On average, people donate more than $2.5 billion each year to over 40,000 American charities with military-related missions. While most of these charities are trustworthy, others prey on Americans’ patriotism and generosity. Late last month, the Federal Trade Commission announced Operation Donate with Honor, a nationwide law enforcement and education initiative aimed at stopping veteran-related charity fraud.

Here in Washington, Attorney General Bob Ferguson brought civil enforcement claims against two charities as a part of the Operation Donate with Honor initiative. The AG’s respective complaints allege that the charities violated Washington’s Consumer Protection Act and the Charitable Solicitations Act by donating little to no money to their advertised causes and using deceptive practices to draw in donations.

Continue Reading A Note of Caution on Charitable Giving

Been a while — not sure “Roundup of White Collar News” is the catchy phrase we’re looking for after a month or so, but here we go:

  • Interesting explanation of the Carter Page FISA application over at Lawfare
  • The Attorney General announced the publication of the Cyber-Digital Task Force Report — Question: does anyone actually read a bureaucratic monstrosity like this?
  • Good for the DOJ — firing reservists because they’re performing military duty is awful, not just illegal
  • Good for the DOJ again — I can never get enough of health car fraudsters getting caught and being made to pay
  • Blows my mind that we’re even having a debate as to whether a president’s conduct amounts to treason
  • Very sad day for L.A. — Jonathan Gold, the man who informed me it was ok, even right, to put yellow mustard on my pastrami sandwich died today

I’m assuming there weren’t any big legal news items that we missed in our absence . . .

Some highlights from recent weeks:

  • Finally word that the Senate has confirmed a new AAG for the Criminal Division. But as this Financial Times piece points out, the Criminal fraud section still has seven out of its nine leadership positions unfilled.
  • An announcement this past week of a new inter-agency task force focused on market integrity and consumer fraud
  • An indictment last week in Seattle alleging a scheme to defraud food and beverage manufacturers by representing that a business would destroy unsaleable items or convert it into agricultural feed, but instead resell the products to discount grocery stores and other consumers
  • Sentences in Alaska for members of a mail theft ring

Back on May 9, I suggested that a future post on whether the Fifth Amendment’s guarantee against self-incrimination applies to non-citizens abroad was forthcoming.  Though I’ve been a bit distracted by trial the last few weeks, I have not forgotten that commitment.

As a general matter, foreign nationals outside the United States are not entitled to constitutional protections, including due process protections. This limitation might extend to non-citizens interrogated abroad by U.S. law enforcement, or non-citizens without status in the United States giving interviews to U.S. consular officials in an effort to obtain a visa. But there’s a good case for arguing that the right against self-incrimination embedded within the Fifth Amendment’s text would preclude the use of any incriminating statements given without procedural warnings in a subsequent criminal prosecution. Such an argument would not depend on an extraterritorial application of the Fifth Amendment, but rather a domestic one.

Continue Reading Self-Incrimination Abroad

A few weeks ago, Justin flagged an Oregon case alleging money laundering through the Black Market Peso Exchange, one of the most successful and efficient laundering schemes in the world.  The Black Market Peso Exchange is a trade-based money laundering technique commonly used by narcotics traffickers based in Colombia and Mexico. The central feature is the use of a money trader to ensure that the revenue from drug sales in the U.S. doesn’t actually cross any borders. Instead, those dollars are used to purchase any number of legitimate commodities from unsuspecting businesses on behalf of legitimate South American businesspersons whose legitimate imports are used to obtain pesos for the drug cartels.

This system involves several key advantages for the trafficker:

  • Avoiding the risk of having large quantities of cash detected at international borders
  • Avoiding the type of large cash deposits that trigger reporting requirements for financial institutions in many jurisdictions
  • Achieving quick access to pesos

Continue Reading Money Laundering Through the Black Market Peso Exchange

  • Ron Rockwell Hansen, a former Defense Intelligence Agency case officer, was arrested in Seattle for spying on behalf of China — here’s the arrest warrant and complaint
  • So many ways to commit fraud — here’s gift card fraud complete with reverse engineering, algorithms, and other techy Seattle things that lawyers don’t understand, as exemplified by the indictment
  • Apparently, embezzling from a tribe is its own separate crime
  • I love the Washington Post but they get this story about civil asset forfeiture completely wrong and in the most lazy way by simply repeating an attorney’s allegations — a post to follow about how asset forfeiture really works
  • Another laugher from the Washington Post about the possible end of legalese — legalese will never die and we’ll have a future post on why
  • The SEC is going after a lawyer here in Seattle who specializes in sham IPOs

Last week, I teased the continuation of a series of posts about the Fifth Amendment.  That’s still coming, but I had to return to another common theme first.  My preview came at the end of a post about both the Fifth Amendment and parallel proceedings, which I’d also written about before. The Inception-ing of the blog continues with yet another brief comment on parallel proceedings, this time inspired by a news item that Justin flagged in last week’s roundup: Deputy Attorney General Rosenstein gave a speech before the New York City Bar Association’s annual white collar crime conference.  The whole speech is worth watching or reading, but the highlight of the address was DAG Rosenstein’s announcement of “a new Department policy that encourages coordination among Department components and other enforcement agencies when imposing multiple penalties for the same conduct.”

Continue Reading Genug with the Parallel Proceedings . . .