Money Laundering Probe Spreads To US Banks As New York Regulators Fall Asleep At The Wheel
Click Here Or On Above Image To Reach Our Experts
Money Laundering Probe Spreads To US Banks As
New York Regulators Fall Asleep At The Wheel
New York Regulators Fall Asleep At The Wheel
NY Regulator Ben Lawsky Is No Where To Be Found
"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill." — Charles A. Lindbergh, Sr. , 1913
A $4.4 billion money-laundering probe linked to state-run Petroleo Brasileiro SA is spreading to financial institutions as prosecutors investigate whether they met compliance requirements.
Court documents cite units of banks including New York-based Citigroup Inc. (C), Madrid-based Banco Santander SA (SAN) and London-based HSBC Holdings Plc (HSBA), as well as Sao Paulo-based Itau Unibanco Holding SA (ITUB4) and Osasco, Brazil-based Banco Bradesco SA (BBDC4) as holding accounts or executing operations linked to the alleged laundering of 10 billion reais.
All the banks said privacy rules prevent them from releasing information to the public.
Fincen Provides More Lip-Service To Banks
If it wasn’t already clear, the Treasury Department’s Financial Crimes Enforcement Network is serious about compliance and the C-suite.Fincen Provides More Lip-Service To Banks
NY. Regulator Ben Lawski Measures Himself
FinCen this week issued an advisory to U.S. financial institutions on “promoting a culture of compliance.” The six-page document “seems to kind of restate the obvious,” said Greg Brower, a partner at Snell And Wilmer. The guidance suggests that leadership should be involved with compliance and the program should be tested by an independent party, among other things.
Fincen Dir. Jennifer Shasky Calvery, "Is That My Job?"
Even Fincen director Jennifer Shasky Calvery said in a speech Tuesday the advisory “does not say anything that you have not heard before.”
While the guidance may be common sense to compliance professionals, it also sends a strong message about Fincen’s focus on senior management. “What this is trying to do is further focus and emphasize the expectation of Fincen that it will hold the entire organization responsible, including its senior management and its board of directors for any lapses in the [compliance] program,” said Peter Djinis, an anti-money laundering consultant and former senior Fincen official. Ms. Shasky nodded to this as well in her speech, saying the guidance could be a tool “that you can use to influence your organization’s leadership.”
Prosecutors are reviewing bank documents provided by police and the central bank, said Prosecutor Carlos Fernando Lima, the spokesman for a group of six prosecutors assigned to the case. He declined to name the banks because the group hasn’t started a formal prosecution and it’s not yet clear if any wrongdoing occurred.
“Institutions have a civil responsibility for all of their clients,” Lima said in an interview in Curitiba where the case is before a judge. “My experience is there’s usually no big money laundering operation without someone behind it from a financial institution. It’s too much to go unnoticed.”
The refining division at Petrobras, as the biggest producer in ultra-deep waters is known, is already under investigation by a congressional committee for runaway spending including alleged inflated contracts to suppliers, and is cited as one of the possible sources of cash being laundered in the case dubbed “Car Wash” by police.
Privacy Protection
Petrobras didn’t respond to e-mailed requests for comment on the case. The stock fell 1.9 percent to 19.76 reais at 12:14 p.m. in Sao Paulo.
Banks including units of Citigroup, Santander, HSBC, Bradesco and Itau, as well as brokerages, either created accounts, transferred money or both for alleged front companies cited in the investigation, according to court documents that compile the results of a police investigation, banking records, wire taps and initial conclusions from the prosecutors assigned to the case. The documents cite specific branches in Brazil and abroad, and specific account numbers.
The prosecution is “facing some difficulties” gaining cooperation from banks, Lima said. “They are not providing the data with the required speed and detail.”
The court has lifted privacy protections for banking information related to the case and the prosecution has repeatedly sought cooperation from banks and brokerages, he said.
Money Changers
The $4.4 billion of alleged laundering includes cash from Brazilians seeking to evade tax authorities, revenue from drug trafficking and money allegedly embezzled from Petrobras (PETR4) contracts, according to police press releases and court documents.
Informal foreign exchange traders known as doleiros normally receive money from clients in Brazil and then make deposits abroad from seemingly unrelated accounts for a fee, allowing clients to export cash without alerting the tax authorities. In the Car Wash scheme, doleiros or their associates allegedly set up front import and export companies to move larger volumes of cash, according to court documents.
Citigroup declined to comment in an e-mailed response. Itau said it meets appropriate compliance requirements and will collaborate with investigations. HSBC said it follows the highest compliance standards and collaborates with authorities whenever asked. Bradesco said it reports any suspicious operations to authorities in a timely way. Santander said it always collaborates with authorities in Brazil.
Top 10
Those institutions are among the top 10 biggest non-government owned banks in Brazil by assets, according to the central bank website as of March 2014. They represent 38 percent of total assets in Brazil’s financial system.
Pioneer Corretora de Cambio, one of the largest brokerages in Brazil, said all of its transactions cited in the case followed central bank regulations.
Those institutions are among the top 10 biggest non-government owned banks in Brazil by assets, according to the central bank website as of March 2014. They represent 38 percent of total assets in Brazil’s financial system.
Pioneer Corretora de Cambio, one of the largest brokerages in Brazil, said all of its transactions cited in the case followed central bank regulations.
Prosecutors are looking to identify bank staff who could have assisted in the alleged scheme and will seek collaboration from countries where the money was sent, Lima said.
NY. Regulator Ben Lawski, "I Screwed-Up Didn't I?"
‘Preliminary Phase’
In June, Swiss authorities voluntarily blocked $28 million in accounts in the names of former Petrobras director Paulo Roberto Costa or his alleged associates. He is accused of being a link between Petrobras and an alleged laundering organization led by Alberto Youssef who is jailed in Curitiba.
In June, Swiss authorities voluntarily blocked $28 million in accounts in the names of former Petrobras director Paulo Roberto Costa or his alleged associates. He is accused of being a link between Petrobras and an alleged laundering organization led by Alberto Youssef who is jailed in Curitiba.
Youssef’s defense has entered a request to have him released while the case is in progress and denies the accusations, his lawyer Antonio Augusto Figueiredo Basto said in a phone interview from Curitiba. Youssef hasn’t been able to enter a plea yet because the case “is in a preliminary phase,” Basto said.
Costa’s lawyer, Nelio Machado didn’t respond to e-mails and phone calls requesting comment. Machado has repeatedly denied accusations against his client and said he will enter a plea in comments published by local media.
Fincen Dir. Jennifer Shasky Calvery, "I Let The Banks Do What?"
Youssef and his group allegedly diverted at least $445 million from June 2011 to March 2014 through 3,649 operations that included funds from Petrobras’s Abreu e Lima refinery, according to a criminal case dated April 22 that prosecutors submitted to the court. Youssef is providing testimony to the court while under arrest, Basto said.
(Buy/Rent/Layaway)
Gathering Testimony
The police first announced the investigation in March after seizing assets including 6 million reais in cash, three hotels and 25 luxury cars, including a Land Rover that Youssef bought for Costa, according to press releases from the police. Costa told investigators the car was a payment for consulting services and that he has done nothing wrong.
More than 40 people have been indicted in 10 separate prosecutions since then. Youssef is included in five of them and Costa in two. The court is still gathering testimony from witnesses before reaching any conclusions on convictions or acquittals, the court’s press office said in e-mailed responses.
Brazil loses between 1.4 percent and 2.3 percent of annual gross domestic product to corruption, according to a 2010 study from Sao Paulo state’s Industry Federation, Fiesp. Latin America’s largest economy ranks 133rd in diversion of public funds due to corruption among 148 countries in the World Economic Forum’s Global Competitiveness Report.
Remittances Abroad
Brokerage Pioneer appears in court documents on hundreds of foreign exchange transactions, for what investigators allege are front companies in the laundering scheme. Pioneer director Joao Medeiros denied irregularities and said in a telephone interview that there is no evidence of fraud from Pioneer’s clients.
Brokerage Pioneer appears in court documents on hundreds of foreign exchange transactions, for what investigators allege are front companies in the laundering scheme. Pioneer director Joao Medeiros denied irregularities and said in a telephone interview that there is no evidence of fraud from Pioneer’s clients.
Banks and financial institutions that fail to notify authorities about suspicious activities may be subject to administrative penalties and fines, Pierpaolo Bottini, a Brazilian lawyer and author of a book on money laundering, said in a telephone interview. If staff not only suspected but knew about actual illegal activities and didn’t notify authorities, the employees and the financial institutions could be sued for participating in financial crimes, he said.
Criminal procedures against Youssef and Costa dated from April cite evidence of alleged money laundering and remittances abroad without required notification to authorities.
Criminal procedures against Youssef and Costa dated from April cite evidence of alleged money laundering and remittances abroad without required notification to authorities.
(Buy/Rent/Layaway)
‘Overpriced Contracts’
Costa, who led the refining unit from 2004 through 2012, assisted Youssef’s alleged money laundry organization by leveraging his position to obtain fraudulent contracts from Petrobras even after he had been dismissed as part of a wider management shakeup, prosecutors allege in a recommendation for criminal action that was delivered to a federal judge.
Costa, who led the refining unit from 2004 through 2012, assisted Youssef’s alleged money laundry organization by leveraging his position to obtain fraudulent contracts from Petrobras even after he had been dismissed as part of a wider management shakeup, prosecutors allege in a recommendation for criminal action that was delivered to a federal judge.
(Buy/Rent/Layaway)
Judge Sergio Moro has requested testimony and further investigative work. Prosecutors said they have identified evidence of embezzlement at Petrobras from 2009 to 2014.
One of the documents where prosecutors recommend criminal action cites “overpriced contracts to companies that provide services, directly or indirectly to Petrobras, with collaboration and intermediation from Paulo Roberto Costa.”
Youssef was sentenced to seven years in jail in 2004 for participating in a money-laundering scandal at Banestado. Court documents say Youssef returned to the informal financial market, where money moves in and out of Brazil without formal notification to authorities, with increased activity after an early release for cooperating with investigators and promising to steer clear of illegal financial activities.
Three of the six prosecutors working on the Car Wash case also took part in the Banestado investigation, including Lima. Dozens of people besides Youssef were convicted, including bank managers responsible for foreign exchange operations.
One of the documents where prosecutors recommend criminal action cites “overpriced contracts to companies that provide services, directly or indirectly to Petrobras, with collaboration and intermediation from Paulo Roberto Costa.”
Youssef was sentenced to seven years in jail in 2004 for participating in a money-laundering scandal at Banestado. Court documents say Youssef returned to the informal financial market, where money moves in and out of Brazil without formal notification to authorities, with increased activity after an early release for cooperating with investigators and promising to steer clear of illegal financial activities.
Three of the six prosecutors working on the Car Wash case also took part in the Banestado investigation, including Lima. Dozens of people besides Youssef were convicted, including bank managers responsible for foreign exchange operations.
(Buy/Rent/Layaway)
How A Big US Bank Laundered Billions From Mexico's Murderous Drug Gangs
As the violence spread, billions of dollars of cartel cash began to seep into the global financial system. But a special investigation by the Observer reveals how the increasingly frantic warnings of one London whistleblower were ignored
On 10 April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases packed with 5.7 tons of cocaine, valued at $100m. But something else – more important and far-reaching – was discovered in the paper trail behind the purchase of the plane by the Sinaloa narco-trafficking cartel.
During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo.
The authorities uncovered billions of dollars in wire transfers, traveller's cheques and cash shipments through Mexican exchanges into Wachovia accounts. Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering programme. Of special significance was that the period concerned began in 2004, which coincided with the first escalation of violence along the US-Mexico border that ignited the current drugs war.
Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year's "deferred prosecution" has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.
More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico's gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.
"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank's $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement.
The conclusion to the case was only the tip of an iceberg, demonstrating the role of the "legal" banking sector in swilling hundreds of billions of dollars – the blood money from the murderous drug trade in Mexico and other places in the world – around their global operations, now bailed out by the taxpayer.
At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were "the only liquid investment capital" available to banks on the brink of collapse. "Inter-bank loans were funded by money that originated from the drugs trade," he said. "There were signs that some banks were rescued that way."
Wachovia was acquired by Wells Fargo during the 2008 crash, just as Wells Fargo became a beneficiary of $25bn in taxpayers' money. Wachovia's prosecutors were clear, however, that there was no suggestion Wells Fargo had behaved improperly; it had co-operated fully with the investigation. Mexico is the US's third largest international trading partner and Wachovia was understandably interested in this volume of legitimate trade.
José Luis Marmolejo, who prosecuted those running one of the casas de cambio at the Mexican end, said: "Wachovia handled all the transfers. They never reported any as suspicious."
"As early as 2004, Wachovia understood the risk," the bank admitted in the statement of settlement with the federal government, but, "despite these warnings, Wachovia remained in the business". There is, of course, the legitimate use of CDCs as a way into the Hispanic market. In 2005 the World Bank said that Mexico was receiving $8.1bn in remittances.
During research into the Wachovia Mexican case, the Observer obtained documents previously provided to financial regulators. It emerged that the alarm that was ignored came from, among other places, London, as a result of the diligence of one of the most important whistleblowers of our time. A man who, in a series of interviews with the Observer, adds detail to the documents, laying bare the story of how Wachovia was at the centre of one of the world's biggest money-laundering operations.
Martin Woods, a Liverpudlian in his mid-40s, joined the London office of Wachovia Bank in February 2005 as a senior anti-money laundering officer. He had previously served with the Metropolitan police drug squad. As a detective he joined the money-laundering investigation team of the National Crime Squad, where he worked on the British end of the Bank of New York money-laundering scandal in the late 1990s.
Woods talks like a police officer – in the best sense of the word: punctilious, exact, with a roguish humour, but moral at the core. He was an ideal appointment for any bank eager to operate a diligent and effective risk management policy against the lucrative scourge of high finance: laundering, knowing or otherwise, the vast proceeds of criminality, tax-evasion, and dealing in arms and drugs.
Woods had a police officer's eye and a police officer's instincts – not those of a banker. And this influenced not only his methods, but his mentality. "I think that a lot of things matter more than money – and that marks you out in a culture which appears to prevail in many of the banks in the world," he says.
Woods was set apart by his modus operandi. His speciality, he explains, was his application of a "know your client", or KYC, policing strategy to identifying dirty money. "KYC is a fundamental approach to anti-money laundering, going after tax evasion or counter-terrorist financing. Who are your clients? Is the documentation right? Good, responsible banking involved always knowing your customer and it still does."
When he looked at Wachovia, the first thing Woods noticed was a deficiency in KYC information. And among his first reports to his superiors at the bank's headquarters in Charlotte, North Carolina, were observations on a shortfall in KYC at Wachovia's operation in London, which he set about correcting, while at the same time implementing what was known as an enhanced transaction monitoring programme, gathering more information on clients whose money came through the bank's offices in the City, in sterling or euros. By August 2006, Woods had identified a number of suspicious transactions relating to casas de cambio customers in Mexico.
Primarily, these involved deposits of traveller's cheques in euros. They had sequential numbers and deposited larger amounts of money than any innocent travelling person would need, with inadequate or no KYC information on them and what seemed to a trained eye to be dubious signatures. "It was basic work," he says. "They didn't answer the obvious questions: 'Is the transaction real, or does it look synthetic? Does the traveller's cheque meet the protocols? Is it all there, and if not, why not?'"
Woods discussed the matter with Wachovia's global head of anti-money laundering for correspondent banking, who believed the cheques could signify tax evasion. He then undertook what banks call a "look back" at previous transactions and saw fit to submit a series of SARs, or suspicious activity reports, to the authorities in the UK and his superiors in Charlotte, urging the blocking of named parties and large series of sequentially numbered traveller's cheques from Mexico. He issued a number of SARs in 2006, of which 50 related to the casas de cambio in Mexico. To his amazement, the response from Wachovia's Miami office, the centre for Latin American business, was anything but supportive – he felt it was quite the reverse.
As it turned out, however, Woods was on the right track. Wachovia's business in Mexico was coming under closer and closer scrutiny by US federal law enforcement. Wachovia was issued with a number of subpoenas for information on its Mexican operation. Woods has subsequently been informed that Wachovia had six or seven thousand subpoenas. He says this was "An absurd number. So at what point does someone at the highest level not get the feeling that something is very, very wrong?"
In April and May 2007, Wachovia – as a result of increasing interest and pressure from the US attorney's office – began to close its relationship with some of the casas de cambio. But rather than launch an internal investigation into Woods's alerts over Mexico, Woods claims Wachovia hung its own money-laundering expert out to dry. The records show that during 2007 Woods "continued to submit more SARs related to the casas de cambio".
In July 2007, all of Wachovia's remaining 10 Mexican casa de cambio clients operating through London suddenly stopped doing so. Later in 2007, after the investigation of Wachovia was reported in the US financial media, the bank decided to end its remaining relationships with the Mexican casas de cambio globally. By this time, Woods says, he found his personal situation within the bank untenable; while the bank acted on one level to protect itself from the federal investigation into its shortcomings, on another, it rounded on the man who had been among the first to spot them.
On 16 June Woods was told by Wachovia's head of compliance that his latest SAR need not have been filed, that he had no legal requirement to investigate an overseas case and no right of access to documents held overseas from Britain, even if they were held by Wachovia.
Woods's life went into freefall. He went to hospital with a prolapsed disc, reported sick and was told by the bank that he not done so in the appropriate manner, as directed by the employees' handbook. He was off work for three weeks, returning in August 2007 to find a letter from the bank's compliance managing director, which was unrelenting in its tone and words of warning.
The letter addressed itself to what the manager called "specific examples of your failure to perform at an acceptable standard". Woods, on the edge of a breakdown, was put on sick leave by his GP; he was later given psychiatric treatment, enrolled on a stress management course and put on medication.
Late in 2007, Woods attended a function at Scotland Yard where colleagues from the US were being entertained. There, he sought out a representative of the Drug Enforcement Administration and told him about the casas de cambio, the SARs and his employer's reaction. The Federal Reserve and officials of the office of comptroller of currency in Washington DC then "spent a lot of time examining the SARs" that had been sent by Woods to Charlotte from London.
"They got back in touch with me a while afterwards and we began to put the pieces of the jigsaw together," says Woods. What they found was – as Costa says – the tip of the iceberg of what was happening to drug money in the banking industry, but at least it was visible and it had a name: Wachovia.
In June 2005, the DEA, the criminal division of the Internal Revenue Service and the US attorney's office in southern Florida began investigating wire transfers from Mexico to the US. They were traced back to correspondent bank accounts held by casas de cambio at Wachovia. The CDC accounts were supervised and managed by a business unit of Wachovia in the bank's Miami offices.
"Through CDCs," said the court document, "persons in Mexico can use hard currency and … wire transfer the value of that currency to US bank accounts to purchase items in the United States or other countries. The nature of the CDC business allows money launderers the opportunity to move drug dollars that are in Mexico into CDCs and ultimately into the US banking system.
"On numerous occasions," say the court papers, "monies were deposited into a CDC by a drug-trafficking organisation. Using false identities, the CDC then wired that money through its Wachovia correspondent bank accounts for the purchase of airplanes for drug-trafficking organisations." The court settlement of 2010 would detail that "nearly $13m went through correspondent bank accounts at Wachovia for the purchase of aircraft to be used in the illegal narcotics trade. From these aircraft, more than 20,000kg of cocaine were seized."
All this occurred despite the fact that Wachovia's office was in Miami, designated by the US government as a "high-intensity money laundering and related financial crime area", and a "high-intensity drug trafficking area". Since the drug cartel war began in 2005, Mexico had been designated a high-risk source of money laundering.
"As early as 2004," the court settlement would read, "Wachovia understood the risk that was associated with doing business with the Mexican CDCs. Wachovia was aware of the general industry warnings. As early as July 2005, Wachovia was aware that other large US banks were exiting the CDC business based on [anti-money laundering] concerns … despite these warnings, Wachovia remained in business."
On 16 March 2010, Douglas Edwards, senior vice-president of Wachovia Bank, put his signature to page 10 of a 25-page settlement, in which the bank admitted its role as outlined by the prosecutors. On page 11, he signed again, as senior vice-president of Wells Fargo. The documents show Wachovia providing three services to 22 CDCs in Mexico: wire transfers, a "bulk cash service" and a "pouch deposit service", to accept "deposit items drawn on US banks, eg cheques and traveller's cheques", as spotted by Woods.
"For the time period of 1 May 2004 through 31 May 2007, Wachovia processed at least $$373.6bn in CDCs, $4.7bn in bulk cash" – a total of more than $378.3bn, a sum that dwarfs the budgets debated by US state and UK local authorities to provide services to citizens.
The document gives a fascinating insight into how the laundering of drug money works. It details how investigators "found readily identifiable evidence of red flags of large-scale money laundering". There were "structured wire transfers" whereby "it was commonplace in the CDC accounts for round-number wire transfers to be made on the same day or in close succession, by the same wire senders, for the … same account".
Over two days, 10 wire transfers by four individuals "went though Wachovia for deposit into an aircraft broker's account. All of the transfers were in round numbers. None of the individuals of business that wired money had any connection to the aircraft or the entity that allegedly owned the aircraft. The investigation has further revealed that the identities of the individuals who sent the money were false and that the business was a shell entity. That plane was subsequently seized with approximately 2,000kg of cocaine on board."
Many of the sequentially numbered traveller's cheques, of the kind dealt with by Woods, contained "unusual markings" or "lacked any legible signature". Also, "many of the CDCs that used Wachovia's bulk cash service sent significantly more cash to Wachovia than what Wachovia had expected. More specifically, many of the CDCs exceeded their monthly activity by at least 50%."
Recognising these "red flags", the US attorney's office in Miami, the IRS and the DEA began investigating Wachovia, later joined by FinCEN, one of the US Treasury's agencies to fight money laundering, while the office of the comptroller of the currency carried out a parallel investigation. The violations they found were, says the document, "serious and systemic and allowed certain Wachovia customers to launder millions of dollars of proceeds from the sale of illegal narcotics through Wachovia accounts over an extended time period. The investigation has identified that at least $110m in drug proceeds were funnelled through the CDC accounts held at Wachovia."
The settlement concludes by discussing Wachovia's "considerable co-operation and remedial actions" since the prosecution was initiated, after the bank was bought by Wells Fargo. "In consideration of Wachovia's remedial actions," concludes the prosecutor, "the United States shall recommend to the court … that prosecution of Wachovia on the information filed … be deferred for a period of 12 months."
But while the federal prosecution proceeded, Woods had remained out in the cold. On Christmas Eve 2008, his lawyers filed tribunal proceedings against Wachovia for bullying and detrimental treatment of a whistleblower. The case was settled in May 2009, by which time Woods felt as though he was "the most toxic person in the bank". Wachovia agreed to pay an undisclosed amount, in return for which Woods left the bank and said he would not make public the terms of the settlement.
After years of tribulation, Woods was finally formally vindicated, though not by Wachovia: a letter arrived from John Dugan, the comptroller of the currency in Washington DC, dated 19 March 2010 – three days after the settlement in Miami. Dugan said he was "writing to personally recognise and express my appreciation for the role you played in the actions brought against Wachovia Bank for violations of the bank secrecy act … Not only did the information that you provided facilitate our investigation, but you demonstrated great personal courage and integrity by speaking up. Without the efforts of individuals like you, actions such as the one taken against Wachovia would not be possible."
The so-called "deferred prosecution" detailed in the Miami document is a form of probation whereby if the bank abides by the law for a year, charges are dropped. So this March the bank was in the clear. The week that the deferred prosecution expired, a spokeswoman for Wells Fargo said the parent bank had no comment to make on the documentation pertaining to Woods's case, or his allegations. She added that there was no comment on Sloman's remarks to the court; a provision in the settlement stipulated Wachovia was not allowed to issue public statements that contradicted it.
But the settlement leaves a sour taste in many mouths – and certainly in Woods's. The deferred prosecution is part of this "cop-out all round", he says. "The regulatory authorities do not have to spend any more time on it, and they don't have to push it as far as a criminal trial. They just issue criminal proceedings, and settle. The law enforcement people do what they are supposed to do, but what's the point? All those people dealing with all that money from drug-trafficking and murder, and no one goes to jail?"
One of the foremost figures in the training of anti-money laundering officers is Robert Mazur, lead infiltrator for US law enforcement of the Colombian Medellín cartel during the epic prosecution and collapse of the BCCI banking business in 1991 (his story was made famous by his memoir, The Infiltrator, which became a movie).
Mazur, whose firm Chase and Associates works closely with law enforcement agencies and trains officers for bank anti-money laundering, cast a keen eye over the case against Wachovia, and he says now that "the only thing that will make the banks properly vigilant to what is happening is when they hear the rattle of handcuffs in the boardroom".
Mazur said that "a lot of the law enforcement people were disappointed to see a settlement" between the administration and Wachovia. "But I know there were external circumstances that worked to Wachovia's benefit, not least that the US banking system was on the edge of collapse."
What concerns Mazur is that what law enforcement agencies and politicians hope to achieve against the cartels is limited, and falls short of the obvious attack the US could make in its war on drugs: go after the money. "We're thinking way too small," Mazur says. "I train law enforcement officers, thousands of them every year, and they say to me that if they tried to do half of what I did, they'd be arrested. But I tell them: 'You got to think big. The headlines you will be reading in seven years' time will be the result of the work you begin now.' With BCCI, we had to spend two years setting it up, two years doing undercover work, and another two years getting it to trial. If they want to do something big, like go after the money, that's how long it takes."
But Mazur warns: "If you look at the career ladders of law enforcement, there's no incentive to go after the big money. People move every two to three years. The DEA is focused on drug trafficking rather than money laundering. You get a quicker result that way – they want to get the traffickers and seize their assets. But this is like treating a sick plant by cutting off a few branches – it just grows new ones. Going after the big money is cutting down the plant – it's a harder door to knock on, it's a longer haul, and it won't get you the short-term riches."
The office of the comptroller of the currency is still examining whether individuals in Wachovia are criminally liable. Sources at FinCEN say that a so-called "look-back" is in process, as directed by the settlement and agreed to by Wachovia, into the $378.4bn that was not directly associated with the aircraft purchases and cocaine hauls, but neither was it subject to the proper anti-laundering checks. A FinCEN source says that $20bn already examined appears to have "suspicious origins". But this is just the beginning.
Antonio Maria Costa, who was executive director of the UN's office on drugs and crime from May 2002 to August 2010, charts the history of the contamination of the global banking industry by drug and criminal money since his first initiatives to try to curb it from the European commission during the 1990s. "The connection between organised crime and financial institutions started in the late 1970s, early 1980s," he says, "when the mafia became globalised."
Until then, criminal money had circulated largely in cash, with the authorities making the occasional, spectacular "sting" or haul. During Costa's time as director for economics and finance at the EC in Brussels, from 1987, inroads were made against penetration of banks by criminal laundering, and "criminal money started moving back to cash, out of the financial institutions and banks. Then two things happened: the financial crisis in Russia, after the emergence of the Russian mafia, and the crises of 2003 and 2007-08.
"With these crises," says Costa, "the banking sector was short of liquidity, the banks exposed themselves to the criminal syndicates, who had cash in hand."
Costa questions the readiness of governments and their regulatory structures to challenge this large-scale corruption of the global economy: "Government regulators showed what they were capable of when the issue suddenly changed to laundering money for terrorism – on that, they suddenly became serious and changed their attitude."
Hardly surprising, then, that Wachovia does not appear to be the end of the line. In August 2010, it emerged in quarterly disclosures by HSBC that the US justice department was seeking to fine it for anti-money laundering compliance problems reported to include dealings with Mexico.
"Wachovia had my résumé, they knew who I was," says Woods. "But they did not want to know – their attitude was, 'Why are you doing this?' They should have been on my side, because they were compliance people, not commercial people. But really they were commercial people all along. We're talking about hundreds of millions of dollars. This is the biggest money-laundering scandal of our time.
"These are the proceeds of murder and misery in Mexico, and of drugs sold around the world," he says. "All the law enforcement people wanted to see this come to trial. But no one goes to jail. "What does the settlement do to fight the cartels? Nothing – it doesn't make the job of law enforcement easier and it encourages the cartels and anyone who wants to make money by laundering their blood dollars. Where's the risk? There is none.
"Is it in the interest of the American people to encourage both the drug cartels and the banks in this way? Is it in the interest of the Mexican people? It's simple: if you don't see the correlation between the money laundering by banks and the 30,000 people killed in Mexico, you're missing the point."
Woods feels unable to rest on his laurels. He tours the world for a consultancy he now runs, Hermes Forensic Solutions, counselling and speaking to banks on the dangers of laundering criminal money, and how to spot and stop it. "New York and London," says Woods, "have become the world's two biggest laundries of criminal and drug money, and offshore tax havens. Not the Cayman Islands, not the Isle of Man or Jersey. The big laundering is right through the City of London and Wall Street.
"After the Wachovia case, no one in the regulatory community has sat down with me and asked, 'What happened?' or 'What can we do to avoid this happening to other banks?' They are not interested. They are the same people who attack the whistleblowers and this is a position the [British] Financial Services Authority at least has adopted on legal advice: it has been advised that the confidentiality of banking and bankers takes primacy over the public information disclosure act. That is how the priorities work: secrecy first, public interest second.
"Meanwhile, the drug industry has two products: money and suffering. On one hand, you have massive profits and enrichment. On the other, you have massive suffering, misery and death. You cannot separate one from the other.
"What happened at Wachovia was symptomatic of the failure of the entire regulatory system to apply the kind of proper governance and adequate risk management which would have prevented not just the laundering of blood money, but the global crisis."
Monty Henry, Owner
Additional Resources:
* US Is Losing the Anti-Money Laundering War (Could Bitcoin Be The Answer)
* Banks Face New U.S. Laws Against Laundering Yet Bitcoin Is Labeled As Being Evil! (Huh?)
* How To Prevent The Theft of Intellectual Property
* How Do I Know If I’ve Been Bugged?
* Operating The Brain By Remote Control
What is BitCoin and How Does It Work?
* The Creature From Jekyll Island: This Blog And Video Playlist Explains Why The U.S. Financial System is Corrupt and How It Came To Be That Way
* Number of Americans Renouncing Citizenship Surges To Escape Oppressive Tax Rules
* Dropping Off The Grid: A Growing Movement In America: Part I
* Online Privacy Tools and Tips
Next-Generation Bug / Microwave / ELF / Spy Phone / GSM And Camera Detectors (Buy, Rent, Layaway) tinyurl.com/2eo8mlz Open...
— Spy Store Rentals (@MontyHenry1)
Nanny IP (Internet) Cameras, GPS Trackers, Bug Detectors and Listening Devices, etc, (Buy / Rent / Layaway): tinyurl.com/396jlw6...
— Spy Store Rentals (@MontyHenry1)
NOW, look in on your home, second home, lake house or office anytime, anywhere from any internet connected PC/Lap-top or Internet active cell phone, including iphone or PDA.
Watch your child's caregiver while sitting at a traffic light or lunch meeting, or check on your business security from the other side of the world. Our built-in hidden video features all digital transmissions providing a crystal clear image with zero interference. With the IP receiver stream your video over the internet through your router, and view on either a PC or smart phone. Designed exclusively for DPL-Surveillance-Equipment, these IP hidden wireless cameras come with multiple features to make the user's experience hassle-free.
NOW, look in on your home, second home, lake house or office anytime, anywhere from any internet connected PC/Lap-top or Internet active cell phone, including iphone or PDA: http://www.dpl-surveillance-equipment.com/wireless_hidden_cameras.html
Watch your child's caregiver while sitting at a traffic light or lunch meeting, or check on your business security from the other side of the world. Our built-in hidden video features all digital transmissions providing a crystal clear image with zero interference. With the IP receiver stream your video over the internet through your router, and view on either a PC or smart phone. Designed exclusively for DPL-Surveillance-Equipment, these IP hidden wireless cameras come with multiple features to make the user's experience hassle-free.
• Remote Video Access
• Video is Recorded Locally To An Installed SD Card (2GB SD Card included)
• Email Notifications (Motion Alerts, Camera Failure, IP Address Change, SD Card Full)
• Live Monitoring, Recording And Event Playback Via Internet
• Back-up SD Storage Up To 32GB (SD Not Included)
• Digital Wireless Transmission (No Camera Interference)
• View LIVE On Your SmartPhone!
Includes:
* Nanny Cameras w/ Remote View
* Wireless IP Receiver
* Remote Control
* A/C Adaptor
* 2GB SD Card
* USB Receiver
FACT SHEET: HIDDEN NANNY-SPY (VIEW VIA THE INTERNET) CAMERAS
Specifications:
Receiver Specs:
* Transmission Range of 500 ft Line Of Sight
* Uses 53 Channels Resulting In No Interference
* 12V Power Consumption
* RCA Output
* Supports up to 32gig SD
Camera Specs:
* 640x480 / 320x240 up to 30fps
* Image Sensor: 1/4" Micron Sensor
* Resolution: 720x480 Pixels
* S/N Ratio: 45 db
* Sensitivity: 11.5V/lux-s @ 550nm
* Video System: NTSC
* White Balance: Auto Tracking
• Video is Recorded Locally To An Installed SD Card (2GB SD Card included)
• Email Notifications (Motion Alerts, Camera Failure, IP Address Change, SD Card Full)
• Live Monitoring, Recording And Event Playback Via Internet
• Back-up SD Storage Up To 32GB (SD Not Included)
• Digital Wireless Transmission (No Camera Interference)
• View LIVE On Your SmartPhone!
Includes:
* Nanny Cameras w/ Remote View
* Wireless IP Receiver
* Remote Control
* A/C Adaptor
* 2GB SD Card
* USB Receiver
FACT SHEET: HIDDEN NANNY-SPY (VIEW VIA THE INTERNET) CAMERAS
Specifications:
Receiver Specs:
* Transmission Range of 500 ft Line Of Sight
* Uses 53 Channels Resulting In No Interference
* 12V Power Consumption
* RCA Output
* Supports up to 32gig SD
Camera Specs:
* 640x480 / 320x240 up to 30fps
* Image Sensor: 1/4" Micron Sensor
* Resolution: 720x480 Pixels
* S/N Ratio: 45 db
* Sensitivity: 11.5V/lux-s @ 550nm
* Video System: NTSC
* White Balance: Auto Tracking
Make Your Own Nanny Cameras: Make Tons Of Money In A Booming, Nearly Recession-Proof Industry!
Your Primary Customers Include But Are Not Limited To Anyone In The Private Investigator, Government, Law Enforcement And/Or Intelligence Agencies Fields!
* You Buy Our DVR Boards And We'll Build Your Products! (Optional)
* You Buy Our DVR Boards And We'll Build Your Products! (Optional)
Our New Layaway Plan Adds Convenience For Online Shoppers
DPL-Surveillance-Equipment's
layaway plan makes it easy for you to buy the products and services
that you want by paying for them through manageable monthly payments
that you set. Our intuitive calculator allows you to break down your
order's purchase price into smaller payment amounts. Payments can be
automatically deducted from your bank account or made in cash using
MoneyGram® ExpressPayment® Services and you will receive your order once
it's paid in full. Use it to plan and budget for holiday purchases,
anniversaries, birthdays, vacations and more!
DPL-Surveillance-Equipment's
Customers can now use the convenience of layaway online to help them
get through these tough economic times.
We all shop now
and then just to face a hard reality -- big credit card bills. However,
our latest financing innovation can help you avoid that. Find out why
more and more shoppers are checking out DPL-Surveillance-Equipment's
e-layaway plan.
If you're drooling over a new nanny
camera, longing for a GPS tracker, or wishing for that spy watch, but
you're strapped for cash and can't afford to do credit, do what Jennie
Kheen did. She bought her iPod docking station (hidden camera
w/motion-activated DVR) online using our convenient lay-away plan.
Our
online layaway plan works like the old-fashioned service stores used to
offer. But, in Kheen's case, she went to
DPL-Surveillance-Equipment.com, found the iPod docking station (hidden
camera w/motion-activated DVR), then set up a payment plan.
"It's automatically drawn from my account," she said. "I have a budget, $208.00 a month.
In
three months, Kheen had paid off the $650.00 iPod docking station. She
paid another 3.9 percent service fee, which amounted to about $25.35
(plus $12.00 for shipping) for a total of $687.35.
"You
pay a little bit each month," Kheen said. "It's paid off when you get
it and you don't have it lingering over your head. It's great."
Flexible
payment terms and automated payments make our layaway plan an
affordable and fiscally responsible alternative to credit cards.
1. Register:
It's quick, easy and FREE! No credit check required!
2. Shop:
Select
the items or service you want and choose "e-layaway" as your payment
option. Our payment calculator makes it easy for you to set up your
payment terms.
3. Make Payments:
Payments are made on the schedule YOU set. Check your order status or adjust your payments online in a secure environment.
4. Receive Products:
Receive the product shortly after your last payment. The best part, it's paid in full... NO DEBT.
More Buying Power:
*
Our lay-away plan offers a safe and affordable payment alternative
without tying up your credit or subjecting the purchase to high-interest
credit card fees.
No Credit Checks or Special Qualifications:
* Anyone 18 years old or older can join. All you need is an active bank account.
Freedom From Credit Cards:
*
If you are near or beyond your credit limit or simply want to avoid
high interest credit card fees, our e-layaway is the smart choice for
you.
Flexible Payment Schedules:
*
Similar to traditional layaway, e-layaway lets you make regular payments
towards merchandise, with delivery upon payment in full. Payments are
automatically deducted from your bank account or made in cash using
MoneyGram® ExpressPayment®
A Tool for Planning Ahead:
*
Our e-layaway makes it easy for smart shoppers like you to plan ahead
and buy items such as bug detectors, nanny cameras, audio bugs, gps
trackers, and more!
No Hidden Charges or Mounting Interest:
Our
e-layaway makes shopping painless by eliminating hidden charges and
monthly interest fees. Our customers pay a flat transaction fee on the
initial purchase price.
NO RISK:
* You have the right to cancel any purchase and will receive a refund less a cancellation fee. See website for details.
Security and Identity Protection:
DPL-Surveillance-Equipment
has partnered with trusted experts like McAfee and IDology to ensure
the security and integrity of every transaction. Identity verification
measures are integrated into our e-layaway system to prevent fraudulent
purchases.
Note: Simply Choose e-Lay-Away as a "Payment Option" in The Shopping Cart
DPL-Surveillance-Equipment.com
is a world leader in providing surveillance and security products and
services to Government, Law Enforcement, Private Investigators, small
and large companies worldwide. We have one of the largest varieties of
state-of-the-art surveillance and counter-surveillance equipment
including Personal Protection
and Bug Detection Products.
Buy, rent or lease the same
state-of-the-art surveillance and security equipment Detectives, PI's,
the CIA and FBI use. Take back control!
DPL-Surveillance-Equipment.com
Phone: (1888) 344-3742 Toll Free USA
Local: (818) 344-3742
Fax (775) 249-9320
Monty@DPL-Surveillance-Equipment.com
Google+ and Gmail
DPLSURVE
Twitter
DPLSURVE
MSN
Monty@DPL-Surveillance-Equipment.com
AOL Instant Messenger
DPLSURVE32
Skype
Montyl32
Yahoo Instant Messenger
Montyi32
Alternate Email Address
montyi32@yahoo.com
Join my Yahoo Group!
My RSS Feed
Phone: (1888) 344-3742 Toll Free USA
Local: (818) 344-3742
Fax (775) 249-9320
Monty@DPL-Surveillance-Equipment.com
Google+ and Gmail
DPLSURVE
DPLSURVE
MSN
Monty@DPL-Surveillance-Equipment.com
AOL Instant Messenger
DPLSURVE32
Skype
Montyl32
Yahoo Instant Messenger
Montyi32
Alternate Email Address
montyi32@yahoo.com
Join my Yahoo Group!
My RSS Feed
posted by DPL-Surveillance-Equipment | 9:47 PM
0 Comments:
Post a Comment
Note: Only a member of this blog may post a comment.
<< Home