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MONEY LAUNDERING

More money laundering after Arab Spring

Switzerland's Money Laundering Reporting Office has attributed a major increase in the number of reported cases in 2011 to the Arab Spring.

In its annual report released on Monday, the agency recorded a rise of 40 percent in comparison with the number of suspicious reports made in 2010, up to a new high of 1,625 reports.

Of the 139 reports of suspected money laundering, a majority were related to Egypt, Syria, Tunisia and Libya, with combined assets totalling almost 600 million francs ($642 million), newspaper Neue Zürcher Zeitung reported.

The fact that no reports had been made concerning these countries in 2010 has led analysts to conclude that the Arab Spring has contributed significantly to the rise.

However, it was also noted that new regulations were put in place concerning Egypt and Tunisia, which resulted in more cases being identified.

The total amount of laundered assets reported set a new record of 3.3 billion francs ($3.53 billion), although the agency noted that some of the reports came from different institutions but concerned the same assets.

The number of cases reported by banks rose to 1,080 suspected cases, including suspected laundering through casinos, asset managers, and funds. The volume reported by lawyers also increased.

The majority of cases linked to criminal organizations concerned the Italian mafia, and there was an increase in the number of cases linked to fraud, bribery, and embezzlement. Instances of terrorist financing in 2011 were down on the 2010 figures.

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MONEY LAUNDERING

Swiss bank exec pleads guilty in $1.2 bn Venezuelan laundering scam

A former Swiss bank manager pleaded guilty in a US court on Wednesday for his role in a $1.2 billion money laundering scheme involving Venezuelan state oil company PDVSA, the Justice Department announced.

Swiss bank exec pleads guilty in $1.2 bn Venezuelan laundering scam
Matthias Krull is a former employee of Swiss private bank Julius Bär. File photo: AFP

Matthias Krull, 44, a German national and Panamanian resident, was one of a ring of conspirators and he admitted the scam began in late 2014 with “a currency exchange scheme that was designed to embezzle around $600 million from PDVSA,” the Justice Department said in a statement.

PDVSA was the crown jewel of Venezuela's imploding economy and remains virtually the only source of hard currency for the embattled government. But it also has made the company a target of theft and graft.

The Justice Department said the stolen fund were “obtained through bribery and fraud.”

The conspiracy in 201 doubled to $1.2 billion in funds embezzled from PDVSA. Krull, at the time a banker with Switzerland's Julius Bär private bank, became involved in 2016 when another member of the ring asked him to help launder the proceeds. 

They used Florida real estate and “sophisticated false-investment schemes to conceal that the $1.2 billion was in fact embezzled from PDVSA,” the statement said.

He pleaded guilty in a Florida court to conspiracy to commit money laundering. He is scheduled to be sentenced October 29th.

Krull's co-conspirators “include former PDVSA officials, professional third-party money launderers, and members of the Venezuelan elite, sometimes known as 'boliburgues.'”

US authorities arrested Krull in Miami last month, while Gustavo Hernandez Frieri, a Colombian, was arrested in Italy and is awaiting extradition.

The Venezuelans indicted in the case are Francisco Convit, shareholder of energy company Derwick Associates; Carmelo Urdaneta, former petroleum and mining ministry legal advisor; Abraham Ortega, ex-PDVSA staffer; and Jose Vicente “Chente” Amparan, a businessman and “professional money launderer” with links to Spain and Malta.

Venezuela's economic freefall continues, with hyperinflation expected to soar to one million percent, according to the International Monetary Fund.

On Tuesday, President Nicolas Maduro introduced a new currency, dropping five zeros and devaluing the “sovereign bolivars” by 96 percent.