North America’s most unaffordable city cracks down on dirty money

Vancouver’s red hot housing market has prompted authorities to introduce a series of transparency measures aimed at uncovering the owners of homes in Canada’s most expensive real estate market.

One new probe will scrutinize dirty money in the province of British Columbia’s real estate, horse-racing and luxury car sales industries, according to Attorney General David Eby who announced the investigation in late September, Bloomberg reported. Finance Minister Carole James also appointed an expert panel to examine money laundering in the housing sector.

These probes, which are expected to be complete by March, follow a similar review of the province’s casinos.

“There is good reason to believe the bulk of the cash we saw in casinos is a fraction of the cash generated through illicit activities that may be circulating in British Columbia’s economy,” Attorney General David Eby told reporters late last month. “We cannot ignore red flags that came out of the casino reviews of connections between individuals bringing bulk cash to casinos, and our real estate market.”

Similar calls to action have been made south of the border. Earlier this month, two U.S. senators — Chris Van Hollen of Maryland and Sheldon Whitehouse of Rhode Island — sent a letter to the Government Accountability Office, calling for an investigation into the potential vulnerabilities of existing U.S. money-laundering provisionsas they pertain to real estate.

Last month, The Real Deal‘s quarterly magazine in South Florida dove into a $1.2 billion Venezuelan money laundering case in which federal authorities are looking to seize 16 high-end properties. [Bloomberg]—Kathryn Brenzel

Senate Democrats call for federal investigation into money laundering in luxury real estate

By Ben lane

The Treasury Department’s Financial Crimes Enforcement Network has been looking into whether foreign buyers are using shell companies to buy luxury U.S. real estate in order to launder money for almost three years, but two Democratic senators want the government to do more to figure out how much criminal activity is prevalent in these deals.

The initial FinCEN investigation delved into unknown buyers using shell companies to buy high-end real estate in Manhattan and Miami-Dade County, because the government was “concerned about illicit money” being used in the deals.

The results of that initial investigation showed more than 25% of transactions covered in the initial inquiry involved a “beneficial owner” who is also the subject of a “suspicious activity report,” which is an indication of possible criminal activity.

The initial investigation also led FinCEN to expand the probe to include all of New York City, Los Angeles, San Francisco and several other areas. The investigation was later expanded again to include wire transfers.

The expanded investigation required title insurance companies in the designated areas to identify the actual person behind shell companies used to pay all cash for high-end residential real estate.

But that investigation isn’t enough for two Senate Democrats.

This week, Sens. Chris Van Hollen, D-Maryland, and Sheldon Whitehouse, D-Rhode Island, asked the Government Accountability Office, to also look into whether money laundering is taking place in U.S. real estate.

In a letter sent to the independent watchdog agency, Van Hollen and Whitehouse say that they are concerned that “transnational criminal organizations and other illicit actors” may be taking advantage of “gaps” in the government’s regulatory and law enforcement process surrounding real estate dealings.

“The widespread money laundering risks posed by real estate transactions conducted without any financing (i.e.,“all-cash”) through the use of shell companies creates challenges for law enforcement and federal regulators seeking to safeguard the financial system from illicit use,” the senators write in their letter to the GAO.

The senators write that they are hopeful that a GAO investigation will help determine whether violations of the Bank Secrecy Act or federal anti-money laundering laws are taking place.

“FinCEN has indicated that these GTOs (geographic targeting orders, the measures FinCEN has taken to this point), which have been renewed and extended several times, are temporary measures intended to help the agency, ‘better understand the vulnerabilities presented by the use of shell companies to engage in all-cash residential real estate transactions,’” the senators write.

“To better ensure effective and consistent AML safeguards, we are requesting an assessment of the results of the real estate GTOs, including the information provided to FinCEN and any actions taken, and how it has helped FinCEN achieve its defined objectives,” they add.

Van Hollen and Whitehouse also lay out a series of questions they’d like the GAO to answer about the issue, including:

Has the information gathered by the GTOs provided useful insight about any of the above mentioned regulatory gaps or exemptions that exist regarding the BSA and the real estate industry?

Has the information gathered by the GTOs produced other tangible benefits, and in what ways will closing the above mentioned regulatory gaps or exemptions enhance financial market integrity in the United States?

How has FinCEN used the information collected from the real estate GTOs to inform its ongoing efforts to address money laundering vulnerabilities?

Has the information gathered by the GTOs improved the ability of FinCen, DOJ, the FBI and other law enforcement agencies to prevent money laundering in the real estate industry?

Based on the information it has collected from these GTOs, is FinCEN considering any regulatory changes?

Are there ways to improve upon the information gathered by the GTOs to make FinCEN more effective in the fight against money laundering?

Are there any gaps or loopholes that exist in the design of the GTO program that could be exploited by illicit actors, such as the beneficial ownership thresholds  or limiting the GTO to title insurance companies?

Are there any unintended consequences from targeting specific geographic regions while leaving other areas uncovered? The adaptive nature of illicit actors raises concerns they may shift their real estate activities from GTO areas to other regions of the United States.

Lastly, we ask that GAO identify any additional vulnerabilities and gaps in the current BSA framework, specifically as they pertain to the real estate sector, and how they might be addressed through regulatory or legislative action.

U.S. to Allow Small Banks to Pool Anti-Money-Laundering Resources

Community banks and credit unions can share certain resources for anti-money-laundering compliance purposes, helping them address the risk of financial crime while keeping down costs, federal regulators said Wednesday.

joint statement issued by the Federal Reserve, the Federal Deposit Insurance Corp., the Treasury Department, the Office of the Comptroller of the Currency and the National Credit Union Administration is the result of a working group formed by the agencies aimed at improving the effectiveness and efficiency of the country’s anti-money-laundering legal regime.

Sigal Mandelker, the Treasury undersecretary for terrorism and financial intelligence, said the statement was part of a broader effort to work with regulatory partners to strengthen money-laundering defenses across the U.S. financial system.

Banks may benefit from using shared resources to manage their obligations more efficiently and effectively, but they should approach the establishment of such an arrangement as it would other business decisions, the joint statement said.

The statement highlighted the benefits of collaborative arrangements that pool resources, such as staff or technology. The statement explains how these arrangements are most suitable for banks with a community focus, less complex operations and a lower-risk profile.

Each bank in such an arrangement, however, is responsible for ensuring its own compliance.

“Sharing resources in no way relieves a bank of this responsibility,” the statement said. “Nothing in this interagency statement alters a bank’s existing legal and regulatory requirements.”

Crypto Exchange ShapeShift Calls Money Laundering Claims ‘Deceptive

By Nikhilesh De

ShapeShift has issued a stinging rebuke of a Wall Street Journal investigative article that claimed the crypto exchange was used by criminals to launder money.

In a blog post published Monday, CEO Erik Voorhees said the news outlet’s report showed a misunderstanding of how cryptocurrencies work and that the article’s claims were factually incorrect.

Calling the claims “factually inaccurate and deceptive,” Voorhees wrote that his exchange had been working with the Journal for nearly half a year, but the final story “omitted relevant information” and showed that “the authors do not have a sufficient understanding of blockchain and our platform in particular.”

The article – published Friday – follows an investigation by the Journal into cryptocurrency exchanges. The authors concluded that some $88 million was laundered through 46 different exchanges over two years, with $9 million going through ShapeShift in that period. This was the largest sum sent through any U.S.-based exchange, the report said (though registered in Switzerland, ShapeShift operates out of the state of Colorado).

Voorhees wrote that “even if it was true” that $9 million was laundered through ShapeShift, it would represent only 0.15 percent of the exchange’s total volume. Moreover, the exchange has “a strong record of complying with law-enforcement requests, providing valuable assistance in over 30 investigations in 13 different countries all over the world.”

He also claimed users cannot launder fiat currencies through the exchange, saying:

“Unlike most other exchanges, ShapeShift is a crypto-to-crypto, non-custodial platform.  We don’t take custody of user funds, but instead swap our own assets for theirs, at a set price.  We don’t touch fiat currency, so users cannot swap their dollars/euros/yen for our bitcoin/ethereum/dogecoin. Not a single dollar, euro, or yen has ever been laundered through ShapeShift.  It can’t be done.”

Understanding transactions

Voorhees claimed that some fundamental misunderstandings of how wallet addresses work may have resulted in some of the Journal’s conclusions.

He cited one example, saying that funds from a suspicious transaction were sent to an exchange, which later sent funds to ShapeShift.

“Because ShapeShift happens to be a customer of this same exchange – 10 months later in a completely unrelated transaction – the exchange sent funds to ShapeShift. The authors didn’t understand how to properly read the blockchain transactions, so they assumed there was $70k in ‘dirty money’ sent to ShapeShift,” he wrote.

Voorhees said ShapeShift has asked the Journal for additional transaction information to verify other claims, but the news organization has so far not done so.

Data transparency

Voorhees also asserted that ShapeShift is one of the most transparent exchanges operating today.

Every transaction through the exchange is published online, despite the user privacy protections that it has maintained to date, he wrote.

The Journal relied on this information to conduct its investigation, he said, adding that “perhaps the irony is lost on the WSJ, but the WSJ would have been unable to do this kind of investigation with any other crypto exchange, because they aren’t transparent in this way.”

“Ultimately, we are trying to pioneer a new financial system,” he concluded. “We don’t expect to be loved by the old … yet ShapeShift has always been in favor of complying with the laws of the jurisdictions in which it operates, even though many of these laws are unclear, ever-changing, contradictory, and in some cases ineffective.”

Money Laundering and Specific Intent Can Be Difficult to Prove

By Terence Grugan

A recent decision out of the United States District Court for the Eastern District of Virginia adjudicating a seemingly straight-forward alleged fraud and money laundering scheme reminds us that money laundering charges still require the government to establish elements which can be difficult to prove, including, importantly, specific intent.

United States v. Millender involved an investment fraud scheme charged against a husband and wife and their associate. Terry and Brenda Millender were, respectively, the founder and pastor, and the “First Lady” of the Victorious Life Church (“VLC”) in Alexandria, Virginia. The evidence at trial established that Mr. Millender conceived of and founded Micro-Enterprise Management Group (“MEMG”), purportedly for the purpose of helping the poor in developing countries by making small, short-term loans to entrepreneurs who wished to start or expand existing businesses. Mrs. Millender was the co-founder, registered agent, and signatory of MEMG. To fund the enterprise, MEMG solicited “loans” from VLC congregants and other private lenders. MEMG promised its investors high rates of return through profits on the entrepreneur loans and assured them that the loans were securely backed by MEMG assets. Moreover, written materials soliciting investment represented that MEMG had a successful history of making micro-loans in Africa and had established relationships with on-going projects. Later, Mr. Milliner founded a second entity, Kingdom Commodities Unlimited (“KCU”), purportedly for the purpose of brokering Nigerian oil deals, and promising investors substantial returns on what they claimed were short term loans. The defendants solicited over $600,000 from investors from 2008 until 2015.

The Millender opinion reflects the complexity of the different prongs of the money laundering statutes, and their somewhat overlapping and competing requirements. The opinion is particularly noteworthy because of its procedural posture: despite jury verdicts finding guilt, the district court nonetheless found at least as to some counts that there was insufficient evidence as a matter of law of knowledge and specific intent.

On June 29, 2017, the grand jury returned a superseding indictment charging the Millenders and Grentta Wells, an associate, with 31 counts of wire fraud, tax fraud and money laundering. The government charged that the defendants traded the borrowed funds in high risk investments on foreign exchanges (“FOREX”), losing a substantial portion of the investments. MEMG allegedly never made any micro-loans or consummated any oil deals. Instead, and according to the superseding indictment, the defendants squandered their investors’ assets on unsuccessful FOREX trading and used the remained to fund personal expenses. Investors never were repaid their loans and were provided falsified information and, in some instances, small “lulling” payments when the promised full repayments were not forthcoming. After Wells pleaded guilty to one count of conspiracy to commit wire fraud, the Millenders went to trial. They were convicted.

Following an eight day trial, Terry Millender was convicted of wire fraud, conspiracy to commit wire fraud, filing false tax returns and aiding and assisting in the filing of false returns, obstruction of justice, and various money laundering charges. As to the money laundering charges, he was convicted of committing, or conspiring to commit, money laundering with an intent to “promote” the underlying criminal activity, in violation of 18 U.S.C. § 1956(a)(1)(A)(i), or an intent to “conceal” the illegal proceeds derived from that activity, in violation of 18 U.S.C. § 1956(a)(1)(B)(i). He also was convicted under the “international” prong of the money laundering statute, in violation of 18 U.S.C. § 1956(a)(2)(A), of conducting a cross-border financial transaction with the intent to promote a specified unlawful activity (as we have blogged, this is a unique money laundering provision because it does not require the use of previously-obtained illegal proceeds in the transaction), and under the “spending” money laundering statute, in violation of 18 U.S.C. § 1957, which requires a transaction involving over $10,000 of illegal funds.

Brenda Millender was convicted of conspiracy to commit wire fraud, conspiracy to commit money laundering, and substantive money laundering. Similar but not identical to the charges against her husband, her money laundering charges variously involved an intent to “promote” the underlying criminal activity, in violation of 18 U.S.C. § 1956(a)(1)(A)(i), and an intent to “conceal” the illegal proceeds derived from that activity, in violation of 18 U.S.C. § 1956(a)(1)(B)(i). Mrs. Millender was not charged with any “international” money laundering charges.

Following the verdict, the Millenders both moved for judgment of acquittal under Federal Rule of Criminal Procedure 29, and Mrs. Millender also moved for a new trial under Federal Rule of Criminal Procedure 33. Although the Court denied Mr. Millender’s motion, it granted Mrs. Millenders’ motions, overturning the jury’s decision and vacating its guilty verdict against her.

The Underlying Fraud Scheme: Husband vs. Wife

Describing the underlying schemes as “hair brained,” the Court distinguished Mr. Millenders’ involvement from Mrs. Millender’s. Addressing the wire fraud charges first, the Court explained that Mr. Millender “was the moving force, leader and manager” of the fraudulent schemes and “he effectively controlled and directed” the scheme by “review[ing] and approv[ing] all of the informational brochures and documents for investors that contained false and misleading information; and clearly knew that some of the representations used to solicit borrowed funds were false or misleading.” Further, Mr. Milliner “actively and knowingly concealed the fraudulent nature of the schemes through both MEMG and KCU, and engaged in further misrepresentations in order to induce lenders to either part with more money or not press for repayment.”

In contrast, the Court stated as to Mrs. Millender that “there was no evidence that she played any role in conceiving or understanding the scheme or ‘business model’ used to solicit borrowed funds [and she] . . . was not listed in promotional materials [or] was involved in generating any promotional materials or had ever seen the promotional materials provided to potential lenders.” The Court also explained that there was no evidence she had any active involvement in the creation or operation of the venture beyond being listed as its owner and registered agent. Although the Court found that Mrs. Millender “substantially benefited from the charged fraudulent scheme,” the Court determined there was still no evidence that Mrs. Milliner knew the distributions she received were improper or part of the fraudulent scheme. In addition, the Court discounted a bankruptcy filing jointly submitted by Mr. and Mrs. Millender “which contained false and misleading statements,” stating that there was no evidence establishing what role Mrs. Millender played in the filing. In essence, the Court made clear that it was not enough for the government to connect Mrs. Millender – or any similarly-situated fraud defendant – to the fraudulent enterprise. Rather, the connection must be to the actual fraudulent conduct: the government must present specific evidence that a defendant specifically intended to perpetrate or participate in the charged fraud.

The Money Laundering Scheme: Insufficient Evidence of Mental State

Turning to the money laundering charges, the Court overturned Mrs. Millender’s conspiracy to commit money laundering because “the evidence was insufficient to establish that she knew the funds involved in the . . . transactions represented the proceeds from some form of unlawful activity,” for the same general reasons underlying the vacation of her wire fraud convictions.

Finally, the Court dismissed all of the substantive money laundering charges against Mrs. Millender, and several of the substantive money laundering charges against Mr. Millender, as insufficiently proven. Mr. Millender was charged with two forms of money laundering: “promotional” money laundering and “concealment” money laundering – and the “promotional” money laundering charges involved both the traditional charge under Section 1956(a)(1)(A)(i), and the “international” charge under Section 1956(a)(2)(A), which, as noted, does not require proof that the transaction involved the use of previously-obtained illegal proceeds. Both Millenders were also charged with several substantive counts of “concealment” money laundering under 18 U.S.C. § 1956(a)(1)(B)(i), which requires in part proof that the defendant knew that the transaction was designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of the proceeds.

Addressing the promotional money laundering charges against Mr. Millender, the Court held the evidence was sufficient to prove that he used fraudulently-obtained funds to promote his scheme when he made wire transfers from the account of a British Virgin Islands company created by Mr. Millender to facilitate his FOREX trading to an MEMG account located in the United States. This holding by the Court is slightly incorrect, because it was unnecessary for the jury to find, at least for the purposes of any charges under the “international” prong, that fraudulently-obtained funds were used. Regardless, the point here is that there was sufficient evidence of an intent to promote.

However, the Court dismissed the concealment money laundering charges as to both Millenders. According to the Court, “concealment” money laundering requires the government prove “a specific intent to structure a transaction so as to conceal the true nature of the proceeds.” Those charges centered on debits from a bank account associated with the venture purportedly for business related expenses. The Court held that none of the transactions “was sufficiently structured such that a jury could infer the required mens rea” because none of the transactions concealed the source of the money or reflected any other indicia that their purpose was to conceal their source.

Arguably, as to Mrs. Millender, the Court should have vacated all of her money laundering charges once it found for the purposes of the conspiracy charge that she lacked knowledge that the proceeds at issue in the charged transactions involved the proceeds of specified unlawful activity. Given lack of knowledge by Mrs. Millender, it may have been unnecessary to assess her specific intent.

A Rare but Not Impossible Defense Victory

The Court’s opinion is noteworthy because of the posture from which it disposed of the charges against the Millenders. Fed. R. Crim. P. 29 permits the Court to overturn a jury’s guilty verdict only if it concludes that “after viewing the evidence in the light most favorable to the prosecution, no rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” This is an exceedingly deferential standard prohibiting the Court from “weighing the credibility of the evidence or resolving any conflicts in the evidence presented,” instead requiring the Court to “assume that the jury resolved all contradictions in the testimony in favor of the government.” Similarly, Fed. R. Crim. P. 33 permits a Court to grant a new trial after the jury has rendered a guilty verdict only “in the rare circumstance when the verdict is against the great weigh of the evidence.” Rule 29 and Rule 33 motions are rarely successful, particularly where, like with Mrs. Millender, circumstantial evidence connects the defendant with the fraudulent enterprise.

Nevertheless, intent remains a meaningful and sometimes elusive element of criminal offenses. As the Court here did, court should take care to ensure that intent is not conflated with other elements of the offense and accorded its full weight and meaning. However, recognizing the government may appeal its decision, and seemingly acknowledging that the government’s position may have some merit, the Court concluded its order by alternatively holding that Mrs. Millender still would receive a new trial if her convictions were reinstated.

US deports Pakistani man convicted in money laundering scheme

The US has deported a Pakistani national, who was convicted last year for laundering money and was ordered to pay nearly USD 71 million, after his release from a prison, a federal law enforcement agency has said.

Muhammad Sohail Qasmani, 50, was removed from the US and turned over to Pakistani authorities without incident on Tuesday after he served his sentence at a Pennsylvania prison.

In June 2017, he was convicted in a federal court for conspiring to commit wire fraud. He was sentenced to 48 months imprisonment and ordered to pay nearly USD 71 million in restitution, according to US Immigration and Customs Enforcement or ICE.

According to court documents, Qasmani had applied for admission into US at Los Angeles International Airport in California as a B-2 nonimmigrant visitor on December 22, 2014. US Customs and Border Protection paroled him into the US for the purpose of criminal prosecution and released him to the custody of the Federal Bureau of Investigations.

In an interview with FBI agents, Qasmani admitted that from November 2008 till December 31, 2012, he agreed to provide money laundering services to co-conspirators in exchange for a percentage of the money he transferred. Qasmani provided these services with the knowledge that his collaborators had obtained this money from victims of an international telecommunications fraud, federal attorney said. In June 2017,  Qasmani was convicted federally.

Money laundering case: SC stops special court from unfreezing Omni Group accounts

ISLAMABAD: The Joint Investigation Team (JIT) constituted to probe the Rs35 billion money laundering case disclosed to the Supreme Court that 33 more suspicious accounts had been detected.

A three-member bench of the apex court, headed by Chief Justice Mian Saqib Nisar and comprising Justice Umer Ata Bandyaal and Justice Ijazul Ahsen, resumed the hearing into a suo moto case over an investigation into fake transactions worth billions of rupees conducted through several mainstream banks via ‘benami’ accounts. The apex court also refrained lower courts from unfreezing the bank accounts of the accused.

Former president Asif Ali Zardari, his sister Frayal Talpur and others are the respondents in the case being investigated by the FIA for using fake accounts and their alleged involvement in the fraudulent bank transactions to the tune of Rs35 billion. The Federal Investigation Agency (FIA) Additional Director General, Economic Crime Wing, Ehsan Sadiq, head of Joint Investigation Team (JIT), while submitting a progress report before the apex court stated that 33 more suspicious accounts were identified that were also being scrutinized. It is pertinent to mention here that in early September, the Supreme Court had constituted a six-member Joint Investigation Team to probe into the money laundering and the fake accounts case.

The members of the JIT included Ahsan Sadiq, Additional Director General (Economic Crime Wing), FIA Headquarters, Islamabad, Imran Latif Minhas, Commissioner-IR (Corporate Zone), Regional Tax Office, Islamabad, Majid Hussain, Joint Director BID-I, State Bank of Pakistan, Islamabad, Noman Aslam, Director, National Accountability Bureau, Islamabad, Muhammad Afzal, Director, Specialized Companies Division, Securities and Exchange Commission of Pakistan, Islamabad; and Brigadier Shahid Parvez of Inter-Services Intelligence (ISI). The court had directed the JIT to submit its progress report after every fortnight. In pursuance of the court’s direction, the JIT informed the apex court on Monday that as many as 334 people were involved in conducting transactions through the bank accounts in question. The JIT head further told the court that 210 companies also were linked with the fake bank accounts. During the hearing, the Chief Justice inquired if any progress was made in investigations regarding money sent through sea launches. Ahsen Sadiq replied in the negative.

The Chief Justice, Mian Saqib Nisar, observed that Arif Khan, an accountant of Omni Group, also has an integral role in the matter. The JIT head submitted that Arif is not in Pakistan and he has no information about his whereabouts. The FIA Additional Director General contended that efforts are underway for the repatriation of the accused in the instant case adding they are also coordinating with the National Accountability Bureau (NAB), Federal Board of Revenue (FBR), Securities and Exchange Commission of Pakistan (SECP) and State Bank of Pakistan (SBP) for sharing the records to conduct the investigation effectively. He further submitted that 47 companies involved in the case have a direct nexus with the Omni Group. To a court’s query, the JIT head submitted that the Omni Group owns 16 sugar mills.

During the hearing, the Chief Justice asked Shahid Hamid, counsel for Omni Group, as to why the JIT expenditures should not be borne by the Omni Group. The Chief Justice asked why should the government pay if someone else has stolen the money. The learned counsel contended that all their accounts are frozen and they don’t even have the money to pay salaries to their employees. The court then directed the special court not to issue ruling on the Omni Group’s petition to unfreeze their accounts. The Chief Justice also directed the special court not to give any rulings without informing the Supreme Court. Later, the court adjourned the hearing for 10 days.

Meanwhile, the court directed shifting Anwar Majeed, Chief Executive Omni Group, his son Abdul Ghani Majeed as well as Hussain Lawai to jail after the medical board declared them fit to join the interrogation. On the last hearing, the court had directed for constitution of a medical board led by Surgeon General of Pakistan Lt Gen Zahid Hameed.

On Monday, the Additional Attorney General submitted a report, filed by the Medical Board. The court was informed that the board had declared Anwar Majeed as having a normal cardiac status and is advised to continue minimal medication, which he is taking for the control of blood pressure. “He is considered fit at present to undergo interrogation,” the Board recommended.

Similarly referring to the status of Abdul Ghani Majeed, son of Anwar Majeed, the Board recommended surgical management for hemorrhoids. At present, he can be managed outside the hospital stating however, he should be kept under observation for any increased bleeding from rectum, till a surgery is performed. The board further said moreover, he may also be counseled for an early surgical treatment. “He is fit at present to undergo interrogation while avoiding a prolonged sitting posture till surgical cure of his hemorrhoids,” the board recommended. Likewise, in case of Hussain Lawai, the Board submitted that the patient is considered to have a normal cardiac status and is advised to continue the minimal medication which he is taking for the control of blood pressure. “He is considered fit at present to undergo interrogation”, the Board recommended. After the report, the court directed to immediately shift, Anwar Majeed CEO Omni Group, his son Abdul Ghani Majeed and Hussain Lawai to jail and disposed of the case.

The Chief Justice, while addressing Advocate General, Sindh, also warned the Chief Minister Sindh against giving any favour to the accused and if the court came to know about any of it, strict action would be taken. The Chief Justice also hinted that the court may transfer them from Sindh to the Punjab prisons in that case.

Kent police captain charged with operating gambling house, money laundering

KENT — Lorain County authorities have charged a Kent police captain and his wife with money laundering and racketeering in a grand jury indictment related to their interest in alleged illegal gambling at so-called “internet cafes.”

James W. “Jayme” Cole, 52, and his wife Audrey Cole, 45, both of Stow, were indicted Wednesday by a Lorain County grand jury on three counts of engaging in a pattern of corrupt activity — commonly called racketeering — which are all first-degree felonies; seven counts of money laundering, all third-degree felonies; four counts of illegal casino gaming, all fifth-degree felonies; and four counts of operating a gambling house, all first-degree misdemeanors.

Cole has been a Kent police officer since July 1988, according to his personnel file, released by the city and reviewed Thursday by the Record-Courier following a public records request.

According to the Elyria Chronicle-Telegram, a Lorain County grand jury was convened following an investigation and a series of raids Aug. 15 in multiple Northeastern Ohio counties.

“These indictments are the result of an ongoing investigation involving numerous law enforcement agencies including the Ohio Casino Control Commission, the Lorain County Sheriff’s Office and a number of other area police agencies,” Lorain County Prosecutor Dennis Will said.

One of the raids was on Cole’s home in Stow. Agents of the Portage County Drug Task Force served a search warrant there Aug. 15 on behalf of Lorain County authorities and seized records and cash, according to a law enforcement official who asked not to be identified due to the ongoing investigation.

Cole was placed on paid administrative leave the following day after the Kent Police Department was made aware of the investigation, Kent police spokesman Lt. Mike Lewis said. That changed to unpaid leave on Wednesday when Cole was arrested.

Lewis and Police Chief Michelle Lee said they have no reason to believe Cole committed any crimes in Kent or Portage County.

Cole became a Kent police officer after attending the Hiram Police Department Basic Police Academy in late 1987. He briefly worked as a dispatcher for both Hiram and Chagrin Falls police before Kent police hired him in July 1988.

He served on road patrol, earning Officer of the Year in 1994 along with a Meritorious Service Award, and was the department’s MADD Officer of the Year every year from 1990-94.

Cole was promoted to sergeant in July 1998 and to lieutenant in June 2006, serving both as a patrol supervisor and later as the department’s spokesman. He was promoted to captain in 2011.

In recent years, howeverm Lee’s performance reviews of her second-in-command cited Cole for “unreliability,” including missing several overtime shifts in 2015-16 and failing to show up for a shift on Halloween 2016 — one of the busiest nights of the year for Kent police.

Only one disciplinary item was included in Cole’s personnel file: An internal departmental investigation in 2012 resulted in a two-week suspension without pay, restitution to the department and the loss of his take-home vehicle after Lee discovered the captain was using it for personal matters.

Global standard for cryptocurrency anti-money laundering to be agreed

The global anti-money laundering task force has said it is closer to establishing a worldwide set of standards to apply to virtual currencies.

The president of the Financial Action Task Force, Marshall Billingslea, said he is optimistic that at its plenary, due in October, the FATF will agree a series of standards that will close the anti-money laundering “gaps” that all nations face.

“It is essential that we establish a global set of standards that are applied in a uniform manner,” he added.

The task force has accelerated its work and made significant progress on reaching a “consensus across nations” after the G20 requested the organisation tackle the issue as a matter of urgency.

In October, the FATF will discuss which of its existing standards need to be updated to address virtual assets, since its current recommendations do not acknowledge them. It will then revise the methodology it uses to assess how countries implement these standards and when this revised assessment methodology will take effect.

Mr Billingslea, who is also assistant secretary to the US secretary, said currently the adoption of anti-money laundering standards and regimes pertaining to digital assets and virtual currencies is “very much a patchwork quilt or spotty process,” which is “creating significant vulnerabilities for both national and international financial systems”.

China and South Korea have clamped down on the sector, while other countries — including France, Switzerland, Malta and Gibraltar — are drawing up regimes for formally policing the space in an attempt to attract fintech business.

UK MPs also highlighted on Wednesday the urgent need to regulate “Wild West” crypto-asset markets. The Commons Treasury select committee warned that a dearth of regulation around crypto-assets had left investors exposed to a “litany of risks” — without any of the protections usually afforded to consumers, such as access to compensation.

Cryptocurrencies are not regulated by central banks but are held digitally via electronic identities that in many cases allow their owners to remain anonymous. As a result, they have been linked to payments for prohibited goods such as guns and drugs and are a target for hackers.

Mr Billingslea said there were concerns of an emerging use of virtual currencies by terrorist organisations including Isis, as well as in extortion schemes, such as the WannaCry attacks.

His comments come after some observers argued that authorities such as Europol, Europe’s law enforcement agency, should devise a centralised system that flags cryptocurrency wallets linked to nefarious activities to major exchanges, so that they can block the owners from exchanging those funds for hard cash.

Despite the risks associated with digital assets, Mr Billingslea said they also presented “a great opportunity”. In terms of regulation, he said, “you can’t tilt too far in one direction or another” since blockchain, the technology that underpins virtual assets, “will continue to evolve”.

House Passes Bill to Update Money Laundering Crypto Enforcement

By Jacob Rund

The Treasury Department’s anti-money laundering enforcement unit could soon see an update to its duties after the House advanced legislation aimed at prioritizing its focus on cryptocurrencies and other emerging technologies.

The FinCEN Improvement Act (H.R. 6411), which passed Sept. 12 on a voice vote, would add language to the Financial Crimes Enforcement Network’s governing law that requires it to coordinate with other countries’ financial intelligence units on cryptocurrency-related initiatives.

It would also add tribal law enforcement groups to the list of “partners” with whom FinCEN is tasked with working to combat money laundering and other activities that fund terrorism and organized crime. Those partners, according to U.S. code, include “federal, state, local, and foreign” law enforcement and regulatory authorities.

The bill “is an important step in modernizing FinCEN and ensuring our law enforcement and intelligence communities can detect and prevent criminals and terrorist networks from using virtual currencies” for money laundering and cyberwarfare, Rep. Ed Perlmutter (D-Colo.) said in July when the bill was introduced.

Rep. Steve Pearce (R-N.M.) joined Perlmutter in sponsoring the legislation.


“It’s an insult to small potatoes everywhere,” Ross Delston, a Washington attorney and anti-money laundering expert witness, said of the bill. It would give FinCEN authority that it already has to deal with activities involving cryptocurrency, he told Bloomberg Law.

FinCEN officials have stated that they will go after criminals using bitcoin and other virtual currencies to launder money and avoid the traditional financial system.

“As far as coordinating with tribal authorities, while that could in theory be an issue, it’s not going to come up an awful lot,” Delston said. “It’s a really minor issue.”

Regardless of these complaints, the bill passed with bipartisan support.

The bill, in addition to its language on cryptocurrencies and tribal law enforcement, contains a provision that would require FinCEN to support activities that protect against “terrorism,” rather than “international terrorism” as U.S. code now states.

Another Bill Coming

Another bill targeted at FinCEN’s information sharing and collaborative efforts will be considered this week. Financial Services Committee members plan to vote Sept. 13 on the 2018 FinCEN Modernization Act (H.R. 6721), which would instruct the bureau to create and maintain “research, development, and information sharing programs.”

It would allow FinCEN to enter into transactions with other government agencies, states, and “any agency or instrumentality” of the United States that furthers the goals of information sharing and developing new technologies. The bureau could also solicit and accept gifts from these parties.

The bill could provide an inside track for vendors to avoid the normal procurement process and land a government contract by offering cash or “in kind” gifts, Delston said.