Happy holidays after a long break. While we may have been quiet, DOJ has not.
There’s been a slew of white collar enforcement actions in the Pacific Northwest and around the country in the last six weeks:
You might have heard the term “hawala” mentioned over the last few weeks. Maybe you saw it discussed while watching Amazon’s new Jack Ryan series, or maybe you’re more of a C-SPAN fan, and caught it a few times while watching the House Financial Services Committee’s Subcommittee on Terrorism and Illicit Finance hearing on September 7th on terrorist groups and their means of financing.
Hawala is a trust-based informal value transfer system (sometimes called parallel banking) that is widely used for perfectly legitimate purposes across parts of South Asia, West Africa, and the Middle East, and for facilitating transactions between communities there and people in other parts of the world, like Europe and North America. Its attraction to money launderers and terrorist financers is driven in large part by the difficulty of tracing the transactions and the limited means of regulatory enforcement. Notably, hawala is generally unlawful in countries like Pakistan and India, and in some U.S. states.
Continue Reading Financing Terrorism Through the Hawala System
I’m assuming there weren’t any big legal news items that we missed in our absence . . .
Some highlights from recent weeks:
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.
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:
Continue Reading Money Laundering Through the Black Market Peso Exchange
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 . . .
News of the last few weeks has prompted me to return to two issues I’ve discussed here before: parallel proceedings and the Fifth Amendment. This time around, the Fifth Amendment issue is not double jeopardy, but instead the constitutional protection against compulsory self-incrimination.
Remember parallel proceedings? By that I mean the government conducting criminal and civil investigations of the same or similar conduct, and bringing related criminal, civil, or administrative enforcement proceedings around the same time. This creates all kinds of problems for defendants, including the difficulty and expense of fending off legal challenges on several fronts and the care needed to ensure that steps taken responding to one enforcement action don’t bite you in the other.
Among the most important dangers are those stemming from offering testimony in a civil or administrative proceeding. You see, “pleading the Fifth” and refusing to answer questions that might incriminate you doesn’t work the same way in civil and administrative settings that it does in the criminal context.