What happened with the criminal case against Holenweger ? Not enough evidence, according to the judge. A blow to prosecutors in this high profile case. Details on the Alstom case will follow as they pop up.

http://bit.ly/gigJp3

http://bit.ly/fWoHEB

http://bit.ly/dfiQqA

http://bit.ly/fn1TD3

http://financialcrimeonline.com/archives/875

http://bit.ly/dfiQqA

Other transactions that probably are under investigation involve the oil business. Some of the money that was transferred to Switzerland is believed to have come from illegal commissions and other fraudulent means between 2000 and 2005, when he presided over the KazTransOil state company, according to Bruno de Preux, the Geneva lawyer who is representing a group of Kazakh citizens “opposed to state corruption”.

Some months ago, the Kazakh financial police investigated him on corruption allegations to no avail. In June 2010, embezzlement accusations against Kulibayev were ruled groundless by an Almaty court.

http://bit.ly/h7BXyC

http://bit.ly/hcVW4q

http://bit.ly/i53kPb

So what is going on? What were the (business) ties between Haider and the Libian leader? Fact is that Kaddafi attended Haider’s funeral in 2008. Haider successfully negotiated the release of two Austrian hostages held in the Sahara desert in 2008. Haider allegedly asked the son of Libyan leader Muammar Gaddafi in March 2008 for help in freeing the Austrians, who disappeared while on holiday in Tunisia. They are believed to have been held by al Qaeda’s North African wing. The hostages were released several months after Haider wrote to his close friend Saif al-Islam Gaddafi. The Austrian Foreign Ministry said Libya only helped in initial negotiations but not the eventual release.

The Austrian magazine has plenty of sources close to the investigation; let’s hope we will get some more answers soon. To be continued.

http://www.profil.at/articles/1030/560/274405/exklusiv-haider-45-millionen-euro-liechtenstein

http://en.wikipedia.org/wiki/Muammar_al-Gaddafi

http://financialcrimeonline.com/archives/994

http://blogs.reuters.com/global/2008/11/05/austrias-haider-a-hero-beyond-the-grave/

http://www.dailymail.co.uk/news/worldnews/article-1078408/Austrian-far-Right-leader-Haider-goes-grave-taking-secret-hours-gay-club-him.html

http://www.telegraph.co.uk/news/worldnews/europe/germany/7921306/Far-right-Austrian-leader-Joerg-Haider-secretly-had-40-million-in-Liechtenstein.html

http://in.reuters.com/article/idINIndia-50552720100801

“..Among the findings in the new report, which features a number of high-impact maps and charts that illustrate illicit flows and their markets are: Europe is the highest-value regional heroin market (US$ 20 billion), while the Russian Federation is now the single largest national heroin consumer in the world (70 tons). Countries that grow most of the world’s illicit drugs, like Afghanistan (opium) and Colombia (coca), receive the most attention and criticism. Yet, most drug-related profits are made in the destination (rich) countries. For example, out of a global market of perhaps US$ 55 billion for Afghan heroin, only about 5 per cent (US$ 2.3 billion) goes to Afghan farmers, traders and insurgents. The report shows that the North American cocaine market is shrinking because of lower demand and greater law enforcement, which in turn has generated a turf war among trafficking gangs, particularly in Mexico, and new drug routes..”.

UNODC states that crime has internationalized faster than law enforcement and governance. That is obviously not a new finding, as is this one: “Criminals are motivated by profit: so let us go after their money,” said Mr. Costa (UNODC chief), adding that “We must increase the risks and lower the incentives that enable the bloody hand of organized crime to manipulate the invisible hand of competition”. He called for more robust implementation of the United Nations Convention against Corruption, more effective anti-money-laundering measures, and a crackdown on bank secrecy:

“..That means strengthening integrity by implementing the United Nations Convention against Corruption. It also means stopping informal money transfers (hawala), offshore banking and the recycling through real estates that make it possible to launder money. In particular, governments and financial institutions should implement Article 52 of the anti-corruption Convention that requires Parties to know their customers, determine the beneficial owners of funds and prevent banking secrecy from protecting proceeds from crime..”.

The emphasis on financial investigation and asset forfeiture has increased world wide, as has the bank secrecy crackdown. But financial investigations are labor intensive, complex from an international law point of view and dependent on a commitment to dedicate resources that could also target other types of crime that allow a more direct ‘result on investigation’.

The difficulty to actual reduce (organized) crime is well described by this view on organized crime:

“..Today, organized crime seems to be less a matter of a group of individuals who are involved in a range
of illicit activities, and more a matter of a group of illicit activities in which some individuals and groups are presently involved. If these individuals are arrested and incarcerated, the activities continue, because the illicit market, and the incentives it generates, remain. Strategies aimed at the groups will not stop the illicit activities if the dynamics of the market remain unaddressed..”

The UNODC report has chapters dedicated to different types of crime. Financial crime, fraud and money laundering are not amongst them. UNODC understands that money is key to all types of organized crime so the financial aspect is touched upon in these chapters. Fraud is not a separate chapter; fraud is probably one of the types of crime that generates billions yearly. But while cocaine is cocaine all over the globe, the variance in fraud is significant. This makes fraud more difficult to measure. Let’s see if fraud makes a grand appearance in organized crime statistics someday.

The UNODC report, as always, is a great source of statistics. It describes recent developments in the major crime areas such as drugs, human trafficking and firearms. Just under 300 pages, give it a go on a rainy Sunday morning..

http://tinyurl.com/368dchp

The crash site was secured by the Russian army. A short time after the crash a creditcard belonging to one of the victims jumped back to life again. It should not surprise anyone that this got detected.

“The criminal case has been started against four conscript soldiers on charges of theft by an organized group. The four were in the cordon at the scene of the crash,” the Investigation Committee of the Russian Prosecutor’s Office said.

The soldiers took several cards but only used one of them to withdraw cash, stealing about 60,345 rubles (about $1,900) in several transactions, the committee said. The committee said the suspects were identified by the command of the military base that services the military airport near Smolensk, Russia, where the plane crashed April 10….All four soldiers have confessed and are actively cooperating with the investigation, the committee said.”

According to a CNN report, Russian State TV reported the soldiers admitted they spent the money at a local cafe. Three of the four suspects had a criminal record before they were conscripted into the army, the committee said. They are now being held at their military base “under the observation of their command.”

Although we are not sure what “observation of their command” would entail, we are probably better of guessing what it is rather than experiencing it.

http://edition.cnn.com/2010/CRIME/06/08/russia.poland.crash.theft/index.html?hpt=T1

http://en.wikipedia.org/wiki/2010_Polish_Air_Force_Tu-154_crash

The cash is brought into Mexico both in amounts small enough for an individual to carry and in amounts large enough to fill shipping containers. Revenue from local dealing operations across the U.S. is first consolidated in cities that serve as “collection points,” including Los Angeles, then moved to the border and broken up again for the cross-border leg of the transport.

In Mexico, where 75% of the formal and informal economy works through cash transactions, cartel bosses can launder their profits with all-cash purchases of large tracts of land, luxury hotels, cars, car dealerships and an endless array of high-end items.

The fight between the Mexican administration and the cartels claimed around 27,000 lives. As we speak the Mexicans are still not able to stop the violence, the inflow of money and related corruption.

http://articles.latimes.com/2010/jun/03/world/la-fg-mexico-cash-20100603

http://financialcrimeonline.com/archives/886

http://financialcrimeonline.com/archives/609

http://financialcrimeonline.com/archives/848

Mayor Sanchez is suspected of tipping off and protecting the Beltran Leyva and Zetas drug cartels – gangs known for brutal tactics including beheading rivals. He had taken a leave of absence as Cancun mayor to run for governor of Quintana Roo state, known for turquoise Caribbean waters and white-sand beaches marketed as the Mayan Riviera.

On May 13, gunmen killed a mayoral candidate in a town near the border with Texas after he ignored warnings to quit the race. Several other candidates have received threats, and in some towns near the U.S. border, some parties couldn’t find anyone to run for mayor.

High-level corruption remains one of the biggest impediments in the fight against drug trafficking in Western Hemisphere countries that have become key smuggling corridors. In Jamaica, security forces are fighting supporters of a major drug trafficking suspect who has ties to the ruling party and is resisting extradition to the U.S. In Guatemala, the national anti-drug czar and police chief are under arrest in a case involving cocaine and slain police.

The Sanchez case will be another tough test for Mexico’s judicial system and its ability to successfully prosecute high-profile drug and corruption cases.

http://www.reuters.com/article/idUSTRE64P5ST20100526

http://www.huffingtonpost.com/2010/05/26/cancun-mayor-arrested-for_n_590013.html

http://www.latimes.com/news/nationworld/world/la-fg-mexico-cancun-20100527,0,1967342.story

Sources claim the the investigation started when a drug trafficker informed the police about the banker’s role in a money laundering scheme. Based on the suspicions, investigators infiltrated a drug network and sought help from the banker to launder money that the police spy pretended came from trafficking, the government office said in a statement. The banker took the bait. Based on the suspicions, investigators infiltrated a drug network and sought help from the banker to launder money that the police spy pretended came from trafficking, the government office said in a statement. The Swiss government alleges that Holenweger made false representations to banks in the process, while the money from the offshore accounts was used by industrial giant Alstom to bribe officials to win projects and increase market share in foreign countries.

In March 2003 the UK Serious Fraud Office (SFO) arrested three Alstom executives in a corruption probe. UK sources claim that Alstom used money on an offshore account to bribe officials abroad for approx $65 million to secure contracts. According to Swisster, bribes – commonly labeled as “commissions” – were long seen as a way for European businesses to secure business in overseas markets but France outlawed such practices in 2000 after the OECD called for states to stop approving them. Alstom updated its code of ethics this year and maintains it now has “rules and control procedures at the best international standards”.

Banker’s taking customer service to the next (illegal) level; a blast from the past or still common practice? Some things really change.

http://www.swisster.ch/news/business/zurich-banker-charged-alstom-fraud-case.htm

http://www.businessweek.com/ap/financialnews/D9FHECQ80.htm

The New York investigation has prompted several other states to examine how their pension funds solicit investments, and firms including the Carlyle Group have settled related cases.

“This case has started a national investigation of public pension funds all across the nation,” attorney general Mr. Cuomo said in a conference call with reporters on Thursday. “A significant amount of this country’s wealth is in these public pension funds and I fear — seeing what we’ve seen in New York — that it’s going to be a serious problem for the nation.”

http://www.nytimes.com/2010/04/16/business/16pension.html?src=me&ref=business

http://www.businessweek.com/news/2010-04-15/quadrangle-settles-with-cuomo-in-state-pension-probe-update1-.html