Assistant Special Agent in Charge Doug Leff Federal … · Assistant Special Agent in Charge Doug...

Assistant Special Agent in Charge Doug Leff

Federal Bureau of Investigation

New York Office

Each of FBI’s 56 field offices has an Asset Forfeiture Program.

The FBI also has over 75 foreign offices.

Therefore, regardless of where assets are concealed or laundered, the FBI can assist in locating and recovering it.

Searching our databases for names of individuals and entities who have come up in your investigations to check for commonalities with other open cases.

Comparison of fact patterns uncovered by your investigations to determine likelihood of bribery, kickbacks and other corruption.

Exchange of valuable intelligence.

Two ways: 1. Joint investigations

2. Adoptions

By bringing a case to the FBI that has asset forfeiture potential, the FBI can request DOJ to authorize sharing of all forfeited funds and property, less any victim restitution and processing costs.

The FBI and the referring agency then work the case jointly, and the forfeiture sharing percentage is based on the percentage of time and personnel contributed by each agency.

Memorandum of Understanding can be done to lock in the sharing percentages ahead of time.

The investigation is done by your department, and you call the FBI to process the forfeiture federally.

Even though they did no work towards your case, upon DOJ approval, the feds take a 20% share and your department receives 80%.

Why would you want to do this?

Reasons for wanting a federal adoption:

1. 80% is a larger share than your department would receive through a New York State forfeiture.

2. A federal forfeiture is much easier to get than a NY State forfeiture. NY law requires a conviction for most state crimes before there can be any kind of forfeiture.

You can benefit from any or all of these:

1. Administrative

2. Civil

3. Criminal

Your department’s share of a federal forfeiture can be used for virtually any law enforcement purpose. This is much less restrictive than NY forfeiture law.

No court proceeding necessary; no judges, no prosecutors.

This procedure doesn’t exist under NY law.

Person from whom property is seized is given notice and has 35 days to submit sworn claim setting forth their legit interest or else FBIHQ declares it forfeited.

Many criminals, particularly drug dealers and gang members, will not file claims contesting an administrative forfeiture because they don’t want to set themselves up for a perjury charge by falsely swearing that the seized property is legitimate.

Also, these criminals consider seizures a cost of doing business.

Q. Can we forfeit all seized property administratively?

A. No, but most things we can, such as:

1. Any amount of cash

2. All personal property with a value up to $500,000.

3. Any type of vehicle, including planes, used for narcotics trafficking.

Again, no conviction is necessary and an uncontested admin forfeiture can be done in a matter of months.

However, the feds have to send notice within 60 days of a seizure on a joint investigation and 90 days on an adoption.

If notice not sent on time, administrative forfeiture cannot be used.

Q. What if the subject from whom the property was seized does file a claim in an administrative forfeiture?

A. In that case, we refer it to an AUSA to decide if they will do a criminal or civil forfeiture. Same with any houses, buildings or other real property that we want to forfeit.

Requires a conviction in federal court on a charge that is a forfeiture predicate.

Plea bargains often include a stipulation that the defendant will consent to forfeiture.

Doesn’t require any criminal charge and the burden of proof is much less.

Civil discovery is a lot broader than criminal, but the AUSA can usually get the civil forfeiture case stayed if any related criminal case is pending.

We also get to use the civil discovery rules against the subject, so we can force them to testify under oath or else they lose.

1. If your officers think a criminal has money or other valuables, they should ask for consent to search (remember recent Supreme Court decision).

2. When money or valuables are found, we need to ask whose they are & how the subject got them. Even if they lie, it will make it very difficult for them to change their story later on when they want to put a claim in.

3.There has to be probable cause to connect the seized property to a federal crime that is also a forfeiture predicate. There are many, many federal crimes that are similar to NY Penal Law crimes and a lot of these federal crimes are forfeiture predicates. We can help you figure out which federal crime fits your circumstances.

4. Call us as soon as you can because of the time limits to serve notice:

FBI New York: 212-384-1000

Squad C-40: 212-384-2094

1. Public corruption

2. Mortgage fraud

3. Disaster relief fraud

4. Healthcare fraud

5. Money laundering

6. Theft of trade secrets/industrial espionage

Corrupt contract procurement officers create shell corporations.

The corrupt officials then award government contracts to the shell corporation through a non-competitive bid.

The corrupt officials then take the money out of the shell corporations through personal loans, paychecks to family members, etc.

The contracted work is either never performed or done by non-union labor hired cheaply by the corrupt officials.

U/FOUO 21

Corrupt

Government

Employees

Shell companies

made to appear

as agencies

providing services

to the poor

Government

Contracts

$$$$$$$$

$$$$$$$

PROCURMENT FRAUD

U/FOUO 23

Government

Treasury

Shell

Corporation

Personal loans to

corrupt officials,

paychecks to

family members

$$$$$$$$$

$$$$$$$$

Account holders receive dividend checks or loans from companies which he is not a shareholder.

Account holder is a government employee and the employee or family members receive checks or wire transfers from off-shore bank accounts.

Account holder is a government employee and either the employee or a family member receive significant paychecks from a company with no website or Dun and Bradstreet entry.

U/FOUO 24

Criminals take advantage of the government’s and the public’s relief efforts after natural disasters.

For example, even prior to recent hurricanes, domain names were purchased that sounded like charities set up to help victims so that donations could be solicited from the public.

Fraudulent damage claims get submitted to FEMA and other government agencies.

Government officials rigged contract bids in order to ensure organized crime or another criminal element was awarded the contract.

In return, the corrupt officials were paid through transactions sent through money remitters. Some, like Western Union, were licensed while others were not.

Also known as an unlicensed “money transmitting business” the definition is found in 31 U.S.C. § 5330(d)(1).

Basically means providing the service of moving money from one point to another by any means.

bidder on municipal contract

corrupt

official

$$$$

kickback

money remitter

$$$$$$

money remitte

r

$$$$$

family member or other nominee

$$$$$

bank account

$$$$$

Unlicensed money remitters are known to use the following techniques to hide their existence by minimizing CTR filings:

1. Use of multiple branches to deposit cash. 2. Use of multiple accounts at different

banks. 3. Use of personal accounts to wire funds. 4. Use of shell companies to open bank

accounts. 5. Structuring of checks, despite the fact that

they wouldn’t have triggered a CTR.

Even sophisticated money launderers can’t completely cover up the paper trail when they move criminal proceeds.

Some criminals are better at it than others.

Money Laundering – Case Example

An emerging method in which corrupt officials are paid bribes or kickbacks is through the use of stored value cards.

Most common in the U.S. at this time are pre-paid cards and debit cards.

Two types of stored value cards: closed system and open system.

BRIBE

PAYER CORRUPT

OFFICIAL

HOME DEPOT GIFT CARDS

These are cards where the amount of money on them is pre-loaded and cannot be refilled.

Typical examples: gift cards, such as Starbucks & Home Depot.

Q. What can a criminal get with $10,000 in Starbucks gift cards?

Q. What can a criminal get with $10,000 in Starbucks gift cards?

A. Two large cups of coffee and a scone.

CORRUPT

OFFICIAL E-BAY,

CRAIGS LIST,

ETC.

Home Depot cards

sold at less than face value

Q. What’s the most effective way to find out who’s behind a U.S. corporation?

A. Find out where the company has its bank accounts.

Credit bureau subpoenas will not get us accounts that are not linked to any credit, e.g. savings, checking accounts.

A 314(a) request requires every U.S. bank to check and see if has or has ever had any account with named individuals or entities.

Q. Do we need a subpoena in order to make a 314(a) request?

A. No. Agents can make these requests internally.

The only requirement for a 314(a) request is that it must pertain to a terrorism or significant money laundering investigation.

Q. How long does it take to get the results back from the 314(a) request?

A. 3-4 weeks.