AML/CFT e-NEWSLETTER
For the week ending 14 February 2008
During the course of the following week we are sending out a series of sample issues of the new e-Newsletters. Each covers one topic area previously covered in the TerrorismCentral Newsletter. This AML/CFT e-Newsletter is complimentary to subscribers of the AML/CFT Monitor, or can be purchased separately. Subscribers also receive additional source documents and special reports, and are eligible for discounts on other purchases.
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This e-Newsletter is copyright The Asset Management Network Inc. All rights reserved.
CONTENTS:
1. Incidents and Cases
2. Legislation and Regulation
3. Modalities
4. Technology and Business
5. The Asset Management Network Inc.
1. INCIDENTS AND CASES
Complaints over the Exclusive Brethren Christian sect breaching electoral and money laundering laws were referred to the Australian Federal Police (AFP). Commissioner Mick Keelty said that the investigation continues, but they have uncovered no evidence to support the accusations.
http://www.news.com.au/heraldsun/story/0,21985,23231891-5005961,00.html
Ramon Baez, former president of Figueroa Banco Intercontinental SA (Baninter) appealed the Dominican Republic's National District court’s sentence of 10 years in prison and the more than $2.5 billion in damages for his role in Baninter's 2003 bankruptcy, the largest in Dominican history. At his appeal hearing this week, his attorneys insist that his billion-dollar purchases did not constitute money laundering.
http://www.dominicantoday.com/dr/local/2008/2/21/27109/Money-laundering-denied-in-largest
-Dominican-bank-fraud-case
http://goliath.ecnext.com/coms2/summary_0199-2820287_ITM
http://www.bancentral.gov.do/discursos.asp?a=Discurso_2003-05-13 (in Spanish)
In an AML operation directed atainst the Sinaloa Cartel, Mexican troops seized 103 airplanes and three helicopters.
http://news.xinhuanet.com/english/2008-02/18/content_7622905.htm
Morocco says it dismantled a terrorist network that raised funds through robberies in Europe and plotted to assassinate Cabinet ministers and members of the Jewish community.
http://www.iht.com/articles/ap/2008/02/21/africa/AF-GEN-Morocco-Terror-Ring.php
http://www.magharebia.com/cocoon/awi/xhtml1/en_GB/features/awi/features/2008/02/21/
feature-01
Ana Miren Alberdi, Carlos Saez de Eguilaz and Cristina Goirizelaia, members of Basque separatist group ETA, were sentenced to 15 years imprisonment for extortion - one of the major activities through which they finance their terrorist activities.
http://www.eitb24.com/new/en/B24_87704/politics/TRIAL-IN-PARIS-French-court-sentences-
3-ETA-members-to-15/
Swiss lawyers for Pakistan are calling on Swiss judicial authorities to try Pakistan Peoples Party co-chair, and widower of Benazir Bhutto, for laundering more than $50 million in funds received through bribery and corruption. Charges against Zardari and Bhutto have been under investigation for more than a decade. A decision is expected in a few weeks.
http://english.aljazeera.net/NR/exeres/FFF1C6D6-D2CD-4F4A-BDB5-67B1BBA6C0D7.htm
http://www.latimes.com/news/nationworld/world/la-fg-zardari4jan04,0,5097252.story
In the British town of Carlisle, Terrence O'Neil admitted to 22 counts of obtaining property by deception. He was cleared of seven counts of laundering money for his criminal elder brother.
http://www.newsandstar.co.uk/news/viewarticle.aspx?id=796232
http://www.newsandstar.co.uk/news/viewarticle.aspx?id=795278
Richard G. Renzi, the U.S. Representative from Arizona's first congressional district; real estate investor James W. Sandlin, and business associate Andrew Beardall, have been indicted on multiple counts. Renzi and Sandlin face 27 counts including honest services wire fraud, extortion and money laundering, and conspiracies to engage in these acts, based on Renzi's active involvement in the sale of Sandlin's property in Cochise County, Ariz. to a participant in a federal land exchange
proposal.
http://phoenix.fbi.gov/dojpressrel/2008/ph022208.htm
http://www.borderfirereport.net/jim-kouri/congressman-and-associates-nailed-for-extortion
.html
In California, former golf company CEO Peter Carlo Mertens, his wife Bettina Thakore, and accountants Wayne Joseph Fernandes and William Hamman were charged with laundering a drug dealer's profits by channeling drug cash to bank accounts linked to Mertens' business, Diamond Golf Co., and later write checks back to the dealer.
http://www.signonsandiego.com/news/business/20080223-9999-1b23launder.html
http://www.nctimes.com/articles/2008/02/24/news/top_stories/23_34_552_23_08.txt
Gabriel MacEnroe of Ireland was extradited from Switzerland, where he operated a finance business, to the US state of Florida, where he was charged with a money laundering conspiracy involving a $2.8 million pyramid fraud. He has been sentenced in US District Court to a prison term of 63 months, a $10,000 fine, and three years of supervised release.
http://miami.fbi.gov/dojpressrel/pressrel08/mm20080219a.htm
http://www.usdoj.gov/usao/fls/PressReleases/080219-02.html
https://ecf.flsd.uscourts.gov/cgi-bin/login.pl?100770069750394-L_186_0-1
Minnesota real estate closing company proprietor Molly L. Heise pleaded in a money launder scheme that involved the theft of more than $2.5 million from clients.
http://www.usdoj.gov/usao/mn/press/econ/econ0174.pdf
http://www.startribune.com/local/west/15857037.html
New Jersey produce distributor Joseph Diorio was found guilty of money laundering, conspiracy, and theft by deception. Sentencing will take place 25 April.
http://www.nj.gov/oag/newsreleases08/pr20080222a.html
http://www.app.com/apps/pbcs.dll/article?AID=/20080222/NEWS01/802220442/1004/
NEWS01
Steve Warshak founded Berkeley Premium Nutraceuticals, selling Enzyte "natural male enhancement" pills on television. He has been convicted in US District Court in Ohio of conspiracy, bank fraud, and money laundering. Three other employees were convicted on similar charges.
http://news.enquirer.com/apps/pbcs.dll/article?AID=/20080222/NEWS01/302220071
http://news.cincinnati.com/apps/pbcs.dll/article?AID=/20080223/NEWS01/802230352/
-1/CINCI
http://www.ftc.gov/os/caselist/berkeley/berkeley.shtm
In Virginia court, former Roman Catholic priest Rodney Rodis was sentenced to 63 months in prison and restitution of stolen funds.. He had pleaded guilty to mail fraud and money laundering in October in the theft of more than $600,000 in donations from St. Jude Church and Immaculate Conception Catholic Church in Louisa County between 2002 and 2006. To do this, he set up bank accounts and a post office box for contributions, then transferred the money to his personal account. He spent
it on his wife and three children hidden from parishioners, and wired money overseas to relatives who used it to buy real estate.
http://www.dailypress.com/news/local/virginia/dp-va--priestcharged0221feb21,0,4613047
.story
http://www.usdoj.gov/usao/vae/press.html
In Zimbabwe, the Harare regional court cleared businessman Nicholas Von Hessen ("Van Hoogstraten") of money laundering and possession of counterfeit money allegations, but he will be tried on two counts of illegally dealing in foreign currency.
http://www.herald.co.zw/inside.aspx?sectid=31122&cat=1
http://www.herald.co.zw/inside.aspx?sectid=31228&cat=1
top
2. LEGISLATION AND REGULATION
This article focuses on Australia's new customer identification requirements.
http://www.news.com.au/business/money/story/0,25479,23250582-5013953,00.html
Bangladesh will soon promulgate a new AML ordinance under which the state or Bangladesh Bank will be able to sign agreements with other governments and organizations to confiscate and recover assets illegally sent abroad. It is in the final stages of a bilateral agreement with Bank Negara Malaysia.
http://www.thedailystar.net/story.php?nid=24672
http://www.bernama.com.my/bernama/v3/news.php?id=315244
Canadian Finance Minister Jim Flaherty opened the permanent headquarters of the Egmont Group Secretariat.
http://news.gc.ca/web/view/en/index.jsp?articleid=378609&categoryid=1&category=News+
Releases
This comes shortly after Canada released final regulations strengthening and expanding current AML/CFT regulations.
http://canadagazette.gc.ca/partII/2008/20080220/html/sor21-e.html
MONEYVAL released the third round assessment on the Czech Republic. The economy is advancing, but is still based heavily on cash. Financial institutions used for laundering include banks, credit unions, insurance companies and exchange offices, commercial networks operating international money transfer services, cash businesses, and the gaming sector and casino industry. Terrorists have occasionally used the country temporarily, connected with organized crime. The government plans to
fulfill international commitments, but has not adopted a national strategy. There has been moderate progress since the last evaluation.
http://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/round3/MONEYVAL(2006)21Rep
-CZE3_en.pdf
The Gulf Cooperation Council (GCC) held its second Regulators' meeting. Al Khaliji bank's senior executive for corporate governance, Niall Coburn, moderated. He discussed corporate governance and international best practices, and called for an end to the $1.5 trillion worldwide money laundering business.
http://www.menafn.com/qn_news_story_s.asp?StoryId=1093186169
http://www.gulf-daily-news.com/Story.asp?Article=209223&Sn=BUSI&IssueID=30337
http://www.alkhaliji.com/EnglishKhaliji/documents/2nd GCC Regulators' Summit press release FINAL FINAL.pdf
http://www.alkhaliji.com/EnglishKhaliji/documents/Niall's Final presentation [Compatibility Mode].pdf
Representatives of the Financial Action Task Force (FATF), the US Treasury, and an Iranian delegation met in late January to discuss Iran's new money laundering law and related issues. Iran played down the presence of US officials, but both countries will be at a larger FATF meeting later this month.
http://www.alertnet.org/thenews/newsdesk/DAH638992.htm
http://ap.google.com/article/ALeqM5hdVphwtHPpy9Q9tjjJ_nrCbbPG3gD8URL0UG3
Ireland plans to extend money laundering laws to high value retailers.
http://www.independent.ie/national-news/strict-money-laundering-laws-to-be-extended-to-
retailers-1292438.html
The principality of Liechtenstein, a major European tax haven, has threatened Germany with legal action because German authorities paid an informant for stolen financial data on hundreds of investors who now face prosecution for alleged tax evasion.
http://www.iht.com/articles/ap/2008/02/21/europe/EU-FIN-Liechtensteins-Hot-Seat.php
http://www.spiegel.de/international/europe/0,1518,536299,00.html
This article illustrates Malta's approach to money laundering by describing a 2002 case involving Stephanie Butler and her mother Carmen.
http://www.independent.com.mt/news.asp?newsitemid=65250
Puerto Rican bank holding company Doral Financial Corp., which was rescued from the brink of bankruptcy last year, has agreed to improve its protections against money laundering after a the US Federal Deposit Insurance Corp. (FDIC) cited the San Juan-based company's principal subsidiary, for violations that took place starting in 2005.
http://www.caribbeannetnews.com/news-6256--21-21--.html
http://www.snl.com/irweblinkx/file.aspx?IID=102801&FID=5648247
St Kitts and Nevis is preparing for its second mutual assessment by the Caribbean Financial Action Task Force.
http://www.cuopm.com/newsitem.asp?articlenumber=1587
A release from the Central Bank of Sri Lanka describes progress in the Financial Intelligence Unit, which was established in March 2006. In addition to staffing up, holding awareness and training programs, and contributing to international conferences they have:
* Issued reporting procedures and directions for Know Your Customer rules required of licensed banks, registered finance companies, and stock brokers.
* Investigated terrorist financing activities, resulting in a number of suspicious bank accounts being suspended and legal action initiated.
http://www.cbsl.gov.lk/pics_n_docs/latest_news/press_20080219e.doc
http://www.lankabusinessonline.com/fullstory.php?newsID=2098643892&no_view=1&SEARCH
_TERM=11
The Institute of Agricultural Secretaries and Administrators (IAgSA) warns its members that anyone doing bookkeeping, accountancy or payroll services on a self-employed basis, needs to be registered under the new Money Laundering Regulations with either HM Revenue and Customs, or other appointed supervisory body, by 1 July.
http://www.iagsa.co.uk/MW064363167
http://www.hmrc.gov.uk/mlr/asp.htm
http://www.hmrc.gov.uk/mlr/forms.htm
The UK Charity Commission is receiving GBP1 million financial support from Treasury to help its members identify and counter terrorist groups trying to launder money through their accounts. Comments on the counterterrorism strategy for charities, released last December, are due by 29 February.
http://news.scotsman.com/uk/Charities--get-1m-to.3809929.jp
http://www.gnn.gov.uk/environment/fullDetail.asp?ReleaseID=340708&NewsAreaID=2
http://www.charitycommission.gov.uk/spr/cts.asp
US groups opposed to a long-standing embargo against Cuba have used Cuban leader Fidel Castro's retirement to call for an end to the sanctions.
http://www.miamiherald.com/news/breaking_news/story/424715.html
Two weeks ago, prominent Florida attorney Ben Kuehne was accused of laundering drug proceeds for Medelln cartel kingpin Fabio Ochoa to pay another lawyer. This has sparked a national debate in the legal profession, where many people consider it an attack on the constitutional right for legal representation, and could intimidate attorneys from taking drug cases.
http://www.sun-sentinel.com/news/local/southflorida/sfl-fl_bkuehne0224xsbfeb24,0,
5614606.story
The US Office of Foreign Assets Control (OFAC) designated Medellin-based narcotics trafficker Carlos Mario Jimenez Naranjo ("Macaco") as a Specially Designated Narcotics Trafficker pursuant to Executive Order 12978. OFAC also designated the individuals Rosa Edelmira Luna Cordoba, the wife of Carlos Mario Jimenez Naranjo, and Marco Julio Londono Vasquez. Luna Cordoba and Londono Vasquez act as front persons through their roles as owners and managers for companies
that are owned or controlled by Jimenez Naranjo. Luna Cordoba and Londono Vasquez were also indicted on federal drug trafficking charges in the Southern District of Florida in 2007 along with Jimenez Naranjo. Designated companies are Inversiones Licom Ltda., Tejar la Mojosa S.A., Administradora Ganadera el 45 Ltda. and Ganaderia Luna Hermanos Ltda.
http://www.treas.gov/press/releases/hp821.htm
top
3. MODALITIES
Another excellent Glenn Simpson report addresses additional scrutiny of the role Islamic charities play in financing terrorist organizations.
http://online.wsj.com/article/SB120372644333987125.html
F-Secure reports that the volume of spammers seeking help to launder money, including through the Storm botnet, is growing, and have disproportionately attracted a Canadian following. One commentator suggested that that was a way to bypass Canada's strict privacy laws.
http://www.f-secure.com/weblog/archives/00001382.html
http://www.f-secure.com/weblog/archives/comments.html?PostID=00001382
The MONEYVAL third round assessment on the Czech Republic identifies the sources of criminal proceeds coming from " all types of criminal activities carried out in an organized manner (drug trafficking, human trafficking and smuggling) and
economic crimes (particularly fraud, tax evasion, misuse of information in business relations). Other major proceeds generating crimes include criminal offences against property, insurance fraud and credit fraud. Connections between organized crime and ML have been observed mainly in relation with activities of foreign groups, in particular from the former Soviet Union republics, the Balkan region and Asia. The Czech Republic would also be affected by certain illicit financial activities
(credit/loan services, money remittance particularly in connection with the Asian community, and illegal foreign exchange business – taking place blatantly on certain streets of the capital city).
http://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/round3/MONEYVAL(2006)21
Rep-CZE3_en.pdf
top
4. TECHNOLOGY AND BUSINESS
The Network Branded Prepaid Card Association (NBPCA) has created "Recommended Practices for Anti-Money Laundering Compliance for U.S.-Based Prepaid Card Programs", which provides recommendations for those in the prepaid card industry to comply with Bank Secrecy Act and AML program requirements.
http://www.nbpca.com/
Swiss Bank Julius Baer has obtained an injunction in California court against Wikileaks to prevent it posting articles that suggest its Cayman branch may be involved in money laundering and tax evasion. The judicial ruling raises issues of prior restraint and free speech, but also points out how far the legal system needs to go to become technically literate. The judge ordered the internet host provide to remove the domain name, apparently unaware that that has no impact on the Internet
Protocol (IP) address actually used to find an internet location. Now a myriad of mirror sites has emerged, turning an argument over a handful of documents from more than a million on the site, into a virtual cause celebre.
http://www.newsweek.com/id/114415
http://www.guardian.co.uk/theguardian/2008/feb/23/internet.usa
http://www.csmonitor.com/2008/0222/p02s02-usgn.html
http://www.pcworld.idg.com.au/index.php/id;402916476;fp;2;fpid;1
http://bits.blogs.nytimes.com/2008/02/20/wikileaks-site-has-a-friend-in-sweden/
http://www.indybay.org/newsitems/2008/02/22/18480978.php
http://88.80.13.160/wiki/Wikileaks
top
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