Feeds:
Posts
Comments

Archive for the ‘money-laundering’ Category

Exclusive: California Grand Jury Probing Shadowy Money Groups

Jul 17, 2013 1:16 PM EDT

A California grand jury has been convened in a probe that began when a PAC didn’t disclose the sources of its spending, as required by California law. Peter Stone reports.

A grand jury is now involved in a high-stakes California probe that is looking into whether a PAC and three so-called dark-money groups—including one with ties to the billionaire brothers Charles and David Koch—broke a campaign disclosure law by funneling $11 million from secret sources to influence ballot initiatives in the state’s 2012 election, The Daily Beast has learned.

The state grand jury, previously unreported, is part of an expanding investigation that’s been spearheaded by the state’s attorney general and the Fair Political Practices Commission (FPPC), according to two people familiar with the probe, who requested anonymity since they weren’t authorized to discuss the ongoing grand jury proceedings, which are secret.

The existence of a grand jury, something typically convened to obtain sworn testimony from witnesses, appears to signal increased prosecutorial interest in the inquiry to uncover the actual donors. Launched last fall, the probe could lead to eight-figure civil penalties and possible criminal charges, according to statements last year from the A.G.’s office and the FPPC, the state’s election watchdog agency.

Neither Lynda Gledhill, a spokeswoman for the attorney general, nor Ann Ravel, the head of the state FPCC, would comment on the probe or the grand jury’s activities.

The inquiry, focused on three out-of-state dark-money groups and a California business PAC, was triggered when the PAC, the Small Business Action Committee, reported in October 2012 spending $11 million on two ballot initiatives—but did not reveal its donors’ names, a legal requirement in the state for contributors to ballot initiatives.

The PAC used the funds in what turned out to be two losing efforts: opposing Proposition 30, a measure supported by Gov. Jerry Brown to temporarily raise the state income tax as well as the person tax for wealthier voters, and supporting Proposition 32, which would have barred unions from using payroll-deducted funds for political spending.

Since the probe’s inception, the FPPC, in tandem with the A.G., has issued subpoenas for documents and financial records to the PAC and the dark-money groups as well as individuals and other groups suspected of involvement in channeling the funds for the ballot drives, according to a person familiar with the inquiry. In recent weeks, the A.G.’s office, which has been ramping up its involvement, sent out another round of subpoenas, according to the same person.

Charles R. Schwab, the chairman of the Charles Schwab Corp., or an entity affiliated with Schwab has received a subpoena, according to a person familiar with the probe. In 2011 Schwab was one of about 30 wealthy donors who was cited in a speech by Charles Koch as having given at least $1 million the prior year to Koch backed conservative projects.

A spokesperson for Schwab declined to comment, as did Jason Torchinsky, a lawyer who has represented the PAC and also the three dark-money groups.

The involvement of a grand jury often indicates that an inquiry is intensifying. Grand juries are commonly used in cases where prosecutors are moving to bring chargesor pressuring targets to cut deals, say white-collar lawyers. It’s not known whether any of the three dark-money groups, the PAC, or others have received target letters, which often signal that charges are in the works.

“The largest contribution ever disclosed as campaign money laundering in California history.”

“The convening of a state grand jury is as serious a step in a state investigation as a federal grand jury is in a federal probe,” white-collar attorney Stan Brand told The Daily Beast. “It’s not a foregone conclusion that someone will be charged, but it indicates a heightened level of prosecutorial interest.”

Brand added that California’s disclosure law for ballot initiatives would trump the IRS rules that allow dark-money groups that have “social welfare” tax status to keep their donors secret.

Other lawyers concur. “The Internal Revenue Code would not prevent California law from requiring disclosure of donors,” said Marc Owens, the former head of the IRS tax-exempt unit and now a partner at Caplin & Drysdale.

If prosecutors do move forward, their investigation could shine light on parts of the burgeoning network of conservative “social welfare” outfits that spent hundreds of millions in the last two elections. Under IRS rules, social-welfare groups can engage in political activities so long as that work is not their primary purpose, a loosely enforced rule often interpreted to mean that 49 percent of a group’s spending can go toward political work.

One of the three groups that allegedly channeled the funds to California was the Arizona-based Center to Protect Patient Rights, founded in 2009 by Koch operative Sean Noble, who has emerged in recent cycles as a big player in conservative political and fundraising circles. Noble has spoken at least twice at the billionaire brothers’ biannual conferences aimed at tapping other wealthy conservatives for their favorite projects, and he has been a key strategist at small Washington meetings with other GOP allied groups such as the Karl Rove-founded American Crossroads.

“Sean is the wizard behind the screen” for the Kochs and their network of wealthy donors, said one GOP operative familiar with Noble’s political work.

In 2010 and 2012, Noble’s Center appeared to act mainly as a cash conduit, shipping millions to allied conservative groups. In the 2010 cycle, for instance, it channeled almost $55 million—a sum almost identical to its revenues—to a couple dozen conservative bastions including Americans for Tax Reform and the American Future Fund, according to the group’s filings with the IRS. Most of that largess went to pay for advertising backing GOP candidates or attacking Democrats.

“We had no involvement whatsoever, financial or otherwise, neither directly nor indirectly, on anything to do with Prop. 30 or Prop. 32,” a spokesman for Koch Industries, Rob Tappan, said in an email. Tappan, however, indicated he spoke only for Koch and not “independent entities,” such as Noble’s Center. Asked if the Kochs had received subpoenas from the grand jury, Tappan said it was company policy not to comment on “the existence or nonexistence of investigations.” Noble did not return phone calls seeking comment.

Koch Industries, a sprawling energy and manufacturing conglomerate, is the country’s second-largest privately held company, with annual sales of about $100 billion and some 70,000 employees.

The circuitous routes apparently used to funnel the $11 million into the state were deemed “the largest contribution ever disclosed as campaign money laundering in California history” by the Fair Political Practices Commission.

But the PAC only disclosed that the funds came from a group in Arizona, Americans for Responsible Leadership, a two-year-old “social welfare” entity that had never before spent funds in California. When the FPPC asked the Arizona group for more information and was rebuffed, the commission went to the California Supreme Court, which ordered the outfit to reveal where it received the funds.

To comply, the Arizona group said the $11 million came initially from another dark-money group, the Virginia-based based Americans for Job Security, which is registered with the IRS as a “business league,” which like social-welfare groups can shield the names of its donors.

Making the money trail even murkier, the Virginia group passed the $11 million along to Noble’s Center to Protect Patient Rights which, in turn handed it over to Americans for Responsible Leadership. (Notably, Noble’s Center donated $4.8 million to Americans for Job Security in a separate 2010 money transfer, according to the center’s IRS filings.)

As the California probe has intensified, it has sparked the hiring of some of Washington’s high-powered election-law specialists. For several months, Jason Torchinsky was representing the PAC and the three dark-money groups, but other lawyers with big-name firms are now involved on behalf of unspecified clients. One firm, not previously reported, is Patton Boggs, whose attorneys include Ben Ginsberg, the famously plugged-in election lawyer for numerous GOP campaigns and committees, and William McGinley; also involved in the case is Wiley Rein, home of Jan Baran who for many years has represented Koch in election-law matters. Both McGinley and Baran declined to discuss their clients or the probe.

The grand jury and the widening California probe has stirred considerable unease among some Koch allies and in certain conservative quarters, according to multiple GOP operatives who asked not to named. “People are very puckered up about it,” said one such operative.

SOURCE

Read Full Post »

Chairman and CEO of Las Vegas Sands Corporation Sheldon Adelson. AFP PHOTO / AARON TAM

Reuters | Posted: 08/04/2012  1:25 pm Updated: 08/04/2012  2:55 pm

CHICAGO, Aug 4 (Reuters) – Las Vegas Sands Corp,  controlled by billionaire Republican donor Sheldon Adelson, is  the target of a federal investigation into possible violations  of U.S. money-laundering laws, the Wall Street Journal reported  on Saturday.

The Los Angeles U.S. attorney’s office is looking into the  casino company’s handling of the receipt of millions of dollars  from a Mexican businessman, later indicted in the United States  for drug trafficking, and a former California businessman, later  convicted of taking illegal kickbacks, the Journal said, citing  lawyers and others involved in the matter.

The transactions date from the mid-2000s.

The Journal said there are no indications that actions by  Adelson, who is the company’s chief executive officer and  largest shareholder, are being investigated.

The Los Angeles U.S. attorney could not be reached for  comment by Reuters on Saturday. A Sands spokesman was not  immediately available to comment to Reuters, but spokesman Ron  Reese told the Journal, “The company believes it has acted  properly and has not committed any wrongdoing.”

Reese said the company was cooperating with federal  investigators.

The timing of the investigation could open the Justice  Department to criticism that it is politically motivated, the  Journal said. Adelson is a major donor to the super PAC  supporting presumed Republican presidential nominee Mitt Romney  against President Barack Obama and plans to spend $100 million  on Republican candidates in November’s elections.

Adelson, who owns casinos in Las Vegas, Macau and Singapore,  began this campaign season as a major donor to Newt Gingrich  before Gingrich dropped out of the Republican presidential race.  He has since switched his support to Romney and last month was  in Jerusalem with the candidate when Romney met Israeli Prime  Minister Benjamin Netanyahu, who Adelson also strongly supports.

The Journal said the Las Vegas money-laundering  investigation focused on two “whales” – as big-money gamblers  are known – and whether Sands officials ignored warning signs  and did not alert federal authorities about millions of dollars  the gamblers had deposited.

The Journal identified one of the “whales” as Zhenli Ye Gon,  a Chinese-born Mexican national who was indicted in 2007 in the  United States on charges of dealing in materials used to make  methamphetamine.

The drug case was dismissed in 2009 but Ye Gon is still in  U.S. custody awaiting extradition to Mexico, where authorities  want to try him on drug trafficking and money laundering  charges, the Journal said, citing court records.

The Journal said Ausaf Umar Siddiqui, a former executive  with the Fry’s Electronics retail chain, also was under  scrutiny. Court filings in another case showed Siddiqui sent  more than $100 million to the Sands. Siddiqui was charged with  taking kickbacks from Fry’s vendors, pleaded guilty and is now  in prison.

U.S. authorities also are investigating the Sands to see if  there were breaches of the Foreign Corrupt Practices Act (FCPA),  which prohibits bribes to foreign officials by U.S. companies,  in its Macau operation.

HERE

Read Full Post »

Apple Jacks, Prada, And Kidney Trafficking: Taking Stock Of The New Jersey Arrests

TPM Muckraker- By Zachary Roth – July 27, 2009, 12:04PM

At 6am last Thursday, more than 200 FBI and IRS agents fanned out across the state of New Jersey, as part of that corruption and money-laundering probe that ended up netting 44 people, including mayors, rabbis, and a state lawmaker.

Now that the dust has settled, it’s worth taking a look at the whole sprawling operation.

The story (sub. req.) starts with a 36-year-old real-estate investor and philanthropist named Solomon Dwek. Dwek, a member of the tight-knit Syrian-Jewish community of Deal, New Jersey, used family connections — his father is a prominent local rabbi — to win investors’ trust and build a real-estate fortune whose value at one time approached $500 million.

But at some point, Dwek appears to have taken out more loans than he could pay back. In 2006, in an effort to pay back his creditors, he allegedly deposited a $25 million check at PNC Bank, which was not backed by funds. He was charged with defrauding the bank out of $25 million.

MORE HERE

Read Full Post »

%d bloggers like this: