Canada appeals decision staying extradition of Khadr to Supreme Court of Canada

By Christine Duhaime | July 30th, 2011

The Canadian government has applied for leave to appeal a decision staying the extradition of Abdullah Khadr to the Supreme Court of Canada. In May of this year, the Ontario Court of Appeal upheld a lower court decision staying Khadr’s extradition.

The Canadian government is arguing that it’s ability to comply with international obligations could be compromised if the decision staying Khadr’s extradition is allowed to stand. In the past, Canada has been criticized for failures to comply with counter terrorist financing and anti-money laundering international standards. Through membership in the FATF, Canada agreed to comply with the FATF standards which require, among other things, that Canada:

  1. Not provide a safe haven for persons charged with terrorist financing or terrorist acts;
  2. Give the U.S. (among other countries), the greatest possible measure of assistance in U.S. proceedings relating to terrorist financing and terrorist acts; and
  3. Facilitate the extradition of persons charged with terrorist financing or terrorism.

In 2005, Khadr was arrested in Toronto while the U.S. sought his extradition on charges that, while in Afghanistan, he supplied firearms, ammunition and components for landmines to al-Qaeda, a listed terrorist organization in Canada.

Continue reading →

Prominent hip-hop agent charged with money laundering

By Christine Duhaime | July 12th, 2011

James Rosemond, also known as Jimmy Henchman, a well-known hip-hop talent manager for several singers, including Sean Kingston and The Game, was charged at the beginning of July by the U.S. Department of Justice, Eastern District of New York, on money laundering and other charges in a thirteen-count superseding indictment based on allegations that Rosemond used his music business, Czar Enterprises, as a front for a criminal enterprise that trafficked cocaine. In addition to the charges, the U.S. Attorney’s office is arguing for the disqualification of Rosemond’s lawyer.

Money Laundering Charges

The indictment alleges that Rosemond laundered proceeds from the cocaine operation, engaged in unlawful monetary transactions and structured financial transactions to evade anti-money laundering reporting requirements. One of Rosemond’s money laundering techniques allgedly involved converting the cash proceeds into postal money orders and structuring those orders to avoid generating a report that would tie him to the money orders. There are apparently over 1,200 money orders totalling over US$1 million, the proceeds of which were allegedly used by Rosemond for various purposes, including payment of legal fees.

The U.S. Assistant Attorney’s Office has said that it has evidence esatblishing the criminal enterprise that includes statements from numerous confidential sources and witnesses who were part of Rosemond’s enterprise; recorded telephone calls, e-mails and text messages between Rosemond and his colleagues; and parcels containing large amounts of cocaine and narcotics proceeds.

Continue reading →

Supreme Court of Canada agrees to hear appeal of terrorism law

By Christine Duhaime | July 2nd, 2011

The Supreme Court of Canada has granted leave to Mohammed Khawaja to appeal the decision of Ontario Court of Appeal that upheld his conviction for terrorist activity financing and other terrorism-related charges under the Anti-Terrorism Act. The Ontario Court of Appeal called Khawaja’s initial 101/2 year sentence manifestly unfit and substituted it for a sentence of life imprisonment plus 24 years to be served concurrently. Khawaja is the first person convicted in Ontario of terrorist activity financing under the Anti-Terrorism Act.

Ontario Court of Appeal

The Court found that Khawaja:

  • Was an active member of a terrorist group whose goal was to eradicate western culture and civilization and establish Islamic dominance.
  • Was prepared to go anywhere and do anything for the violent jihadist cause.
  • At the time of arrest, was in possession of a prototype remote detonator device and had promised to build 30 more such devices for a terrorist group. The device was intended to be used to bomb key locations for the jihad.
  • Willingly participated knowing that his activity was likely to result in the killing of innocent people on a massive scale.

In several e-mails Khawaja expressed the need to devise a way to drain the economies of Kuffars (derogatory term for non-Muslims) of all their resources, crippling their industries and bankrupting their systems by violent means including through the random murder of civilians.

Shutting the Doors Swiftly to Terrorism

In the decision, the Court of Appeal stated:

Terrorism is a crime unto itself. It has no equal. It does not stop at, nor is it limited to, the senseless destruction of people and property. It is far more insidious in that it attacks our very way of life and seeks to destroy the fundamental values to which we ascribe values that form the essence of our constitutional democracy, once detected, it must be dealt with in the severest of terms;

When terrorists, acting on Canadian soil, are apprehended and brought to justice, the responsibility lies with the courts to send a clear and unmistakable message that terrorism is reprehensible and those who choose to engage in it here will pay a very heavy price;

Terrorists, in particular, may view Canada as an attractive place from which to pursue their heinous activities. And it is up to the courts to shut the door on that way of thinking, swiftly and surely.

The Anti-Terrorism Act amended several federal statutes, including the Criminal Code of Canada.

Continue reading →

$120 billion removed from China by public officials reports finds

By Christine Duhaime | May 7th, 2011

According to a report published in China by the Central Bank (that has since been removed from the Bank of China’s website) and reported by the BBC, close to 20,000 public officials in China have collectively removed about US$120 billion from China and transferred it to just 4 countries –> Canada, the US, Australia and the Netherlands, through the use of offshore structures such as trusts, foundations, companies and property purchases.

The funds were removed from mid-1990s to 2008. According to the Report, officials in China determined that Chinese public officials set up bogus entities to justify the transfers of funds while they were the intended recipients. In all, the report seems to suggest that upwards of $10 billion is removed from China by corruption annually.

Uncertainty over recovery of seized funds from PokerStars, Absolute Poker and Full Tilt Poker

By Christine Duhaime | April 16th, 2011

The news on Friday that the U.S. had indicted 11 individuals associated with the operation of the Internet gambling sites PokerStars, Full Tilt Poker and Absolute Poker for violations of U.S. gambling and anti-money laundering laws and bank fraud, has raised questions about the future of the funds held by those entities on behalf of gamblers, including wins and deposits which likely range in the hundreds of millions of dollars for all three sites.

Prior to the unsealing of the indictment, the U.S. Attorney’s Office obtained an ex parte court order freezing 76 bank accounts in 14 countries because the funds are suspected to be proceeds of crime. The order affects funds held in the names of various corporate entities affiliated with, or controlled by PokerStars, Full Tilt Poker and Absolute Poker in Canada, the U.S., Ireland, Switzerland, Cyprus, Germany, Hong Kong, Malta, Philippines, Luxembourg, Denmark, Panama and England.

Continue reading →

U.S. charges 3 Canadians affiliated with PokerStars, Full Tilt Poker and Absolute Poker with money laundering in $3 billion indictment

By Christine Duhaime | April 15th, 2011

The U.S. Attorney and the FBI today unsealed an indictment today charging 3 Canadians with money laundering, bank fraud and illegal gambling in connection with the operation of Internet gambling websites that provide online gambling services to U.S. residents. Eight other individuals, mostly residents of the U.S., were also indicted. The defendants include the founders of three of the largest Internet gambling sites – PokerStars, Full Tilt Poker and Absolute Poker.

The 3 Canadians indicted are:

  • Isai Scheinberg, currently living in the Isle of Man;
  • Nelson Burtnick, currently living in Ireland; and
  • Ryan Lang, currently living in Canada.

Continue reading →

Prepaid access and stored value cards used for money laundering

By Christine Duhaime | April 10th, 2011

 

According to the most recent information available, stored value cards (or prepaid access) are often used for money laundering and terrorist financing activities. Stored value cards can be used like currency except that they have certain characteristics that make them attractive to criminals – they are:

  • accepted worldwide;
  • reusable and re-loadable;
  • essentially anonymous;
  • untraceable;
  • instantly settled; and
  • do not require an intermediary for the user.

There are two types of prepaid access (a) closed loop cards and (b) open loop cards. Closed loop cards are those issued by certain merchants that are limited to their services and products (e.g. Gap or Starbucks gift card).

Continue reading →

Spanish lawyer convicted of money laundering in one of Europe’s biggest money laundering rings

By Christine Duhaime | April 2nd, 2011

Spanish lawyer Fernando del Valle, whom we wrote about here, was convicted of money laundering and sentenced to six years in prison and ordered to pay $3.4 million in fines. Authorities believe del Valle laundered up to $250 million through his law firm in Spain’s exclusive Marbella region. The case was one of the largest in Europe. Investigators from several countries including Canada, the U.S. and Germany helped Spanish authorities uncover evidence which led to the seizure of more than $72 million in accounts in 28 different banks. Del Valle laundered the funds through a maze of elaborate shell corporations he set up that were controlled through his law firm.

BC Court of Appeal upholds terrorist financing sentence

By Christine Duhaime | March 22nd, 2011

The Court of Appeal for British Columbia has upheld a six month prison sentence imposed on a former Sri Lankan refugee in Canada for terrorist activity financing. In 2008, Prapaharan Thambaithurai solicited funds from members of the Tamil community in Vancouver to support the Liberation Tigers of Tamil Eelam (LTTE), a designated terrorist group in Canada and many other countries. In 2004, Thambaithurai was a member of the World Tamil Movement, also a designated terrorist group in Canada. He was arrested in 2008 and admitted that he knew the funds raised would be used to support the LTTE.

The Supreme Court of British Columbia had earlier sentenced Thambaithurai to six months in jail. On appeal, the Crown argued that the sentence was unfit given the seriousness of the offence and the harm posed by terrorist financing activity. It also argued that pursuant to Canada’s international obligations to deter terrorism, courts in Canada must ensure that sentences for terrorist activity financing are sufficiently harsh to further counter terrorist financing objectives.

The Court of Appeal held that the sentence of six months incarceration was appropriate for Thambaithurai because his terrorist financing activities fell at the low end of the scale of such activities and the conviction would have long lasting effects for him because it would interfere with his ability to travel beyond Canada.