Postal worker Ivan Crisostomo helped 16-year-old Crystal Allen escape after being abducted and held captive for three months. They finally reunited.
Postal worker Ivan Crisostomo helped 16-year-old Crystal Allen escape after being abducted and held captive for three months. They finally reunited.
The chief executive of Backpage.com, a website investigators have described as an “online brothel,” pleaded guilty Thursday to California money-laundering charges, while the company itself pleaded guilty to human trafficking in Texas.
In addition to those pleas, federal prosecutors in Arizona announced Thursday Backpage.com and CEO Carl Ferrer had pleaded guilty to conspiracy charges on April 5.
Under the California plea agreement, Ferrer will cooperate in prosecuting Backpage.com’s creators and will serve no more than five years in state prison. He pleaded guilty to one count of conspiracy and three counts of money laundering in California.
In the Arizona plea, Ferrer acknowledged knowing that a great majority of Backpage.com’s ads were for sex services. He also admitted to conspiring with others at the company to launder the proceeds from such ads after credit card companies and banks refused to do business with the site.
Ferrer also agreed to make the company’s data available to law enforcement as investigations and prosecutions continue. The guilty pleas are the latest in a cascade of developments in the last week against the company founded by the former owners of the Village Voice in New York City, Michael Lacey, 69, and James Larkin, 68.
The company founders were among company officials indicted by a federal grand jury in Arizona, while Ferrer, 57, was noticeably absent from the indictment. The U.S. Justice Department also seized and shut down the website used to prominently advertise escorts and massages, among other services and some goods for sale. Authorities allege the site was often used to traffic underage victims, while company officials said they tried to scrub the website of such ads.
Attorneys for the company and the three men did not respond to multiple telephone and email messages from The Associated Press.
“Human trafficking is modern-day slavery, and it is happening in our own backyard,” California Attorney General Xavier Becerra said in a statement announcing the plea deal. “The shutdown of Backpage.com is a tremendous victory for the survivors and their families. And the conviction of CEO Ferrer is a game-changer in combating human trafficking in California, indeed worldwide.”
Larkin remains jailed in Arizona while he awaits a hearing Monday on whether he should be released after pleading not guilty to federal charges alleging he helped publish ads for sexual services. Magistrate Judge Bridget Bade said Thursday that attorneys have agreed on the terms of release, but other details must be ironed out.
Four employees and the site’s founders pleaded not guilty to the federal charges.
Lacey and Larkin also earlier pleaded not guilty to the California charges after Sacramento County Superior Court Judge Larry Brown last year allowed the state to continue with money laundering charges. Prosecutors allege Backpage’s operators illegally funneled nearly $45 million through multiple companies and created websites to get around banks that refused to process their transactions.
But Brown threw out pimping conspiracy and other state charges against Backpage’s operators. Brown ruled that the charges are barred by a federal law protecting free speech that grants immunity to websites posting content from others.
President Donald Trump this week signed a law making it easier to prosecute website operators in the future.
Paxon called Thursday’s pleas “a significant victory in the fight against human trafficking in Texas and around the world.”
Texas state agents raided the Dallas headquarters of Backpage and arrested Ferrer on a California warrant after he arrived at Houston’s Bush Intercontinental Airport on a flight from Amsterdam on Oct. 6, 2016. The Dutch-owned company is incorporated in Delaware, but its principal place of business is in Dallas.
WASHINGTON (AP) — The government would take modest steps toward hindering money laundering by human traffickers under legislation approved Tuesday by the House as lawmakers found a widely popular cause to tackle in a mostly discordant election year.
The bipartisan bill would require an existing presidential task force to recommend how Congress can better thwart money laundering by traffickers. Another federal council would suggest improvements in how U.S. agencies train investigators to pursue such cases.
The State Department would also have to factor money laundering into its annual rating of how well countries combat human trafficking.
The House approved the bill, 408-2. It now goes to the Senate.
Estimates of human trafficking victims vary, but recent reports put the number at tens of millions of people globally. It generally includes coerced sexual exploitation, prostitution, military service, labor and even organ donation.
The House also approved a separate bill imposing harsher penalties on predators convicted of stalking children, including people who pursue them online. The bill would add five years to maximum federal prison terms for convicted stalkers of minors under age 18. Victims’ advocates say 7.5 million people are stalked annually in the U.S., with federal figures showing that about 1 in 4 of them report online stalking.
The bill was approved 409-2 and now goes to the Senate. The strong bipartisan support for both bills is crucial for legislation to move through Congress in the months approaching the November midterm elections. Partisan divisions are likely to block approval of major measures on infrastructure, immigration, health care and other high-profile issues.
President Donald Trump is expected to sign related legislation this week making it easier for prosecutors and sex trafficking victims to take legal action against websites that list ads for prostitutes. Children’s advocates say such advertising is one way minors are sexually exploited.
The measure sharpens current law by opening the door to criminal and civil action against sites that assist advertisers of sexual trafficking. That broadens current laws, which until now have made it a crime to participate directly in a sex trafficking enterprise.
Last week, federal authorities took down Backpage.com, a classified ad website whose listings include sexual services. Site founders Michael Lacey and James Larkin and five others face federal charges of facilitating prostitution and money laundering, according to an indictment unsealed Monday.
A two-year-long cyberfraud investigation in Europe has culminated with the arrest of 20 suspects in a series of coordinated raids, according to a Europol press release.
As of March 28, nine suspects remained in custody in Romania and 11 were jailed in Italy on charges of bank fraud that netted 1 million euros ($1.23 million) from hundreds of customers of two major banking institutions.
Europol said that the organized crime group, comprised mostly of Italian nationals, used spear phishing emails impersonating tax authorities in order to harvest the online banking credentials of their victims.
The criminals allegedly used the stolen online banking credentials to transfer money from the victims’ accounts into accounts under their control, and then withdrew the money from ATMs in Romania.
In addition to bank fraud and money laundering, the gang is accused of drug and human trafficking, Europol said.
Participating authorities included the Romanian National Police, the Italian National Police, Europol and its Joint Cybercrime Action Taskforce, and Eurojust, according to the release.
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.
When Nebraska State legislator Carol Blood started thinking about cryptocurrencies and blockchain, she focused on sex trafficking and money laundering. During two significant events held in Omaha — the NCAA College World Series and the Berkshire Hathaway Annual Meeting — law enforcement reported that sex trafficking had increased in the state.
“These are high-profile events that draw a lot of people,” she said.
When she became a legislator, she wrote a law that would punish wrongdoing when using virtual currencies.
Even before the bitcoin value run-up in the fall, states were slowly recognizing that virtual currencies and the cybersecurity potential of blockchain technologies could enhance economic development for states looking to grow. They also recognized that the swift growth of cryptocurrencies might also drive criminality within their states. In January, 11 states introduced bills that would regulate or encourage the growth of financial tech (fintech).
One of those legislators was Sen. Blood, who found herself concerned that crime could grow in her state, but she was also excited about the possibilities for fintech to attract companies and jobs.
You might think Nebraska is a rural state where sex trafficking would be anathema, but you would be wrong. Every month, at least 900 individuals are trafficked, often multiple times — this according to the Nebraska Human Trafficking Initiative.
As a member of the Bellevue City Council and a board member of the Bellevue Public Safety Foundation, Blood says she heard horror stories about the sex trade. “Several people were caught in a sting utilizing bitcoin for sex trafficking,” she said. “With this law, we could hold them accountable.”
The proposed law would give peace officers enough ammunition to charge and fine those who disguise the nature, location, source or ownership of cryptocurrencies. The same holds true for money laundering. The bill also provides for fines for those who try to avoid transaction reporting as required under state law.
But despite her desire to reinforce laws on the books against illegal gains by crooks, Blood would like to encourage the fintech industry to take advantage of Nebraska’s laws. “I wanted to take care of the dark side of bitcoin,” she said. “We also wanted to create a welcoming atmosphere for” those engaged in legitimate business with cryptocurrencies and blockchain technologies.
She has authored two other laws that would prohibit taxation of cryptocurrencies and define distributed ledgers used for smart contracts. She believes that blockchain technologies will revolutionize financial transactions and government record storage. Over-regulation of these businesses is something she wants to avoid. “Nebraska wants these businesses to know that we are open for business.”
In 10 other states, legislators have introduced bills that would define the use of blockchain and its applications in the fintech space. These include:
Arizona: Republicans Sen. Warren Petersen and Rep. Jeff Weninger introduced SB 1091 to allow Arizonans to pay their taxes with cryptocurrency and directs the Arizona Department of Revenue to convert cryptocurrency payments to U.S. dollars at the prevailing rate within 24 hours. Another bill introduced by the duo would push the Arizona Department of Revenue to tax capital gains made by cryptocurrency traders.
In previous actions, Arizona Gov. Doug Ducey signed HB 2417 into law in 2017. This bill clarifies the use of smart contracts using blockchain.
Colorado: Introduced by a bipartisan group of lawmakers, SB 18-086 proposes utilizing a distributed ledger to keep state data secure. The bill empowers the chief information security officer in the Colorado State Office of Information Technology to look at the benefits and costs of adopting and applying blockchain in all state agencies to secure state records. According to the bill, attempted data breaches to Colorado government records in 2017 reached between 6 million and 8 million per day.
Florida: Buried in a bill on the implementation of digital drivers’ licenses, Florida Republican Rep. James Grant has included clarifying language about blockchain and its uses for smart contracts and electronic signatures.
Hawaii: The Hawaiian Senate introduced two bills governing cryptocurrencies in January that would require virtual currency transmission to be licensed and to include a definition of virtual currency in the state’s Money Transmitters Act.
Illinois: On Jan. 31, the Illinois Blockchain Task Force released its first report on blockchain technology and its uses for safely storing government documents. The committee concluded that blockchain would enable the state to advance its digital transformation and enhance economic development. The task force was formed in November 2016.
New York: New York Assemblyman Clyde Vanel introduced four bills to secure voting records and government record storage; create a digital currency taskforce to analyze the impact of cryptocurrencies on New York financial markets and amend the state’s technology law to include a definition of blockchain technology; smart contracts and provide a legal understanding for digital signatures stored on a blockchain.
Tennessee: Rep. Jason Powell introduced HB 1507 a measure that would permit the use of distributed ledger smart contracts.
Vermont: Sen. Alison Clarkson introduced a bill that would allow distributed ledger startups to create limited liability companies; allow companies to create personal identity trust companies; allow for the taxation of cryptocurrencies; and explore the creation of an e-residency program.
Virginia: Introduced by Sen. Glen Sturtevant, SB 864 directs the State Corporation Commission to study cryptocurrencies and how they are currently used in Virginia to determine whether the Virginia General Assembly should establish laws to protected citizens from fraud when making transactions using virtual currencies. The commission will issue its report by Dec. 1, 2018.
Wyoming: Legislators led the Wyoming Blockchain Coalition, a grass-roots group seeking to turn the state into a haven for cryptocurrencies and blockchain technology, and have introduced several bills that should see a vote this month. All three bills would create a platform for fintech by allowing LLCs (limited liability companies) to register ownership on blockchain and exempt cryptocurrency token purveyors from security regulation.
As Tennessee Sen. Bob Corker considers how to use his remaining time in office to address human trafficking, there is a simple, bipartisan step he can take.
Go after the money.
There is a lot of money involved in modern-day slavery. Billions and billions of dollars. So where is all that money?
According to the state department, there are as many as 27 million people being trafficked today, and it’s more profitable than any other illegal enterprise except drugs. In one of the deepest stains on the global conscience, millions of the victims are children, trafficked for sex.
One of the main issues law enforcement faces with shutting down human trafficking operations is the confusion of victims for criminals. Someone thinks they are being hired for a job, only to find they are to work without pay in another country, while their traffickers hold their passports.
If such a victim encounters law enforcement, the victim could be mistaken for someone working illegally. Thanks to the tireless work of advocates across the country — where Tennessee is a leader — many police departments and emergency room personnel have been trained to recognize trafficking victims and help them escape. While awareness is growing, this is still a problem.
This dynamic also makes it that much harder to hold those profiting from human exploitation accountable. Victim testimony as a basis for prosecution is complicated, and painful for the victims.
This brings us back to the question at hand: Where is the money?
It’s not a mystery why people exploit others in forced labor or sex work. They do it to make money.
Better financial enforcement also helps take the pressure off victims. If we were able to bring money-laundering charges against traffickers, we wouldn’t need to rely on victim testimony to put traffickers behind bars.
There are bipartisan bills before Congress right now that would make it easier to catch traffickers for money laundering by ending anonymous companies, companies formed without any way of knowing who owns or benefits from their activities. Because it’s impossible to tell — even for law enforcement — who is behind these shadow companies, they are a favorite tool for setting up front businesses or moving dirty money.
Anonymous companies are used in all manner of crimes, from drug trafficking, to tax dodging, consumer fraud and even terrorist financing. But their application to human trafficking is multi-layered.
In 2016, anti-slavery advocates at Polaris analyzed public information to identify human trafficking occurring in businesses fronting as massage parlors in eight cities across the country. The inability to identify beneficial ownership was a recurring challenge in every location. In Fairfax County, Va., alone, Polaris identified 108 illicit massage businesses that were connected to 181 different corporations.
These anonymous shell businesses allow criminals to post ads, for clearly illegal services, with no way to connect the business listed with its true owners. Global Witness, in their “Great Rip Off” report, found that a Moldovan gang used anonymous companies from Kansas, Missouri and Ohio to trick victims from overseas in a $6 million dollar human trafficking scheme. Anonymous shell companies are ideal for tricking people in this way.
January is human trafficking awareness month, and we’re hoping this can be an opportunity for all of Congress to get behind bills introduced by Reps. Carolyn Maloney and Peter King in the House, and Sens. Ron Wyden and Marco Rubio in the Senate to give law enforcement access to who really owns a company.
So where is the money that modern slavers are making? That’s a question that we can’t answer without action from Congress.
Maybe the real question is: Will Congress help us go after the money?
A North Miami couple is accused of laundering millions of dollars for a “sophisticated” international human smuggling organization based in Brazil through several local businesses.
Eduardo Pereira, 49, and Marcia Tiago, 48, faced Miami-Dade Judge Mindy Glazer during bond court on Tuesday. They are accused of being the primary money launderers for Vantuir De Souza, the alleged kingpin of the organization who is under house arrest in Brazil pending human smuggling charges, according to an arrest warrant.
De Souza is also accused of organizing a human smuggling vessel that was lost at sea in November 2016. Two boat captains and at least 17 people seeking to be smuggled into the United States are still missing and presumed dead by authorities.
The human smuggling group’s activities were uncovered after the establishment of Operation: Rota Caribe, a task force formed by the U.S. Department of Homeland Security to target human smugglers.
Though the couple was charged in Miami-Dade, a Broward County Sheriff’s Office task force led the money laundering operation – named Operation: Florida Phoenix – that uncovered details related to the illicit flow of money.
The De Souza operation was found to have set up a network of captains and small vessels to separately smuggle narcotics and people to the United States.
“During the course of this investigation, a sophisticated international smuggling and money laundering organization was identified. This organization was shown to be actively smuggling people into the United States and laundering the illicit proceeds,” the arrest warrant reads. “This elaborate trade-based money laundering scheme was used to launder tens of millions of dollars of illicit proceeds generated by the smuggling organization.”
Pereira and Tiago face the same charges: three counts of money laundering greater than $100,000, two counts of engaging in an unlicensed money service business greater than $100,000 and one count of engaging in an unlicensed money service business from $20,000 to $100,000. The federal charges could see the couple behind bars for decades.
The judge ordered the couple to be placed under house arrest if they were able to pay the $300,000 bond they were individually ordered to post. They must also prove the money used to post bond came from a legitimate source.
Citing cooperating witnesses, authorities conservatively estimate that hundreds of people were smuggled into the United States – primarily through the route of Brazil to the Caribbean, where a travel visa is not required, and then by boat to South Florida. The people smuggled in would ultimately be transported by vehicles to the area of New Jersey and Pennsylvania, where they would often stay, the arrest warrant adds.
The organization charged up to $25,000 per person smuggled. That charge was usually paid in cash by the friends and family of the people being smuggled in.
Whereas human smuggling is the importation of people to the United States while deliberately evading immigration laws, human trafficking involves the exploitation of people, such as that seen in sex trafficking or slavery, according to U.S. Customs and Immigration Enforcement.
According to authorities, most of the money paid to the operation was entrusted to Pereira and Tiago, who integrated the illicit funds to the U.S. economy through several businesses – identified as Maxdu Properties LLC, Get Trade Enterprises LLC, Alaska Inc. and Auto Exchange USA Corp.
“Eduardo Pereira, Marcia Tiago, have conspired, together and with others, to launder the illicit proceeds from human smuggling,” the arrest warrant adds.
The husband and wife are accused of laundering $3.6 million in 2015, $4.5 million in 2016 and $170,000 in 2017 “by way of seemingly innocuous payments for goods and services in a further attempt to layer and conceal the source of the illicit funds.”
In September 2010, bettors at the All American Futurity race in New Mexico watched the long-shot Mr. Piloto gallop to the million-dollar first prize by less than a nose, the second-closest win in the race’s history. Meanwhile, over the border in Mexico, a gang of drug traffickers from the Zetas cartel cheered the victory with whiskey, from a safe house. Mr. Piloto was registered to the company of a Dallas bricklayer named José Treviño Morales, but the money to buy him had come from his brother Miguel Treviño, alias “El Cuarenta,” a Zeta boss blamed for some of the worst massacres in Mexico’s drug war. Bloodstained dollars had gone from American drug users over the Rio Grande to cartel killers, and then back north into the American racing industry.
The true-life tale of the Zetas’ foray into quarter horses is masterfully recounted by the journalist Joe Tone in his debut book, “Bones.” He shines a light on an often overlooked corner of the blood bath ravaging Mexico: how cartel money is laundered in the United States. In this case, federal agents finally busted the operation, seizing more than 400 “narco horses,” which they auctioned off for $12 million. But with Americans estimated to spend $100 billion a year on illegal drugs, this is probably just the tip of an iceberg.
In addition to following the drug money, Tone has found a great yarn. His finely-painted cast of characters includes a rookie F.B.I. agent hungry to make his name, a Texas cowboy fighting to keep his family business afloat and a talented Mexican horseman picking winners for a very dangerous boss. Tone weaves the threads together with skillful pacing and sharp prose, marking him as an important new talent in narrative nonfiction.
He is helped along by ample documentation of the case. While much of the narco world remains in the shadows, Treviño and his cronies were brought to trial in Austin, in 2013, in one of the most extensive lawsuits against a Mexican cartel to be heard in an American courtroom. (Major Mexican traffickers often don’t go to trial, because they cut deals.) Even though he builds on the reporting of Ginger Thompson, who broke the story in The New York Times, Tone adds some vivid details, recounting wiretapped phone calls and drawing the full back story from Lawson, the rookie F.B.I. agent who pursued the case. “Lawson could hear the horses if he listened closely,” Tone writes. “He was standing outside the black-iron gate with the horse silhouettes, at the bottom of a long driveway that led up to José’s brick homestead. It was a little after six in the morning, the earliest moment the court would allow them to raid without a judge’s permission.”
Tone digs deep into the colorful world of quarter-horse racing, a variant of the sport developed by white cowboys, Mexican ranchers and Native Americans. He also shows how some players in the horse industry reaped the drug money and went on to enjoy their profits; how those arrested were all Hispanic while some white horsemen doing similar things remained free; how José Treviño’s daughter, a college student who married a Marine, was caught up in the sweep.
Like many journalists of the drug war, Tone sheds doubt on the whole strategy of fighting the trade. “Better answers might lie in the halls of American power and influence — in the way drugs are regulated, drug users treated, drug traffickers sentenced.” He is right to push for more debate on how to stop the billions of drug dollars from funding the crime armies tearing Mexico apart. But law enforcement agents still need to keep hacking at the tentacles of cartel finances that stretch through the United States, where the blood wealth of narcos could be right before your eyes.
LOS ANGELES • Motel 6 has agreed to pay $250,000 to settle a lawsuit brought by Los Angeles that alleged one of the chain’s locations was a base for human traffickers, drug dealers and gang members, prosecutors said.
Los Angeles City Attorney Mike Feuer told The Associated Press on Wednesday that the money will be used to help deter human trafficking.
The city in November sued the managers of a motel in the Sylmar neighborhood and G6 Hospitality Property LLC, which operates the Motel 6 chain, seeking to quell “unrelenting crime and nuisance activity.”
Los Angeles police had made more than 60 arrests at the location since 2013 for prostitution, battery, firearms possession and drug-related charges, authorities said.
“We allege this has been used as a base for which known gang members and drug dealers had operated,” Feuer said. “We allege that there was prostitution happening at this site — pimps and prostitutes both — and we allege it was a base for stolen goods, for distributing drugs like meth and cocaine and heroin.”
Raiza Rehkoff, a spokeswoman for G6 Hospitality, did not immediately respond to a request for comment on the settlement.
In one case, staff members “didn’t hesitate” to rent a room to an undercover police officer who had been posing as a pimp and told the workers that he intended for another undercover officer to work as a prostitute there, the lawsuit alleged.
In another incident, three undercover police officers were approached at the motel’s pool by a suspected gang member who propositioned them to work as prostitutes, offered to act as their pimp and said he would post ads on Backpage. com in exchange for half of the proceeds, Feuer said.
A loaded handgun was found hidden in a box-spring under a mattress, and police had arrested suspects in several different robberies at the motel, the city attorney said.
“I know there are other incidents where, we allege, clearly this motel was using for pimping and prostitution activities. And that needs to change,” Feuer said.
As part of the settlement, the motel will require guests to provide valid photo identification, hire security guards and post signs in the lobby about human trafficking.
The motel also will give Los Angeles police access to its guest list and visitor logs, as well as give officers access to remotely monitor the motel’s security cameras.