`Deep-Cover' Russian Spies Worked in U.S.

Federal agents arrested 10 alleged members of a “long-term, deep-cover” Russian spy ring whose ultimate goal was to infiltrate U.S. policy-making circles, according to the Justice Department. The arrests in the New York area, Boston and Arlington, Virginia, broke up a group that began operating in the 1990s, according to two criminal complaints unsealed yesterday in Manhattan federal court. The alleged ring included Russian agents posing as American and Canadian citizens, some of them living in the U.S. for more than 20 years, with the goal of becoming “Americanized” and passing intelligence back to the Russian Federation, according to court papers. “The fact that there are 10 or 11 people here illegally as part of a highly organized effort” and may explain why federal authorities made the arrests now, said William C. Banks, Director of the Institute for National Security and Counterterrorism at Syracuse University in New York. “It may be to send a statement that we’re on to this.” The conspiracy involved at least three unnamed Russian government officials, including one associated with the Russian Mission to the United Nations, according to the complaints.

The defendants face as long as 20 years in prison on the money laundering conspiracy charges. The charges of conspiracy to act as an agent of a foreign government without notifying the U.S. attorney general carries a prison sentence of as long as five years. None of the defendants were charged with espionage, which can result in a life sentence upon conviction. According to Banks, the fact that the alleged agents weren’t charged with espionage or conspiracy to commit espionage may show they didn’t obtain classified information. It may also make the cases easier for the government to prosecute, he said. Prosecutors in spy cases often are forced to drop cases to avoid making classified material public, he said. “The prosecutors are in a fairly enviable position,” said Banks. “There may be some sensitivity as to the types of electronic surveillance used, but a lot of it was old-school cloak-and-dagger stuff.”

• "The Russian Spy Operation: Was It Worth the Trouble?" Time, 6/30/10.
  
• "Russian spy suspect missing in Cyprus", BBC News, 6/30/10.
  
• "Suspect Dubbed Femme Fatale Of Russian Spy Case", NPR, 6/30/10.
• "‘Illegals’ Spy Ring Famed in Lore of Russian Spying", New York Times, 6/29/10.
  
• "Putin hopes US spying claims 'won't harm ties'", BBC News, 6/29/10.
• "Russian Beauty Had Beastly Intentions, U.S. Prosecutors Charge", Fox News, 6/29/10.
• "Russian intelligence found gold market info 'very valuable,' FBI says", GoldSeek.com, 6/29/10.
• "Timeline: Previous U.S.-Russia spy incidents", Reuters, 6/29/10.

Read more...

32 arrested in hit on major European crime ring

British, Irish and Spanish police launched dawn raids Tuesday in a coordinated hit aimed at smashing a major European guns, drugs and money laundering empire. 32 people were arrested, including the suspected "godfather", in a strike on a crime conspiracy with tentacles stretching across the globe. "The target was a criminal network suspected of trafficking huge quantities of drugs and firearms and of laundering hundreds of millions of pounds in criminal profits," Britain's Serious Organised Crime Agency (SOCA) said in a statement. The gang's suspected crime lord, a 53-year-old Irish-born British national living in Malaga, was arrested in the southern Spanish coastal resort.

Spanish officers detained him along with family members, other British and Irish nationals and four Spanish lawyers. The 20 suspects arrested in Spain were being questioned in Malaga. Interior Minister Alfredo Perez Rubalcaba, speaking to Spanish public television from Warsaw, said the raids focused on a "mafia family" based on the southern Costa del Sol. "It's an operation against well-known mafia operating in different countries which is linked to different killings, as well as a number of crimes from drugs trafficking to people trafficking." About 750 officers were involved in the operation.

In Britain around 230 officers raided homes and businesses, with nine men and two women across southeastern England and the west Midlands arrested and taken for questioning. "The scale of this joint operation by law enforcement agencies from so many countries is an indication of how prolific we think this network was," said SOCA's Trevor Pearce. "Today's arrests will have dealt a major blow to an organised criminal business suspected of supplying drugs and guns to gangs in cities across the UK and Europe.

Read more...

Billions laundered through innocent parties

Organised crime is laundering money through the bank accounts of unsuspecting third parties in a global racket known as "cuckoo smurfing", masking millions in Australia alone Queensland's Crime and Misconduct Commission has detailed how criminal syndicates use stooges and legitimate firms to hide illicit profits. Money monitoring agency Austrac believes crime in Australia generates up to $6.3 billion a year, but that pales against former International Monetary Fund boss Michel Camdessus's estimate that money laundering is worth up to 5 per cent of global gross domestic product, equating to a staggering $56bn here.

Cuckoo smurfing is a new laundering technique employing functionaries, or "smurfs", to deposit black money into the bank accounts of unsuspecting individuals or companies. "The term . . . has its origin in the nesting behaviour of the cuckoo bird," the CMC explained in a report on money laundering issued yesterday. "The cuckoo lays its eggs in the nests of other birds. Similarly, offenders deposit their POC (proceeds of crime) into the accounts of unsuspecting and unrelated third parties. The cuckoo smurfing technique involves a legitimate financial transaction occurring . . . in one direction, and an illegitimate flow of the POC in the other direction.

• "The United Kingdom Threat Assessment odf Organised Crime", SOCA, 2009/10.
  
• "Money Laundering Methodologies", Austrac, 2008.
  
• "Money Laundering & Terrorist Financing Typologies 2004-2005", FATF, 6/10/05.
  

Read more...

Corruption New Jersey style, complete with body parts trafficking

A two-year corruption and international money-laundering investigation stretching from the Jersey Shore to Brooklyn to Israel and Switzerland culminated in charges against 44 people on Thursday, including three New Jersey mayors, two state assemblymen and five rabbis, the authorities said.

The case began with bank fraud charges against a member of an insular Syrian Jewish enclave centered in a seaside town. But when that man became a federal informant and posed as a crooked real estate developer offering cash bribes to obtain government approvals, it mushroomed into a political scandal that could rival any of the most explosive and sleazy episodes in New Jersey’s recent past.

It was replete with tales of the illegal sales of body parts; of furtive negotiations in diners, parking lots and boiler rooms; of nervous jokes about “patting down” a man who turned out to indeed be an informant; and, again and again, of the passing of cash — once in a box of Apple Jacks cereal stuffed with $97,000.

“For these defendants, corruption was a way of life,” Ralph J. Marra Jr., the acting United States attorney in New Jersey, said at a news conference. “They existed in an ethics-free zone.” Mr. Marra said that average citizens “don’t have a chance” against the culture of influence peddling the investigation had unearthed.

As 44 people walked before cameras last week, their hands in cuffs, after they were arrested in the state’s biggest corruption scandal in years — but not, to be sure, that many years — even their most scandal-fatigued constituents, from the gritty precincts of Journal Square in Jersey City to the glittering new condominiums on the Hudson in Hoboken, began to wonder: Why is New Jersey so unshakably corrupt?

That answer, it turns out, has as many nuances as corruption itself. Interviews with law enforcement officials, prosecutors and, perhaps the best authority on the subject — those arrested in previous sweeps, like Mr. Botti — reveal a culture of corruption so ingrained that it has become impossible to resist when the envelope appears.

• "44 Charged by U.S. in New Jersey Corruption Sweep", New York Times, 7/23/09.
• "The Man Who Sank New Jersey", Forbes, 7/23/09.
• "With arrests, New Jersey stakes claim as corruption capital", Christian Science Monitor, 7/23/09.
• "The beautiful side of New Jersey corruption", Time, 7/24/09.
• "Officials decry New Jersey corruption", Time, 7/24/09.
  
• "In New Jersey, Ideal Conditions for Corruption", New York Times, 7/26/09.
• "About That New Jersey Organ Scandal", Wall Street Journal, 7/26/09.

Read more...

Money Laundering through the Football Sector

Introduction

With the major European football (soccer) leagues now hard into pre-season training and the Major League Soccer All-Star Game being played next week in the United States, it is timely to focus on a new counter money laundering initiative, looking at this crime throughout the football world.

Executive Summary

Criminals have shown adaptability in finding new channels to launder the proceeds of their illegal activities and sports is one of the many sectors that are at risk of being inflicted with criminal money. With the growing economic importance of sports during the last two decades, especially football, money gradually started to exert a strong influence on the world of sports. This influx of money has positive effects, but also negative consequences.

In order to get a better understanding, this study identifies vulnerabilities which make the football sector attractive to criminals. These are mainly related to the structure, the financing and the culture of this sector.

The study analyses several cases that illustrate the use of the football sector as a vehicle for laundering the proceeds of criminal activities. After this analysis, money laundering (ML) through the football sector is revealed to be deeper and more complex than previously understood. Indeed, this analysis appears to show that there is more than anecdotal evidence indicating that a variety of money flows and / or financial transactions may increase the risk of ML through football. These are related to the ownership of football clubs or players, the transfer market, betting activities, image rights and sponsorship or advertising arrangements. Other cases show that the football sector is also used as a vehicle for perpetrating various other criminal activities.

The ML techniques used vary from basic to complex techniques, including the use of cash, cross

border transfers, tax havens, front companies, non-financial professionals and PEPs. In many cases, connections with other well-known ML typologies were identified such as trade based

ML, the use of non-financial professionals and NPOs for ML purposes, ML through the security

sector, the real estate sector and the gaming sector.

Various initiatives are taken by international and national actors in order to combat threats to the integrity of football, including ML. Looking ahead, there appear to be a number of areas that could be considered to improve the capacity to cope with the ML risks associated with the football sector.

Link

"Money Laundering through the Football Sector", Financial Action Task Force, July 2009.

Read more...