On August 31, 2018, Guatemalan President Jimmy Morales said he would close the United Nations-sponsored International Commission against Impunity in Guatemala (CICIG), which is conducting a criminal investigation of him for alleged illicit campaign financing.[1]

As he spoke in front of civilian and military leaders whose army vehicles surrounded the CICIG’s headquarters, Morales explained he had informed the UN secretary general of his decision to revoke CICIG’s mandate and “immediately” start transferring its capacities to Guatemalan institutions.

Subsequently, Morales said the CICIG would remain in the country until September 3, 2019, during the transition period.  Hence, the CICIG will have one year to finish the contemplated mandate.  It appeared that Guatemala had sent U.S.-donated army vehicles to the CICIG headquarters in an effort to intimidate. the CICIG.

Morales’ surprise announcement follows a long history of friction between his office and the CICIG.[2]

In August 2017, Morales announced that he was declaring “non grata” and immediately throwing out of the country Ivan Velasquez, CICIG’s chief.  However, the Guatemalan Supreme Court blocked his order hours later.  Morales also said he was firing Foreign Minister Carlos Raul Morales for failure to execute the expulsion.[3]

By midday on the day following Morales’ expulsion order, Francisco de Mata Vela, head of Guatemala’s constitutional court, said that court had issued a temporary injunction blocking the order to expel Velasquez.  The court said it would analyze the case before reaching a definite decision.[4]

The CICIG was instrumental in the investigation and prosecution of former Guatemalan President Otto Perez Molina, who had to resign in 2015 and is now in prison.[5]

On August 31, Morales accused the CICIG of “violating our laws, inducing people and institutions to participate in acts of corruption and impunity,” and “selective criminal prosecution with an ideological bias.”[6]

During the 2015 campaign investigators suspect Morales of obtaining at least US$1 million in undeclared contributions.  He has denied any wrongdoing.

The week before Morales’ announcement the Guatemalan Supreme Court granted a request of CICIG and Guatemalan prosecutors to remove Morales’ immunity from prosecution to go to Congress for its deliberation.  If 105 legislators vote to approve the request, then Morales could stand investigation for possible illicit campaign financing.[7]

Almost immediately, human rights officials and advocates criticized the announcement.[8]  Four former Guatemalan foreign ministers and its former Ambassador to the U.S. Francisco Villagrán de León released a statement, criticizing the displays of military and police force and the fact that with respect to the CICIG, Morales is abandoning reliance on the support of his civilian cabinet or on leaders from civil society.  They said it seemed that, when Morales’ term ends in 2020, he wants to ensure that CICIG will not exist to investigate him.  They observed that the professional investigative capacity of the national police, which took more than 20 years to develop after the Guatemalan Peace Accords, has been systemically dismantled in recent months.[9]

On September 4, 2018, Guatemala’s human rights ombudsman, Jordán Rodas, issued a statement that the government’s actions destabilize the rule of law, and expressed his dismay at “the arbitrary measures of the Government of the Republic that undermine democracy”.[10]

Morales’ military deployment occurred the same day Nicaragua expelled a UN human rights team after the Office of the UN High Commissioner for Human Rights published a critical report accusing President Daniel Ortega’s government of violent repression of opposition protects.[11]

After Guatemalan’s civil war (1960-1996) it was decided to eradicate the leading role of Guatemala’s Illegal Entities and the Clandestine Security Apparatus (Cuerpos Ilegales Aparatos Cladestinos de Seguridad or CIACS).  The Comprehensive Agreement on Human Rights of 1994 required their elimination.   However, the CIACS continued,coopting the nomination process for the attorney general and Guatemala’s top-tier courts in order to ensure impunity for their growing criminal enterprises, including alliances with drug cartels in Mexico and Colombia.[12]  In 2006, when the public security situation became even direr and an international scandal exposed the complicity of the CIACS, the Guatemala Congress consent to the establishment of CICIG.  The goal of CICIG was the following:

To support, strengthen and assist institutions of the State of Guatemala responsible for investigating and prosecuting crimes allegedly committed in connection with the activities of illegal security forces and clandestine security organizations and any other criminal conduct related to these entities operating in the country, as well as identifying their structures, activities, modes of operation and sources of financing and promoting the dismantling of these organizations and the prosecution of individuals involved in their activities.[13]

While the CICIG and civil society have identified the clandestine structures that infiltrated and suborned the institutions of law enforcement and administration of justice in Guatemala and brought to justice many prominent figures, the latter are far from dismantled.  They continue to seek impunity for their members, civilian and military.[14]   The tension between the CICIG and civil society on one hand and the clandestine structures continues to unfold.[15]

[1]    Associated Press, Guatemala president won’t renew UN anti-corruption commission investigating him, Canadian Broadcasting Corporation, Aug. 31 2018.

[2]    Id.

[3]    Associated Press, Guatemala top court blocks president’s move to expel UN anti-corruption chief, CBC, Aug. 27, 2017.

[4]    Id.

[5]    Id.

[6]    Associated Press, Guatemala president won’t renew UN anti-corruption commission investigating him, supra.

[7]    Id.

[8]    Id.

[9]    An Alarming Decision on the Future of CICIG, Letter of former Guatemalan ministers and diplomats: “An alarming decision on the future of CICIG, Sept. 4, 2018, https://www.univision.com/univision-news/opinion/an-alarming-decision-on-the-future-of-cicig.

[10]    Alarm as Guatemala bans head of UN anti-corruption body from country, The Guardian, Sept. 5, 2018.

[11]    Associated Press, Guatemala president won’t renew UN anti-corruption commission investigating him, supra.

[12]    Carlos Castresana, Guatemala: Illegal Entities and the Clandestine Security Apparatus, Criminalized Power Structures:  The Overlooked Enemies of Peace (Michael Dziedzic, ed.) 53 (2016).

[13]    CICIG Agreement, Article 1.

[14]    Castresana, supra, at 72-73.

[15]    For an article supporting Moarles’ decision to close CICIG, see Mary Anastasia O’Grady, Guatemala’s President Defends Democracy Against the U.N., Wall St. J., Sept. 5, 2018, at A17, col. 1.

On August 22, 2018, Matthias Krull, a German national and Panamanian resident who was the former managing director and vice chairman of Julius Baer, pleaded guilty for his participation in a billion-dollar scheme to launder funds embezzled from Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil company.[1]

Krull, 44, pleaded guilty to one count of conspiracy to commit money laundering.  U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida accepted his plea and scheduled his sentencing on October 29.

In his plea Krull admitted that his prior work with Julius Baer helped attract private clients, especially from Venezuela, to the bank.  In particular, Francisco Convit Gurceaga, who was indicted on money laundering charges on August 16, was a client, as well as three unnamed conspirators described in the August 16 indictment.[2]

On July 25, 2018, U.S. law enforcement announced the arrest of Krull, Gustavo Adolfo Hernandez Frieri, 45, a Colombian national and naturalized citizen, in a criminal complaint charging them with conspiracy to commit money laundering. The complaint also charges Francisco Convit Guruceaga. 40; Jose Vincente Amparan Croquer, aka “Chente,” 44; Carmelo Urdaneta Aqui, 44; and Abraham Eduardo Ortega, 51, all Venezuelan nationals; and Hugo Andre Ramalho Gois, 39, a Portuguese national, and Marcelo Federico Gutierrez Acosta y Lara, 40, a Uruguayan national, for their alleged participation in the scheme.  Krull was arrest the preceding night in Miami while Hernandez was arrested in Sicily on July 25 and faces extradition proceedings. [3]

The complaint alleges that the conspiracy started in December 2014 with a currency exchange scheme that was meant to embezzle approximately $600 million from PDVSA, obtained through bribery and fraud, and the defendants’ efforts to launder part of the proceeds of that scheme.  By May 2015, the conspiracy had allegedly doubled in amount to $1.2 billion embezzled from PDVSA.  For Venezuela PDVSA is the main source of income and foreign currency.

According to the complaint, surrounding and supporting the false-investment laundering schemes are complicit money managers, brokerage firms, banks and real estate investment firms in the U.S. and elsewhere, operating as a network of professional money launderers.

Included in the alleged conspirators were former PDVSA officials, professional third-party money launderers, and members of the Venezuelan elite, sometimes referred to as “biliburgués.”[4]

Hernandez allegedly used Global Securities Advisors and Global Strategic Investments to launder money with false mutual-fund investments.  The two brokerage companies have offices at 701 Brickell Ave.  They are affiliated.  Hernandez allegedly used them for meetings with members of the money-laundering network.  However, representatives of Global Strategic Investment claim Hernandez was not involved in the firm, which is headed by Cesar Hernandez, Gustavo’s brother. [5]

The case results from efforts by the Organized Crime Drug Enforcement Task Force’s (OCDETF) “Operation Money Flight,” a partnership among federal, state and local law enforcement agencies.  The OCDETF mission is to identify, investigate and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.  Homeland Security Investigations (HSI) Miami, HSI London, HSI Rome and HSI Madrid investigated the case.  The Criminal Division’s Office of International Affairs furnished substantial assistance in the case, as well as U.S. Customs and Border Protection, the National Crime Agency of the U.K.; and Italian, Spanish and Maltese law enforcement authorities.[6]

The court has granted the U.S. Attorney’s Office’s motion to freeze the assets of nine defendants in the case.  The assets include 17 South Florida homes, condos and horse ranches with a total value from $22 million to $35 million, based on property assessments in public records and real estate market estimates.  According to prosecutors, their assets are typically put in other people’s names or corporate entities to disguise the defendants’ ownership interests.  The prosecutors will be able to seize the properties if they obtain convictions.[7]

According to one media report, Venezuelan President Maduro is under investigation, along with his three stepsons and a TV network mogul, Raúl Gorrín.  Maduro is reportedly mentioned in court documents as “Venezuelan Official 2”.  His stepsons are said  to have received an estimated $200 million from PDVSA that were wired to a European bank in late 2014 and early 2015.[8]

A major contributing factor to the ouster of Manuel Noriega was an indictment for corruption in and money laundering conspiracy in the Southern District of Florida.    The criminal complaint and investigation are one of many targeting corruption arising from PDVSA.  The case illustrates the use of Southern Florida by Latin Americans to invest in the U.S.   Unfortunately, some of the money is  not legal.  The Treasury has issued Customer Due Diligence rules that took effect on May 11, 2018,[9] and Geographic Target Orders (GTOs).  FinCEN has the authority to impose additional data collection and reporting requirements through GTOs, on financial institutions and other trade or business activities for geographic areas.[10] FinCEN  has applied GTOs  to Miami and requires title companies to identify the natural persons behind holding companies and/or straw men used to pay for luxury residential real estate.  By the terms of authorizing statutes GTOs can be effective for only up to 180 days at a time, but may be renewed.  There is a strong possibility that the GTOs will be made permanent.

A potential implication for Julius Baer is the Deferred Prosecution Agreement (DPA) between it and the U.S. Attorney’s Office for the Southern District of New York on February 2, 2016.  The bank promised in paragraph 14 as part of its consent to the filing of a one-count information, charging the bank with conspiring with others to various tax crimes that it would

“bring to this Office’s attention (a) all criminal conduct by, and criminal investigations of, Julius Baer or its employees related to any violations of the federal laws of the United States that come to the attention of Julius Baer, and (b) any administrative or regulatory proceeding or civil action brought or investigation conducted by any U.S. governmental authority that alleges fraud by Julius Baer or any other violations of the federal laws of the United States in the operation or management of Julius Baer’s business.”[11]

Paragraph 16 states the obligations of Julius Baer continued for three years from the signing of the agreement.  Since the Krull plea mentions other Julius Baer officials were involved in the PDVSA wrongdoing during at least 2014 and 2015, the questions will be when the bank knew of the wrongdoing and whether it reported the same to the U.S. Attorney for the Southern District of New York once it became aware of the wrongdoing.  One adverse consequence of a DPA is that it puts the signatory/defendant under broad requirements to discover and self-report all bad conduct for the entire duration of the agreement.

[1]    U.S. Department of Justice, Former Swiss Bank Executive Pleads Guilty to Role in Billion-Dollar International Money Laundering Scheme Involving Funds Embezzled from Venezuelan State-Owned Oil Company, Press Rel., Aug. 22, 2018

[2]    Id.

[3]    U.S. Department of Justice, Two Members of Billion-Dollar Venezuelan Money Laundering Scheme Arrested, Press Rel, June 25, 2018.

[4]    Id.

[5]    Jay Weaver and Antonio Maria Delgado, Feds freeze millions in assets linked to stolen Venezuelan oil funds laundered in South Florida, Miami Herald, Aug. 22, 2018.

[6]    U.S. Department of Justice, Former Swiss Bank Executive Pleads Guilty to Role in Billion-Dollar International Money Laundering Scheme Involving Funds Embezzled from Venezuelan State-Owned Oil Company, supra.

[7]    Weaver and Delgado, supra.

[8]    Id.

[9]    81 Fed. Reg. 29397 (2016).

[10]   31 U.S.C. § 5326(a); 31 C.F.R. § 1010.370; Treasury Order 180-01, Federal Crimes Enforcement Network (Sept. 26, 202).

[11]   Bank Julius Baer & Co. Ltd. –Deferred Prosecution Agreement, Feb. 2, 2016 (letter from Jason Cowley to Juan P. Morillo and Tomislav A. Joksimovic), United States v. 219,250,000, Case No. 1:16-civ.-00886, Verified Complaint Exhibit B https://www.justice.gov/opa/file/820041/download.

On September 5, 2018, the British Crown Prosecution Service (CPS) announced they have charged two Russian individuals, who are officers of the Russian military intelligence service (GRU), with the nerve-agent poisoning of Russian former spy Sergei Skripal and his daughter Yulia in Salisbury, England.[1]

The CPS has said its Counter Terrorism Division have considered the evidence and has concluded sufficient evidence exists “to provide a realistic prospect of conviction and it is clearly in the public interest to charge Alexander Petrov and Ruslan Boshirov, who are Russian nationals, with the following offences: conspiracy to murder Sergei Skripal; attempted murder of Sergei Skripal, Yulia Skripal and Nick Bailey; use and possession of Novichok contrary to the Chemical Weapons Act; and causing grievous bodily harm with intent to Yulia Skripal and Nick Bailey.”[2]

The CPS said it will not request Russia to extradite these men, as the Russian constitution does not permit extradition of its own nationals.  Russia has shown following requests for extradition in other cases that it will not extradite its nationals. If Russia’s position changes, then an extradition request would be made.

However, British authorities have obtained a European Arrest Warrant which means that if either man travels to a country where an EAW is valid, they will be arrested and face extradition on these charges, for which there is no statute of limitations.[3]

On September 5, 2018, British authorities posted detailed surveillance camera images and other information tracking the two men moving through Gatwick Airport, London train and subway stations, and the streets of Salisbury.

British Prime Minister Theresa May said the suspects had traveled from Moscow to London, using Russian passports with false names.[4]

According to British authorities, the two Russians arrived on March 2, conducted surveillance in Salisbury on March 3, left the nerve agent on the door handles of the Skripal house in the afternoon, and then took a flight that night from Heathrow Airport to Moscow.[5]

More than 250 detectives, as well as dozens of forensic scientists and health investigators worked on the case.  They took 1,400 statements and reviewed 11,000 hours of video surveillance footage recorded on Britain’s extensive closed-circuit television camera systems.[6]

Britain is one of the most intensively surveilled countries.  It has an estimated one surveillance camera per 11 citizens  Its technology to visually identify criminals enables the police to scan an airport for a tattoo. The  technology combines with using genetically gifted humans, known as “super-recognizers.”[7]

A major breakthrough in the investigation occurred two months after the Skripals were poisoned.  The police investigated the City Stay Hotel in East London, where the two suspects had spent the two nights before the placing of the poison.  Officers took samples from the room where the two men had stayed.  In the laboratory trace contamination for the nerve agent used in the attack was found.[8]

Another fortunate circumstance was that heavy snow fell through the weekend of the placement of the poison, which decreased the number of people on the streets to review on the close circuit cameras.

On September 5, 2018, Russian officials denied any responsibility and repeated claims that the British were making false claims and refusing to allow Russia access to the evidence.[9]

Three months after the Skripals were poisoned, Charlie Rowley, a Salisbury man, found the bottle.  He gave what appeared to be a bottle of perfume to a 44-year-old girl friend Dawn Sturgess, a mother of three.  She died from exposure to the same nerve agent that afflicted the Skripals.  Rowley found the bottle in a charity bin.  Rowley became sick, but later recovered.[10]

On September 3, the Organization for the Prohibition of Chemical Weapons confirmed that Rowley and Sturgess were also exposed to Novichok.

British police are trying to ascertain where the bottle was between the Skripal poisoning in March and its discovery by Rowley on June 27.  Because of this police are not yet ready to bring charges in the second poisoning.[11]

The case shows the utility of the pervasive video cameras.  The EAW and likely INTERPOL notices will make it difficult for the two Russians to travel outside Russia, once Britain learns their true names.

The case is likely to lead to additional sanctions against Russia and cause the ruble to fall further.  In this regard, on August 8, 2018, the U.S. government announced sanctions imposed on Russian for the Skripal poisonings.[12]  If Britain charges Russia with the death of Sturgess, then the potential for sanctions against Russia is likely to escalate.  In addition, on June 27, 2018,  the Organization for the Prohibition of Chemical Weapons (OPCW) gained the power to assign blame for chemical weapons attacks, which has the potential to blame Russia for the nerve agent incidents in Salisbury.[13]

On September 6, the leaders of the U.S., France, Germany and Canada endorsed Britain’s assessement that Russian military officers had conducted a nerve agent attack on the Skripal and that a senior level of the Russian government had to have approved it.    Ahortly thereafter, in an emergency Security Council meeting called by Britain to brief diplomats on the investigation, British Ambassador Karen Pierce summarized evidence that she said illustrated Russia’s complicity in the attacked.  Russian Ambassador Vassily Nebenzia denied Russian involvement in the case. And denied that Russia had ever developed or used Novichok.[14]

[1]    Associated Press, Britain charges 2 Russians over nerve-agent poising of ex-spy and daughter, CBC, Sept. 5, 2018; Laura Smith-Spark and Milena Veselinovic, Russians charged over UK Novichok nerve agent attack, CNN, Sept. 5, 2018.

[2]   CPS, CPS Statement – Salisbury, September 5, 2018 https://www.cps.gov.uk/cps/news/cps-statement-salisbury.

[3]    Id.

[4]    Karla Adam and William Booth, Britain names two Russian suspects in nerve agent attack, Wash. Post, Sept. 6, 2018, at A9, col. 1.

[5]    Id.

[6]    Id.

[7]    Ellen Barry, Britain’s Web of Cameras Cracks Poisoning Case, N.Y. Times, Sept. 6, 2018, at A1 col. 4.

[8]    Id.

[9]    Adam and Booth, supra.

[10]    Id.

[11]    Associated Press, supra.

[12]   Bruce Zagaris, U.S. Announces Sanctions on Russia for Violation of Chemical and Biological Weapons Treaty, 34 Int’l Enforcement L. Rep. 448 (Aug. 2018).

[13]    Maria O’Sullivan,  The OPCW Votes to Attribute Blame for Chemicals Weapons Violations: Not Everyone’s Happy, 34 Int’l Enforcement L. Rep. 442  (July 2018).

[14]    Karla Adam and Carol Morello, World leaders endorse Novichok assessment, Wash. Post, Sept. 7, 2018.

On August 3, 2018, the Indian Minister of State for External Affairs V.K. Singh said the Indian government has requested the extradition of Nirav Modi, a jeweler, in connection with a $2 billion scam in the Punjab National Bank (PNB), and that INTERPOL has issued Red Notices on him.[1]  India has also sent an extradition request to Antigua and Barbuda for Mehul Choksi, Modi’s uncle.[2]

Since January, when PNB reports surfaced about the alleged fraud by the two jewellery groups by Modi and his uncle, both Modi and Choksi left India and their location was unknown.[3]

The allegations are that Modi through tellers at a branch of PNB obtained a $1.8 billion loan from branches of other banks by issuing fraudulent letters of credit.[4]

The PNB fraud is believed the largest in India’s bank history. The incident revealed defects in the management of PNB and caused a loss of confidence in India’s state-operated banking sector, which controls more than two-thirds of the country’s bank assets.[5]

Vijay Aggarwal, Modi’s counsel, said his client was innocent and that the fraud allegations arose out of a misunderstanding over a $40 million loan.[6]

Since 2002, Modi is the 29^th fugitive India has requested the U.K. to extradite.  The U.K. government has rejected India’s request nine times in the last sixteen years.[7]

Another high profile extradition case is case involves Vijay Mallya, an Indian businessman, airline, and liquor magnate and former parliamentarian. He fled to Britain after Indian prosecutors accused him of defrauding banks of $1.4 billion.  Since 2016, many of the state-owned Indian bank lenders have tried to recover their money.  Mallya has denied wrongdoing, while India has requested his extradition.[8]

With respect to Choksi, India has requested his extradition under the U.N. Convention against Corruption (UNCAC). Choksi is said to have obtained police clearance for Antiguan citizenship in just 15 days.[9]

After Choksi obtained Antiguan citizenship, he left India on January 4.  He has refused to return to India saying he would be killed by mobs if he were returned. Antigua has said that it granted citizenship to Choksi after Indian police authorities said he had a clean record.[10]

 

The Choksi extradition request illustrates how governments use the UNCAC to obtain extradition either by itself or sometimes as a supplement to using a bilateral extradition treaty.

One issue is how Modi has traveled between six countries on his revoked Indian passport since India revoked their passports in February.[11]

On August 30, 2018, the Citizenship by Investment Unit (CIU) in Antigua rejected a claim made by online publications that a person named Jabir Motiwala, also known as Moti and Jabir Siddiq, was given Antigua and Barbuda citizenship “as part of the country’s citizenship by investment programme.”

“The claim is utterly false,” the CIU said, adding that it has thoroughly reviewed its files and confirmed that it has not granted citizenship to anyone by the name of Jabir Motiwala or Jabir Siddiq.[12]

Meanwhile, President Ram Nath Kovind has approved a law that will deter fugitive economic offenders to evade legal process in India and flee the country.  The law defines a fugitive economic offender as any individual against whom an arrest warrant is issued for his involvement in certain economic offences involving amounts of at least Rs. 100 crore or more and has left India so as to avoid criminal prosecution.

The Fugitive Economic Offenders Act of2018 has received the approval from the president, according to an official order.

The new law allows designated special court to declare a person as fugitive economic offender and to confiscate his property, including ‘benami’ ones.

In justification of the financial limit of Rs. 100 crore for invoking the provisions of this new law, Finance Minister Piyush Goyal had recently said in Parliament that the limit was set  to “catch the big offenders and not to clog the courts.”[13]

The case illustrates the interplay between the ability of people to travel quickly, obtain new residences, and the difficulty that governments may have in obtaining custody of individuals when they are trying to investigate and prosecute crimes.

[1]    India requests U.K. to extradite Nirav Modi, The Hindu, Aug. 3, 2018.

[2]    Munish Chandra Pandey, India sends extradition requests for Mehul Choksi and Nirav Modi, India Today, Aug. 5, 2018.

[3]    Aditya Kalra, India sends extradition request to UK for fugitive billionaire Nirav Modi, Reuters, Aug. 3, 2018.

[4]    Maria Abi-Habib, India Asks to Extradite Elite Jeweler Accused Of $2 Billion in Fraud, N.Y. Times, Aug. 21, 2018, at B4, col. 1.

[5]   Aditya Kalra, India sends extradition request to UK for fugitive billionaire Nirav Modi, Reuters, Aug. 3, 2018.

[6]   Abi-Habib, supra.

[7]   Neeta Sharma, Nirav Modi Is In UK Files for Extradition, NDTV, Aug. 20, 2018

[8]    Abi-Habib, supra.

[9]    Sharma, supra.

[10]   Id.

[11]   Id.

[12]   Antigua-Barbuda refutes claim of economic citizenship granted to wanted criminal, Caribbeannewsnow.com, August 29, 2018.

[13]   All India/PressTrust of India, Economic Offenders Will Not Be Able To Flee Country. Here’s Why, NDTV, Aug. 5, 2018.

On August 18, 2018, Seif Eddin Mustafa, an Egyptian national who hijacked a domestic EgyptAir flight in 2016 and forced it to land in Cyprus, was extradited to Egypt after relinquishing his fight over extradition.[1]

On August 18, Egypt took custody of Mustafa and flew him to Egypt, where prosecutors are investigating the matter.

On August 19, Egyptian prosecutors ordered Mustafa to remain in detention for 15 days while they investigate the 2016 hijacking.[2]

At the time of the hijacking Cypriot authorities said the incident was not terrorism-related.

Mustafa was apparently motivated to hijack the plane after a fight between Mustafa, who is 61 years old, and his ex-wife, who lives in Cyprus.[3]

In March 2016, Mustafa used a fake suicide belt to hijack the EgyptAir flight and diverted it to Cyprus.  After a six-hour confrontation with Cypriot authorities on the tarmac of Larnaca airport, Mustafa allowed the release of all 72 passengers and crew.  Cypriot authorities arrested Mustafa.

Initially Mustafa represented to a Cypriot court that he did not mean to cause harm to anyone.  Instead he was endeavoring to expose the so-called “fascist regime” of Egyptian President Abdel-Fattah el-Sissi and obtain the release of 63 female dissidents who were detained in Egyptian prisons.[4]

According to Cypriot prosecutors, Mustafa admitted in a written statement to police that he hijacked the plane to reunite with his Cypriot family with which he had not seen in 24 years.  Initially Mustafa characterized the written statement as “purposeful misinformation” by the Cypriot and Egyptian governments to discredit him and undermine his defense.[5]

Egypt requested his extradition pursuant to a 1966 extradition treaty.

In November 2017, the European Court of Human Rights (ECHR) in a unanimous decision upheld a lower court ruling which rejected Mustafa’s defense that he may be tortured by Egyptian authorities or be subjected to an unfair trial if he’s returned.   The court also dismissed the argument that Mustafa can’t be extradited because his political asylum claim is still pending.[6]

However, the ECHR stayed the extradition of Seif Eddin Mustafa so it could rule on whether doing so would violate Article 3 of the European Convention of Human Rights, which prohibits the return of individuals to countries where they may face torture or inhuman treatment.  The European Court of Human Rights has further held that this provision prohibits the extradition of a person to a foreign state if they are likely to be subjected there to torture.

The ECHR decision was issued a few hours after Cyprus’ Supreme Court rejected Mustafa’s appeal against his extradition, ruling that there are no legal reasons for the man not to return to his homeland to face justice.[7]

According to Doros Polycarpou, KISA migrant support group that helped Mustafa, he decided to return to Egypt and face charges, notwithstanding his fears that he may be tortured because he could “no longer take” his detention conditions in Cyprus’ prison complex.  Mustafa complained about his detention in isolation and the psychological stain of being kept from the prison’s general population.[8]

Over the past quarter-century, human rights considerations have increasingly influenced extradition determinations, such as ones arising out of the 1950 ECHR, the 1966 International Covenant on Civil and Political Rights, and the 1984 Convention against Torture and all forms of Cruel, Inhuman or Degrading Treatment or Punishment (CAT).

A requesting state faced with allegations of potential abuse or lack of a fair trial if the relator is returned may offer diplomatic assurances to persuade the requested state that the relator will be treated in compliance with applicable legal standards.[9]  On August 19, 2018, the Cypriot Justice Ministry said Egyptian authorities gave assurances that Mustafa would “face legal proceedings commensurate with international standards.”[10]

[1]    Menelaos Hadjicostis and Samy Magdy, Cyprus extradites Egyptian hijacker who dropped legal fight, Associated Press, Aug. 19, 2018.

[2]    Id.

[3]   EgyptAir hijack: Cyprus extradites suspect Seif al-Din Mustafa, BBC, Aug. 19, 2018.

[4]    Hadjicostis and Magdy, supra.

[5]    Id.

[6]    Menelaos Hadjicostis, EU Βlocks Egyptian Hijacker’s Extradition from Cyprus, Associated Press November 2, 2017.

[7]   Id.

[8]   Hadjicostis and Magdy, supra.

[9]   See Bruce Zagaris, U.K. Appellate Court Affirms Reliance on Diplomatic Note in Case, 23 Int’l Enforcement L. Rep. 85 (2007).  David A. Sadoff, Bringing International Fugitives to Justice;  Extradition and Its Alternatives 317-19 (2016).

[10]   Hadjicostis and Magdy, supra.

On August 28, 2018, U.S. District Judge Frank P. Geraci Jr. of the U.S. District Court for the Western District of New York sentenced Daveanan Sookdeo, 46, formerly of Ontario Canada, to sixty months in prison for promoting a scheme in which Canadian citizens filed false tax returns with the Internal Revenue Service (IRS) that fraudulently sought approximately $10 million in income tax refunds.[1]

Participants in the scheme applied for and then received their tax refunds, after which they traveled to the United States where they opened bank accounts at various financial institutions to deposit the refund checks.  The co-conspirators then sent the money to Canada by wire transfers and other means.  The fraudulent tax returns resulted in actual losses to the U.S. government more than $3.5 million.

Sookdeo charged his co-conspirators an upfront fee for the false documents employed in the scheme, as well as a percentage of any tax refunds obtained through the scheme.  Sookdeo worked with Ronald Brekke, a co-conspirator in California, to prepare fraudulent Forms 1099-)(D that participants in the scheme attached to their false income tax returns.  Sookdeo personally filed nine false tax returns and obtained a tax refund check in the amount of $73,662.25.[2]

In August 15 2017, after his arrest at his home in Debe, Trinidad and Tobago, Sookdeo agreed to the extradition request by the U.S.[3]  acting Attorney General Stuart Young signed a warrant of committal for Daveanan Sookdeo as his committal proceedings before acting Chief Magistrate Maria Busby-Earle-Caddle ended on August 15.

Attorney General Faris Al-Rawi had signed off with the authority to proceed with the extradition after receiving the US’ request on July 28. Sookdeo was arrested hours later by Sgt Herman Narace of the Interpol Bureau.

When he was taken before Magistrate Busby-Earle-Caddle to start the committal proceedings on August 2, Sookdeo indicated that he was not opposed to his extradition.[4]  Sookdeo is a Trinidad national, Canadian citizen and US resident.[5]

In addition to the term of imprisonment imposed, Judge Geraci ordered Sookdeo to serve a three eyar term of supervised release and pay restitution to the IRS in the amount of $3,553,303.

Sookdoe is the fifth Canadian citizen to bhe convicted, and the second to be sentenced, for his role in the scheme.

In January 2016, Kevin Cyster of Burlington, Ontario was sentenced to 135 months in prison after a jury convicted him of conspiring to defraud the U.S. and commit theft of government funds, making a false claim against the U.S., and transferring stolen money in foreign commerce.   Cyster was convicted after a six day jury trial.  Cyster and his co-conspirators forged IRS forms to falsely claim that almost $10 million of income had been withheld on their behalf by various Canadian financial institutions.  They arranged for the false forms to be filed electronically with the IRS by Ronald Brekke.  Brekke is currently serving a 12 year prison sentence.

Thereafter, Cyster and his co-conspirators used the false filings to file false federal income tax returns seeking refunds based on the fictitious withholding amounts.  The IRS identified some of the fraudulent returns, but returns worth more than $3.5 million were sent to Cyster and his co-conspirators before the IRS detected the magnitude of the fraud.[6]

Renee Jarvis, Timothy Johnson, and Jose Compuesto, also of Canada, pleaded guilty to conspiring to defraud the U.S. and commit theft of government funds.[7]

In March 2009, Johnson, 36, of Calgary, filed a fraudulent nonresident alien income tax return seeking a refund of $642,947.26.  His return falsely claimed that the requested refund represented the amount of income taxes that had been withheld and paid to the IRS on his behalf.  After the IRS issued the refund to Johnson, he entered the U.S. and opened a bank account in Rochester, New York to deposit the fraudulently obtained check.  Between August 2009 and December 2011, Johnston had the funds transferred from this account to a bank account in Canada and account in the U.S. in the names of his co-conspirators.[8]

The cases reveal a sophisticated scheme to defraud the IRS.  The U.S. Department of Justice and IRS have succeeded, after spending substantial resources, in arresting and securing convictions of the perpetrators, including extraditing a Trinidad citizen from his country.   Since the U.S. started enforcing the requirements to file Foreign Bank Account Reports (FBARs) and declare and pay taxes on a taxpayer’s worldwide income, Canadians have complained about the complex web of the foreign account reporting rules and the interplay between Canadian and U.S. tax and reporting rules, especially the high penalties for taxpayers who do not comply.[9]

Despite the political and diplomatic tensions, the U.S. and Canadian tax authorities cooperate closely.  Sometimes, tax officials attend each other’s enforcement meetings.  Individuals who try to cheat the American or Canadian systems thus have a high risk of being caught, prosecuted, and harshly sentenced.

 

[1]    U.S. Department of Justice, Canadian Man Sentenced to Prison for Promoting Tax Fraud Scheme, Press Rel., Aug. 28, 2018.

[2]    Id.

[3]    Trini wanted in US for fraud agrees to extradition, Trinidad Guardian, Aug. 16, 2017 http://www.guardian.co.tt/news/2017-08-17/trini-wanted-us-fraud-agrees-extradition.

[4]    Id.

[5]    Trini fraudster extradited to US, Newsday, Sept. 14, 2018.

[6]    U.S. Department of Justice, Canadian to Defraud the United States, Press Rel., Jan. 4, 2016.

[7]    U.S. Department of Justice, Canadian Man Sentenced to Prison for Promoting Tax Fraud Scheme, supra.

[8]    U.S. Department of Justice, Canadian Man Pleads Guilty to Conspiring to Defraud the United States and Steal Government Funds, Press Rel., June 14, 2017.

[9]    Robert Wood, Third Canadian Convicted in IRS Tax Refund Scam Could Face Five Years Prison, Forbes, June 15, 2017.