Transparency International leads the fight against public corruption which includes bribery & theft by government officials. It basically says that corruption proceeds are transferred offshore & are one of the sources of illicit financial flows. How do financial investigators across the globe search for these illicit assets? One way they search is by looking for money laundering red flags. The following discusses red flags in the case of Vladimir Kuznetsov, a former Russian diplomat at the United Nations. These red flags were structuring bank deposits; forming an offshore corporation; & using an offshore bank account to hide assets/hinder an asset search:
Mr. Vladimir Kuznetsov ‘s October 19, 2007 criminal judgment mentions his $73,671 fine and prison sentence of 51 months for violating 18 U.S.C. § 1956 (h), conspiracy to commit money laundering. According to a press release, Mr. Kuznetsov had conspired with Mr. Alexander Yakovlev– a United Nations’ procurement officer who was taking bribes. The press release explains that Mr. Kuznetsov had laundered money while he was the highest ranking Russian diplomat at the United Nations. According to his superseding indictment, Mr. Kuznetsov had been a member of the Advisory Committee on Administrative and Budgetary Questions, which advises the United Nations’ General Assembly.
As part of Mr. Kuznetsov’s laundering scheme, he had received $32,000 from Antigua via two New York financial accounts. Most significant however, was his use of an offshore bank account at Antigua Overseas Bank Ltd. as the repository of hundreds of thousands of dollars in bribery proceeds. Mr. Kuznetsov had opened this account in the name of his offshore company Nikal Ltd., which he had formed in about 2000. Although Mr. Kuznetsov was not finally convicted of it, his indictment had also alleged that he had structured bank deposits in violation of 31 U.S.C. § 5324.
Structuring bank deposits, (a.k.a “smurfing”), indicates an attempt to avoid bank reporting requirements and can be a red flag of money laundering. Other red flags of money laundering in Mr. Kuznetsov’s case included his use of the offshore corporation Nikal Ltd. to open his Antigua Overseas Bank Ltd. account. The transfer of the $32,000 from Antigua to Mr. Kuznetsov in New York was also a red flag, especially because Antigua is a tax haven/high-risk location vulnerable to money laundering.
Copyright 2008-2018 Fred L. Abrams