Tag: Financial Crimes

Older posts
Newer posts

Goldman Sachs’ Leissner to Take Fall For Bank?

Posted on by

Is Goldman Sachs in trouble in the tropics? One of its top executives, Tim Leissner, the Singapore-based chairman of Goldman’s Southeast Asia operations, remains under investigation by the FBI for his connections to embattled Malaysian Prime Minister Najib Razak. Razak has come under fire from the Malaysian government regarding $681 million in funds that were mysteriously transferred to his personal bank account by the Saudi Arabian government.

In addition, Leissner is being investigated for his role in striking deals worth $6.5 billion for his employer with the Malaysian financial fund 1Malaysia Development Berhad (1MDB), owned by Razak, for which Goldman Sachs earned an almost $600 million commission, amounting to 9.1 percent of the money raised. The average commission for an investment bank is about five percent, or less.

Leissner, 45, who was married to model and fashion designer Kimora Lee Simmons in 2013 (Simmons is the former wife of hip-hop mogul Russell Simmons), reportedly was considered one of the financial firm’s ‘Golden Boys’. . . Click here to read the rest of this story on Medium.com.

Israel’s Addition to Financial Action Task Force Long Overdue – Medium

Posted on by

Data proves some existing FATF member countries have much deeper AML issues than Israel

The worldwide Financial Action Task Force (FATF) on money laundering recently announced that Israel will join the organization as an observer starting in June 2016. Considering Israel’s tough stand on terrorists, adding it as an observer is a big step forward for the prestigious FATF, which sets global rules and standards for combating money laundering and terror financing. To date, only 34 countries make up its membership; countries that don’t meet FATF’s standards land on the task force’s blacklist.

In order for Israel to become a full member of FATF, it will have to pass comprehensive international inspection, showing that it has improved identification requirements at its financial institutions and expanded its AML regulations. The rewards for doing this work and joining the organization are that Israel will be able to participate in shaping global policy dealing with financial fraud and position itself as one of the leading countries in the worldwide fight against money laundering and terror financing.

Knowing the other 34 countries already accepted as full FATF members, I’m surprised it took this long to start the membership process for Israel. . . Click here to read the rest of this story on Medium.com.

Pot is legal…but the income isn’t? – Medium

Posted on by

Banking the proceeds remains a crap shoot for legal pot shops

Despite the fact that federal statutes make it illegal, a growing number of states (23 and the District of Columbia at last count) are approving some form of sale of marijuana to the public. These legitimate (by state) businesses have figured out how to securely grow, ship, receive and store their products, but banking the proceeds from these agribusinesses is still a crap shoot.

Banks inherently avoid risk due to the stiff penalties they face for money laundering, an activity largely associated with drugs, so any profits earned from the sale of marijuana are suspicious. As a result, nearly all of the nation’s banks refuse to even offer basic services to these businesses, their owners and employees. This has forced many marijuana-based organizations to move to all-cash transactions — spawning more opportunity for money laundering than if the transactions were handled by the financial services industry.

It’s such a murky area that a bipartisan group of U.S. senators proposed a bill that would legalize banking. . . Click here to read the rest of the story on Medium.com.

A rookie’s guide to money laundering – Medium

Posted on by

Turns out, it’s not that difficult

I frequently talk about money laundering and how financial services industries are required to guard against it, but I’m consistently asked by friends and colleagues, “just how easy is it to take questionable cash and turn it into legitimate funds?” Turns out, it’s not that difficult.

Despite the damage that the illegal flow of money inflicts on the global economy, it’s been occurring for thousands of years and people do it every day. It’s international in scope, with China holding the dubious honor of being at the head of the pack. Conservative estimates have China losing more than $1 trillion between 2002–2011, despite laws prohibiting foreign exchange. Other countries with significant problems include Russia, Mexico, Malaysia, India, Saudi Arabia and Brazil.

So how is it done? There are several ways a U.S. citizen with a little illegal money can launder it. . . Click here to read the rest of this story on Medium.com.

Mexico’s Know Your Country Problem – Medium

Posted on by

Mexico develops a U.S. dollar transfer business to thwart money laundering and encourage international commerce

Bloomberg Business broke the news last week that Mexico will soon enter the dollar transfer business in an effort to catch money laundering before it causes harm and to promote the continued exchange of U.S. currency by legitimate Mexican businesses. Mexico’s money laundering woes, followed by subsequent de-risking and this proposed dollar transfer solution, are prime examples of the impact ‘Know Your Country’ can have on a nation’s economy.

Money laundering leads to punishment and de-risking

When it comes to criminal activities, money laundering is a necessary evil. Criminal enterprises in Mexico were finding it a little too easy to launder illicit pesos through U.S. banks. For example, banks were failing to flag transfers linked to Mexican drug cartels, with Wachovia’s gaffe of failing to alert authorities to billions of dollars in wire transfers, travelers checks and cash shipments through Mexico being one of the most egregious. This led to a crackdown by U.S. regulators and law enforcers, causing many banking institutions to back out of working with Mexican businesses entirely as a way to avoid the risk of money laundering and the millions of dollars in penalties associated with it. This process of de-risking, while understandable, does not foster economic growth.

What happens now? Click here to find out on Medium.com. . .

Money laundering is not a victimless crime – Medium

Posted on by

When discussing money laundering, I rarely dig into the details of the victims. Instead, I’ve focused on the actions and possible motives of the criminals, the size of their crimes and the resulting penalties. This may have given the impression that money laundering is a largely victimless crime, but nothing could be further from the truth. Typically, the victims of money laundering are reimbursed for the financial crimes perpetrated against them, but often face little recourse in terms of getting compensated for physical pain and/or mental anguish in civil court — unless that case is focused on some aspect of terrorism.

Americans can legally sue foreign governments and the banks that support them for compensation related to terrorist attacks. By linking money laundering with terrorism, there may be some justice for these victims in the court system. Here are just two instances:

A Father’s Love Uncovers Iranian Mess

In 1995. Stephen Flatow’s 20-year old daughter Alisa was killed in a terrorist attack by a suicide bomber on the Gaza Strip. What followed is simply incredible. . . Click here to read the rest of the story on Medium.com.

AML Scandals that Flew Under the Radar in ’15 – American Banker’s BankThink Blog

Posted on by

Screen Shot 2016-06-20 at 3.03.02 PMIn addition to anti-money-laundering scandals involving global banks and worldwide organizations such as FIFA that grabbed headlines last year, there were plenty of damaging laundering convictions and accusations in 2015 that went unnoticed but still took a heavy toll on midlevel banks.

Money laundering is a crime that occurs more often than the general public realizes, and in most sectors of our economy. In the past year alone, charity officials, a mortuary owner, a church director and a doctor providing chemo treatments were at the center of appalling cases you probably never heard about.

1. Tayfun Karauzum, of Newport Beach, Calif., was sentenced to five years in prison for distributing $1 million to $2.5 million of Potion 9, which contained a solvent that metabolizes in the body to become gamma-Hydroxybutyrate, or GHB, a known date-rape drug. He then laundered the proceeds.

2. Charles and Diana Muir were sentenced to 48 and six months in prison, respectively, and forced to return the $1.1 million they stole from a 140-year-old college scholarship charity in Louisville, Ky. — the Woodcock Foundation — that was run by Charles Muir. The couple then laundered the proceeds through Diana Muir’s dental business.

To view the rest of the top 10 most unheralded, yet just as disturbing money laundering stories from 2015 please click here.

American banks: all aboard Bitcoin Express? – Medium

Posted on by

U.S. applying anti-money laundering rules to digital currencies

Digitally encrypted cryptocurrencies are hot, particularly as consumer confidence in the current global money infrastructure wanes. So what exactly is a cryptocurrency? The most visible example, Bitcoin bypasses traditional banking systems and operates as an alternative to cash. It’s decentralized, virtual and somewhat anonymous, and was originally developed to handle transactions over the Internet. The currency units consist of a series of numbers that can be traded between accounts, or “wallets,” for services or goods; when it launched in 2009, Bitcoin transactions happened without any government interference (or oversight).

Today, Bitcoin’s not just popular with the average consumer; organized crime and the criminal element have figured out how to use it to efficiently launder money, just as they did with the original cryptocurrency, eGold. In fact, I recently wrote about a money laundering case involving Bitcoin and two secret servicemen who attempted to launder a considerable amount of Bitcoin stolen from Silk Road. For this reason, the U.S. is now applying the anti-money laundering (AML) rules initially written to govern traditional financial organizations to all digital cash companies.

Perhaps even more interesting is that. . . Click here to read the rest of this article on Medium.com.

Money laundering uptick in 2016? Magic 8 Ball says, ‘signs point to yes.’ – Medium

Posted on by

When I was a kid, the Magic 8 Ball was a quirky toy used to tell fortunes or predict the future. The answers to yes-no questions were often vague enough to be accurate, such as “Ask Again Later” and “Don’t Count on It.” As we kick-off 2016, it might be fun to ask the Magic 8 Ball what we can expect to see as far as financial institutions and risk strategies go for coping with money laundering in the coming months.

Most Likely. We all know that we can expect to see an uptick in attempts to launder money, despite the tightened scrutiny by banks. In fact, as 2015 drew to a close, a man in Minnesota was being charged with conspiring to launder more than $2 million in a penny stock fraud scheme. It’s probably just human nature: where there are laws, there will always be people who try to figure out how to avoid them for personal gain.

Signs Point to Yes. . . Click here to read the rest of this prediction article. 

Older posts
Newer posts







    What is Refresh icon