U.S. OBTAINS $480 MILLION OF STOLEN MONEY, LARGEST FORFEITURE EVER OBTAINED THROUGH KLEPTOCRACY ACTION

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, August 7, 2014

U.S. Forfeits Over $480 Million Stolen by Former Nigerian Dictator in Largest Forfeiture Ever Obtained Through a Kleptocracy Action

The Department of Justice has forfeited more than $480 million in corruption proceeds hidden in bank accounts around the world by former Nigerian dictator Sani Abacha and his co-conspirators.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement after a judgment was entered on Aug. 6, 2014, by U.S. District Judge John D. Bates of the District of Columbia.

“Rather than serve his county, General Abacha used his public office in Nigeria to loot millions of dollars, engaging in brazen acts of kleptocracy,” said Assistant Attorney General Caldwell.  “With this judgment, we have forfeited $480 million in corruption proceeds that can be used for the benefit of the Nigerian people.  Through the Kleptocracy Asset Recovery Initiative, the Department of Justice’s Criminal Division denies kleptocrats like Abacha the fruits of their crimes, and protects the U.S. financial system from money laundering.  In coordination with our partners in Jersey, France and the United Kingdom, we are helping to end this chapter of corruption and flagrant abuse of office.”

“We remain steadfast in protecting the U.S. banking system from becoming a tool for dictators to hide their criminal proceeds,” said Assistant Director in Charge Parlave.  “This court order bolsters the FBI’s ability to combat international corruption and money laundering by seizing the assets of those involved.  I want to thank the special agents, financial analysts and prosecutors whose hard work over the years resulted in today’s announcement.”

The forfeited assets represent the proceeds of corruption during and after the military regime of General Abacha, who assumed the office of the president of the Federal Republic of Nigeria through a military coup on Nov. 17, 1993, and held that position until his death on June 8, 1998.  The complaint alleges that General Abacha, his son Mohammed Sani Abacha, their associate Abubakar Atiku Bagudu and others embezzled, misappropriated and extorted billions of dollars from the government of Nigeria and others, then laundered their criminal proceeds through U.S. financial institutions and the purchase of bonds backed by the United States.  

The judgment is the result of a civil forfeiture complaint the department filed in November 2013 against more than $625 million in the largest kleptocracy forfeiture action brought in the department’s history.  The forfeiture judgment includes approximately $303 million in two bank accounts in the Bailiwick of Jersey, $144 million in two bank accounts in France, and three bank accounts in the United Kingdom and Ireland with an expected value of at least $27 million.  The ultimate disposition of the funds will follow the execution of the judgment in each of these jurisdictions.  Claims to an additional approximately $148 million in four investment portfolios in the United Kingdom are pending.

As alleged in the complaint, General Abacha and others systematically embezzled billions of dollars in public funds from the Central Bank of Nigeria on the false pretense that the funds were necessary for national security.  The conspirators withdrew the funds in cash and then moved the money overseas through U.S. financial institutions.  General Abacha and his finance minister also allegedly caused the government of Nigeria to purchase Nigerian government bonds at vastly inflated prices from a company controlled by Bagudu and Mohammed Abacha, generating an illegal windfall of more than $282 million.  In addition, General Abacha and his associates allegedly extorted more than $11 million from a French company and its Nigerian affiliate in connection with payments on government contracts.  Funds involved in each of these schemes were allegedly laundered through the United States.

This case was brought under the Kleptocracy Asset Recovery Initiative by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov.

The investigation was conducted by the FBI.  The case is being prosecuted by Trial Attorney Elizabeth Aloi and Assistant Deputy Chief Daniel Claman of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with substantial support from the Criminal Division’s Office of International Affairs.  The department appreciates the extensive assistance provided by the governments of Jersey, France and the United Kingdom in this investigation.

OVER $458 MILLION FROZEN BY U.S. IN KLEPTOCRACY FORFEITURE ACTION AGAINST NIGERIAN DICTATOR

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, March 5, 2014
U.S. Freezes More Than $458 Million Stolen by Former Nigerian Dictator in Largest Kleptocracy Forfeiture Action Ever Brought in the U.S.

The Department of Justice has frozen more than $458 million in corruption proceeds hidden in bank accounts around the world by former Nigerian dictator Sani Abacha and conspirators.  A civil forfeiture complaint unsealed today in the United States District Court in the District of Columbia seeks recovery of more than $550 million in connection with the largest kleptocracy forfeiture action brought in the department’s history.

The restraint of funds announced today includes approximately $313 million in two bank accounts in the Bailiwick of Jersey and $145 million in two bank accounts in France.   In addition, four investment portfolios and three bank accounts in the United Kingdom with an expected value of at least $100 million have also been restrained, but the exact amounts in the accounts will be determined at a later date.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.

“General Abacha was one of the most notorious kleptocrats in memory, who embezzled billions from the people of Nigeria while millions lived in poverty,” said Acting Assistant Attorney General Raman.  “This is the largest civil forfeiture action to recover the proceeds of foreign official corruption ever brought by the department.  Through our Kleptocracy Initiative, we are seizing the assets of foreign leaders who steal funds that properly belong to the citizens they serve.  Today’s action sends a clear message: we are determined and equipped to confiscate the ill-gotten riches of corrupt leaders who drain the resources of their countries.”

“We will not let the U.S. banking system be a tool for dictators to hide their criminal proceeds,” said Assistant Director in Charge Parlave.  “This action demonstrates the FBI’s ability to combat international corruption and money laundering by seizing the assets of those involved.   I want to thank the special agents, financial analysts and prosecutors whose hard work over the years resulted in today’s announcement.”

The over $458 million in frozen funds and the additional assets named in the complaint represent the proceeds of corruption during and after the military regime of General Abacha, who assumed the office of the president of the Federal Republic of Nigeria through a military coup on Nov. 17, 1993, and held that position until his death on June 8, 1998.   The complaint alleges that General Abacha, his son Mohammed Sani Abacha, their associate Abubakar Atiku Bagudu and others embezzled, misappropriated and extorted billions from the government of Nigeria and others, then laundered their criminal proceeds through the purchase of bonds backed by the United States using U.S. financial institutions.

As alleged in the complaint, General Abacha and others systematically embezzled billions of dollars in public funds from the Central Bank of Nigeria on the false pretense that the funds were necessary for national security.   The conspirators withdrew the funds in cash and then moved the money overseas through U.S. financial institutions.  General Abacha and his finance minister also allegedly caused the Government of Nigeria to purchase Nigerian government bonds at vastly inflated prices from a company controlled by Bagudu and Mohammed Abacha, generating an illegal windfall of more than $282 million.  In addition, General Abacha and his associates allegedly extorted more than $11 million from a French company and its Nigerian affiliate in connection with payments on government contracts.   Funds involved in each of these schemes were allegedly laundered through the United States.

The complaint seeks to forfeit bank accounts and investment portfolios with funds located in Bailiwick of Jersey, France and the United Kingdom.   On Feb. 25 and 26, 2014, U.S. arrest warrants for the assets were enforced in Jersey and France though mutual legal assistance requests and in the United Kingdom through litigation brought pursuant to the U.K. Civil Jurisdiction and Judgments Act.   The complaint also seeks to forfeit five corporate entities registered in the British Virgin Islands.

This case was brought under the Kleptocracy Asset Recovery Initiative by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office.   Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov.

The investigation was conducted by the FBI.   The case is being prosecuted by Trial Attorney Elizabeth Aloi and Assistant Deputy Chief Daniel Claman of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with substantial support from the Criminal Division’s Office of International Affairs.   The department appreciates the extensive assistance provided by the Governments of Jersey, France and the United Kingdom in this investigation.

U.S. OFFICIALS REMARK'S ON FIGHTING INTERNATIONAL CRIME

FROM: U.S. DEPARTMENT OF STATE
Remarks
David M. Luna
Director for Anticrime Programs, Bureau of International Narcotics and Law Enforcement Affairs
Jakarta, Indonesia
January 26, 2013
 
Good morning.

It is a pleasure to be here with you as we begin the new APEC year.

The United States applauds the leadership of the Government of the Republic of Indonesia as the APEC Host Economy in 2013 and the Indonesian Corruption Eradication Commission (KPK) as Chair of this year’s APEC Anticorruption and Transparency (ACT) Working Group.

Your Excellency, Bambang Widjowanto, KPK Deputy Chairman, as a previous Chair of this very important and influential sub-forum in APEC, let me congratulate you on your appointment as our new ACT Chair and commend your life-long commitment to promoting human rights, advancing the rule of law, and safeguarding integrity in Indonesia.

The KPK remains a model within APEC on prosecuting high-level corruption cases, including within the police and security agencies, and demonstrating to us all that no official is above the law. The ACT must continue to support the KPK and all of our economies’ anticorruption authorities to eradicate corruption, safeguard integrity and public trust, and restore people’s faith in government as a steward of equality and justice.

I would also like to thank the Government of the Russian Federation for its leadership last year, and applaud all of the economies here for our collective achievements in 2012. I am confident that we will make great gains this year on developing an APEC regional network of anticorruption authorities that further protects our economies against abuses of power and the plunder of our national assets, human capital, and natural resources.

In 2013, we must work together to achieve the three core objectives outlined in our ACT five-year strategy: 1) to minimize impunity and kleptocracy by preventing and prosecuting public corruption; 2) to level the playing field for all businesses by fighting foreign bribery; and 3) to shut down the illegal economy and criminalized markets by combating corruption and illicit trade.

Combating Impunity and Kleptocracy: Enough is Enough!

No economy is immune from corruption, nor can any economy combat it alone. In addition to effective governance within our own jurisdictions, we must take collective action to improve governance across borders and reconfigure the way we fight corruption with smarter, more holistic strategies and approaches. We must work to prevent the flow of illicit funds, including proceeds of corruption.

APEC Leaders recognized the ACT work program in the 2012 Vladivostok Declaration on Fighting Corruption. They emphasized their commitment to investigate and prosecute corruption; to enforce our domestic bribery laws and laws criminalizing the bribery of foreign public officials; to fight money laundering and deny safe haven to assets illicitly acquired by individuals engaged in corruption. They also vowed to combat illicit trade by attacking the financial underpinnings of transnational criminal organizations and illicit networks; stripping criminal entrepreneurs and corrupt officials of their illicit wealth; and severing their access to the global financial system.

The Vladivostok Declaration also renewed and elevated APEC Leaders’ commitment to "enhance public trust by committing to transparent, fair, and accountable governance" to empower communities to monitor government policies and voice their perspectives on the use of resources.

Voice and accountability can not only help check corruption, but also allow our citizens and communities to take hold of their destinies, enjoy higher standards of living, and trust that their governments exist to do good. Transparent and open governments tend to pursue cost-effective policies; minimize misallocation of resources; and attract investment from companies looking for solid investment environments and opportunities. This is why eight APEC member countries (Canada, Chile, Indonesia, Mexico, Peru, Philippines, Russia, and the United States) have joined the Open Government Partnership (OGP), a multi-stakeholder initiative launched in 2011 to promote transparency, enhance accountability, and fight corruption. Indonesia is also a co-chair of the OGP’s Steering Committee this year, and its leadership of both the OGP and the ACT presents an opportunity for us all to further our efforts to enhance public trust and raise standards of living.

Our Leaders have spoken. They have repeatedly affirmed their will to combat corruption across the Asia Pacific region. We must answer them with a transformative good governance agenda that will anchor economic growth and development from Moscow to Jakarta, from Beijing to Lima, from San Francisco to Sydney, and transform people’s lives across all markets in APEC.

ACT colleagues, we must act decisively and collectively to implement the five-year strategy. I am confident that we can fulfill our Leaders’ mandate and achieve APEC’s broader agenda to secure open markets, economic prosperity, and the rule of law.

Fighting All Forms of Bribery

Continued cooperation with the private sector is a critical component of our efforts to level the playing field for businesses across APEC economies.

Our recent work with the APEC Business Advisory Council (ABAC) and other partners has ushered in a new era of cooperation between the public and private sectors. This partnership is enhancing market integrity and forging a more connected, innovative, and dynamic Asia Pacific region that thrives on openness and a rules-based approach to trade and investment.

We can do more. Building on the APEC Santiago Commitment, the APEC Code of Conduct for Business (Business Integrity and Transparency Principles for the Private Sector), and the Complementary Anti-Corruption Principles for the Public and Private Sectors, we can vigorously enforce domestic bribery laws, including laws criminalizing the bribery of foreign public officials, and fulfill our international obligations. I also hope that we can continue to share experiences and best practices in combating foreign bribery, enlist the private sector as a partner in combating bribery, and provide specialized training to make greater inroads on this important front.

We can minimize corruption as a significant market and trade barrier and improve the investment climate in our economies by ensuring that we effectively investigate and prosecute corrupt public officials and those who bribe them, in compliance with our respective domestic laws and international obligations, where appropriate, under the UN Convention against Corruption (UNCAC), the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and similar instruments.

The United States looks forward to working with Indonesia, China, and all economies to support stronger bribery enforcement, prosecutions, and other actions in APEC in 2013-2014.

Combating Illicit Trade and Shutting Down the Illegal Economy

Sustainable economic growth also depends on our progress to combat illicit trade and its pernicious impact on the environment and markets.

Illicit trade and the illegal economy undermine social stability and the welfare of our communities. Illicit enterprises not only distort the legal economy, but they also divert revenue from legitimate market drivers such as businesses and governments. Illicit trade further hampers development by preventing the equitable distribution of public goods. But this goes beyond just economic harm. The illegal economy also incurs a significant negative social cost, and in some cases, devastates vital ecosystems and habitats.

The dumping of toxic waste contaminates our food and water supplies. Illegal logging and deforestation or poaching exacerbate climate change and undermine our ability in APEC to advance inclusive, green, sustainable development. Poaching and trafficking of endangered wildlife robs economies of their natural assets and their future.

The corruption that allows counterfeit or ineffective pharmaceuticals to enter our communities endangers public health, denying the sick effective treatment and permitting deadly diseases to mutate and become untreatable.

The corruption that allows traffickers to move people across borders and exploit them with impunity not only violates individuals’ basic rights and freedoms but also stunts both their and their communities’ economic potential and political development.

Kleptocracy and the embezzlement of national revenue and assets that are intended to finance the future for our citizens impair the ability of communities to make the investments necessary to stimulate growth. Revenue that could be used to build roads to facilitate commerce, hospitals to save lives, homes to raise and protect families, or schools to educate future leaders and entrepreneurs is instead siphoned away for private gain.

APEC has a number of tools in its toolkit to combat corruption and illicit trade, and we have an ongoing opportunity to work together to comprehensively and holistically combat corruption, as well as illicit finance more broadly; to foster integrity in global markets and supply chains; and to protect and promote economic growth and shared prosperity.

Among them is the ACT Multi-Year Project that Thailand and Chile are co-leading on ways to combat money laundering, recover the fruits of corrupt and criminal activity, and track illicit financial flows. As kleptocrats and criminal entrepreneurs continue to hide the proceeds of their crimes in legal structures such as offshore shell companies and foundations and then launder most of that through casinos, financial institutions, or real estate into the global financial system, we must bring them to justice and, where possible, return their illicit wealth back to impacted communities.

To do this effectively, we must also target more aggressively the financial facilitators and service providers who commit crimes in helping corrupt officials, criminals, and illicit networks inject their dirty money into our financial system.

The APEC-ASEAN Pathfinder Workshop on Combating Corruption and Illicit Trade that will be held in Siem Reap, Cambodia, in June 2013, will advance a dialogue among partners across the Asia Pacific region and strengthen cooperation by creating a network of anticorruption authorities, promoting information and intelligence exchanges, and facilitating cooperation and information sharing in investigations related to corruption and illicit trade and efforts to shut down the illegal economy.

More broadly, we can and should support the effective implementation of global anti-money laundering standards promulgated by the Financial Action Task Force. Among these are preventive measures that facilitate financial transparency and help prevent the flow of proceeds of corruption.

Converting Political Will into Action: Regional Networks and Partnerships

We can build on our APEC anti-corruption and transparency commitments and the collaborative relationships around this table to create a regional network of anti-corruption bodies that would facilitate the sharing of intelligence and information, as well as the sharing of best practices and challenges in effectively tracking cross-border corruption, other crime, and illicit financial flows.

The United States is more committed than ever to combating corruption and illicit trade, and we look forward to the discussion here in Jakarta.

Together, we will create a better, more prosperous future by uniting our efforts to combat corruption and support accountability and good governance. We must turn our shared interests into collective action by developing more comprehensive approaches to combating corruption so that we can prosecute corrupt public officials and those who bribe them.

Again, I wish Indonesia a great and successful year in APEC 2013 and applaud my ACT colleagues for developing and pressing forward on a vibrant course of action to fight corruption and promote integrity—a course that I know will lead us towards economic growth and a stronger foundation to build the new markets and investment frontiers of tomorrow.

Thank you.

JUSTICE DEPARTMENT OFFICIAL'S REMARKS ON ANTI-MONEY LAUNDERING REGULATION

FROM: U.S. DEPARTMENT OF JUSTICE
Remarks as Prepared for Delivery by Assistant Attorney General Lanny A. Breuer at Public Hearing on Potential Regulation to Strengthen Anti-Money Laundering Safeguards WASHINGTON, D.C. ~ Tuesday, July 31, 2012

Thank you, Jamal. I am delighted to be here and want to thank my friend, Under Secretary David Cohen, for inviting me to this important event. The proposed rulemaking we are here to discuss is critically important, and I am here to tell you that the Department of Justice strongly and unequivocally supports it. We believe that this rule will assist us in preventing criminals from using the United States financial system to commit crimes.

A public hearing such as this one on the proposed regulation is very valuable. We want to advance an effective rule, so having representatives from the financial industry here today is so very important. Indeed, financial institutions are often law enforcement’s first line of defense. Protecting the financial system requires close collaboration between law enforcement and the private sector, and the proposed customer due diligence rulemaking would also require working closely together.

I am aware that there may be some concern in this room about the potential burdens of the proposed rulemaking. So I want to take this opportunity to explain why the rule is so important to law enforcement.

We know that a key way in which criminals launder the proceeds of their crimes is through the use of shell companies. They open bank accounts in the name of a shell company, for example, and then use that shell company to conduct business transactions that appear legitimate. In short, these individuals use the United States financial system to commit, or facilitate, crimes.

We have seen this occur with respect to corrupt officials, health care fraudsters, organized criminal groups in the United States and abroad, Mexican drug cartel members, and many others. And without access to the shell company account’s beneficial ownership information, law enforcement is often stymied in what it can accomplish. If financial institutions were required to collect beneficial ownership information, however, that would go a long way toward helping us to fight money laundering.

In the Criminal Division, the Asset Forfeiture and Money Laundering Section is at the forefront of our anti-money laundering efforts and has been a strong advocate for the proposed rulemaking. One area in particular in which we have seen very extensive use of shell companies is that of kleptocracy.

Over the past two years, we in the Criminal Division have been building up our Kleptocracy Asset Recovery Initiative, through which we bring civil suits to forfeit the proceeds of foreign official corruption.

We have recently had our first successes in this area, each of which involved the use of shell companies. Last month, we announced that we had forfeited over $400,000 in assets traceable to Diepreye Solomon Peter Alamieyeseigha, or DSP, a former governor of the oil-producing Bayelsa State in Nigeria. We allege that DSP’s official salary for the entire period that he was governor was approximately $81,000, and that he had a total declared income during that period of approximately $248,000, but that he nevertheless accumulated millions of dollars in wealth at the same time – through corruption. We allege that DSP used shell companies to launder his corruption proceeds and, indeed, he pleaded guilty in Nigeria to money laundering violations on behalf of certain of those shell companies. In addition to the money that we recently forfeited, we are also seeking to forfeit, in a separate action, $600,000 worth of property held in the name of one of his shell companies.

A second example involves James Onanefe Ibori, the former governor of the oil-producing Delta State in Nigeria. Last week, we announced that we had secured a restraining order against more than $3 million in corruption proceeds related to Ibori. Ibori was convicted in the United Kingdom on money laundering and fraud charges and sentenced to 13 years in prison. We allege that he used shell companies and bank accounts in the United Kingdom and the United States to hide his money.

There are many more examples of criminals using shell companies to hide their illicit gains outside the kleptocracy area. For example, last month, we announced charges against seven individuals and four check cashing businesses for schemes to violate the Bank Secrecy Act. A key aspect of our allegations with respect to those charges is that certain defendants allegedly used shell companies that appeared to be health care related in order to conceal their illegal activity.

For every shell company scheme that we uncover, however, there are many we of course never find out about. In part, that is because financial institutions are not routinely collecting beneficial ownership information as part of their customer due diligence programs. This has significant effects on our domestic law enforcement efforts because it deprives us of critical information.

The lack of beneficial ownership information also affects our ability to provide information in response to requests from our foreign allies, who are conducting their own investigations.

The proposed customer due diligence rulemaking under consideration will help us to address these challenges, and hopefully discourage criminals from using the United States financial system to commit crimes.

The concerns some of you may have about the proposed rulemaking should be considered as the rule is finalized. But we should not let those concerns obscure the key point – that the collection of beneficial ownership information will help law enforcement bring money launderers to justice.

This rulemaking presents an important opportunity to close a gap in our financial regulations that makes it easier for criminals to move illicit proceeds through the United States financial system. Today’s hearing is an important step in the rulemaking process.

Thank you for having me here. I wish you a productive hearing today and look forward to working with my colleagues at the Treasury Department and others as this rulemaking progresses