Weekly Roundup in AML/CFT

Weekly Roundup in AML/CFT

U.S. Makes Unprecedented Person-for-Person Swap with Russia

            In a story that has dominated international headlines over the last week, WNBA star Brittney Griner, who had been serving a 10-month stay in Russian prison, was freed last week as part of an agreement reached between the Biden Administration and the Kremlin. Griner, who was initially arrested in February after smuggling a personal supply of marijuana vaping materials into Russia, was ultimately convicted and sentenced to 9 years in prison for this crime. Unfortunately for the U.S. and its counterparts, it took a whopping return to see Griner released, leading to mixed reactions from the American public as well as much of the international community. While there was celebration at the announcement of an American captive returning home, there was also shock and outrage over the terms of the deal – more specifically, whom Griner was traded for.

            Enter Viktor Bout. The 55-year-old international war criminal is known as the “Merchant of Death.” A former military officer in the Soviet Union, Bout got his start selling Soviet weapons after the collapse of the USSR. Eventually he expanded his operation around the world, helping to fuel countless regional military conflicts in the 90’s and early 2000’s by providing various countries with advanced weaponry and logistics support. Several of the countries directly tied to Bout’s criminal exports include Afghanistan, Angola, Congo, Lebanon, Somalia, and Yemen, though he supplied both governments and rebel groups alike. Given his widespread reach, Michael Braun, the former chief of operations for the U.S. Drug Enforcement Administration (DEA), went as far as to call Bout “one of the most dangerous men on the face of the earth.”4 He was ultimately apprehended as part of a DEA sting operation in Thailand in 2008 where U.S. agents were posing as members of the Revolutionary Armed Forces of Colombia (FARC) and was extradited to the U.S. in 2010 following court proceedings.2

            With Griner in route back home, the Pentagon released a statement saying they were concerned that Bout – who was serving a 25-year sentence for on charges of conspiring to kill Americans, delivery of anti-aircraft missiles, and aiding a terror organization –could immediately return to arms trafficking after the exchange. When comparing a little-known professional basketball player to the most dangerous and notorious arms dealer in the world, it would seem the Biden administration got the short end of the stick in this exchange. According the CIA, Americans may also be at increased risk due to the exchange. Only time will tell how the deal will ultimately play out.

Feds charge over 20 money launderers in crypto bust

            Early last week, the United States Attorney’s Office for the Eastern District of Texas announced that they had brought charges against a total of 21 individuals involved in an international cryptocurrency money-laundering network. The charges were unsealed as part of an investigation coined “Operation Crypto Runner.”1 The network at hand was reportedly responsible for “washing” millions of dollars in funds stolen from thousands of victims across the U.S.  The targets of the attacks were elderly individuals – a demographic long tied to susceptibility to fraud.

“These arrests are just the beginning. We are committed to bringing each of the remaining perpetrators to justice,” Secret Service Special Agent William Smarr said. Law enforcement officials also disclosed that a whopping $300 million worth of money laundering transactions had been disrupted as part of their operation. The results of the case bode well for future domestic cryptocurrency investigations and are a testament to improvements in international cooperation and transaction tracking in this regard seen over recent months.

Malaysian agency investigating misuse of $136 billion in government funds

This past week, the Malaysian Anti-Corruption Commission announced that they had opened an investigation into an alleged misappropriation of 600 billion ringgit ($136.39 billion) in government funds.

The investigation originated when Prime Minister Anwar Ibrahim announced that a review of his predecessor’s “government projects” revealed a plethora of suspicious activity during his tenure between 2020 and 2021. Former Prime Minister Yassin recently lost to Ibrahim in a very hotly contested election, and corruption remains arguably one of Malaysia’s largest issues stemming from the fallout of the infamous 1MDB state fund scandal.

The Anti-Corruption Commission has yet to announce any suspects or whom they are targeting, but they did call on the public to come forward with any information on nefarious activity related to these projects. Tengku Zafrul Aziz, the former finance minister of Muhyiddin’s administration oversaw government spending during the time period in question. Aziz claims he will cooperate with law enforcement if asked to. “There’s nothing to hide,” he said in a Twitter post.3

Citations

  1. Goswami, Rohan. “Feds Charge 21 People in Global Crypto Money Laundering Bust.” CNBC, CNBC, 30 Nov. 2022. 
  2. Hansler, Jennifer. “Exclusive: Paul Whelan Tells CNN He Is ‘Disappointed’ That More Has Not Been Done to Secure His Release | CNN Politics.” CNN, Cable News Network, 9 Dec. 2022. 
  3. Latiff, Rozanna. “Malaysia’s Anti-Graft Agency Probes Alleged Misuse of $136 BLN in Govt Funds.” Reuters, Thomson Reuters, 8 Dec. 2022. 
  4. Yilek, Caitlin. “Who Is Viktor Bout? Russian Arms Dealer Known as the ‘Merchant of Death’ Swapped for Brittney GrinerC.” CBS News, CBS Interactive, 8 Dec. 2022. 
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