Anti Money Laundering Blog

Tavid, Estonian exchange company, has been implicated in one the largest money laundering schemes in the history of the CEE region. This is the 2nd money laundering scheme with the participation od the Estonian exchange company in the past 3 years.

The company is claimed to receive a payment of 45 million kroons in late 2007 to its Nordea Bank account. This payment was made by Stern Treid LLC. Stern Treid LLC is a company that is partially owned by Yuri Kasjanov, a Russian citizen who is the subject of a major money laundering probe in Bulgaria. This company had signed a contract with Tavid under which the company was to transfer more than 200 million kroons to Tavid.

It is believed that the money has originated in Russia and has bee laundered through a series of fake sales agreements in Bulgaria to be transfered back to Russia through the Estonia company.

Former President of Guatemala Alfonso Portillo faces money laundering charges in the US.

Portillo is charged with embezzling tens of millions of USD in public funds. These money was allegedly laundered through bank accounts located in the United States and Europe as well as in other places. According to prosecutors, the money laundering took place allegedly through at least 2006.

It should be noted that Portillo was the president of Guatemala from 2000 to 2004. He came into power promising to erase corruption, however his own government mired in the same accusations as his predecessors.

Guatemalan authorities started searching for the ex-president after the US requested his extradition.

On November 24, 11 former officials of Colombian football club Independiente Medellin were charged with money laundering.

The charged officials included Rodrigo Tamayo, club president in 1998-2000 and 2004, his wife, Dolly Cardenas, and 2 other former presidents, Mario de J. Valderrama and Luis Fernando Jimenez. Conviction carries a term of 6-15 years in prison.

According to the estimations from the club’s former auditor Juan Bautista Avalos Salgar made by prosecutor Cesar Velez, Tamayo might have laundered USD 4.6 million during his terms as president.

Salgar said that one way of laundering money could be selling a player for, for example USD 100, but entering the transaction on the books as USD 1 000. As a result, the extra USD 900 entered on the books was money gained allegedly through drug trafficking.

On October 22, a Colombian man connected with a pyramid scheme that bilked Colombians out of hundreds of millions of USD was deported by Venezuela to the United States of America. This criminal was wanted on money-laundering charges in the US .

Venezuelan authorities took Luis Cediel to Caracas’ main airport for the flight to the US Justice Minister Tareck El Aissami. In the United States, Cediel was be handed over to the US Drug Enforcement Administration.

Cediel was indicted by US authorities in New York earlier in 2009 with his 3 co-defendents who were accused of coordinating the collection of millions of USD in drug proceeds in Mexico City beginning in February 2008.

The Colombian is charged with conspiracy to commit money laundering. He can be imprisoned for up to 20 years.

It was discussed in February that the former president of Taiwan and his wife were convicted of money-laundering and related crime.

As a result, on September 11, 2009, the ex-president was convicted of corruption and sentenced to life imprisonment. It should be noted that this event is a watershed one in the turbulent political history of Taiwan.

Chen Shui-bian, who presided from 2000 to 2008, was charged with embezzling $3.15 million from a special presidential fund, receiving bribes worth at least $9 million, money laundering, and other charges. His wife was also convicted. Both spouses were sentenced to life.

On September 16, 2009, the Russian News and Information Agency RIA Novosti announced that Russia’s Finance Minister Alexei Kudrin said the Bank of New York will pay Russia’s customs authorities at least USD 14 million as an out-of-court settlement of a USD 22.5 billion money laundering lawsuit.

The Federal Customs Service had asked for the compensation from the Bank of New York (BNY) as it accused the bank of helping to transfer billions of USD in shadow imports to Russia in the late 1990s.

According to Kudrin, the US authorities had failed to prove similar money laundering charges against the bank, but BNY paid them USD 14 million in costs acknowledging its employees’ mistakes. He said, “The sides have come to an amicable settlement and agreed that some costs, amounting to no less than the sum paid to the US government should be paid”.

Kudrin’s statement was confirmed by Wall Street Journal report that cited people close to the talks with Russia’s customs service that court costs would be paid in the case.

As a result of a broken light and a failure to signal a lane change, a truck driver was arrested for money laundering and possession of marijuana in Texas, US.

Now, this 30-year-old unlucky driver Christopher Dwayne Porter is in custody. He is seeking a reduction in his USD 70 000 total bond and/or the appointment of an attorney.

On August 25, the police officer decided to stop the truck because it had a defective identification lamp as well as because the driver failed to signal when he changed lanes. The driver denied to let search the truck, but a K-9 unit was brought to the location and alerted on possible narcotics from the outside of the vehicle. Inside the truck, 10 pounds of marijuana, USD 155 000 in cash and a 12-gauge shotgun were discovered by the officer.

So, Porter was arrested and booked into the Hunt County Jail, with USD 35000 bond on each charge.

On August 10, Police in south China announced that had broken up a money laundering gang that illegally transferred USD 1.46 billion abroad, mainly to Vietnam.

According to the official Xinhua News Agency, 11 members (8 of them are Vietnamese) of the alleged gang were arrested by police in south China’s Guangxi region in May. However, for some reason, police didn’t announce the arrests earlier.

A Chinese national named Ruan Zhizhong, one of the main suspects, allegedly opened 77 accounts and illegally transferred USD 1.05 billion through more than 10 000 transactions over a 4-year period that ended in March 2008.

During a raid of the gang’s headquarters in Guangxi’s Fangchenggang city, police seized 70 deposit books, 590 bank cards, 2 cars, 6 computers and USD 99 400 in cash. Also, 327 related bank accounts were frozen, but they gave no details.

Multibillion dollar drugs trade in Afghanistan is not a secret to anyone. According to the UN, in 2006 Afghanistan supplies about 92% of the world’s supply of opium, which is used to make heroin. Some estimates are provided in The Spoils of War: Afghanistan’s Multibillion Dollar Heroin Trade by Michel Chossudovsky. According to The Independent, in 2003 drug trafficking was the 3rd biggest global commodity in cash terms after oil and the arms trade. The IMF estimated global money laundering to be between USD 590 billion and 1.5 trillion a year, which represents 2-5% of global GDP. And it is worth remembering that a large share of global money laundering is related to the drugs trade.

However, tt appeared lately that there have been no convictions in Afghanistan against those who make hundreds of millions of USD at the top of Afghanistan’s drugs pyramid. According to Western counter-drugs officials, even in Western countries building such cases takes years. In Afghanistan, drugs industry is estimated at USD 3.4 billion, but it is suposed to have a corrupting influence on the government, therefore fighting drugs in Afghanistan is much harder. For example, President Karzai of Afghanistan recently pardoned 5 persons sentenced to 16-18 years for moving 120kg of heroin, and one of the released men was the nephew of the campaign manager to Mr Karzai’s election campaign. So, the Afghan drug mafia benefits from political protection. It is also suported by Afghanistan’s lawlessness and lack of infrastructure.

The drug-money trail is difficult to discover because of the hawala system of local money changers widely used by the drug mafia in preference to Western electronic banking. This system is based on trust. In this system, the only evidence of money transfer may be a phone call between 2 hawala dealers in different cities/countries who agree to settle the money transfer. This system is widely used across the Middle East.

Counter-drugs officials tried to arrest the 3 biggest hawala dealers in the province of Nangarhar 2 years ago, which brought the economy of the province to a halt and, as a result, the 3 criminals had to be released.

Currently, a construction boom may be seen in the capital, Kabul, which is the evidence of money laundering - laundering of drug billions into legitimate business.

Gaborone lawyer, Busang Manewe said that his clients were discharged regarding a P 2 million money laundering case as the state failed to prove the case.

The accused parties are a company Levico’s Building and Multi Services, Victor Mathumo, Daniel Ramosiane, Rodgers Lekgoba, Khumo Zaba and Taboka Zaba. They are represented by Manewe.

The accused persons allegedly have received and deposited a cheque of more than P 400 000 from proceeds of a crime. The cheque purportedly was written in favour of Jet Supermarket and deposited into a Standard Bank account held by Levico’s Building and Multi Services.

As to the 2nd account, Mathumo, Ramosiane, Lekgoba Khumo Zaba and Taboka Zaba are charged with money laundering involving P 1.8 million as they probably have known that such the money derived from illegal activities.

A ruling on the money laundering case will be given by Gaborone Chief Magistrate, Lot Moroka on May 28, 2009.