U.S. terror report cites Venezuela, Iran

WASHINGTON (CNN) -- Venezuela's associations with terror states, Iran's meddling in Iraq and the resurgence of al Qaeda in Afghanistan top the concerns in a new State Department report on terrorism threats in countries around the world.

Venezuelan President Hugo Chavez is not cooperating with U.S. anti-terror efforts and has "deepened Venezuelan relationships with state sponsors of terrorism Iran and Cuba," the annual report says.

The report notes Chavez's "ideological sympathy" for the Revolutionary Armed Forces of Colombia and the Colombian-based National Liberation Army, which "regularly crossed into Venezuelan territory to rest and regroup."

While the report says it "remained unclear to what extent the Venezuelan government provided support to Colombian terrorist organizations," it notes that Venezuelan weapons stocks have turned up in the hands of Colombian terrorist organizations.

It also notes that Iran and Venezuela began weekly flights between their capitals and the passengers were not subject to proper checks. Among the passengers was a suspect in the plot to bomb New York's John F. Kennedy International Airport.

"Venezuelan citizenship, identity, and travel documents remained easy to obtain, making Venezuela a potentially attractive way station for terrorists," the report says.

Once again, the report says, Iran "remained the most active state sponsor of terrorism."

"Elements of its Islamic Revolutionary Guard Corps were directly involved in the planning and support of terrorist acts throughout the region and continued to support a variety of groups in their use of terrorism to advance their common regional goals," it says, citing the group's support for Hezbollah, Hamas, Iraq-based militants, and Taliban fighters in Afghanistan.

The report says that despite promises to stabilize Iraq, Iran "continued to provide lethal support, including weapons, training, funding, and guidance, to some Iraqi militant groups that target coalition and Iraqi security forces and Iraqi civilians."

"In this way, Iranian government forces have been responsible for attacks on coalition forces. The Islamic Revolutionary Guard Corps-Quds Force continued to provide Iraqi militants with Iranian-produced advanced rockets, sniper rifles, automatic weapons (and) mortars that have killed thousands of coalition and Iraqi Forces," it says.

The report says that Iraq "remained at the center of the war on terror," with al Qaeda in Iraq and other insurgent groups battling coalition and Iraqi forces.

It also criticizes Syria, another U.S.-designated state sponsor of terrorism, for allowing foreign fighters into Iraq, citing U.S. government reports that found "nearly 90 percent of all foreign terrorists known to be in Iraq had used Syria as an entry point."

"The Syrian government could do more to stop known terror networks and foreign fighter facilitators from operating within its border," it adds.

Although it notes that no Syrian official has been implicated in bombing attacks in Lebanon, the report says that Damascus "continued to undermine Lebanon's sovereignty and security through its proxies," including Hezbollah.

Syria is also criticized for its weak treatment of terrorist financing and its continued support of Palestinian terror groups such as Hamas, including providing safe haven to its leader, Khalid Mishal. It notes that "Palestinian groups with leaders in Syria have claimed responsibility for anti-Israeli terrorist attacks."

The report notes that the Sudan, North Korea and Cuba, all designated as state sponsors of terror, had not actively supported terrorist groups inside their countries over the past year.

The report once again found al Qaeda and its affiliated networks "remained the greatest terrorist threat to the United States and its partners" last year, reconstituting some of its pre-9/11 operational capabilities in Pakistan's tribal areas. It also found a resurgence of the Taliban in Afghanistan and voiced concern about a rash of bombings by militants, including the one that killed former Prime Minister Benazir Bhutto last year.

"Despite the efforts of both Afghan and Pakistani security forces, instability, coupled with the Islamabad brokered cease-fire agreement in effect for the first half of 2007 along the Pakistan-Afghanistan frontier, appeared to have provided AQ leadership greater mobility and ability to conduct training and operational planning, particularly that targeting Western Europe and the United States," the report says.

The report again notes that al Qaeda continued to exploit local grievances for larger terrorist purposes and "seeks weapons of mass destruction in order to inflict the maximum possible damage on anyone who stands in its way, including other Muslims and/or elders, women, and children."

Al Qaeda operatives in East Africa and al-Shabaab militants in Somalia once again posed "the most serious threat to American and allied interests in the region," the report says.

Somalia's weak central government and the lack of rule of law "make Somalia a permissive operating environment and a potential safe haven for both Somali and foreign terrorists already in the region," it found.

"Somalia remains a concern, as its unsecured borders and continued political instability provide opportunities for terrorist transit and/or organization. AQ is likely to keep making common cause with cells of Somali extremists in an attempt to disrupt international peacemaking efforts in Somalia," it adds.

The report also voices concern about insurgent terror tactics in Algeria over the last year and calls Yemen's counterterrorism efforts last year "mixed" with "significant setbacks," including releasing all returned Guantanamo detainees and instituting a surrender program for terrorists with "lenient requirements." It also criticizes Yemen's weak counterterrorism laws and an "ineffective" justice system.

The report notes that human rights organizations have accused China of using counterterrorism in the run-up to the Olympics as a pretext to suppress ethnic Uighurs in the Xinjiang Autonomous Region. Although the Chinese have claimed they are terrorists, the report found no concrete evidence of that.

It also notes a spread of radical Islam in Europe, where several "significant terrorist plots" were foiled.

U.S. says Iran increasing activity in Latin America

Iran is increasing its activity in Latin America and the Caribbean, including actions aimed at supporting the Lebanese militant group Hezbollah, a top U.S. military commander said on Tuesday.

Navy Admiral James Stavridis, who oversees U.S. military interests in the region as head of U.S. Southern Command, also said Hezbollah was linked to drug-trafficking in Colombia.

"We have seen... an increase in a wide level of activity by the Iranian government in this region," Stavridis told the Senate Armed Services Committee.

"That is a concern principally because of the connections between the government of Iran, which is a state sponsor of terrorism, and Hezbollah," he said.

The U.S. State Department lists the Lebanese-based political and military movement as a terrorist organization.

Stavridis said Hezbollah activities in South America have been concentrated particularly in the border region between Brazil, Paraguay and Argentina, but also in Colombia.

"We have been seeing in Colombia a direct connection between Hezbollah activity and narco-trafficking activity," the commander added, without providing specifics.

Colombia said last October that it had smashed a drug and money-laundering ring suspected of shipping funds to Hezbollah.

Hezbollah has denied links to drugs and money-laundering and described allegations as part of a propaganda campaign aimed at harming its image.

President Barack Obama's administration has sought to move toward dialogue with Tehran, despite sharp differences on several topics including Iran's nuclear program. Iran says it only wants to generate power while the Washington and its allies accuse Tehran of trying to build a nuclear bomb.

Stavridis is the latest U.S. defense official to express concerns about Iranian influence in Latin America, where the left-wing governments in Venezuela, Cuba, Ecuador, Nicaragua and Bolivia have all become allies of Iran in recent years.

In January, Defense Secretary Robert Gates told the same Senate panel he was more worried about Iranian "meddling" than he was about Russia's activities in Latin America.

(Reporting by David Morgan, editing by Alan Elsner)

Source: Reuters

Spain Breaks Global Money Laundering Ring

Written by Heidi Wardman

Spanish authorities have arrested twenty people suspected of having facilitated an international money laundering operation through the sale of drugs. The investigation was initially launched in May 2008, when Police became suspicious over several substantial transfers of money to Colombia. Police reports suggest that the group was responsible for transferring in excess of 3 million euros during 2007 and 2008, which was sent from Spain to bank accounts in China, Panama, Venezuela and the United States and were eventually collated at a fake dentistry foundation in Colombia. The Police statement went on to say that the suspected ringleader of the Colombian network was detained by US police in Miami, whilst the remaining suspects were detained by Spanish police in raids carried out across Spain. At the same time, the Police confiscated 5 vehicles; 32 mobile telephones; a quantity of cocaine; 6 fake passports and other documentation.

Spain Torn by Albino Plea
An albino teenager from Benin has sent a plea to the Spanish Government, begging them not to send him back to his home land for fear of his life. The 18-year old’s wooden boat was intercepted immediately on arrival to the island of Tenerife in Spain’s Canary’s Islands, which carried some 60 other illegal African migrants. The Spanish Government vowed that all of its inhabitants would be returned directly, but confirmed that it will look upon the request to stay made by the albino youth more sympathetically, following suggestions that he would be killed in a witchcraft ritual if he was sent back home as albinos are considered to be bad omens, or conversely help to bring good fortune to anyone who crosses their path.

The asylum request was facilitated by the Spanish Commission for Refugee Aid (CEAR) which is also campaigning for his release from the centre for illegal immigrants in Tenerife, where he has been held since his arrival in Spain.

The Director of CEAR, Juan Carlos Lorenzo, confirmed that, “In Africa, albinos are considered to be a bad omen or a factor of good luck. It is logical that he fears for his life because among different ethnic groups, his body may be used in a sacrifice ritual.”

New Finance Minister Calls for Support
Spain’s new Finance Minister, Elena Salgado, has sent out an appeal to banks nationwide, requesting that they offer some form of aid to businesses and families who are struggling through the economic crisis. Elena Salgado said that Banks “must contribute strongly, but also rapidly to help overcome the problems that families are having; the self-employed, small and medium-sized businesses”, suggesting that the provision of loans is the way forward.

Ms Salgado’s replacement of former EU Economic Commissioner, Pedro Solbes, as Finance Minister, in the cabinet reshuffle announced by Prime Minister Jose Luis Rodriguez Zapatero, was no great surprise as suggestions had been made for some time that Mr Solbes would be standing aside. At 59-years old, Ms Salgado is the first woman to occupy the post, and has vowed that she will make “every effort” to get the economy “back on the path of growth”, adding that “Our first efforts will be focused on creating jobs”. Meanwhile, Mr Solbes, who has remained a key player in Zapatero’s cabinet since 2004, said that he had “mixed feelings” about leaving the Government but felt “reasonably satisfied” with what he had achieved during his time there.

Spain Rallies for 2016 Olympics
The Spanish Prime Minister has vowed that he will personally oversee the sports portfolio in a bid to push forward Madrid’s candidature for the 2016 Olympics. In a news conference Spanish Prime Minister, Jose Luis Rodriguez Zapatero, was heard to say that, “I can see that it is the most useful and most efficient way to support Spanish sport, where we have had success, and above all for the Spanish candidature for the Olympic Games”. Sport is currently the responsibility of the Secretary of State for Sport, Jaime Lissavetzky, who works under the Minister of Education and Sport. Mr Zapatero stressed that the Secretary would continue in his role, but would work directly alongside the Government in relation to the Olympics. Last November, he had also announced that Spain would soon be welcoming a Sports Minister at cabinet-level, but no such position has been confirmed to date.

Young Drink Drivers Plead Ignorance
A recent report has revealed shocking results in relation to legal blood/ alcohol levels. The drink driving survey was conducted by the ‘Royal Automobile Club of Cataluña’ (RACC), and unveiled a series of worrying misconceptions amongst young Spanish drivers. The survey questioned a random section of drivers between the ages of 18 and 34 years, and the majority responded by saying that they thought they could pass a breathalyser test after consuming up to four and a half glasses of beer. The legal limit in Spain is actually recorded at 0.5g of alcohol per litre of blood.

This equates to just one and a half glasses of beer, for a male driver, or one glass of beer, or less if drinking wine, in the case of a woman. Male drivers considered that they would be fined with as many as four glasses of wine inside them. What is even more worrying is that almost 30% of those questioned admitted to having driven while drunk at least once in the past three months, or had accompanied a drunk driver as a passenger.

Source: RTN

Money launderers wash billions through international trade

By JOSEPH A. MANN

Imported plain cotton pillow cases from France that cost more than $900 apiece and new bulldozers exported to Venezuela that cost $387 each. Such prices seem highly suspect -- and could be examples of someone using international trade to launder money.

Despite strict enforcement of federal anti-money-laundering laws, criminals are constantly finding ways to transform dirty money -- the proceeds of illegal activities -- into clean cash, and one of their most important routes is laundering money via international trade.

Money launderers are moving enormous sums through ports in Florida and other parts of the country by overvaluing or undervaluing exports and imports, said John Zdanowicz, a professor of finance at Florida International University.

Using a statistical program he developed to track money laundering, Zdanowicz analyzes U.S. government trade figures, calculates average prices for commodities and merchandise and searches the data for abnormally priced products.

The pillow cases and bulldozers are among the products he has turned up that seem to indicate trade may have been used to disguise the movement of money. But since the names of importers and exporters don't appear with government trade figures, Zdanowicz doesn't know who is moving the merchandise -- or the money.

''The front door of money laundering is the banking system,'' Zdanowicz said. ``The government has done a pretty good job of closing the front door, but the back door -- international trade -- is wide open.''

In its 2009 report, the U.S. State Department's Bureau of International Narcotics and Law Enforcement Affairs said annual estimates of trade-based money laundering reached into the hundreds of billions of dollars.

Lester Joseph, principal deputy chief at the Department of Justice criminal division, told participants at a recent anti-money-laundering conference in Miami that one of the government's priorities this year is to focus more attention on trade-related laundering.

As a center for world commerce, South Florida offers abundant opportunities for trade-related money laundering. Last year international trade in the Miami Customs District, which includes airports and seaports along the coast from Fort Pierce to Key West, reached an all-time high of $90.2 billion with exports of $54.9 billion and imports of $35.3 billion.

One way money launderers move large sums is by undervaluing exports to a foreign destination or by overvaluing imports. Alternatively, those overseas can use trade to move money into the U.S. by undervaluing goods shipped here or overvaluing merchandise exported from here to other countries.

CHEATING ON INVOICES

Zdanowicz explained how it would be easy to launder $1 million in cash quickly and move it out of the country: ``I'd buy 200 Rolex watches in Miami [at about $5,000 each] and export them to my partner in Colombia, charging $5 each on the invoice. My partner there pays me $1,000 for the shipment, sells the watches at the market rate in Colombia and we've laundered $1 million.

''I've heard about Corvettes being bought in Miami for $40,000 in cash and sending them to Latin America, invoicing them for $500,'' said Zdanowicz, who also is president of International Trade Alert, a firm that offers consulting services on international trade issues. The cars are then sold for $50,000 or more, thus making a profit while laundering money.

The over-valuation method works like this: ''Let's say my partner in Latin America spends $1,000 to buy 10,000 pencils at 10 cents each and ships them to me in Miami. The invoice says the pencils are worth $100 each, and I pay my partner $1 million. That way, I'm able to move $1 million out of the country in one operation,'' he said.

The same thing can happen with international services, such as marketing surveys, accounting and legal services and concert promotions. For example, a company in Venezuela may offer an advertising and marketing plan to a client in Miami for $2 million, when a plan of this type might cost $50,000. The Miami company writes a check or makes an international funds transfer, and $2 million legitimately leaves the country.

BOGUS SERVICES

In some cases, companies bill for services that are never delivered, said Kieran Beer, editor-in-chief of Fortent Inform and moneylaundering.com, which provide news and analysis on international money laundering, regulatory and fraud activities.

While some of the prices used in these examples may seem unrealistic, it is not illegal to overcharge or undercharge for merchandise or services, unless merchandise mispricing is designed to avoid paying Customs duties.

By comparing invoice prices with average world prices, Zdanowicz estimated that $192 billion was moved out of the U.S. in 2005 via undervalued exports and overvalued imports, and $189 billion in 2006.

''The IRS and [U.S.] Customs sometimes find these things, but they don't have the capability of analyzing [so much] data,'' Zdanowicz said. ``They're now pressuring the banks to monitor prices. They're trying to pass the buck to them.''

To combat trade-related money laundering, U.S. Immigration and Customs Enforcement has set up special operations called trade transparency units in Colombia, Brazil, Argentina, Mexico and Paraguay to detect and track money laundering as well as other illegal activities.

In fiscal year 2008, ICE launched more than 3,500 investigations into money laundering and other types of financial crimes, obtained 823 convictions and seized more than $260 million, an 81 percent increase over the previous year.

ICE can spot unusual trade pricing patterns and investigate trade fraud and money laundering through Customs inspections at U.S. ports and its trade transparency units in Latin America, said Jere Miles, ICE's Trade Transparency Unit chief in Washington, D.C.

LOOKING AT AVERAGES

Miles said that ICE uses average import and export prices to determine if items are grossly overpriced or underpriced, and also checks documentation. Some Latin governments cooperate with U.S. anti-money laundering efforts because they can lose millions of dollars in Customs duties on mispriced merchandise.

Asked what ICE could do if it detected something similar to the underpriced Rolex watches, he said the agency could ask an exporter to prove that the watches were purchased for $5 each or investigate where an importer here obtained large sums of money to pay for overpriced merchandise.

MASSIVE VOLUME

But ferreting out trade-related laundering is difficult because of the sheer volume of commerce. ''It's a game of numbers. What better place to hide illegal money than in trade because it accounts for hundreds of billions of dollars a year,'' said Miles.

And trade is just one of many conduits for cleaning up dirty money.

''Money laundering always invents new channels,'' said Beer. ``When it's blocked in one direction, it cuts a new stream, like water. Personally, I think that as long as American demand for illicit drugs continues, there will be a lot of incentive for money laundering and a lot of incentive to produce imaginative ways to move the profits of that trade.''

CLEVER TRICKS

Launders may funnel money through layers of supposedly legitimate businesses, invest in real estate and art, use foreign exchange dealers/brokers and move money across borders via stored value cards such as pre-paid gift cards, Internet payments and online gaming.

Or they may turn to more rudimentary methods, simply smuggling large volumes of cash out of the United States into other countries where anti-money laundering laws and rules are lax.

That's the route some drug dealers seem to prefer, and drug money often gets most of the media attention, usually when agents seize piles of cash.

Still, the government admits it finds only a tiny percentage of drug money. Americans spend approximately $65 billion per year on illegal drugs, according to the Office of National Drug Control Policy, but U.S. seizures by all federal agencies typically total only about $1 billion.

Despite the magnitude of the money laundering, the federal government claims to be making headway.

''We have made much progress in the field of detecting and prosecuting money launderers,'' said Ian McCaleb, a spokesman for the Department of Justice. ``For instance, some money launderers have switched to bulk cash smuggling after finding it harder to launder large amounts of money through financial institutions. But criminals are constantly adapting their techniques, and our challenge is to do all we can to stay as far ahead of new money laundering trends as possible.''

MANY DOUBTFUL

But others are skeptical and say despite well-publicized successes, the federal government is barely making a dent in money laundering, especially trade-related laundering.

''It depends on who you talk to as to whether all these anti-money laundering actions are working,'' said Beer of moneylaundering.com.

After 9/11, many federal investigative resources were diverted to anti-terrorist intelligence work, which includes money laundering related to terrorist financing. But this switch in emphasis at the federal level meant there were fewer investigators assigned to general money laundering operations.

The FBI, for example, reduced the number of squads assigned to money laundering, transferring agents to anti-terrorist work.

ATTENTION DIVERTED

Moreover, as the U.S. financial system went into crisis last year, the Treasury Department, other federal banking agencies and state bank regulators focused on monitoring the stability of the financial system, weakening enforcement of money laundering crimes.

Turf wars are inevitable since more than a score of federal agencies and thousands of state, county and local officials and police are involved. Government officials have asked for bigger budgets and more manpower to battle money laundering, but this may not be the answer.

''Money laundering efforts are like anti-drug trafficking measures,'' said Jerry Haar, an expert on international trade and associate dean of international affairs and projects at Florida International University's College of Business Administration. ``There's only so much money around to hire police and build infrastructure. You can slow down money laundering, but you'll never be able to stamp it out.''

Source: The Miami Herald

Venezuela: US Information About Laundering

Venezuela is waiting on Monday for the petition of information to the US about a laundering investigation that allegedly involves Venezuelans, according to versions of US officials.

Minister of Foreign Affairs Nicolas Maduro informed that an official note, which requests cooperation to make progress in an investigation of the case, was handed in to an official at the US embassy to Caracas.

According to the American version, the Venezuelan currency parallel market, which is a mechanism criticized by Chavez, who ordered to suspend it so that the Central Bank would assume that responsibility, is being used to launder.

Venezuelan authorities consider that these irregularities are affecting the rate of the bolivars regarding the dollar and this mechanism could be used to launder the money coming from drug-trafficking or other illegal business.

Maduro pointed out that Venezuela waits for the handing over of facts with no delay considering that "our organs permanently cooperate in the deportation of drug-traffickers."

The US government informed the detection of a network that was operating in Puerto Rico, New York and Florida and was trading part of the money at the dollar parallel market in Venezuela.

Source: Inside

Venezuela deports man in money-laundering case

A Colombian man with links to a pyramid scheme that bilked Colombians out of hundreds of millions of dollars was deported by Venezuela on Thursday to the United States, where he is wanted on money-laundering charges.

Venezuelan authorities took Luis Cediel to Caracas' main airport for the flight to the U.S. Justice Minister Tareck El Aissami said Cediel would be handed over to the U.S. Drug Enforcement Administration.

The Colombian was indicted by U.S. authorities in New York earlier this year along with three co-defendents, accused of coordinating the collection of millions of dollars in drug proceeds in Mexico City beginning in February 2008.

The indictment unsealed in March says Cediel worked primarily out of Mexico for DMG Group Holdings SA, a business that promised fantastic interest rates but collapsed last November, prompting hundreds of angry investors to storm the company's office in Colombia. Authorities arrested DMG's principals and shuttered the company.

Cediel is charged with conspiracy to commit money laundering and if convicted could face up to 20 years in prison.

His defense attorney, Lawrence M. Herrmann, said by phone from New York that he would like to speak with his client before commenting on the case.

Cediel was captured by the Venezuelan National Guard last week in the northwestern state of Falcon.

He was an associate of David Murcia, the man who built DMG and who is imprisoned in Colombia. Murcia also has been indicted in the U.S. on charges of conspiracy to launder money, including at least $2.2 million wired to a Merrill Lynch account allegedly set up on his behalf.

Colombian police Col. Jaime Vega said last week that funds totaling $2.2 million have been frozen in the U.S., and that $11 million in properties have also been frozen in the case.

Vega said authorities believe Cediel was involved in receiving dollars in cash, then providing Colombian currency, and then moving the funds to Mexico and the United States.

U.S. and Colombian authorities say Cediel's wife, Margarita Pabon, who is also imprisoned in Colombia, was legal adviser to DMG and was on the board of several of its companies.

Source: AP