Articles Posted in money laundering

IMG_0264-1-300x200Dr. Patrick Ifediba, 60, and his sister, Ngozi Ozuligbo, were convicted for health care fraud, unlawful drug distribution, and money laundering revolving around a massive scheme that garnered nearly $8 million in fraudulent funds.

According to the Department of Justice, Ifediba was operating as a doctor of internal medicine and the owner of Care Complete Medical Clinic (CCMC). Evidence presented at trial showed that Ifediba used the facility as a “pill mill”, regularly prescribing a range of highly addictive opioids with the goal of creating repeat office visits for their renewal. The trial found that Ifediba not only overprescribed the drugs intentionally but also offered dangerous combinations of the drugs. One of these combinations was referred to as “the holy trinity” and was known for creating a high similar to that of heroin. The high risk of overdose using this cocktail was well-known, yet continued to be prescribed by Ifediba routinely.

In total, 85% of Ifediba’s patients were written prescriptions for opioids, despite the fact that Ifediba was not a pain specialist and CCMC was not operating as a pain management facility.

IMG_0081-300x193In his book, Moneyland, Oliver Bullough details how wealthy individuals and large companies take advantage of a long list of loopholes to hide profits and leverage their control over the world. With a combination of geography and demography, Bullough takes readers on a journey of the corrupt practices followed by some of the most influential entities in the world.

Tax havens and lenient laws are part of what makes such an extreme level of corruption possible, and seemingly legal. Known tax havens like the Cayman Islands, Bermuda, and Switzerland have been used by corporations and individuals around the world to hide profits and reduce tax fees for decades. With little to no taxes owed on profits in these locations, tax havens are extremely inviting to the greedy. But how does it work?

The idea is quite simple. For example, a company in the United States merely has to open a subsidiary located in a tax haven to reroute profits and enjoy the more lenient practices of that area. This practice is only made safer for the individuals involved due to the fact that most tax havens have little to no legislation preventing or criminalizing such acts.

IMG_0094-300x225PrivatBank, a Ukrainian based institution, is suing one of its original founders in U.S. court in an effort to gain control of the bank and prevent future fraud. The lawsuit was filed on May 21st in the state of Delaware against Ihor Kolomoyskiy and Hennadiy Boholyubov. However, executives of PrivatBank worry that Kolomoyskiy’s wealth and political connections may decrease their chances of a positive outcome in the lawsuit.

Kolomoyskiy founded PrivatBank in 1992, but has been living in exile for over two years. With connections to the newly appointed president, Volodymyr Zelenskiy, Kolomoyskiy has returned from exile and now seeks to regain control of PrivatBank. However, according to the lawsuit, Kolomoyskiy is responsible for numerous fraudulent acts using the bank’s funds.

Along with Boholyubov, Kolomoyskiy is accused of using PrivatBank to lend money to the various companies and entities that they controlled. These funds were then laundered through Delaware, which is known for its corporate-friendly laws, and used to acquire numerous properties in the United States.

C4D2A548-214B-41B2-8A08-026ECC3BD4F5-300x200Canada’s weak money-laundering laws, especially when it comes to real estate monitoring,  has left areas like British Columbia vulnerable as an attractive place to store ill-gotten cash. The main way this works is through buying real estate with little to no information to verify the identity of those involved in the purchasing. In 2018 alone, $5 billion was laundered through real estate in British Columbia.

Many proprietors of ill-gotten funds will often attempt to hide them by first mixing them with legitimate proceeds. This can include something like a business they operate. They then will transfer these funds into a bank, which are limited in how much information they can gather about the client’s day-to-day transactions. Finally, these funds are funneled into shell companies, or companies known to only be made for financial juggling, and then in some cases use those companies to buy up real estate in tax havens that will allow for tax breaks as well as the anonymity they require.

For these launderers, houses, condominium floors, and mansions can all act as a sort of bank account. While it may not be physically active money, they are assists in the form of bricks-and-mortars that keep their finances safe and sound. This system usually leaves a good portion of vacant properties, which naturally causes real estate prices to rise.

money launderingDeutsche Bank is facing legal action for its involvement in a $20 billion Russian money-laundering scheme, known as the Global Laundromat. Upon the announcement of these allegations, Deutsche Bank expressed its deep concern of “significant disciplinary action” in a confidential report by The Guardian.

According to the report, Deutsche Bank was found to be involved in an extensive scheme which was linked to criminals formerly involved with the Kremlin, as well as the KGB and FSB. The money-laundering scheme took place between 2010 and 2014 when an estimated $80 million was moved into western-based accounts. In order for Russian funds to make their way into the US and Europe, shell companies were used to create and send falsified loans back and forth to each other. Eventually, the shell companies would purposely default on the loan, allowing judges involved in the scandal to authenticate the debt. The billions of dollars in illegal funds were then routed to the desired accounts using the Deutsche Bank network.

However, according to the report, Deutsche Bank was unaware of its part in the global money laundering scheme until 2017 when The Guardian published their initial report. Today, Deutsche Bank not only faces the embarrassment of its unknown involvement but also risks diminishing its overall market value as investors continue to drop their shares given the reports of the scandal.

money laundering and terrorism financing The Cayman Islands, three islands located in the western Caribbean, lack the capacity to spot money laundering and terrorism financing. This is a major fault considering the Cayman’s role as an international financial center.

The Caribbean Financial Action Task Force (CFATF) took control over the evaluation of this region in 2017, when they visited the Cayman Islands to compile a report on the deficiencies. This report specifically analyzed how the Cayman Islands complied with 40 Financial Action Task Force standards in relation to combating money laundering and terrorism financing. The Cayman evaluation was discussed by the CFATF and Plenary was held in November of 2018 in Barbados and published by March of 2019. The CFATF found much during their evaluation of Cayman.

They discovered that while the Inter Agency Coordination Committee and the Anti-Money Laundering Steering Group are a strong combination, they could use more cooperation with law enforcement organizations and the Financial Reporting Authority.