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 . . .

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.

Continue Reading Parallel Proceedings Revisited

  • Disgusting — Seattle man charged with selling food that was supposed to be destroyed or recycled into agricultural feed to discount grocery stores
  • The Ninth Circuit said you don’t have to know you’re transporting ammo to be convicted of smuggling ammo
  • Panasonic Avionics Corporation agreed to pay a $137.4 million penalty for falsifying its books and concealing payments to third-party sales agents
  • VW’s board is thinking of going after its former CEO
  • The UK’s data protection watchdog has ordered Cambridge Analytica to release information on US professor David Carroll
  • Interesting interview from a a compliance chief regarding a “speak up culture”

  • Last Monday, the U.S. Treasury’s Office of Foreign Assets Control authorized certain transactions winding down or maintaining business with Russian aluminum giant RUSAL through October, after sanctions against the company announced earlier this month hurt industry
  • Charges against two men alleged to have been conspiring to commit economic espionage on behalf of a Chinese company
  • New stats this week from the Administrative Office of the U.S. Courts on the 2017 activities of the Foreign Intelligence Surveillance Court
  • In Portland, a man is charged with conspiring to launder money in furtherance of his drug business
  • Charges in Anchorage for killing Steller sea lions in violation of the Endangered Species Act and the Marine Mammal Protection Act, false statements, and obstructing the investigation
  • In Tacoma, Washington, a woman is charged with wire fraud and identity theft—after being convicted in 2014 of stealing almost $100,000 in an earlier identity theft scheme
  • In Chicago on Thursday, Deputy Attorney General Rod Rosenstein provided appropriate context for Shakespeare’s joke about “kill[ing] all the lawyers” in a speech to the International Association of Defense Counsel’s “Corporate Counsel College”

  • Lance Armstrong settled a False Claims Act case for $5 million. His cycling team was sponsored at one point by the U.S. Postal Service. Apparently doping violates the terms of federal government sponsorship agreements. Who knew?
  • In Texas, the GM of a Venezuelan energy company entered a guilty plea for his role in an international money laundering and bribery scheme
  • Closer to home, former FBI Director James Comey will be in Portland tomorrow to plug his new book. He’ll be in Seattle on Sunday. I’ll be attending the Seattle talk.
  • It’s not just famously fired government officials who are active in the Pacific Northwest. Current prosecutors are busy as well. In Portland, a CPA’s 4/20 plans went up in smoke when the U.S. Attorney’s Office accused him of hiding income and diverting investor money from his accounting business to his marijuana business.
  • In Seattle, the former president and former vault-manager of a King County precious metals business were arraigned this week on charges that they fraudulently obtained millions of dollars from thousands of customers by misrepresenting shipping times for bullion and using bullion and money belonging to customers to fulfill other bullion orders. I can still think of at least one far more ambitious bullion-based criminal scheme: