The fastest way to send criminal cash: money transmitters

How com­pa­nies like Western Union and MoneyGram play a hid­den role in laun­der­ing cash from around the globe.

No, this for­mer vice pres­i­dent can­not have his sev­en planes back.

In May, the International Criminal Court ruled that Jean-Pierre Bemba Gombo, for­mer vice pres­i­dent of the Democratic Republic of Congo, will not be com­pen­sat­ed for spend­ing more than a decade in deten­tion on war crimes and oth­er charges most­ly over­turned on appeal. He will not be reunit­ed with his planes, vil­las and riv­er cruis­er, nor will he receive the $77 mil­lion he asked for in compensation.

After 12 years and more than 100 wit­ness­es, his­to­ry now records just one judg­ment of guilt: that Bemba bribed wit­ness­es using Western Union and MoneyGram International, the world’s largest mon­ey transmitters.

Bemba and his allies, the court found, offered sol­diers and civil­ians $100 or more — and in some cas­es relo­ca­tion to Europe — to lie in Bemba’s trial.

In 2002 and 2003, Bemba com­mand­ed 1,500 Congolese sol­diers who inter­vened in a con­flict in the neigh­bor­ing Central African Republic. His forces killed civil­ians and raped women and girls as young as 10, vic­tims and oth­er wit­ness­es lat­er claimed. The ICC found Bemba guilty of war crimes, crimes against human­i­ty and wit­ness tam­per­ing in 2016. The first two charges were over­turned on appeal in 2018.

The bribery con­vic­tion held up. A leak of U.S. gov­ern­ment bank­ing records reveals new details about the alleged pay­offs — and the role Western Union played in them.

Bemba and four aides, also con­vict­ed of brib­ing wit­ness­es, sent more than $429,000 through Western Union from 2005 to 2015, accord­ing to a sus­pi­cious activ­i­ty report sub­mit­ted by Western Union to the Financial Crimes Enforcement Network, a divi­sion of the U.S. Treasury Department. It is unclear how much of this mon­ey was used for bribes.

The sus­pi­cious activ­i­ty report cites hun­dreds of recip­i­ents in 23 coun­tries and names three peo­ple who have not been iden­ti­fied before, includ­ing one of Bemba’s key allies, Narcisse Arido, who received near­ly $30,000 through Western Union, accord­ing to the report.

The Western Union report is also notable for its tim­ing. Financial insti­tu­tions are required to reg­u­lar­ly exam­ine trans­ac­tions and accounts for signs of mon­ey laun­der­ing and oth­er types of finan­cial crime. Western Union didn’t file the sus­pi­cious activ­i­ty report, or SAR, describ­ing the pay­ments until 2015 or lat­er — at least sev­en years after Bemba’s arrest.

The undat­ed Western Union doc­u­ment is one of more than 2,600 records obtained by BuzzFeed News and shared with the International Consortium of Investigative Journalists as part of the FinCEN Files inves­ti­ga­tion. The report­ing team found that banks, mon­ey trans­mit­ters like Western Union and oth­er finan­cial insti­tu­tions have moved vast amounts of mon­ey for peo­ple accused of cor­rup­tion and oth­er crimes, often long after alle­ga­tions were first made public.

Bemba’s mon­ey flows are among sus­pi­cious trans­fers worth at least $150 mil­lion that went through Western Union and MoneyGram between 2005 and 2017, accord­ing to an ICIJ analy­sis of trans­ac­tions from the FinCEN Files. The two com­pa­nies filed or were cit­ed by oth­er finan­cial insti­tu­tions in 236 sus­pi­cious activ­i­ty reports, accord­ing to ICIJ’s analy­sis. Suspicious activ­i­ty reports reflect the views of bank­ing pro­fes­sion­als and are not them­selves evi­dence of criminality.

Payments through mon­ey trans­mit­ters, while often small, are cen­tral to mod­ern crime. The FBI counts such pay­ments as the third most com­mon method to laun­der mon­ey, after bank trans­ac­tions and pay­ments in hard cash. Recent cas­es in which mon­ey trans­mit­ters alleged­ly played a cen­tral role include sev­er­al involv­ing opi­oid traf­fick­ing rings and the crime ram­page of a vio­lent Eurasian mobster.

Certain mon­ey trans­fer com­pa­nies have repeat­ed­ly demon­strat­ed a readi­ness to pro­vide essen­tial sup­port to crim­i­nals and ter­ror­ists,” said David Pressman, an attor­ney suing Western Union, MoneyGram and two Russian banks on behalf of fam­i­lies of vic­tims killed by Ukrainian sep­a­ratists who shot down Malaysian Airlines flight MH17 in 2014. “The busi­ness mod­el is pred­i­cat­ed on mov­ing cash fast, at a glob­al scale, even when it means mov­ing cash to those intent on car­ry­ing out mur­der­ous acts.”

Big guys and little guys

The amount of mon­ey that Western Union, MoneyGram and oth­er mon­ey trans­mit­ters send world­wide in a year exceeds the gross domes­tic prod­uct of Switzerland or Saudi Arabia. More than $689 bil­lion was sent in 2018, the last year for which fig­ures are available.

While remit­tances — espe­cial­ly trans­fers to rel­a­tives — are a cru­cial source of income for many peo­ple, espe­cial­ly in poor­er coun­tries, crime agen­cies say drug and human traf­fick­ers, fraud­sters and arms smug­glers push mon­ey around the world through the same companies.

The Financial Action Task Force, an inter­na­tion­al net­work of gov­ern­ment anti-mon­ey-laun­der­ing agen­cies, found that many crim­i­nals avoid banks because they see mon­ey trans­mit­ters “as offer­ing less risk of detection.”

Money trans­mit­ters are hard to mon­i­tor; there are 23,968 com­pa­nies in the United States alone that fall under the tech­ni­cal term “mon­ey ser­vice busi­ness.” They are based at post offices, banks, liquor stores, Walmarts and gas sta­tions. They range from behe­moths like Western Union to a three-per­son out­fit in Pago Pago, American Samoa.

Like banks, American mon­ey trans­mit­ters must report sus­pi­cious activ­i­ties to FinCEN, the U.S. agency that over­sees the fight against finan­cial crime. Yet offi­cials acknowl­edge that they catch lit­tle of the illic­it mon­ey that pass­es through mon­ey transmitters.

Criminal exploita­tion of mon­ey trans­mit­ters is one of the “most sig­nif­i­cant vul­ner­a­bil­i­ties” in the United States, accord­ing to the Treasury Department’s 2020 report on the nation­al strat­e­gy to counter illic­it finance. There are sim­ply not enough audi­tors to mon­i­tor the indus­try, the strat­e­gy paper said.

In the vast mon­ey trans­mis­sion sec­tor, the FBI calls MoneyGram and Western Union the “Big Guys.”

The big guys have a big rap sheet.

In 2012, the U.S. Justice Department agreed not to pros­e­cute Dallas-based MoneyGram, the world’s sec­ond-largest mon­ey trans­mit­ter, after its agents con­spired with fraud­sters to trick vic­tims into send­ing mon­ey with false promis­es of lot­tery win­nings and bargains.

MoneyGram Agents know­ing­ly entered false address­es, tele­phone num­bers, and per­son­al iden­ti­fi­ca­tion” and took fees for pro­cess­ing the frauds, the com­pa­ny admit­ted in a state­ment of facts filed in fed­er­al court.

To escape pros­e­cu­tion, MoneyGram agreed to cre­ate a sys­tem to spot and stop poten­tial frauds, tie exec­u­tive bonus­es to com­pli­ance with the law and require every MoneyGram office world­wide to fol­low U.S. anti-mon­ey-laun­der­ing rules, among oth­er con­di­tions. MoneyGram broke the agree­ment when its new anti-fraud sys­tem failed to pre­vent a sub­stan­tial num­ber of crim­i­nal trans­ac­tions, accord­ing to the Justice Department. MoneyGram paid a $125 mil­lion penalty.

Citing MoneyGram’s “envi­ron­ment of fraud,” the Justice Department in 2014 took the unusu­al step of suing a senior exec­u­tive. It accused the company’s chief com­pli­ance offi­cer, Thomas Haider, of allow­ing crim­i­nals to use MoneyGram “to defraud inno­cent con­sumers and then laun­der the pro­ceeds.”  Haider set­tled and paid $250,000.

Western Union, head­quar­tered in Colorado, oper­ates in more than half a mil­lion loca­tions world­wide, com­pared with MoneyGram’s more than 350,000 outlets.

In 2010, the com­pa­ny agreed to upgrade its anti-mon­ey-laun­der­ing sys­tems and paid $94 mil­lion to set­tle charges that drug, human and weapons smug­glers mis­used the com­pa­ny to move vast sums of mon­ey across the U.S.-Mexico border.

Seven years lat­er, Western Union agreed to pay $586 mil­lion after a U.S. inves­ti­ga­tion found that the com­pa­ny enabled scam­mers to defraud hun­dreds of thou­sands of Americans who paid to claim prizes or job offers that didn’t exist. “Various Western Union agents were com­plic­it in these fraud schemes, often pro­cess­ing the fraud pay­ments in return for a cut of the fraud pro­ceeds,” the Justice Department said in a news release.

A year lat­er, New York state fined the com­pa­ny $60 mil­lion for, among oth­er things, wav­ing through cash for crim­i­nals in China. And in 2019, French offi­cials fined the com­pa­ny for fail­ing to alert reg­u­la­tors to sus­pi­cious cus­tomers in Afghanistan, Iran and Turkey.

Western Union told ICIJ that it would respond to ques­tions. It nev­er did; the company’s com­mu­ni­ca­tions chief, Claire Treacy, did not return sub­se­quent emails or phone calls.

MoneyGram pro­posed a phone con­ver­sa­tion with ICIJ to “poten­tial­ly help” with research. MoneyGram can­celed the call and sent a writ­ten response in which the com­pa­ny declared that it had found “sev­er­al state­ments to be com­plete­ly base­less.” The com­pa­ny did not explain what it con­sid­ered “base­less.”

MoneyGram takes finan­cial crime very seri­ous­ly and does not tol­er­ate uneth­i­cal or ille­gal con­duct,” the com­pa­ny said in a state­ment. MoneyGram “has invest­ed tens of mil­lions of dol­lars in our state-of-the-art com­pli­ance pro­gram” and “has among the low­est fraud rates in the indus­try,” it said.

Exploitation’

Jean-Pierre Bemba’s deten­tion in 2008 made glob­al head­lines after police in Brussels arrest­ed him and the ICC asked African and European cap­i­tals to seize vil­las, cars, bank accounts and a Boeing 727–100.

The ICC, which was cre­at­ed to bring the world’s worst war crim­i­nals to jus­tice, whisked Bemba to The Hague, where his tri­al opened in November 2010. He was charged with wit­ness tam­per­ing three years later.

Whiskey” was Bemba’s code name for Western Union and “Mike” for MoneyGram, accord­ing to wire­taps obtained by ICC pros­e­cu­tors. “Never, nev­er, nev­er” should pay­ments pass through a bank account, Bemba told one aide.

Bemba con­spired with aides – all of whom were also con­vict­ed, includ­ing his defense lawyer and a mem­ber of the DRC par­lia­ment – to coach wit­ness­es to pre­tend that they were sol­diers and tes­ti­fy in Bemba’s favor.  During his tri­al, pros­e­cu­tors alleged that Narcisse Arido, an expert wit­ness for Bemba’s defense, lured Central African wit­ness­es with the hope of asy­lum in Europe and “exploit­ed the pre­car­i­ous per­son­al sit­u­a­tions of these wit­ness­es, sell­ing them the illu­sion that by tes­ti­fy­ing false­ly for Bemba they would have a bet­ter future.”

Sometime after Oct. 12, 2015, Western Union filed a sus­pi­cious activ­i­ty report to FinCEN say­ing an employ­ee had “iden­ti­fied” news about Bemba on the ICC’s web­site. Western Union report­ed almost 2,000 trans­fers from 2005 to Oct. 12, 2015, that involved Bemba and accom­plices. Arido, for exam­ple, received $28,732 from 30 Western Union branch­es in sev­en coun­tries, accord­ing to the sus­pi­cious activ­i­ty report. The ICC had issued a war­rant for Arido’s arrest at least a year and 10 months before Western Union sub­mit­ted its report to FinCEN.

The Western Union report indi­cates that Arido sent pay­ments to three peo­ple in Cameroon and France: Arlette Josiane Tongui Bengue, Louis Kotys and Sylvie Ngo Manding. The aver­age trans­ac­tion was worth less than $300. It is unclear whether the pay­ments were part of the bribery scheme.

Kotys and Ngo Manding could not be reached. Tongui Bengue, who now lives in Quebec, refused to answer ques­tions when contacted.

You don’t need Western Union or banks to “go around and threat­en a wit­ness with a mon­key wrench,” said Robert Cryer, a law pro­fes­sor at the University of Birmingham in England. “But mon­ey is cen­tral to oth­er forms of wit­ness intimidation.”

In a WhatsApp call with ICIJ, Bemba denied brib­ing wit­ness­es. “No, that is absolute­ly false,” Bemba said. “I was not in a posi­tion to do it.” He has appealed the rejec­tion of his com­pen­sa­tion request.

From drug dealers to the godfather

From bustling metrop­o­lis­es like Tokyo to the world’s small­est cap­i­tal city, Ngerulmud in Palau, Western Union’s black and yel­low logo or MoneyGram’s white arrow can be found almost every­where. For a fee, the com­pa­nies offer an easy way to wire mon­ey to a loved one in a pan­ic or to seal a busi­ness deal on a dead­line. They play an essen­tial role in the lives of tens of mil­lions of peo­ple who use their ser­vices, from vice pres­i­dents to journalists.

While a bank-to-bank trans­fer can take days, both com­pa­nies claim to make cash avail­able “with­in minutes.”

There’s no stop­ping all illic­it mon­ey trans­fers, espe­cial­ly those involv­ing small dol­lar amounts and peo­ple not known to law enforce­ment. But finan­cial insti­tu­tions are sup­posed to be on the watch for peo­ple like Anthony Gomes and his cronies.

Gomes and oth­ers helped intro­duce the potent opi­oid fen­tanyl to the U.S., rout­ing the drug from Chinese lab­o­ra­to­ries to American deal­ers and users through the postal sys­tem. More than 36,000 Americans died last year from over­dos­es of fen­tanyl and sim­i­lar syn­thet­ic drugs.

His traf­fick­ing ring hid trans­ac­tions through off­shore accounts and wired mon­ey through Western Union, accord­ing to court doc­u­ments. The records show that he and oth­ers sent $17,600 to China in one month alone via the mon­ey remitter.

I have the guy on the way to wu [Western Union] now give me a few,” Gomes emailed anoth­er deal­er, accord­ing to court records. “Ok good stuff,” the fen­tanyl deal­er replied. “New batch is even stronger than [the] last.”

At least four Americans, includ­ing 19-year-old Daniel Latjerman in North Dakota, were killed by fen­tanyl import­ed by Gomes’ ring, pros­e­cu­tors said. Gomes plead­ed guilty in 2018 to con­spir­a­cy charges relat­ed to drug traf­fick­ing and mon­ey laundering.

Gomes and eight oth­ers appear in a spread­sheet includ­ed with a sus­pi­cious activ­i­ty report in con­nec­tion with more than $403,000 in pay­ments made via MoneyGram from 2012 to 2017. Also named in MoneyGram’s undat­ed report was Darius Ghahary, a north­ern New Jersey man charged in 2014 with manslaugh­ter after Latjerman died. Ghahary died in cus­tody. It is unclear why MoneyGram filed the report when it did.

MoneyGram helped move mon­ey for Ghahary despite his well-pub­li­cized con­vic­tion for inter­net fraud more than a decade earlier.

Money trans­mit­ters are one of “two key pay­ment sys­tems which sup­port illic­it pro­cure­ment of opi­oids,” the assis­tant direc­tor of the U.S. Immigration and Customs Enforcement told Congress in 2018. Just a few months ear­li­er, an under­cov­er agent of the U.S. Drug Enforcement Administration told a fed­er­al court that he received fen­tanyl in a box marked “peanuts” after wiring $80 to China via MoneyGram.

Last year, the Treasury Department alert­ed finan­cial insti­tu­tions to the poten­tial abuse of mon­ey trans­mit­ters in fen­tanyl and syn­thet­ic opi­oid trafficking.

The FinCEN Files show that one of America’s most dan­ger­ous Eurasian mafia dons built his empire with help from mon­ey transmitters.

In 2018, Razhden Shulaya, a Brooklyn tow-truck-leas­ing com­pa­ny man­ag­er, was con­vict­ed in New York of mas­ter­mind­ing “a vast and vio­lent crim­i­nal enter­prise” involv­ing gam­bling, cred­it card fraud, con­tra­band cig­a­rettes and stolen choco­lates. Authorities said he also had plans to defraud casi­nos with rigged slot machines.

Shulaya was a “thief-in-law” the Russian equiv­a­lent of a god­fa­ther, U.S. pros­e­cu­tors said. “He used his pow­er to steal, defraud, extort and dis­fig­ure.” They cit­ed occa­sions when Shulaya pis­tol-whipped his nephew and bat­tered the face of a lieu­tenant after a per­ceived insult. Members of his gang beat ene­mies with pool cues. Others, to cur­ry favor, gave Shulaya a Mercedes and a cross­bow as gifts.

Read an excerpt from an intelligence assessment report prepared by FinCEN

Read doc­u­ment

Shulaya is serv­ing a 45-year prison sen­tence in West Virginia. He has appealed his conviction.

Two years before Shulaya’s con­vic­tion, FinCEN report­ed that an “asso­ciate”  named George Meskhishvili sent $12,600 from Western Union loca­tions in New York City to eight peo­ple, includ­ing Shulaya. The agency’s report called Meskhishvili one of the pos­si­ble “cen­tral facil­i­ta­tors” in the finan­cial net­works of Eurasian crime gangs. Meskhishvili has not been crim­i­nal­ly charged.

FinCEN said the trans­ac­tions were sus­pi­cious because many amounts were below the $10,000 thresh­old that banks must report in cur­ren­cy trans­ac­tions, or were sent on the same or con­sec­u­tive days.

In May 2014, Meskhishvili wired $1,200 from Brooklyn to Shulaya at the Bellagio hotel and casi­no in Las Vegas weeks before the U.S. launched its inves­ti­ga­tion. By the time Western Union approved Meskhishvili’s pay­ment to Shulaya, the thief-in-law had pre­vi­ous­ly been arrest­ed in Europe dur­ing a high-pro­file anti-mafia crack­down. Shulaya was also want­ed in Russia on unspec­i­fied charges, accord­ing to U.S. prosecutors.

ICIJ was unable to reach Meskhishvili for com­ment through social media or his last list­ed address in Brooklyn.

Asked five times why it approved pay­ments to Shulaya, Western Union nev­er replied.

Contributors: Agustin Armendariz, Christian Locka, Scott Pham, Frédéric Zalac

ICIJ by Will Fitzgibbon and Mago Torres

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