do not have that,” he said.

Money launderers are able to use state-of-the-art techniques and hire the best and the brightest in the business, including lawyers, and accountants.

But Mr Cassara said in the end, “old-fashioned” ways of moving money, such as bulk cash smuggling, continue to be extremely difficult to detect.

“Basically the smuggling of drug proceeds — somewhere between $20-$40 billion a year is probably moved across the southern US border into Mexico,” he said.

‘Laws aren’t the problem, we need more enforcement’

Post 9/11, Mr Cassara said countries around the world put in place robust money laundering and counter-terrorism finance regimes.

But in the fight against money launderers, the problem is not with the laws, rules and regulations, but with enforcement.

Mr Cassara said current money laundering systems in place were constantly exposed to potential failure, which is why more regulation in certain industries is necessary.

“I know that in the United States and Australia there’s been a lot of talk about, for example, real estate agents should be reporting — [and] attorneys, accountants, this type of thing,” he said.

“There are always things that we need to do. But where we’ve fallen down is lack of law enforcement.”

A perceived loophole in Australian law means lawyers, accountants and real estate agents do not have to declare anything over $10,000.

Australia’s anti-money laundering law in fact does not cover those industries, despite promises when the law was enacted in 2006 the legislation would be widened.

Mr Cassara said it was essential for such designated professionals to be made to adhere to anti-money laundering guidelines.

“Unfortunately this is taking a lot of time, there’s a lot of pushback from the industry, there’s a lot of lobbying going on,” he said.

“Eventually it will happen, but I just hope it’s sooner rather than later.”

http://www.abc.net.au/news/2017-10-05/how-can-countries-stop-money-launderers/9017578

World’s largest asset manager says digital currencies show how much money laundering is going on

  • BlackRock CEO Larry Fink says activity in digital currencies comes mostly from Asian investors’ speculation and heavy use in money laundering.
  • U.S. authorities cracked down on several dark web marketplaces, which tend to use digital currencies for transactions, and exchanges for their involvement in illegal activities.
  • Fink does see “huge opportunities” in digital currencies but says most of the interest right now comes from speculation.

By: Evelyn Cheng

Larry Fink, the head of the world’s largest money manager, said Tuesday he thinks the rise of digital currencies reflects how much money laundering is going on.

“Most importantly, when I think about most of the cryptocurrencies, it just identifies how much money laundering is being done in the world,” Fink, founder, chairman and CEO of BlackRock, said in a Bloomberg TV interview.

“It’s much more of a speculative platform for Asia and it’s heavily used for money laundering,” Fink said.

 South Korean, Japanese and, until last month, Chinese investors, are major traders of the largest digital currencies by market cap, bitcoin and ethereum.

U.S. authorities have repeatedly shut down online marketplaces in the part of the internet known as the dark web, where illegal goods are sold and money laundering often occurs. Transactions on those websites often occur in bitcoin or other digital currencies in an attempt to preserve anonymity.

Just this summer, the U.S. Justice Department and Europol announced the closure of AlphaBay and Hansa, the two largest dark web marketplaces at the time. A grand jury in the U.S. District Court for the Northern District of California also charged Russian national Alexander Vinnik and the digital currency exchange he allegedly operated, BTC-e, with money laundering and related crimes.

Fink joins a number of major Wall Street executives who have spoken on digital currencies in the last several weeks.

JPMorgan Chase CEO Jamie Dimon called bitcoin a “fraud” and warned that if digital currencies grow too large, governments will close them down. On the other hand, Morgan Stanley CEO James Gorman said cryptocurrencies are “certainly something more than just a fad” and authorities may actually need to adapt to the growth of the digital currencies.

Goldman Sachs CEO Lloyd Blankfein put a message on Twitter Tuesday, “Still thinking about #Bitcoin. No conclusion – not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold.”

 

President Donald Trump’s Statement On Las Vegas

STATEMENT FROM PRESIDENT DONALD J. TRUMP

My fellow Americans, we are joined together today in sadness, shock, and grief. Last night, a gunman opened fire on a large crowd at a country music concert in Las Vegas, Nevada. He brutally murdered more than 50 people, and wounded hundreds more. It was an act of pure evil.

The FBI and the Department of Homeland Security are working closely with local authorities to assist with the investigation, and they will provide updates as to the investigation and how it develops.

I want to thank the Las Vegas Metropolitan Police Department and all of the first responders for their courageous efforts, and for helping to save the lives of so many. The speed with which they acted is miraculous, and prevented further loss of life. To have found the shooter so quickly after the first shots were fired is something for which we will always be thankful and grateful. It shows what true professionalism is all about.

Hundreds of our fellow citizens are now mourning the sudden loss of a loved one — a parent, a child, a brother or sister. We cannot fathom their pain. We cannot imagine their loss. To the families of the victims: We are praying for you and we are here for you, and we ask God to help see you through this very dark period.

Scripture teaches us, “The Lord is close to the brokenhearted and saves those who are crushed in spirit.” We seek comfort in those words, for we know that God lives in the hearts of those who grieve. To the wounded who are now recovering in hospitals, we are praying for your full and speedy recovery, and pledge to you our support from this day forward.

In memory of the fallen, I have directed that our great flag be flown at half-staff.

I will be visiting Las Vegas on Wednesday to meet with law enforcement, first responders, and the families of the victims.

In moments of tragedy and horror, America comes together as one — and it always has. We call upon the bonds that unite us — our faith, our family, and our shared values. We call upon the bonds of citizenship, the ties of community, and the comfort of our common humanity.

Our unity cannot be shattered by evil. Our bonds cannot be broken by violence. And though we feel such great anger at the senseless murder of our fellow citizens, it is our love that defines us today — and always will, forever.

In times such as these, I know we are searching for some kind of meaning in the chaos, some kind of light in the darkness. The answers do not come easy. But we can take solace knowing that even the darkest space can be brightened by a single light, and even the most terrible despair can be illuminated by a single ray of hope.

Melania and I are praying for every American who has been hurt, wounded, or lost the ones they love so dearly in this terrible, terrible attack. We pray for the entire nation to find unity and peace. And we pray for the day when evil is banished, and the innocent are safe from hatred and from fear.

May God bless the souls of the lives that are lost. May God give us the grace of healing. And may God provide the grieving families with strength to carry on.

Thank you. God bless America. Thank you.

Las Vegas Shooting Near Mandalay Bay Casino Kills 50

Las Vegas Shooting Near Mandalay Bay Casino Kills 50

LAS VEGAS — A gunman on a high floor of a Las Vegas hotel rained a rapid-fire barrage on a huge outdoor concert festival on Sunday night, killing more than 50 people, injuring hundreds of others, and sending thousands of terrified survivors fleeing for cover, in one of the deadliest mass shootings in American history.

Online video of the attack near the Mandalay Bay Resort and Casino showed the singer Jason Aldean performing outside at the Route 91 Harvest Festival, a three-day country music event, interrupted by the sound of automatic gunfire. The music stopped, and as victims fell, bleeding, concertgoers screamed, ducked for cover, or ran.

“Get down,” one shouted. “Stay down,” screamed another.

“Currently the Clark County Fire Department is estimating the injuries to be well over 400” Sheriff Joseph Lombardo of the Las Vegas Metropolitan Police Department said on Monday morning. One of those killed was an off-duty Las Vegas police officer, the department said.

He said there were about 22,000 people at the concert.

SWAT units swarmed the upper floors of the Mandalay Bay, closing in on the source of the shooting, a 32nd-floor room where they found the gunman, with “in excess of 10 rifles,” the sheriff said. “We believe the individual killed himself prior to our entry.”

The first reports of the shooting came at 10:08 p.m. local time, and officers overheard on police radio reported being pinned down by gunfire. Shortly before midnight the Las Vegas police reported that “one suspect is down,” and soon after the police said they did not believe there were any more active gunmen.

The sheriff identified the gunman as Stephen Paddock, 64, of Mesquite, Nev., who had no significant prior criminal history.

Before dawn on Monday, Mr. Lombardo said the police were executing a search warrant on Mr. Paddock’s home, adding, “We’re going to clear the residence first for any possible explosives, so that will be slow and methodical.”

Eric Paddock, a brother of Stephen Paddock who lives in Orlando, Fla., told The Orlando Sentinel that he had made a statement to the police. “We are completely dumbfounded,” he said. “We can’t understand what happened.”

Laith Alkhouri, a senior analyst at Flashpoint Global Partners, a security consulting firm in New York that tracks militant websites, said that he had seen no information yet on whether the suspect acted out of political motivation or grievance, or something else.

Video of the shooting captured nine seconds of rapid-fire, continuous bursts, followed by 37 seconds of silence from the weapon amid panicked screaming. The barrage of gunfire then erupted again in at least two more rounds, both shorter than the first.

In the confusion after the shooting, the police also descended on the Ali Baba Restaurant, about a 10-minute drive from the Mandalay Bay, and they also investigated reports of a shooting at the New York-New York Hotel and Casino, not far from the concert ground.

The police reported clearing out the Mandalay Bay’s 29th floor and working their way up to the 32nd floor. A police Twitter post described reports of an “active shooter” near or around the Mandalay Bay casino.

Video from the shooting showed Mr. Aldean, the final performer of the night, running off the stage as the gunfire erupted.

Jake Owen, a country singer who was on stage with Mr. Aldean when the shooting began, told CNN on Monday that it was like “shooting fish in a barrel from where he was.”

“This is not an exaggeration: This shooting was going on for at least 10 minutes,” he added. “It was nonstop.”

Concertgoers described hearing round after round of gunfire. “Everyone was running, you could see people getting shot,” Gail Davis, one of the witnesses, said. “I’ve never been that scared in my life,” she added. “To have this happen, I can’t wrap my mind around it.”

“It just kept coming,” one of the witnesses, Robyn Webb, told The Las Vegas Review-Journal. “It was relentless.”

They said they saw about 20 people bleeding in the street.

“That’s when we knew for sure it was real,” said her companion, Matt Webb.

A photo posted by a Review-Journal photographer showed emergency responders transporting one injured person in a wheelbarrow.

As survivors poured into surrounding streets and buildings, and the police and paramedics streamed into the scene, unsure how many gunmen there were, the massacre shut down roads and highways; the police reported closing off about a mile of Las Vegas Boulevard and asked the public to steer clear of the area. Hours later, much of the city remained at shut down.

McCarran International Airport in Las Vegas said that some flights destined for the airport were diverted because of police activity. The airport is just east of the Mandalay hotel, and after the shooting there were reports of people fleeing the concert by running onto an airport runway.

The hotel itself was placed on virtual lockdown after the shooting, guests said.

“We went into the hotel and they started shutting down casinos,” Todd Price, a guest of Mandalay Bay, told CNN. “We tried to get into our rooms, and they shut down the elevators and started to get everybody out.”

The Route 91 Harvest Festival bills itself as “three days of country music on the Vegas Strip,” and Sunday night’s performance was the last of the festival. The site of the concert, the Las Vegas Village and Festival Grounds, run by MGM Resorts, sprawls over 15 acres and has a capacity of 40,000 people. The festival’s website said this year’s three-day concert was sold out.

In the first hours after the shooting, the police searched for a woman described as “a companion” of the gunman, Marilou Danley. Later, the sheriff said she had been located out of the country, and apparently was not with Mr. Paddock when he checked into the hotel, but that “he was utilizing some of her identification.”

https://www.nytimes.com/2017/10/02/us/las-vegas-shooting.html?mcubz=0