International Money Laundering

This is the kind of factual information I would like to see more of from Tax Justice Network and Richard Murphy. A few interesting facts:   a) most of the laundering went into a USA account and then to London. It was London that picked up on the suspicious transactions, not the USA. What happened to regulation there?   b) Some of the later money went via Jersey when she was still not under arrest, but as soon as arrested, money was frozen and recovered from the Jersey account. Banking secrecy does not apply in money laundering cases in Jersey.       http://www.uk-fraud.info/case_studies/moneylaundering.html   INTERNATIONAL MONEY LAUNDERING

Floriberta Clemente, a 42 year old Mexican national, arrived in London in 1997 and began associating people involved in international frauds. Aided by them she set up "shelf companies" in the UK, supported by bank accounts. Clemente styled herself as a lawyer based in London and purported to specialise in representing clients involved in investment opportunities. She opened an account with Merrill Lynch in London who used a correspondent bank in New York to move the account to New York in order to reduce her UK tax liability. In late 1997 and early 1998 the New York account was credited with five deposits: $999,985 from an opaque Grand Cayman-based corporate entity. $800,000 from a US citizen based in Tennessee. $3,499,990 from the Dutch Malaccan Churches. $999,985 from an opaque Liechtenstein-based corporate entity. $20,448,950 from the Dutch Malaccan Churches. Clemente instructed Merrill Lynch to invest the monies in a variety of 'blue chip' stocks. Some monies were transferred to London, which were dissipated in the form of property purchases. A London-based financial institution made a disclosure in respect of these transfers and, as a result of the ensuing financial investigation, the following was established: The bank in London was being used to finance the purchase of property based assets in the UK. The funds were the proceeds of a fraud in the USA. The audit trail led back to Merrill Lynch in New York where the bulk of the fraudulently obtained funds were located. Audit trails also led back to the victims of fraud. The Metropolitan Police fraud squad, with the assistance of law enforcement agencies in the US, applied for the restraint of the funds in the US. The beneficial owners of the two opaque corporate entities were difficult to identify. At no time had they ever reported that they were the victims of a fraud. It was decided to proceed only with the evidence of the frauds perpetrated to the detriment of US citizens in Tennessee and the Dutch Malaccan Churches, who had reported their respective frauds to law enforcement agencies. Anecdotal evidence suggested that Clemente had been involved in those frauds with other parties. Clemente was arrested, resulting in the recovery of evidence that would assist prosecutions in the UK, US & The Netherlands. She was bailed pending case preparation. Whilst she was on bail another victim of an 'Advance Fee' fraud was induced to wire-transfer $400,000 from Vienna to Clemente's London account. Clemente then transferred these funds to Spain via Jersey. Again an early arrest was made which led to recovery of 50% of the funds in a Jersey account. As police and prosecutors felt it would be more difficult to prove the originating fraud, Clemente was immediately charged with money laundering offences for this fraud and for laundering the proceeds of the earlier frauds. She was held in custody pending trial and pleaded 'Not guilty' to all three offences. The jury found her guilty on all counts and she was sentenced to a total of eight years imprisonment. The investigation resulted in the recovery of $23,000,000. Conclusions This case illustrates how the UK police can assist a foreign law enforcement agency investigating a fraud. If there is an audit trail running through the UK, or an individual based in the UK who has facilitated the receipt of funds and their dissipation or onward transmission, then action can be taken. It is necessary for the requesting agency to provide evidence that the funds are the proceeds of crime. This will substantiate an allegation of money laundering in the UK and the police can investigate with a view to prosecuting an individual in the UK and applying for the restraining of funds.