Confessions of a Money Launderer

[Miriam Mikeba Mirabeau]

I found this very interesting, the link is:
www.world-check.com/confessions/

1.
Confessions is on holiday until the New Year, but read earlier chapters here
8 December 2008
Confessions of a Money Launderer is on holiday hiatus until January. If you haven't read all 81 chapters, this is your opportunity to catch up on the story. Thank you for your interest in Confessions. We will see you on 3 January. The compliments of the season.
2.
Confession of a Money Launderer - Part 81
29 November 2008
As a compliance officer, I maintained a friendly, yet decidedly adversarial relationship with the new accounts staff. After a while, you learn who you can usually trust to give you accurate information that was not adulterated or created by sales as a means of securing compliance approval. You also know who those individuals are that are totally untrustworthy, and who will audaciously pervert the compliance process with manufactured personal data, which they believe will pass compliance scrutiny. The real problem people, in my humble opinion, are the staff who only from time to time. try to slip in a bad one, cobbled up to look acceptable. You just do not know, from one day to the next, exactly what they have sent over to compliance for vetting. Is this new client's information unchanged from what was originally submitted, or did they just make him look good? That's the human factor complicating what is already an occupational challenge; culling out the unacceptable risks amongst the new customers' files.
3.
Confession of a Money Launderer - Part 80
24 November 2008
Whilst a compliance officer, I witnessed a wide variety of cute tricks, intentional disinformation, and even bold untruths contained in the applications from the prospective clients. The problem was, you never know how much of the client information was subsequently altered or doctored by the sales staff, either remotely, or in-house, so that they will pass muster with compliance. Your compliance training allows you to recognise information that is clearly inconsistent with the client's total picture, but the real challenge is to spot personal information that seems odd to your trained eye, and, using your analytical abilities, prove or disprove its truth and accuracy. That is where compliance advances beyond a learned skillset, and approaches a professional calling. Your ability to tie together a couple of seemingly authentic and ordinary answers to the clients' application and, after dissecting them, to either approve or decline the customer, is nothing less than an art, in my humble opinion. It must be learned over a period of time on the job, and cannot be taught. In law school, we are taught what is called issue perception, the ability to glean and extract the primary issues from a lengthy appellate decision. In compliance, there simply is no way to impart this focused analytical ability. You acquire it after reviewing many, many files; learning from your mistakes, and becoming sensitised to the nuances of new account personal information.
4.
Confession of a Money Launderer - Part 79
17 November 2008
When I worked as a compliance officer, my short list of "red flags" consisted of the techniques that I personally used, or had observed other money launderers employing with a high degree of success. It was, at first, quite strange to see those tricks and clever gambits from the other side of the playing field, so to speak. I know that the financial criminals that I identified, and prevented from attaining client status probably never realised that a person who was formerly one of their own was reviewing their techniques, simply because I never considered it when I was working in that illicit industry. Whilst I never underestimated the abilities of compliance officers as a practising money launderer, I never conceived of the concept of a former laundryman working on the side of the banks. if I had known such a thing existed, I would have been forced to make major modifications in my strategies and tactics, abandoning the more simplistic tricks in favour of new methods. Not just old wine in new bottles, but totally new tradecraft.
5.
Confessions of a Money Launderer - Part 78
8 November 2008
Now on with the conclusion of last week's segment on how and why I testified against my clients. I went off to the minimum-security prison at Eglin Air Force Base, in the Florida Panhandle, with a four-year sentence. Gain Time, or time deducted from one's assigned sentence, is only 15% since the Federal Sentencing Guidelines became law in 1987. That meant I would be serving roughly 41 months in custody. This was not a very pleasant thought, understanding three and a half years of confinement. It was difficult to take, because I knew I was there because clients whom I had zealously (and recklessly) protected for a decade had put me there to lessen their own sentences. Since they had thrown me under the bus, my loyalty was gone, and that would represents a problem for the clients, as it was yours truly who had started a lot of their drug profits on a long journey into the tax havens of the world. I knew intimate details of their placement, layering and integration techniques, as I had created many of them myself. In short, I knew where the financial bodies were buried.
6.
Confessions of a Money Launderer - Part 77
3 November 2008
I want to digress a bit today, due to a comment I received recently during the Q & A at one of the New York seminars. The questioner bluntly asked me whether I was concerned for my safety, due to my chosen occupation, and wondered whether my cooperation with US law enforcement during my criminal case might be the real reason. That is a fair question, and if you have ever been to any of my lectures, you know that there is no question I will not answer, which I candidly did, but the underlying story was much too complex to explain, so I will do so here. Our readers have the right to the unvarnished truth, and to the realities of the criminal justice system, because if the unthinkable happens, and one is arrested for money laundering, whether guilty or innocent, my experiences may make their journey a little less frightening.
7.
Confessions of a Money Launderer - Part 76
27 October 2008
We return to my experiences at the compliance desk. For me as a compliance officer, it was all about efficiency, for the never-ending pile of files that were delivered to my desk daily had to be completed, and returned for processing after approval, unless there were issues with the prospective client, and then everything stopped, whilst I made my case for declining the client and his business. New accounts staff/client relationship managers would frequently call me up, or even drop in unannounced, to enquire as to the status of a particularly lucrative potential client's file. Just as many businessmen dislike lawyers, claiming that they always kill a transaction, sales staff often heaped anger upon the compliance staff, complaining that they rejected otherwise acceptable clients. I call it shoot the messenger.
8.
Confessions of a Money Launderer - Part 75
20 October 2008
When I was a compliance consultant, the new accounts staff at times seemed to be as committed to deceiving me into accepting unsuitable new customers, as I was in rejecting them. Was I just being paranoid, or were they really looking to fool me? I cannot say, because just when I wanted drop a claim of obstruction on one, he would come through with all the documents I had originally requested. Zealous sales practices I can tolerate, but when New Accounts/Sales tries to finesse the truth, I draw the line. The usual methods involve the use of business entities; if one is not careful, unwanted officers, directors, and even shareholders can make it past the gateway. You do not want to hear, two years later, that a law enforcement subpoena was served upon your company, naming an individual who is a client, or that you violated OFAC sanctions, or that documents were seized from an individual who has a minor relationship with your firm, following his arrest for major crimes. Catch them at the portal, please. Shall we return to business organisations, then?
9.
Confessions of a Money Launderer - Part 74
13 October 2008
What I found as a compliance officer is that I was not only matching wits with new clients, but also fending off clever techniques practised by the sales & new account staff, some of whom were determined to place money from customers who would utterly fail our due diligence. A few of the the new accounts people deliberately coached the client in their presentation of information, and supporting documents, so that they would be accepted, based upon bogus data or evidence that the customer relationship officer knew (or hoped) would suffice, based upon prior experience with compliance. Some of them actually resented the fact that I was doing an effective job, and caught their clients regularly in the act of submitting incorrect or untrue personal information, or that I refused to accept documents which purported to establish beneficial ownership. Many of the top producers were close friends with not only senior management, but the owner as well, and they wasted no time going to him over particularly lucrative new business that I declined. That's why I ended up actually going to the daily sales meeting, being literally Daniel in the lions' den. That way, if they had issues, I could be there to defend not only the compliance programme, but my own decisions and rulings as well. I also could offer tips on exactly what information and evidence would result in a positive result from compliance.
10.
Confessions of a Money Launderer - Part 73
4 October 2008
I found that I liked the compliance job very much; it was truly the flip side of my life as a money launderer. Whereas, in my earlier life, I was trying to move the proceeds of crime into the financial system, as a compliance officer my task was to deny the entry of which I believed to be criminal funds, funds whose provenance were suspicious, or funds from entities whose beneficial ownership could not established by the preponderance of the evidence. I used very objective standards in enhanced due diligence investigations, and demanded complete cooperation from new accounts/ customer relationship/sales staff, who received a short list from me of the exact documents and information we needed to approve the high-risk clients. At times, the staff who stood to gain substantially from our approval of their client would seek to influence me, or even take proactive steps to circumvent compliance, but I usually caught them in the act when I verified the information through my own devices. Naturally, once their subterfuge had been exposed, the staff members became quite sheepish, but never apologetic. They wanted those clients accepted by compliance, notwithstanding their dodgy nature. Did they resent me? You bet they did, but they also came to respect me, because I was totally on their side if the client passed muster.
11.
Confessions of a Money Launderer - Part 72
28 September 2008
I accepted the offer of a compliance position at the investment firm, with the understanding that I would be in the office daily for at least four hours. Though originally anticipated as a part-time position, I found that the heavy workload soon made it a full-time task. I made it my business to be in the office every day at 7 AM, so that enquiries from Europe and the Middle East would find me at my desk, and ready to respond on a real-time basis. I was responsible for the difficult customer identification files, from high-risk jurisdictions, or high-volume investors, or clients using corporations from tax-haven jurisdictions. I also got the ones that I disagreeociates could not find sufficient information on, and ones where the information was suspect, inconsistent, or otherwise found to be of a suspicious nature. For the first time, I learned about the direct and indirect pressures compliance officers face daily; first, there's the obvious pressure from New Accounts sales staff to complete and forward the files. Then, there's the pressure from your associates on a file, simply because they couldn't find sufficient information to accept or decline a file, or have a problem and need assistance. Finally, there's the pressure from senior management when Sales has a big one who is a bit dodgy, and the party who stands to make the most from approval of the client goes up the chain of command until he finds someone willing to seek to intimidate me into passing it.
12.
Confessions of a Money launderer - Part 71
20 September 2008
Readers have asked me to relate the enhanced due diligence techniques that I employed in last week's chapter (Confessions of a Money launderer - part 70, dated 15 September, 2008), and this might also be a good time to also review the topic in detail. When several compliance officers get together to talk shop, and the subject of what is appropriate and necessary for the proper enhanced due diligence investigation in a customer identification programme comes up, there is generally a marked disagreement as to what one must do. If in doubt, follow this maxim: just when you think you have done all that you should, press on and continue, until you have either satisfied yourself as to the bona fides of the target, or you have found him to be an unacceptable risk. It's one or the other, and to do any less is simply not enhanced due diligence, in my humble opinion. Remember, I have been there, and know what you have to deal with every day: anxious relationship managers who want you to quickly and amiably approve all their new clients, ambitious senor staff who want to bring in that high net-worth businesses, that pile of unfinished files, already sitting on on your desk. That's why I used to be at my desk at 7am every morning; so that I could complete my unfinished work before the New Accounts staff came by during normal business hours to bother me with their pending CIP complaints.
13.
Confessions of a Money Launderer - Part 70
15 September 2008
How did I become a compliance officer? Totally by accident; I regularly criticised the profession in my writing, for failing to understand, and appreciate, the skills possessed by financial criminals. Due to an unusual chain of events, I was about to find out what it is like to discharge those important responsibilities on a day-to-day basis. By way of background, a friend of mine is a banking attorney in Miami, with one of America's major law firms. He had left the firm to become a compliance officer with a major banking client of the firm. When their international banking division moved away from Miami sometime later, he returned to the law firm in a prominent role in their global banking division. He frequently lectured on important issues, and at times, we jointly covered AML/BSA topics before local banking groups. One evening, he approached me with a problem; he was scheduled to give a money laundering lecture the next morning before a conference on Miami Beach, and the topic was "Hedge Fund Money Laundering." His firm had called him to immediately travel to Argentina on urgent business, and he asked me to take the lecture. By now, I am sure you know that I love to lecture on money laundering tactics and trade-craft, and I readily accepted. The attendees at my lecture included the compliance officer and the CFO of a Florida investment firm. I actually knew the compliance officer, a Peruvian-American who was the daughter of a Key Biscayne neighbour, who was formerly with the US State Department, and now a trusted financial adviser to Latin American investors. (More about the CFO later).
14.
Confessions of a Money Launderer - Part 69
15 June 2008
So, what else did I show the students in the investigations classes? Here are a final few that may one day allow you to extract an incriminating gem which will cause you to decline an otherwise promising client who is, in truth and in fact, a fraudster. When that happens, you know that you have properly discharged your compliance role. Though reference each day to all the Internet resources I have discussed during the past three weeks is not necessary, I hope that I have been able to broaden your Internet horizons a bit with these four lists of resources.
15.
Confessions of a Money Launderer - Part 68
8 June 2008
What I found was that my presentation on Internet resources useful in money investigations required weekly updating, as the world wide web was expanding during the mid-1990s at an exponential rate. Whilst websites important in compliance due diligence enquiries evaporated for unknown reasons, this was more than made up by the explosion of both commercial and governmental sites which greatly facilitated armchair investigating. The days when one was forced to visit the city's largest library, public records office, property appraiser, civil & criminal courthouses, law library and newspaper morgue were giving way to quick Boolean searches of websites. True, some of the data useful to me had been converted to CD-ROM format, but the moment you took possession of it, it started to become outdated. The Internet's constant updating feature rendered most other resources obsolete.
16.
Confessions of a Money Launderer - Part 67
1 June 2008
In conducting the lectures on the efficient use of what was then the relatively new Internet, I always held a Q & A session at the end of each class. Their questions revealed not only a lack of knowledge of the best websites, but an inflexibility in search techniques. Whether this was specific to the industry, as law enforcement culture encourages conformity in all things, or simply a lack of imagination, it required a solution. Since many searchers were glued to one or two search engines, I encouraged the use of sites that featured multiple search engines, such as Dogpile (www.dogpile.com), or the use of more obscure search engines, like Northern Light, and similar significant alternatives to Lycos. AltaVista, Excite, HotBot and others. They needed to understand that search engines were not a substitute for an inquiring mind. But on to the resources I found that were of great value in money laundering investigations, due diligence enquiries, customer identification procedures, and suspicious activity queries.
17.
Confessions of a Money Launderer - Part 66
26 May 2008
When the Internet became a commercial reality around 1994, I realised that I needed to add this valuable tool to my lectures, for the resources that were coming online gave law enforcement investigators and financial institution compliance staff the ability to access the information without regular and time-consuming trips to the urban university & law school libraries, courthouse file rooms, public records microfilm storage facilities, newspaper archives, and other information locations that they had been required to visit to conduct thorough investigations or proper due diligence enquiries. I created a class specifically to address the relevant websites that were beginning to come online, who they were, where they could be located, their value, and efficient search methods.
18.
Confessions of a Money Launderer - Part 65
19 May 2008
As I continued to lecture, conduct training classes, and present at anti-money laundering and law enforcement conferences, I began to understand that the audience, whether they be compliance officers or law enforcement investigators, were reactive to money laundering, and not proactive to its identification and suppression. I realised that they were not anticipating emerging threats as they surfaced in the global financial picture. By the time they became aware that a new method of laundering, or new opportunity, or permutation or combination of an established scheme, had been employed, the damage had already been done. I sensed that I had found my niche; increasing their level of sensitivity and awareness to current events as the instrument upon which imaginative money launderers practise their profession.
19.
Confessions of a Money Launderer - Part 64
12 May 2008
Not all of my cooperative work with law enforcement resulted in the arrest and conviction of the targets, generally because of mistakes made by the federal agents handling the matter. Some of those guys were guilty of the cardinal sin of arrogance, which can lead to overconfidence. When you think you know everything, you make mistakes. Understand that though these specific cases took place over the course of a decade or more, that most of the errors could have been prevented. The law enforcement culture of many agencies unfortunately perpetuates a conformist mindset that discourages original thinking and improvisation. Watch and learn how inflexibility can turn a certain win into a loss. Rather than soundly embarrass the agents involved, I have omitted the name of the agencies involved. Of course, if a reader really has to know, all you have to do is e-mail me for the name of the guilty one in any of these stories.
20.
Confessions of a Money Launderer - Part 63
4 May 2008
My personal view on money laundering: if you're not part of the solution, you're part of the problem. To be truly rehabilitated, a former money launderer must not only keep his or her nose clean, but also be pro-active, and take the battle to your new enemy. That's why I agreed to work in a undercover capacity, to masquerade as a practising laundryman, on behalf of law enforcement. And why not, since I had the skills, put them to use in a positive manner. Here's how it happened.
21.
Confessions of a Money Launderer - Part 62
27 April 2008
Then there was the time I was engaged by a major television network to set up and operate an undercover operation targeting money laundering lawyers working in Caribbean Tax Havens, for broadcast on a popular prime-time programme that specialised in investigative journalism. The theme was to demonstrate that that offshore financial centres were still accepting illicit cash. Several that were blacklisted by the Financial Action Task Force (FATF) had enacted anti-money laundering laws, created Financial Intelligence Units (FIUs), and ultimately been taken off the list. My task was to show that these "reforms" amounted to little more than window dressing, and that, when dirty money presented itself, it would be eagerly accepted by local lawyers, who had the ability to place the same in offshore banks affiliated with them.
22.
Confessions of a Money Launderer - Part 61
20 April 2008
My initial efforts in anti-money laundering instruction, which began in late 1992, were generally limited to law enforcement, as the level of interest I found early on in the banking community was, in my opinion, insufficient. Were many financial institutions were not interested in my skills because I was a former money launderer? That may have been a factor, as I certainly experienced disapproval, and at times, even hostility, when I approached bankers with my offer to instruct their compliance officers in money laundering trade-craft. However, the appreciation of the clear and present danger, of reputation damage, presented by money laundering, was the second reason. Therefore, I favoured approaching the class of potential client who demonstrated a genuine interest in having their staff learn both the techniques and strategies of that dark calling: American law enforcement agencies.
23.
Confessions of a Money Launderer - Part 60
13 April 2008
Once I had given my first law enforcement money laundering trade-craft lecture, I realised that there was another benefit to be derived from giving back. I was laboring under a three-year post-incarceration period of what is known as Supervised Release. This is basically parole in disguise. The US Congress, in its infinite wisdom, abolished parole for new offenses committed after October 31, 1987, pursuant to the Sentencing Reform Act of 1984. Remember, prisoners could be paroled after as little as one third of their sentences, and faced mandatory full-term release after two-thirds. What the Sentencing Reform Act cleverly did is ensure that criminals served 85% of their sentence, and were liable, after their release to a term of years of supervision, generally three or five years. Should they re-offend during that period, they could be returned to prison for the balance of their Supervised Release period. It directed that the US Probation Office, which was then supervising those parolees still under the old law, supervise all the new law (post-1987) cases. It was parole under another label, and I was required to serve three years of it by the sentencing judge, in line with the then-mandatory US Sentencing Guidelines (the Guidelines are now optional, but still a powerfully persuasive authority). Could I not have my Supervised Release reduced for some reason?
24.
Confessions of a Money Launderer - Part 59
31 March 2008
Opportunity sometimes arrives unexpectedly, as did mine. In 1994, I received a call from a sergeant in the intelligence division of a police department in Florida. He had an unusual request; would I be interested in lecturing on the subject of money laundering before a state-wide organisation of law enforcement agents involved in acquiring intelligence about criminal activities in their respective jurisdictions. He wanted me to tell the story of my experiences over the previous fifteen years, and to lecture on money laundering tradecraft, the actual techniques and strategies I employed on behalf of my narco-clients. At first, the idea sounded ominous. How could I possibly stand up before a room full of law enforcement officers who knew full well that I had been convicted of, and did prison time for, the serious crime of racketeering? I am no shrinking violet, but these people had been, until I decided to cooperate with law enforcement during my incarceration, my adversaries, and they were sworn to bring me to justice, meaning arrest and conviction. Furthermore, I was being asked to appear at their annual conference, meaning that I would be the "odd man out," or sole non-law enforcement type at the event. Classes given to attendees at such conferences generally contain information restricted to law enforcement, and I would be barred from sitting in. This means I would be sitting around for a while, under the watchful eye of some of the officers. Does this sound like something you would like to do? I was apprehensive about the reception I would receive from the attendees, but agreed to appear.
25.
Confessions of a Money Launderer - Part 58
18 March 2008
On the day of my release, after nineteen months and several days in custody, I gave away my Army watch, law-books and all the other useful items, as I wouldn't need them on the outside. I said my goodbyes to people who wouldn't get out for some time, some former clients, some friends from Miami's legal scene, and to my clients' accountant, who would not be released for several more months. I was going "to the door," to actual release, not to the halfway-house. My sister, who had been the only constant during my incarceration, and who would later go to law school herself, came to pick me up. Leaving the camp for good was a lot like being permanently transferred out of a military installation during service, but infinitely better; A breath of fresh air. At Eglin, the civilian airport was part of the air base. When I boarded the aircraft, and saw that the pilot, first officer, and flight engineer were all female, I thought I'd been away for far too long, as the world had changed around me. Maybe it was me that had changed, but in any event, I was free, airborne and on my way to the next chapter in my life.
26.
Confessions of a Money Launderer - Part 57
4 March 2008
I was returned to the Federal Prison Camp at Eglin Air Force Base, in northwest Florida, where I had begun my incarceration, because it was my permanent assignment. With less than six months to go before my release, things were looking up, although my future was cloudy. I had no law license, wife had divorced me, and I knew that I would certainly be shunned in Miami by the professionals and bankers who had worked with, or against, me for twenty years, but the prospect of freedom seemed to push all those concerns to the back of my mind. Fortunately, one of the lawyers who had represented me offered me a paralegal assistant job, so I did have some sort of "release plan," as the Bureau of Prisons called it. Beyond that, I had no clue what the future would bring.
27.
Confessions of a Money Launderer - Part 56
25 February 2008
They dumped me at the Escambia County Jail, which is in Pensacola, (a Navy town on Florida's Gulf Coast, at the boder with Alabama) solely because the Prison Camp where I was permanently based, inside Eglin AFB, would not take weekend transfers. I assumed it was only to be for a day or so, but it turned out to be much longer than that. I look upon it as simply another chapter in my practical education concerning the shorrcomings of the correctional system. If you regard untoward events as educational, then your sense of humour saves you from the generally negative experiences that will, of course, follow.
28.
Confessions of a Money Launderer - Part 55
16 February 2008
All good things must come to an end, and I was transferred from the small-town county jail in rural Gilchrist County back to the high-tech one in Wakulla County, which serviced the US District Court in nearby Tallahasse. Although I was going to the minimum-security block, the conditions, though clean, were spartan, with few privileges. But I had an idea; since I had been successful in reducing my 4-year sentence to 2 years (meaning that I would be serving around 22 months, as gain or good time earned equaled about a month per year), I wanted to do more. Could I actually get my now-two year sentence cut to one?
29.
Confessions of a Money Launderer - Part 54
10 February 2008
I would soon be transferred from that small-town jail, as I had achieved the goal every inmate aims for; a sentence reduction, in this case, a fifty per cent cut. As the man said, "you will not want to leave that jail, " and, strange as it sounds, he was right. The creature comforts experienced at the Gilchrist County Jail would be missed, for wherever I went in the future; the conditions of my confinement would never be that good. But we're getting ahead of ourselves. Before leaving, it is important to describe the jail's unique usefulness to law enforcement. I knew one of the trustees at the jail, for he was a former client, and he had been specially placed there by a US law enforcement agency, because he could assist that agency in ways that could not be accomplished elsewhere. What am I talking about? Read and learn about some of the more obscure tactics utilised by law enforcement to combat the money laundering of narcotics proceeds.
30.
Confessions of a Money Launderer - Part 53
3 February 2008
After I gave testimony in camera, describing the circuitous path my clients' narcotics profits took, ultimately ending up in Switzerland when the clients themselves, seeking to hide the final destination from even yours truly, quietly moved their wealth there, the government advised that it had other plans for me. I was to be moved to another institution, with a number of other inmates, this time located in Central Florida. The new location would turn out to be much more user-friendly than I anticipated. It all started when I asked a more experienced inmate about the jail conditions at my destination. His answer, which led me to believe that he was suffering from some sort of mental condition, was "when you get to the county jail at xxx, you won't want to leave." Was he crazy? What prison inmate actually likes the place where he is confined? It sounded like extended incarceration had affected his mind. Whilst enjoyable conditions, if that term can ever be described in connection with serving time, might be portrayed in such Hollywood movies as "Goodfellas", they certainly do not exist in real life. Or do they?
31.
Confessions of a Money Launderer - Part 52
27 January 2008
I spent several weeks locked down in a solitary cell in the Special Housing Unit at Tallahassee FCI, after which time I was transported by the DEA to a local county jail in adjacent Wakulla County, where I ran into a number of my clients, as well as one of those individuals who had testified against me. Most of them were there in the event that they were needed to testify at the trials of a couple of subsequently-arrested defendants in our case that had elected to go to trial, rather than plead out. To obtain that prized sentence reduction, they would either testify against a former associate, or the prosecutors believed that their mere presence and announced availability to testify was responsible for another defendant deciding to change his or her plea to guilty. I had not seen some of these clients for a couple of years, ever since their arrest before the first major trial in the case. At least there, I had the small comfort of others that I knew intimately to talk to. My prior experience in Federal and state custody was not with clients, with rare exceptions. Also, I was able to be briefed on who was a fugitive overseas, who fled to avoid prosecution, and who was already doing time in other cases when arrested; All the sad details.
32.
Confessions of a Money Launderer - Part 51
20 January 2008
Serving a long four years in a Federal Prison Camp was a very unattractive reality. Could my sentence be trimmed under Rule 35, which allows the US Attorney to move the court to reduce the sentence for what the law calls "Substantial Assistance," delivering information to the prosecutor or to law enforcement, that will result in the arrest of additional individuals, or the recovery of criminally-derived assets by the government? Whilst every inmate dreams of a sentence reduction, either through some magical feat of his or her lawyer, or through cooperation, obtaining one is purely at the discretion of federal prosecutors, who alone can file such a motion. Remember, I was in prison precisely because I did not cooperate in years past, when my stubbornness and misplaced sense of loyalty to clients who failed to reciprocate, resulted in my eventual imprisonment. Could I switch sides, and return to the legitimate society, which I had left a decade before? The clients had certainly abandoned me, and I was on my own, and no longer bound by my perverse interpretation of the attorney-client privilege.
33.
Confessions of a Money Launderer - Part 50
14 January 2008
About a month after I arrived, the weather turned cold and windy. Of course, I should have expected it, and steeled myself for it, but coming as it did so close to the Christmas holiday season, it was doubly depressing. Here I am, thrown in with a motley crew that for the most part consisted of drug traffickers who are also serving short sentences for one reason or another, and it is becoming downright dreary, both mentally as well as physically. I see that a large number of the inmates are seeking solace (and perhaps redemption) at the chapel, the one place in the prison where they don't harass you. The intimidation and constant belittling is unnerving to those prisoners who never had to endure some form of military service, and many are clearly looking for a quiet area to hide from the stress. Many also hit the law library, where kindly and well-meaning inmate librarians seek to assist those who have some sort of issue about either the outcome of their case, their lawyer's perceived lack of skill, or their sentence. Is there really a get-out-of-jail card? I am afraid not, except in the world of fantasy.
34.
Confessions of a Money Launderer - Part 49
6 January 2008
We return to the daily regimen of Federal Prison Camp life; I arrived at Eglin, which is in the Florida Panhandle, a portion of the state that juts out into the Gulf of Mexico, and more like Alabama or Mississippi than the rest of the state, just before Thanksgiving, meaning mid-November. The weather in that area was soon to change to a cool, and then cold, state the likes of which I had not known since my days spent freezing during a winter in the Army at Fort Dix in the 1960s, and it was a physical shock. After all, I had by that time been living in a sub-tropical climate for an uninterrupted two decades. I'll take 40 degrees Celsius any day before zero, believe me. It's bad enough to have to adjust to the reality that you are going to be spending the next four years in a Federal correctional institution, but to have to endure cold weather makes it far more depressing. Here I am getting up every day just before dawn, and donning a out-of-fashion Air Force blue work uniform, to trudge down to a military-style mess hall for a bland breakfast, followed by an artificially-created work day where most of inmates must journey out to the far corners of the surrounding airbase to perform menial labour, in penitence for their white-collar or drug-trafficking transgressions. At least going to war was interesting; this place is terminally boring, and full of bored and stressed-out inmates who just want the experience to be over. Back to our story.
35.
Confessions of a Money Launderer - Part 48
16 December 2007
Today we shall continue on with my typical, ordinary Federal Prison day, as patiently endured by for yours truly for a little less than two years. I spent more time in the US Army than I did in prison, and in the military your adversaries have a bad habit of shooting rockets at you at sundown, but being in custody, though generally safer, is terminally boring to anyone in the professions. Street-level drug organisation members can go lift weights, watch and infinite amount of television whilst not on work details, and share embellished tales with their brethren about their favourite wild escapades, but the doctors, lawyers, judges and politicians who were doing time were usually bored to tears. Fortunately, I found a few ways to amuse myself. Let's talk about those after we complete a description of my work-day routine.
36.
Confessions of a Money Launderer - Part 47
9 December 2007
What is life like in a Federal Prison for inmates doing time for financial crime? Perhaps a snapshot of the daily routine I experienced will give you a feeling for the utter boredom of living a life where each month is mindlessly endured, day after day, and then triumphantly checked off on some tiny calendar kept somewhere, as the inmate tries to measure progress in what feels like an infinitely long stretch. Of course, I cannot hope to do more than give you the flavour of imprisonment, and more than watching a war movie will let you feel what it is like to really be on the receiving end of a rocket attack, but I trust that this will show you the futility of it all, of marking time in a place you don't want to be, with roommates you could do without, in an institutional system you profoundly dislike, as a defrocked professional in a sea of drug offenders.
37.
Confessions of a Money Launderer - Part 46
1 December 2007
Mike's attorney, one of Miami's most capable, sought to cut a favourable deal for his client. Trouble was, the client had chosen to "visit" his son in California, meaning technically that the DEA could not locate him. Was he a fugitive from justice? The judge later opined that he thought so, but his lawyer disagreed. Anyway, the lawyer called me up and asked for a meeting. We had gone to law school together. The purpose: there were dozens of defendants in the case, and it seemed that nobody else could identify many of them. That's how large the criminal organisation had grown. Fortunately or unfortunately, I had either moved cash for them, socialised with them, done cocaine with them, or knew what their sins were from disclosures made in moments of candor. I went through the Indictment and pass on what I knew about the true occupations, and roles of the particular individuals, as I felt I had to assist Mike in the defence of his case. Mike had assisted the clients in legitimising their illicit income through the use of the "commission salesman method" we discussed earlier in the story. Of course, he ethically couldn't advise me that he knew that I was a target of the investigation, but I figured that since Mike had a problem, I was part of the case as well.
38.
Confessions of a Money Launderer - Part 45
25 November 2007
I ran into Mike, who was the accountant for one of my client criminal organisations, outside the prison mess hall. We hadn't seen each other for some time, for when the authorities started looking for Mike, as he had been indicted along with dozens of out mutual clients, he quietly moved to California, and dropped off the radar. Whilst he later would claim that he was merely out there to spend some quality time with his son. in truth and in fact, he was ensuring that he would not fall into the hands of law enforcement by relocating to an area where they would not think of locating him. In the meantime, his lawyer worked very hard to learn all he could about the case, and sought to make a deal. But we're getting ahead of ourselves. Back to the beginning.
39.
Confessions of a Money Launderer - Part 44
18 November 2007
When one arrives at a Federal prison or prison camp, you are placed in an "Admissions & Orientation" programme, where the correctional staff presents several seminars & lectures intended to orient the new inmates into the requirements and expectations of the Bureau of Prisons. It includes ensuring that all the inmates prove that they have a high school diploma; otherwise they are sent to the institution's school to obtain sufficient instruction to allow them to pass the state high school diploma examination. Some of the issues that have arisen out of this policy are quite comical, such as demanding that individuals who have post-graduate or professional degrees prove that they finished high school. Whilst this is a prime example of the governmental mindset, there is a reason for all their concern. I discovered to my amazement that no less than twenty-five per cent of the inmates did not have a high school diploma. It seems that the lure of easy money, meaning drug trafficking, caused them to leave school before finishing. Strangely enough, I was eventually to be assigned to the education centre, where my role was to prepare the inmate-students for the mathematics section of the examination. As one of those who detested math in school, but learned it nevertheless, perhaps it was part of my punishment that I would be thrust in the role of math teacher.
40.
Confessions of a Money Launderer - Part 43
11 November 2007
I was standing next to my bunk at what the Federal Bureau of Prisons said was to be my new home for the next four years, when the rest of the residents, meaning inmates, arrived from their daily duties. Minimum security facilities, known as prison camps in correctional parlance, require their residents to perform menial duties, often at adjacent military bases or forts. They actually pay something like five cents per hour for these manual tasks. If one is unwilling to submit to such mindless activity, they find a way to transfer you to a higher-level facility, which means controlled movement, an environment where one cannot move around the facility except at specified times, which severely restricts you. We will discuss security levels shortly. Anyway, the returning inmates, a couple of whom I had known or met earlier in civilian life, came in the door; most were dirty and tired from a day spent cutting grass or performing some other repetitive chore at Eglin Air Force Base, which surrounded the prison camp, taking up the better part of three north Florida counties, and is the largest base of its kind in the world.
41.
Confessions of a Money Launderer - Part 42
3 November 2007
When the time came, my name was called, and I walked through the prison administration building into Receiving & Discharge, the input/output facility of the institution. There, my belongings were examined, and those few items that I could not bring into the prison were boxed up and sent home. I had worked from a list sent to me weeks before, and the only thing I wanted in that they wouldn't let me have were some OD (olive drab) t-shirts, a personal link to my military past, when only soldiers going to combat zone were issued OD. My civilian clothes off, I donned a navy blue air force-type work utility uniform;I was, after all, totally inside a USAF facility. No name tag, though, no stripes to denote rank, no patches or other identification. It was a totally anonymous identity, and, carrying my issued bedding and other items, like a new recruit in any military, I went into the next room to be interviewed by one of the staff.
42.
Confessions of a Money Launderer - Part 41
27 October 2007
I had a farewell dinner with close friends, and it was time to pack for my trip to the Federal Prison Camp at Eglin Air Force Base, in the Florida Panhandle. The night before, I felt feverish, but figured out that it was stress related. There was a specific list of things to bring, in the way of clothing and accessories. To meet the specified cost of a watch, I journeyed to one of my favourite Little Havana stores, an army surplus facility where I had picked up a lot of useful equipment over the years, some to assist me in my covert life, and some for the pure utility that military gear has for one who knows how to use it. An olive drab watch of military design was perfect for where I was bound.
43.
Confessions of a Money Launderer - Part 40
21 October 2007
As the time drew near for me to journey to the Federal Prison Camp at Eglin Air Force Base in northwest Florida, where I had been ordered to report to begin serving my four-year sentence, the little things in life, which I would not be enjoying for a long time, were especially dear. Such mundane domestic things as walking the dog, or taking my small son to the park were appreciated, for when I returned from confinement, years later, everything would be different. As I had felt the same exact way during my leave prior to being shipped out to Vietnam twenty years before, I was somewhat on familiar ground. The only thing one can do is to cut one's hair short, and prepare mentally for one of life's more difficult experiences. After all, many of the clients had already done this, and it was now my turn.
44.
Confessions of a Money Launderer - Part 39
14 October 2007
Looking at serving a sentence in a Federal Prison from the front end, whilst depressing, is not the end of the world. It's certainly not like going to war, where you know you could very well come back in a box. It just seems like a long, long time when one thinks about a term of years of incarceration. You know intuitively that the world will still be there when you come back, with only minor changes. However, and more importantly, you are the one thing that will have changed. One aspect is the world of work. When your identity for 20 years revolves around your chosen profession, and you know that those privileges will be revoked, one way or another, as the result of your criminal conviction, you know that your workday and life will be very different when you get out. So, as I began to close out my law practice, I realised that I was soon to lose an important piece of my perception of who I was. What would survive?
45.
Confessions of a Money Launderer - Part 38
7 October 2007
For a lawyer, attending your own sentencing hearing is one of the most humbling experiences one can experience. It is one thing to be representing a client in such proceedings; you are there purely as an advocate, and are also providing moral support for your client, who is fearful of the outcome. When you are an attorney-defendant, and you know exactly how much prison time the judge could potentially mete out to you, that information makes the experience all the more dreadful. Since my case was prosecuted by an Organised Crime Drug Enforcement Task Force in another city in Florida, I had to travel to the hearing. I think the term fear & loathing is an appropriate description of how I felt on that day; Imagine what it would be like if it happened to you. It was, for me, a necessary rite of passage between my life of financial crime and normal society.
46.
Confessions of a Money Launderer - Part 37
1 October 2007
My situation was dire; there were at least three important former clients who were obviously going to be assisting the US Attorney, and who would testify against me. I had opened companies in tax haven jurisdictions for them, transported illicit cash offshore with them and banked it, and advised them on a wide variety of criminal ventures involving narcotics smuggling and laundering the proceeds of crime. With the Gainesville jury pool composed of conservative small-town Floridians, and the anticipated introduction of evidence of my many other money laundering ventures, my eventual conviction was pretty much a foregone conclusion. A good lawyer knows when to be a zealous advocate, especially on his own behalf, and when it is simply hopeless, and a lost cause.That possible maximum sentence of twenty five years to life made the decision for me. It was time to admit my guilt, and accept the consequences that ensue from such an action; the legal equivalent of shooting one's self in the head.
47.
Confessions of a Money launderer - Part 36
23 September 2007
I needed to decide on how I would conduct my defence; my lawyer, known to me personally to be experienced and a veteran of many Federal Court cases, told me that I was at a fork in the road. If I decided to go to trial, the possible maximum sentence that could be imposed was twenty-five years or more. He said that only the defendant himself can decide whether to risk that amount of prison time by taking the case to trial. I knew that the kingpins in the case had already been sentenced to extremely long terms of imprisonment. The judge had actually meted out a sentence of three life sentences plus 200 years to the most culpable individual who had taken his case to trial. My case was pending before a very conservative judge. Should I plead guilty, or prepare a defence, and risk spending the rest of my life in custody? What would you do? Remember, in Federal Court, the prosecution usually takes years to build up an ironclad case. I had been under active investigation for the past seven years. Did they have a good case against me? Let's look at the possible evidence.
48.
Confessions of a Money Launderer - Part 35
16 September 2007
What does one do when faced with 25 years to life in prison? I was charged with 20-year and 5-year felonies, but the Organised Crime Drug Enforcement Task Force Force that had brought the case could certainly add up all the drugs & all the money, and come up with a life sentence pursuant to the then-mandatory Federal Sentencing Guidelines. Under the Guidelines, there is no gain time, time reduced from one sentence for good behaviour, and a life sentence would be exactly what it is, life in prison without the possibility of release. Think about what it is like to face that exposure as a defendant in a criminal case. What would you do, and how would you cope?
49.
Confessions of a Money launderer - Part 34
3 June 2007
Arriving in court as a criminal defendant, in handcuffs, and chained to a bunch of street-level drug dealers, was a rude awakening. After all, I was used to sitting quietly at the counsel table, and here I was, the center of attention as a person who has just been arrested. The First Appearance is mainly a formality, but it does have one aspect dear to all defendants, a preliminary enquiry into whether the arrested is eligible for pretrial release, more commonly known as bond. My case was no different, but as the arresting agents remarked whilst transporting me downtown after they picked me up at my office, (see Confessions of a Money Launderer - Part 33) they fully expected me to be allowed to bond out. Most lawyers or other professionals arrested were granted bond, otherwise known as bail, which allowed them to stay out of prison until the resolution of the case, usually at trial. Few if any serious felonies were ever dismissed in District Court.
50.
Confessions of a Money Launderer - Part 33
27 May 2007
Everyone has important days in their lives that they will always remember, and I've got a few great ones. The birth of my first child; graduation from law school; the opening of my own law office; marriage ceremonies, all were memorable. But I also have a few not so positive, like the first time I was on the receiving end of a rocket attack in Vietnam; discovering that I was under active surveillance by law enforcement; eluding customs agents on the streets of Miami; Coming into the US with documents that I did not want the authorities to see under any circumstances, and many other high-stress events that most people would prefer to forget. One day, which began much like all others in my office, was to be one such event; the day of my arrest for racketeering, a serious charge, and one which is generally only brought against career criminals who richly deserve it. Was that me? You bet it was.
51.
Confessions of a Money launderer - Part 32
21 May 2007
Waiting for the ax to fall when you are under investigation is an eerie feeling; You know that your adversaries in law enforcement are out there somewhere, unseen. One can almost feel, or even smell, their presence. I had that feeling every day when I was in the field in Vietnam, and here it was back again, twenty years later. When I went out in the morning to walk the dogs, I half expected to be confronted by a team of DEA agents who had my name on their warrant. Are they out there? Nope, not today. Perhaps tomorrow. One becomes very fatalistic under those circumstances, but the tension never fades.
52.
Confessions of a Money launderer - Part 31
6 May 2007
So how did I evade arrest for a decade? Readers often ask how I was caught, assuming that I went to federal prison after being arrested with a suitcase of illicit cash at some US border checkpoint. In truth and in fact, I was never caught in the act, but because three clients, convicted and looking at serious prison time, turned upon me and the organisation's accountant. It is known as Substantial Assistance in the Federal Sentencing Guidelines (then mandatory and now officially only a guide to District Court judges) and it allowed my former clients to reduce their sentences. But just how did I escape justice for all those years? Today I provide a glimpse into the precautions I observed to minimise my personal risk during that period, for the consequences of failure or discovery in a money laundering operation are serious.
53.
Confessions of a Money launderer - Part 30
30 April 2007
In the money laundering business, where mistakes could result in a twenty-year vacation, courtesy the Federal Bureau of Prisons, or even termination of your employment with extreme prejudice, you need to keep your sense of humor. When the clients suffered setbacks that could result in your immediate arrest, you had to roll with the punches, practice damage control, and if necessary cut their losses as efficiently as possible. And things had a habit of going south without warning; that's the nature of crime. One time, two clients tearfully called me to come for a visit late at night. They had recently smuggled some prime grade marijuana in from Jamaica and, secreting it artfully in the attic of their Coral Gables home, had gone off on a vacation. They returned to find their house broken into, with only the drugs missing. Had there been a breach of security, or had a member of their crew ripped them off? We never found out. Episodes like that will make you crazy if you let them. For that reason, I always chose to focus on the humour in the drugs trade.
54.
Confessions of a Money Launderer - Part 29
22 April 2007
His street name was J.R., not because of any resemblance to the television star from "Dallas," but because those were his initials. His was a long haul life, Miami to the Midwest, over and over and over again, moving cocaine overland in a Jaguar sedan, blending in with the interstate traffic in and out of Florida. His wife was from a prestigious Illinois family, and I don't think she actually knew exectly what he did for a living, notwithstanding his long absences from their Florida Gulf Coast home. I used to watch him cut kilos of cocaine, sitting on the floor, with a non-toxic derivative made from corn called inositol, prior to driving the results all the way to Chicago, for sale to his customers. He escaped criminal prosecution for his crimes, though there was once a close call, when his wife left some marijuana in a rental car, and I had to take her into a small-town Florida police station to explain that she had no idea how that pot got there. Back to our story; it was J.R. who introduced me to Rick, a clerk who worked in a Miami music store, and had a powerful cocaine habit. Rick dropped out of sight for a while, but when he returned he had both an interesting story, and some clients with money laundering business for me.
55.
Confessions of a Money Launderer - Part 28
15 April 2007
Operating a money laundering enterprise whilst under a law enforcement microscope required that I exercise extreme care, but criminal clients can get sloppy, which may have a resulting impact on the laundryman. One such episode involved a client who was purchasing a light aircraft for use as a marijuana smuggling vehicle between Jamaica and Florida. The human factor was that the organisation's leader was of small physical stature, which he overcompensated for by being arrogant, imperious and difficult. Of course, those characteristics could be applied to many normal-sized drug smugglers, as their successful operations caused them to often be incredibly egotistical, to the point where they tended to ignore instructions from the professionals advising them in their money laundering operations. For example, I have previously referred to the placement of $6m in Switzerland by my clients, against my specific advice, as I feared it would be lost. As fate would have it, both the US & Swiss governments shared in that plunder when they later seized those accounts.
56.
Confessions of a Money Launderer - Part 27
8 April 2007
Operating a money laundering enterprise when you know you are under active law enforcement investigation is stressful, to say the least. One simply does not know when the proverbial "knock on the door," meaning your arrest, will occur. Since such untoward events generally take place in the wee hours of the morning, you never sleep as soundly as you'd like whilst at risk of arrest. One knows that those law enforcement adversaries are out there somewhere, unseen, close enough that you can sense their presence, or at least think you can. It is not an experience that I recommend to anyone, and the only functional equivalent I have ever experienced with the same degree of fear and loathing is being in the field during a time of war, with the enemy out of sight, but known to be at close quarters, and prone to attack at night. It's that kind of feeling; not for the faint of heart. But it does cause you to be hyper-vigilant. Paranoia? You betcha.
57.
Confessions of a Money Launderer - Part 26
2 April 2007
I traveled that evening to another Florida city, for though the Federal judge who presided over that particular matter held court in the city where I had declined to testify, his permanent chambers were in the state cap

[Sapphire Capital]

Issues of the International Criminal Regulation of Money Laundering in the Context of Economic Globalization

Leonardo Borlini
Bocconi University - Department of Law


November 1, 2008

Paolo Baffi Centre Research Paper No. 2008-34

Abstract:
This work has a twofold aim. First, it outlines the serious threats posed by transnational laundering operations in the context of economic globalization, showing, at the same time, the foremost reasons for sustaining the need of international responses to such crime. In the first part the focus is on the phenomenological aspect of money laundering as the necessary means through which criminal activity can live on and proliferate. Moreover, we analyse the main results economic studies on the matter has lately achieved. In this way, we aim at highlighting that money laundering is also (if not mainly) an economic issue and an accurate diagnosis of it can not exclude its economic essence and consequences. The economic analysis calls for an accurate legal response, which faces a typical trade-off. It should, indeed, deter criminals from laundering by increasing the costs for such illicit operations. Arguably this aim can be achieved by intensifying regulation and enhance the enforcing activities. However, a stronger enforcement yields increased costs and reduces the privacy of citizens. Both at the international level and within the single domestic legal systems, anti money-laundering law is typically characterised by a multidisciplinary approach combining the repressive profile with preventive mechanisms. The non-criminal measures lately implemented both at the international level and by the national legislation seem to be consistent with the insights the most recent economic studies on money laundering have put forward. On the other hand, the economic analysis highlights that some crucial criminal issues are in the need of further revision. Therefore, the second part of our work centres on elements of international criminal regulation of the crime under discussion. The adoption of international hard law instruments since 1988 is encouraging. The treaty-approach regarding criminalisation has unquestionably contributed in calibrating the national responses and, in some cases (e.g. the definition of the actus reus, and the promotion of the liability ex crimine for legal entities) formulating them ex novo. Nonetheless, there still seems to be a hiatus between the well-recognised need of concerted criminal strategies, the challenges posed by transnational dynamics of laundering crimes, and a certain determination of States to maintain their criminal prerogatives. For instance, issues regarding the national definitions of predicate offences persist. Again, the emergence of causal chains stretching across national jurisdictional boundaries with effects that transgress one or more national criminal norms poses serious jurisdictional challenges.

papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1296636_code962400.pdf?abstractid=1296636&mirid=3