What Is Money Laundering? And Why Does It Matter To Robert Mueller?
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It has become clear in the time since that Mueller intends to use that clause to follow the money.
The former FBI director has assembled a team of lawyers, many of whom specialize in white collar law and financial crimes, leading to speculation that he is diving into the finances of those on the inner and outer orbit of the Trump campaign.
"They're looking for ties, they're looking for relationships, and a lot of that will come down to money trails," said Jennifer Rodgers, the executive director of the Center for the Advancement of Public Integrity at Columbia Law School.
And when it comes to chargeable offenses Mueller could be zeroing in on, money laundering is at the top of the list.
Pop culture phenomena like Breaking Bad and Office Space have provided some education — but many people don't really know what money laundering is or how it works.
What is money laundering?
Put simply: Money laundering turns "dirty" money "clean" — making proceeds from criminal activity usable without drawing the attention of law enforcement.
John Cassara, a money laundering expert who worked for the State Department and the Department of Treasury for more than 25 years, says money launderers work through a three-step system.
1. Placement: This is the first time that money acquired through a crime — stolen, say, or through drug or human trafficking — enters the financial system. The cash can be blended into a legitimate business' cash flow and receipts, or deposited in small amounts to banks for later transfer. This is where launderers are most vulnerable to being caught, says Cassara, as banks and financial institutions have a number of tools to try to catch suspicious activity.
Intel, for instance, just announced new artificial intelligence software that monitors "transactions and suggestive personality behaviors" to catch would-be launderers, according to Axios.
2. Layering: The second step is where a money launderer covers their tracks. By transferring the money between companies and accounts in different places, the goal here is to make it difficult for law enforcement to follow the trail because of jurisdictional issues and transparency laws.
Many countries and even some states require very little personal information to start a company, leading bad actors to start what are called "shell companies" — companies without any purpose other than to be a disguising vehicle for money to change hands.
By the time someone is spending money in the United States, for example, it might have been transferred from Cyprus, having been transferred from Ukraine, having been transferred from, say, Russia, where it might have been stolen or received as payment in the drug or human trafficking trade.
"You can also layer it by switching it from cash to gold to cyber to commodities," Cassara said.
3. Integration: Once the money has been moved, moved and moved again, it's time to legitimize it. Cassara says luxury items, property or stock investments are all options for a criminal to park the rewards of the ill-gotten gains.
For example, there are whole sections of the richest sections of London owned by wealthy foreigners that mostly sit empty, leading locals to wonder whether they're at the end of a pipeline of illicit money. Real estate in hot markets such as London or New York is a good investment for anyone because it seldom loses value and can often be quickly resold in legitimate transactions, freeing up cash. In the U.K., people call this phenomenon "Lights Out London."
"Outside of crimes of passion, for example murder committed in a jealous rage, why do criminals and criminal organizations commit crime?" Cassara asks rhetorically. "Greed."
How big a deal is money laundering?
"Essentially, with any crime that generates money, the criminal needs to launder the money in order to use it," says Stefanie Ostfeld, the deputy head of the U.S. office for Global Witness, a nonprofit focused on exposing economic networks that breed corruption.
"The issue with money laundering is it tends to take two to money launder: You have the criminal who committed the original crime, but then you also have the bank, the lawyer, the accountant that actually moved the money into the financial system."
The United Nations Office on Drugs and Crime estimates that between 2 percent and 5 percent of global gross domestic product is laundered each year. Even if you take the lowest end of that guess, it's around $800 billion.
Ostfeld says the root of the problem is lax laws that make it easy to create businesses, or shell companies, with anonymous or hard-to-trace owners as part of the layering process.
"Time and time again, our investigations highlight the same problem," Ostfeld said. "That's sham companies that allow those who steal state funds to move it undetected through the international financial system."
Places like the island of Jersey and the Cayman Islands have reputations as shell company havens, but an article published earlier this year in The Atlantic found the U.S. to be "perhaps the foremost shell-company provider globally."
Delaware, for instance, is famous around the world for being an easy place to set up a shell company. In 2012, the state had more corporate entities than people, according to The New York Times. And as NPR reported, at least one entity linked with Russian advocates who want the U.S. to roll back sanctions on Moscow is chartered in Delaware.
Why does it matter in the Robert Mueller investigation?
It's not a secret that Trump and those close to his campaign have had some financial ties to Russia.
"Russians make up a pretty disproportionate cross section of a lot of our assets," as Donald Trump Jr. said at a real estate conference in 2008. "We see a lot of money pouring in from Russia."
And it's also no secret that corruption in Russia means oligarchs there can't always keep money in Russian banks. They move it overseas, to Europe or the United Kingdom or the U.S., for use in buying real estate or other purposes. Often, they have help: One of the Russians who met with Trump Jr. in June 2016 in Trump Tower, Irakly Kaveladze, was said to have set up some 2,000 shell companies in the United States.
"Over the past three decades, at least 13 people with known or alleged links to Russian mobsters or oligarchs have owned, lived in and even run criminal activities out of Trump Tower and other Trump properties," wrote Craig Unger, in a long feature for The New Republic.
"Whatever his knowledge about the source of his wealth, the public record makes clear that Trump built his business empire in no small part with a lot of dirty money from a lot of dirty Russians."
Rodgers of the Center for the Advancement of Public Integrity says it may not be Trump who should necessarily worry about money laundering charges at this point. The president may have good reason to fear, according to some reports, but the person in the most pressing legal jeopardy could be Trump's former campaign manager, Paul Manafort.
McClatchy reported in August that Mueller was "zeroing in" on Manafort's finances.
"I personally think they're looking at money laundering for Manafort," Rodgers said. "It looks like they may get something there, given the sheer number of accounts he has, and the number of transactions involved."
A spokesman for Manafort declined to comment for this story. No one has been charged with any crime so far in the Russia imbroglio, and Trump has repeatedly denied any wrongdoing in connection with Russia.
All the same, observers including Rodgers say Mueller may try to use the threat of financial charges to flip Manafort into being a witness against others in the campaign.
"Anyone facing serious charges for money laundering and tax offenses involving undisclosed foreign bank accounts would have huge incentives to trade cooperation for prison time," Jonathan Winer, the State Department's top money laundering expert during the Clinton administration, told McClatchy.
Details about how deep Manafort's ties go continue to emerge.
NBC reported recently on a $26 million loan between Manafort and Russian oligarch Oleg Deripaska, making the pair's total financial relationship about $60 million over the past decade.
"Money launderers frequently will disguise payments as loans," Stefan Cassella, a former federal prosecutor, told NBC. "You can call it a loan, you can call it 'Mary Jane.' If there's no intent to repay it, then it's not really a loan. It's just a payment."
While there aren't any charges yet, Mueller's prosecutors reportedly told Manafort in September that they plan at some point to indict him."
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Manhattan US attorney’s office collaborating with special counsel Mueller in new Manafort money laundering probe
The Manhattan U.S. attorney’s investigation is occurring in tandem with a separate probe by the Brooklyn U.S. attorney’s office, which is investigating the development business owned by Jared Kushner’s family.
Trump is currently interviewing candidates to head the Manhattan and Brooklyn attorney’s offices, potentially complicating those investigations.
“The president’s already demonstrated interest in trying to insert himself into decision-making in the Department of Justice,” Paul Rosenzweig, who served on Kenneth Starr’s independent counsel during his investigation of former president Bill Clinton, told the Journal.
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Tucker BOMBSHELL: Podesta Group Is In Mueller’s ‘Crosshairs’ Over Russian Influence
Fox News’ Tucker Carlson reported explosive details on Tuesday night about the scope of special counsel Robert Mueller’s investigation into Russian influence in the United States, which may be putting John Podesta’s group in Mueller’s “crosshairs.”
Carlson said in his opening segment that, according to a source Mueller is looking into the Podesta Group, a “group” with close ties to Hillary Clinton, over spreading Russian influence in the United States during Barack Obama’s presidency.
Carlson said, “The central effort to extend Russian influence was focused on the executive branch, the Obama administration. The vehicle through which [Paul] Manafort worked for the Russians was a shell group called the European Centre for a Modern Ukraine. The group was supposedly based in Belgium but had no offices there. It had only two employees, both based in Ukraine.
“Their telephone number in Brussels rang in Kiev. It was a sham, yet it had a presence in Washington. The European Centre for a Modern Ukraine was a major client of the Podesta Group. Why did the Russians choose the Podesta Group? Because both Podestas were close to the Clintons, and Hillary was then Secretary of State. She could get things done for the Podestas’ Russian clients. It was influence peddling, the most obvious kind,” he continued.
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The Podesta Group has close ties with Hillary Clinton.
Carlson said of the ties, “Sometimes, our source told us, ties between the Podesta Group and the Clintons were explicit. Tony Podesta spoke regularly to Hillary Clinton while she ran the State Department. Our source remembers Podesta’s assistant announcing that Secretary Clinton is on the line.'”
The Daily Caller co-founder added, “At one point, in either 2013 or early 2014, our source says a meeting was held that included both Tony Podesta and a representative of the Clinton Foundation. The explicit subject of that meeting: How to assist Uranium One, the Russian-owned company which controls 20 percent of U.S. uranium production capacity, and whose board members gave more than $100 million dollars to the Clinton Foundation. As our source put it, ‘Tony Podesta was basically part of the Clinton Foundation.'”
According to Carlson, Manafort was in on the scheme.
“According to our source, Manafort was clear that Russia wanted to cultivate ties to Hillary Clinton, in the belief she was likely to become president,” he said during the segment. “These links to Hillary were apparently valuable; our source believes that the Russian money Manafort funneled to the Podesta Group greatly exceeds the roughly $1 million they were officially paid. Some of these payments, he said, could be hidden kickbacks that would be hard to trace. He described the Podesta Group’s books as a ‘treasure trove’ and highly secret. He told us the Podesta Group had no board, and all financial decisions were personally made by Tony Podesta. The Group’s employees, he said, included a person whose only official job was managing Tony Podesta’s art collection. It would be easy for such an organization to conceal financial transactions.”
“The source we spoke to has been interviewed extensively by Robert Mueller’s independent investigation. In press accounts, Mueller’s investigation is still framed as a hunt for collusion between Donald Trump’s presidential campaign and Russia,” the Fox host said.
“Our source says investigators are very interested in Manafort’s behavior while he ran the Trump campaign, but otherwise that description is mostly bogus. The investigation has broadened to determine which people and organizations in Washington have spent years working secretly as de facto operatives on behalf of the Russia government. The Podesta Group is chief among these de facto foreign operatives. ‘They’re are more focused on facilitators of Russian influence in this country, not election collusion,’ our source said. The Podesta Group is ‘in their crosshairs.'”
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In a statement, a spokesman for the Podesta Group said the firm "is cooperating fully with the Special Counsel's office and has taken every possible step to provide documentation that confirms timely compliance. In all of our client engagements, the Podesta Group conducts due diligence and consults with appropriate legal experts to ensure compliance with disclosure regulations at all times — and we did so in this case."
much ado about nothing....as is always with ddt slattern
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On Tuesday, October 24, 2017 at 11:00:42 PM UTC-5, herman wrote:
I get tired of reading her articles and finding they don't say what she claims.
Mueller Now Investigating Democratic Lobbyist Tony Podesta
by TOM WINTER and JULIA AINSLEY
WASHINGTON — Tony Podesta and the Podesta Group are now the subjects of a federal investigation being led by Special Counsel Robert Mueller, three sources with knowledge of the matter told NBC News.
The probe of Podesta and his Democratic-leaning lobbying firm grew out of Mueller's inquiry into the finances of former Trump campaign chairman Paul Manafort, according to the sources. As special counsel, Mueller has been tasked with investigating possible collusion between the Trump campaign and Russia.
Manafort had organized a public relations campaign for a non-profit called the European Centre for a Modern Ukraine (ECMU). Podesta's company was one of many firms that worked on the campaign, which promoted Ukraine's image in the West.
The sources said the investigation into Podesta and his company began as more of a fact-finding mission about the ECMU and Manafort's role in the campaign, but has now morphed into a criminal inquiry into whether the firm violated the Foreign Agents Registration Act, known as FARA.
Related: What Did Paul Manafort Really Do in Ukraine?
Under FARA, people who lobby on behalf of foreign governments, leaders or political parties must file detailed disclosures about their spending and activities with the Justice Department. Willful failure to file the forms is a felony and can result in up to five years in prison, though such prosecutions are rare.
The Podesta Group amended its FARA registration to accurately reflect its work with ECMU only after the payments were reported by the media. Manafort's firm also filed a FARA registration after media reports in June disclosed its work in Ukraine from 2012 through 2014.
A spokeswoman said the Podesta Group’s original filing was submitted after the advice of legal experts because the ECMU "had certified that it was neither funded nor directed by a foreign government or political party."
After the media reports, said the spokeswoman, the Podesta Group reached out to FARA regulators who instructed how the firm should file.
The ECMU was reportedly backed by the Party of Regions, the pro-Russian and oligarch-funded Ukrainian political party for which Manafort worked as a consultant, and which paid his firm millions. Viktor Yanukovych of the Party of Regions, a Manafort client, was president of Ukraine during the ECMU campaign, which ran from 2012 to 2014. He fled the country in 2014.
Tony Podesta is the chairman of the Podesta Group and the brother of John Podesta, Hillary Clinton's presidential campaign chairman. John Podesta is not currently affiliated with the Podesta Group and is not part of Mueller's investigation.
In a statement, a spokesman for the Podesta Group said the firm "is cooperating fully with the Special Counsel's office and has taken every possible step to provide documentation that confirms timely compliance. In all of our client engagements, the Podesta Group conducts due diligence and consults with appropriate legal experts to ensure compliance with disclosure regulations at all times — and we did so in this case."
A spokesperson for Mueller's office declined to comment.
In late August, NBC News reported that Special Counsel Mueller's team sent subpoenas to six firms who were involved in public relations lobbying for ECMU.
The subpoenas sought testimony from public relations executives who worked on the campaign organized by Manafort, people directly familiar with the matter told NBC News.
One source with knowledge of the investigation said that federal investigators have now met with several former staffers of the various firms involved in the ECMU campaign.
Mueller's team is closely examining the lobbying campaign, which ran between 2012 and 2014. Six firms participated in the public relations effort that Manafort coordinated, paid for by the Brussels-based ECMU. The stated goal was to build support for Ukraine's entry into the European Union, the same source said.
Related: Mueller Seeks Testimony From PR Firms That Worked With Manafort
Two of the firms, Podesta Group and Mercury LLC, worked in Washington with Manafort partner Rick Gates, according to lobbying disclosure records. Three other firms worked in Europe, the executive said. NBC News could not confirm the identity of those three.
Manafort, whose Alexandria, Virginia, apartment was raided by FBI agents in July, has emerged as a key figure in the Mueller probe. The inquiry into the lobbying campaign appears to be part of a larger investigation into his work for the Party of Regions, his offshore banking transactions, his tax compliance and his real estate dealings, people familiar with the probe have told NBC News.
The Associated Press first revealed the pro-Ukraine lobbying campaign in August 2016, while Manafort was still running the Trump campaign. Manafort left the campaign within days.
The report said the ECMU campaign was designed to sway public opinion and included attempts to solicit favorable press coverage in The New York Times and The Wall Street Journal.
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On Tuesday, October 24, 2017 at 11:00:42 PM UTC-5, herman wrote:
Minister Rebel
Irie
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On Wednesday, October 25, 2017 at 1:10:54 PM UTC-5, Irie
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Why Clinton Camp's Funding of the Trump Dossier Matters
Dealing
Photographer: Mikhail Svetlov/Getty ImagesThe news that Hillary Clinton's campaign and the Democratic National Committee paid for former U.K. spy Christopher Steele's investigation into Donald Trump showed one thing: Rarely have two political candidates been so worthy of each other in terms of cynicism as Clinton and Donald Trump. No wonder Russian President Vladimir Putin, another world-class cynic, dealt himself in.
Democrats were indignant when it turned out that Donald Trump Jr., the candidate's son, was willing to accept damaging information about Clinton from a Russian source. No dirt was forthcoming in that case, though: Instead, a suburban Russian lawyer fighting for the interests of her client, sanctioned under the Magnitsky Act in the U.S., came to see Trump campaign officials to lobby against the law, not to share intelligence.
In the Clinton case, Fusion GPS, the firm working on the Trump opposition research, paid Steele, a foreigner, with the campaign's money. The U.K., of course, is a U.S. ally; Russia is an adversary. But the information Steele produced came mainly from Russian sources. Unlike lawyer Natalya Veselnitskaya, who once did legal work for the FSB domestic intelligence in a minor property dispute, these sources were really well-connected, if Steele is to be believed. They included, according to the version of his dossier published by Buzzfeed, "a senior Russian Foreign ministry figure," "a former top level Russian intelligence officer still active inside the Kremlin," "a senior Russian financial official" and "a senior Kremlin official."
In Moscow's paranoid political climate, with the Kremlin seeing foreign agents everywhere and the FSB eager to earn its bread, what was the upside for these sources in sharing explosive secrets with a foreigner? The downside is clear: The standard prison sentence for espionage, handed down in recent spying cases, was 12 years -- at the lower bound of the Russian criminal code's range of 12 to 20. As a private operative, Steele couldn't even offer his informants the thin protection that comes with working for a foreign intelligence agency, which might help a valuable agent if push came to shove.
But if the FSB and the Kremlin knew of Clinton's interest in putting together a dossier on Trump, all these people had an excellent reason to talk, and especially to provide nonsensical information -- such as that Dmitry Peskov, Putin's press secretary, and not anyone in Russia's intelligence community, was the keeper of a top-secret file on Trump. It was always obvious from the Steele reports that his sources were having fun spinning tall tales for him; since he wasn't required to verify them and vouch for their accuracy -- that's the nature of raw intelligence -- Steele faithfully wrote them down on Fusion GPS's time.
Russia has never hid or denied its propaganda campaign during the U.S. election -- except the elements of "active measures" it included: The rallies Kremlin trolls attempted to organize in the U.S. hinterland through Facebook ads, perhaps (but not definitely) the distribution of Democrats' stolen emails to the media. These fit in nicely with the possible use of a Brit on Clinton's payroll as a disinformation channel. Now that the nature of Russian activity on social networks has come to light, it's likelier than ever that the goal of the whole exercise was to sow discord and instability in the U.S. Pushing Russian-generated kompromat on Trump to Clinton would have served that purpose brilliantly.
The Clinton campaign and the DNC reportedly started paying Fusion GPS in April 2016, which was after the FBI warned about potential Russian hacking and several months before the DNC publicly confirmed that its network was breached by groups tied to Russian intelligence. It's likely that, even before that announcement, the Democrats had been planning to use the Russian angle against Trump. That should prompt further investigation of Russia-related conclusions by Crowdstrike, the cybersecurity firm hired by the DNC, which was the only organization to examine the servers that had allegedly been hacked. It should also prompt the U.S. intelligence community to release more information about the sources of its conclusion that an arm of the Russian government had hacked the Democrats. Since the Steele dossier made the same conclusion -- adding that Trump's team helped -- an obvious question follows that has not been answered: Did U.S. intelligence rely at least in part on the information Steele had obtained while his employer was being funded by the Clinton campaign and the DNC?
Of course, collusion between the Trump camp and the Kremlin still cannot be ruled out. Putin's people courted former National Security Adviser Michael Flynn, and campaign chairman Paul Manafort had business ties to Kremlin-friendly billionaire Oleg Deripaska (who, however, is not part of Putin's close circle). And in any case, the Russian efforts to diligently and creatively amplify the Trump's divisive messages gave him an advantage.
It's looking increasingly likely, however, that the Kremlin was playing both sides against each other, giving each something it wanted. That's a classic destabilization tactic that Russia has long employed in Ukraine, feeding the local establishment's internal conflicts.
That it got the opportunity to do so is a problem for the U.S. Both of its main parties need candidates that aren't so easy to ensnare in international intrigue (at best) and collusion (at worst). Until that happens, Russia -- and everybody else interested in humiliating the U.S. -- will keep coming back to do more harm.