FROM: U.S. DEFENSE DEPARTMENT
2015 - U.S. Coast Guard Deputy Commandant for Operations, VADM Charles Michael testified before a House subcommittee on Western Hemisphere Drug Interdiction Efforts.
Showing posts with label INTERNATIONAL CRIME. Show all posts
Showing posts with label INTERNATIONAL CRIME. Show all posts
Wednesday, June 17, 2015
Saturday, June 13, 2015
FTC TESTIFIES ON COMBATING ILLEGAL ROBOCALLS
FROM: U.S. FEDERAL TRADE COMMISSION
FTC Testifies Before Senate Special Committee on Aging Regarding Efforts to Combat Illegal Robocalls
The Federal Trade Commission highlighted to Congress its multi-faceted approach to protecting consumers from unwanted telemarketing calls and illegal robocalls (prerecorded phone messages) in testimony today before the U.S. Senate Special Committee on Aging.
Testifying on behalf of the agency, Lois Greisman, Associate Director, FTC’s Division of Marketing Practices, said the Commission is using every tool at its disposal to fight illegal robocalls (some of which target seniors) including aggressive law enforcement, crowdsourcing technical solutions, and robust consumer and business outreach.
To date, the National Do Not Call Registry has garnered more than 217 million active telephone numbers and protected consumers’ privacy from the unwanted calls of tens of thousands of legitimate telemarketers who subscribe to the Registry each year. The FTC amended its Telemarketing Sales Rule in 2009, making the majority of robocalls illegal – regardless of whether a consumer participates in the Registry or not.
According to the written testimony, the Commission has brought 120 Do Not Call enforcement actions against 377 corporations and 298 individuals, of which 37 are robocall enforcement actions against 121 companies and 90 individuals. Of the $100 million collected in Do Not Call cases, $28 million have resulted from cases involving illegal robocalls. The FTC also regularly coordinates its enforcement actions with state and federal law enforcement partners, including referrals to its partners for criminal prosecution.
Yet, illegal robocalls remain a significant problem for consumers because Voice over Internet Protocol (VoIP) and other telephony technology make it possible for telemarketers to blast millions of prerecorded messages at low cost. Many scammers from around the world also use these calls to harass consumers and attempt to defraud them.
Recognizing a need to spur the marketplace to develop technical solutions, the agency has hosted a series of crowdsourcing initiatives in recent years. These public challenges are designed to put solutions in the hands of consumers as well as further the development of investigative tools used by law enforcement.
The qualifying phase of the FTC’s current contest, Robocalls: Humanity Strikes Back, ends on June 15, 2015. The agency is challenging contestants to build solutions for consumers that not only block robocalls from reaching consumers, but also enables them to forward unwanted calls to a crowd-source honeypot so the data will be accessible to law enforcement and industry stakeholders. The FTC is offering up to $50,000 in cash prizes for the winners.
Staff also engages with industry experts including academics, telecommunication carriers, technology companies, and other counterparts to better understand the robocall landscape and seek new strategies and technical solutions to tackle this difficult issue.
FTC Testifies Before Senate Special Committee on Aging Regarding Efforts to Combat Illegal Robocalls
The Federal Trade Commission highlighted to Congress its multi-faceted approach to protecting consumers from unwanted telemarketing calls and illegal robocalls (prerecorded phone messages) in testimony today before the U.S. Senate Special Committee on Aging.
Testifying on behalf of the agency, Lois Greisman, Associate Director, FTC’s Division of Marketing Practices, said the Commission is using every tool at its disposal to fight illegal robocalls (some of which target seniors) including aggressive law enforcement, crowdsourcing technical solutions, and robust consumer and business outreach.
To date, the National Do Not Call Registry has garnered more than 217 million active telephone numbers and protected consumers’ privacy from the unwanted calls of tens of thousands of legitimate telemarketers who subscribe to the Registry each year. The FTC amended its Telemarketing Sales Rule in 2009, making the majority of robocalls illegal – regardless of whether a consumer participates in the Registry or not.
According to the written testimony, the Commission has brought 120 Do Not Call enforcement actions against 377 corporations and 298 individuals, of which 37 are robocall enforcement actions against 121 companies and 90 individuals. Of the $100 million collected in Do Not Call cases, $28 million have resulted from cases involving illegal robocalls. The FTC also regularly coordinates its enforcement actions with state and federal law enforcement partners, including referrals to its partners for criminal prosecution.
Yet, illegal robocalls remain a significant problem for consumers because Voice over Internet Protocol (VoIP) and other telephony technology make it possible for telemarketers to blast millions of prerecorded messages at low cost. Many scammers from around the world also use these calls to harass consumers and attempt to defraud them.
Recognizing a need to spur the marketplace to develop technical solutions, the agency has hosted a series of crowdsourcing initiatives in recent years. These public challenges are designed to put solutions in the hands of consumers as well as further the development of investigative tools used by law enforcement.
The qualifying phase of the FTC’s current contest, Robocalls: Humanity Strikes Back, ends on June 15, 2015. The agency is challenging contestants to build solutions for consumers that not only block robocalls from reaching consumers, but also enables them to forward unwanted calls to a crowd-source honeypot so the data will be accessible to law enforcement and industry stakeholders. The FTC is offering up to $50,000 in cash prizes for the winners.
Staff also engages with industry experts including academics, telecommunication carriers, technology companies, and other counterparts to better understand the robocall landscape and seek new strategies and technical solutions to tackle this difficult issue.
Wednesday, May 27, 2015
SEVERAL FIFA OFFICIALS INDICTED FOR ROLES IN CORRUPTING INTERNATIONAL SOCCER
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, May 27, 2015
Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and Corruption
The Defendants Include Two Current FIFA Vice Presidents and the Current and Former Presidents of the Confederation of North, Central American and Caribbean Association Football (CONCACAF); Seven Defendants Arrested Overseas; Guilty Pleas for Four Individual Defendants and Two Corporate Defendants Also Unsealed
A 47-count indictment was unsealed early this morning in federal court in Brooklyn, New York, charging 14 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with the defendants’ participation in a 24-year scheme to enrich themselves through the corruption of international soccer. The guilty pleas of four individual defendants and two corporate defendants were also unsealed today.
The defendants charged in the indictment include high-ranking officials of the Fédération Internationale de Football Association (FIFA), the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of other soccer governing bodies that operate under the FIFA umbrella. Jeffrey Webb and Jack Warner – the current and former presidents of CONCACAF, the continental confederation under FIFA headquartered in the United States – are among the soccer officials charged with racketeering and bribery offenses. The defendants also include U.S. and South American sports marketing executives who are alleged to have systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
The charges were announced by Attorney General Loretta E. Lynch, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Director James B. Comey of the FBI, Assistant Director in Charge Diego W. Rodriguez of the FBI’s New York Field Office, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Erick Martinez of the IRS-CI’s Los Angeles Field Office.
Also earlier this morning, Swiss authorities in Zurich arrested seven of the defendants charged in the indictment, the defendants Jeffrey Webb, Eduardo Li, Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel and José Maria Marin, at the request of the United States. Also this morning, a search warrant is being executed at CONCACAF headquarters in Miami, Florida.
The guilty pleas of the four individual and two corporate defendants that were also unsealed today include the guilty pleas of Charles Blazer, the long-serving former general secretary of CONCACAF and former U.S. representative on the FIFA executive committee; José Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and two of Hawilla’s companies, Traffic Sports International Inc. and Traffic Sports USA Inc., which is based in Florida.
“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said Attorney General Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort.”
Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland, as well as several other international partners, for their outstanding assistance in this investigation.
“Today’s announcement should send a message that enough is enough,” said Acting U.S. Attorney Currie. “After decades of what the indictment alleges to be brazen corruption, organized international soccer needs a new start – a new chance for its governing institutions to provide honest oversight and support of a sport that is beloved across the world, increasingly so here in the United States. Let me be clear: this indictment is not the final chapter in our investigation.”
Acting U.S. Attorney Currie extended his thanks to the agents, analysts and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS-CI Los Angeles Field Office, as well as their colleagues abroad, for their tremendous effort in this case.
“As charged in the indictment, the defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,” said Director Comey. “Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA. I want to commend the investigators and prosecutors around the world who have pursued this case so diligently, for so many years.”
“When leaders in an organization resort to cheating the very members that they are supposed to represent, they must be held accountable,” said Chief Weber. “Corruption, tax evasion and money laundering are certainly not the cornerstones of any successful business. Whether you call it soccer or football, the fans, players and sponsors around the world who love this game should not have to worry about officials corrupting their sport. This case isn't about soccer, it is about fairness and following the law. IRS-CI will continue to investigate financial crimes and follow the money wherever it may lead around the world, leveling the playing field for those who obey the law.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Enterprise
FIFA is composed of 209 member associations, each representing organized soccer in a particular nation or territory, including the United States and four of its overseas territories. FIFA also recognizes six continental confederations that assist it in governing soccer in different regions of the world. The U.S. Soccer Federation is one of 41 member associations of the confederation known as CONCACAF, which has been headquartered in the United States throughout the period charged in the indictment. The South American confederation, called CONMEBOL, is also a focus of the indictment.
As alleged in the indictment, FIFA and its six continental confederations, together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.
As alleged in the indictment, one key way the enterprise derives revenue is to commercialize the media and marketing rights associated with soccer events and tournaments. The organizing entity that owns those rights – as FIFA and CONCACAF do with respect to the World Cup and Gold Cup, their respective flagship tournaments – sells them to sports marketing companies, often through multi-year contracts covering multiple editions of the tournaments. The sports marketing companies, in turn, sell the rights downstream to TV and radio broadcast networks, major corporate sponsors and other sub-licensees who want to broadcast the matches or promote their brands. The revenue generated from these contracts is substantial: according to FIFA, 70% of its $5.7 billion in total revenues between 2011 and 2014 was attributable to the sale of TV and marketing rights to the 2014 World Cup.
The Racketeering Conspiracy
The indictment alleges that, between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering. Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks. All told, the soccer officials are charged with conspiring to solicit and receive well over $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.
Most of the schemes alleged in the indictment relate to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF). Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.
The Indicted Defendants
As set forth in the indictment, the defendants and their co-conspirators fall generally into three categories: soccer officials acting in a fiduciary capacity within FIFA and one or more of its constituent organizations; sports media and marketing company executives; and businessmen, bankers and other trusted intermediaries who laundered illicit payments.
Nine of the defendants were FIFA officials by operation of the FIFA statutes, as well as officials of one or more other bodies:
Jeffrey Webb: Current FIFA vice president and executive committee member, CONCACAF president, Caribbean Football Union (CFU) executive committee member and Cayman Islands Football Association (CIFA) president.
Eduardo Li: Current FIFA executive committee member-elect, CONCACAF executive committee member and Costa Rican soccer federation (FEDEFUT) president.
Julio Rocha: Current FIFA development officer. Former Central American Football Union (UNCAF) president and Nicaraguan soccer federation (FENIFUT) president.
Costas Takkas: Current attaché to the CONCACAF president. Former CIFA general secretary.
Jack Warner: Former FIFA vice president and executive committee member, CONCACAF president, CFU president and Trinidad and Tobago Football Federation (TTFF) special adviser.
Eugenio Figueredo: Current FIFA vice president and executive committee member. Former CONMEBOL president and Uruguayan soccer federation (AUF) president.
Rafael Esquivel: Current CONMEBOL executive committee member and Venezuelan soccer federation (FVF) president.
José Maria Marin: Current member of the FIFA organizing committee for the Olympic football tournaments. Former CBF president.
Nicolás Leoz: Former FIFA executive committee member and CONMEBOL president.
Four of the defendants were sports marketing executives:
Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
Aaron Davidson: President of Traffic Sports USA Inc. (Traffic USA).
Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates.
And one of the defendants was in the broadcasting business but allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials:
José Margulies: Controlling principal of Valente Corp. and Somerton Ltd.
The Convicted Individuals and Corporations
The following individuals and corporations previously pleaded guilty under seal:
On July 15, 2013, the defendant Daryll Warner, son of defendant Jack Warner and a former FIFA development officer, waived indictment and pleaded guilty to a two-count information charging him with wire fraud and the structuring of financial transactions.
On Oct. 25, 2013, the defendant Daryan Warner waived indictment and pleaded guilty to a three-count information charging him with wire fraud conspiracy, money laundering conspiracy and the structuring of financial transactions. Daryan Warner forfeited over $1.1 million around the time of his plea and has agreed to pay a second forfeiture money judgment at the time of sentencing.
On Nov. 25, 2013, the defendant Charles Blazer, the former CONCACAF general secretary and a former FIFA executive committee member, waived indictment and pleaded guilty to a 10-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, income tax evasion and failure to file a Report of Foreign Bank and Financial Accounts (FBAR). Blazer forfeited over $1.9 million at the time of his plea and has agreed to pay a second amount to be determined at the time of sentencing.
On Dec. 12, 2014, the defendant José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, waived indictment and pleaded guilty to a four-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy and obstruction of justice. Hawilla also agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea.
On May 14, 2015, the defendants Traffic Sports USA Inc. and Traffic Sports International Inc. pleaded guilty to wire fraud conspiracy.
All money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.
* * * *
The indictment unsealed today has been assigned to U.S. District Court Judge Raymond J. Dearie of the Eastern District of New York.
The indicted and convicted individual defendants face maximum terms of incarceration of 20 years for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges. In addition, Eugenio Figueredo faces a maximum term of incarceration of 10 years for a charge of naturalization fraud and could have his U.S. citizenship revoked. He also faces a maximum term of incarceration of five years for each tax charge. Charles Blazer faces a maximum term of incarceration of 10 years for the FBAR charge and five years for the tax evasion charges; and Daryan and Daryll Warner face maximum terms of incarceration of 10 years for structuring financial transactions to evade currency reporting requirements. Each individual defendant also faces mandatory restitution, forfeiture and a fine. By the terms of their plea agreements, the corporate defendants face fines of $500,000 and one year of probation.
The government’s investigation is ongoing.
The government’s case is being prosecuted by Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, Keith D. Edelman and Brian D. Morris of the Eastern District of New York, with assistance provided by the Justice Department’s Office of International Affairs and Organized Crime and Gang Section.
Wednesday, May 27, 2015
Nine FIFA Officials and Five Corporate Executives Indicted for Racketeering Conspiracy and Corruption
The Defendants Include Two Current FIFA Vice Presidents and the Current and Former Presidents of the Confederation of North, Central American and Caribbean Association Football (CONCACAF); Seven Defendants Arrested Overseas; Guilty Pleas for Four Individual Defendants and Two Corporate Defendants Also Unsealed
A 47-count indictment was unsealed early this morning in federal court in Brooklyn, New York, charging 14 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with the defendants’ participation in a 24-year scheme to enrich themselves through the corruption of international soccer. The guilty pleas of four individual defendants and two corporate defendants were also unsealed today.
The defendants charged in the indictment include high-ranking officials of the Fédération Internationale de Football Association (FIFA), the organization responsible for the regulation and promotion of soccer worldwide, as well as leading officials of other soccer governing bodies that operate under the FIFA umbrella. Jeffrey Webb and Jack Warner – the current and former presidents of CONCACAF, the continental confederation under FIFA headquartered in the United States – are among the soccer officials charged with racketeering and bribery offenses. The defendants also include U.S. and South American sports marketing executives who are alleged to have systematically paid and agreed to pay well over $150 million in bribes and kickbacks to obtain lucrative media and marketing rights to international soccer tournaments.
The charges were announced by Attorney General Loretta E. Lynch, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Director James B. Comey of the FBI, Assistant Director in Charge Diego W. Rodriguez of the FBI’s New York Field Office, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Erick Martinez of the IRS-CI’s Los Angeles Field Office.
Also earlier this morning, Swiss authorities in Zurich arrested seven of the defendants charged in the indictment, the defendants Jeffrey Webb, Eduardo Li, Julio Rocha, Costas Takkas, Eugenio Figueredo, Rafael Esquivel and José Maria Marin, at the request of the United States. Also this morning, a search warrant is being executed at CONCACAF headquarters in Miami, Florida.
The guilty pleas of the four individual and two corporate defendants that were also unsealed today include the guilty pleas of Charles Blazer, the long-serving former general secretary of CONCACAF and former U.S. representative on the FIFA executive committee; José Hawilla, the owner and founder of the Traffic Group, a multinational sports marketing conglomerate headquartered in Brazil; and two of Hawilla’s companies, Traffic Sports International Inc. and Traffic Sports USA Inc., which is based in Florida.
“The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” said Attorney General Lynch. “It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks. And it has profoundly harmed a multitude of victims, from the youth leagues and developing countries that should benefit from the revenue generated by the commercial rights these organizations hold, to the fans at home and throughout the world whose support for the game makes those rights valuable. Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice – and we look forward to continuing to work with other countries in this effort.”
Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland, as well as several other international partners, for their outstanding assistance in this investigation.
“Today’s announcement should send a message that enough is enough,” said Acting U.S. Attorney Currie. “After decades of what the indictment alleges to be brazen corruption, organized international soccer needs a new start – a new chance for its governing institutions to provide honest oversight and support of a sport that is beloved across the world, increasingly so here in the United States. Let me be clear: this indictment is not the final chapter in our investigation.”
Acting U.S. Attorney Currie extended his thanks to the agents, analysts and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS-CI Los Angeles Field Office, as well as their colleagues abroad, for their tremendous effort in this case.
“As charged in the indictment, the defendants fostered a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,” said Director Comey. “Undisclosed and illegal payments, kickbacks, and bribes became a way of doing business at FIFA. I want to commend the investigators and prosecutors around the world who have pursued this case so diligently, for so many years.”
“When leaders in an organization resort to cheating the very members that they are supposed to represent, they must be held accountable,” said Chief Weber. “Corruption, tax evasion and money laundering are certainly not the cornerstones of any successful business. Whether you call it soccer or football, the fans, players and sponsors around the world who love this game should not have to worry about officials corrupting their sport. This case isn't about soccer, it is about fairness and following the law. IRS-CI will continue to investigate financial crimes and follow the money wherever it may lead around the world, leveling the playing field for those who obey the law.”
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The Enterprise
FIFA is composed of 209 member associations, each representing organized soccer in a particular nation or territory, including the United States and four of its overseas territories. FIFA also recognizes six continental confederations that assist it in governing soccer in different regions of the world. The U.S. Soccer Federation is one of 41 member associations of the confederation known as CONCACAF, which has been headquartered in the United States throughout the period charged in the indictment. The South American confederation, called CONMEBOL, is also a focus of the indictment.
As alleged in the indictment, FIFA and its six continental confederations, together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.
As alleged in the indictment, one key way the enterprise derives revenue is to commercialize the media and marketing rights associated with soccer events and tournaments. The organizing entity that owns those rights – as FIFA and CONCACAF do with respect to the World Cup and Gold Cup, their respective flagship tournaments – sells them to sports marketing companies, often through multi-year contracts covering multiple editions of the tournaments. The sports marketing companies, in turn, sell the rights downstream to TV and radio broadcast networks, major corporate sponsors and other sub-licensees who want to broadcast the matches or promote their brands. The revenue generated from these contracts is substantial: according to FIFA, 70% of its $5.7 billion in total revenues between 2011 and 2014 was attributable to the sale of TV and marketing rights to the 2014 World Cup.
The Racketeering Conspiracy
The indictment alleges that, between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering. Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks. All told, the soccer officials are charged with conspiring to solicit and receive well over $150 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.
Most of the schemes alleged in the indictment relate to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, including FIFA World Cup qualifiers in the CONCACAF region, the CONCACAF Gold Cup, the CONCACAF Champions League, the jointly organized CONMEBOL/CONCACAF Copa América Centenario, the CONMEBOL Copa América, the CONMEBOL Copa Libertadores and the Copa do Brasil, which is organized by the Brazilian national soccer federation (CBF). Other alleged schemes relate to the payment and receipt of bribes and kickbacks in connection with the sponsorship of CBF by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.
The Indicted Defendants
As set forth in the indictment, the defendants and their co-conspirators fall generally into three categories: soccer officials acting in a fiduciary capacity within FIFA and one or more of its constituent organizations; sports media and marketing company executives; and businessmen, bankers and other trusted intermediaries who laundered illicit payments.
Nine of the defendants were FIFA officials by operation of the FIFA statutes, as well as officials of one or more other bodies:
Jeffrey Webb: Current FIFA vice president and executive committee member, CONCACAF president, Caribbean Football Union (CFU) executive committee member and Cayman Islands Football Association (CIFA) president.
Eduardo Li: Current FIFA executive committee member-elect, CONCACAF executive committee member and Costa Rican soccer federation (FEDEFUT) president.
Julio Rocha: Current FIFA development officer. Former Central American Football Union (UNCAF) president and Nicaraguan soccer federation (FENIFUT) president.
Costas Takkas: Current attaché to the CONCACAF president. Former CIFA general secretary.
Jack Warner: Former FIFA vice president and executive committee member, CONCACAF president, CFU president and Trinidad and Tobago Football Federation (TTFF) special adviser.
Eugenio Figueredo: Current FIFA vice president and executive committee member. Former CONMEBOL president and Uruguayan soccer federation (AUF) president.
Rafael Esquivel: Current CONMEBOL executive committee member and Venezuelan soccer federation (FVF) president.
José Maria Marin: Current member of the FIFA organizing committee for the Olympic football tournaments. Former CBF president.
Nicolás Leoz: Former FIFA executive committee member and CONMEBOL president.
Four of the defendants were sports marketing executives:
Alejandro Burzaco: Controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.
Aaron Davidson: President of Traffic Sports USA Inc. (Traffic USA).
Hugo and Mariano Jinkis: Controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates.
And one of the defendants was in the broadcasting business but allegedly served as an intermediary to facilitate illicit payments between sports marketing executives and soccer officials:
José Margulies: Controlling principal of Valente Corp. and Somerton Ltd.
The Convicted Individuals and Corporations
The following individuals and corporations previously pleaded guilty under seal:
On July 15, 2013, the defendant Daryll Warner, son of defendant Jack Warner and a former FIFA development officer, waived indictment and pleaded guilty to a two-count information charging him with wire fraud and the structuring of financial transactions.
On Oct. 25, 2013, the defendant Daryan Warner waived indictment and pleaded guilty to a three-count information charging him with wire fraud conspiracy, money laundering conspiracy and the structuring of financial transactions. Daryan Warner forfeited over $1.1 million around the time of his plea and has agreed to pay a second forfeiture money judgment at the time of sentencing.
On Nov. 25, 2013, the defendant Charles Blazer, the former CONCACAF general secretary and a former FIFA executive committee member, waived indictment and pleaded guilty to a 10-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy, income tax evasion and failure to file a Report of Foreign Bank and Financial Accounts (FBAR). Blazer forfeited over $1.9 million at the time of his plea and has agreed to pay a second amount to be determined at the time of sentencing.
On Dec. 12, 2014, the defendant José Hawilla, the owner and founder of the Traffic Group, the Brazilian sports marketing conglomerate, waived indictment and pleaded guilty to a four-count information charging him with racketeering conspiracy, wire fraud conspiracy, money laundering conspiracy and obstruction of justice. Hawilla also agreed to forfeit over $151 million, $25 million of which was paid at the time of his plea.
On May 14, 2015, the defendants Traffic Sports USA Inc. and Traffic Sports International Inc. pleaded guilty to wire fraud conspiracy.
All money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.
* * * *
The indictment unsealed today has been assigned to U.S. District Court Judge Raymond J. Dearie of the Eastern District of New York.
The indicted and convicted individual defendants face maximum terms of incarceration of 20 years for the RICO conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges. In addition, Eugenio Figueredo faces a maximum term of incarceration of 10 years for a charge of naturalization fraud and could have his U.S. citizenship revoked. He also faces a maximum term of incarceration of five years for each tax charge. Charles Blazer faces a maximum term of incarceration of 10 years for the FBAR charge and five years for the tax evasion charges; and Daryan and Daryll Warner face maximum terms of incarceration of 10 years for structuring financial transactions to evade currency reporting requirements. Each individual defendant also faces mandatory restitution, forfeiture and a fine. By the terms of their plea agreements, the corporate defendants face fines of $500,000 and one year of probation.
The government’s investigation is ongoing.
The government’s case is being prosecuted by Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, Keith D. Edelman and Brian D. Morris of the Eastern District of New York, with assistance provided by the Justice Department’s Office of International Affairs and Organized Crime and Gang Section.
Sunday, May 3, 2015
ALLEGED DRUG TRAFFICKING LEADER EXTRADITED FROM GUATEMALA
FROM: U.S. JUSTICE DEPARTMENT
Friday, May 1, 2015
Alleged Leader of the Lorenzana Drug Trafficking Organization Extradited to the United States
An alleged leader of an international drug trafficking organization based in Guatemala was extradited to the United States yesterday to face international narcotics trafficking charges in the District of Columbia, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Eliu Elixander Lorenzana-Cordon, 43, was arrested in Guatemala on Nov. 8, 2011, after being indicted for conspiracy to import cocaine into the United States, and has been detained since that time pending extradition. He arrived in the United States yesterday and was arraigned today before U.S. Magistrate Judge Alan Kay of the District of Columbia.
According to allegations contained in the indictment, Lorenzana-Cordon is a leader of an international drug trafficking organization that includes his father and several other family members. Between 1996 and 2012, the organization allegedly received and stored multi-ton quantities of cocaine from Colombia for later importation into Mexico and the United States.
These cocaine shipments, worth millions of dollars, were allegedly transported to El Salvador on “go-fast” boats, and then smuggled into Guatemala by land and air. The cocaine was then inventoried and stored for later export to Mexico and eventually the United States.
On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated Lorenzana-Cordon as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act due to his significant role in international narcotics trafficking and his ties to the Sinaloa Cartel.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Lorenzana-Cordon’s brother, Waldemar Lorenzana-Cordon, was extradited to the United States on Nov. 13, 2014, and is currently awaiting trial. Lorenzana-Cordon’s father, Waldemar Lorenzana-Lima, pleaded guilty on Aug. 18, 2014, to conspiracy to import over 450 kilograms of cocaine into the United States, and is currently awaiting sentencing. All three defendants were charged in the same indictment.
The investigation was led by the DEA’s 959/Bilateral Investigations Unit and Guatemala City Country Office, and was part of the Organized Crime Drug Enforcement Task Force. The case is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The department appreciates the assistance provided by the government of Guatemala.
Friday, May 1, 2015
Alleged Leader of the Lorenzana Drug Trafficking Organization Extradited to the United States
An alleged leader of an international drug trafficking organization based in Guatemala was extradited to the United States yesterday to face international narcotics trafficking charges in the District of Columbia, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Eliu Elixander Lorenzana-Cordon, 43, was arrested in Guatemala on Nov. 8, 2011, after being indicted for conspiracy to import cocaine into the United States, and has been detained since that time pending extradition. He arrived in the United States yesterday and was arraigned today before U.S. Magistrate Judge Alan Kay of the District of Columbia.
According to allegations contained in the indictment, Lorenzana-Cordon is a leader of an international drug trafficking organization that includes his father and several other family members. Between 1996 and 2012, the organization allegedly received and stored multi-ton quantities of cocaine from Colombia for later importation into Mexico and the United States.
These cocaine shipments, worth millions of dollars, were allegedly transported to El Salvador on “go-fast” boats, and then smuggled into Guatemala by land and air. The cocaine was then inventoried and stored for later export to Mexico and eventually the United States.
On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated Lorenzana-Cordon as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act due to his significant role in international narcotics trafficking and his ties to the Sinaloa Cartel.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Lorenzana-Cordon’s brother, Waldemar Lorenzana-Cordon, was extradited to the United States on Nov. 13, 2014, and is currently awaiting trial. Lorenzana-Cordon’s father, Waldemar Lorenzana-Lima, pleaded guilty on Aug. 18, 2014, to conspiracy to import over 450 kilograms of cocaine into the United States, and is currently awaiting sentencing. All three defendants were charged in the same indictment.
The investigation was led by the DEA’s 959/Bilateral Investigations Unit and Guatemala City Country Office, and was part of the Organized Crime Drug Enforcement Task Force. The case is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The department appreciates the assistance provided by the government of Guatemala.
Saturday, April 18, 2015
THREE ARRESTED FOR ALLEGED ROLES IN SYNTHETIC DRUG TRAFFICKING ORGANIZATION
FROM: U.S. JUSTICE DEPARTMENT
Thursday, April 16, 2015
Three Members of International Synthetic Drug-Trafficking Organization Arrested in Los Angeles
Three members of an international synthetic drug-trafficking organization—responsible for selling synthetic drugs with brand names like Twilite, Passion Sense, Stoopid, Black Diamond, and Platinum—were arrested in Los Angeles on Tuesday. The federal charges were unsealed in the Northern District of New York today. According to documents also unsealed in the Southern District of Indiana today, a leader of the organization has already pleaded guilty to federal drug-trafficking charges.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Richard S. Hartunian of the Northern District of New York and U.S. Attorney Josh J. Minkler of the Southern District of Indiana made the announcement.
“The manufacture and distribution of synthetic narcotics is a growing problem that is especially dangerous to the young people of our communities,” said Assistant Attorney General Caldwell. “Drug traffickers peddle these illegal synthetic drugs with harmless sounding names to impressionable youth who are typically unaware of the harmful chemicals they actually are ingesting. The Criminal Division will continue to partner with local and federal law enforcement around the nation to stem the flow of these unsafe and illegal substances and bring the traffickers to justice.”
“Despite the efforts of these drug traffickers to evade prosecution through the creation of synthetic drugs, these indictments demonstrate the ability of law enforcement to effectively respond to those who market these dangerous substances,” said U.S. Attorney Hartunian. “We will continue to use all our resources to combat this national problem.”
“Synthetic narcotics are not the harmless product traffickers and users make them out to be,” said U.S. Attorney Minkler. “They are mind-altering substances that cause psychosis and even death with our nation’s youth.”
Andrew Raymond, 36, Brian Requena, 37, and Zefren Michael, 35, all of Los Angeles, California, were indicted in the Northern District of New York for conspiracy to possess with the intent to distribute and to distribute controlled substance analogues, intending that those analogues be used for human consumption. Raymond and Requena were also charged with a money laundering conspiracy.
In a related case, Roger Upchurch, 66, of Indianapolis, Indiana, pleaded guilty on March 11, 2015, before Chief U.S. District Judge Richard L. Young in the Southern District of Indiana, to conspiracy to distribute a controlled substance analogue and money laundering. Upchurch also forfeited over $2 million in cash and other assets obtained from his illegal activities, including a house, two cars and a Sweetwater pontoon boat. A sentencing date has not yet been scheduled.
As part of his guilty plea, Upchurch admitted that he was a leading member of the international drug-trafficking organization, working in the Los Angeles-area, to produce and distribute thousands of kilograms of smokable synthetic cannabinoids (SSCs) with brand names such as Twilite, Passion Sense, Stoopid, Black Diamond and Platinum. SSCs, also popularly known as “Spice,” are smokable drugs that are designed to mimic marijuana. The synthetic chemicals used to produce these SSCs were imported from China, then applied to a plant-like substance and sold like marijuana in a smokable form.
According to allegations in the indictment, Raymond, Requena, Michaels, and others conspired with Upchurch to manufacture SSCs for distribution throughout the United States. In an effort to avoid detection and prosecution by law enforcement, the drug-trafficking organization allegedly mislabeled and fraudulently labeled packages with “not for human consumption” and other false statements, including falsely marketing their products as potpourri, incense or aroma.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This investigation is part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, and these cases were supported under the DEA Special Operations Division’s Project Synergy. These cases are the result of investigative efforts led by the DEA’s Indianapolis Field Office, with valuable assistance provided by the U.S. Postal Inspection Service and the Indianapolis Metropolitan Police Department.
The case in the Southern District of Indiana is being prosecuted by Trial Attorney Brian Sardelli of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorneys Matthew Brookman and Debra Richards of the Southern District of Indianapolis. The case pending in the Northern District of New York is being prosecuted by Assistant U.S. Attorney Carla Freedman.
Thursday, April 16, 2015
Three Members of International Synthetic Drug-Trafficking Organization Arrested in Los Angeles
Three members of an international synthetic drug-trafficking organization—responsible for selling synthetic drugs with brand names like Twilite, Passion Sense, Stoopid, Black Diamond, and Platinum—were arrested in Los Angeles on Tuesday. The federal charges were unsealed in the Northern District of New York today. According to documents also unsealed in the Southern District of Indiana today, a leader of the organization has already pleaded guilty to federal drug-trafficking charges.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Richard S. Hartunian of the Northern District of New York and U.S. Attorney Josh J. Minkler of the Southern District of Indiana made the announcement.
“The manufacture and distribution of synthetic narcotics is a growing problem that is especially dangerous to the young people of our communities,” said Assistant Attorney General Caldwell. “Drug traffickers peddle these illegal synthetic drugs with harmless sounding names to impressionable youth who are typically unaware of the harmful chemicals they actually are ingesting. The Criminal Division will continue to partner with local and federal law enforcement around the nation to stem the flow of these unsafe and illegal substances and bring the traffickers to justice.”
“Despite the efforts of these drug traffickers to evade prosecution through the creation of synthetic drugs, these indictments demonstrate the ability of law enforcement to effectively respond to those who market these dangerous substances,” said U.S. Attorney Hartunian. “We will continue to use all our resources to combat this national problem.”
“Synthetic narcotics are not the harmless product traffickers and users make them out to be,” said U.S. Attorney Minkler. “They are mind-altering substances that cause psychosis and even death with our nation’s youth.”
Andrew Raymond, 36, Brian Requena, 37, and Zefren Michael, 35, all of Los Angeles, California, were indicted in the Northern District of New York for conspiracy to possess with the intent to distribute and to distribute controlled substance analogues, intending that those analogues be used for human consumption. Raymond and Requena were also charged with a money laundering conspiracy.
In a related case, Roger Upchurch, 66, of Indianapolis, Indiana, pleaded guilty on March 11, 2015, before Chief U.S. District Judge Richard L. Young in the Southern District of Indiana, to conspiracy to distribute a controlled substance analogue and money laundering. Upchurch also forfeited over $2 million in cash and other assets obtained from his illegal activities, including a house, two cars and a Sweetwater pontoon boat. A sentencing date has not yet been scheduled.
As part of his guilty plea, Upchurch admitted that he was a leading member of the international drug-trafficking organization, working in the Los Angeles-area, to produce and distribute thousands of kilograms of smokable synthetic cannabinoids (SSCs) with brand names such as Twilite, Passion Sense, Stoopid, Black Diamond and Platinum. SSCs, also popularly known as “Spice,” are smokable drugs that are designed to mimic marijuana. The synthetic chemicals used to produce these SSCs were imported from China, then applied to a plant-like substance and sold like marijuana in a smokable form.
According to allegations in the indictment, Raymond, Requena, Michaels, and others conspired with Upchurch to manufacture SSCs for distribution throughout the United States. In an effort to avoid detection and prosecution by law enforcement, the drug-trafficking organization allegedly mislabeled and fraudulently labeled packages with “not for human consumption” and other false statements, including falsely marketing their products as potpourri, incense or aroma.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This investigation is part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, and these cases were supported under the DEA Special Operations Division’s Project Synergy. These cases are the result of investigative efforts led by the DEA’s Indianapolis Field Office, with valuable assistance provided by the U.S. Postal Inspection Service and the Indianapolis Metropolitan Police Department.
The case in the Southern District of Indiana is being prosecuted by Trial Attorney Brian Sardelli of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorneys Matthew Brookman and Debra Richards of the Southern District of Indianapolis. The case pending in the Northern District of New York is being prosecuted by Assistant U.S. Attorney Carla Freedman.
Sunday, April 12, 2015
WHITE HOUSE FACT SHEET ON MEETING WITH CENTRAL AMERICA INTEGRATION SYSTEM MEMBERS
FROM: THE WHITE HOUSE CENTRAL AMERICA
April 10, 2015
FACT SHEET: U.S. Cooperation with Central America; Meeting with Members of the Central America Integration System (SICA)
At the 2015 Summit of the Americas in Panama, President Obama met with the leaders of Central America Integration System (SICA) member states and the SICA Secretary General on April 10 to underscore the strong U.S. commitment to, and partnership with, Central America. The U.S. Strategy for Engagement in Central America promotes the goal of an economically integrated region that provides economic opportunities to its people, enjoys more accountable, transparent, and effective public institutions, and ensures a safe environment for its citizens.
President Obama requested $1 billion from the U.S. Congress for Fiscal Year 2016 in support of the U.S. Strategy for Engagement in Central America in all seven Central American nations. While the United States will prioritize assistance to the Northern Triangle – El Salvador, Guatemala, and Honduras – our strategy is region-wide. Central America’s prosperity and security, its opportunities and challenges, are inextricably linked and have a direct impact on the rest of the hemisphere.
Eleven years have passed since the August 2004 signing of the Dominican Republic-Central America - United States Free Trade Agreement (CAFTA-DR), when our countries committed to promote economic growth, expand trade and investment opportunities, and strengthen both regional integration and competitiveness of the parties, yielding positive results for the seven partners of this trading bloc.
Higher and sustained growth is required to create opportunity and reduce poverty. Despite the economic challenges faced by the world economy in recent years, the intra-regional trade among Central American countries and the Dominican Republic increased from US$6.3 billion in 2010 to more than US$8 billion by 2014. U.S goods exports to Central America and the Dominican Republic in 2014 were $31.3 billion, up 99 percent from 2004; U.S. good imports from Central America and the Dominican Republic totaled $28.4 billion in 2014, up 60 percent over that same period. These increased trade flows are promising, and stronger economic growth is possible with greater economic integration.
At the meeting with SICA Heads of State, President Obama encouraged his counterparts to pursue regional integration, promote trade facilitation, and approach security as a region. He also noted that sustainable economic growth is more likely when a country enjoys transparent, accountable democratic institutions and a strong commitment to citizen security.
Promoting Regional Economic Integration and Growth
Central America’s place at the geographic crossroads of this hemisphere is a tremendous economic asset. In order to make the most of this advantage, Central American nations should continue to work together to integrate and grow their economies by reducing tariffs, investing in infrastructure and border facilities, streamlining customs procedures, and partnering with each other on issues such as energy. The region is the focal point of the Connecting the Americas 2022 initiative, which will help attract investment in clean energy and reduce energy costs by interconnecting the region’s electricity markets. The United States has just launched a $20 million facility to drive private sector investment into clean energy projects in the Caribbean and Central America. The Facility will provide early-stage funding to catalyze larger private sector investment in clean energy projects. The United States will also partner with Central American and Caribbean countries in a task force to evaluate our progress on energy cooperation and identify concrete steps to advance energy sector reform, regional integration, and clean energy development.
Countries should accelerate actions such as improved access to and quality of education, vocational training opportunities, and small business development models to encourage entrepreneurship and ensure growth that is broad-based and equitable. By improving public financial management, governments also will be better equipped to make key public investments, provide critical public services, improve fiscal transparency and over time decrease the need for international donor support. Deeper regional integration can also help build resilience against destabilizing events such as natural disasters, for example through pooled efforts to insure against risk.
Cooperating on Violence Prevention and Combating Crime
U.S. engagement on security complements the efforts of host nations and like-minded donors to reduce levels of crime and violence, strengthen rule of law institutions, and help address the root causes of insecurity that impede broader economic development and social inclusion. Our programs in Honduras, El Salvador and Guatemala amplify local government efforts to promote crime prevention and police capacity-building in the most adversely affected communities. We are similarly united in our efforts to combat transnational organized, crime, including by providing support to improve land border and maritime interdiction throughout the region, and cooperating with partner nations to investigate and prosecute those who conduct human smuggling operations exploiting the desperation of parents and children making the dangerous journey north. In Panama, the Regional Border Management Academy conducts training of border officials, while in Costa Rica, our assistance to prisons, border police training, and support for nationwide use of data-driven policing is positioning them as a regional model.
In November 2014, the U.S. Department of State announced its in-country refugee processing program in El Salvador, Guatemala, and Honduras. The program is part of the Obama Administration’s response to last summer’s influx of unaccompanied children and families fleeing to the United States from Central America and will work to provide a safe, legal, and orderly alternative to the dangerous journey that some children are currently undertaking to the United States. The new program allows parents from those nations, who are lawfully present in the United States, to submit an application to have their children join them in the United States if they qualify for refugee status or humanitarian parole.
Sustaining Economic and Security Gains through Accountable Governance
The enabling environment for sustained growth, stability and prosperity for the region will require good governance, including support for democratic values, strengthening of criminal justice and other legal institutions to combat impunity and promote the rule of law, and advancing rights and protections for civil society and the media. The private sector, small business owners, and international investors want confidence in the security of their investment and assurances that business dealings are fair and legal. Institutions must establish a pattern of transparency, accountability, effectiveness, and independence.
April 10, 2015
FACT SHEET: U.S. Cooperation with Central America; Meeting with Members of the Central America Integration System (SICA)
At the 2015 Summit of the Americas in Panama, President Obama met with the leaders of Central America Integration System (SICA) member states and the SICA Secretary General on April 10 to underscore the strong U.S. commitment to, and partnership with, Central America. The U.S. Strategy for Engagement in Central America promotes the goal of an economically integrated region that provides economic opportunities to its people, enjoys more accountable, transparent, and effective public institutions, and ensures a safe environment for its citizens.
President Obama requested $1 billion from the U.S. Congress for Fiscal Year 2016 in support of the U.S. Strategy for Engagement in Central America in all seven Central American nations. While the United States will prioritize assistance to the Northern Triangle – El Salvador, Guatemala, and Honduras – our strategy is region-wide. Central America’s prosperity and security, its opportunities and challenges, are inextricably linked and have a direct impact on the rest of the hemisphere.
Eleven years have passed since the August 2004 signing of the Dominican Republic-Central America - United States Free Trade Agreement (CAFTA-DR), when our countries committed to promote economic growth, expand trade and investment opportunities, and strengthen both regional integration and competitiveness of the parties, yielding positive results for the seven partners of this trading bloc.
Higher and sustained growth is required to create opportunity and reduce poverty. Despite the economic challenges faced by the world economy in recent years, the intra-regional trade among Central American countries and the Dominican Republic increased from US$6.3 billion in 2010 to more than US$8 billion by 2014. U.S goods exports to Central America and the Dominican Republic in 2014 were $31.3 billion, up 99 percent from 2004; U.S. good imports from Central America and the Dominican Republic totaled $28.4 billion in 2014, up 60 percent over that same period. These increased trade flows are promising, and stronger economic growth is possible with greater economic integration.
At the meeting with SICA Heads of State, President Obama encouraged his counterparts to pursue regional integration, promote trade facilitation, and approach security as a region. He also noted that sustainable economic growth is more likely when a country enjoys transparent, accountable democratic institutions and a strong commitment to citizen security.
Promoting Regional Economic Integration and Growth
Central America’s place at the geographic crossroads of this hemisphere is a tremendous economic asset. In order to make the most of this advantage, Central American nations should continue to work together to integrate and grow their economies by reducing tariffs, investing in infrastructure and border facilities, streamlining customs procedures, and partnering with each other on issues such as energy. The region is the focal point of the Connecting the Americas 2022 initiative, which will help attract investment in clean energy and reduce energy costs by interconnecting the region’s electricity markets. The United States has just launched a $20 million facility to drive private sector investment into clean energy projects in the Caribbean and Central America. The Facility will provide early-stage funding to catalyze larger private sector investment in clean energy projects. The United States will also partner with Central American and Caribbean countries in a task force to evaluate our progress on energy cooperation and identify concrete steps to advance energy sector reform, regional integration, and clean energy development.
Countries should accelerate actions such as improved access to and quality of education, vocational training opportunities, and small business development models to encourage entrepreneurship and ensure growth that is broad-based and equitable. By improving public financial management, governments also will be better equipped to make key public investments, provide critical public services, improve fiscal transparency and over time decrease the need for international donor support. Deeper regional integration can also help build resilience against destabilizing events such as natural disasters, for example through pooled efforts to insure against risk.
Cooperating on Violence Prevention and Combating Crime
U.S. engagement on security complements the efforts of host nations and like-minded donors to reduce levels of crime and violence, strengthen rule of law institutions, and help address the root causes of insecurity that impede broader economic development and social inclusion. Our programs in Honduras, El Salvador and Guatemala amplify local government efforts to promote crime prevention and police capacity-building in the most adversely affected communities. We are similarly united in our efforts to combat transnational organized, crime, including by providing support to improve land border and maritime interdiction throughout the region, and cooperating with partner nations to investigate and prosecute those who conduct human smuggling operations exploiting the desperation of parents and children making the dangerous journey north. In Panama, the Regional Border Management Academy conducts training of border officials, while in Costa Rica, our assistance to prisons, border police training, and support for nationwide use of data-driven policing is positioning them as a regional model.
In November 2014, the U.S. Department of State announced its in-country refugee processing program in El Salvador, Guatemala, and Honduras. The program is part of the Obama Administration’s response to last summer’s influx of unaccompanied children and families fleeing to the United States from Central America and will work to provide a safe, legal, and orderly alternative to the dangerous journey that some children are currently undertaking to the United States. The new program allows parents from those nations, who are lawfully present in the United States, to submit an application to have their children join them in the United States if they qualify for refugee status or humanitarian parole.
Sustaining Economic and Security Gains through Accountable Governance
The enabling environment for sustained growth, stability and prosperity for the region will require good governance, including support for democratic values, strengthening of criminal justice and other legal institutions to combat impunity and promote the rule of law, and advancing rights and protections for civil society and the media. The private sector, small business owners, and international investors want confidence in the security of their investment and assurances that business dealings are fair and legal. Institutions must establish a pattern of transparency, accountability, effectiveness, and independence.
Monday, April 6, 2015
THE FIGHT AGAINST WILDLIFE CRIME
FROM: U.S. STATE DEPARTMENT
04/01/2015 01:54 PM EDT
The INL Beat, February/March 2015
Bureau of International Narcotics and Law Enforcement Affairs
Fighting Wildlife Crime
Date: 03/31/2015
In recent years, INL has significantly increased its effort to combat wildlife crime, as the problem has worsened and transnational organized crime has become more intricately involved in the trade. Wildlife trafficking is a multi-billion dollar criminal activity that ranks near the top of the list of most lucrative forms of illicit trade, behind narcotics trafficking, money laundering, and counterfeiting. Trafficking of protected species fosters corruption, threatens the rule of law, and destabilizes communities that depend on wildlife for biodiversity and eco-tourism revenues. INL has increased its programming and partnered with a wide variety of stakeholders including governments, communities, law enforcers, civil society, and the private sector, pursuing a multifaceted approach that includes capacity building, and multilateral action.
This month senior INL officials participated in several outreach events to raise public awareness of the importance of combating wildlife crime. In celebration of World Wildlife Day on March 3, Assistant Secretary Brownfield participated in a high-level stakeholder dialogue at the Central Park Zoo hosted by multiple UN organizations and NGOs. The theme for this year’s celebration, “Let’s Get Serious about Wildlife Crime,” refers to the need for countries to designate wildlife trafficking as a “serious crime” and to recognize the security threats posed by the growing involvement of transnational organized crime. Later in the week, Ambassador Brownfield participated in a live Q&A session on the State Department’s flagship Facebook page to answer wildlife crime questions from the public, journalists, and NGOs. Reaching over 1 million people worldwide, the Facebook Q&A gave Ambassador Brownfield the opportunity to speak directly to the public and offer them a chance to help in the fight. On March 9, INL Principal Deputy Assistant Secretary Luis Arreaga joined private sector and civil society counterparts in a public panel discussion on international environmental crime issues at the Stimson Center in Washington.
In support of the interagency U.S. Implementation Plan that was released in February 2015, Congress has set aside $25 million for overseas law enforcement capacity building to counter wildlife trafficking, with work in four primary areas: 1) strengthening legislative frameworks; 2) enhancing investigative and law enforcement functions; 3) developing capacities to prosecute and adjudicate wildlife crimes and related corruption; and 4) supporting cross border law enforcement cooperation. Aligning with the Implementation Plan, INL has invested in tools and technology to better assist law enforcement efforts.
One of INL’s most important and exciting efforts to combat this threat is support for groundbreaking forensics analysis on ivory seizures. Together with the UN Office on Drugs and Crime and the World Bank, INL is supporting forensic DNA analysis by University of Washington scientists on major ivory seizures. This analysis compares DNA samples from major seizures against a database of existing DNA profiles of elephants across Africa, allowing researchers to identify the approximate geographic origin of individual ivory samples. The results show that the vast majority of large ivory seizures come from only a few poaching hotspots in Africa, far more limited than previously thought, providing a clearer picture of the trade routes in ivory trafficking. This information should greatly assist law enforcement in placing their limited resources in a focused area for a more targeted approach, helping to disrupt the criminal networks involved in ivory trafficking.
04/01/2015 01:54 PM EDT
The INL Beat, February/March 2015
Bureau of International Narcotics and Law Enforcement Affairs
Fighting Wildlife Crime
Date: 03/31/2015
In recent years, INL has significantly increased its effort to combat wildlife crime, as the problem has worsened and transnational organized crime has become more intricately involved in the trade. Wildlife trafficking is a multi-billion dollar criminal activity that ranks near the top of the list of most lucrative forms of illicit trade, behind narcotics trafficking, money laundering, and counterfeiting. Trafficking of protected species fosters corruption, threatens the rule of law, and destabilizes communities that depend on wildlife for biodiversity and eco-tourism revenues. INL has increased its programming and partnered with a wide variety of stakeholders including governments, communities, law enforcers, civil society, and the private sector, pursuing a multifaceted approach that includes capacity building, and multilateral action.
This month senior INL officials participated in several outreach events to raise public awareness of the importance of combating wildlife crime. In celebration of World Wildlife Day on March 3, Assistant Secretary Brownfield participated in a high-level stakeholder dialogue at the Central Park Zoo hosted by multiple UN organizations and NGOs. The theme for this year’s celebration, “Let’s Get Serious about Wildlife Crime,” refers to the need for countries to designate wildlife trafficking as a “serious crime” and to recognize the security threats posed by the growing involvement of transnational organized crime. Later in the week, Ambassador Brownfield participated in a live Q&A session on the State Department’s flagship Facebook page to answer wildlife crime questions from the public, journalists, and NGOs. Reaching over 1 million people worldwide, the Facebook Q&A gave Ambassador Brownfield the opportunity to speak directly to the public and offer them a chance to help in the fight. On March 9, INL Principal Deputy Assistant Secretary Luis Arreaga joined private sector and civil society counterparts in a public panel discussion on international environmental crime issues at the Stimson Center in Washington.
In support of the interagency U.S. Implementation Plan that was released in February 2015, Congress has set aside $25 million for overseas law enforcement capacity building to counter wildlife trafficking, with work in four primary areas: 1) strengthening legislative frameworks; 2) enhancing investigative and law enforcement functions; 3) developing capacities to prosecute and adjudicate wildlife crimes and related corruption; and 4) supporting cross border law enforcement cooperation. Aligning with the Implementation Plan, INL has invested in tools and technology to better assist law enforcement efforts.
One of INL’s most important and exciting efforts to combat this threat is support for groundbreaking forensics analysis on ivory seizures. Together with the UN Office on Drugs and Crime and the World Bank, INL is supporting forensic DNA analysis by University of Washington scientists on major ivory seizures. This analysis compares DNA samples from major seizures against a database of existing DNA profiles of elephants across Africa, allowing researchers to identify the approximate geographic origin of individual ivory samples. The results show that the vast majority of large ivory seizures come from only a few poaching hotspots in Africa, far more limited than previously thought, providing a clearer picture of the trade routes in ivory trafficking. This information should greatly assist law enforcement in placing their limited resources in a focused area for a more targeted approach, helping to disrupt the criminal networks involved in ivory trafficking.
Saturday, April 4, 2015
4 INDICTED FOR ROLES IN INTERNATIONAL COUNTERFEIT CURRENCY OPERATION HEADQUARTERED IN UGANDA
FROM: U.S. JUSTICE DEPARTMENT
Thursday, April 2, 2015
Four Charged in International Uganda-Based Cyber Counterfeiting Scheme
A federal grand jury in Pittsburgh, Pennsylvania, has indicted four people in connection with an international counterfeit currency operation headquartered in the African nation of Uganda, announced U.S. Attorney David J. Hickton for the Western District of Pennsylvania.
The indictment, returned on April 1, 2015, charges Ryan Andrew Gustafson, 27, aka “Jack Farrel” aka “Willy Clock,” a U.S. citizen currently incarcerated in Kampala, Uganda, Zackary L. Ruiz, 18, aka “Mr. Mouse,” of Las Vegas, Nevada, Jeremy J. Miller, 30, aka “Sinner,” of Seattle, Washington and Michael Q. Lin, 20, aka “Mlin” aka “Mr. Casino,” of Bethlehem, Pennsylvania, with conspiracy and counterfeiting acts committed within and outside of the U.S. from December 2013 until December 2014.
“Today we announce the dismantling of an international cyber conspiracy in which Ugandan-made counterfeit Federal Reserve Notes were being advertised, bought and sold through online criminal forums then passed in coffee shops and corner stores in neighborhoods across our country,” said U.S. Attorney Hickton. “Working cooperatively with law enforcement partners in the U.S. and abroad, we were able to quickly infiltrate and disrupt this counterfeit trafficking network and limit losses.”
“The early and aggressive application of traditional and cyber investigative expertise and the cooperation and assistance of numerous domestic and international law enforcement agencies in this case led to the quick and efficient identification of conspirators in a widespread cyber-based counterfeiting network,” said Special Agent in Charge Eric P. Zahren of the U.S. Secret Service Pittsburgh Field Office, “but as importantly, minimized financial losses in the U.S. and elsewhere, consistent with our charge to protect our currency, our commerce and, ultimately, our communities.”
According to the indictment, in late December 2013, Gustafson created his own dark web website called Community-X, which was dedicated to the manufacturing, selling, buying, distribution and passing of counterfeit Federal Reserve Notes (FRNs), which he claimed to have manufactured. The website contained forums where members discussed the counterfeit bills and shared tips on how best to pass, ship and distribute counterfeit FRNs.
In September 2014, Gustafson redesigned this website into two different sites, a Community-X HQ site, with controlled access and a Community-X Recruitment Center site, which was accessible to the public. Gustafson, Ruiz and Miller were active members of both sites. Lin was only a member of the Recruitment Site.
Gustafson and others allegedly sold these counterfeit FRNs to purchasers in the U.S. From December 2013 through February 2014, an associate of Gustafson sent DHL packages containing these counterfeit FRNs to individuals in the U.S. After February 2014, Gustafson had the counterfeit FRNs smuggled into the U.S. by hiding the counterfeit FRNs in glued together pages of fake charity pamphlets.
The indictment alleges that Ruiz, Miller and Lin had varied levels of roles and responsibilities as participants in the conspiracy. In particular, the indictment alleges that Ruiz and others unpacked the counterfeit FRNs, that Ruiz, Miller and others treated the counterfeit FRNs to prepare them for passing and used the U.S. Postal Service to mail the treated FRNs to re-shippers and to purchasers and that Lin was a purchaser of the FRNs, who offered a guide on how to pass the counterfeit notes through casinos.
The indictment alleges more than $1.4 million in counterfeit FRNs have been seized and passed worldwide, both overseas and in the U.S. as part of this scheme.
Gustafson was charged by Ugandan authorities on Dec. 16, 2014, with conspiracy, possession of counterfeit, selling/dealing in counterfeit and unlawful possession of ammunition. He is presently on trial in Uganda on their charges.
The law provides for a maximum total sentence of five years in prison, a fine of $250,000, or both, on the conspiracy count; a maximum total sentence of 20 years in prison, a fine of $250,000, or both, on the conspiracy to commit money laundering count; and a maximum total sentence of 20 years in prison, a fine of 250,000, or both, on each of the passing and receiving counterfeit money counts. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
U.S. Attorney Hickton commended numerous agencies and organizations for conducting the investigation leading to charges in this case, including the U.S. Secret Service in Pittsburgh, Los Angeles, California, Seattle, Washington, Las Vegas, Nevada, Philadelphia, Pennsylvania, Charlotte, North Carolina, Raleigh, North Carolina, Baltimore, Maryland, Minnesota, Miami, Florida, Washington, D.C., Cincinnati, Ohio, Denver, Colorado, Phoenix, Arizona, Rome, Italy, Pretoria, South Africa and the Criminal Investigative Division in Washington, D.C., the U.S. State Department, the U.S. Postal Inspection Service in Pittsburgh, Seattle, Las Vegas, Philadelphia and Charlotte, the Federal Bureau of Investigation – Pittsburgh Division, Homeland Security Investigations in Pittsburgh, Baltimore and Cincinnati, U.S. Customs and Border Protection and the National Cyber-Forensics & Training Alliance.
Thursday, April 2, 2015
Four Charged in International Uganda-Based Cyber Counterfeiting Scheme
A federal grand jury in Pittsburgh, Pennsylvania, has indicted four people in connection with an international counterfeit currency operation headquartered in the African nation of Uganda, announced U.S. Attorney David J. Hickton for the Western District of Pennsylvania.
The indictment, returned on April 1, 2015, charges Ryan Andrew Gustafson, 27, aka “Jack Farrel” aka “Willy Clock,” a U.S. citizen currently incarcerated in Kampala, Uganda, Zackary L. Ruiz, 18, aka “Mr. Mouse,” of Las Vegas, Nevada, Jeremy J. Miller, 30, aka “Sinner,” of Seattle, Washington and Michael Q. Lin, 20, aka “Mlin” aka “Mr. Casino,” of Bethlehem, Pennsylvania, with conspiracy and counterfeiting acts committed within and outside of the U.S. from December 2013 until December 2014.
“Today we announce the dismantling of an international cyber conspiracy in which Ugandan-made counterfeit Federal Reserve Notes were being advertised, bought and sold through online criminal forums then passed in coffee shops and corner stores in neighborhoods across our country,” said U.S. Attorney Hickton. “Working cooperatively with law enforcement partners in the U.S. and abroad, we were able to quickly infiltrate and disrupt this counterfeit trafficking network and limit losses.”
“The early and aggressive application of traditional and cyber investigative expertise and the cooperation and assistance of numerous domestic and international law enforcement agencies in this case led to the quick and efficient identification of conspirators in a widespread cyber-based counterfeiting network,” said Special Agent in Charge Eric P. Zahren of the U.S. Secret Service Pittsburgh Field Office, “but as importantly, minimized financial losses in the U.S. and elsewhere, consistent with our charge to protect our currency, our commerce and, ultimately, our communities.”
According to the indictment, in late December 2013, Gustafson created his own dark web website called Community-X, which was dedicated to the manufacturing, selling, buying, distribution and passing of counterfeit Federal Reserve Notes (FRNs), which he claimed to have manufactured. The website contained forums where members discussed the counterfeit bills and shared tips on how best to pass, ship and distribute counterfeit FRNs.
In September 2014, Gustafson redesigned this website into two different sites, a Community-X HQ site, with controlled access and a Community-X Recruitment Center site, which was accessible to the public. Gustafson, Ruiz and Miller were active members of both sites. Lin was only a member of the Recruitment Site.
Gustafson and others allegedly sold these counterfeit FRNs to purchasers in the U.S. From December 2013 through February 2014, an associate of Gustafson sent DHL packages containing these counterfeit FRNs to individuals in the U.S. After February 2014, Gustafson had the counterfeit FRNs smuggled into the U.S. by hiding the counterfeit FRNs in glued together pages of fake charity pamphlets.
The indictment alleges that Ruiz, Miller and Lin had varied levels of roles and responsibilities as participants in the conspiracy. In particular, the indictment alleges that Ruiz and others unpacked the counterfeit FRNs, that Ruiz, Miller and others treated the counterfeit FRNs to prepare them for passing and used the U.S. Postal Service to mail the treated FRNs to re-shippers and to purchasers and that Lin was a purchaser of the FRNs, who offered a guide on how to pass the counterfeit notes through casinos.
The indictment alleges more than $1.4 million in counterfeit FRNs have been seized and passed worldwide, both overseas and in the U.S. as part of this scheme.
Gustafson was charged by Ugandan authorities on Dec. 16, 2014, with conspiracy, possession of counterfeit, selling/dealing in counterfeit and unlawful possession of ammunition. He is presently on trial in Uganda on their charges.
The law provides for a maximum total sentence of five years in prison, a fine of $250,000, or both, on the conspiracy count; a maximum total sentence of 20 years in prison, a fine of $250,000, or both, on the conspiracy to commit money laundering count; and a maximum total sentence of 20 years in prison, a fine of 250,000, or both, on each of the passing and receiving counterfeit money counts. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
U.S. Attorney Hickton commended numerous agencies and organizations for conducting the investigation leading to charges in this case, including the U.S. Secret Service in Pittsburgh, Los Angeles, California, Seattle, Washington, Las Vegas, Nevada, Philadelphia, Pennsylvania, Charlotte, North Carolina, Raleigh, North Carolina, Baltimore, Maryland, Minnesota, Miami, Florida, Washington, D.C., Cincinnati, Ohio, Denver, Colorado, Phoenix, Arizona, Rome, Italy, Pretoria, South Africa and the Criminal Investigative Division in Washington, D.C., the U.S. State Department, the U.S. Postal Inspection Service in Pittsburgh, Seattle, Las Vegas, Philadelphia and Charlotte, the Federal Bureau of Investigation – Pittsburgh Division, Homeland Security Investigations in Pittsburgh, Baltimore and Cincinnati, U.S. Customs and Border Protection and the National Cyber-Forensics & Training Alliance.
Saturday, March 7, 2015
THREE CHARGED FOR ROLES IN HACKING EMAIL SERVICE PROVIDERS IN U.S.
FROM: U.S. JUSTICE DEPARTMENT
Friday, March 6, 2015
Three Defendants Charged with One of the Largest Reported Data Breaches in U.S. History
One Of The Defendants Has Already Pleaded Guilty
An indictment was unsealed yesterday against two Vietnamese citizens who resided in the Netherlands, for their roles in hacking email service providers throughout the United States. The guilty plea of one of the defendants was also unsealed at the same time. In addition, a federal grand jury returned an indictment this week against a Canadian citizen for conspiring to launder the proceeds obtained as a result of the massive data breach.
Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Acting U.S. Attorney John A. Horn of the Northern District of Georgia, Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office, Special Agent in Charge Reginald Moore of the United States Secret Service’s (USSS) Atlanta Field Office and Special Agent in Charge Veronica F. Hyman-Pillot with the Internal Revenue Service-Criminal Investigation’s (IRS-CI) made the announcement.
“These men — operating from Vietnam, the Netherlands, and Canada — are accused of carrying out the largest data breach of names and email addresses in the history of the Internet,” said Assistant Attorney General Caldwell. “The defendants allegedly made millions of dollars by stealing over a billion email addresses from email service providers. This case again demonstrates the resolve of the Department of Justice to bring accused cyber hackers from overseas to face justice in the United States.”
“This case reflects the cutting-edge problems posed by today’s cybercrime cases, where the hackers didn’t target just a single company; they infiltrated most of the country’s email distribution firms,” said Acting U.S. Attorney Horn. “And the scope of the intrusion is unnerving, in that the hackers didn’t stop after stealing the companies’ proprietary data—they then hijacked the companies’ own distribution platforms to send out bulk emails and reaped the profits from email traffic directed to specific websites.”
“Large scale and sophisticated international cyber hacking rings are becoming more problematic for both the law enforcement community that is faced with the challenges of identifying them and laying hands on them, but also the fortune 500 companies that are so often their targets,” said Special Agent in Charge Johnson. “The federal indictments, apprehensions and extraditions in this case represents several years of hard work as the FBI and its cadre of cyber trained agents and technical experts acted quickly to stop the ongoing damage to the numerous victim companies as a result of these individuals’ hacking activities. In August 2012, the FBI, with the assistance of its legal attaches stationed abroad and in conjunction with Dutch law enforcement officials, executed a search warrant in the Netherlands that disrupted continued compromises of those companies while allowing U.S. authorities to advance its investigation. That investigation targeted not only the hackers but the businesses that helped monetize the data that was stolen from those victim companies. This case further reflects the productive partnership of the FBI and the U.S. Secret Service in aggressively addressing this 21st century crime problem.”
“Our success in this case and other similar investigations is a result of our close work with our law enforcement partners,” said Special Agent in Charge Moore. “The Secret Service worked closely with the Department of Justice and the FBI to share information and resources that ultimately brought these cyber criminals to justice. This case demonstrates there is no such thing as anonymity for those engaging in data theft and fraudulent schemes.”
“Those individuals who line their pockets with money gained through deceiving others should know they will not go undetected and will be held accountable,” said Special Agent in Charge Hyman-Pillot. “IRS Criminal Investigation is committed to unraveling financial transactions to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”
According to allegations in the indictments, between February 2009 and June 2012, Viet Quoc Nguyen, 28, a citizen of Vietnam, allegedly hacked into at least eight email service providers (ESPs) throughout the United States and stole confidential information, including proprietary marketing data containing over one billion email addresses. Nguyen, along with Giang Hoang Vu, 25, also a citizen of Vietnam, then allegedly used the data to send “spam” to tens of millions of email recipients. The data breach was the largest in U.S. history and was the subject of a Congressional inquiry in June 2011.
David-Manuel Santos Da Silva, 33, of Montreal, Canada, was also indicted by a federal grand jury on March 4, 2015, for conspiracy to commit money laundering for helping Nguyen and Vu to generate revenue from the “spam” and launder the proceeds.
According to allegations in the indictments, Da Silva, the co-owner, president and a director of 21 Celsius Inc., a Canadian corporation that ran Marketbay.com, entered into an affiliate marketing arrangement with Nguyen that allowed the defendants to generate revenue from the computer intrusions and data thefts.
As an affiliate marketer, Nguyen allegedly received a commission on sales generated from Internet traffic that he directed to websites promoting specific products. Nguyen allegedly used the information stolen from the ESPs to send “spam” emails to tens of millions of customers and provided hyperlinks to allow the purchase of the products. These products were marketed by Da Silva’s Marketbay.com.
Between approximately May 2009 and October 2011, Nguyen and Da Silva received approximately $2 million for the sale of products derived from Nguyen’s affiliate marketing activities.
Vu was arrested by Dutch law enforcement in Deventer, Netherlands, in 2012 and extradited to the United States in March 2014. On Feb. 5, 2015, Vu pleaded guilty to conspiracy to commit computer fraud. He is scheduled to be sentenced on April 21, 2015, before U.S. District Judge Timothy C. Batten Sr. of the Northern District of Georgia. Nguyen is a fugitive.
Da Silva was arrested based upon charges set forth in a criminal complaint at Ft. Lauderdale International Airport on Feb. 12, 2015, and is scheduled to be arraigned today in Atlanta before Magistrate Judge E. Clayton Scofield III.
The charges contained in an indictment are merely accusations, and defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the FBI with the assistance of the USSS and IRS-CI. Law enforcement in the Netherlands and the Criminal Division’s Office of International Affairs also provided valuable assistance. This case is being prosecuted by Trial Attorney Peter Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Steven D. Grimberg of the Northern District of Georgia.
Friday, March 6, 2015
Three Defendants Charged with One of the Largest Reported Data Breaches in U.S. History
One Of The Defendants Has Already Pleaded Guilty
An indictment was unsealed yesterday against two Vietnamese citizens who resided in the Netherlands, for their roles in hacking email service providers throughout the United States. The guilty plea of one of the defendants was also unsealed at the same time. In addition, a federal grand jury returned an indictment this week against a Canadian citizen for conspiring to launder the proceeds obtained as a result of the massive data breach.
Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Acting U.S. Attorney John A. Horn of the Northern District of Georgia, Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office, Special Agent in Charge Reginald Moore of the United States Secret Service’s (USSS) Atlanta Field Office and Special Agent in Charge Veronica F. Hyman-Pillot with the Internal Revenue Service-Criminal Investigation’s (IRS-CI) made the announcement.
“These men — operating from Vietnam, the Netherlands, and Canada — are accused of carrying out the largest data breach of names and email addresses in the history of the Internet,” said Assistant Attorney General Caldwell. “The defendants allegedly made millions of dollars by stealing over a billion email addresses from email service providers. This case again demonstrates the resolve of the Department of Justice to bring accused cyber hackers from overseas to face justice in the United States.”
“This case reflects the cutting-edge problems posed by today’s cybercrime cases, where the hackers didn’t target just a single company; they infiltrated most of the country’s email distribution firms,” said Acting U.S. Attorney Horn. “And the scope of the intrusion is unnerving, in that the hackers didn’t stop after stealing the companies’ proprietary data—they then hijacked the companies’ own distribution platforms to send out bulk emails and reaped the profits from email traffic directed to specific websites.”
“Large scale and sophisticated international cyber hacking rings are becoming more problematic for both the law enforcement community that is faced with the challenges of identifying them and laying hands on them, but also the fortune 500 companies that are so often their targets,” said Special Agent in Charge Johnson. “The federal indictments, apprehensions and extraditions in this case represents several years of hard work as the FBI and its cadre of cyber trained agents and technical experts acted quickly to stop the ongoing damage to the numerous victim companies as a result of these individuals’ hacking activities. In August 2012, the FBI, with the assistance of its legal attaches stationed abroad and in conjunction with Dutch law enforcement officials, executed a search warrant in the Netherlands that disrupted continued compromises of those companies while allowing U.S. authorities to advance its investigation. That investigation targeted not only the hackers but the businesses that helped monetize the data that was stolen from those victim companies. This case further reflects the productive partnership of the FBI and the U.S. Secret Service in aggressively addressing this 21st century crime problem.”
“Our success in this case and other similar investigations is a result of our close work with our law enforcement partners,” said Special Agent in Charge Moore. “The Secret Service worked closely with the Department of Justice and the FBI to share information and resources that ultimately brought these cyber criminals to justice. This case demonstrates there is no such thing as anonymity for those engaging in data theft and fraudulent schemes.”
“Those individuals who line their pockets with money gained through deceiving others should know they will not go undetected and will be held accountable,” said Special Agent in Charge Hyman-Pillot. “IRS Criminal Investigation is committed to unraveling financial transactions to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”
According to allegations in the indictments, between February 2009 and June 2012, Viet Quoc Nguyen, 28, a citizen of Vietnam, allegedly hacked into at least eight email service providers (ESPs) throughout the United States and stole confidential information, including proprietary marketing data containing over one billion email addresses. Nguyen, along with Giang Hoang Vu, 25, also a citizen of Vietnam, then allegedly used the data to send “spam” to tens of millions of email recipients. The data breach was the largest in U.S. history and was the subject of a Congressional inquiry in June 2011.
David-Manuel Santos Da Silva, 33, of Montreal, Canada, was also indicted by a federal grand jury on March 4, 2015, for conspiracy to commit money laundering for helping Nguyen and Vu to generate revenue from the “spam” and launder the proceeds.
According to allegations in the indictments, Da Silva, the co-owner, president and a director of 21 Celsius Inc., a Canadian corporation that ran Marketbay.com, entered into an affiliate marketing arrangement with Nguyen that allowed the defendants to generate revenue from the computer intrusions and data thefts.
As an affiliate marketer, Nguyen allegedly received a commission on sales generated from Internet traffic that he directed to websites promoting specific products. Nguyen allegedly used the information stolen from the ESPs to send “spam” emails to tens of millions of customers and provided hyperlinks to allow the purchase of the products. These products were marketed by Da Silva’s Marketbay.com.
Between approximately May 2009 and October 2011, Nguyen and Da Silva received approximately $2 million for the sale of products derived from Nguyen’s affiliate marketing activities.
Vu was arrested by Dutch law enforcement in Deventer, Netherlands, in 2012 and extradited to the United States in March 2014. On Feb. 5, 2015, Vu pleaded guilty to conspiracy to commit computer fraud. He is scheduled to be sentenced on April 21, 2015, before U.S. District Judge Timothy C. Batten Sr. of the Northern District of Georgia. Nguyen is a fugitive.
Da Silva was arrested based upon charges set forth in a criminal complaint at Ft. Lauderdale International Airport on Feb. 12, 2015, and is scheduled to be arraigned today in Atlanta before Magistrate Judge E. Clayton Scofield III.
The charges contained in an indictment are merely accusations, and defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the FBI with the assistance of the USSS and IRS-CI. Law enforcement in the Netherlands and the Criminal Division’s Office of International Affairs also provided valuable assistance. This case is being prosecuted by Trial Attorney Peter Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Steven D. Grimberg of the Northern District of Georgia.
Saturday, February 21, 2015
INTERPOL SECRETARY GENERAL STOCK VISITS WASHINGTON OFFICE
FROM: U.S. JUSTICE DEPARTMENT
WASHINGTON, DC – On February 19, 2015, newly elected Interpol Secretary General Jürgen Stock visited the Interpol Washington office. While at the agency, Dr. Stock addressed Interpol Washington staff, highlighting the role effective information sharing can play via the world police body’s tools and resources and underscoring that the key to the organization’s strength lies in collaboration with Interpol’s 189 other member countries. Dr. Stock also emphasized the importance of defining Interpol’s core capabilities. After his remarks, the Secretary General toured the office, visiting with analysts in Interpol Washington’s 24/7 Interpol Operations and Command Center (IOCC) and meeting with Interpol Washington’s senior staff.
Prior to his visit at Interpol Washington, the Secretary General presented at a ministerial session during the White House Summit on Countering Violent Extremism. The meeting was organized by the U.S. Department of State and attended by Secretary of State John Kerry, Attorney General Eric Holder and Assistant Attorney General John Carlin. In his address, Dr. Stock underlined the effectiveness of Interpol’s Foreign Terrorist Fighter program to deter the movements of foreign fighters. The program represents the third pillar of President Barack Obama’s National Security Strategy and was lauded as a critical component in the fight against transnational crime in the United Nations’ Security Council Resolution 2178. The program has over 40 participating countries which share information on more than 1,500 suspected and confirmed fighters linked to Syria and Iraq. Foreign fighters may seek to travel with revoked passports, stolen or lost passports, or simply their own valid travel documents. In the first two cases, Interpol’s Stolen and Lost Travel Document database can make this information available at the frontlines. In cases where the individual’s valid passport information has been shared, Interpol global tools will generate hit alarms.
WASHINGTON, DC – On February 19, 2015, newly elected Interpol Secretary General Jürgen Stock visited the Interpol Washington office. While at the agency, Dr. Stock addressed Interpol Washington staff, highlighting the role effective information sharing can play via the world police body’s tools and resources and underscoring that the key to the organization’s strength lies in collaboration with Interpol’s 189 other member countries. Dr. Stock also emphasized the importance of defining Interpol’s core capabilities. After his remarks, the Secretary General toured the office, visiting with analysts in Interpol Washington’s 24/7 Interpol Operations and Command Center (IOCC) and meeting with Interpol Washington’s senior staff.
Prior to his visit at Interpol Washington, the Secretary General presented at a ministerial session during the White House Summit on Countering Violent Extremism. The meeting was organized by the U.S. Department of State and attended by Secretary of State John Kerry, Attorney General Eric Holder and Assistant Attorney General John Carlin. In his address, Dr. Stock underlined the effectiveness of Interpol’s Foreign Terrorist Fighter program to deter the movements of foreign fighters. The program represents the third pillar of President Barack Obama’s National Security Strategy and was lauded as a critical component in the fight against transnational crime in the United Nations’ Security Council Resolution 2178. The program has over 40 participating countries which share information on more than 1,500 suspected and confirmed fighters linked to Syria and Iraq. Foreign fighters may seek to travel with revoked passports, stolen or lost passports, or simply their own valid travel documents. In the first two cases, Interpol’s Stolen and Lost Travel Document database can make this information available at the frontlines. In cases where the individual’s valid passport information has been shared, Interpol global tools will generate hit alarms.
Thursday, February 19, 2015
RUSSIAN NATIONAL EXTRADITED TO U.S. FOR ALLEGED ROLE IN MAJOR INTERNATIONAL HACKING SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, February 17, 2015
Russian National Charged in Largest Known Data Breach Prosecution Extradited to United States
Defendant Brought From Netherlands
After Fighting Extradition for Over Two Years
A Russian national appeared in federal court in Newark today after being extradited from the Netherlands to face charges that he conspired in the largest international hacking and data breach scheme ever prosecuted in the United States, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Secretary Jeh Johnson of the Department of Homeland Security, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Director Joseph P. Clancy of the U.S. Secret Service.
Vladimir Drinkman, 34, of Syktyykar and Moscow, Russia, was charged for his alleged role in a data theft conspiracy that targeted major corporate networks, stole more than 160 million credit card numbers, and caused hundreds of millions of dollars in losses. Prior to his extradition, he had been detained by the Dutch authorities since his arrest in the Netherlands on June 28, 2012.
Drinkman appeared today before U.S. Magistrate Judge James B. Clark and entered a plea of not guilty to all 11 counts charged in the indictment and was ordered detained without bail. Trial before U.S. District Judge Jerome B. Simandle was scheduled for April 27, 2015.
“Cyber criminals conceal themselves in one country and steal information located in another country, impacting victims around the world,” said Assistant Attorney General Caldwell. “Hackers often take advantage of international borders and differences in legal systems, hoping to evade extradition to face justice. This case and today's extradition demonstrates that through international cooperation, and through great teamwork between the Department of Justice and the Department of Homeland Security, we are able to bring cyber thieves to justice in the United States, wherever they may commit their crimes.”
“Drinkman’s extradition on the indictment this office brought more than a year and a half ago shows how relentlessly we will pursue those who are charged with these serious crimes,” said U.S. Attorney Fishman. “The incredibly sophisticated work with our partners at the U.S. Secret Service to uncover this enormous, far-reaching scheme demanded an equal effort by our colleagues at the Department of Justice Criminal Division in Washington and our law enforcement partners overseas to bring the defendant back to face these charges.”
“This case demonstrates our commitment to fulfilling an important part of our integrated mission; that of protecting our Nation’s critical financial infrastructure,” said Acting Director Clancy. “Our success in this investigation and other similar investigations is a credit to our skilled and relentless cyber investigators. Our determination, coupled with our network of foreign law enforcement partners, ensures that our investigative reach can expand beyond the borders of the United States.”
According to the second superseding indictment, unsealed on July 25, 2013, and other court filings, Drinkman and four co-defendants each served particular roles in the scheme. Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, each allegedly specialized in penetrating network security and gaining access to the corporate victims’ systems. Roman Kotov, 33, of Moscow, allegedly specialized in mining the networks Drinkman and Kalinin compromised to steal valuable data. According to allegations in the indictment, the hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 27, of Odessa, Ukraine. Dmitriy Smilianets, 31, of Moscow, then allegedly sold the stolen information and distributed the proceeds of the scheme to the participants.
Drinkman and his co-defendants are charged with attacks on NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard. It is not alleged that the NASDAQ hack affected its trading platform.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 33, of Miami, in connection with five corporate data breaches, including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: one charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited on Sept. 7, 2012, and remains in federal custody. Kalinin, Kotov and Rytikov remain at large. All of the defendants are Russian nationals except for Rytikov, who is a citizen of Ukraine.
The Attacks
According to allegations in the indictment, the five defendants conspired with others to penetrate the computer networks of several of the largest payment processing companies, retailers and financial institutions in the world, stealing the personal identifying information of individuals. They allegedly took user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired at least 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programming language designed to manage data held in particular types of databases. The hackers allegedly identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants allegedly placed malicious code, or malware, on the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were allegedly able to regain access through persistent attacks.
Instant message chats obtained by law enforcement reveal that the defendants allegedly targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway, sometimes leaving malware implanted for more than a year.
The defendants allegedly used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then allegedly used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data—which they referred to as “dumps”—the conspirators allegedly sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was allegedly in charge of sales, selling the data only to trusted identity theft wholesalers. He allegedly charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data, offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by either withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants allegedly used a number of methods to conceal the scheme. Rytikov allegedly allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants allegedly communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators allegedly attempted to meet in person.
To protect against detection by the victim companies, the defendants allegedly altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also allegedly worked to evade existing protections by security software.
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses—including more than $300 million in losses reported by just three of the corporate victims—and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges.
The charges and allegations contained indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The ongoing investigation is being conducted by the U.S. Secret Service. The case is being prosecuted by Trial Attorney Rick Green of the Criminal Division’s Computer Crime and Intellectual Property Section, Chief Gurbir S. Grewal of the District of New Jersey’s Economic Crimes Unit, and Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the District of New Jersey’s Economic Crimes Unit.
The Criminal Division’s Office of International Affairs assisted with the case, as did public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.
Tuesday, February 17, 2015
Russian National Charged in Largest Known Data Breach Prosecution Extradited to United States
Defendant Brought From Netherlands
After Fighting Extradition for Over Two Years
A Russian national appeared in federal court in Newark today after being extradited from the Netherlands to face charges that he conspired in the largest international hacking and data breach scheme ever prosecuted in the United States, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Secretary Jeh Johnson of the Department of Homeland Security, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Director Joseph P. Clancy of the U.S. Secret Service.
Vladimir Drinkman, 34, of Syktyykar and Moscow, Russia, was charged for his alleged role in a data theft conspiracy that targeted major corporate networks, stole more than 160 million credit card numbers, and caused hundreds of millions of dollars in losses. Prior to his extradition, he had been detained by the Dutch authorities since his arrest in the Netherlands on June 28, 2012.
Drinkman appeared today before U.S. Magistrate Judge James B. Clark and entered a plea of not guilty to all 11 counts charged in the indictment and was ordered detained without bail. Trial before U.S. District Judge Jerome B. Simandle was scheduled for April 27, 2015.
“Cyber criminals conceal themselves in one country and steal information located in another country, impacting victims around the world,” said Assistant Attorney General Caldwell. “Hackers often take advantage of international borders and differences in legal systems, hoping to evade extradition to face justice. This case and today's extradition demonstrates that through international cooperation, and through great teamwork between the Department of Justice and the Department of Homeland Security, we are able to bring cyber thieves to justice in the United States, wherever they may commit their crimes.”
“Drinkman’s extradition on the indictment this office brought more than a year and a half ago shows how relentlessly we will pursue those who are charged with these serious crimes,” said U.S. Attorney Fishman. “The incredibly sophisticated work with our partners at the U.S. Secret Service to uncover this enormous, far-reaching scheme demanded an equal effort by our colleagues at the Department of Justice Criminal Division in Washington and our law enforcement partners overseas to bring the defendant back to face these charges.”
“This case demonstrates our commitment to fulfilling an important part of our integrated mission; that of protecting our Nation’s critical financial infrastructure,” said Acting Director Clancy. “Our success in this investigation and other similar investigations is a credit to our skilled and relentless cyber investigators. Our determination, coupled with our network of foreign law enforcement partners, ensures that our investigative reach can expand beyond the borders of the United States.”
According to the second superseding indictment, unsealed on July 25, 2013, and other court filings, Drinkman and four co-defendants each served particular roles in the scheme. Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, each allegedly specialized in penetrating network security and gaining access to the corporate victims’ systems. Roman Kotov, 33, of Moscow, allegedly specialized in mining the networks Drinkman and Kalinin compromised to steal valuable data. According to allegations in the indictment, the hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 27, of Odessa, Ukraine. Dmitriy Smilianets, 31, of Moscow, then allegedly sold the stolen information and distributed the proceeds of the scheme to the participants.
Drinkman and his co-defendants are charged with attacks on NASDAQ, 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, JetBlue, Dow Jones, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard. It is not alleged that the NASDAQ hack affected its trading platform.
Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 indictment charging Albert Gonzalez, 33, of Miami, in connection with five corporate data breaches, including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported. Gonzalez is currently serving 20 years in federal prison for those offenses. Kalinin is also charged in two federal indictments in the Southern District of New York: one charges Kalinin in connection with hacking certain computer servers used by NASDAQ and the second charges him and another Russian hacker, Nikolay Nasenkov, with an international scheme to steal bank account information from U.S.-based financial institutions. Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.
Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited on Sept. 7, 2012, and remains in federal custody. Kalinin, Kotov and Rytikov remain at large. All of the defendants are Russian nationals except for Rytikov, who is a citizen of Ukraine.
The Attacks
According to allegations in the indictment, the five defendants conspired with others to penetrate the computer networks of several of the largest payment processing companies, retailers and financial institutions in the world, stealing the personal identifying information of individuals. They allegedly took user names and passwords, means of identification, credit and debit card numbers and other corresponding personal identification information of cardholders. The conspirators allegedly acquired at least 160 million card numbers through hacking.
The initial entry was often gained using a “SQL injection attack.” SQL, or Structured Query Language, is a type of programming language designed to manage data held in particular types of databases. The hackers allegedly identified vulnerabilities in SQL databases and used those vulnerabilities to infiltrate a computer network. Once the network was infiltrated, the defendants allegedly placed malicious code, or malware, on the system. This malware created a “back door,” leaving the system vulnerable and helping the defendants maintain access to the network. In some cases, the defendants lost access to the system due to companies’ security efforts, but were allegedly able to regain access through persistent attacks.
Instant message chats obtained by law enforcement reveal that the defendants allegedly targeted the victim companies for many months, waiting patiently as their efforts to bypass security were underway, sometimes leaving malware implanted for more than a year.
The defendants allegedly used their access to the networks to install “sniffers,” which were programs designed to identify, collect and steal data from the victims’ computer networks. The defendants then allegedly used an array of computers located around the world to store the stolen data and ultimately sell it to others.
Selling the Data
After acquiring the card numbers and associated data—which they referred to as “dumps”—the conspirators allegedly sold it to resellers around the world. The buyers then sold the dumps through online forums or directly to individuals and organizations. Smilianets was allegedly in charge of sales, selling the data only to trusted identity theft wholesalers. He allegedly charged approximately $10 for each stolen American credit card number and associated data, approximately $50 for each European credit card number and associated data and approximately $15 for each Canadian credit card number and associated data, offering discounted pricing to bulk and repeat customers. Ultimately, the end users encoded each dump onto the magnetic strip of a blank plastic card and cashed out the value of the dump by either withdrawing money from ATMs or making purchases with the cards.
Covering Their Tracks
The defendants allegedly used a number of methods to conceal the scheme. Rytikov allegedly allowed his clients to hack with the knowledge he would never keep records of their online activities or share information with law enforcement.
Over the course of the conspiracy, the defendants allegedly communicated through private and encrypted communications channels to avoid detection. Fearing law enforcement would intercept even those communications, some of the conspirators allegedly attempted to meet in person.
To protect against detection by the victim companies, the defendants allegedly altered the settings on victim company networks to disable security mechanisms from logging their actions. The defendants also allegedly worked to evade existing protections by security software.
As a result of the scheme, financial institutions, credit card companies and consumers suffered hundreds of millions in losses—including more than $300 million in losses reported by just three of the corporate victims—and immeasurable losses to the identity theft victims in costs associated with stolen identities and false charges.
The charges and allegations contained indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The ongoing investigation is being conducted by the U.S. Secret Service. The case is being prosecuted by Trial Attorney Rick Green of the Criminal Division’s Computer Crime and Intellectual Property Section, Chief Gurbir S. Grewal of the District of New Jersey’s Economic Crimes Unit, and Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the District of New Jersey’s Economic Crimes Unit.
The Criminal Division’s Office of International Affairs assisted with the case, as did public prosecutors with the Dutch Ministry of Security and Justice and the National High Tech Crime Unit of the Dutch National Police.
Friday, December 26, 2014
U.S. OFFICIAL'S OP-ED ON CORRUPTION
FROM: THE STATE DEPARTMENT
Stopping the Flow of Corruption
Op-Ed
Tom Malinowski
Assistant Secretary, Bureau of Democracy, Human Rights, and Labor
Washington Post
December 26, 2014
When Viktor Yanukovych fled Kiev in February, the Ukrainian leader left behind a spectacular Swiss chalet-style mansion, a golf course, dozens of antique cars and a private zoo boasting $10,000 nameplates for the animal pens. Even the Ukrainian public, painfully familiar with the corruption of its leaders, was shocked. Yanukovych had managed to keep the chalet hidden because it was owned not by him but by an anonymous shell company registered in Britain. Other corrupt leaders have used the same trick to hide billions of dollars offshore, including through companies registered in the United States.
The rise and fall of Ukraine’s top kleptocrat teaches us a couple of things about corruption.
First, in many countries, corruption and human rights are tightly bound. The chance to profit from corruption is why many authoritarian leaders seize and cling to power. It becomes the glue that holds their regimes together, giving them spoils to distribute while turning their cronies into criminals who could be exposed and punished if they turn disloyal. It is also among the issues most likely to fuel popular resistance to authoritarianism, as we’ve seen from Tunisia to Russia and Venezuela. Any strategy to promote democracy and human rights must have the fight against corruption at its heart.
Second, we can’t fight corruption abroad if we don’t stop its proceeds from flowing through our companies and banks. We already work hard to return illicitly acquired assets to benefit the citizens of such countries, generally after the leaders who stole them have left office. But this kind of “departure tax” for falling autocrats is not enough: We must do more to deny safe haven to such funds while corrupt leaders are still in power. One way to do that is to prevent the registration of anonymous shell companies on our shores.
The Treasury Department recently took a significant step toward limiting the use of such companies by proposing a regulation that would require financial institutions to collect and verify the identity of the people behind company accountholders. President Obama’s 2015 budget includes a much more far-reaching proposal: It would require all companies to identify their “beneficial ownership” — the human beings who own or control them — to the IRS as part of a routine tax filing and make that information more readily available to law enforcement. Congress should enact this proposal now to ensure that our legal and financial systems are not used to hide corruption and facilitate autocracy overseas.
The overwhelming majority of U.S. companies that have a bank account or pay taxes in the United States already disclose their beneficial ownership. Thus, they would not be burdened and would only benefit from a reform that makes registration in the United States a sure sign of legitimacy rather than a cause for suspicion.
It is foreign criminals and corrupt officials who can benefit from the ability to conceal their identities under our current financial system. They are unlikely to file a U.S. tax return, and if they register a paper legal entity in the United States, they can use it to open a bank account on an offshore island. Indeed, they can create a web of 50 anonymous entities overnight simply by calling a state company registration office, or they can even purchase “shelf” companies registered a decade ago, adopting an additional guise of establishment and credibility. When U.S. law enforcement agencies investigate corruption or other crimes, often all they have is the name of a company and a dead end.
The wildly corrupt son of Equatorial Guinea’s president, for example, allegedly set up a slew of shell companies in the United States to launder millions of dollars of bribes from international logging companies, hiding any ties to himself. Teodoro Nguema Obiang Mangue used this money to purchase a $30 million Malibu, Calif., estate, a $38 million private jet and about $2 million worth of Michael Jackson memorabilia, among other luxuries. Meanwhile, most of his compatriots live on less than $2 per day.
Corruption empowers and enriches dictators. But here is another lesson from Ukraine: It can also become their greatest political vulnerability. Authoritarian governments may be able to muster excuses for shooting demonstrators, arresting political enemies or censoring the Internet, but no cultural, patriotic or national security argument can justify thievery. Disgust with corruption can also ease the ethnic, religious and social divisions such regimes exploit to stay in power — it’s a point of agreement between southern and northern Nigerians, nationalists and liberals in Russia, Shiites and Sunnis across the Middle East.
Fighting corruption by improving financial transparency may be one of the most effective ways of promoting liberty around the world. Members of Congress who believe in that cause and who want us to do better should embrace the president’s proposal to strengthen those laws by closing the shell company loophole that enables dictators to conceal their criminality from their people and the world.
Stopping the Flow of Corruption
Op-Ed
Tom Malinowski
Assistant Secretary, Bureau of Democracy, Human Rights, and Labor
Washington Post
December 26, 2014
When Viktor Yanukovych fled Kiev in February, the Ukrainian leader left behind a spectacular Swiss chalet-style mansion, a golf course, dozens of antique cars and a private zoo boasting $10,000 nameplates for the animal pens. Even the Ukrainian public, painfully familiar with the corruption of its leaders, was shocked. Yanukovych had managed to keep the chalet hidden because it was owned not by him but by an anonymous shell company registered in Britain. Other corrupt leaders have used the same trick to hide billions of dollars offshore, including through companies registered in the United States.
The rise and fall of Ukraine’s top kleptocrat teaches us a couple of things about corruption.
First, in many countries, corruption and human rights are tightly bound. The chance to profit from corruption is why many authoritarian leaders seize and cling to power. It becomes the glue that holds their regimes together, giving them spoils to distribute while turning their cronies into criminals who could be exposed and punished if they turn disloyal. It is also among the issues most likely to fuel popular resistance to authoritarianism, as we’ve seen from Tunisia to Russia and Venezuela. Any strategy to promote democracy and human rights must have the fight against corruption at its heart.
Second, we can’t fight corruption abroad if we don’t stop its proceeds from flowing through our companies and banks. We already work hard to return illicitly acquired assets to benefit the citizens of such countries, generally after the leaders who stole them have left office. But this kind of “departure tax” for falling autocrats is not enough: We must do more to deny safe haven to such funds while corrupt leaders are still in power. One way to do that is to prevent the registration of anonymous shell companies on our shores.
The Treasury Department recently took a significant step toward limiting the use of such companies by proposing a regulation that would require financial institutions to collect and verify the identity of the people behind company accountholders. President Obama’s 2015 budget includes a much more far-reaching proposal: It would require all companies to identify their “beneficial ownership” — the human beings who own or control them — to the IRS as part of a routine tax filing and make that information more readily available to law enforcement. Congress should enact this proposal now to ensure that our legal and financial systems are not used to hide corruption and facilitate autocracy overseas.
The overwhelming majority of U.S. companies that have a bank account or pay taxes in the United States already disclose their beneficial ownership. Thus, they would not be burdened and would only benefit from a reform that makes registration in the United States a sure sign of legitimacy rather than a cause for suspicion.
It is foreign criminals and corrupt officials who can benefit from the ability to conceal their identities under our current financial system. They are unlikely to file a U.S. tax return, and if they register a paper legal entity in the United States, they can use it to open a bank account on an offshore island. Indeed, they can create a web of 50 anonymous entities overnight simply by calling a state company registration office, or they can even purchase “shelf” companies registered a decade ago, adopting an additional guise of establishment and credibility. When U.S. law enforcement agencies investigate corruption or other crimes, often all they have is the name of a company and a dead end.
The wildly corrupt son of Equatorial Guinea’s president, for example, allegedly set up a slew of shell companies in the United States to launder millions of dollars of bribes from international logging companies, hiding any ties to himself. Teodoro Nguema Obiang Mangue used this money to purchase a $30 million Malibu, Calif., estate, a $38 million private jet and about $2 million worth of Michael Jackson memorabilia, among other luxuries. Meanwhile, most of his compatriots live on less than $2 per day.
Corruption empowers and enriches dictators. But here is another lesson from Ukraine: It can also become their greatest political vulnerability. Authoritarian governments may be able to muster excuses for shooting demonstrators, arresting political enemies or censoring the Internet, but no cultural, patriotic or national security argument can justify thievery. Disgust with corruption can also ease the ethnic, religious and social divisions such regimes exploit to stay in power — it’s a point of agreement between southern and northern Nigerians, nationalists and liberals in Russia, Shiites and Sunnis across the Middle East.
Fighting corruption by improving financial transparency may be one of the most effective ways of promoting liberty around the world. Members of Congress who believe in that cause and who want us to do better should embrace the president’s proposal to strengthen those laws by closing the shell company loophole that enables dictators to conceal their criminality from their people and the world.
Monday, December 22, 2014
DOJ ANNOUNCES CHARGES FILED RELATED TO INTERNATIONAL CYBER COUNTERFEITING SCHEME BASED IN UGANDA
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 18, 2014
Criminal Charges Filed Against U.S. Citizen in Connection with a Multi-Million Dollar International Cyber Counterfeiting Scheme Based in Uganda
U.S. Attorney David J. Hickton for the Western District of Pennsylvania and U.S. Secret Service Special Agent in Charge Eric P. Zahren of the Pittsburgh Field Office today announced the filing of a criminal complaint in Pittsburgh charging a U.S. citizen with leading an international counterfeit currency operation headquartered in the Republic of Uganda.
Ryan Andrew Gustafson, aka Jack Farrel, aka Willy Clock, 27, a U.S. citizen currently residing in Kampala, Uganda, was charged with conspiracy and counterfeiting acts committed outside of the U.S. When he lived in the United States, he mainly resided in Texas and Colorado.
“This complicated, international cyber counterfeiting conspiracy was broken as a result of expert investigation by the Secret Service and a total commitment of all cooperating law enforcement to reject the premise that criminals committing cybercrimes in the U.S. – but who reside outside our borders – cannot be reached,” stated U.S. Attorney Hickton. “We will hold cyber criminals accountable and bring them to justice no matter where they reside.”
“This investigation involves the manufacture of counterfeit U.S. currency, which has been the Secret Service’s core mission since 1865,” said Special Agent in Charge Zahren. “Add to that the modern elements of an international counterfeiting conspiracy utilizing new-age, cyber technology, and it represents the full evolution and unique investigative capabilities of today’s Secret Service.”
As detailed in the affidavit in support of the criminal complaint, in December 2013, the Secret Service began investigating the passing of counterfeit Federal Reserve Notes (FRNs), believed to be manufactured in Uganda, at Pittsburgh-area retail stores and businesses. Agents determined that an individual identified as J.G. had passed these notes and was renting a postal box at The UPS Store on Pittsburgh’s South Side. On Feb 19, 2014, law enforcement learned that J.G. received three packages addressed from Beyond Computers, located in Kampala, Uganda. Agents executing a search warrant on the packages found $7,000 in counterfeit $100, $50 and $20 FRNs located in two hidden compartments within the packaging envelopes. A fingerprint on a document inside one of the packages was identified as belonging to Ryan Andrew Gustafson.
The Secret Service subsequently worked with Ugandan authorities to identify the source of the counterfeit FRNs. Their efforts led to A.B., who admitted to sending the packages, explaining that an American named “Jack Farrel,” and another person, provided him the counterfeit notes to ship. Based on information provided by A.B., the Secret Service used facial recognition to identify Jack Farrel as Ryan Andrew Gustafson.
According to the affidavit, J.G. met “Willy Clock” on an online criminal forum called Tor Carding Forum. Through private messaging, J.G. and Clock discussed counterfeit currency and J.G. agreed to purchase counterfeit FRNs.
In January 2014, Clock told J.G. that he had established his own online forum called Community-X, a website dedicated to the selling of counterfeit reserve notes. The forum requires a username and password to access the site, and individuals must be invited and approved by Clock to become members. Secret Service used an undercover operative to communicate with Clock through the website, to purchase additional counterfeit $100 FRNs, and to become a re-shipper of counterfeit notes.
In November 2014, the Secret Service executed a search warrant at the residence of another re-shipper, who had been an active member of Community-X. This person cooperated and provided information that a forum member had traveled to Uganda and brought back more than $300,000 in counterfeit notes.
The Secret Service, working with Ugandan authorities, engaged yet another confidential informant, in Uganda, who had knowledge of Jack Farrel and his counterfeiting operations. On Dec. 11 2014, this confidential informant called Farrel to arrange to purchase counterfeit FRNs. The informant met Farrel’s associate and made the buy. Two trusted sources followed the associate back to Farrel’s home and reported the location to the Secret Service who turned it over to the Uganda Special Investigations Unit. Their search of Farrel’s residence netted two million Ugandan shillings from the buy; $180,420 in counterfeit FRNs; counterfeit Euros, Indian Rupees, Ugandan Shillings, Congo Francs, and Ghana Cedis; computers and printers; inks and ink jet cartridges; paper cutters; glue sticks; “Give a Child Hope Today” pamphlets with counterfeit FRNs in between glued together pages; and a pair of “Anon Hands.” Anon Hands are life-like rubber molds that fit like gloves over the user’s hands and are meant to conceal the wearer’s fingerprints. As noted above Farrel has been identified as Gustafson. Evidence collected at the scene also allowed investigators to identify Gustafson as Willy Clock.
Gustafson was charged by Ugandan authorities on Dec. 16 with conspiracy, possession of counterfeit, selling/dealing in counterfeit, and unlawful possession of ammunition. He was brought before the court that day to be informed about the charges; he also is being represented by counsel in Uganda.
U.S. Secret Service estimates $1.8 million in counterfeit FRNs have been seized and passed in Uganda. The total amount of Ugandan-made counterfeit FRNs seized or passed domestically was approximately $270,000. This amount was limited due to early detection by the Secret Service.
U.S. law provides for a maximum total sentence of 25 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
U.S. Attorney Hickton commended numerous agencies and organizations for conducting the investigation leading to charges in this case, including the Directorate of Public Prosecution, the Criminal Investigations and Intelligence Department, the Special Investigations and Intelligence Unit, and Stanbic Bank in Uganda; various domestic and foreign Secret Service Field Offices, including the Rome, Italy, Field Office and the Criminal Investigative Division in Washington, D.C.; the U.S. State Department; the U.S. Postal Inspection Service; the Federal Bureau of Investigation; Homeland Security Investigations; U.S. Customs and Border Protection and the National Cyber-Forensics & Training Alliance.
Assistant U.S. Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
A criminal complaint contains charges and is not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
Thursday, December 18, 2014
Criminal Charges Filed Against U.S. Citizen in Connection with a Multi-Million Dollar International Cyber Counterfeiting Scheme Based in Uganda
U.S. Attorney David J. Hickton for the Western District of Pennsylvania and U.S. Secret Service Special Agent in Charge Eric P. Zahren of the Pittsburgh Field Office today announced the filing of a criminal complaint in Pittsburgh charging a U.S. citizen with leading an international counterfeit currency operation headquartered in the Republic of Uganda.
Ryan Andrew Gustafson, aka Jack Farrel, aka Willy Clock, 27, a U.S. citizen currently residing in Kampala, Uganda, was charged with conspiracy and counterfeiting acts committed outside of the U.S. When he lived in the United States, he mainly resided in Texas and Colorado.
“This complicated, international cyber counterfeiting conspiracy was broken as a result of expert investigation by the Secret Service and a total commitment of all cooperating law enforcement to reject the premise that criminals committing cybercrimes in the U.S. – but who reside outside our borders – cannot be reached,” stated U.S. Attorney Hickton. “We will hold cyber criminals accountable and bring them to justice no matter where they reside.”
“This investigation involves the manufacture of counterfeit U.S. currency, which has been the Secret Service’s core mission since 1865,” said Special Agent in Charge Zahren. “Add to that the modern elements of an international counterfeiting conspiracy utilizing new-age, cyber technology, and it represents the full evolution and unique investigative capabilities of today’s Secret Service.”
As detailed in the affidavit in support of the criminal complaint, in December 2013, the Secret Service began investigating the passing of counterfeit Federal Reserve Notes (FRNs), believed to be manufactured in Uganda, at Pittsburgh-area retail stores and businesses. Agents determined that an individual identified as J.G. had passed these notes and was renting a postal box at The UPS Store on Pittsburgh’s South Side. On Feb 19, 2014, law enforcement learned that J.G. received three packages addressed from Beyond Computers, located in Kampala, Uganda. Agents executing a search warrant on the packages found $7,000 in counterfeit $100, $50 and $20 FRNs located in two hidden compartments within the packaging envelopes. A fingerprint on a document inside one of the packages was identified as belonging to Ryan Andrew Gustafson.
The Secret Service subsequently worked with Ugandan authorities to identify the source of the counterfeit FRNs. Their efforts led to A.B., who admitted to sending the packages, explaining that an American named “Jack Farrel,” and another person, provided him the counterfeit notes to ship. Based on information provided by A.B., the Secret Service used facial recognition to identify Jack Farrel as Ryan Andrew Gustafson.
According to the affidavit, J.G. met “Willy Clock” on an online criminal forum called Tor Carding Forum. Through private messaging, J.G. and Clock discussed counterfeit currency and J.G. agreed to purchase counterfeit FRNs.
In January 2014, Clock told J.G. that he had established his own online forum called Community-X, a website dedicated to the selling of counterfeit reserve notes. The forum requires a username and password to access the site, and individuals must be invited and approved by Clock to become members. Secret Service used an undercover operative to communicate with Clock through the website, to purchase additional counterfeit $100 FRNs, and to become a re-shipper of counterfeit notes.
In November 2014, the Secret Service executed a search warrant at the residence of another re-shipper, who had been an active member of Community-X. This person cooperated and provided information that a forum member had traveled to Uganda and brought back more than $300,000 in counterfeit notes.
The Secret Service, working with Ugandan authorities, engaged yet another confidential informant, in Uganda, who had knowledge of Jack Farrel and his counterfeiting operations. On Dec. 11 2014, this confidential informant called Farrel to arrange to purchase counterfeit FRNs. The informant met Farrel’s associate and made the buy. Two trusted sources followed the associate back to Farrel’s home and reported the location to the Secret Service who turned it over to the Uganda Special Investigations Unit. Their search of Farrel’s residence netted two million Ugandan shillings from the buy; $180,420 in counterfeit FRNs; counterfeit Euros, Indian Rupees, Ugandan Shillings, Congo Francs, and Ghana Cedis; computers and printers; inks and ink jet cartridges; paper cutters; glue sticks; “Give a Child Hope Today” pamphlets with counterfeit FRNs in between glued together pages; and a pair of “Anon Hands.” Anon Hands are life-like rubber molds that fit like gloves over the user’s hands and are meant to conceal the wearer’s fingerprints. As noted above Farrel has been identified as Gustafson. Evidence collected at the scene also allowed investigators to identify Gustafson as Willy Clock.
Gustafson was charged by Ugandan authorities on Dec. 16 with conspiracy, possession of counterfeit, selling/dealing in counterfeit, and unlawful possession of ammunition. He was brought before the court that day to be informed about the charges; he also is being represented by counsel in Uganda.
U.S. Secret Service estimates $1.8 million in counterfeit FRNs have been seized and passed in Uganda. The total amount of Ugandan-made counterfeit FRNs seized or passed domestically was approximately $270,000. This amount was limited due to early detection by the Secret Service.
U.S. law provides for a maximum total sentence of 25 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
U.S. Attorney Hickton commended numerous agencies and organizations for conducting the investigation leading to charges in this case, including the Directorate of Public Prosecution, the Criminal Investigations and Intelligence Department, the Special Investigations and Intelligence Unit, and Stanbic Bank in Uganda; various domestic and foreign Secret Service Field Offices, including the Rome, Italy, Field Office and the Criminal Investigative Division in Washington, D.C.; the U.S. State Department; the U.S. Postal Inspection Service; the Federal Bureau of Investigation; Homeland Security Investigations; U.S. Customs and Border Protection and the National Cyber-Forensics & Training Alliance.
Assistant U.S. Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
A criminal complaint contains charges and is not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
Sunday, June 22, 2014
SECRETARY KERRY'S REMARKS ON THE TRAFFICKING IN PERSONS REPORT
FROM: U.S. STATE DEPARTMENT
Remarks at the Release of the 2014 Trafficking in Persons Report
Remarks
John Kerry
Secretary of State
Ben Franklin Room
Washington, DC
June 20, 2014
SECRETARY KERRY: Ambassador Lou CdeBaca, thank you very, very much. Thank you for your leadership, primarily. You’re a visionary on this and a relentless advocate on behalf of human rights. We are all deeply grateful to you for your leadership. And Sarah Sewall, thank you for your leadership and for being part of this great effort.
And thank you all for being here. This is an assembly of people who have come here out of concern, a group of advocates, many of you part of law enforcement, many of you members of NGOs, advocacy groups, human rights activists – all of you deeply concerned. And I want to emphasize this report, theTrafficking In Persons Report, June 2014, this is not just a book, it’s not just a report filled with stories that will touch you. This is a call to action. It’s a call to conscience. It is a reminder of what happens in many dark places that need light. And we have a responsibility to try to bring that light to these individuals and to these places.
I’m very grateful to the heroes who are here. You’ll hear in a little bit about each of them as we hand out the awards. Their stories are inspiring. I’m very grateful also to all of our distinguished guests from the diplomatic corps, a number of ambassadors here. We are very, very grateful to them for coming. In fact, all of you are a testimony to the fact that trafficking in persons is one of those rare issues that could bring everybody together, whatever their politics or their ideology. I’m particularly grateful that one of the strongest advocates in the United States Congress, Congressman Chris Smith, is here and I thank him for his presence as well as for his leadership.
If the cries of those who are enslaved around the world today were an earthquake, then the tremors would be felt in every single nation on the continent on every continent simultaneously. For years, we have known that this crime affects every country in the world, including ours. We’re not exempt. More than 20 million people, a conservative estimate, are victims of human trafficking. And the United States is the first to acknowledge that no government anywhere yet is doing enough. We’re trying. Some aren’t trying enough. Others are trying hard. And we all need to try harder and do more.
At our last meeting of our all of government, President Obama has charged us with the responsibility of creating an all-of-government response. So when we sit down on this, every single Cabinet officer who has a responsibility, whether it’s DHS, Department of Justice, they’re all there, all coordinating. And I, as the chair, instructed this year that none of us should travel anywhere in the world and fail to raise this issue with our interlocutors, no matter what meetings, no matter where we are. This has to be on the agenda. (Applause.)
Whether it is a young girl trapped in a brothel or a woman enslaved as a domestic worker or a boy forced to sell himself on the street or a man abused on a fishing boat, the victims of these crimes all have names, all had families. And they each have been robbed of the right to lead their lives the way that they might choose to for themselves. All of us in this room are really all too aware that there’s perhaps no greater threat to human dignity and no greater assault on basic freedom than the evil of human trafficking, which is – as Sarah and Lou have said, this is a form – not a form – it is slavery, even in the 21st century. Now, I know that sometimes it’s difficult to see how or where somebody might be able to make a difference, but nothing should give us more hope than the courage of those who stand up and say loudly and clearly: We’re going to stop this. No more, never again.
So let me begin by thanking Under Secretary Sewall. Because time and again, Sarah has proven that when all the instruments of American power complement one another, when they do come together, we can find a way to tackle the most difficult challenges. She helped to get the nuclear testing moratorium passed when everybody said it’s impossible. She helped to reinvent counterinsurgency at a time when our force in Iraq was nearly broken and our efforts were at the precipice. And she convinced the U.S. Government, including the military, that it needed to think differently about genocide and how to act. She is a very, very welcome addition to our team here at the State Department.
I also want to thank our outstanding Ambassador-at-Large, Lou CdeBaca, for everything he has done these past years. Part conscience, part prosecutor, Lou has made it his mission to relegate human trafficking to the history books where it belongs. And he’s changing the way businesses – (applause) – he’s changing the way businesses root out abuses in their supply chains – from government contractors to private sector partners. And for Lou, the supply chains are not just product lines. They represent lines of responsibility. And we each have a responsibility to make sure that the goods we buy, we buy free of forced labor.
Now, I want to pay a special tribute to all of Lou’s team and everybody in the Trafficking in Persons Office. There’s an enormous amount of work that goes into this. This isn’t just a report churned out in a few days when there’s a deadline looming. This is not a week-long, it’s not even a month-long affair. This is a year-long effort that requires an enormous amount of focus and energy and ambition. And the Trafficking in Persons Report is common sense, it’s conscience, it’s conviction – it’s also facts – all rolled into one. And it’s a call to action to governments and citizens around the world to uncover modern slavery and hold it accountable to identify the victims, and bring their abusers to justice. There cannot be impunity for those who traffic in human beings. It must end. (Applause.) So that is the standard that we intend to hold ourselves to.
And when we put out a report like this, I want to say something. I have received calls from different parts of the world, from ministers and others who are concerned about this accountability and kind of want to push back a little, suggest it should be otherwise. This is not an act of arrogance. We hold ourselves to the same standard. This is an act of conscience. It is a requirement as a matter of advocacy and as a matter of doing what is right.
And the fight against modern slavery should matter to all of us. I know that it matters to this Department, and I’m proud to lead a Department that cares about it. When I was a prosecutor outside of Boston in the 1970s, I worked to put people behind bars for rape and for sexual assault, among other crimes. We were actually one of the very first jurisdictions in America to establish a witness-victim assistance program, in order to make sure that people weren’t twice victimized – once by the crime, and then by the system.
And my time as a prosecutor seared in me a very simple lesson: In the fight for justice and equality, all of us are really interconnected. And modern slavery does not exist in a vacuum. It’s interconnected with so many other 21st century challenges, from narcotics trafficking to all of the criminal enterprises that traffic in arms or other efforts – even global international crime creates the channels and frameworks which are used to be able to abuse these kinds of processes. And I learned that back when I was uncovering the Noriega drug connections and the banking system that gave into it and the willingness of people to entertain people, including Usama bin Ladin, who was part of the clientele of a particular bank that we uncovered. That’s what happens. Other criminal activity is empowered, and it all rips and tears at the fabric of rule of law and of viable states remaining viable.
So we have to combat this. Obviously, there is no denying that we face big challenges. Big countries tackle big challenges every single day, and that’s, I think, what defines us. So even as we know that Iraq is in trouble and we’re dealing with conflicts still in Afghanistan and other places, that’s no reason to back off. It’s no reason to turn away. There is no excuse for not pursuing all of these things. We have the ability to multi-task, we have the ability to stay focused, and in the end, they’re all connected because the networks that fund terrorists are the same networks that permit people to move this kind of money illicitly around the world.
We are talking about real people – men and women, boys and girls, transgender individuals – whose lives have been abandoned to the most depraved instincts. Because on this World Refugee Day we are especially mindful of our common responsibility to care for the most vulnerable, for the displaced, and for those who migrate in search of a better life.
Now, I know in today’s world with all of the hurly-burly of everyday life, with massive amounts of media coming at everybody, it’s pretty easy to miss the human faces behind the statistics. So I just want to share with you a few stories, if I can, to put faces to this crime – a few ways that you will see how modern slavery is a stain on the conscience of the world.
Abeo is a young woman from Nigeria. And one night, she was abducted from her home – from her home – and forced into prostitution. She suffered unspeakable crimes – from beatings to rape to forced labor. And after learning that she was pregnant from one of the many rapes that she had endured, her traffickers sent her by boat to Spain. Her traffickers told her that she owed them tens of thousands of dollars for the cost of the journey, and they planned to force her into prostitution there in order to pay for it. Her situation was horrific by any standard. But Abeo did not just persevere. She reported the threat to Spanish authorities, when she found a place that she was able to go to where there was a system of law. And thanks to her courage and thanks to the commitment of the authorities in Spain, the human trafficking ring that abused her was broken up and its leaders were brought to justice.
So here’s the lesson that Abeo teaches us: Wherever rule of law is weak, where corruption is most ingrained, and where populations can’t count on the protection of governments and of law enforcement, there you find zones of vulnerability to trafficking. But wherever rule of law is strong, where individuals are willing to speak out and governments willing to listen, we find zones of protection against trafficking. And that is what is possible if we double down on dignity, which is what we are doing here today.
But if you dive deeper, you’ll see that some of the worst abuses happen in places that we rarely think to look – within the supply chains of logging and mining industries, on board fishing vessels, and in processing plants.
Oscar, a young boy from Peru. His cousin worked in the mining region and he told him stories about being paid in chunks of gold. So Oscar left home at 16 for Peru’s forests with the dream of finding a job. But those dreams became his nightmare the moment he arrived at the gold mine. The owner told him that he had to work 90 days just to repay the fee his cousin got for recruiting him. Oscar thought about running away, but the owner controlled the river traffic. Escape was simply not an option. So he stayed. He toiled in deplorable conditions. He contracted malaria and was left to die in a hut. After eight months, Oscar returned home only to come down with yellow fever. He had to borrow money from his family to pay for a doctor. He fell into debt and returned to the very forests he’d worked to escape just months before.
Here’s what Oscar teaches us: Exacting profits from exploiting people often go hand in hand in illegal, unsustainable, and unregulated industries – the very things we’re trying to fight: unregulated, unsustainable, exploited outside of the law. And they destroy all of commerce, because they undermine the legitimacy of the rest of the business world. From Latin America to Africa to Asia, to other parts of the world, there are illegal mining and logging that can create not only environmental degradation because it operates outside of the law and regulatory concepts, but zones of impunity where trafficking can prey on their victims. So we need to bring these industries and these people that they exploit out of the shadows. And we need to bring the perpetrators to justice.
Now obviously, it’s not just illegal mining and logging where you find this kind of a problem. And how do I know that? Because of the story of a woman named Flor.
Flor was a seamstress from Mexico. She worked two jobs just to support her young children. One day, she heard about a sewing opportunity in the United States. Her recruiter told her that she’d make a lot more money if she – than she did in Mexico, and therefore she’d be able to give her kids a better life. So she headed for the border. When she got there, the woman who arranged her trip stripped her of her identification documents and her belongings. She was taken immediately to a sewing factory and put to work – from four in the morning until late at night. She was beaten, abused, and prevented from leaving the factory. After 40 days of this hell, she managed to escape to a local church. And they got the help she needed, and today, she is a leader in the national survivors’ caucus in the United States.
So here’s what Flor teaches us: We need to integrate anti-trafficking efforts into all areas of our diplomatic and development work. Trafficking is a criminal enterprise, plain and simple. The profits alone exceed $150 billion a year. No company can compete with another company that’s willing to inhumanely commercialize its workforce. And if we want to have our legitimate businesses compete on a fair playing field, then we need to end the climate of impunity behind these hidden sectors of the economy.
And that is why the State Department is working with civil society to prevent corporate and federal dollars from abetting this crime. That’s why we’re partnering with MadeintheFreeWorld.com – MadeintheFreeWorld.com[1] – in order to develop a risk assessment tool that will help business leaders weigh the risks of trafficking throughout their supply chains. And that’s why we’re teaming up with Verite, an award-winning labor-rights NGO, in order to develop a range of resources for businesses committed to eradicating this scourge, from trainings and awareness programs to plans for recruitment and fair wages and housing.
So my friends, in summary, the lessons here are as clear as they are compelling: When we embrace our common humanity and stand up for the dignity of all people, we realize the vision of a world that is more caring and more just – a world free from slavery. That is the vision that inspired generations of abolitionists who have preceded us. William Wilberforce spent a lifetime fighting to end slavery throughout the British Empire. Standing before parliament, he said: “Having heard all of this you may choose to look the other way but you can never again say that you did not know.”
Today, thanks to Abeo, Oscar, Flor and so many other survivors, thanks to the 10 that we will honor today, we all know about the horrors of modern slavery. And we are determined, we will not look the other way. That’s what this year’s report is all about. That’s our cause of action now, and together, I am convinced that we can and we will make a difference.
Thank you all. (Applause.)
Thursday, May 1, 2014
ASSISTANT SECRETARY BROWNFIELD'S REMARKS AT WILDLIFE CRIMINOLOGY SYMPOSIUM
FROM: U.S. STATE DEPARTMENT
Remarks at the Wildlife Criminology Symposium
Remarks
William R. Brownfield
Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs
World Bank,
Washington, DC
April 23, 2014
Thank you very much, Mr. Magrath and Mr. McCarthy. Ladies and gentlemen, I would like to open with my own personal note of thanks, not just to the two gentlemen seated up here with me, but to the entire World Bank. I say this with sincerity. The World Bank has done excellent work in managing, leading, and in many ways, pioneering the effort worldwide to address the crisis of illegal wildlife trafficking. I have this on the best authority on the entire planet – the United States Ambassador to Thailand, a woman to whom I have the unmitigated pleasure of being married for the past 30 years -- and her assessment this morning is that no organization has been more active and more effective in this effort in South East Asia than the World Bank.
Ladies and gentlemen, you may be asking yourselves the question, “What is Mr. Brownfield, a man who is known in the State Department as Mr. Drugs and Thugs, doing here to discuss the issue of international wildlife conservation, protection, and preservation?” My message for all of you is that I am here because there is a very important connection between what I do and what those in the conservation community do. We are talking about two communities that for the past 100, 1000, or 5000 years have not actually worked together a great deal. The conservation community is comprised of men and women who have done extraordinarily effective and noble work in protecting and preserving not dozens, not scores, but hundreds of species of life on our planet that would otherwise be as extinct today as the dinosaurs. To them, we all owe a tremendous debt of gratitude. On the other hand, there is the law enforcement community -- a community that while not traditionally dedicated to the conservation and preservation of species, is very dedicated and quite talented at the process by which we combat and eventually defeat criminal trafficking organizations. Our challenge, ladies and gentlemen – and what I submit to you is the unspoken theme of this symposium - is how to make these two communities work effectively together. That is our challenge for the 21st century.
I know why I am doing this. I am doing this because two and a half years ago a woman looked at me with very firm eyes and said to me, “Brownfield, you are going to do counter-wildlife trafficking, whether you like it or not.” Her name was Hillary Rodham Clinton and I did what you would expect any Assistant Secretary of State to do under those circumstances -- I said ‘yes Ma’am, I will get right on it.’ And if any of you are wondering whether her departure and the arrival of her successor generated any change in this regard, may I offer you a personal anecdote? The only conversation that I have had with John Kerry that was, shall I say, “pointed,” over the last 14 months has been about how fast I was moving in order to make progress on the issue of wildlife trafficking. So that is why I am here.
Why are you here? I offer the following suggestions. One, you are here because if you did not come or did not focus on this issue, hundreds of species of our planet would be dead, eliminated forever, before this century is out. And second, law enforcers are now dealing with a criminal enterprise that is generating perhaps as much as $10 billion in criminal proceeds every year. Ten billion, ladies and gentlemen, that begins to be real money. You might actually want to begin to pay attention to an enterprise that is moving in an illegal and illicit manner, corrupting institutions and governments to the tune of $10 billion a year.
Ladies and gentlemen, I, like Mr. McCarthy, do not claim to be an expert on wildlife conservation or even on wildlife trafficking. I do think I know something about trafficking in general, and I know that there are certain elements common to each and every one of the trafficking industries. Whether it is cocaine and heroin, firearms, people, cut flowers, or wildlife, I know that first, in every case; there is a demand for the product, which produces a market. In every case, there will be a producer at the source region. Perhaps that producer is growing the product. Perhaps that producer is manufacturing the product. Perhaps that producer is butchering the product in order to traffic it. I know that every trafficking organization develops a logistics network – normally an extremely sophisticated logistics network, because it must move a product from one country across numerous national borders to get to the final market, and it must do so in an illicit manner. Every trafficked product eventually has a retail marketing system at the country of destination. And finally every trafficking network has a financial system that permits those involved in the enterprise eventually to convert their product into some form of cash or other marketable commodity that they can use in the open and licit market. This, law enforcers, is the challenge that we confront as we move down the road toward combatting illegal wildlife trafficking; while every product is different, there are not that many differences between how we will attack this problem and how we attack the problem of drugs or trafficking in persons or trafficking in firearms.
From the law enforcement perspective, we are not at a bad starting point. We do have international conventions, foremost among them CITES, but others as well, that give us the international authority or basis to cooperate and attack this problem. We have certain existing international organizations which have taken on this responsibility, such as Interpol and its regional subgroups, the United Nations Office on Drugs and Crime, the World Customs Organization, even ICCWC, as Leonard laid out. These international organizations or groupings give us natural allies and umbrellas beneath which we can operate. We have regional organizations that have taken on the mission: the OECD, APEC for the Pacific nations, ASEAN specifically for Southeast Asia, and the UN Crime Commission. We are not starting at point zero. Man has walked this path before us and we can take advantage of some of the institutions, the infrastructure, and the architecture that has already been built for us.
For those of us who are from the United States of America, and specifically the United States Government, we have a new weapon as of February of this year, when the President’s new National Strategy for Combatting Wildlife Trafficking came online. This Strategy is easily available online to anyone who may choose to access it.
The President’s National Strategy offers three areas of focus: first, strengthening enforcement of laws and regulations. That, ladies and gentlemen, is what I do for a living. I support law enforcement around the world.
Second, reducing demand for illegally trafficked wildlife. That, to a very considerable extent, is what the conservation community does for a living. However, I do predict that demand will drop rather substantially if, for instance, we tell most individuals that they could be sent to prison for 20 years for buying a rhino horn. I predict that the demand for rhino horn just might diminish a little bit as a result of law enforcement efforts.
The third area laid out in this strategy is building greater international and domestic cooperation. And, that is what both the conservation and the law enforcement communities do.
Now, despite the fact that I am widely referred to in the State Department as “drugs and thugs,” I am actually the Assistant Secretary for International Narcotics and Law Enforcement Affairs, or INL. We have $15 million that we are putting to wildlife trafficking in 2014. And, without going into detail, I am going to divide it into two basic categories. One, we are processing roughly $5 million through some of these international organizations that I just laid out for you. They have already developed programs that are transnational in scope and address the wildlife trafficking issue in an entire region. They need support, they need funds, they need resources. We are trying to provide some of that for them.
The remaining $10 million or so is going into programs with individual countries and governments. This is heavily focused at this time on Africa, and we will have cooperative and close programs with the Governments of Kenya and the Republic of South Africa. Some of the $10 million will be available for other regional programs and cooperation in southern Africa.
We have organized our work on this issue around four basic categories. The first is what we call “legislative framework.” The principle behind this is amazingly simple: it is very difficult to prosecute someone for wildlife trafficking if there is no law on the books that makes it a criminal offense. Judges get annoyed when prosecutors bring cases before them and the prosecutors cannot explain what law has been violated by the defendant. And, believe it or not, in many countries and regions around the world, there are not existing statutes on the books criminalizing this sort of activity or, in some cases; it is criminalized to such a minimal extent that it becomes the equivalent of a traffic offense or a failure to pay parking tickets. Creating the legislative framework must be the first plank in a successful strategy of combatting wildlife trafficking.
Our second organizational concept is support for law enforcement. In the United States of America, this is largely a ranger’s function, though not exclusively. The more we get into prosecutions, the more state and local law enforcement will become engaged, but trying to stop poachers and traffickers at the point of infraction is an expanded ranger function. By expanded, I mean that what these poor guys have to deal with are groups of people armed to the level of an infantry platoon – that degree of firepower. The prospect of coming in and enforcing the law with a nightstick and possibly a 9mm pistol puts local law enforcement in an extraordinarily difficult position. They need training, they need equipment, and in some instances, they need weaponry. That must be part of our challenge.
Our third organizational category includes prosecutors and courts. As you can well imagine, if we have identified them, arrested them, and brought them to court, but a prosecutor has no experience whatsoever on how to prosecute this particular type of crime, then we are not likely to have success. There is nothing that will kill a strategy and a policy more quickly than two or three losing cases that send the message out to everyone in the trafficking industry that “they can’t touch us even if they get us to court.”
Our fourth organizational category is cross-border cooperation. We do it through something we call wildlife enforcement networks – WENS. The principle behind this initiative is extremely simple. It is that governments that are neighbors or at least in the same region as each other stand to benefit from sharing intelligence and information and notifying each other about trafficking groups that seem to be moving across frontiers and borders. At times, regional partners might even plan and cooperate on joint operations and efforts. I can assure you that sophisticated wildlife trafficking organizations know exactly where the borders are located and know precisely how to take advantage of the border if country or government X is enforcing and government Y is not enforcing.
That is the plan. Has there been an impact? I would suggest that there has been. Let me offer three examples from the INL anti-wildlife trafficking initiative. First, recently, 28 governments and their law enforcement communities cooperated for one month in an exercise called COBRA II. This involved law enforcement communities and organizations from Asia, Africa, and North America. What did they accomplish in one month? More than 400 arrests and 350 seizures of illegally trafficked wildlife - and they learned in that month how to do it. They learned lessons from other law enforcement organizations as to what worked and what did not work. They also learned how to communicate with one another and learned new tactics, techniques, and technologies.
Second, in April 2013, the United Nations Crime Commission met and - with the eventual sponsorship of 20 different governments - passed a resolution that stated that wildlife trafficking is a “serious crime” in the United Nations system. Now, ladies and gentlemen, in UN speak, that is about as tough as you can get. They have given the tool and the weapon to any government that is prepared to take on the challenge, by saying the United Nations system and the world’s global community says that this act is a serious crime.
Third and finally, in November of last year, the government for which I work issued its first ever reward offer of the Transnational Organized Crime Rewards Program. Under the authority created by the President of the United States and supporting our Transnational Organized Crime Strategy, this reward program was designed to fill the gap between counterterrorism on one side and counternarcotics on the other side by creating the authority to offer rewards for the most serious participants in transnational organized crime. Who was the very first named suspected criminal under this authority? Ladies and gentleman, it was the organization known as the Xaysavang Network, under the leadership, we believe, of Mr. Keosavang, a citizen of Laos. We believe this organization is perhaps one of the world’s largest wildlife trafficking organizations. They traffic product from Asia and Africa in search of markets around the world.
We have offered $1 million to anyone who assists in taking down this trafficking network. It is symbolic, I acknowledge, but it is important symbolism to say that at the first opportunity we had to identify a transnational criminal organization and to put real money behind its dismantlement, we selected a wildlife trafficking organization. May I say to anyone in the Xaysavang network who may be listening today or in the future that this reward offer still stands. There is no rock beneath which you can hide; no tree behind which you may conceal yourself that will make that $1 million go away.
Ladies and gentlemen, may I mention one other program? I believe there are some academics in this room and I would like to draw you in to this conversation as well. There is a program that the State Department has been managing for several years. It’s kind of a cool program that we call the Diplomacy Lab. It works on the following concept. Neither the Department of State nor any other foreign ministry in the world has so many resources, so many people, so much money that it can do all of the research and analysis that it requires with its own employees. We want to draw in the academic world to this effort. We want to allow them the opportunity, whether they are undergraduate or graduate students or tenured professors, to do research and work that will have a direct, real-world impact on what we are doing. We identify areas and invite research and analysis in those areas. We had excellent success with this in areas related to my line of work, including corrections, prison management, community policing, and tribal courts. There have been a half-dozen of these sorts of research efforts which we absorb in the INL bureau, integrate into our programs and then attempt to apply in genuine programs in many countries around the world. May I suggest to you, academics, to look to the year 2014 for the opportunity to engage in several of these projects and programs that are related to illicit wildlife trafficking?
The problem of wildlife trafficking is not going to be solved today or even this year. It has taken us centuries and perhaps even millennia to get into this problem. It is going to take us some years as a human race to solve it. Yet we will solve the problem, step by step. We will do it together as two communities: a community that is dedicated to conservation and preservation and a community that is dedicated to the enforcement of our nations’ and our planet’s laws. We will do it because we can. We will do it because we must.
Leonard mentioned in his remarks the sound of a lioness mourning the loss of its cub. I come from the west Texas panhandle. I can assure you that I have never heard that sound. I hope I never do. But there is one sound of a mother mourning that, I suggest to you, I would not mind hearing at all. That would be the sound of a homo sapien mourning the departure of her poacher son as he begins several years of incarceration following his conviction and sentencing for wildlife trafficking. That is a vision that I would not mind associating myself with, because the more of that sort of mourning we hear, the less mourning we will hear from lionesses who have lost their cubs. Someday, if we do our jobs right and well, perhaps we’ll hear neither of those two sorts of mourning. Neither the lioness nor the elephant nor the rhino mother, mourning the loss of its young, nor the homo sapien mother mourning the departure of her poacher son. When that day comes, we will have succeeded.
I thank you very much; I look forward to further discussion.
Ladies and gentlemen, you may be asking yourselves the question, “What is Mr. Brownfield, a man who is known in the State Department as Mr. Drugs and Thugs, doing here to discuss the issue of international wildlife conservation, protection, and preservation?” My message for all of you is that I am here because there is a very important connection between what I do and what those in the conservation community do. We are talking about two communities that for the past 100, 1000, or 5000 years have not actually worked together a great deal. The conservation community is comprised of men and women who have done extraordinarily effective and noble work in protecting and preserving not dozens, not scores, but hundreds of species of life on our planet that would otherwise be as extinct today as the dinosaurs. To them, we all owe a tremendous debt of gratitude. On the other hand, there is the law enforcement community -- a community that while not traditionally dedicated to the conservation and preservation of species, is very dedicated and quite talented at the process by which we combat and eventually defeat criminal trafficking organizations. Our challenge, ladies and gentlemen – and what I submit to you is the unspoken theme of this symposium - is how to make these two communities work effectively together. That is our challenge for the 21st century.
I know why I am doing this. I am doing this because two and a half years ago a woman looked at me with very firm eyes and said to me, “Brownfield, you are going to do counter-wildlife trafficking, whether you like it or not.” Her name was Hillary Rodham Clinton and I did what you would expect any Assistant Secretary of State to do under those circumstances -- I said ‘yes Ma’am, I will get right on it.’ And if any of you are wondering whether her departure and the arrival of her successor generated any change in this regard, may I offer you a personal anecdote? The only conversation that I have had with John Kerry that was, shall I say, “pointed,” over the last 14 months has been about how fast I was moving in order to make progress on the issue of wildlife trafficking. So that is why I am here.
Why are you here? I offer the following suggestions. One, you are here because if you did not come or did not focus on this issue, hundreds of species of our planet would be dead, eliminated forever, before this century is out. And second, law enforcers are now dealing with a criminal enterprise that is generating perhaps as much as $10 billion in criminal proceeds every year. Ten billion, ladies and gentlemen, that begins to be real money. You might actually want to begin to pay attention to an enterprise that is moving in an illegal and illicit manner, corrupting institutions and governments to the tune of $10 billion a year.
Ladies and gentlemen, I, like Mr. McCarthy, do not claim to be an expert on wildlife conservation or even on wildlife trafficking. I do think I know something about trafficking in general, and I know that there are certain elements common to each and every one of the trafficking industries. Whether it is cocaine and heroin, firearms, people, cut flowers, or wildlife, I know that first, in every case; there is a demand for the product, which produces a market. In every case, there will be a producer at the source region. Perhaps that producer is growing the product. Perhaps that producer is manufacturing the product. Perhaps that producer is butchering the product in order to traffic it. I know that every trafficking organization develops a logistics network – normally an extremely sophisticated logistics network, because it must move a product from one country across numerous national borders to get to the final market, and it must do so in an illicit manner. Every trafficked product eventually has a retail marketing system at the country of destination. And finally every trafficking network has a financial system that permits those involved in the enterprise eventually to convert their product into some form of cash or other marketable commodity that they can use in the open and licit market. This, law enforcers, is the challenge that we confront as we move down the road toward combatting illegal wildlife trafficking; while every product is different, there are not that many differences between how we will attack this problem and how we attack the problem of drugs or trafficking in persons or trafficking in firearms.
From the law enforcement perspective, we are not at a bad starting point. We do have international conventions, foremost among them CITES, but others as well, that give us the international authority or basis to cooperate and attack this problem. We have certain existing international organizations which have taken on this responsibility, such as Interpol and its regional subgroups, the United Nations Office on Drugs and Crime, the World Customs Organization, even ICCWC, as Leonard laid out. These international organizations or groupings give us natural allies and umbrellas beneath which we can operate. We have regional organizations that have taken on the mission: the OECD, APEC for the Pacific nations, ASEAN specifically for Southeast Asia, and the UN Crime Commission. We are not starting at point zero. Man has walked this path before us and we can take advantage of some of the institutions, the infrastructure, and the architecture that has already been built for us.
For those of us who are from the United States of America, and specifically the United States Government, we have a new weapon as of February of this year, when the President’s new National Strategy for Combatting Wildlife Trafficking came online. This Strategy is easily available online to anyone who may choose to access it.
The President’s National Strategy offers three areas of focus: first, strengthening enforcement of laws and regulations. That, ladies and gentlemen, is what I do for a living. I support law enforcement around the world.
Second, reducing demand for illegally trafficked wildlife. That, to a very considerable extent, is what the conservation community does for a living. However, I do predict that demand will drop rather substantially if, for instance, we tell most individuals that they could be sent to prison for 20 years for buying a rhino horn. I predict that the demand for rhino horn just might diminish a little bit as a result of law enforcement efforts.
The third area laid out in this strategy is building greater international and domestic cooperation. And, that is what both the conservation and the law enforcement communities do.
Now, despite the fact that I am widely referred to in the State Department as “drugs and thugs,” I am actually the Assistant Secretary for International Narcotics and Law Enforcement Affairs, or INL. We have $15 million that we are putting to wildlife trafficking in 2014. And, without going into detail, I am going to divide it into two basic categories. One, we are processing roughly $5 million through some of these international organizations that I just laid out for you. They have already developed programs that are transnational in scope and address the wildlife trafficking issue in an entire region. They need support, they need funds, they need resources. We are trying to provide some of that for them.
The remaining $10 million or so is going into programs with individual countries and governments. This is heavily focused at this time on Africa, and we will have cooperative and close programs with the Governments of Kenya and the Republic of South Africa. Some of the $10 million will be available for other regional programs and cooperation in southern Africa.
We have organized our work on this issue around four basic categories. The first is what we call “legislative framework.” The principle behind this is amazingly simple: it is very difficult to prosecute someone for wildlife trafficking if there is no law on the books that makes it a criminal offense. Judges get annoyed when prosecutors bring cases before them and the prosecutors cannot explain what law has been violated by the defendant. And, believe it or not, in many countries and regions around the world, there are not existing statutes on the books criminalizing this sort of activity or, in some cases; it is criminalized to such a minimal extent that it becomes the equivalent of a traffic offense or a failure to pay parking tickets. Creating the legislative framework must be the first plank in a successful strategy of combatting wildlife trafficking.
Our second organizational concept is support for law enforcement. In the United States of America, this is largely a ranger’s function, though not exclusively. The more we get into prosecutions, the more state and local law enforcement will become engaged, but trying to stop poachers and traffickers at the point of infraction is an expanded ranger function. By expanded, I mean that what these poor guys have to deal with are groups of people armed to the level of an infantry platoon – that degree of firepower. The prospect of coming in and enforcing the law with a nightstick and possibly a 9mm pistol puts local law enforcement in an extraordinarily difficult position. They need training, they need equipment, and in some instances, they need weaponry. That must be part of our challenge.
Our third organizational category includes prosecutors and courts. As you can well imagine, if we have identified them, arrested them, and brought them to court, but a prosecutor has no experience whatsoever on how to prosecute this particular type of crime, then we are not likely to have success. There is nothing that will kill a strategy and a policy more quickly than two or three losing cases that send the message out to everyone in the trafficking industry that “they can’t touch us even if they get us to court.”
Our fourth organizational category is cross-border cooperation. We do it through something we call wildlife enforcement networks – WENS. The principle behind this initiative is extremely simple. It is that governments that are neighbors or at least in the same region as each other stand to benefit from sharing intelligence and information and notifying each other about trafficking groups that seem to be moving across frontiers and borders. At times, regional partners might even plan and cooperate on joint operations and efforts. I can assure you that sophisticated wildlife trafficking organizations know exactly where the borders are located and know precisely how to take advantage of the border if country or government X is enforcing and government Y is not enforcing.
That is the plan. Has there been an impact? I would suggest that there has been. Let me offer three examples from the INL anti-wildlife trafficking initiative. First, recently, 28 governments and their law enforcement communities cooperated for one month in an exercise called COBRA II. This involved law enforcement communities and organizations from Asia, Africa, and North America. What did they accomplish in one month? More than 400 arrests and 350 seizures of illegally trafficked wildlife - and they learned in that month how to do it. They learned lessons from other law enforcement organizations as to what worked and what did not work. They also learned how to communicate with one another and learned new tactics, techniques, and technologies.
Second, in April 2013, the United Nations Crime Commission met and - with the eventual sponsorship of 20 different governments - passed a resolution that stated that wildlife trafficking is a “serious crime” in the United Nations system. Now, ladies and gentlemen, in UN speak, that is about as tough as you can get. They have given the tool and the weapon to any government that is prepared to take on the challenge, by saying the United Nations system and the world’s global community says that this act is a serious crime.
Third and finally, in November of last year, the government for which I work issued its first ever reward offer of the Transnational Organized Crime Rewards Program. Under the authority created by the President of the United States and supporting our Transnational Organized Crime Strategy, this reward program was designed to fill the gap between counterterrorism on one side and counternarcotics on the other side by creating the authority to offer rewards for the most serious participants in transnational organized crime. Who was the very first named suspected criminal under this authority? Ladies and gentleman, it was the organization known as the Xaysavang Network, under the leadership, we believe, of Mr. Keosavang, a citizen of Laos. We believe this organization is perhaps one of the world’s largest wildlife trafficking organizations. They traffic product from Asia and Africa in search of markets around the world.
We have offered $1 million to anyone who assists in taking down this trafficking network. It is symbolic, I acknowledge, but it is important symbolism to say that at the first opportunity we had to identify a transnational criminal organization and to put real money behind its dismantlement, we selected a wildlife trafficking organization. May I say to anyone in the Xaysavang network who may be listening today or in the future that this reward offer still stands. There is no rock beneath which you can hide; no tree behind which you may conceal yourself that will make that $1 million go away.
Ladies and gentlemen, may I mention one other program? I believe there are some academics in this room and I would like to draw you in to this conversation as well. There is a program that the State Department has been managing for several years. It’s kind of a cool program that we call the Diplomacy Lab. It works on the following concept. Neither the Department of State nor any other foreign ministry in the world has so many resources, so many people, so much money that it can do all of the research and analysis that it requires with its own employees. We want to draw in the academic world to this effort. We want to allow them the opportunity, whether they are undergraduate or graduate students or tenured professors, to do research and work that will have a direct, real-world impact on what we are doing. We identify areas and invite research and analysis in those areas. We had excellent success with this in areas related to my line of work, including corrections, prison management, community policing, and tribal courts. There have been a half-dozen of these sorts of research efforts which we absorb in the INL bureau, integrate into our programs and then attempt to apply in genuine programs in many countries around the world. May I suggest to you, academics, to look to the year 2014 for the opportunity to engage in several of these projects and programs that are related to illicit wildlife trafficking?
The problem of wildlife trafficking is not going to be solved today or even this year. It has taken us centuries and perhaps even millennia to get into this problem. It is going to take us some years as a human race to solve it. Yet we will solve the problem, step by step. We will do it together as two communities: a community that is dedicated to conservation and preservation and a community that is dedicated to the enforcement of our nations’ and our planet’s laws. We will do it because we can. We will do it because we must.
Leonard mentioned in his remarks the sound of a lioness mourning the loss of its cub. I come from the west Texas panhandle. I can assure you that I have never heard that sound. I hope I never do. But there is one sound of a mother mourning that, I suggest to you, I would not mind hearing at all. That would be the sound of a homo sapien mourning the departure of her poacher son as he begins several years of incarceration following his conviction and sentencing for wildlife trafficking. That is a vision that I would not mind associating myself with, because the more of that sort of mourning we hear, the less mourning we will hear from lionesses who have lost their cubs. Someday, if we do our jobs right and well, perhaps we’ll hear neither of those two sorts of mourning. Neither the lioness nor the elephant nor the rhino mother, mourning the loss of its young, nor the homo sapien mother mourning the departure of her poacher son. When that day comes, we will have succeeded.
I thank you very much; I look forward to further discussion.
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