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.

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.

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.

Deutsche Bank Faces Growing U.S Scrutiny Over Money Laundering

By Bloomberg

Deutsche Bank AG is facing broadening U.S. scrutiny as a leading Republican lawmaker joined Democratic colleagues in questioning the company’s steps to combat money-laundering amid reports that its U.S. unit may have been a key conduit for dirty cash.

Representative Patrick McHenry, the top Republican on the House Financial Services Committee, sent a letter Thursday to CEO Christian Sewing, seeking documents that outline what internal and independent reviews have turned up about how the bank shields against illicit transactions.

The North Carolina lawmaker’s move comes as the bank acknowledged that it has received an inquiry from House Democrats who are coordinating efforts to probe the Frankfurt-based lender and as the Federal Reserve looks into the company’s involvement with a scandal-plagued Danish bank.

“It is critically important for the American public to have confidence Deutsche Bank is adequately addressing the vulnerabilities that allowed billions of dollars tied to criminal activities to move through the international banking system,” McHenry said in his letter, which set a Feb. 7 deadline for a response from the bank.

McHenry highlighted Deutsche Bank’s involvement in scandals ranging from “mirror trading” to how its U.S. unit handled billions of dollars in tainted transactions from Danske Bank A/S. Bloomberg reported Wednesday that the Fed is looking into the Danske transactions, adding to the international authorities, including the U.S. Department of Justice, pursuing investigations on those interactions.

In response to the probes, the bank has launched internal reviews and been required to bring in outside firms to investigate its conduct and controls. McHenry requested that findings from those reviews be provided to the committee, even though the reports haven’t been made public.

“We remain committed to providing appropriate information to all authorized investigations,” the bank said Thursday in a statement responding to a request for comment. Deutsche Bank acknowledged earlier Thursday that it is engaged in “productive dialogue” with the House Financial Services and Intelligence Committees, whose leaders have said they will work together on oversight of the company.

Representatives Maxine Waters of California, who leads the financial services panel, and Adam Schiff of California, who leads the intelligence group, have said they’d jointly pursue information on the bank’s dealings with the real estate business of President Donald Trump.

The Democrats, who ascended to chairmanships when their party took control of the House this year, have long been interested in the bank’s ties to the Trump Organization, but previously lacked authority to call witnesses or issue subpoenas for other material.

“The House Financial Services and Intelligence Committees are engaged in productive discussions with Deutsche Bank, and look forward to continued cooperation,” Waters and Schiff said in a statement.

Senate Democrats Elizabeth Warren of Massachusetts and Chris Van Hollen of Maryland last month urged Banking Committee Chairman Mike Crapo to probe the company’s correspondent banking business for vulnerabilities to money laundering.

The German lender has been sanctioned before by the Fed, its primary U.S. regulator. In 2017, the company agreed to pay $41 million to settle allegations its U.S. business failed to keep up sufficient money-laundering protections.

The bank’s faulty monitoring involved billions of dollars in “potentially suspicious transactions” processed from 2011 through 2015, the Fed said, adding that the transactions involved affiliates in Europe that failed to provide “accurate and complete information.”

In corruption-plagued Chicago, high-level shakedown charges loom over mayoral race, candidates

By Aamer Madhani

CHICAGO – Over the last four decades, federal prosecutors have racked up more than 1,700 corruption convictions of elected officials, government employees and contractors, a whopping toll of graft and malfeasance that’s left longtime Chicagoans accustomed to the sight of public servants taking perp walks on the evening news.

Former Illinois Gov. Rod Blagojevichex-Rep. Jesse Jackson Jr. and disgraced public schools chief Barbara Byrd-Bennett are among the many who in recent years have done or are still doing time in the federal penitentiary for using their office to enrich themselves.

More than 30 Chicago aldermen – members of the City Council – have been convicted of political corruption since 1973. Another, Willie Cochran, heads to trial in June to answer charges of wire fraud, bribery, and extortion. Federal authorities say the retired police officer solicited a bribe from a local business owner and made off with $30,000 he collected to help people in his ward.

But the latest political scandal unveiled by federal prosecutors this month has shocked even hardened veterans of Chicago’s political scene – and cast a shadow over next month’s mayoral election.

Authorities say Democratic Alderman Ed Burke, a 50-year veteran of the City Council and chairman of its powerful finance committee, tried to shake down officials of a company that operates dozens of Burger King franchises in Illinois.

The 14-candidate mayoral race already was shaping up to the city’s most competitive in decades. In the weeks since charges of attempted extortion against Burke were unsealed Jan. 3, political corruption has become the dominant topic in the campaign.

“Chicago is still America’s most corrupt city,” said former Alderman Dick Simpson, a political scientist at the University of Illinois at Chicago.

Simpson co-authored a study last year that showed Chicago had tallied more convictions for political corruption than any other U.S. city between 1976 and 2016.

“There is still a patronage problem left over,” Simpson told USA TODAY. “The bold corruption isn’t as rampant as it once was. But as we saw in Alderman Burke’s criminal charge, the old-style politics of shaking down businessmen for illegal bribes or campaign contributions still continues.”

Burke, who is running for re-election to the City Council next month, said he’s “not guilty of anything.”

“I have not done anything wrong,” Burke said. “And I’m sure that once it gets to court it will be clear.”

The nation’s third-largest city abounds with thorny challengesPersistent gun violence terrorizes pockets of the city, taxpayers face $27 billion in unfunded pension obligationsfor city workers, and an ongoing exodus of residents from Chicago complicates nearly all facets of governing.

Mayor Rahm Emanuel, who has served as Chicago’s mayor for nearly eight years, announced in September that he would not seek a third term.

Now, the city’s long-simmering problem with corruption has moved to the forefront.

The four top-funded candidates to succeed him – Cook County Board President Toni Preckwinkle, Illinois Comptroller Susana Mendoza, former Chicago Board of Education President Gery Chico and former U.S. Commerce Secretary Bill Daley – have all found themselves under scrutiny for longstanding ties to Burke.

Preckwinkle, who was endorsed by the powerful Chicago Teachers Union, says she has returned $116,000 in political donations she collected at a fundraiser at Burke’s home last year.

She’s also faced questions about why her administration hired Burke’s son, Edward Burke Jr., in 2014 to serve as the training and exercise manager for the Cook County Homeland Security and Emergency Management Department. The younger Burke left the job last year.

Mendoza was married at Burke’s home in a ceremony officiated by the alderman’s wife, Illinois Supreme Court Justice Anne Burke.

When Mendoza announced she was running for city clerk in 2010, she called Ed Burke her “true champion,” and told supporters the alderman was “primarily the reason why I stand before you today.”

Burke endorsed Chico, who worked as an aide to the alderman 30 years ago and in recent years partnered in a law firm that has earned millions lobbying at City Hall on behalf of Cisco Systems, Exelon Generation and Clear Channel and other companies.

Burke said “there’s probably nobody more qualified” in the mayoral race than Chico.

Daley, commerce secretary under Bill Clinton and chief of staff to Barack Obama, is the son and brother of Chicago’s two most famous mayors – Richard J. and Richard M. Daley.

Burke has given the Daley family at least $30,000 in political contributions over the years, according to the Chicago Tribune. But the Daleys and Burke have also been rivals: Richard M. Daley beat Burke in the 1980 race for the Cook County State’s Attorney’s office.

Former Obama strategist David Axelrod, director of the Institute of Politics at the University of Chicago, said the Burke case “already has had an impact in that there is more focus on ethics than there has been in previous elections.”

“Elections are often turned by things you never anticipate,” he told USA TODAY. “This certainly fits that.”

The four candidates with ties to Burke are working mightily now to distance themselves. Some are trying to use the moment to tout ethics reform plans they say will purge city from the pay-to-play and kickback schemes that have bedeviled the political scene.

Preckwinkle has called on Burke to resign from City Council. She has proposed prohibiting council members from holding outside employment.

Bill Daley has also called for banning outside employment, shrinking the size of the council from 50 to 15 and imposing term limits.

Chico has also backed term limits and called for a ban on most outside income for aldermen.

He also wants to do away with aldermanic prerogative – the Chicago practice, dating back to the 1930s, that gives council members wide latitude over permits, zoning changes and parking and liquor licenses within their wards.

“The time has come to end this old-school practice,” Chico said. “No one deserves this much power.”

Daley says any politician who has been active in Chicago over the last half-century has inevitably had contact with Burke. Still, he said, his three rivals’ ties to Burke should be more concerning to voters than his own.

He said he’s had an “arms-length political relationship with Burke.

“You have to get along for political reasons,” Daley told USA TODAY. “The others have business, and really strong personal or political (ties) with Burke.

I have yet to have someone do a fundraiser of $110,000. … That is a big fundraiser. Getting married in someone’s home is more than just showing up at a political event. Having your law business be very focused on City Hall – where Ed Burke is a force – is a different thing than engaging him around politics every four years when there is a campaign.”

Preckwinkle has also tried to play down her connections to Burke while spotlighting her rival’s connection to the powerful alderman.

“I won’t have my name dragged through the mud over the alleged criminal conduct of Susana Mendoza’s mentor, Gery Chico’s best friend and Bill Daley’s long-time political ally,” she said in a statement.

Mendoza has attempted to turn the spotlight on her rivals without addressing her own connections to Burke.

In a statement to USA TODAY, she said there is a “stark contrast to Bill Daley, who won’t release his tax returns and has chosen instead to hide his conflicts of interest, Toni Preckwinkle, who has a history of lying until she gets caught, and Gery Chico, who spent years lobbying Ed Burke at City Hall and is Ed Burke’s endorsed candidate in this race.”

Some candidates untouched by the Burke scandal question whether any candidate who has long been part of Chicago’s political establishment has the will or ability to bring meaningful change.

Former federal prosecutor Lori Lightfoot, ex-chairwoman of a city police accountability task force, began pushing ethics reform as key to solving other issues soon after she announced her candidacy last year.

She says voters should question the credibility of candidates who waited until the Burke charges landed to talk about corruption.

“If we’re going to truly have a new day in city government where we put people first, then we have to start attacking the elephant in the room,” Lightfoot said. “In some ways, we’re rotting from the inside out. We’re losing population, we’re losing our tax base, and the gap between the haves and have-nots continues to grow. I think there is a moral imperative to do something about it.”

Amara Enyia, a community organizer and municipal consultant running for mayor, said the Burke scandal seems to be spurring voters to consider how corruption connects to the other ails of a cash-strapped city that has seen the closure of dozens of schools in African-American neighborhoods, the shuttering of mental health clinics and disproportionate levels of poverty in black and Latino neighborhoods.

“Voters don’t want business as usual,” Enyia said. “They want someone who does not carry the baggage of corruption.

Burke, who was forced to give up his role as chairman of the finance committee after he was charged, has faced a federal investigation before.

In February 2012, a federal grand jury subpoenaed finance committee records related to the city’s workers compensation program.

Burke denied wrongdoing and vowed to cooperate with authorities. No charges were brought.

In the alleged Burger King shakedown, Burke first applied a light touch on operators of Tri City Foods Inc., the second-largest franchisee of Burger King restaurants with stores in six Midwest states.

Federal prosecutors say in court papers that Burke told the company’s owner that he had been holding up permits to renovate one of its Burger King restaurants in his wardbecause constituents expressed concerns about trucks parking there overnight.

Prosecutors say the company promised to address the matter.

Prosecutors say Burke told owner Shoukat Dhanani and another Tri City official that he was a partner in a law firm that works with clients on property tax appeals.

Dhanani told the FBI that he “read between the lines” that Burke was suggesting he’d smooth the permits in exchange for their business, prosecutors say. Dhanani said he told Burke that his company already had legal representation.

Less than two weeks later, prosecutors say, another official with the restaurant group called to give Burke an update on steps they had taken to address concerns about the trucks parking at the restaurant.

This time, prosecutors say, Burke was more direct.

“Good,” Burke said, in a conversation the FBI says was wiretapped. “And, um, we were going to talk about the real estate tax representation and you were going to have somebody get in touch with me so we can expedite your permits.”

Dhanani and others working for the restaurant group said Burke pressed them to give his law firm their business, prosecutors say. The FBI surveillance also picked up talk from the alderman that suggested he wanted the company as a client, they say.

Burke slow-walked the permitting process for months, prosecutors say, causing the Burger King franchise to lose 40 to 50 percent in sales because it couldn’t open an unfinished dining room to customers.

Dhanani told the FBI he eventually relented and informed Burke his company would hire his law firm, prosecutors say, but he never followed through.

Dhanani also told the FBI that he made a $10,000 political donation to Preckwinkle at the urging of Burke, prosecutors say.

Preckwinkle said her campaign returned the contribution to the donor because it exceeded the $5,600 contribution limit for individual contributions.

Former federal prosecutor Patrick Cotter, a white-collar defense attorney in Chicago, said an alarming number of city politicians have been caught committing graft and stealing taxpayer money.

Still, he said, it’s important to keep in perspective that Chicago is hardly alone in having to deal with political corruption.

Federal prosecutors in Los Angeles tallied more than 1,500 convictions for public corruption between 1976 and 2016, according to Simpson’s study. Federal prosecutors in New York counted more than 1,300 convictions during those years.

“The problems here are not because every once in a while an alderman gets caught doing something crooked,” Cotter said. “It is a bad thing, and it’s important to prosecute. But it’s not why the schools are not good. It’s not why we have a homeless issue in this city that’s insane. It’s not why we have the pension problem that is going to make life hard for every Chicagoan’s kids and their grandkids.

“There are basic structural problems in this city, and solving corruption alone is not going to bring an end to these big issues.”

https://www.usatoday.com/story/news/2019/01/23/chicago-federal-political-corruption-scandal-mayor-election-alderman-ed-burke/2581411002/

 

Attorneys for Russian national charged in money laundering, murder-for-hire plot want him released due to health concerns

By Natalie Matthews

Attorneys for a wealthy Raleigh man at the center of an international money laundering and murder-for-hire case want him freed for health reasons and say he is not a threat, according to newly released documents.

Leonid Teyf, a Russian national with connections to the Putin administration, is due in court on Tuesday for a detention appeal hearing.

Teyf and associates allegedly scammed more than $150 million in kickbacks on Russian government contracts, according to the charges against him.

In newly filed documents opposing Teyf’s motion for release, the attorneys for the federal government say Teyf not only tried to murder his wife’s suspected lover (his housekeeper’s son), but also discussed killing her.

Teyf allegedly bribed an undercover Department of Homeland Security official to try to have the young man deported, authorities said. When that took too long, he paid another federal agent to kill the man, even supplying him with an illegal gun, authorities said.

Federal officials raided Teyfs’ north Raleigh mansion in December. They also raided a condo Leonid Teyf owned in the Glenwood South area, where they found a safe, several assault weapons and a lot of ammunition.

The government believes that Teyf is a flight risk and said he has multiple apartments, a compound in Russia and a home in Switzerland.

Since December 2010, the Teyfs opened at least 70 financial accounts at four different banks, and wire transfers show money coming into the couple’s bank accounts from countries known to launder money, including Belize, the British Virgin Islands, Panama and the Seychelles. Investigators said the Teyfs bought hundreds of thousands of dollars’ worth of luxury cars and more than $2.5 million worth of art.

Teyf, his wife Tatyana, and four others are charged in the case involving murder for hire, bribery, money laundering and violation of immigration laws.

Federal attorneys promise to release more information at Tuesday’s court hearing.

Leonid Teyf remains in jail without bond.  Tatyana Teyf was released from jail without bond last month.

What drives a public official to white-collar crime? ‘Greed’

By Jennifer Bowman

ASHEVILLE — Buncombe County officials illegally used taxpayer dollars to enrich themselves, paying for daytime shopping trips, private phone bills, meals, vacations, spa treatments and other personal pleasures, according to federal indictments. Three of them have admitted as much.

Research says they’re not the first to try out government corruption.

A 2018 report by the Association of Certified Fraud Examiners found occupational fraud in government and public administration caused organizations a median loss of more than $125,000, most commonly through corruption schemes. Financial damage was worse when the fraud was committed by a person of authority like a manager or executive, and even greater when multiple perpetrators were involved.

What is the cost to Buncombe County?

In Buncombe, federal prosecutors say corruption has cost much more. Even without quantifying the alleged kickbacks received by former managers Wanda Greene, Mandy Stone and Jon Creighton, the U.S. Attorney’s Office cited more than $200,000 in illegal credit card purchases and more than $2.5 million used for life insurance policies.

That’s not including millions of dollars in other controversial expenses made under Greene’s 20-year tenure as county manager, prosecutors allege.

What would drive Buncombe’s highest-ranking administrators — already paid handsomely with six-figure base salaries, bonuses, retention incentives and some of the best benefits in the state — to behave in such a way?

If they’re like any white-collar criminal, it’s greed, said Michael Clark, a former FBI agent with decades of experience investigating public corruption.

“They go in there usually with pretty good intentions, and they see (money) all around them,” Clark said. “They’re giving out a million-dollar contract to a sewer guy, another million to a road guy. Everyone’s getting rich around them — they have a lot of money, beach houses, ski trips, trips to Florida.

“The county manager — they’re civil servants. They’re making a set salary, which is comfortable but not rich. They kind of feel this sense of entitlement. ‘I’m as smart as these guys. They’re rich. I’m stuck with a civil service job. I deserve the perks.’ The greed part steps in. And we saw that time after time after time.”

No oversight? ‘That just opens the floodgates’

The report by the Association of Certified Fraud Examiners, conducted annually and in its 10th edition, said most employees never commit fraud. But when they do, researchers said, they can cause “enormous damage.”

Of nearly 2,700 cases across more than 100 countries, the study found that most occupational fraud costs a victim organization less than $200,000. Twenty-two percent, however, exceed $1 million in financial damage.

The schemes last an average of 16 months, according to the report. Government and public organizations are among the industries with the highest proportion of corruption cases.

Prosecutors allege fraud in Buncombe County government is wide-ranging, involves multiple longtime officials and dates back to more than a decade ago.

Four officials have been indicted: Greene, Stone, Creighton, and Michael Greene, Wanda Greene’s adult son and the county’s former business intelligence manager.

All but Wanda Greene have reached deals with the U.S. Attorney’s Office, pleading guilty to conspiracy charges. Joe Wiseman, a Georgia-based engineer said to be at the center of the yearslong kickback scheme with the former managers, has not been charged.

The four ex-officials represent a total of nearly 110 years as county employees. Wanda Greene served as county manager for two decades — nearly three times longer than the average tenure of city and county managers in the U.S. Stone and Creighton were Buncombe staffers for even longer.

Fraudsters who had been working with their company longer stole twice as much, according to fraud examiners’ findings: If the perpetrator had worked more than 10 years at the organization, the financial damage increased by over six times more than the median loss caused by the fraudulent scheme of someone who worked there less than one year.

“Some people get in these positions and there’s no oversight,” said Thomas Raftery III, a former FBI agent who investigated construction and contract fraud in the Afghanistan war zone.

“And that just opens up the floodgates. You gotta have some type of system of checks and balances and it doesn’t look like this county had any.”

The FBI investigation: 18 months and counting

Federal officials confirmed Wanda Greene “and others” were under investigation in August 2017, more than a month after county officials flagged financial irregularities during Greene’s last week as manager.

The investigation continues nearly a year and a half later. That’s common, former FBI agents said.

“Some of these types of investigations, they’ve taken several years — as many as five years,” Raftery said. “It depends on what’s involved, what else is going on. The agents typically have other cases, so there’s peaks and valleys in attention.”

Raftery said it’s likely the county investigation has required “a whole host of subpoenas.” The superseding indictment, in which a grand jury indicted Greene for additional charges in August, is evidence that investigators likely are picking up additional information along the way, he said.

Raftery, who has 23 years of federal law enforcement experience and served as the first inspector general for the Delaware River Port Authority, said the FBI also pays special attention to professional services contracts like those granted to Wiseman. In North Carolina and other states, they’re not subject to bidding requirements and “are a great way to shield bribes,” he said.

“They’re just more prone to manipulation,” Raftery said.

Clark said corruption cases can be complicated. A 22-year veteran of the FBI, he supervised the investigation of former Connecticut Gov. John Rowland, a case that ultimately led to the governor’s imprisonment for corruption and fraud.

Clark also oversaw major bribery and kickback investigations of several mayors throughout the state, and his work on high-profile corruption cases made the bureau’s public integrity operation in Connecticut a national model. He now is a senior lecturer in the criminal justice department at the University of New Haven.

Investigators looking into Buncombe County likely have been working through subpoenaed records, from credit card statements to travel documents, Clark said. And corruption cases often work on “moving up the food chain,” he said — finding others, perhaps more significant participants, potentially engaged in corruption.

“Let’s say they get a plea or someone decides to cooperate,” Clark said. “They’re cooperating behind the scenes before they even plead, most of the time. (Investigators) are lifting up the rocks and taking a peek and looking around, and they are sent down a whole new path.”

And the decision to cooperate is a common one, he said.

“For the most part, they’re not hardened criminals who are used to doing jail time,” Clark said. “If you’re a drug dealer or in the mob, that’s a red badge of courage. With a white-collar crime person or a public official, that’s not the case.

“They’ll cut a deal.”

‘There’s got to be checks and balances’

Internal control weaknesses were responsible for nearly half of all fraud cases, according the fraud examiners’ report. In Buncombe, officials quickly became aware of what they lacked, albeit after the fact.

“When they’ve been in that one job for that long, they certainly know how to manipulate the system, there’s no question about that,” Clark said. “They know where they can hide things or grab things from, things along those lines.”

The investigation revealed glaring problems in Buncombe County government.

Commissioners never received line-item budgets under Greene, never gave her annual performance reviews and did not regularly ask for information about her expense reports. Greene, meanwhile, redacted receipts she submitted for reimbursement, was accused of using bullying and intimidation techniques, and never reported back to commissioners on no-bid contracts,.

The county has since overhauled its policies, clamping down on how economic development money is spent, capping performance bonuses and promoting their whistleblower hotline. They’ve also changed auditing firms, strengthened the role of the county’s internal auditor and required more public reporting of contract activity.

Raftery said oversight is key, even if it’s unpopular in the organization. As inspector general, he said he regularly received pushback after issuing negative reports and implementing policies against waste and fraud. He left the job in 2014, penning a scathing resignation letter that accused officials of interfering with his independent watchdog role and preventing him from issuing audits.

Commissioners need to take responsibility for their fiduciary duty, Raftery said, and that includes being aware of contracts that don’t require their approval.

And they should remember that the county manager works for them, not the other way around, he said.

“What little I saw (about the case) just struck me — where is the oversight?” Raftery said. “Nobody’s watching. You’ve got two, three people there it looks like just doing whatever they wanted to do.

“And they got caught. Because, eventually, you’re going to get caught.”

Panama Papers: US files first criminal charges over money laundering scheme

By Will Fitzgibbon

United States authorities have charged four men, including two former Mossack Fonseca employees, with money laundering and fraud, the Department of Justice announced today.

The charges are the first in the U.S. following the Panama Papers investigation, which was first published in 2016 by the International Consortium of Investigative Journalists, Süddeutsche Zeitung and more than 100 global media partners.

Ramses Owens and Dirk Brauer, two former senior employees of the Panama-headquartered law firm, were charged with a string of offenses “in connection with their alleged roles in a decades-long criminal scheme,” the DOJ said in a statement.

Authorities also charged Boston-based accountant Richard Gaffey, and former U.S. taxpayer Harald Joachim Von Der Goltz with tax evasion, wire fraud and money laundering.

A statement from the DOJ alleges that the four men “defrauded the U.S. government through a large scale, intercontinental money laundering and wire fraud scheme.”

“These defendants went to extraordinary lengths to circumvent U.S. tax laws in order to maintain their wealth and the wealth of their clients,” said U.S. Attorney Geoffrey S. Berman.

“For decades, the defendants, employees and a client of global law firm Mossack Fonseca, allegedly shuffled millions of dollars through offshore accounts and created shell companies to hide fortunes.”

U.S. authorities partnered with enforcement agencies around the world to arrest Brauer in Paris, France, and Von Der Goltz in London, United Kingdom. Gaffey was arrested in Boston on Tuesday. Panamanian citizen Owens remains at large.

“These efforts reflect the commitment of U.S. law enforcement to follow that trail and apprehend these criminals regardless of where they are in the world.”

The men are presumed innocent until proven guilty.

According to the DOJ, Mossack Fonseca employees deliberately created bank accounts in tax havens to hinder enforcement investigations and advised U.S. taxpayers to secretly repatriate money. The names of the real owners of shell companies “generally did not appear” on offshore company paperwork.

The Panama Papers investigation was based on a trove of 11.5 million files from inside Mossack Fonseca that were leaked to reporters Bastian Obermayer and Frederik Obermaier at German newspaper Süddeutsche Zeitung, and shared with ICIJ. The investigation, done in collaboration with more than 370 reportersworking for 100 media outlets, exposed the offshore holdings of world political leaders, links to global scandals, and details of the hidden financial dealings of fraudsters, drug traffickers, billionaires, celebrities, sports stars and more.

German-born Von Der Goltz, who lived in the U.S. from 1984, allegedly evaded taxes through shell companies and offshore bank accounts.

The DOJ alleged that Von Der Goltz falsely claimed his mother, who lived in Guatemala and is now 102, owned companies and bank accounts. Von Der Goltz denied wrongdoing, according to a 2016 report from ICIJ media partner The New York Times.

Gaffey allegedly helped Von Der Goltz and another unnamed U.S. taxpayer evade taxes, the DOJ alleged.

“The charges announced today demonstrate our commitment to prosecute professionals who facilitate financial crime across international borders and the tax cheats who utilize their services,” said Assistant Attorney General Brian A. Benczkowski.

Police raid Deutsche Bank headquarters as part of Panama Papers money laundering investigation

By David Rising & Frank Jordans

BERLIN (AP) — German authorities raided Deutsche Bank’s headquarters Thursday amid suspicions that its employees helped clients set up offshore companies that were used to launder hundreds of millions of euros.

About 170 police officers, investigators and prosecutors swooped in on the bank’s offices in Frankfurt and premises in nearby Eschborn and Gross-Umstadt at 10 a.m. (0900 GMT), seizing electronic and paper records.

The investigation emerged from an analysis of documents leaked from tax havens in recent years, including the 2016 “Panama Papers,” said Frankfurt prosecutors’ spokeswoman Nadja Niesen.

It is focused on two Deutsche Bank employees, aged 50 and 46, and possibly other still unidentified suspects, she said. At least one site raided was a suspect’s home.

Analysis of the Panama Papers and other documents “gave rise to suspicion that Deutsche Bank was helping clients set up so-called offshore companies in tax havens and the proceeds of crimes were transferred there from Deutsche Bank accounts” without the bank reporting it, Niesen said.

In 2016 alone, more than 900 customers are alleged to have transferred some 311 million euros ($351 million) to one such company set up in the British Virgin Islands, she said.

The suspects, both German citizens, are accused of failing to report the suspicious transactions even though there was “sufficient evidence” to have been aware of it.

Deutsche Bank confirmed the search and said “the investigation has to do with the Panama Papers case.”

“More details will be communicated as soon as these become known. We are cooperating fully with the authorities,” the bank said.

Money laundering has become a growing problem in Europe, where a series of scandals has exposed lax regulation.

And it’s not the first time Deutsche Bank has run into trouble over the flow of dirty money.

It was fined more than $600 million by U.S. and U.K. authorities in January 2017 for allowing customers to transfer $10 billion out of Russia in what regulators said was “highly suggestive of financial crime.”\

The Panama Papers are a trove of documents from a law firm that handled shell companies for thousands of rich and powerful clients around the world. While owning a shell company is not illegal, it is used to hide the beneficial owner of a company or transfer, making it important for the handling and laundering of dirty money.

Several other institutions besides Deutsche Bank have been fined by authorities in the U.S. and Europe for not properly checking up on the beneficial owners of shell companies that send money through their accounts.

Analysts say that because these transactions can be lucrative and punishments are lax, banks have few incentives to do more than the minimum required by law to check on the identity of a bank.

“Even in the most egregious cases, banks are often only required to pay a monetary penalty for engaging in criminal activity, which is merely the cost of doing business,” said Jimmy Gurule, a former undersecretary for enforcement for the U.S. Treasury Department.

“The failure to hold banks accountable for money laundering encourages such criminal activity, including laundering hundreds of millions of dollars in Panama and other money laundering havens,” said Gurule, now a professor at Notre Dame Law School.

Most recently, Denmark’s biggest bank, Danske Bank, admitted that some 200 billion euros ($235 billion) in suspicious money had flown through its Estonian branch from 2007 to 2015. Whistleblower and former employee Howard Wilkinson has indicated that Danske Bank’s management was aware of what was going on at the branch, which was among the bank’s most profitable units. He has also alleged that family members of Russian President Vladimir Putin and Russia’s spy agency were using the bank for money laundering. The bank’s CEO has since stepped down over the scandal.

Another Baltic state, Latvia, has also emerged as a major hub of money laundering, with a 2014 leak showing that tens of billions of dollars were funneled from Russia in 2010-14. Some of the money reportedly went through Deutsche Bank and ended up in major capitals like London, according to The Organized Crime and Corruption Reporting Project.

There was no indication that Thursday’s raid was linked to that scandal, though Deutsche Bank says that it has since stopped providing dollar transactions in some countries, including Latvia.

Venezuela’s ex-treasurer sentenced to 10 years for South Florida money-laundering scheme

By Jay Weaver

A former national treasurer in the socialist government of Venezuelan President Hugo Chávez was sentenced to 10 years in prison Tuesday by a U.S. judge for his central role in a $1 billion bribery and money-laundering scheme that enabled him to acquire luxury real estate and other assets in South Florida.

Alejandro Andrade, 54, sold access to the Venezuelan government’s lucrative foreign-currency exchanges both before and after Chávez’s death in 2013, enriching himself and an elite circle of other senior officials and a prominent businessman, according to court records.

U.S. District Judge Robin Rosenberg imposed the maximum sentence for Andrade’s money-laundering conspiracy conviction in West Palm Beach federal court, rejecting a proposal by his defense attorneys to give him seven years in prison for accepting responsibility for his crime in a plea deal. The judge did not impose a fine because Andrade has no money to pay one. He was allowed to surrender to prison on Feb. 25 instead of immediately because he has been assisting federal authorities in the massive corruption and money-laundering investigation.

Andrade apologized to the judge, his family and the Venezuelan people for his crime, and then described how he became involved in a “movement” led by Chávez that he believed would benefit his country. Soon, however, the national treasurer acknowledged that he betrayed the public’s trust.

“I made some very bad choices when I was treasurer, and for that I am very sorry from the bottom of my heart,” said Andrade, who served as the top financial official in Venezuela’s government from 2007 to 2010 before moving with his family to South Florida in 2014. “To this day, I am convinced the decision I made [to cooperate] is the right one.”

Before his sentencing, Andrade owned several properties in the wealthy equestrian community of Wellington in the western part of Palm Beach County. In a $1 billion forfeiture judgment, the U.S. attorney’s office and Homeland Security Investigations have begun the process of taking those tainted properties, along with his vast collection of high-priced cars, show-jumping horses and watches.

At Tuesday’s sentencing, federal prosecutor Vanessa Snyder said Andrade conspired with three other key players in the money-laundering ring by giving them access to the Venezuelan government’s favorable dollar-to-bolivar currency exchange. Snyder said the scheme generated about $2.4 billion in illicit profits for Andrade’s three co-conspirators and they agreed to share half of their money with Andrade while keeping it in European and U.S. banks.

“Mr. Andrade abused the trust of the people of Venezuela,” Snyder said, describing how his crime contributed to the longstanding economic crisis in the South American country. “The amount of money he agreed to receive was staggering.”

But Andrade’s defense attorneys, Curtis Miner and Bob Martinez, said the co-conspirators controlled the bank accounts and that their client received about $70 million in bribes — not $1 billion.

Andrade, who pleaded guilty to a money-laundering conspiracy charge last December, has provided insider information to Snyder and fellow prosecutor Michael Nadler to assist them in building a sprawling criminal case against some of Venezuela’s richest people. Among them: TV network tycoon Raúl Gorrín, 50, who was indicted last Monday, one day before the case against Andrade was unsealed in federal court in West Palm Beach.

The indictment charges Gorrín, a politically connected Caracas businessman, with conspiring to bribe Venezuelan officials and commit money laundering by hiding embezzled government funds in South Florida and New York real estate over the past decade.

The international money-laundering scheme allegedly led by Gorrín transpired over a period of extreme economic hardship for everyday Venezuelans. Oil rich and once wealthy, Venezuela is staggering under an economic collapse that has led to hyperinflation and food and medicine shortages. More than three million people have fled the country in recent years, according to the United Nations.

The national political coordinator for Venezuela’s opposition Voluntad Popular party, Carlos Vecchio, said Andrade’s web of corruption is tied directly to current President Nicolás Maduro and his wife, Cilia Flores.

“All of them are responsible for the deep crisis that Venezuela is living through,” Vecchio said in a statement, adding that the one billion dollars that Andrade amassed “is money that was stolen from the Venezuelan people.”

The South Florida probe of Andrade was first reported by the Miami Herald and el Nuevo Herald in March. Andrade, a former Chávez bodyguard who rose to become national treasurer, faced up to 10 years in prison under his plea agreement — substantially less prison time than Gorrín now faces as a fugitive wanted by federal authorities in Miami.

Andrade was staying at his equestrian farm in Wellington while assisting the feds in the case against Gorrín and others. In mid-November, federal agents seized his Wellington properties, including 17 prized show horses.

The warmblood horses, with names like Bonjovi, Hardrock Z and Tinker Bell, were imported from various parts of Europe, court records show. Andrade’s son, Emanuel, used them to compete in show-jumping events in South Florida and other parts of the world.

Agents also seized Andrade’s fleet of luxury vehicles, from a 2017 Mercedes-Benz GLS 550 to a 2015 Bentley Continental Convertible, along with numerous U.S. and Swiss bank accounts, and a vast collection of high-end watches.

Andrade, Gorrín and other associates in Venezuela’s government, banking and business sectors are accused of enriching themselves by capitalizing on favorable foreign currency exchanges and concealing their staggering profits in European and U.S. bank accounts and investments, according to Gorrín’s indictment. Andrade used his official position to give Gorrín access to the government’s preferred exchange rates to maximize profits on currency transactions. The funds to fuel the scheme were generated by the national treasury’s issuance of bonds.

Gorrín is accused of paying hundreds of millions of dollars in bribes to Andrade and another former high-ranking official in the national treasury office by funneling the money to them through a Venezuelan banker in the Dominican Republic. The banker, Gabriel Arturo Jimenez Aray, 50, controlled the Dominican bank with Gorrín.

Jimenez was charged with conspiracy to commit money laundering earlier this year, pleaded guilty in March and awaits sentencing on Thursday as he cooperates with federal authorities. He faces up to 10 years in prison. His defense attorney, Marissel Descalzo, declined to comment.

In addition to wiring millions through Swiss and U.S. banks to those two former high-ranking Venezuelan treasury officials, Gorrín paid for an array of lavish expenses for Andrade, including three jets, a yacht, champion show horses and high-end watches, according to Gorrín’s indictment and other court records. He even paid some of Andrade’s veterinarian bills.

Gorrín’s indictment and the cases against Andrade and Jimenez are unrelated to a $1.2 billion South Florida money-laundering case filed in July that charged nine defendants, including some close to President Maduro, with embezzling vast sums of money from Venezuela’s national oil company and washing it through foreign currency exchanges to inflate profits. Millions in ill-gotten funds were invested in South Florida’s real estate market, including luxury high-rise condos and waterfront mansions in the Cocoplum section of Coral Gables.

Two defendants in that case — Gorrín’s personal banker Matthias Krull and former Venezuelan national oil-company executive Abraham Ortega — have pleaded guilty to money-laundering conspiracy charges and are cooperating with the U.S. Attorney’s Office and Homeland Security investigations.

Gorrín, owner of the Globovisión network in Caracas, has not been charged in that case. He is suspected of steering $600 million from the country’s state-owned oil company, PDVSA, to a European bank to enrich himself, Maduro’s three stepsons and other members of Venezuela’s political elite, according to court records and multiple sources familiar with the federal probe in Miami.

Maduro’s stepsons and the president himself are also under investigation in that case.