European countries have been ‘oblivious’ in fighting money laundering, says Latvian minister

By Silvia Amaro

European countries have failed to address financial crime and it is time to take action, the Latvian finance minister told CNBC Wednesday.

The Latvian ABLV, the Danish Danske Bank and the Dutch ING have all recently been involved in scandals over money laundering and financial crime. Dana Reizniece-Ozola, finance minister of Latvia said that these cases have “opened a Pandora’s box” and asked banks do to more to prevent such situations.

“Countries in the European Union have been oblivious in fighting financial crime,” the finance minister told CNBC’s “Squawk Box Europe.”

“Something has to be done, not only at the national level but also at the European level, like probably strengthening the EBA (European Banking Authority),” she suggested.

In the case of ABLV, the U.S. Treasury accused the bank earlier this year of “institutionalized money laundering,” including allowing its clients to conduct business with parties connected to North Korea, which would violate sanctions imposed by the United Nations on the country. At the time, ABLV said the accusations were based on assumptions and information that was then unavailable to the bank.

When the scandal emerged earlier this year, European institutions were criticized for not having the means to oversee and prevent money laundering in the financial system.

This issue has been under further scrutiny after the head of the Danish lender, Danske Bank, resigned last week following a money laundering investigation into the bank. Earlier this month, ING agreed to pay 775 million euros ($910.20 million) in penalties for failing to stop several companies to allegedly launder money over a six-year period.

Separately, German regulators on Monday ordered Deutsche Bankto take internal actions to prevent money laundering.

“The game cannot be won only by one side playing, only by the government playing. The private sector, namely banks themselves have to participate and demonstrate a strong dedication,” Reizniece-Ozola said, adding that “this is the right time” to take action.

CEO of Denmark bank quits amid an alleged $233 billion money-laundering investigation

By Renae Merle

The chief executive of Danske, Denmark’s largest bank, resigned Wednesday after a year-long internal investigation into money laundering found $233 billion in suspicious transactions moving through the bank’s tiny branch in Estonia — nearly 10 times larger than that country’s gross domestic product.

Danske said that CEO Thomas F. Borgen will continue in his position until his successor is named.

The scandal has rocked Denmark as suspicions grew that Danske had become a hub for Russian money laundering. The eye-popping figure, which was released in a report Wednesday by a law firm hired by the bank’s board, could make the case for one of the biggest money-laundering cases in history.

That report, by the firm Bruun & Hjejle, said the bank ignored years of signals about problematic transactions at its Estonia branch, including a warning in 2007 about “criminal activity in its pure form” involving “billions of rubles monthly.”

The bank is likely to face huge fines and investigations around the globe, including a criminal probe in Denmark and other legal action by European and U.S. investigators. The bank has lost about 30 percent of its market value this year, including a 3 percent drop Wednesday, as it scrambles to contain the growing crisis.

Denmark is also threatening to draft tougher penalties against money laundering.

“It is important to get one of the toughest levels of fines in Europe to signal we’re taking this very seriously, because this case has damaged Denmark’s image a lot,” Lisbeth Bech Poulsen, a spokeswoman for the opposition Socialist People’s Party, told Reuters. Financial penalties should be increased by up to 700 percent, Poulsen said.

The report said that the investigation still does not know much will ultimately be deemed illicit of the $233 billion that has been identified. So far, Danske has investigated 6,200 high-risk customer accounts but has many thousands more to go, according to the report. Almost all of those customers have been reported to authorities. “Overall, we expect a significant part of the payments to be suspicious,” the bank said.

Still, the sheer volume of the transactions should have raised alarms, said Nienke Palstra, an anti-money laundering campaigner for Global Witness, a London-based nonprofit organization. “There is no way that senior management would not have noticed that,” she said.

“There is no doubt that the problems related to the Estonian branch were much bigger than anticipated,” Ole Andersen, chairman of Danske’s board, said in a statement. “The findings of the investigations point to some very unacceptable and unpleasant matters at our Estonian branch.”

Danske’s branch in Estonia, a Baltic former Soviet Republic, operated independently from the rest of the bank with its own information technology system and many documents written in Estonian or Russian, according to the 87-page report. But there were “serious” indications of problems that the Danske never acted on. The branch, for example, had a lot of nonresident customers who “carried out large volumes of transactions that should have never happened,” according to the report. The bank said it suspects that some employees helped or collaborated with the customers.

In 2007, the Russian Central Bank warned that it was concerned some of its customers were connected to money laundering or other potential crimes estimated at “billions of rubles monthly,” according to the report. About 177 customers could be involved in what is known as the “Russian Laundromat,” an alleged money laundering scheme, and the investigation is also reviewing allegations of $230 million tax fraud involving “high-ranking officials in the Russian Government,” the report says. In 2013, a whistleblower, an employee at the Estonia branch, reported that “the bank knowingly continued to deal with a company that had committed a crime,” according to the report.

The bank did not launch its internal investigation until 2017.

Danske said it has since improved its anti-money laundering operations and would donate about $230 million in profit to a foundation to combat financial crime.

Borgen, the chief executive, said in a statement that ”it is clear that Danske Bank has failed to live up to its responsibility.”

“I deeply regret this,” Borgen added. “It has been clear to me for some time that resigning would be the right thing to do, but I have held off the decision, because I have felt a responsibility for seeing the bank through this difficult period toward presentation of the investigations.”

https://www.washingtonpost.com/business/2018/09/19/ceo-denmark-bank-quits-amid-an-alleged-billion-money-laundering-investigation/?noredirect=on&utm_term=.32438ad11264

Kent police captain charged with operating gambling house, money laundering

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

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

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

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

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

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

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

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

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

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

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

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

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

https://www.ohio.com/news/20180920/kent-police-captain-charged-with-operating-gambling-house-money-laundering/1

The EU Has a Problem With Dirty Money

https://www.bloomberg.com/view/articles/2018-09-18/the-european-commission-misses-an-opportunity-on-money-laundering

After a string of scandals, the European Commission has unveiled new plans to crack down on money laundering. It’s right to take this problem seriously — but its proposals are weak. Instead of setting up a new agency and equipping it to do the job, Europe plans to keep relying on national authorities, some of which aren’t up to the task.

Banks in Denmarkthe NetherlandsLatvia and Malta have all been linked to criminal inflows from countries including Russia and North Korea. The EU has moved to centralize banking supervision, but money laundering has remained a national responsibility. It was the U.S. Treasury Departmentthat found out that ABLV, a Latvian lender, was involved in “institutionalized money laundering,” prompting EU authorities to withdraw its banking license. And a report by the European Banking Authority (EBA) concluded that the Maltese regulator had “failed to conduct an effective supervision” of Pilatus Bank, a lender with links to Iran.

In principle, there’s nothing wrong with national regulation of international financial crime. The U.S. Treasury’s Office of Terrorism and Financial Intelligence deals with money laundering. But some EU governments, concerned about the reputation of their respective banks, have taken an unduly lax approach. A common EU agency would be less susceptible to local pressure. Also, EU banks can set up branches across the union on preferential terms thanks to its so-called passporting system — so EU banking is intrinsically cross-border, strengthening the case for more centralized supervision.

Brussels wants to give new powers to the EBA, so that the agency can tell national supervisors to investigate cases and consider possible sanctions. This is a step in the right direction. But the EBA isn’t equipped for the job. The London-based agency is primarily responsible for designing stress tests and overseeing prudential rules. Some aspects of money laundering fall under its review, but it currently has just two officials assigned to the task. The EU wants to add 10 more. That isn’t enough.

Most important, the EU wants domestic regulators to stay in charge. It would have been better to harmonize the rules, create a new agency, and give it lead responsibility for investigating offenders. The EU has missed an opportunity to move to a better system and improve its reputation for sound financial supervision.

Credit Suisse censured by watchdog over anti-money laundering failings

By Ralph Atkins

Credit Suisse has been censured by the Swiss financial watchdog for failings in anti-money laundering, in the latest slapdown of a European bank over the handling of suspected illicit finance.

Finma, the financial supervisor, identified weaknesses in a number of corruption scandals, including those involving the world football body Fifa, the Brazilian oil company Petrobras and the Venezuelan oil company PDVSA.

The failings highlighted were the latest in a wave exposed recently at European banks, which have included revelations that as much as $30bn of Russian and former Soviet money flowed through the Estonian branch of Danish lender Danske Bank in a single year.

Last week, the finance director at ING resigned after the Dutch bank was fined €775m for weak controls on preventing money laundering.

On Monday, Finma demanded remedial steps at Credit Suisse to improve procedures, which would be monitored by a independent third party. Under Swiss law, Finma does not have the power to impose fines.

The criticism from Finma comes as a blow to Tidjane Thiam, who took over as chief executive of Credit Suisse in 2015 and has pushed through a sweeping restructuring to refocus the bank on managing the wealth of the world’s rich.

Credit Suisse acknowledged Finma’s conclusions in what it described as “legacy cases”. It had commissioned its own reviews of the incidents, “and has co-operated with Finma throughout the process, taking proactive remediation measures”.

The scandal at Fifa erupted in May 2015 with the dramatic arrest of top football officials at a Zurich luxury hotel. US and Swiss law authorities subsequently launched probes into allegations of criminal misconduct, bribery and corruption, which called into question Fifa’s future.

Finma said that since 2015 it had been investigating “several banks” in relation to suspected corruption involving Fifa, Petrobras and PDVSA. Its investigation at Credit Suisse examined the period from 2006 to 2016 and found shortcomings, including in identifying clients, determining beneficial owners, categorising riskier business relationships and in documentation.

“The identified shortcomings occurred repeatedly over a number of years, mainly before 2014,” Finma said.

To combat money laundering effectively, the watchdog said, all relevant departments “must be able to see all the client’s relationships with the bank instantly and automatically”. Credit Suisse had made progress in implementing such a “single client view”, Finma said, “however this overview is still to be extended outside the compliance unit”.

Separately, Finma said the bank had failed to adequately record and monitor risks arising from a business relationship with a “politically exposed person” and the responsible client “relationship manager”, who had since been criminally convicted.

Finma’s statement did not identify the individuals involved in the case but one person familiar with the matter said it referred to Patrice Lescaudron, a former Credit Suisse client adviser, who was convicted in a Geneva court in February for abusing the trust of clients, including Bidzina Ivanishvili, a former prime minister of Georgia.

Finma said the relationship manager, who had been “very successful in terms of assets under management”, breached the bank’s compliance regulations repeatedly over a number of years. “However, instead of disciplining the client manager promptly and proportionately, the bank rewarded him with high payments and positive employee assessments. The supervision of the relationship manager was inadequate due to this special status,” the regulator said.

Sistine Chapel Choir under investigation for money laundering

The Vatican has launched an investigation in the Sistine Chapel Choir, after claims that members of the world-renowned choir may be involved in embezzlement, fraud and money laundering.

The Vatican issued a statement on Wednesday confirming that Pope Francis had authorised an investigation into possible financial irregularities in the choir, which is one of the world’s oldest singing groups.

The statement came just hours after a report in La Stampa newspaper about the choir, which said Vatican magistrates were investigating the choir’s manager, who is a layman, and its director, who is a priest, on suspicion of embezzlement, fraud and money laundering.

The Vatican statement said only that the pope had authorised the investigation several months ago and that it was continuing.

Efforts by Reuters to reach the two men for comment were unsuccessful. La Stampa website also had no comment from them.

Last May, the choir, which is made up of men and young boys and has a recording contract with a major label, performed at the gala opening of an exhibit at the Metropolitan Museum of Art in New York called “Heavenly Bodies: Fashion and the Catholic Imagination.“

Its summer tour of the United States was cancelled without official explanation in July.

Founded in 1471, it is believed to be the world’s oldest choir, with roots going back to the Schola Cantorum instituted by Pope Saint Gregory the Great around the year 600.

https://www.theguardian.com/world/2018/sep/13/sistine-chapel-choir-under-investigation-for-money-laundering

Former Bucks County official pleads guilty to money laundering and extortion charges

U.S. Immigration and Customs Enforcement

PHILADELPHIA — Former director of public safety in Lower Southampton Township, Pennsylvania, pleaded guilty to money laundering and extortion charges Sept. 5, following an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), FBI, Internal Revenue Service – Criminal Investigations, and the Pennsylvania State Police.

Robert P. Hoopes, 71, of Doylestown, Pennsylvania, pleaded guilty to one count of conspiracy to commit money laundering and four counts of Hobbs Act extortion under color of official right. From February 2016 until December 2016, Hoopes had authority over all police, fire, and emergency operations in the township.

From 2014 to 2016, Hoopes solicited, extorted, and attempted to extort bribes and kickbacks from individuals and businesses in exchange for his influence over Lower Southampton Township’s Board of Supervisors, Solicitor, officers, and employees. For example, Hoopes solicited bribe payments from Robert A. DeGoria, who was then the vice-president of an outdoor advertising company, in exchange for offering his influence to reduce lease payments that the company owed to Lower Southampton Township.

In November 2016, Hoopes and co-defendant Bernard T. Rafferty, who was then a Deputy Constable in Bucks County, accepted a bribe of $1,000, as well as the promise of other fees, in exchange for Hoopes and Rafferty using their positions as public officials to “fix” a traffic case in Bucks County Magisterial District Court.

Additionally, from June 2016 to August 2016, Hoopes, Rafferty, and co-defendant Kevin M. Biedmeran, who was then a business development manager at Philadelphia Federal Credit Union, laundered $400,000 in cash, represented to be proceeds from health care fraud and illegal drug trafficking, and accepted money laundering fees totaling $80,000 in cash.

Hoopes faces a maximum possible sentence of 100 years in federal prison for his crimes. He is scheduled to be sentenced on Dec. 17, 2018.

Rafferty previously pleaded guilty to conspiracy to commit money laundering and honest services mail fraud. He is scheduled to be sentenced on Nov. 9, 2018.

Biederman previously pleaded guilty to conspiracy to commit money laundering and bank bribery. He is scheduled to be sentenced on Nov. 8, 2018.

DeGoria previously pleaded guilty to one count of making a false statement to federal agents. DeGoria is scheduled to be sentenced on Nov. 6, 2018.

In a related case, Michael J. Savona, an attorney who also served as Solicitor in Lower Southampton Township, previously pleaded guilty to one count of making a false statement to federal agents. Savona is scheduled to be sentenced on Nov. 7, 2018.

Russia-Linked Money-Laundering Probe Looks at $150 Billion in Transactions

By Bradley Hope, Drew Hinshaw, and Patricia Knowsmann

Denmark’s largest bank is investigating whether companies with ties to Russia used it to launder money, examining $150 billion in transactions that flowed through a tiny branch in Estonia, according to people familiar with the matter.

The $150 billion figure, covering a period between 2007 and 2015, has been presented to the bank’s board of directors and would equal to more than a year’s worth of the corporate profits for the entire country of Russia at the time. The flows would have stayed in the branch for only a short time before leaving Estonia, according to a person familiar with the investigation, so they might not show up in deposit statistics, which reflect the balance at the end of month and not from day to day.

“Any conclusions should be drawn on the basis of verified facts and not fragmented pieces of information taken out of context,” Danske Bank Chairman Ole Andersen said in a statement. “As we have previously communicated, it is clear that the issues related to the portfolio were bigger than we had previously anticipated.” The bank says the results of its probe are being finalized.

Shares in the bank fell as much as 7% on Friday after The Wall Street Journal reported on the size of the amounts involved.

The U.S. has paid close attention to the ways Russia’s wealthy have taken money out of the country, according to U.S. officials, especially since sanctions imposed during the invasion of Crimea in 2014. Sanctions were strengthened following determinations of Russian meddling in the 2016 U.S. presidential election and again earlier this year.

Washington has watched illicit money flows channeled through European-regulated banks to the West. In February, the Treasury Department declared Latvia’s ABLV bank an “institutionalized money laundering” operation where weapons dealers and corrupt politicians from former Soviet Union countries sent their money into Europe. ABLV denied knowingly laundering money and later collapsed.

In 2017, Deutsche Bank agreed to pay nearly $630 million to settle investigations by U.K. and New York regulators into Russian equity trades that transferred $10 billion out of that country in violation of anti-money-laundering laws.

Since last year, NATO has positioned troops in three former Soviet Union republics—Estonia and its neighbors Latvia and Lithuania, all bordering Russia. In return, the U.S. has asked those governments to crack down on illicit Russian money flowing into the West through their banks, according to U.S. officials. That understanding was hammered out after Russia’s 2014 annexation of Crimea.

Danske’s Estonian branch is the subject of criminal investigations in Denmark and Estonia, prosecutors in the countries said. The Danish Financial Supervisory Authority reprimanded the bank for weak controls in May and ordered Danske to hold about $800 million more in capital, but didn’t issue a fine.

Shell companies, including many registered in the U.K., controlled most of the accounts in question, and many of the accounts had links to people in Russia and former Soviet Union countries, people familiar with the matter said. The U.K.’s Financial Conduct Authority isn’t probing the bank, according to a person familiar with the matter.

Danske Bank’s Estonian office in Tallinn.
Danske Bank’s Estonian office in Tallinn. PHOTO:INTS KALNINS/REUTERS

Estonia, a former Soviet Republic of 1.3 million people, became a European Union member in 2004 and joined the euro in 2011. Like its Baltic neighbor Latvia, it quickly became a way station for funds from other former Soviet states. The $150 billion figure is a substantial sum considering Estonia’s entire banking system reports total deposits of €17 billion ($19 billion).

At Danske, clients would typically move funds among several companies with accounts at its Estonia branch before transferring the money to accounts in banks in Turkey, Hong Kong, Latvia, the U.K. and other countries, one of the people familiar with the investigation said.

Danske’s management dragged its feet dealing with the issue, according to a report filed by Danish regulators this year, ignoring complaints from internal whistleblowers and correspondent banks, which made international payments and transfers on its behalf.

Estonian regulators complained to Danish counterparts as early as 2012 and compiled a 200-page report in 2014 detailing the local branch’s extensive failures to ask even basic questions about the source of its clients’ income.

“There were many red flags,” said Kilvar Kessler, chairman of the management board of Estonia’s banking supervisor, the Finantsinspektsioon.

It was only after another bank refused to deal with Danske’s Estonian unit that the bank shut down “nonresident” Estonian accounts in 2015.

Danske Chief Executive Thomas Borgen was in charge of international banking—including in Estonia—during part of the period under investigation. He was promoted to run the bank in 2013. He declined to comment.

Denmark’s Berlingske newspaper earlier reported around $8 billion of illicit money went through the Estonian branch. The Financial Times reported this month that some $30 billion flowed through the Estonian branch in the year 2013. In both instances, Danske said it needed time to look into the reports.

Danske’s investigation is overseen by the bank’s legal counsel and assisted by forensic accountants at PricewaterhouseCoopers LLP and consultants at Ernst & Young LLP. Both firms didn’t immediately respond to requests for comment. Promontory Financial Group, a unit of International Business Machines Corp. , and Palantir Technologies Inc. are also helping in the probe and declined to comment.

Such large sums were able to slip by European regulators’ watch for years largely because of a series of design flaws in the Continent’s anti-money-laundering systems, said James Oates, the founder of Cicero Capital, a financial adviser in the Estonian capital of Tallinn.

“Everybody was looking the other way because they thought they were covered, and it turns out they weren’t,” said Mr. Oates.

Danske Bank’s Estonia branch isn’t directly supervised by the European Central Bank, which in any case lacks the authority to investigate money-laundering cases. Estonian authorities, meanwhile, say that because Danske operated as a branch—and not a subsidiary with a legal entity based in Estonia—they had limited authority and incomplete information.

Parent bank Danske said in a September 2017 statement that the Estonia branch “operated very much as an independent unit, with its own systems, procedures and culture regarding anti-money-laundering measures.”

https://www.wsj.com/articles/danske-bank-money-laundering-probe-involves-150-billion-of-transactions-1536317086

Canada a hotbed for money laundering: Report

Canada is being taken advantage by criminal organizations who launder dirty money from drug trafficking, smuggling, corruption and fraud, according to a report by the C.D. Howe Institute.

And the feds have failed to enact the proper legislation to stop it, the Canadian research institute says.

Money laundering in Canada is estimate to be between $5 billion and $100 billion, Denis Meunier writes in the study. Taxes evaded on these illicit funds become a burden for those honest, hardworking individuals who pay their taxes as they have to cover the bulk of government costs, it states. Canada is a hotbed for this illegal activity because of a lack of transparency in beneficial corporate ownership, Meunier explains.

Simply put, a beneficial owner is someone who owns 25% or more of a company or corporation. Other countries, especially in Europe, require corporations to have publicly accessible registries for beneficial ownership. But here, these registries aren’t public and the onus is on the financial service provider, such as a bank, to verify the accuracy of the information of the beneficial owners and directors.

However, the study states, they generally rely on customers for this information. This is a lower bar than is required for buying a car or getting a library card which often require photo identification, proof of address, email and phone number.

Canada is ranked 21st worst in the Tax Justice Network’s 2018 Financial Secrecy Index of 112 jurisdictions, the study notes.

“There is a clear link between money laundering and hidden beneficial ownership,” Meunier writes. “The abuse of corporate vehicles and camouflaged beneficial ownership is a recognized means of laundering money — and a worldwide problem.”

It points to a World Bank study that in 85% of 150 grand corruption cases (more than US$1 million) reviewed, companies were used to launder money.

“In more than half of these cases, corrupt officials used nominees, shell corporations and trusts to disguise their beneficial ownership and the proceeds of their crimes,” it states.

The report recommends the feds create a central, publicly accessible beneficial ownership registry and make corporations and trusts to “truthfully and fully disclose” information for that database.

https://torontosun.com/news/national/canada-a-hotbed-for-money-laundering-report/wcm/bd905754-38f4-4243-b8da-09c0da362c72

Former Lower Southampton public safety director pleads guilty in $400,000 money-laundering scheme

By Erin McCarthy

Former Lower Southampton Public Safety Director Robert Hoopes pleaded guilty Wednesday to taking part in a money-laundering scheme with a Bucks County judge and a constable, calling it “the first thing that I truly regret that I ever did in my life.”

Judge Gene E.K. Pratter asked him: Why decide to enter the plea now?

“Because I did it,” Hoopes said. “I did the things that are in [the indictment]. … It  was the stupidest thing I’ve ever done in my life.”

“Right after my arrest,” he added, “I was ready to admit my guilt.”

A superseding indictment later painted an even more corrupt picture. Between 2014 and 2016, authorities say, Hoopes, Waltman, and Rafferty shook down several businessmen, with Hoopes often serving as the front man in negotiations.

A former police officer and attorney, Hoopes had been in charge of Lower Southampton’s police department, rescue squad, and two fire departments for less than a year when he was charged and subsequently fired by the township.

Hoopes said he has since separated from his wife, who now lives in California, and retired from his law practice. He lives alone in his family’s Doylestown home, he said, and has struggled with alcohol and post-traumatic stress disorder, which he developed serving in Vietnam.

He stressed to Pratter that he “never had a blemish” on his records as a police officer or lawyer and that he regretted his actions.

But “I’m not worried about myself,” he said. “I’m worried about my family.”

Three of Hoopes’ five daughters attended the hearing and wiped away tears as they sat behind him in court.

Hoopes previously had pleaded not guilty. With Hoopes’ change of plea Wednesday, Waltman, 60, of Lower Southampton, remains the only defendant in the case who has not entered a guilty plea. Waltman awaits trial, scheduled for later this fall, on charges related to the scheme. Rafferty, 63, of Lower Southampton, pleaded guilty in the spring.

At the end of Wednesday’s proceeding, Pratter asked Hoopes whether he ever socializes with anyone allegedly involved in the scheme.

“No, I’ve never seen them or talked to them” since charges were filed, Hoopes said.