WE RESPOND TO READERS' QUERIES REGARDING DETAILS OF HOW THE U.S LET $100m BE LAUNDERED THROUGH NORWAY WITH IMPUNITY

 

A number of our regular readers have asked for more information on the circumstances surrounding how a Special Agent for an American law enforcement agency allowed one hundred million dollars in new US currency, stolen from Iraqi reconstruction funds, to be laundered through a Norwegian bank, and thereafter disappeared. I believe the individual involved, who was then with the DEA, is no longer on active duty, so the story won't damage anyone's career, but it should serve as a reminder that any actionable intelligence about money laundering on a grand scale must be investigated, no matter how unconventional it may seem. When compliance officers uncover such information, they should ensure that it is acted upon, even if they have to make waves to do so.

First, some background. We turn back the clock to the largest  Federal seizure and forfeiture civil action ever brought in the United States to that time, the two hundred and forty million dollar Rosemont Financial case. Rosemont was a licensed money service business operating in Miami that advised its Caracas broker-dealer clients who needed access to the American financial system that its Federal and Florida money service business (MSB) licenses extended to their accounts within Rosemont, known as sub-accounts at the local Miami Bank of America. 

Based upon that totally wrong advice, a number of companies utilized the Miami sub-accounts to move many millions of client dollars at a time through those accounts. Subsequently, Rosemont's senior officer, RAMAKRISHNA VYASULU, agreed to launder what was represented to him to be the proceeds of crime; unfortunately for him, the individuals were DEA Agents, from the Boston Field Division, and he was arrested. He would later enter a plea of guilty to money laundering,  beian cooperating with the authorities, and ultimately receive a short sentence.

In the course of the criminal investigation, it was determined that a large number of Venezuelan brokers were using the Rosemont accounts to transact business in the US, without MSB licenses. The United States Attorney in Massachusetts secured orders to seize approximately $151m of the brokers' clients' money, in 60 accounts, alleging that there were narcotics profits or other criminal proceeds in those accounts.

 A messy civil case ensued, and the brokers settled for large fines and penalties after proving that the funds held for their clients represented legitimate transactions. I know all this because I was tasked by two of the companies to perform enhanced due diligence, to prove that the transactions were from legitimate international business.

While the Boston DEA was investigating the case, I learned, from a reliable Middle East source, of the plan to move over $100m, in cash, stolen from Iraq, into Europe, and into a major Norwegian bank, from where, represented as legitimate capital, it was going onward to certain destinations, for the benefit of the senders. I immediately conveyed this intelligence to the DEA Special Agent handling the Rosemont case, but for some reason not known to me, he chose to ignore the information, and I was later advised that the transfer had been successfully completed. The agent obviously chose to apply all of his attention to the Rosemont case.

While anti-money laundering compliance has come a long way in Norway since then, I still believe that innovative Russian money launderers today, applying tradecraft to the complex web of international corporate relationships I discussed in my recent article, Where will Russian Sanctions Evaders/Money Launderers go now ? Scandinavia, Perhaps (March 17,2022), can successfully launder Russian funds through Scandinavia, without being interdicted. We hope this article will motivate compliance officers in that region accordingly.