Archives for January 2017

On Wednesday, January 25, 2017, a U.S. District Court in Montana granted a petition from the Internal Revenue Service and issued a “John Doe” summons in order to find the identities of those it suspects of evading taxes. The summons, served to Michael Behr of Bozeman, MT, seeks the records of U.S. taxpayers who had, during the years 2005 to 2016, been issued a “Sovereign Gold Card” from the Panamanian firm Sovereign Management & Legal LTD (SML). These debit cards could have been used in such a manner that would allow U.S. taxpayers to access funds that they had stored overseas in order to avoid paying taxes. The government alleged that SML had offered numerous services — including the facilitation of investments in third-party entities (and even dummy non-profit organizations) — to assist its clients in hiding their assets overseas. The Sovereign Gold Card could then be used by SML clients to access their offshore accounts without revealing their identities or the location of their funds.

The government uses John Doe summonses to ascertain the identities of unknown individuals whom it has reasonable basis to believe are in a class that has committed a crime. In this instance, the IRS obtained the summons to find all those who had owned a Sovereign Gold Card, with the court finding that ownership of such a card constituted a reasonable basis to believe one had committed tax evasion.

The Justice Department press release can be found here: https://www.justice.gov/opa/pr/court-authorizes-service-john-doe-summons-seeking-identities-us-taxpayers-who-have-used-debit

The order granting the John Doe summons can be found here: https://www.justice.gov/opa/press-release/file/931226/download

Michael Randles, a Canadian citizen living in Costa Rica, has been sentenced to two years in prison in the United States for his role as the proprietor of a money laundering platform headquartered in Costa Rica. The platform, known primarily as Moneyline Bankers, operated largely as a trader of what are commonly known as microcaps or “penny stocks” — stocks which have little value and thus can be traded cheaply. Mr. Randles’ scheme, commonly known as a “pump and dump” scheme, involved purchasing large quantities of a stock, thus raising the price of the stock, and then selling the purchased stock after having artificially inflated its value. Mr. Randles then laundered the proceeds of this activity into the U.S. through a Colorado-based company called Bryn Resources, Inc., which purported to be a company that invested in Canadian precious metals, but was in fact a shell corporation with negligible operations or assets. Mr. Randles pleaded guilty to one count of conspiracy to commit money laundering. Three of Mr. Randles’ co-conspirators, Harold Bailey Gallison, Ann Marie Hiskey and Roger G. Coleman, had already pleaded guilty to similar charges, with Gallison receiving an 18 year sentence, and Hiskey and Coleman receiving 2 years probation.

The Department of Justice press release can be found here: https://www.justice.gov/opa/pr/owner-offshore-brokerage-firm-sentenced-prison-role-international-money-laundering

The U.S. State Department signed a memorandum of understanding submitted by the Cuban Ministry of Interior on Monday in which both governments agreed to share information on international criminal activity. The memorandum, signed by Jeffrey DeLaurentis, chief of mission at the U.S. Embassy in Havana, and Vice Adm. Julio Cesar Gandarilla, the newly appointed Cuban interior minister, allows for not only the increased sharing of information, but also joint investigations and possible cooperation between law enforcement officials.

A statement from the National Security Council regarding the agreement touts bilateral law enforcement cooperation to stem global issues like terrorism and drug trafficking as in the interests of both nations: “The goals of the President’s Cuba policy have been simple: to help the Cuban people achieve a better future for themselves and to advance the interests of the United States. While significant differences between our governments continue, the progress of the last two years reminds the world of what is possible when we are defined not by the past but by the future we can build together.”

This is just one in a flurry of moves regarding Cuba made in the waning days of the Obama administration — last Friday, the administration announced the end of the “wet-foot, dry-foot” program which grants immediate asylum to all those who emigrate from Cuba to the U.S. This recent activity comes as the Cuba policy of the incoming Trump administration remains unclear.

More information on the deal can be found here: http://abcnews.go.com/International/wireStory/us-cuban-interior-ministry-sign-law-enforcement-deal-44817653

On January 12, 2017, Al Jazeera released a documentary on the use of INTERPOL red notices by several countries to extraterritorialy persecute exiled dissidents. The documentary is linked below:

http://players.brightcove.net/665003303001/SJg0bzqkZ_default/index.html?videoId=5279091325001

On January 10, 2017, a federal grand jury indicted three former traders at major banks for “conspiring to fix prices and rig bids for U.S. dollars and euros exchanged in the FX spot market,” per the press release announcing the indictment.  The indictment, filed in the Southern District of New York, charges Richard Usher (former Head of G11 FX Trading-UK at an affiliate of The Royal Bank of Scotland plc, as well as former Managing Director at an affiliate of JPMorgan Chase & Co.), Rohan Ramchandani (former Managing Director and head of G10 FX spot trading at an affiliate of Citicorp) and Christopher Ashton (former Head of Spot FX at an affiliate of Barclays PLC) each with one count of Conspiracy to Restrict Trade. The indictments come after, on January 4, 2017, former trader Jason Katz pleaded guilty to the same charges for his involvement in the FX market manipulation scheme. Citicorp, JPMorgan Chase &Co., Barclays PLC, and The Royal Bank of Scotland plc (RBS) pleaded guilty to charges related to the scheme on May 20, 2015, and agreed to pay criminal fines totaling more than $2.5 billion.

The indictment can be found here: https://www.justice.gov/opa/press-release/file/924206/download

INTERPOL’s International Child Sexual Exploitation (ICSE) database has now been used to identify ten thousand victims of sexual abuse throughout the globe, INTERPOL officials announced Monday. The database uses “sophisticated image and video comparison software” to enable officers to match documentation of sexual abuse with the children being abused, their whereabouts, and their abusers. The database, which was launched less than seven years ago, is now utilized by 49 countries, including the United States, often in conjunction with the work done by local and federal law enforcement entities. Authorized users can access the database in real time; the rapid sharing of information attempts to aid law enforcement in locating victims of child sexual abuse as quickly as possible, the aim in any investigation, but especially in child sexual abuse cases.

For more information, visit the INTERPOL website: https://www.interpol.int/News-and-media/News/2017/N2017-001