Dirty money entering the U.S. from foreign nationals
The U.S. Senate Committee on Homeland Security & Governmental Affairs released a special money laundering report today that describes four case studies of foreign politically exposed persons (“PEP“) who laundered money in the U.S. without detection. Two of the case histories have a Canadian connection. The 330-page report, entitled ‘Keeping Foreign Corruption out of the United States: Four Case Histories”, available here, describes how dirty money from powerful PEPs entered the U.S. financial system and how the PEPs used lawyers, real estate agents, escrow agents, bankers, lobbyists, and university officials to circumvent money laundering laws in the US.
Here are highlights from the four case histories in the report:
- From 2004 to 2008, Obiang hired two U.S. lawyers to help him bring millions of dollars in suspect funds from EG into the United States, carry out transactions and pay his bills and expenses. The lawyers, each of whom operated independently of each other, formed U.S. shell companies for Obiang, helped him open bank accounts, and allowed their respective law firms to serve as conduits for his funds by accepting millions of dollars in wire transfers from EG, moving the funds into the bank accounts and using the funds to pay his bills and expenses;
- Obiang’s purchases were lavish and included frequent payments to high-end retailers such as Ferrari, Gucci, Lamborghini and Dolce and Gabbana in Beverly Hills and US$38.5 million for a private jet;
- One of the lawyers who facilitated Obiang’s activities was taken to celebrity parties, including a function at the Playboy mansion, by Obiang;
- Obiang used two real estate agents to buy and sell high-end California real estate, including a US$30 million house in Malibu;
- Obiang used his lawyers and real estate agents to obtain access to the U.S. financial system, even at banks that had previously closed his accounts and declined to do business with him, and managed to bring US$100 million into the country by wire transfers;
- Transparency International‘s Corruption Perceptions Index has consistently ranked EG as having one of the most corrupt images in the world, ranking it 171 out of 180 countries evaluated. In 2006, its president (Obiang’s father) was named by Forbes as one of the world’s ten wealthiest rulers with an estimated personal wealth of US$600 million; and
- Obiang’s family is suspected of misappropriating EG’s oil and timber wealth for personal gain.
- From 2003 – 2007, Bongo used a U.S. lobbyist to buy armored vehicles and a C-130 aircraft, and transferred US$18 million to the U.S. financial system through U.S. bank accounts; and
- Bongo’s daughter, Yamilee Bongo-Astier, now a Canadian citizen, opened several bank accounts in the U.S. and made large cash deposits from Bongo family members. She also purchased vehicles at the request of her father. In 2007, she asked the Commerce Bank in New York City to count the bills she had in her safety deposit box – she had US$100 bills wrapped in plastic totaling US$1 million in that safety deposit box. When questioned by the bank, Bongo-Astier said that the funds came from cash her father had brought into the U.S. One of the banks reported that because she produced a Canadian passport for identification purposes, it did not tie her to her father or suspect she was a PEP. Her mother, Marie-Yva Astier, also sent her funds from Canada and Haiti.
Jennifer Douglas Abubakar, 4th wife of Atiku Abubakar, former Vice President of Nigeria
- From 2000 – 2008, Douglas helped her husband bring over US$40 million in suspect funds into the U.S. primarily through wire transfers sent by offshore corporations;
- Douglas managed to open over 30 bank accounts at various banks most of which were unaware of her PEP status;
- Douglas’ U.S. lawyer agreed to convince a bank to open an account for her when the bank had initially declined to do so; and
- She listed her occupation as unemployed or a student and yet continued to receive wire transfers of large sums of money from offshore corporations over the years. One American university accepted millions of dollars from unfamiliar offshore corporations to advance the interests of Douglas.
Pierre Falcone, convicted French arms dealer
- Falcone was convicted in France in 2009 on charges of illegal arms dealing in Angola, tax fraud, and money laundering, and is serving a six-year prison sentence in Fleury-Mérogis;
- From 1989- 2007, he and his relatives were able to launder over US$60 million through bank accounts worldwide, and in particular, in Scottsdale, Arizona. One of the U.S. banks, although aware that he was connected to arms sales, did not treat Falcone as a PEP;
- Falcone and his family were able to maintain a lavish lifestyle in Arizona since the 1980s. In 2000, Falcone bought a US$49 million house in Paradise Valley; and
- From 1989 to 2005, Bank of America opened 29 bank accounts for the Falcones in Scottsdale, including 10 for Falcone’s mother, Vincente Falcone, who lives in Canada.