22 Jan 2019
By Robert Mazur
Testimony in the ongoing New York federal trial of “El Chapo” Guzman offered a repeat of facts heard in hundreds of similar trials since the prosecution of Al Capone.
Despite that blaring reminder, governments, including the one now prosecuting El Chapo, appear to turn a deaf ear to the screaming need for a meaningful proactive global plan that will routinely identify and attack the world’s mega money launderers that enable criminal enterprises to corrode the free world.
For those who feel what we’ve been doing on the money laundering front is a success, please refer to the United Nations on Drugs & Crime estimate that annual revenue from global sales of illegal drugs is thought to be in the range of $400 billion.
Compare that to statistics concerning the annual forfeiture of drug proceeds by law enforcement and you’ll discover that more than 95% of annual illegal drug proceeds flow freely under the noses of law enforcement, regulators and compliance professionals into the world’s economy.
That’s not success.
Time to get serious
Beyond that, let’s not forget that the greatest number of meaningful achievements on the money laundering front have come through gifts handed to governments by whistleblowers. The world has been lucky in that regard, but we can’t count on that alone, especially since whistleblowing is shunned in many nations.
We need to develop an effective global initiative to attack this problem on a continuing basis. Evidence provided in the criminal trial of “El Chapo” Guzman underscores a major problem he and other leaders of criminal enterprises face – what to do with mountains of currency?
A lot of the cash, yes hard cold greenbacks – not cryptocurrency, was smuggled out of the U.S. to Tijuana where Guzman would send his three private jets each month, fill them with tens of millions in U.S. dollars, and then have his workers drag the cash to banks in Mexico.
Hopefully the world hasn’t forgotten that those banks weren’t just Mexican banks, they included banks whose home offices were in many countries, including the U.S. and U.K. According to the first witness called by the government in the El Chapo trial, bankers were bribed to launder El Chapo’s dirty U.S. dollars.
Yes, individuals were bribed, and individuals did it. The bankers didn’t launder because of some corporate legal concept that led to a non-human phenomenon where somehow the institution, not people, “intentionally failed to maintain an antimoney laundering program”.
This wasn’t a software glitch; it was an integrity glitch.
A sharp, simple solution
The testimony suggests a different story than the Deferred Prosecution Agreement HSBC bought for $1.9 billion. The U.S. and other nations repeatedly fail to grasp the simple solution to thugs like El Chapo who create hordes of addicts and corrupted politicians in every corner of the world.
What’s desperately needed is an Occam’s Razor approach – the best solution is the simplest one. This simple approach could be launched tomorrow if governments and the international banking community had the will to meaningfully attack the heart of real laundering.
We can’t rely on a mosaic of dozens of agencies in every nation to focus on the big picture. Yes, each agency does some good, prosecuting the money laundering cases that fall into their laps through investigations of crimes within their jurisdiction, but solving the true underlying problem requires a laser sharp and well-coordinated hunt in certain places where significant evidence exists to find the mega-launderers.
That undertaking needs to be done by one initiative or taskforce comprised of a few personnel from very specific law enforcement and regulatory agencies.
We don’t have 24 agencies in one nation independently sifting through everything related to terrorism.
In the U.S. it is done by one body, the Joint Terrorism Task Force (JTTF). As the FBI proudly notes, “When it comes to investigating terrorism, the JTTF does it all: chase down leads, gather evidence, make arrests, provide security for special events, conduct training, collect and share intelligence, and respond to threats and incidents at a moment’s notice.”
The JTTF is comprised of officers from 500 state and local agencies and 55 federal agencies that are positioned in 104 U.S. cities.
Money laundering is no less of a threat than terrorism. It is the lifeblood of all major criminal enterprises. The unique thing about real money laundering is that it is interwoven within those enterprises that facilitate terrorism, global drug trafficking, illegal arms dealing, corruption, and more.
If we ever hope to liberate the suppression of the rule of law, freedom and hope in countries like Guatemala, Honduras, EL Salvador, Venezuela and far too many others, we have to see money laundering as a crime and not an “add-on” offense to cases brought by different agencies focused on their respective jurisdictions.
Whitepaper: A plan to end global money laundering
We absolutely must improve our game plan to identify, prosecute and imprison those that enable the river of dirty money for the endless number of El Chapos of the world. People that are morally bankrupt and launder for big time drug dealers don’t shun dirty money from other corners of crime.
I learned that first hand when I worked undercover as a money launderer for Colombian cartels and sat across the boardroom table from dirty professionals who I witnessed also welcome the opportunity to launder for corrupt politicians that pilfered the treasuries of impoverished African nations, illegal arms dealers, terrorists, tax evaders, sanction busters, and more.
If you think that was an anomaly, study the facts about the recent prosecution of Altaf Khanani here. He laundered billions for felons from every walk of crime.
If you think Khanani was an aberration and had an exclusive franchise to mega laundering, you’re wrong.
Read my exclusive Whitepaper; A plan to ending Global Money Laundering for my recommendations and eight step plan.
Get the latest AML news stories direct to your inbox here when you sign up for a FREE KYC360 CPD account – Create an online record of your evolving AML expertise. Register here
About the author
Robert Mazur is the New York Times bestselling author of The Infiltrator, a memoir about his undercover life, much of which was spent acting as a conduit between ruthless drug barons and corrupt legitimate appearing senior executives that cleaned billions in blood stained money through otherwise respectable international banks and businesses.
After completing a highly decorated 27-year career as a federal agent in 3 U.S. agencies, Robert is now the President of KYC Solutions, Inc., a firm that provides speaking, expert witness and consulting services to companies worldwide. More information about Robert, his book, and the film based on his life can be found at www.robertmazur.com .
This article is expressing personal opinions and is meant for information purposes only. The article does not intend to replace professional or legal advice. It is recommended that readers seek independent professional or legal advice, or speak to authorised persons/organisations.
You can claim CPD minutes for this content, by signing up to our CPD WalletFREE CPD Wallet