Mueller prosecutors defend money laundering charge against Manafort

By Josh Gerstein

Prosecutors for special counsel Robert Mueller are urging a federal judge to turn down former Trump campaign chairman Paul Manafort’s argument that a money laundering charge he faces is flawed because the activity that generated the funds — lobbying for a foreign government — is not illegal.

Manafort is accused of laundering more than $30 million that flowed through offshore bank accounts in connection with his work related to Ukraine, but Manafort’s defense lawyers argued in a motion filed last month that his failure to register as a foreign agent in connection with that lobbying isn’t sufficient to render the proceeds the kind of illegally obtained funds that can sustain a money laundering conviction.

However, prosecutors said in a response Wednesday that in 2001 Congress specifically designated felony violations of the Foreign Agents Registration Act as the sort of activity that can lead to money laundering charges.

“This language reflects that Congress added FARA alongside other foreign-focused offenses that it understood to generate proceeds capable of being laundered through U.S. financial institutions — that is, that Congress understood FARA not only as an offense capable of being promoted through the flow of money into the United States, but one that would itself generate proceeds subject to downstream laundering,” prosecutors wrote. “Manafort’s position runs against the grain of that Congressional expectation.”

Mueller’s team also made another point: Even if some of the funds Manafort controlled might have been paid whether or not the lobbying effort was properly registered, he may well have been paid a premium or paid specifically to engage in a lobbying scheme intended to operate illegally, below the radar.

“Manafort overlooks the possibility that a party ‘acting as an agent of a foreign principal’ may well be paid not simply to serve as such an agent but specifically to do so without registering — that is, to ‘wilfully fail to provide information to the government’ that is required under FARA,” the prosecution team wrote.

The prosecution also submitted a filing Wednesday challenging a motion by Manafort’s defense to throw out one of two counts alleging he made false statements or caused others to do so in connection with the lobbying work. Prosecutors say they can pursue a catch-all false statements charge as well as a separate one alleging violation of a specific law focused on false statements related to foreign lobbying.

Manafort is facing two separate indictments obtained by Mueller’s office. One, in Washington, focuses on money laundering and foreign lobbying. Another, in Alexandria, Virginia, involves tax fraud, bank fraud and failure to report overseas bank accounts. The 69-year-old Manafort could potentially spend the rest of his life in prison if convicted in either case.

Neither case appears to directly relate to allegations of collusion between the Trump campaign and Russia, but prosecutors have closely scrutinized Manafort’s dealings with Ukraine because of alliances between Russia and many Ukrainian politicians and businessmen.

In addition to the count-by-count challenges prosecutors responded to Wednesday in the Washington case, Manafort’s defense is challenging all the charges in both cases on the grounds that Mueller’s appointment by Deputy Attorney General Rod Rosenstein was invalid and that Mueller has exceeded any authority he may have.

Manafort’s trial on the charges filed in Virginia is set for July 10. His trial in Washington is set to begin Sept. 17.

Eight people charged with online romance money laundering scam

COLUMBUS (WCMH) — Eight people from Central Ohio have been charged in federal court for an online romance scam.

According to the Department of Justice eight men charged on Valentine’s Day have been indicted by a grand jury for conspiring to launder and for laundering the proceeds of online romance scams.

According to the indictment, the eight men created several profiles on online dating sites and then contacted men and women throughout the United States developing a sense of affection, and often, fake romantic relationship with the victims.

Those charged include: Kwabena M. Bonsu, Kwasi A. Oppong, Kwame Ansah, John Y. Amoah, Samuel Antwi, King Faisal Hamidu, Nkosiyoxoxo Msuthu and Cynthia Appiagyei.

After establishing relationships, perpetrators of the romance scams allegedly requested money, typically for investment or need-based reasons, and provided account information and directions for where money should be sent. In part, these accounts were controlled by the defendants. Typical wire amounts ranged from $10,000 to more than $100,000 per wire

The funds were not used for the purposes claimed by the perpetrators of the romance scams. Instead, the defendants conducted transactions designed to conceal, such as withdrawing cash, transferring funds to other accounts and purchasing assets and sending the assets overseas.

“According to the indictment, the defendants laundered the funds from a scheme to seduce victims throughout the United States using dating websites like Match.com and then defrauding them of millions of dollars,” U.S. Attorney Benjamin C. Glassman said

It is alleged that the individuals commonly used some the fraud proceeds to purchase salvaged vehicles sold online. The cars were commonly exported to Ghana.

Fictitious reasons for investment requests included gold, diamond, oil and gas pipeline opportunities in Africa. Websites used involve Match.com, ChristianMingle.com, BabyBoomerPeopleMeet.com, PlentyofFish.com, OurTime.com, EHarmony.com and Facebook. At least 26 victims have been identified thus far.

In one example, a victim believed she was in a serious relationship with a person named “Frank Wilberg” whom she met on Match.com. She believed they planned to marry and paid $3,000 to reserve a wedding site, and had purchased a wedding gown and shoes.

Wilberg” told the victim he owned a consulting firm that tested gold for purity and needed money to buy gold and gold contracts. He said he expected to profit $6 million and would repay her with the profits. The victim wired money to accounts controlled by Amoah, Bonsu, Msuthu, and Appiagyei, and did not receive any money back.

In furtherance of the scheme, the co-conspirators allegedly created several companies, some of which were shell companies, to help attempt to hide the true nature of their proceeds

 

Report: Putin family used Estonian bank for money laundering

COPENHAGEN, Denmark – A Danish newspaper said Tuesday a whistleblower warned the management of Denmark’s biggest bank in 2013 that family members of Russian President Vladimir Putin and Russia’s spy agency were using its Estonian bank branch for money laundering.

Denmark’s Berlingske daily says the leaked internal report indicated that the Danske Bank leadership knew “of far more serious conditions than previously stated.”

The paper adds that Danske Bank in 2013 shut down 20 Russian customer accounts following a whistleblower report alleging that its Estonian branch possibly had been involved in illegal activity. The clients’ identities were kept secret at the time.

The paper shared details of the scheme with the Organized Crime and Corruption Reporting Project, a group of anti-corruption reporters, and Britain’s Guardian newspaper.

The Guardian said that a different group of firms, mostly registered in London, were involved, including Lantana Trade LLP, which had filed “false accounts.” The British daily said the ultimate owners of Lantana and related partnerships were Russians but “their identities were hidden behind a series of offshore management firms based in the Marshall Islands and the Seychelles.”

It was not clear how the investigative reporters connected Putin’s family members and Russia’s Federal Security Service to the transactions.

Danske Bank told The Associated Press it had carried out “a thorough investigation to get to the bottom of the events at that time in our Estonian branch,” adding it had no comments “until the investigation has (been) finalized.”

“Furthermore, we are unable to comment on specific customers, but the entire portfolio in question (non-residents) has been closed down,” the bank said in a statement.

Danske Bank earlier had acknowledged illegitimate transactions at its Estonian branch in 2011-2014, including money-laundering schemes, involving billions of dollars from Azerbaijan.

“As we have previously said, on the basis of what we know now, we should have done this faster. Today, we have a very different and stronger control setup in Estonia,” the bank added.

Meanwhile, Estonia’s financial watchdog said it suspects Danske Bank’s Estonian branch of misleading the Baltic country’s authorities.

The Financial Supervision Authority said it is considering a new investigation into the branch’s activity in relation to money laundering, Estonian public broadcaster ERR reported Tuesday.

The Estonian regulator did conduct inspections at the branch in 2014 during which it found extensive and systematic violations of anti-money laundering rules.

It also noted at the time that Danske hadn’t sufficiently analyzed the nature and activities of its client Lantana Trade LLP.

 

Report: Putin family used Estonian bank for money laundering

COPENHAGEN, Denmark — A Danish newspaper said Tuesday a whistleblower warned the management of Denmark’s biggest bank in 2013 that family members of Russian President Vladimir Putin and Russia’s spy agency were using its Estonian bank branch for money laundering.

Denmark’s Berlingske daily says the leaked internal report indicated that the Danske Bank leadership knew “of far more serious conditions than previously stated.”

The paper adds that Danske Bank in 2013 shut down 20 Russian customer accounts following a whistleblower report alleging that its Estonian branch possibly had been involved in illegal activity. The clients’ identities were kept secret at the time.
The paper shared details of the scheme with the Organized Crime and Corruption Reporting Project, a group of anti-corruption reporters, and Britain’s Guardian newspaper.
The Guardian said that a different group of firms, mostly registered in London, were involved, including Lantana Trade LLP, which had filed “false accounts.” The British daily said the ultimate owners of Lantana and related partnerships were Russians but “their identities were hidden behind a series of offshore management firms based in the Marshall Islands and the Seychelles.”
It was not clear how the investigative reporters connected Putin’s family members and Russia’s Federal Security Service to the transactions.
Danske Bank told The Associated Press it had carried out “a thorough investigation to get to the bottom of the events at that time in our Estonian branch,” adding it had no comments “until the investigation has (been) finalized.”
“Furthermore, we are unable to comment on specific customers, but the entire portfolio in question (non-residents) has been closed down,” the bank said in a statement.
Danske Bank earlier had acknowledged illegitimate transactions at its Estonian branch in 2011-2014, including money-laundering schemes, involving billions of dollars from Azerbaijan.
“As we have previously said, on the basis of what we know now, we should have done this faster. Today, we have a very different and stronger control setup in Estonia,” the bank added.

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

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

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

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

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

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

Under the agreement, the company will cooperate with investigators.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Former attorney sentenced to 7 years in prison for money laundering

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

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

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

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

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

Honduran lawyer gets 14 months in U.S. money laundering case

NEW YORK (Reuters) – A Honduran lawyer who once worked for a company owned by a powerful political family in the Central American country was sentenced in Manhattan to 14 months in prison on Friday after he pleaded guilty to laundering drug money.

U.S. District Judge John Koeltl said Andres Acosta Garcia’s sentence, less than the 41 to 51 months sought by prosecutors, reflected the defendant’s “minor role in a very serious offense.”

Acosta Garcia, 42, and his lawyers had asked Koeltl for a sentence of time served – about two months – so that he could return to his family.

“Each day and night of this episode of suffering, they are waiting for me at home so we can continue our lives,” Acosta Garcia said in court before Koeltl sentenced him.

Acosta Garcia worked for Grupo Continental, a conglomerate owned by Honduras’ politically influential Rosenthal family, according to court filings. He admitted in August that while working there, he helped launder money from narcotics trafficking through beef sales to the United States.

Prosecutors have said the money was linked to the Cachiros, a Honduran drug trafficking ring.

Koeltl said at Friday’s sentencing hearing that Acosta Garcia never earned any extra money for his role in the money laundering, and the company ultimately laid him off.

Members of the Rosenthal family were also arrested and charged in the case.

Yani Rosenthal, a former Honduran legislator who twice ran for president, pleaded guilty to helping the Cachiros launder money through beef sales and was sentenced to three years in prison on Dec. 15.

His cousin Yankel Rosenthal, a former minister of investment, pleaded guilty to attempting to launder drug money through a real estate purchase in Florida and was sentenced to two years and five months in prison on Jan. 19.

Yani’s father, Jaime Rosenthal, was also charged, but remains at large.

The case is one of several drug-related prosecutions targeting prominent figures in Honduras, which U.S. authorities have long identified as a major transshipment point for drugs being smuggled into the United States.

Fabio Lobo, son of former Honduran President Porfirio Lobo, was arrested in 2015. He pleaded guilty to conspiring to import cocaine into the United States and was sentenced to 24 years in prison in September.

Prosecutors recently announced cocaine trafficking conspiracy charges against Honduran congressman Fredy Renan Najera Montoya, who is not in U.S. custody.

Hallandale Beach Mayor Joy Cooper arrested on 3 felony charges

Hallandale Beach Mayor Joy Cooper was arrested Thursday on three felony charges.

The Broward County state attorney’s office said Cooper was arrested after an undercover FBI investigation that began in May 2012. She surrendered and was booked into jail.

Cooper is charged with money laundering, official misconduct and exceeding limits on campaign contributions, all of which are third-degree felonies. She is also charged with a first-degree misdemeanor of soliciting contributions in a government building.

“We’re all very surprised at City Hall,” Hallandale Beach Commissioner Michele Lazarow said. “It’s a sad day for the city.”

According to the state attorney’s office, FBI agents posing as wealthy land developers met with Cooper, former attorney Alan Koslow and other undercover agents posing as business owners over the course of several months to discuss a business project in the city.

Investigators said Cooper solicited campaign contributions for herself and others that exceeded the legal limit and falsely reported the contributions in campaign reports. Investigators said Cooper also solicited contributions in the amount of $1,500 each for then-Commissioners Bill Julian and Anthony Sanders.

Authorities said all of the meetings were secretly recorded.

Julian lost his bid for re-election after he was caught an audio recording, obtained by Local 10 News investigative reporter Bob Norman, in which he agreed to accept secret favors in exchange for his vote on the Diplomat Golf & Tennis Club project.

Sanders resigned last year after he was alleged to have used his position to approve nearly $1 million in funding to a nonprofit that made monthly payments to a church that he founded.

Cooper is the city’s first elected mayor. She has served on the City Commission since 1999.

Allentown, Pennsylvania, mayor’s corruption trial gets under way

ALLENTOWN, Pa. (Reuters) – The mayor of Allentown, Pennsylvania’s third most-populous city, solicited bribes to fund an expected run for the U.S. Senate, prosecutors told a court on Monday, but the defense said the Federal Bureau of Investigation had falsely accused him.

Edwin Pawlowski, a Democrat who was elected in November to his fourth term as mayor despite a sweeping “pay-to-play” indictment, went on trial in U.S. District Court in Allentown on 54 criminal counts, including bribery, conspiracy and fraud.

Pawlowski and former Reading, Pennsylvania, Mayor Vaughn Spencer were charged in July in a long-running federal corruption investigation. The trial of Spencer, who is also a Democrat, is scheduled to begin on March 5.

In his opening argument to the seven-man, five-woman jury, Assistant U.S. Attorney Anthony Wzorek described a quid pro quo scheme for city contracts.

“It is a case about a man who sold his office, soliciting bribes from the highest bidder,” Wzorek said.

Wzorek said Pawlowski solicited bribes to fund his expected 2016 Senate campaign against incumbent Pat Toomey, a Republican. The mayor had attempted a run for the Democratic nomination for governor of Pennsylvania in 2014 but gave it up for lack of funds.

“He realized he needed lots of money to run for Senate,” Wzorek said. “He vowed to raise $1 million in three months after he announced his candidacy (in 2015).”

Pawlowski suspended his campaign before the primary because of the FBI investigation. Toomey was re-elected in November 2016.

Pawlowski is accused of accepting more than $150,000 in contributions to his various campaigns from vendors with the understanding that they would receive city contracts in exchange.

The mayor sought to cover up the scheme by deleting emails, instructing his campaign aides to do the same and sweeping his office for listening devices installed by law enforcement, the indictment said.

In opening defense arguments, lawyer Jack McMahon said Pawlowski sought perfectly legal campaign contributions, with no explicit promise to the donors. Instead, he was the unwitting victim of an overzealous FBI and a scheme concocted by two mayoral consultants, Mike Fleck and his assistant Sam Ruchlewicz.

Several defendants have pleaded guilty in the Allentown and Reading schemes, including Fleck, a former campaign manager for both mayors.

Early last year, the former managing director of Allentown, which has about 120,000 residents, pleaded guilty as part of the investigation and implicated Pawlowski in a $3 million bid-rigging scheme to benefit a campaign donor.

Western Union turned blind eye to money laundering: officials

Three of the largest revenue-producing Western Union locations in New York — including two Big Apple locations run by a married couple — “willfully ignored” state banking rules over an eight-year stretch and allowed criminals to launder payments of nearly $3 billion to human traffickers in China, state officials said Thursday.

The company, following a months-long probe, agreed to pay a $60 million fine and will report to state regulators periodically about their antimoney-laundering compliance, according to the state Department of Financial Services, which headed up the probe.

The third location, in Flushing, ­which was known to Western Union as­ Agent 3, was perhaps the company’s most important link to China.

“[Agent 3] is our top location to China in the entire United States,” a ­Western Union executive wrote in a 2011 email message, according to the settlement agreement. “Please note that we need to work together to keep this agent active while still satisfying our compliance requirements.”

Evidently, the company’s compliance requirements were not a top priority.

“Western Union executives put profits ahead of the company’s responsibilities to detect and prevent money laundering and fraud, by choosing to maintain relationships with and failing to discipline obviously suspect, but highly profitable, agents,” said Maria Vullo, the DFS boss.

All three Western Union locations — including one in ­lower Manhattan and one in ­Brooklyn’s Sunset Park — are in neighborhoods with large Chinese immigrant populations.

All locations were involved in “structuring” transactions, in which ­large amounts of money were broken up into amounts smaller than $2,000, according to the settlement. Transactions of less than that amount do not require the sender to show ID.

While the details of these transactions aren’t known, the owner of the Manhattan location “admitted to [investigators] that he knew that consumers paid their debt to human smugglers in China through Western Union,” according to a Justice Department settlement with the company last year.

In the settlement with US regulators, Western Union paid a $586 million fine to settle fraud and money-laundering allegations.

The three New York locations were all so important to Western Union’s business that the compliance officers went out of their way to give them a few days’ notice before showing up, according to the DFS settlement.

But even that didn’t deter the agent in Flushing.

During five visits to the business in 2011, a Western Union investigator saw “employees permitting (and in some cases, encouraging) customers to structure large transactions by enlisting friends or relatives to assist, and then dividing the larger transactions into smaller ones,” according to the DFS settlement.

Neither the names nor the addresses of the Western Union locations in New York were disclosed by the DFS.

The company, in a statement, said it is pleased the DFS’ inquiry has ended.