Source: Clarice Feldman
Some weeks there’s a plethora of important stories and this week is no exception, but I’d like to highlight something which is getting far less attention than I think it deserves: The administration is using economic sanctions and anti-money laundering laws to seize the billions of dollars of stolen funds sloshing about the world in international money laundering schemes.
For this, I must thank an online friend “Melinda,” who brought this to my attention during a week in which the rioting in some Democrat-run cities and the horrific explosion in Beirut drew most of the attention.
The mystery began when the President traveled to Cleveland. When he left under very high security, the staff, in what struck some as an unusual move, stood outside the White House to see him off to Ohio. In Cleveland, while standing in front of Whirlpool laundry machines, he said something curious:
“I have a lot of enemies. This may be the last time you see me for a while. I have a lot of very rich enemies. They’re not happy with what I’m doing. But I figure we have one chance to do it. No other president is gonna do what I do.”
To what was this in reference? And why the staff sendoff?
Was he just speaking generally about his policies? Was he making a surprise trip to Afghanistan where a Loya Jirga among all the competing parties was supposed to end in a peace treaty? Was he leaving the White House for a few weeks as he’d done before so that necessary maintenance could take place in his absence and the concern about the staff sendoff was mere hyperventilating?
All we know is that he went from Ohio to Bedminster, New Jersey, and then to the Hamptons.
Brian Cates offered up one suggestion that made the most sense to me. The DoJ is going full bore against the largest international money launderers and there is concern about retaliation against him.
While Trump was in Cleveland the DoJ filed a big case to seize the assets of PrivatBank, which the U.S. claims were purchased by rich Ukrainians with money they had misappropriated and then laundered in Kentucky and Texas.
The complaints allege that Ihor Kolomoisky and Gennadiy Boholiubov, who owned PrivatBank, one of the largest banks in Ukraine, embezzled and defrauded the bank of billions of dollars. The two obtained fraudulent loans and lines of credit from approximately 2008 through 2016, when the scheme was uncovered, and the bank was nationalized by the National Bank of Ukraine. The complaints allege that they laundered a portion of the criminal proceeds using an array of shell companies’ bank accounts, primarily at PrivatBank’s Cyprus branch, before they transferred the funds to the United States. As alleged in the complaint, the loans were rarely repaid except with more fraudulently obtained loan proceeds.
As alleged in the Complaints, in the United States, associates of Kolomoisky and Bogoliubov, Mordechai Korf and Uriel Laber, operating out of offices in Miami, created a web of entities, usually under some variation of the name “Optima,” to further launder the misappropriated funds and invest them. They purchased hundreds of millions of dollars in real estate and businesses across the country, including the properties subject to forfeiture: the Louisville office tower known as PNC Plaza, and the Dallas office park known as the former CompuCom Headquarters. The buildings have a combined value of approximately $70 million.
PrivatBank has been a subject of scrutiny for some time as almost 2 billion dollars it received in bailout funds, partially from the U.S. and International Monetary Fund, mysteriously vanished:
The [Ukrainian] government in December spent $5.6 billion on a recapitalization of PrivatBank, which is owned by Ihor V. Kolomoisky — the pro-Kiev commander of a battle-hardened militia and the governor of a crucial region that is on the front line of the Russian conflict.
Ms. Gontareva, who took the post in 2014, closed half of Ukraine’s private banks. That was part of efforts to carry out a “total revamp of the Ukrainian banking system,” she said in a recent interview.
Not everyone was pleased with her efforts. At one point during her tenure, she found a coffin dumped outside her home.
Among the moves she oversaw were deals offering PrivatBank central bank refinancing to strengthen the lender’s balance sheet. But at least $1.8 billion of that money quickly vanished into bad loans, according to the Anti-Corruption Action Center, an independent organization tracking fraud in Ukraine that is financed in part by United States government grants. By December, PrivatBank faced a huge capital shortfall.
It was through the Latvian branch of PrivatBank that the money from Burisma, the Ukrainian energy company that hired Hunter Biden for a substantial amount of money, seemingly as a bribe to his father, was paid.
The FBI has raided the offices of Optima Management Group in Cleveland and Miami. The company has ties to Privatize Bank that was founded by Ukrainian oligarch Igor Kolomoisky. Kolomoisky also owned Burisma Holdings that hired Devon Archer and Hunter Biden onto the board of directors.
Privat Bank received billions of dollars from the IMF. It is believed that much of the money was laundered and later was embezzled by Kolomoisky. The money was allegedly laundered through shell companies in Cyprus, Belize and the British Virgin Islands. Then much of the money was run through Optima Management Group.
The FBI is very interested in how much money the fund received and where did it go. It has been rumored that Hunter Biden was paid a little over $83,000 a month with laundered funds.
The Bidens were not the only Democrats who apparently rode the Ukrainian merry-go-round. PrivatBank’s owner paid the husband of Democrat congresswoman Debbie Mucarsel-Powell $700,000, ostensibly for legal services.
The month before this complaint was filed, the DoJ filed suit to recover funds (we’re talking well over a billion dollars) on deposit at the Rothschild Bank by Vasco Investments services, Eagle Strategic Investment Fund, and Khadem Abdulla Al Quibasi, which the government alleges were traceable to an international conspiracy to launder money misappropriated from a company wholly owned by the government of Malaysia.
Both complaints charge massive international shell games in which aid donors and investors were bilked out of their funds big time.
It takes a long time to trace these funds sloshing from one company and bank and country and continent to another, and the investigators deserve praise for this hard work.
As Lexology reported, in reviewing the anti-laundering developments in 2017:
Economic sanctions and anti-money laundering (“AML”) remain at the forefront of U.S. regulatory policies.[snip] Last year witnessed a number of dramatic changes to the economic sanctions landscape. President Trump has continued the recent trend of using economic sanctions as a powerful national security and foreign policy tool, and Treasury Secretary Mnuchin estimates that he spends “probably over 50 percent” of his time on national security and sanctions issues. In addition, the U.S. Congress asserted its authority on sanctions by passing the Countering America’s Adversaries Through Sanctions Act (“CAATSA”), which President Trump signed into law on August 2, 2017. The administration’s and Congress’s actions have reshaped President Obama’s sanctions policies, significantly expanded the threat of secondary sanctions, and created new uncertainty and risks for U.S. and non-U.S. companies across industries.[snip]
Enforcement of the Bank Secrecy Act/anti-money laundering (“BSA/AML”) laws — and their state analogues — remains a high priority for federal prosecutors and regulatory agencies, as well as the DFS. Prosecutors and regulators remain willing to impose substantial penalties, as when the Department of Justice (“DOJ”) and Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) reached a $586 million resolution with Western Union, and DFS issued major consent orders against non-U.S. banks. FinCEN also used its USA PATRIOT Act Section 311 authority to designate Bank of Dandong an institution of “primary money laundering concern” based on its alleged processing of North Korean transactions, thus cutting the institution off from the U.S. financial system.
It looks to me as if the focus on money laundering has not been misplaced. It has been reaping rewards for three years now, but these two recent cases look like the biggest, most important catches yet. It also seems to me to be more evidence that the President, no stranger to high finance, continues to use every economic tool short of war to achieve his ends.