http://www.moneylaundering.com (full text sent by subscriber) Posted March 21, 2001 Judge gives impetus to BONY stockholder case against board of directors A New York federal judge has ordered the chairman of the board of the Bank of New York, Thomas A. Renyi, to turn over his tax returns and personal telephone toll and credit card records to the attorneys for three stockholders who sued him and other members of BONY's board of directors in September 1999. On March 1, 2001, Judge Denny Chin told Renyi he had two weeks to turn over his records. The banker will also give his deposition in the next few weeks. Previously, Chin denied the motion of the board members' lawyers to dismiss the suit and to delay the case until the bank's "Special Litigation Committee" reviewed it. Money Laundering Alert says in its April edition that the stockholder derivative suit is "a ticking time bomb" for members of the boards of directors of financial institutions and businesses that encounter money laundering legal problems. The suit says Renyi and the board members inadequately supervised the officers and operations of the bank on the movement of $7 billion of dubious Russian origin. The alleged dereliction of duty, it says, "brought disgrace to the bank,… exposed (it) to potential fines, judgments and forfeiture(s)… in the tens of billions of dollars" and "caused irreversible harm to the bank's name and reputation." It is the first lawsuit against the board of directors of a publicly traded company based on money laundering control deficiencies and consequential institutional damage. (MLA, Nov. 1999). In February 2000, Lucy Edwards, BONY's former vice president of the Eastern European Division, and her husband, Peter Berlin, pleaded guilty in the same federal court to money laundering conspiracy linked to their facilitation of the movement of massive sums of Russian money through corporate accounts Berlin had opened at BONY. They are cooperating with the government and have not yet been sentenced. Posted March 21, 2001 U.S. ducks Russian roulette on entrapment, Casablanca banker gets soft deal The U.S. government avoids playing Russian roulette in a plea agreement that it has signed with the former head of Banco Industrial de Venezuela's Miami office who receives one-year probation, pays a $50,000 fine, has three years of supervised release, and has no duty to cooperate with the U.S. in the still-pending civil money laundering penalty case against BIV. Esperanza de Saad, who was convicted of money laundering by a federal jury in a case spawned by the undercover Operation Casablanca in Los Angeles, and was then acquitted by the trial judge on entrapment grounds, inked a plea deal with the government to which no person charged with laundering would object. In turn, as Money Laundering Alert reports in April, prosecutors gain the satisfaction of knowing that the appeal of the entrapment ruling will not set a bad precedent, which would have resulted if an appellate court had affirmed the trial court's decision. As it stands, there is now only an unpublished lower court opinion that will have little effect on other undercover laundering cases, of which many are in progress (MLA, Feb. 2000). ---------------------------------------------------------------------------- ---- Posted March 21, 2001 'Invisible Web,' other tools help bank's 'Financial Intelligence Unit' eye laundering Money Laundering Alert in April runs the second of a two-part interview with James R. Richards, the head of the "Financial Intelligence Unit" at FleetBoston Financial Corp. He shares some of the unique techniques the FIU uses to detect money laundering. One is the "Invisible Web," a group of search engines that look beyond text searches and delve into databases, many of which are open to the public. Richards says a very good source is www.pac-info.com, which permits search of public records around the world. This helps the unit look at the "contra party" of transactions. These days, the absence of Internet presence of a businessperson who does significant business is unusual, if not suspicious, says Richards. Richards and his colleague, Peter Richards, created the 17-person FIU in 1999 to increase the bank's protection against laundering. They say the unit can save money and reduce reputational harm. It has been cited as a "model" of due diligence in laundering control. Back to the top ---------------------------------------------------------------------------- ---- Posted March 14, 2001 Every spy case has a money laundering element. The incredible case of the alleged 16-year traitorous conduct of senior FBI Special Agent, Robert Philip Hanssen, is no exception. His Soviet and Russian handlers are alleged to have paid Hanssen several hundred thousand dollars in cash and diamonds during his long betrayal while working in the U.S. government’s most sensitive area of counter-intelligence. He reportedly maintained nominee bank accounts at Credit Suisse and Banque Leu, in Switzerland. Those institutions have been under the laundering spotlight before. Banque Leu was convicted in San Francisco in December 1993 after pleading guilty to laundering drug money for Colombian traffickers (Money Laundering Alert, Jan. 1994). More recently, the Swiss Federal Banking Commission exposed that bank and Credit Suisse for having turned a blind eye in their multi-million dollar dealings with the sons of the late corrupt Nigerian dictator, Gen. Sani Abacha (Money Laundering Alert, Dec. 2000). Money Laundering Alert’s May edition will cover the laundering aspects of the Hanssen case. Back to the top ---------------------------------------------------------------------------- ---- Posted March 14, 2001 The money laundering radar of the IRS Criminal Investigation Division has detected a new threat on the international offshore laundering front: Costa Rica. Until now, the small Central American nation, home to thousands of expatriate U.S. citizens because of its low taxes, has not been regarded as a hub of illegal offshore activity. But in a sensational undercover sting revealed in early March, the IRS CID says Costa Rica was the base of a ring of anti-tax conspirators and money launderers. Federal prosecutors charged six persons, two of them now fugitives, with conspiracy to launder millions of dollars, mostly through illegal offshore trusts that their customers used to move and conceal their funds and thus evade U.S. income taxes. Back to the top ---------------------------------------------------------------------------- ---- Posted March 7, 2001 At hearings by a U.S. Senate investigations subcommittee on March 1 and 2, led by Senators Susan Collins and Carl Levin, several large U.S. banks, including Citibank, J.P. Morgan Chase and Bank of America, were severely criticized for lax money laundering controls in their relations with a wide network of offshore correspondent banks. Highlights: Citibank was accused of providing “false” information to the Central Bank of Argentina and Bank of America and Chase were accused of receiving millions of dollars in illegal Internet gambling proceeds from their offshore correspondent banks. Collins and Levin grilled bank executives over practices that allow foreign launderers to funnel criminal fortunes into U.S. Money Laundering Alert’s April issue will have an in-depth analysis. The chief author of the subcommittee’s report, Elise Bean, will be a speaker at Money Laundering Alert’s 6th Annual International Money Laundering Conference, March 28 to 30 in Miami Beach. Back to the top ---------------------------------------------------------------------------- ---- Posted March 2, 2001 'We can't condemn jurisdictions with weak anti-money laundering controls, weak banking oversight and unregulated offshore sectors, and then tolerate U.S. banks doing business with the very banks these jurisdictions license and unleash on the world,' said Sen. Carl Levin, at a hearing of the Senate Permanent Subcommittee on Investigations. The series of hearings, which will take place March 1, 2 and 6, will take a closer look at correspondent banking. Committee Chairman Susan Collins said ' money launderers gamble that U.S. banks will not notice -- or perhaps will not scrutinize -- the source of the funds flowing through their correspondent accounts. The investigation has shown that, in some instances, the gamble paid off. Gaps in oversight clearly still occur,' she added. 'One way of preventing such gaps is for the banking community to work more closely with the regulatory community to exchange information.' Moneylaundering.com will continue to post the latest news on these hearing as it becomes available. Senate Permanent Subcommittee on Investigations site ---------------------------------------------------------------------------- ---- Posted February 28, 2001 As the Levin Subcommittee hearings on money laundering in correspondent banking grow closer, Citibank continues appearing in money laundering news for accounts of corrupt foreign officials or in correspondent banking relationships with offshore banks. The latest incident involves a "bag man" for Peru's Vladimiro Montesinos, Victor Venero Garrido, who was arrested by the FBI on money laundering charges while he tried to withdraw millions from his Citibank account in the U.S. Money Laundering Alert's March issue explains how this conflicts with a policy Citibank announced before Congress in 1997. For more information read the following articles: Money Laundering Alert, March 2001 New York Times -Feb. 27, 2001 Miami Herald - Feb. 27, 2001 ---------------------------------------------------------------------------- ---- Posted February 21, 2001 The U.S. Senate subcommittee report, which spotlighted widespread money laundering through the correspondent bank accounts of foreign banks in U.S. banks, has caused a reaction around the world. Related scandals have caused authorities in Antigua and Bahamas to close three offshore banks. A congressional investigation in Argentina of possible money laundering links to the nation’s Central Bank has caused an uproar. In the U.S., Senator Carl Levin, who leads the probe, will hold hearing of his panel on March 1, 2 and 6 and will later branch out into an inquiry into money laundering in the huge securities and mutual funds industries. In its upcoming March 2001 edition, Money Laundering Alert says that investigation will “cause eyebrows to rise even further.” ---------------------------------------------------------------------------- ---- Posted February 14, 2001 While the big news last week was a scathing report by a Senate subcommittee led by Senator Carl Levin (D. Mich.) on how 20 of the world's largest banks have "facilitated money laundering" through correspondent banking, one bank received praise for "doing things other banks claim are impossible," according to Elise Bean, leader of the Levin probe and chief author of the Senate panel's report. What prompted her comment is an internal money laundering control mechanism that FleetBoston Financial Corp. has implemented, which it calls a Financial Intelligence Unit. Money Laundering Alert interviewed the founder and director of the unit, James R. Richards, a former state prosecutor in Massachusetts who is now Director of Financial Intelligence at FleetBoston Financial Corp. In an exclusive interview in MLA's March edition, Richards describes how the FIU idea originated, the benefits his bank derives and how other large and small banks can follow suit. Richards will also be a featured speaker at Money Laundering Alert's Sixth Annual International Money Laundering Conference from Wednesday March 28 to Friday, March 30, 2001 at the Fontainebleau Hilton Resort, in Miami Beach, Florida ---------------------------------------------------------------------------- ---- Posted February 7, 2001 Many U.S. banks correspondent account relationships with "high risk" foreign banks have facilitated money laundering in many cases, says a report by the U.S. Senate Permanent Subcommittee on Investigations, which was released February 5. The 305-page report, titled Correspondent Banking: A Gateway to Money Laundering, is the product of long investigation led by Senator Carl Levin, the ranking Minority member of the legendary panel. The findings cite "longstanding, widespread, and ongoing" money laundering control failures by huge, blue chip and other U.S. banks, including Bank of America, Citigroup and J.P. Morgan Chase. The cozy and poorly supervised with foreign correspondent banks has made it easier for high risk foreign banks and their clients to use the U.S. banking system to launder criminal proceeds, says the report. The Levin panel plans hearings on the explosive findings in early March. The lead story in the March 2001 issue of Money Laundering Alert will analyze the report. View report (in PDF format) ---------------------------------------------------------------------------- ---- Posted February 7, 2001 In an exclusive, Money Laundering Alert has obtained copies of the written surveys the U.S. General Accounting Office has sent to a carefully selected sample of securities dealers and mutual fund firms. The surveys are part of a broad probe into the money laundering vulnerabilities and controls of those massive U.S. industries. U.S. Senator Carl Levin, the ranking member of the Senate Permanent Subcommittee on Investigations, asked the GAO, which is an investigative arm of Congress, to conduct the inquiry. The GAO is expected to submit a report to Levin in about four months. The U.S. securities industry, which handles about three times more money than banks, has escaped the anti-money laundering regulations that banks face because of active lobbying in Washington, bureaucratic disinterest on the part of the Securities and Exchange Commission and lethargy on the part of the Treasury Department's Financial Crimes Enforcement Network. The GAO surveys capture a wide range of information from the responding companies including their money laundering vulnerabilities and controls. Click here to view of the surveys. The March 2001 issue of Money Laundering Alert will analyze the impact and content of the surveys. Survey Of Anti-Money Laundering Programs In the Securities Industry Survey Of Anti-Money Laundering Programs In the Mutual Fund Industry ---------------------------------------------------------------------------- ---- Posted February 2, 2001 The Financial Action Task Force on February 1, 2001, announced that most of the 15 countries it blacklisted last June as “non-cooperative” in the global anti-money laundering effort had made “impressive strides” but that it is not removing any from the list. The Paris-based organization, which is part of the OECD, will monitor implementation of the laws many of the blacklisted countries recently enacted. The FATF says several of them, including the Bahamas, Cayman Islands, Cook Islands, Liechtenstein, Marshall Islands and Panama, have satisfied most of the legislative requirements the FATF recommends. The FATF will meet in June to explore counter-measures against countries that are still lagging. Full analysis in the March issue of Money Laundering Alert. Read the FATF statement ---------------------------------------------------------------------------- ---- Posted February 2, 2001 The Financial Action Task Force, in Paris, says on-line banking is vulnerable to money laundering, which is causing government officials “serious concern.” The FATF annual Report on Money Laundering Typologies, issued February 1, also says that changes in trust laws in “many” countries have increased the “attractiveness” of trusts to money launderers, that attorneys and accountants play an important role in laundering schemes and that money laundering is an integral part of terrorist activities. The March 2001 issue of Money Laundering Alert provides in-depth analysis of the report. Read the FATF report ---------------------------------------------------------------------------- ---- Back to the top Headlines from the web Media headlines Subscribe to Money Laundering Alert On-Line MLA On-Line Subscribers Register for e-mail alerts Search the MLA Database
