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.

How Obama let Hezbollah’s cocaine empire thrive ‘to save Iran nuclear deal’

 

A Politico investigation has revealed how the administration of former US President Barack Obama attempted to suppress a Drugs Enforcement Agency operation to expose a money-laundering scheme in which “proceeds from Latin American drug-running were being funneled to Hezbollah.”

According to the examination released this week, DEA agents working on an operation codenamed “Project Cassandra” were hoping to prosecute operatives from Hezbollah, the Iranian-backed Lebanese militia, involved in cocaine trafficking and money laundering.

But in order to preserve the Iranian nuclear deal, a feature of the Obama legacy that the former administration prides itself on, the operation was “tamped down for fear of rocking the boat with Iran,” the investigation has found.

The nuclear deal saw economic sanctions lifted on Iran in exchange for the alleged suspension of the Islamic Republic’s nuclear program.

The eight-year-long DEA investigation saw agents using wiretaps, undercover operation and informants “to map Hezbollah’s illicit networks, with the help of 30 U.S. and foreign security agencies.”

Politico spoke with Project Cassandra agents, who claim that the Obama administration stifled or undermined the investigation, “allowing [the Hezbollah operatives] to remain active despite being under sealed US indictment for years.”

“This was a policy decision, it was a systematic decision,” David Asher, a financier who helped establish Project Cassandra.

“They serially ripped apart this entire effort that was very well supported and resourced, and it was done from the top down.”

Project Cassandra

Project Cassandra agents claim that officials at the Justice and Treasury departments repeatedly hindered Project Cassandra agents’ attempts to pursue “investigations, prosecutions, arrests and financial sanctions” against key figures in the scheme.

The operation, which made use of law enforcement agencies in seven countries, is believed to have uncovered “evidence that Hezbollah had transformed itself from a Middle East-focused military and political organization into an international crime syndicate that some investigators believed was collecting $1 billion a year from drug and weapons trafficking, money laundering and other criminal activities,” Politico reported.

Project Cassandra highlighted the “the dangerous global nexus between drug trafficking and terrorism”

Hezbollah operatives allegedly used the drug money to buy weapons that have been used in Syria.

The Obama administration seemingly let Hezbollah “off the hook,” Politico surmises. This is despite the US Department of State declaring the Lebanese militia a foreign terrorist organization since 1997.

 http://english.alarabiya.net/en/features/2017/12/20/How-Obama-let-Hezbollah-s-cocaine-empire-thrive-to-save-Iran-nuclear-deal-.html

Switzerland says JP Morgan violated money-laundering rules

 

By JAMEY KEATEN, ASSOCIATED PRESS

The Swiss division of J.P. Morgan “seriously breached” anti-money laundering rules relating to the Malaysian sovereign wealth fund 1MDB, Switzerland’s financial market regulator said Thursday.

The agency, FINMA, said the Wall Street bank’s local unit had “failed to adequately identify” increased money laundering risks linked to the “allegedly corrupt” sovereign wealth fund at the center of a massive embezzlement scandal.

FINMA said it concluded enforcement proceedings against J.P. Morgan in June, and was not imposing any penalties — in a possible sign that any profits gained by the bank in the alleged breaches were not significant.

J.P. Morgan was the seventh case in the Swiss regulator’s investigation of 1MDB, or 1Malaysia Development Bhd.

FINMA spokesman Vinzenz Mathys declined to identify any institution involved.

Investigators in Singapore, Switzerland, Hong Kong and the United States have been probing allegations that people close to Malaysian Prime Minister Najib Razak stole more than $1 billion from the fund.

In a statement, FINMA said J.P. Morgan had accepted “incomplete or inconsistent information from clients” without looking into or documenting it further, and cited shortcomings in the bank’s monitoring and control system. The Swiss market watchdog said it brought the case to the attention of the U.S. Office of the Comptroller of the Currency, which has overall responsibility for J.P. Morgan.

“The bank seriously breached anti-money laundering regulations by failing to screen adequately transactions and business relationships booked in Switzerland associated with the Malaysian sovereign wealth fund 1MDB and one of its business partners,” FINMA said. The partner was not identified.

It said J.P. Morgan had shown “good cooperation” and had not appealed FINMA’s decision, which is final and binding.

Still, the regulator said it will conduct an “in-depth review” of the bank’s anti-money laundering systems, and has named a “monitor” that will conduct an on-site review of the bank’s controls — focusing on high-risk transactions, notably involving personal and business accounts.

The U.S. Justice Department has said people close to Najib stole billions of dollars, and last year acted to seize more than $1.5 billion in assets it said were purchased by Najib’s relatives and associates using stolen money from 1MDB, a fund intended to promote economic development projects.

Malaysia’s government has said it found no criminal wrongdoing at the fund founded by Najib, who has denied any wrongdoing.

http://abcnews.go.com/International/wireStory/swiss-regulator-jp-morgan-violated-money-laundering-rules-51929611

 

 

TRENDING: U.S. SANCTIONS ON N. KOREA TAKEN LIGHTLY ABROAD

By Global Radar

The latest episode in the ongoing saga between the United States and North Korea saw the East Asian country recently become designated as a state sponsor of terrorism once again, following the country’s removal from the list by President George W. Bush nearly a decade ago. With this designation also came the announcement of new sanctions by the U.S. Treasury Department against North Korea, a common trend seen on seemingly a monthly basis over the course of the past year. As the Trump train continues to steam ahead with its no-holds barred approach to relations with North Korea, it seems that a significant portion of the international community has grown tired of keeping up with the continuously updating list of “do’s” and “don’ts” for their cross-border diplomacy with the embattled country. While it is no secret that U.S. President Donald Trump has aimed to isolate North Korea from the global trading system in an attempt to force the country to drop its potentially catastrophic nuclear weapons initiatives, the measures imposed during his term as Commander in Chief have been unsuccessful to date from multiple standpoints. A report published by CNN on December 6th, 2017 highlights a dilemma facing both the United States and United Nations (UN) as new sanctions continue to be imposed against North Korea: the follow-through rate by which U.S. allies maintain accordance with these restrictions continues its decline.
According to the Institute for Science and International Security, a renowned source of public knowledge on international legislation and regulations, a total of “49 countries violated United Nations sanctions on North Korea to varying degrees between March 2014 and September 2017” (Iyengar, 2017). While this figure is shocking in and of itself, perhaps more startling is the fact that several of the world’s most prominent and/or wealthy countries – including Brazil, China, France, and Germany – were found to be part of this group, perhaps setting the tone for the comparable offenses seen in smaller countries across the globe. It has also been discovered that of the 49, 13 have reported connections to North Korea’s military – either through training or through the receipt or export of military equipment – including infamous, corrupt names such as Cuba, Iran, and Syria. It is the belief of officials from the UN that North Korea has targeted and ultimately exploited “countries with weak or nonexistent export and proliferation financing controls”, as well as those with high levels of corruption (Iyengar, 2017). The exploits of the countries found on the list include, but are not limited to, processing banned financial transactions on behalf of North Korea, the facilitation of front companies for the country’s government, aiding in the successful delivery of shipments to and from the country, occasionally through deceitful means such as changing the national registration of freight carriers to disguise their origin, and in the imports of sanctioned goods and valuable assets altogether.
While international pressure applied to individual country’s via sanctions has been a successful venture for government’s dealing with situation’s of this variety in the past, experts have differing viewpoints on whether or not the efforts being made by the U.S. and U.N., respectively, can rein in North Korea’s nuclear program. Getting sanctions passed against Pyongyang, the capital of Korea, is already a rather difficult process due to the opposing attitudes of countries such as China and Russia who have previously vetoed Security Council sanctions in order to prevent North Korea from becoming overly unstable or collapsing. Additionally, due to the widespread restrictions that are currently in place, there is virtually nothing more that can be cut off that will have any sort of significant impact on the country’s economy, military, or its inhabitants. The U.S.’s main hope had been that the international community would rally around them, heeding to the sanctions already in place and cutting ties with North Korea in order to further constrict the country of valuable resources. India and Singapore are two countries that have recently conceded in the manner that the American government had proposed, with both vowing to end their dealings with North Korea and ban all trade for the foreseeable future. Outside of these infrequent cases however the U.S. government’s ideal scenario has not unfolded. This leaves the United States back at square one, with their most effective option being one that is likely to be accompanied by severe ramifications. As suggested in the report, this option is to “press every country engaged in military or sanctioned trade with North Korea to stop any such activities, and deploy their own sanctions against those that fail to do so” – a move that even an individual as bold as President Trump has yet to pull the trigger on (Iyengar, 2017). What awaits both the U.S. and North Korea in the final chapter of 2017 however remains to be seen.

The 2018 World Cup will only shed more light on corruption in Russia

By: Murad Hemmadi

Scandals have dominated the lead-up to the big event, and there’s little chance of the tournament itself going smoothly

At about 6 p.m. local time on June 14 at Moscow’s Luzhniki Stadium, with Vladimir Putin in attendance and hundreds of millions tuning in around the world, a player will tap the ball to a teammate and kick off the 2018 FIFA World Cup. However the Russian team fares at home, the tournament will likely go down as a bad play by the ruling regime.

Nations treat the hosting of mega sporting events as a marker of “entering the global community [and] being a global player in terms of trade and economics,” says Simon Darnell, an assistant professor at the University of Toronto. They’re looking to be recognized as “a country with international prestige, a leader, forward-looking.” The Putin regime must see the World Cup as a chance to showcase Russia’s resurgence. Instead, reputation-dinging scandals have dominated the lead-up, and there’s little chance of the tournament itself going smoothly.

There’s already the cost: a projected $13.8 billion in government spending. The total expenditure won’t be totted up until well after the tournament, but the 2014 Winter Olympics in Sochi cost four times as much as initially anticipated. The other side of the balance sheet is in bad shape, too—while the World Cup has traditionally been a commercial bonanza, FIFA has reportedly struggled to sign up large sponsors for 2018.

Meanwhile, European media outlets reported last summer that poorly paid and ill-treated North Korean labourers had been involved in building St. Petersburg’s Zenit Arena; according to a trade union, eight workers have perished on the site, among 17 killed at tournament venues in total.

The hosts have hardly been winning good press in other areas, either. Canadian lawyer Richard McLaren’s independent investigation for the World Anti-Doping Agency found an “institutional conspiracy” to cover up the use of performance-enhancing drugs by Russian Olympic and Paralympic athletes. As a result, the Russian team was banned in early December from competing at the 2018 Winter Games in Pyeongchang, South Korea.

Russian officials have vehemently denied these reports. But staging the World Cup is unlikely to illuminate Russia’s renewed relevance. Instead, it will shine the spotlight on a spectacular mess.