2 human trafficking victims rescued, L.A. man arrested in Chino raid

CHINO >> Two victims of human trafficking were rescued and a Los Angeles man was arrested after authorities say they discovered a trafficking den at a medical warehouse in Chino on Wednesday.

Luis Flores Lopez, 39, was arrested on suspicion of felony pimping and pandering. He is being held at West Valley Detention Center in Rancho Cucamonga in lieu of $100,000 bail, San Bernardino County sheriff’s officials said.

The San Bernardino County Human Trafficking Task Force learned several advertisements on Backpage.com — an online classified site that has been connected to instances of human trafficking — listed a commercial medical building in the 12500 block of 10th Street in Chino as a connection site, according to a news release.

“Investigators observed a high volume of males going to and from the business,” the statement said. “After further investigation, it was established that investigators believed victims were being trafficked for the purpose of sex inside the location.”

After obtaining a search warrant, detectives rescued two victims and detained two men authorities say were at the warehouse to pay for sex. They were later released pending further investigation, officials said.

Lopez was also found inside and arrested, sheriff’s authorities said.

Investigators say websites like Backpage.com allow traffickers to list women offering sexual services. According to FAIR Girls, an organization that offers safe housing and services to survivors of human trafficking, 90 percent of the young women and girls they serve — some as young as 14 — were listed on Backpage.

The company has said it believes the company is on firm legal ground and works hard to report abuses of the website.

The Chino investigation is ongoing.

Detectives believe there are other victims and ask anyone with information to contact the San Bernardino County Human Trafficking Task Force at 909-387-8400. Anyone wishing to remain anonymous may contact WeTip at 888-78-CRIME or www.wetip.com.

Australia proposes stronger money laundering rules, includes bitcoin

SYDNEY (Reuters) – Australia said on Thursday it would strengthen its money laundering laws, including bringing bitcoin providers under the government’s financial intelligence unit, days after a fresh scandal at one of the country’s biggest banks.

The government said a coming bill would be the first stage of reforms to strengthen the country’s Anti-Money Laundering And Counter Terrorism Financing Act.

“The threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them. These measures ensure there is nowhere for criminals to hide,” Minister of Justice Michael Keenan said, without specifying when the legislation would be introduced.

The bill will also aim to bolster the investigative and enforcement powers of the financial intelligence agency AUSTRAC.

The announcement comes just days after the agency accused the Commonwealth Bank of Australia (CBA.AX) of “serious and systemic” breaches of money laundering laws.

But the move is more than two years after global watchdog Financial Action Task Force (FATF) found significant deficiencies in Australia’s anti-money laundering framework.

The next and more challenging phase of legislative reforms in Australia will be to extend the rules to lawyers, accountants, real estate agents and dealers in high-value goods.

Under Australian regulations, one can pay millions in cash for precious stones or a prime property without having to identify themselves or the source of their funds.

Australia had agreed in 2003 to extend strict controls to these sectors, but has yet to act on those promises.

“Stopping the movement of money to criminals and terrorists is a vital part of our national security defenses and we expect regulated businesses in Australia to comply with our comprehensive regime,” Keenan said.

The digital currency exchange sector, which includes bitcoin, will be regulated for the first time, Keenan added.

The Australian Digital Currency & Commerce Association welcomed the reform, saying it will increase safeguards and provide regulatory certainty to digital currency businesses.


Photo: Jason Lee

4 arrests in Metro Detroit drug, human trafficking ring

Four people were arrested in connection with an alleged opioid drug and human trafficking operation based in Metro Detroit, Michigan Attorney General Bill Schuette said Tuesday.

The group — identified as Melvin Niblett, Corey Cooper, Maurice Rushton and Jasmin McGinnis — was identified through a probe that launched in September, when the joint FBI and Oakland County Gang and Violent Crimes task force received a tip about a suspected drug and prostitution ring in Madison Heights.

Niblett and Cooper were caught selling drugs in Warren and charged in a separate but related case by the Macomb County Prosecutor Eric Smith, the Attorney General’s Office said.

They both later were released on bond. But in October, police learned Niblett was reportedly using rooms at a Southfield hotel to lead a drug and human trafficking operation with dozens of others, authorities allege.

“Drug and human trafficking continue to plague the safety of many communities in Michigan,” FBI Special Agent in Charge David P. Gelios said in a statement. “Today’s arrests reflect the continuing impact federal, state and local law enforcement are having on the ability of criminals to victimize and enslave others through their addiction to a variety of dangerous and sometimes lethal drugs.”

All four arrested have been charged with 24 felonies, including conducting a criminal enterprise, a felony punishable by up to 20 years in prison and $100,000, Schuette’s office said Tuesday.

An Aug. 21 preliminary examination is scheduled for Cooper, 45, Niblett, 38, of Southfield, and McGinnis, a 27-year-old from Canton Township. Rushton, 57, who was apprehended in Ohio, awaits extradition.

“The individuals involved in this human and drug trafficking ring will be held accountable to the fullest extent of the law,” Oakland County Sheriff Mike Bouchard said Tuesday. “The victims deserve justice and I am proud of our task force members who partnered with the attorney general and other agencies to send a clear message that these types of crimes will not be tolerated in our community.”


CBA scandal blamed on ‘outdated’ banknotes

THE Commonwealth Bank money-laundering scandal has given ammunition to the anti-cash crusade, with one analyst asking whether “outdated” $100 and $50 notes are the “root of the problem”.

The nation’s largest bank is facing allegations of more than 53,000 breaches of anti-money laundering and counter-terrorism financing laws, the majority relating to large cash deposits made at CommBank ATMs.

In a note earlier this month, UBS analyst Jonathan Mott said the CommBank scandal raised “four critical questions”.

“Is the root of the problem the outdated high denomination cash notes?” he wrote. “Should Australia move to phase out cash given its role in the black economy (including: proceeds of crime, money laundering, tax avoidance, welfare fraud)?”

In November, Mr Mott penned a note arguing that removing large-denomination banknotes would be good for the economy and the banks.

“Benefits may include: reduced crime (difficult to monetise); increased tax revenue (fewer cash transactions) and reduced welfare fraud (claiming welfare while earning or hoarding cash),” he wrote.

“From the banks’ perspective there would likely be a spike in deposits — if all the A$100 notes were deposited into banks (ignoring hoarded A$50s), household deposits would rise [roughly] 4%. This would likely fill the banks’ Net Stable Funding Ratio (NSFR) gap and reduce reliance on offshore funding.”

That coincided with the federal government announcing a review of the $100 note as part of its Black Economy Taskforce. The Reserve Bank later came out in support of the $100 note, saying removing it would do little to stamp out crime — because criminals prefer $50s.

In its interim report released in May, the Taskforce made 35 recommendations, including for an “economy-wide” cash payment limit.

“The level of any cash payment limit will require careful consideration (however $10,000 is a possible option),” wrote Taskforce chair Michael Andrew. “Wider payment system policy considerations will also need to be taken into account.”

The report also floated using biometric data such as “fingerprints, palm prints, iris and facial structure” to monitor the black economy. “Fingerprints are already widely used on smart phones and their wider use could bring down payment fees and enable better data checking,” Mr Andrew wrote.

“The Taskforce will consider whether increased used of biometrics (subject to privacy protections) would assist to reduce black economy participation, along with a broader look at the issue of digital identities which some initial consultations have noted should be considered.”

Another recommendation argued the need for “consumer-focused action” to crack down on cash payments, saying while current anti-black economy laws focused on businesses, consumers are “part of the problem”.

“We intend to examine the merits of consumer-focused sanctions, including the loss of consumer protections, warranties and legal rights for people who make cash payments without obtaining a valid receipt,” Mr Andrew wrote. “This is not simply a matter of imposing new penalties, but part of a wider cultural change agenda.”

It comes after Mr Andrew last month floated the idea of using “nano-chips” to keep track of “disappearing” $50 and $100 notes, which could also be subject to “expiry” dates to prevent hoarding of cash under pensioners’ beds and in foreign countries like China.

Estimates for the size of Australia’s so-called black economy vary from $23 billion to $50 billion. The government claims tax avoidance through cash payments costs the budget up to $10 billion in revenue, money that could go towards funding welfare and other services.

According to the Reserve Bank, cash withdrawals from ATMs have fallen by about 3.4 per cent annually since 2009, while credit card transactions are growing at 7.3 per cent per annum, driven by tap-and-go technology.

There are currently around 300 million $100 notes in circulation, almost three times the number of $5 notes, and 92 per cent of all currency by value is in $50s and $100s.

“I don’t know too many people who walk around with $100 notes, I certainly haven’t sighted one in a long time, but the point is that there is clearly an issue that we need to grapple with,” Revenue and Financial Services Minister Kelly O’Dwyer said earlier this year.

The Black Economy Taskforce’s final report is due in October.


Israeli Billionaire Beny Steinmetz Detained Over Suspected Bribery, Money-laundering

Israeli billionaire Beny Steinmetz, a prominent political consultant Tal Silberstein and four other businessmen were detained for questioning under caution on Monday over allegedly using fake contracts to move and launder money. The homes and offices of some of them were raided by law enforcement Monday morning.

The suspicions center on forgery, use of a forged document, money laundering, fraud, breach of trust, obstruction of justice and more. Steinmetz was arrested in December for his suspected role in a sprawling corruption case involving tens of millions of dollars.

Among the four other suspects arrested was Tal Silberstein, a former political consultant to ex-premier Ehud Barak and an advisor to the Austrian chancellor, as well as the CEO of Israeli telecom giant Bezeq, David Granot. Silberstein was let go today by the Austrian chancellor due to the arrest.

The police suspect that the five detainees and central suspect systemically made use of contracts for nonexistent deals, including property deals in a foreign country, to move money around and launder ill-gotten gains. International law enforcement is involved in cracking the case, say Israeli sources.


Photo: Tomer Appelbaum


US warns differences on FARC peace could cause relationship problems with Colombia

A top US anti-drug official has cautioned that “bilateral political problems” could result from differences of opinion between the United States and Colombia about how to deal with rising cocaine production in the context of the ongoing implementation of a peace agreement with the FARC guerrilla group.

At a US congressional hearing on August 2, State Department official William Brownfield offered strong but controversial recommendations on how to curb Colombia’s booming cocaine production, which stand in contrast to the Colombian government’s planned approach to the issue.

According to the assistant secretary for International Narcotics and Law Enforcement Affairs (INL) and former ambassador to Colombia, the United States has a “limited window of opportunity to roll back the recent troubling narcotics trends” in Colombia, which he said had experienced a 200 percent increase in cocaine production over the past three years.

Brownfield stated that cocaine use has simultaneously been rising in the United States, with 2015 seeing the highest number of cocaine-related overdose deaths in almost a decade.

The assistant secretary laid out the main aspects of Colombia’s new drug policy as outlined in the peace accord with the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC), which focuses on substituting coca with legal crops and developing infrastructure in rural areas. He explained that legal and political obstacles prevented the United States from backing those elements of the accord.

“The United States is not currently supporting the Colombian government’s voluntary eradication and crop substitution program because the FARC is involved in some aspects of the program and remains designated as a Foreign Terrorist Organization under several U.S. laws and sanctions regimes,” he said.

“If we don’t reach an acceptable solution for both countries … we’re going to see bilateral political problems” – William Brownfield
Brownfield also pointed to the resource limitations of Colombia’s strategy.

“We are strongly encouraging the Colombian government to limit the number of voluntary eradication agreements they negotiate and sign to make implementation feasible,” he said. “Voluntary eradication agreements must also have expiration dates so the security forces can forcibly eradicate in farms where coca growing communities fail to meet their obligations.”

Colombia aims to eradicate 100,000 hectares of coca crops by the end of the year through a 50-50 mix of crop substitution and forced eradication.
Moreover, Brownfield argued that the “Colombian leadership must find a way to implement a robust forced manual eradication effort” to encourage farmers to abandon illicit crops.

Following the hearing, Brownfield told the press, “If we don’t reach an acceptable solution for both countries reasonably soon, we’re going to see bilateral political problems and this is what I want to avoid.”


Human trafficking and slavery affecting ‘every large town and city in UK’

National Crime Agency warns true scale of modern slavery is ‘far more prevalent’ than previously estimated, with alleged victims as young as 12 being sold to families in the UK from Europe.

The enormous scale of modern slavery and human trafficking in the UK has been revealed in a major official report, with hundreds cases affecting “every large town and city in the country”.

The National Crime Agency (NCA) said the scale of the issue is far more prevalent than previously estimated, and warned that the threat is continuing to expand.

There are currently more than 300 live police operations targeting modern slavery in the UK, with alleged victims as young as 12 being sold to families in the UK from Europe, the report reveals.

Operational activity focusing on labour and sexual exploitation co-ordinated by the NCA through May and June led to 111 arrests in the UK and some 130 people being encountered who may be considered as victims.

Linkedactivity also took place on mainland Europe resulting in around 40 further arrests and the launch of 25 further investigations.

Will Kerr, director of vulnerabilities at the NCA, said: “The more that we look for modern slavery, the more we find evidence of the widespread abuse of the vulnerable.

“The growing body of evidence we are collecting points to the scale being far larger than anyone previously thought. This should not be acceptable in any way, shape or form.”

Responding to the report, Kevin Hyland, the independent anti-slavery commissioner, said the fight against modern slavery must go beyond arrests, and extend into more convictions as well as improved intelligence gathering and better support for victims.

“Arrests have been made by police, victims rescued and convictions secured. But the real work starts now. We need to see more convictions and criminals behind bars,” Mr Hyland said.

“We need to see information gathered and mined for intelligence that leads to organised networks dismantled. And we need these victims to be supported and cared for so that they are no longer vulnerable to traffickers and slave masters.

“It is my hope that the campaign launched today by the NCA leads to an increased awareness among the British public, so that we can pride ourselves on being a nation that will not tolerate the evil of modern slavery.”

The report comes a day after Mr Hyland accused the NCA came of not taking the crime seriously enough and allowing important information about modern slavery offences to “sit dormant” on databases.

Speaking to the Evening Standard on Thursday, Mr Hyland said measures to protect other potential victims had not been taken, in a failure he likened to allowing a rapist to “run around London” without police taking action.

The number of people being referred into the National Referral Mechanism (NRM) – the UK’s official framework for identifying victims of human trafficking – has been steadily rising in recent years. Almost 1,400 victims, including cases of sexual exploitation and domestic servitude, were identified last year.


Photo: Rex

CBA says ‘not every problem’ fixed after money-laundering allegations

Commonwealth Bank chief Ian Narev admits “not every problem” has been fixed following allegations it breached money laundering laws.

Mr Narev was grilled by journalists today over civil action against the bank taken by regulator Austrac, which alleges more than 53,000 breaches of money-laundering laws.

CBA today set out action it had taken to comply with the laws since it was first alerted in 2015 to failures in reporting transactions by its smart ATMs.

But when asked why Austrac would take action against CBA if the problem had been rectified, Mr Narev said: “We’re not saying every problem’s been fixed.

“We need to go through and work……and I’m not going to sit here and say every problem’s been fixed.

“It is important to bear in mind that we have a regulator here that is a very diligent regulator with an extremely important job to do. Austrac needs to exercise its powers, and be seen to exercise its powers very forcefully.”

CBA retreated 0.7 per cent after Mr Narev’s press conference began to a new session low of $80.87.

Mr Narev also defended CBA’s decision not to report alleged breaches to the market before Austrac last week launched civil action in the Federal Court.

“We report around four million transaction reports to Austrac each year. We exercise judgment as to what requires disclosure … our view is that these things didn’t come anywhere near (that requirement) in the form they came at the time.”

Austrac alleges CBA’s repeated failures to deal with suspiciously large and repeated cash deposits into its smart ATMs delayed and hindered enforcement ­efforts, costing agencies intelligence­ and evidence while ­allowing money laundering to continue.

Questioned today, Mr Narev said: “We’re going to look very carefully at the claims and why warnings that claimed to have been given were not heeded.”

He added: “It’s going to be important to make people understand that a lot of work has been done since these claims were brought to our attention. A lot of work still needs to get done and we’ll continue working closely with Austrac.

“The reality is, when dealing with criminal elements, people find ways to circumvent the limits that you put on (the machines).”

Mr Narev also denied CBA had profited from transactions at the centre of the civil action.

“There is no economic reason that would underpin the alleged activity and that’s not part of the equation,” Mr Narev told journalists. Nor was there any evidence the bank had assisted with any terrorist funding.

Mr Narev was speaking after the CBA said earlier it had no reason to believe alleged breaches of money-laundering laws arose from deliberate or unethical behaviour, or any commercial motive.

The statement came as CBA’s board moved to create a dedicated subcommittee to deal with the allegations by Austrac, with $40 million worth of new anti-money laundering technology to be delivered over the next 12 months.

CBA released its update after today unveiling a bumper $9.9 billion full-year profit, and after it yesterday slashed bonuses for CEO Ian Narev and senior executives, and cut directors’ pay, in the wake of over 53,000 alleged breaches of money-laundering laws.

In a statement earlier today, CBA said it had become aware in the second half of 2015 of “alleged issues” relating to threshold transaction reporting (TTRs) on CBA’s network of intelligent deposit machines (IDMs).

CBA said it had already made some progress in strengthening its policies and processes relating to its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act.

The board has already moved to cut the short-term variable remuneration outcomes for Mr Narev and group executives for the financial year ended June 30, 2017. Fees for non-executive directors have also been slashed 20 per cent during the current 2018 financial year.

“This reflects our view that the board, CEO and group executives take ultimate collective responsibility for the reputation of the bank,” the CBA board said.

With management accountability now under a microscope, CBA’s board maintains that the bank had not been deliberately complicit in any laundering activity carried out over its network of smart ATMs.

“The board notes that it has no reason to believe that the allegations arose from deliberate or unethical behaviour, or any commercial motive,” it said.

CBA said this week its automated reporting system was knocked offline by a coding error introduced during a software update in 2012.

The bank added that the error was rectified as soon as it was notified and it had taken significant additional steps, including the addition of manpower to its criminal compliance team, the development of a specialist hub to strengthen its Know Your Customer (KYC) processes; and an upgrade of its financial crime technology capabilities.

Mr Narev added this afternoon: “We are not saying it’s all about a software error … we’re saying a significant proportion was due to a coding error. We are going into this with an open mind and we’re going to look at every single claim under the supervision of the committee. It’s going to take a while.”

Mr Narev today repeated the bank made “made mistakes”.

“It’s been a tough time at the Commonwealth Bank since the Austrac proceedings were filed and we’re taking them very seriously,” Mr Narev said. “We know that we’ve made mistakes; we have fixed a lot of those mistakes and we will continue to look to make our business better and better.”

While each of the more than 53,000 alleged contraventions carries a maximum penalty of $18m, the bank has downplayed the prospect of a massive penalty, arguing the breaches overwhelmingly relate to a single software error.

In a separate development, ANZ responded to media reports by declaring it has

systems in place to ensure it complies with anti-money laundering obligations.

“We are also subject to continuous supervision from Austrac and have no outstanding requirements,” ANZ said.

ANZ said Austrac had reviewed its smart ATMs in late 2015 and found no evidence of noncompliance with anti-money laundering regulation.


Photo: James Croucher

Tallahassee woman, 23, wanted by FBI for human trafficking

The FBI is looking for a Tallahassee woman who it says is involved in facilitating the sex trafficking of minors.

According to the FBI, 23-year-old Rachel Lynn Robillard’s last known address is in Tallahassee, but she is known to travel up the East Coast on Interstate 95. A warrant for her arrest was issued in Alexandria, Virginia, on June 29 for conspiracy to engage in sex trafficking of a minor, sex trafficking of a minor, and using interstate travel to promote prostitution.

Robillard is described as 5’7” to 5’9” with blonde hair and has a tattoo on her neck.

The FBI urges anyone with information about Robillard’s whereabouts to contact the agency’s Washington D.C. field office at 202-278-2000.


CBA blames money laundering allegations on ‘coding error’

Commonwealth Bank of Australia has blamed a software “coding error” for most of the 50,000 breaches of money laundering and counterterrorism laws alleged by Australia’s financial crime-fighting agency.

The country’s biggest lender said on Monday it was reviewing a legal action initiated last week by the Australian Transaction Reports and Analysis Centre (Austrac) but played down reports it could face fines worth almost A$1tn (US$793bn).

“That big number is very inflated due to the nature of the claims,” Ian Narev, CBA chief executive, told Australian media on Monday.

“One very important piece of context is the vast majority related to one software coding error in 2012, which we picked up in 2015, fixed in a month and rectified.”

CBA was shaken by Austrac’s revelations that it was suing the bank for alleged breaches of money-laundering laws, which the agency claimed enabled drug dealers and criminals to launder tens of millions of dollars of cash.

The alleged breaches related to CBA’s rollout in May 2012 of intelligent deposit machines that facilitate anonymous cash and cheque deposits of up to A$20,000 per transaction.

Austrac alleged the machines could be used for illegal dealings, with criminals able to accept cash from anonymous parties to transfer the proceeds of crime overseas.

Austrac has accused CBA of more than 50,000 breaches of the law by failing to adequately monitor A$624.7m of transactions on its network of IDMs over a three-year period. The agency also alleged that CBA failed to adequately report unusual transactions equalling more than A$77m or monitor suspicious customers after it became aware of possible money laundering.

CBA said the issue began after a coding error during a software update to the machines in late 2012. This error meant the machines did not create the necessary suspicious-transaction reports, which by law should be sent to the authorities.

“This error became apparent in 2015 and within a month of discovering it, we notified Austrac, delivered the missing transaction reports and fixed the coding issue,” said CBA.

CBA could face a maximum penalty of A$18m for each breach of the law, which has caused some media to speculate about it facing a fine of almost A$1tn.

On Monday the bank played down these claims, stating that most alleged breaches arose from “a single course of conduct” as they emanated from the same systems error.

CLSA warned in a note that many of the transactions identified by Austrac involved funds remitted outside Australia, which could leave the bank vulnerable to fines in those jurisdictions, including the US where penalties for misbehaviour are higher than in Australia.

The broker also warned of damage to CBA’s reputation, saying the bank “seems to make more mis-steps than its peers”.

Austrac’s legal action marks the latest development in a series of financial scandals that have put a spotlight on alleged rule breaking by Australian banks.

Mr Narev dismissed questions about his future leading the bank, telling Australian radio that all his attention was focused on the legal claim and the bank’s results on Wednesday.

“Whenever we get matters that impact the reputation of the bank we make sure we get to the bottom of it,” he said.


Photo: EPA