Anti Money Laundering Blog

According to the conclusion made by a team of researchers from the University of Dar es Salaam (UDSM), money laundering is kicking within the Great Lakes region. The researchers stated that the Great Lakes region money laundering cartel is part of the USD 500 billion illegal cash laundered globally. The origin of this money is to be searched in corruption, drug trafficking and gun smuggling.

The above-mentioned announcement is based on investigations carried under the auspices of the Great Lakes Peace and Security Network (PeSeNet), and ForDIA that covers Democratic Republic of Congo, Tanzania, Kenya, Uganda, Burundi and Southern Sudan.

It should be mentioned that the Great Lakes region has been a territory of prolonged armed conflicts, so this area is insecure and free jungle for laundered money, drugs, guns and massive plunder of natural resources.

In most cases, researchers have established criminal organisations carrying out dealing related to currency counterfeit, illegal foreign exchange, and illegal drugs.

The essence of the scandal was the following – Liechtenstein’s LGT Group acknowledged that the German secret services obtained LGT Group’s client information. The secret data was revealed by a former employee of the bank, who had stolen it. According to Liechtenstein’s LGT Group, the client information that was illegally disclosed to the German authorities is limited to the client data stolen from LGT Treuhand in 2002.

LGT alleged that a former employee who was the informant was Liechtenstein citizen Heinrich Kieber. He worked for the bank since 1999. Kieber was the subject of an international arrest warrant issued by Spanish authorities over a real estate fraud case in 1997. The bank alleged that Kieber, who was sentenced in Liechtenstein to a fine of CHF 600 000 in October 2001 and left Liechtenstein in November 2002, prior leaving the country stole client data from LGT Group and copied it onto 4 DVDs.

According to Germany, to get the data on holders of accounts with LGT in Liechtenstein, the investigators had paid an informant up to EUR 5 million.

However, a recent tax scandal involving Liechtenstein and Germany has been important across Europe as investigators from the United Kingdom to Scandinavia reportedly tried to get to know the details pointing to widespread tax evasion.

According to Financial Times, the UK authorities have now paid GBP 100 000 pounds for a list of about 100 wealthy Britons who allegedly evaded tax through Liechtenstein. The obtained information could help the Authorities recover GBP 100 million.

Accordin go Germany’s Handelsblatt daily, Finland, Sweden and Norway also got interested in the list of clients of LGT Bank.

The bank said in a statement that apparently, the stolen information has been illegally disclosed, directly or indirectly, to other authorities, and considered such methods to be extremely offensive. According to the bank,
the data regards approximately 1 400 client relationships, and the largest number is resident in Germany –  approximately 600.

As to the informant, he is considered to have been given a new identity to protect him from from those whom he had exposed as hiding money in Liechtenstein’s tax haven. Some claim he has left Europe to start his life anew in Australia.

This week it emerged that the price being paid by Israel Discount Bank subsidiary Israel Discount Bank of New York in order to settle the money laundering case goes on to climb.

According to the Bank’s financial report for the 3rd quarter of 2007, the cost will reach USD 46-47 million, spread over 2005-2007.

In accordance with the settlement between Discount New York with the Banking Department of the State of New York and the Federal Deposit Insurance Corporation (FDIC), Israel Discount Bank of New York paid a fine of USD 16.5 million to the New York State Banking Department, FDIC and Finance Crimes Enforcement Network, for which the bank made a provision in 2006. Also, the bank suggests that the cost to implement the improvements and examinations will be USD 16.1 million in 2006 and USD 11.4 million in January-September 2007, as well as additionally USD 2-3 million through the end of the year.

A leading Venezuelan independent shipowner Wilmer Jose Ruperti Perdomo has been sued in the US Court and charged with committing huge fraud against companies that are owned by Russia. The total amount claimed from Ruperti accounts for USD 17.1 million.

It should be mentioned that Ruperti is a well-known member of a group of Venezuelan businessmen who do business with their government – the so-called Bolivarian Elite, and who are extraordinarily close to President Chavez. Also, Ruperti is considered to be a close associate of numerous Venezuelan Politically Exposed Persons.

The magnate controlling his Panamanian-domiciled companies, Sea Pioneer Shipping Corporation and PMI Trading Inc., is charged with a breach of his fiduciary duties, in earning secret profits and undisclosed covert payments, connected with charters of Plaintiffs’ oil tankers by Venezuela’s government-controlled petrochemical agency named PdVSA. Ruperti is charged with committing charter party fraud.

It has already been described that in the middle of June 2006, Jacob Arabov, better known as Jacob the Jeweler or King of Bling, was arrested for violating federal drug laws and money laundering of USD 270 million.

A 41-year old Uzbek immigrant Arabov is New York City jeweler who designs products under his brand, JACOB & Co. and sells diamonds, posh watches and other baubles to many celebrities including Madonna, Sir Elton John, David Beckham, Bono, Justin Timberlake, Britney Spears, famous hip hop stars, etc.

On October 31, 2007, Gerald McKelvey, a spokesman for Arabov, revealed that the celebrity jeweller plans to offer a guilty plea in a deal with prosecutors over a federal money laundering case.

According to McKelvey, Arabov was to plead guilty at a hearing in Detroit to two counts of making false statements to investigators and is expected to face between 37 and 52 months behind bars. In exchange, prosecutors are expected to drop money laundering charges.

As music legend Taliep Petersen’s diary proves, money laundering, diamonds and forex trading were among of the deals in which Taliep Petersen and his wife Najwa were involved in before Taliep, a famous South African singer, composer and director of many popular musicals, was shot dead on December 16, 2006.

The evidence was provided to the Wynberg Regional Court on October 25, 2007, by Suleiman Effendi, Najwa’s 19-year-old son from a previous marriage.

The evidence was given as an affidavit and read out in court during Najwa Petersen’s 2nd bail application. Her 1st bail application was refused as well as an attempt to appeal the decision in the Cape High Court was was rejected. However, now she is claiming to have new facts indicating that she should be released on bail.

Suleiman Effendi said he knows state witness Faheem Hendricks (who is currently under witness protection.), who claimed that Petersen had approached him to find hitmen to commit the murder. According to Effendi, Hendricks had been at their Athlone home several times since October 2006. He paid visits to take money from Petersen.

Suleiman Effendi said that his mother and Taliep were involved in transactions with diamonds and dollars and frequently traveled to Namibia to obtain USD.

On September 4, 2007, 16 people were arrested in a series of morning raids carried out by British Customs and Revenue officers. This was a part of investigation of a suspected pounds GBP 20 million VAT fraud.

This operation came after a 21-month inquiry into so-called “carousel fraud” and money laundering. It covered a large territory as the addresses of the arrested were located all across England and Wales.

All the 16 people are now being questioned by police.

Customs officers think that they are part of an organised crime group that is dealing with “carouselling” of mobile phones across the European Union. “Carouselling” suggests buying low-volume, high value goods VAT-free from EU countries, and then selling these goods (e.g. mobile phones) in the UK without paying VAT.

According to estimations by Revenue and Customs, in 2005-2006 this type of fraud could cost GBP 2-3 billion.

On July 23, 2007, the General Manager of a large American construction and engineering corporation in the oil and gas industry, Willbros Group Inc., was charged with violating the Foreign Corrupt Practices Act, money laundering and money laundering conspiracy. Jason Steph, a US citizen residing in Kazakhstan, purportedly paid USD 6 million in bribes, allegedly, this money was laundered through consultants and front companies to Nigerian officials, Nigerian national oil company executives and a political party. This was allegedly done to ensure that Willbros Group Inc. would obtain a USD 387 million contract regarding building a pipeline in Nigeria.

The funds were transferred into bank accounts outside the US, and were allegedly paid for services never provided. The consultants, the shell companies that utilised to move the bribes as well as the recipients of the corrupt payments have not been identified yet.

The indictment suggests a conspiracy might last from late 2003 up to March 2005. The defendant could be sentenced to as much as 20 years in prison for each of the money laundering charges.  He can also be fined up to USD 500 000 or twice the value of the funds involved in the transfer.

The fact that a Russian oligarch Boris Berezovsky was alleged of money laundering in connection with the deal between Media Sport Investment (MSI) and Corinthianshas already been described. Now a court in Brazil has issued an arrest warrant for Berezovsky on charges of money-laundering in a case related to this deal.

On July 13, Berezovsky denied the allegations and claimed that he had no idea of being the subject of an arrest warrant. According to him, his lawyers also had no contact with the Brazilian authorities regarding the allegations. The mathematician-turned-entrepreneur, wanted in Russia for a number of criminal offences and living with refugee status since 2003 in the UK claimed that the Brazilian story is “an extension of the Kremlin’s politicized campaign” against him.

The Brazilian case in dates back to 2004, when MSI spent millions to acquire new players.

On June 11, 2007, ex-president of Nicaragua Arnoldo Aleman rejected a proposed amnesty for his money-laundering conviction.

Aleman, who was the president of Nicaragua from 1992 to 2002, said he will back an amnesty for the sake of reconciliation, but he does not use his name in order to help the ones responsible for crimes committed under the presidency of Enrique Bolanos in 2002-2007.

He also said that he had already served several years of the imprisonment under a new penal code passed by the legislature. Ex-president is serving a 20-year sentence under the Family Cohabitation Regime. According to the regime, he is allowed to stay at home and travel within Nicaragua. Deputies from his right-wing Liberal Constitutionalist Party and the Nicaraguan Liberal Party-Conservative Party, had agreed to offer an amnesty for the ex-president Aleman.

Aleman was convicted of money-laundering, fraud and embezzling 100 million USD in 2003.

Bolanos left his post in January 2007, and currently he and Eduardo Montealegre, his finance minister, are under investigation by the nation’s attorney general for alleged corruption.