Asset Recovery Workshop October 8-11, 2018
Photo from the asset recovery workshop held October 8-11, 2018 in Abuja, Nigeria.

Fifteen West African countries sent judges; &/or prosecutors; &/or law enforcement agents to attend the asset recovery workshop I recently lectured at in Abuja, Nigeria. I was one of four resource persons at the workshop which was a joint project of the European Union and the Inter Governmental Action Group Against Money Laundering In West Africa. At the work shop, I talked about government officials, (i.e “politically exposed persons“), who launder large bribe payments offshore. I explained that others hiding vast sums of money also usually launder their money offshore. Therefore, if you are going to conduct asset searches to detect hidden money, you should learn to spot the money laundering indicators.

I) MONEY LAUNDERING INDICATORS

The indicators include: employing strawpersons to act as bank signatories; abusing trusts; hoarding cash/engaging in bulk cash smuggling; etc. I made a list of the indicators at my post “Red Flags For An Asset Search.” The money laundering case involving  Mr. Vladimir Kuznetsov has some of these indicators. As I mentioned in a lecture I gave during the asset recovery workshop, Mr. Kuznetsov was a Russian diplomat working at the United Nations in New York City. Prosecutors in the United States accused Mr. Kuznetsov of washing bribe payments through Nikal, Ltd. which was a suspected offshore shell company Mr. Kuznetsov had formed. Mr. Kuznetsov used Nikal, Ltd. to open an offshore bank account in Antigua & Mr. Kuznetsov titled the offshore bank account in the name of Nikal, Ltd.

Mr. Kuznetsov’s associate, (who took bribe payments from companies seeking contracts at the United Nations), transferred bribe payments to Mr. Kuznetsov’s offshore bank account. Mr. Kuznetsov then reportedly wire transferred the bribe payments in his offshore account to financial accounts in New York City at Chase Manhattan Bank &/or the United Nations Federal Credit Union. On March 2, 2007, Mr. Kuznetsov was convicted of conspiracy to commit money laundering.  On October 12, 2007, Mr. Kuznetsov was  sentenced to fifty one months’ imprisonment. Money laundering indicators or red flags that Mr. Kuznetsov had hidden money were Mr. Kuznetsov’s use of a  suspected shell company, Nikal, Ltd. &  Mr. Kuznetsov’s use of the offshore bank account.

II) ASSET SEARCHES & THE MONEY LAUNDERING STAGES

Besides recognizing money laundering indicators, understanding the way money laundering works can help you succeed at your asset searches. Money laundering occurs in three stages: placement, layering & integration. These stages are thought to have been present in Mr. Kuznetsov’s case. Mr. Kuznetsov’s associate placed bribe payments into Mr. Kuznetsov’s money laundering circuit. This placement occurred when the associate wire transferred bribe payments to Mr. Kuznetsov’s offshore bank account. Mr. Kuznetsov layered by washing the bribe payments through his offshore bank account titled in the name of Nikal, Ltd. This layering disguised Mr. Kuznetsov’s beneficial ownership of the offshore account & the bribe payments. Integration would have happened if Mr. Kuznetsov introduced the washed bribe payments into the economy.  Mr. Kuznetsov could have integrated the bribe payments reportedly at the New York financial accounts, by using the bribe payments to buy things. Placement, layering & integration are described at this Egmont Group Money Laundering Video:¹

¹Video Courtesy of The Egmont Group of Financial Intelligence Units.

Copyright 2018 Fred L. Abrams

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Fred L. Abrams has located tens of millions of dollars hidden in offshore tax havens and filed legal proceedings in Zurich, Geneva, Tel Aviv, Amsterdam and Puerto Rico to seek discovery from foreign bank witnesses. A member of the New York bar since 1990, he has handled a wide variety of legal matters in which assets were hidden, such as RICO, money laundering, identity theft and tax fraud.