DOJ Charges Russian, Syrian Nationals With Money Laundering

Eight Russian and Syrian nationals were charged Tuesday with laundering millions of U.S. dollars for a Russian company that shipped jet fuel to Syria in violation of U.S. sanctions, according to the Department of Justice. The charges accuse the eight men of conspiring to “cause banks in the United States to provide financial services to Syria and to a Syrian SDN without having first obtained the required license,” among a series of other violations that allegedly occurred between October 2011 and October 2017. If convicted, the men will be required to forfeit almost $3 million, and two petroleum tankers.

Report describes Dubai real estate as money-laundering haven

By Jon Gambrell

War profiteers, terror financiers and drug traffickers sanctioned by the U.S. in recent years have used Dubai’s real-estate market as a haven for their assets, a new report released Tuesday alleges.

The report by the Washington-based Center for Advanced Defense Studies, relying on leaked property data from the city-state, offers evidence to support the long-whispered rumors about Dubai’s real-estate boom. It identifies some $100 million in suspicious purchases of apartments and villas across the city of skyscrapers in the United Arab Emirates, where foreign ownership fuels construction that now outpaces local demand.

The government-run Dubai Media Office said it could not comment on the report.

For its part, the center known by the acronym C4ADS said Dubai has a “high-end luxury real estate market and lax regulatory environment prizing secrecy and anonymity above all else.” That comes as the U.S. already warns that Dubai’s economic free zones and trade in gold and diamonds poses a risk.

“The permissive nature of this environment has global security implications far beyond the sands of the UAE,” the center said in its report. “In an interconnected global economy with low barriers impeding the movement of funds, a single point of weakness in the regulatory system can empower and enable a range of global illicit actors.”

The properties in question include million-dollar villas on the fronds of the man-made Palm Jumeirah archipelago to an apartment in the Burj Khalifa, the world’s tallest building. Others appear to be one-bedroom apartments in more-affordable neighborhoods in Dubai, the UAE’s biggest city.

Among the highest-profile individuals named in the report is Rami Makhlouf, a cousin of embattled Syrian President Bashar Assad and one of that country’s wealthiest businessmen. The U.S. has sanctioned Makhlouf, who owns the largest mobile phone carrier Syriatel, for using “intimidation and his close ties to the Assad regime to obtain improper financial advantages at the expense of ordinary Syrians.”

Makhlouf and his brother, also sanctioned by the U.S., own real estate on the Palm Jumeirah, according to the report. They also have ties to two UAE-based free-zone companies. The UAE, a federation of seven sheikhdoms led from oil-rich Abu Dhabi, has opposed Assad in his country’s yearslong war.

The UAE also opposes Hezbollah, the Lebanese political party and militia group backed by Iran. However, C4ADS’ report identified at least one property directly linked to Lebanese businessmen Kamel and Issam Amhaz, who the U.S. sanctioned in 2014 for helping Hezbollah “covertly purchase sophisticated electronics” for military drones. The report identified another nearly $70 million in Dubai properties owned by two other shareholders in Amhaz’s sanctioned firms.

Separately, the report identified some $21 million in real estate still held by individuals associated with the Altaf Khanani money laundering organization, a Pakistani ring that aided drug traffickers and Islamic extremists like al-Qaida through its currency exchange houses.

The report identified Dubai properties owned by Hassein Eduardo Figueroa Gomez, a Mexican national indicted in the U.S. for importing mass quantities of chemicals needed to make methamphetamine. It also identified properties owned by two Iranians previously sanctioned for their work on Iran’s missile program.

Dubai, an Arabian Peninsula entrepot, long has been a favorite port of call for those skirting the law. Gold smuggling into India served as one of the emirate’s most lucrative trades for the decades after the pearling industry collapsed. Guns, drugs and other illicit cargo also moved through the city-state.

Over time, however, Dubai itself became a haven. The emirate’s decision in 2002 to allow foreign ownership of so-called “freehold” properties drew a rapid construction boom that attracted developers from across the world, including President Donald Trump, whose name is on two golf course projects and villas.

Dubai’s easily flipped luxury properties offered an opportunity for those wanting to park money they otherwise couldn’t spend. The Federation of American Scientists warned based on news reports in 2002 that “money-laundering activity in the UAE may total $1 billion annually.”

Money quickly flowed in from all corners, especially those now involved in the U.S. wars in Afghanistan and Iraq, likely topping that.

From Kabul, the Afghan capital, over $190 million in physical cash left for Dubai in three months in 2009 on commercial flights, according to an October 2009 U.S. diplomatic cable published by WikiLeaks. In 2008, some $600 million, as well as 100 million euros and 80 million British pounds, made the trip, according to the cable.

A banking scandal in Afghanistan in 2010 saw regulators demand that a banker turn over 18 Palm Jumeirah villas and two business properties. The brother of former Afghan President Hamad Karzai also profited from the sale of a Palm Jumeirah villa at the time.

In Pakistan, authorities believe citizens invested $8 billion in Dubai’s property market over four years, possibly to evade taxes, officials said in 2017. Alleged Australian drug kingpins arrested in Dubai last year also owned real estate in the city, while the governments of Nigeria and South Africa also have launched investigations into alleged money laundering involving Dubai.

Unlike in the U.S., where property records are public, Dubai does not offer an accessible database of all its transactions, instead requiring specific details only individual buyers and sellers would have. C4ADS said it relied in part on “private UAE data compiled by real estate and property professionals” offered by a confidential source for its reporting.

The U.S. State Department as recently as this year issued a warning about money laundering in the UAE in its annual International Narcotics Control Strategy Report, noting the country’s money-exchange shops can allow for “bulk cash smuggling.” The UAE’s economic free zones, real estate sector and its trade in gold and diamonds also pose risks.

“The UAE has demonstrated both a willingness and capability to take action against illicit financial actors if those actors pose a direct national security threat or present a reputational risk to the UAE’s role as the leading regional financial hub,” the State Department said. “However, the UAE needs to continue increasing the resources devoted to investigating, prosecuting and disrupting money laundering.”

Guatemala’s efforts to fight corruption are under attack

GUATEMALA CITY — Recent headlines about the International Commission Against Impunity in Guatemala (CICIG), a key institution leading the fight against corruption in this country, seem taken straight out of a Cold War playbook: They accuse Russia of subverting the commission in order to further the Kremlin’s interests.

In reality, the U.N.-sponsored anti-corruption body, set up in 2006 to investigate high-level corruption, has been maliciously attacked by groups seeking to degrade its mission. They have used false claims regarding the Bitkovs, a Russian family convicted of identity fraud, to undermine support in Guatemala and in the U.S. Congress for the CICIG.

Some media coverage has reflected a lack of knowledge of the Guatemalan justice system and has echoed a brazen misinformation campaign, driven by a well-financed lobbyist.

Three Russian nationals — Igor Bitkov; his wife, Irina, and their daughter Anastasia — were convicted as part of an investigation by the public prosecutor’s office that targeted a criminal network inside the national immigration agency and other entities that provided fake passports and documents to foreigners and locals. The risks that these types of networks present for regional security (including to the United States) are clear.

The court established that the Bitkovs entered the country legally in 2009 and purchased fake identities that they used to settle in Guatemala, set up companies and obtain travel documents. Igor Bitkov obtained two different identities. The Bitkovs did not request refugee status upon entering the country and, despite later allegations, it seems they never presented any evidence of political persecution by Russia.

The court sentenced the Bitkov family to the maximum sentence according to the Guatemalan penal code for the crimes committed.

The fraud case began in 2010 and convicted dozens of people, including government officials and human traffickers. Nonetheless, some media accounts in the United States and also in Guatemala have reduced the complex case to a single claim: The Bitkovs are victims of the CICIG, which, influenced by Vladimir Putin, manipulated the proceedings and is thus responsible for their conviction. This is a completely baseless accusation.

These accounts attribute powers to the CICIG that are outside its mandate. The commission is an international body born of an agreement between the government of Guatemala and the United Nations to support Guatemalan law enforcement to investigate and dismantle criminal structures that have held state institutions captive for generations, ensuring impunity for a whole range of serious crimes. Two separate Guatemalan government administrations worked with the U.N. to develop the mandate and three subsequent administrations signed mandate extensions so that the CICIG could continue its efforts. The commission has received funds and other support from at least a dozen countries, including strong support from the United States.

The CICIG has been accused by the media and others of being influenced by the state-owned Russian bank VTB, which was the largest creditor of the Bitkovs’ firm, to manipulate the proceedings and even affect the decision over the guardianship of Vladimir Bitkov, the Bitkovs’ young son, or over the conditions of the family’s detention. The CICIG has no authority in these areas, and no evidence has been presented to substantiate these claims.

The Bitkovs have been treated fairly. They were represented by lawyers of their choice and have had access to available procedural and appeal remedies. In April, Guatemala’s Constitutional Court ruled that a criminal court will rehear their case.

Since its establishment, the CICIG has decisively contributed to the strengthening of Guatemala’s institutions. Under the leadership of its current commissioner, Iván Velásquez, the CICIG has supported the public prosecutor’s office in identifying and dismantling networks of corruption. So far, two presidents, several ministers, members of Guatemala’s Congress, judges and influential members of the private sector have been prosecuted. As a result of a joint investigation by the public prosecutor’s office and the CICIG, the current president of Guatemala, Jimmy Morales, is accused of illicit campaign financing. He ordered the commissioner expelled last year.

These sectors see the Bitkov case as a Trojan horse to undermine the fight against corruption and organized crime in Guatemala. They have found support in billionaire Bill Browder, who, convinced that the Bitkovs have been victims of Russian persecution and determined to secure their release, sees the CICIG as a means of exerting direct pressure among members of the U.S. Congress. Browder should seek to support the Bitkovs without destabilizing Guatemala.

The backing of the United States in our struggle to strengthen the rule of law and democracy is fundamental. As is the preservation of the CICIG.

How corruption in the South Carolina Statehouse is impacting the race for governor

By Tim Smith

COLUMBIA – State Sen. John Courson pleaded guilty to misconduct in office charges this week as a Statehouse corruption probe now in its fifth year remains ongoing.

Republican challengers to Gov. Henry McMaster reminded voters Tuesday evening in the GOP’s final debate before next week’s primary that a central character in the probe, Richard Quinn, is a political consultant who until this year also worked for the governor’s campaigns.

Catherine Templeton, who said she was fired from her job at the State Ports Authority after raising concerns over a marketing contract with Quinn, said she has concerns the investigation will ensnare McMaster.

“My concern is whether our current governor is a target of that investigation or will be a target of that investigation,” she said. “If we hire him on June 12 (with election in the primary) and then he gets indicted, we’re handing our state over to the liberals.”

John Warren of Greenville, a Marine veteran, said the Statehouse needs more Marine values.

“It’s never going to happen if we have a governor who employs the biggest criminal in our state for the past 30 years,” he said. “We’ve got to have an outsider, a conservative, someone who is going to fight for the taxpayer for a change to go to Columbia and fight this corruption, and that’s what I’m going to do.”

Lt. Gov. Kevin Bryant said he had written an anti-racketeering bill and that it was an “insult to the taxpayers of the state” when Quinn’s son was sentenced to only a $1,000 fine for selling his vote.

“Richard Quinn has been called the Godfather,” Bryant said. “And as Ms. Templeton said, Gov. McMaster is one of his oldest clients. And the first order of business in the governor’s mansion was to have the Godfather come visit for a family meeting.”

McMaster, the state’s former attorney general and a former U.S. attorney, attempted to deflect his rivals’ accusations and insinuations as politics.

“I think we have to stick to the truth,” McMaster said. “The only investigations I have been involved in are the ones I was working myself, first as U.S. attorney.”

McMaster added that he was the only one on the stage at the University of South Carolina’s Drayton Hall who has been involved with law and order.

Then he turned on Templeton.

“This idea that there is corruption is true,” he said. “I’ll give you an example of it. Mr. Warren mentioned these no-bid contracts. Ms. Templeton had three.”

Templeton was director of the state Department of Health and Environmental Control and signed a no-bid contract as a consultant when she left in 2015. She also worked as a consultant for the state Department of Revenue.

Templeton responded by saying the contracts were disclosed because they were public record, and she said previous DHEC directors also have received consulting contracts when they left.

“Every dollar I have ever made from the state of South Carolina or otherwise has been a public record and always has been,” she said.

Later, McMaster said that Templeton had asked him to be his running mate, a request he said he declined.

“I said I couldn’t do that,” McMaster said. “As you know, I’ve selected Pamela Evette. So then we tried to get her something in the White House, something in the administration somewhere, and that didn’t work out, so here we are today.”

Templeton did not directly answer that assertion at the debate, saying only that McMaster’s timeline was “way off” because he hadn’t appointed his running mate until “way after” she visited McMaster. Evette was picked by McMaster in November 2017.

R.J. May, Templeton’s campaign manager, said after the debate that Templeton did not ask McMaster to be his running mate.

In response to the issue, McMaster’s campaign spokeswoman released texts between the governor and Templeton which appeared to show Templeton asking the governor in November 2016 if he had time so they “could talk quietly.”

The texts also show Templeton texting on Dec. 1 thanking McMaster for seeing her and then asking if he would support her being the U.S. secretary of labor, saying President Donald Trump’s transition team had contacted her.

McMaster’s campaign later released past comments from leaders, including former Gov. Nikki Haley, praising McMaster’s integrity and ethics.

Bruce Ransom, a Clemson University political science professor, said he thinks it is the right political strategy for Templeton and Warren to throw stones at McMaster as a representative of the Statehouse culture they are challenging.

“It’s a matter of what are the degrees of separation,” he said, referring to the distance between McMaster and the Richard Quinn firm at the heart of the Statehouse corruption investigation.

Ransom said it seems like some Republican candidates are taking more advantage of the situation in challenging incumbents over ethics than Democrats are.

“It seems to me if you are a weak minority party you would make more hay out of this than has been made thus far,” he said. “It seems like the hay that is being thrown down is coming from within the Republican party.”

Warren and Templeton also scrapped on stage, after Warren said he was being attacked by ads because he was rising in the polls.

“Their support is crumbling like our roads and bridges,” he said of his attackers.

Warren accused Templeton of flip-flopping on being pro-life. Templeton accused Warren of changing his position on what is called personhood, the proposal to grant rights to the unborn at conception, which would outlaw abortion, and of not supporting a measure concerning noise suppressors for guns.

Warren then accused Templeton of being a “triple threat to conservatives,” saying she had voted for “pro-choice, pro-abortion” Sen. Vincent Sheheen, failed to vote in the GOP presidential primary in 2012 and gave money to pro-abortion Democrats.

Warren also jabbed at McMaster over roads Tuesday.  When the governor talked about repairs to Charleston’s Wando River bridge recently being completed ahead of schedule, Warren shot back, “Fixing one bridge, that’s what you brag about?”

Warren said he wants bring accountability to the state Department of Transportation by abolishing its board because “it serves no purpose,” and he said he wants to roll the State Infrastructure Bank into the DOT.

Heading into Tuesday’s debate, a Target Insyght poll released over the weekend had McMaster in the lead with 37 percent, followed by Templeton at 25 percent and Warren at 20 percent. Bryant had 5 percent in the poll and McGill about 1 percent.

Warren released a poll Tuesday morning that placed him in second place. The poll showed McMaster with 33 percent, Warren with 19 percent and Templeton with 17 percent.

https://www.greenvilleonline.com/story/news/local/south-carolina/2018/06/06/sc-statehouse-corruption-probe-sparks-accusations-lively-gop-debate/672371002/

She won’t back down: Ngozi Okonjo-Iweala’s fight against corruption

Source:  Brookings

Link to entire article:  https://www.brookings.edu/blog/future-development/2018/04/26/she-wont-back-down-ngozi-okonjo-iwealas-fight-against-corruption/

Corruption comes in many forms, some alarming and some insidious. There was an opportunity to ask Ngozi Okonjo-Iweala, former Nigerian finance minister, which form was most alarming at an April 20 discussion about her new book, Fighting Corruption is Dangerous: The Story Behind the Headlines, organized by the Center for Global Development and the Brookings Institution in Washington, D.C. The book is an insider’s account of the practical obstacles in fighting corruption in Nigeria. It is both technical and deeply personal. Very seldom has a policymaker, who has been on the frontlines, courageously exposed the internal forces of corruption in such a rigorous and candid manner.

There are many types of corruption, each of which must be tackled. Grand corruption and political corruption stem from an abuse of high-level power for personal gain, or to benefit a few cronies. It is probably the most difficult to root out. Yet petty corruption is corrosive as well and felt more immediately by ordinary people. Eliminating crooked traffic cops or local police collecting bribes helps persuade people that a broader anti-corruption campaign is underway.

In many countries, there are few instruments to fight grand corruption precisely because those in power benefit so much from the system. For example, in Nigeria, the Finance Ministry was not in control of oil revenues—rather, they simply received funds from the Federal Ministry of Petroleum. Instruments such as introduction of an electronic payment system, biometric identification of government workers, and transparent reporting of transfers to state governments all helped to reduce opportunities for fraud and waste.

In publishing this powerful account, Okonjo-Iweala has achieved three objectives. First, to set the record straight by providing a behind-the-scenes account of real events, which occurred during her time in Nigeria’s government. Second, to expose the main actors and forces behind corruption in Nigeria and share information on some of the efforts by her team to fight them. Finally, to highlight corruption in the developing world more broadly, the obstacles to eradicating it, and the risks to those who choose to fight it. These objectives have been achieved.

 

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.

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