Democrats are planning to grill Michael Cohen about Trump Organization money laundering

By Travis Gettys

Michael Cohen’s testimony has already set off bombshells, based on a prepared statement he will deliver to the House Oversight Committee, but Democrats plan to pursue another area that hasn’t yet drawn as much attention.

The longtime Trump Organization lawyer will tell lawmakers the president knew about Roger Stone’s contacts with WikiLeaks and spoke with his son about an infamous meeting with a Russian attorney promising dirt on Hillary Clinton, but NBC News reporter Heidi Przybyla said Democrats are also interested in Trump’s shady business dealings.

“Beyond that, Democrats want a lot more, and they want to delve deep into this issue of money laundering, not just with Russia but other potential foreign countries,” Przybyla told MSNBC’s “Morning Joe.”

“There was a story that maybe didn’t get a lot of attention last year in February,” she continued, “about a Trump Tower last year in Panama, where the South Americans were essentially trying to kick out Trump business officials. They saw them going into a room with documents, and they heard a shredder going.”

“Why is that important?” Przybyla added. “Democrats are going to dig into this whole notion how the Trump Organization operates with these shell companies, which are supposed to be investments, and a lot of these individuals and foreign countries think are going to be investment but actually turn out to be shell companies potentially used for money laundering.”

 

Feds accuse three Wyoming restaurants of involvement in drug money laundering scheme

By Shane Sanderson

Three Wyoming restaurants participated in a multistate drug money laundering scheme, authorities allege in a 50-page civil complaint filed Friday in federal court.

The filings state that Mexican fast food restaurants in Colorado and Wyoming — including Rodolfo’s Mexican Grill in Cheyenne, Rolando’s Mexican Grill in Cheyenne and Almanza’s Mexican Food in Laramie — were involved in a scheme to use falsified invoices to transfer hundreds of thousands of dollars in concert with a Colorado Springs food distributor. When law enforcement raided the Colorado Springs facility, they found more than $35,000 cash. No cash registers or prices for food items were found in the facility, according to the filings.

The bank accounts associated with Almanza’s Mexican Food and Rolando’s Mexican Grill were closed before law enforcement began investigating the case, the documents state.

By Monday evening, defense attorneys had not responded to the prosecution’s latest filing, but in earlier filings they largely denied the allegations.

The man who ran the distribution business, which is known as El Potosino Foods, has connections with a Mexican drug cartel, the documents state. The phone number for Jose Aguilar-Martinez, who owns El Potosino, turned up in previous investigations of Ismael “El Mayo” Zambada and Joaquín “El Chapo” Guzmán, although the documents do not specify the investigations or the phone number’s connection to them.

Authorities have said Zambada is a leader of the Sinaloa cartel, which has smuggled billions of dollars worth of cocaine, heroin, meth and marijuana into the United States.

Earlier this month, a jury convicted Guzmán, another Sinaloa cartel leader, of various federal crimes, including engaging in a continuing criminal enterprise, conspiracy to launder drug proceeds and international drug distribution. His lawyers have said he will seek a new trial following a Vice News report alleging juror misconduct during the case.

The allegations implicating one of the Wyoming restaurants were reported by the Star-Tribune in January. The report drew from responses to a sealed civil complaint filed in November.

In their responses, defendants laid out some of the government’s allegations, including that bank accounts belonging to Hilario Montejano-Aleman, the owner of Rodolfo’s Mexican Grill in Cheyenne, were used in drug money laundering.

Rather than filing documents under seal, prosecutors partially redacted, and on Friday filed publicly, their amended complaint. It revealed more details of the case, which does not bring any criminal action against the alleged money launderers. Instead, the filings seek to require the forfeiture of $1.5 million spread across 15 bank accounts and two safe deposit boxes alleged to be used in the scheme.

The bank safe deposit boxes alone contained more than $800,000 linked to drug trafficking, according to the documents. One of those boxes was filled to capacity with hundreds of thousands of dollar bills that investigators say are tied to drug trafficking. A woman accessed the box at a Colorado Springs bank 16 times over the course of nine years. Every time she appeared pregnant. “Or, in retrospect, carrying the cash inside of a false belly,” prosecutors wrote.

Although the allegations span multiple states and businesses, the investigation began in Wyoming.

Law enforcement began investigating the case in Cheyenne in July 2016 after receiving a report of a suspicious vehicle purchase. That purchase was among multiple turned up by investigators in which purchasers put down $10,000 or more in cash, the documents state. Among those vehicles were a 2007 Cadillac Escalade for which a cook at the Laramie restaurant put down $14,000 cash.

The case also has a Casper connection, although the extent of that connection is not clear. According to prosecutors, a phone number associated with Rodolfo’s called a Casper number that the DEA is investigating in a different case.

Swiss pond fishers give new meaning to concept of ‘money laundering’

In a bid to earn a little extra pocket money, three young women in Lucerne decided to fish out coins left in the pond by the city’s famous Lion Monument.

The monument – a tribute to the Swiss Guards killed in 1792 during the French revolution – is a popular tourist sight with many visitors throwing small change into the surrounding pond.

The women expected to come away with just a few coins. Instead, they found around 400 francs the first time they collected the money. This amount then rose to 600 francs on another occasion when they used snorkel masks and plastic bags to collect their spoils, according to regional daily Luzerner Zeitung.

The women separated the money they collected into two boxes – one for foreign currency and one for Swiss francs, which they went on to spend.

But as the coins they retrieved were covered in algae, the fishers were forced to mix them up with other change to make them less conspicuous.

Then the group came up with the novel idea of using vending machines to “wash the money”. They would use as many coins as possible to buy the cheapest possible products and would obtain “laundered” coins as change.

The three women have since given up their fishing trips and have gone on to become teachers, according to Luzerner Zeitung.

Meanwhile, police told the newspaper the practice was not illegal. A spokesperson for the force said anyone who threw money into a pond gave up ownership rights.

The city of Lucerne clears out the Lion Monument twice a year at which point city gardeners collect any coins they find. These are then donated to charity.

 

Phishers Target Anti-Money Laundering Officers at U.S. Credit Unions

By KrebsOnSecurity

A highly targeted, malware-laced phishing campaign landed in the inboxes of multiple credit unions last week. The missives are raising eyebrows because they were sent only to specific anti-money laundering contacts at credit unions, and many credit union sources say they suspect the non-public data may have been somehow obtained from the National Credit Union Administration (NCUA), an independent federal agency that insures deposits at federally insured credit unions.

The USA Patriot Act, passed in the wake of the terror attacks of Sept 11, 2001, requires all financial institutions to appoint at least two Bank Secrecy Act (BSA) contacts responsible for reporting suspicious financial transactions that may be associated with money laundering. U.S. credit unions are required to register these BSA officers with the NCUA.

On the morning of Wednesday, Jan. 30, BSA officers at credit unions across the nation began receiving emails spoofed to make it look like they were sent by BSA officers at other credit unions. The missives addressed each contact by name, claimed that a suspicious transfer from one of the recipient credit union’s customers was put on hold for suspected money laundering, and encouraged recipients to open an attached PDF to review the suspect transaction.

The phishing emails contained grammatical errors and were sent from email addresses not tied to the purported sending credit union. It is not clear if any of the BSA officers who received the messages actually clicked on the attachment, although one credit union source reported speaking with a colleague who feared a BSA contact at their institution may have fallen for the ruse.

One source at an association that works with multiple credit unions who spoke with KrebsOnSecurity on condition of anonymity said many credit unions are having trouble imagining another source for the recipient list other than the NCUA.

“I tried to think of any public ways that the scammers might have received a list of BSA officers, but sites like LinkedIn require contact through the site itself,” the source said. “CUNA [the Credit Union National Association] has BSA certification schools, but they certify state examiners and trade association staff (like me), so non-credit union employees that utilize the school should have received these emails if the list came from them. As far as we know, only credit union BSA officers have received the emails. I haven’t seen anyone who received the email say they were not a BSA officer yet.”

“Wonder where they got the list of BSA contacts at all of our credit unions,” said another credit union source. “They sent it to our BSA officer, and [omitted] said they sent it to her BSA officers.” A BSA officer at a different credit union said their IT department had traced the source of the message they received back to Ukraine.

The NCUA has not responded to multiple requests for comment since Monday. The agency’s instructions for mandatory BSA reporting (PDF) state that the NCUA will not release BSA contact information to the public. Officials with CUNA also did not respond to requests for comment.

A notice posted by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) said the bureau was aware of the phishing campaign, and was urging financial institutions to disregard the missives.

The latest scam comes amid a significant rise in successful phishing attacks, according to a non-public alert sent in late January by the U.S. Secret Service to financial institutions nationwide. “The Secret Service is observing a noticeable increase in successful large-scale phishing attacks targeting unsuspecting victims across industry,” the alert warns.

The Secret Service alert reminds readers that we in the United States are entering tax season, which typically brings a large spike in scams designed to siphon personal and financial data. It also includes some helpful reminders, including:

-Never click on links embedded in emails or open any attachments from unknown or suspect fraudulent email accounts.

-Always independently verify any requested information originates from a legitimate source.

-Visit Web sites by entering the domain name yourself (for sensitive sites, preferably by using a bookmark you created previously).

-If you are contacted via phone, hang up, look up the number for the institution at that institution’s Web site, and call back. Do not give out information in an unsolicited phone call.

US Political Activist Linked to Russian Agent Charged with Money Laundering, Fraud

Reuters

A conservative U.S. political activist romantically linked to admitted Russian agent Maria Butina has been indicted by a federal grand jury on wire fraud and money laundering charges, the U.S. Attorney’s Office in South Dakota said on Wednesday.

Paul Erickson, 56, was indicted on 11 counts of wire fraud and money laundering on Tuesday and pleaded not guilty to the charges in an appearance before U.S. Magistrate Judge Mark Moreno, the office said in a statement. Erickson’s attorney did not immediately respond to a request for comment.

Erickson is a well-known figure in Republican and conservative circles and was a senior official in Pat Buchanan’s 1992 Republican presidential campaign.

He was romantically linked to Butina, a 30-year-old native of Siberia, who pleaded guilty in December to conspiracy.

Butina admitted working with a top Russian official to infiltrate the powerful National Rifle Association gun rights group and to make inroads with American conservatives and the Republican Party as an agent for Moscow.

Butina, a former graduate student at American University in Washington, had publicly advocated for gun rights. She was the first Russian to be convicted of working to influence U.S. policy during the 2016 presidential race.

Erickson’s indictment did not specifically refer to Butina by name, but it indicates he made a payment of $8,000 to an “M.B.” in June 2015 and another payment of $1,000 to “M.B.” in March 2017. The indictment also indicates he paid American University $20,472.09 in June 2017.

The indictment against Erickson alleges that between 1996 and 2018, Erickson made “false and fraudulent representations” to people in South Dakota and elsewhere about his business schemes in an effort to convince potential investors to give him money, the U.S. Attorney’s Office said.

Erickson owned and operated Compass Care Inc, Investing with Dignity LLC, and an unnamed venture to develop land in the Bakken oilfields in North Dakota, the U.S. Attorney’s Office said.

He faces a maximum penalty of 20 years in prison on each count as well as possible fines, the U.S. Attorney’s Office. He was released on bond, and no date has been set for a trial.

Iran rejects EU trade, anti-money laundering link

By AFP

Iran on Tuesday ruled out linkage between a new EU mechanism to trade with Tehran bypassing US sanctions and an anti-money laundering bill.

“Linking implementation of this mechanism… with the requirements of institutions such as the FATF is unacceptable,” the foreign ministry said, referring to the international Financial Action Task Force.

Iran is on an FATF blacklist drawn up to counter money laundering and the financing of terrorist groups, but the Paris-based organisation has suspended counter-measures since 2017 while Tehran works on reforms.

EU leaders on Monday welcomed the bloc’s new mechanism to trade with Iran but warned Tehran over its ballistic missile programme and regional policies while calling for it to implement reforms to comply with FATF demands.

Britain, France and Germany created the system last week to allow firms to trade with Iran without falling foul of US sanctions.

The foreign ministry, in its statement, welcomed the EU’s “positive stances” but also criticised the bloc’s warnings on its missile programme and its regional policies.

“Iran´s defence activities… are merely defensive, deterrent and a domestic matter that has never been on the agenda of our negotiations with other countries,” it said.

“Raising such issues under current regional circumstances and clear threats against the national security of the Islamic Republic of Iran is not constructive,” the ministry said.

It urged European countries “to take a realistic look at regional incidents and issues and not to be influenced” by the United States.

Brussels, for its part, hopes the special payment mechanism for trade with Iran — registered under the name INSTEX — will help save the 2015 nuclear deal between Tehran and major powers.

Washington has reimposed sanctions after President Donald Trump last year quit the accord which lifted the measures in exchange for curbs on Iran’s nuclear programme.

Iran has welcomed INSTEX as a “first step”, while US officials have said it would not affect its efforts to exert economic pressure on Tehran.

San Antonio man due in court Tuesday in money laundering case involving luxury cars

By Guillermo Contreras

One of two defendants charged in a money laundering case involving more than 100 exotic and luxury cars that were seized is scheduled for hearings Tuesday to determine whether law officers had enough probable cause to arrest him, and whether he qualifies for bail.

Jose Luis Magallon Jr., 28, is accused of laundering more than $200,000 in a series of undercover law enforcement sting operations.

Magallon is the owner of Magallon Enterprises LLC, an exotic and luxury used auto dealership in San Antonio, but court records accuse him of being a launderer for a drug trafficking organization from Michoacán, Mexico.

Magallon allegedly dealt with an undercover agent who posed as a transporter of large amounts of drug cash, and flashed several high-end cars that were part of Magallon’s money laundering operation, a criminal complaint affidavit said. The affidavit also alleges that other people helped Magallon disguise his money laundering under layers of fronts.

Agents did not raid Magallon’s business, but used him to get to a co-defendant, Karen Mgerian, who was willing to launder larger amounts, according to court records. Mgerian, 40, allegedly laundered $575,000 for undercover agents acting as drug cartel operatives, and was in negotiations to launder another $4.7 million, according to court records.

Agents last Thursday raided Mgerian’s car lot, MGM Auto, near Rittiman and Interstate 35, and an auto body location he allegedly controlled called Odadi Auto near Stahl Road. They also raided his home in Stone Oak and a home Magallon rented near Perrin-Beitel and Loop 410.

Mgerian initially had been scheduled to have his bail hearing Tuesday but it has been rescheduled to Feb. 13, records show.

This is the world’s “money-laundering paradise”

By Kevin Sun

Everything’s bigger in Dubai. Home to the world’s tallest building since 2010, the emirate’s real estate industry could also be one of the world’s largest money laundromats.

Transparency International, the anti-corruption group behind the annual Corruption Perceptions Index (CPI), has now joined the chorus of voices decrying the city-state’s weak regulations and lax enforcement, according to Forbes.

With the release of its latest CPI results, Transparency International singled out Dubai for special attention in its summary for the Middle East region, citing investigations from the Organized Crime and Corruption Reporting Project and the Washington-based Center for Advanced Defense Studies.

“Dubai has become a money laundering paradise, where the corrupt and other criminals can go to buy luxurious property with no restrictions,” said the report.

The United Arab Emirates, of which Dubai is the largest city and second-largest state, was ranked as the “least corrupt” country in the Middle East and Northern Africa, mainly because of efficient public administration and a high level of human development. Other countries in the region, like war-torn Syria, Yemen and Libya, were at the bottom of the worldwide CPI rankings.

Of course, Dubai is far from the only global city where real estate has become a conduit for dirty money. Malaysia’s infamous 1MDB scandalinvolved a number of NYC properties, and efforts to improve transparency in the U.S. have been stymied by political infighting.

Transparency International also notes that the CPI does not really measure money laundering. Denmark, the “least corrupt” country in this year’s rankings, has been rocked by a scandal involving its largest lender, Danske Bank, which is accused of knowingly allowed the laundering of hundreds of billions of dollars through a branch in Estonia.

Cryptocurrency Money Laundering: Alarming New Trends

By Nick Holland

Despite the value of cryptocurrency plummeting since 2017, cybercriminals and rogue nations are still using it to launder funds. One new scheme is “crypto dusting,” according to CipherTrace founder and CEO, Dave Jevans, who discusses the results of the company’s latest Cryptocurrency Anti-Money Laundering Report.

“This is when the bad guys, who typically operate money laundering operations and crypto, want to disable the ability of anti-money laundering and investigation tools,” Jevans explains in an interview with Information Security Media Group. “So what they’re doing is sending tens of thousands of people a week very small amounts of cryptocurrency that has obviously gone through money laundering services … so that everyone active in crypto is getting a negative reputation. Therefore tools that use reputation scoring don’t work anymore.”

In this interview (see audio link below photo), Jevans also discusses:

  • Cryptocurrency money laundering by nation-states, including Iran and Venezuela, to avoid economic sanctions;
  • The rise of cryptocurrency heists in 2018 despite a significant decrease in the value of many currencies;
  • The potential impact regulations could have on cracking down on cryptocurrency money laundering schemes.

Jevans is the founder and CEO of CipherTrace, which specializes in blockchain security and anti-money laundering compliance. He has 20 years of experience in the security and payments markets. He holds 17 U.S. patents in cybersecurity and has founded and sold three cybersecurity startups. He also serves as the chairman of the Anti-Phishing Working Group, a consortium of more than 1,500 government agencies, financial services companies, ISPs, law enforcement agencies and technology vendors.

Dubai Has Become A “Money Laundering Paradise” Says Anti-Corruption Group

The Gulf city of Dubai has been slammed as a “money laundering paradise” by leading anti-corruption group Transparency International.

Dubai – one of the seven emirates that make up the UAE – has built a reputation as the pre-eminent business hub in the Middle East, with an open economy that welcomes companies and individuals from around the world. It is a city that has gained fame for giving supercars to its police and building palm-shaped islands in the sea. However, it has also garnered notoriety as a place where normal rules can at times be ignored or easily sidestepped.

In its latest Corruption Perceptions Index, anti-graft campaigning group Transparency International says that “Dubai has become an active global hub for money laundering … where the corrupt and other criminals can go to buy luxurious property with no restrictions.”

Citing investigations last year by the Organized Crime and Corruption Reporting Project and the Center for Advanced Defense Studies (C4ADS), Transparency International said that real estate worth millions of pounds can be bought in Dubai in exchange for cash with few questions ever asked.

In a report issued in June last year, C4ADS said it had identified 44 properties worth some $28.2m that were held directly by sanctioned individuals, and a further 37 properties worth almost $80m that were owned by members of these individuals’ wider networks. The data was based on a leaked database of property and residency data compiled by real estate professionals.

Clearly these issues are not new and indeed Transparency International has itself previously raised concerns about the dubious practices that go on in Dubai’s real estate market. Despite the negative publicity, however, the authorities appear reluctant to take decisive action.

Regional leader

Despite Dubai’s shortcomings, the UAE as a whole is actually the best rated country in the Middle East and North Africa region when it comes to corruption. In the 2018 Corruption Perceptions Index it is ranked 23 out of 180 countries, with a score of 70 points, closely followed by its near neighbor – and regional rival – Qatar, which is ranked 33 overall, with 62 points.

The index scores countries on a scale from  zero to 100, where zero is highly corrupt and 100 is very clean. The best rated country overall is Denmark with a score of 88 points.

While the UAE and Qatar score higher on the index than other countries in the region, this is largely due to their levels of economic and social development, says Transparency International. Both countries have relatively efficient public bureaucracies, high GDP levels and good health and education systems.

However, both countries also lack democratic institutions and a respect for political rights – something that is common throughout the Gulf and the wider MENA region – making them highly susceptible to corruption. “This leaves control of corruption up to the political will of the incumbent ruling class, which can change suddenly and leave any improvements in anti-corruption efforts behind,” says the Transparency International report.

There is also no freedom of the press in these countries and academics such as British research Matt Hedges have been actively targeted by the UAE authorities.

The opaque nature of the political and legal systems in the UAE can often prove frustrating for businesses. One prominent recent example is the battle over $496m in funds owned by a Kuwaiti investment firm – the money was frozen in a Dubai bank account in November 2017, but despite sustained lobbying of officials in Kuwait and the UAE it remains frozen at the time of writing.