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Full text of "Organized crime and banking : hearing before the Committee on Banking and Financial Services, House of Representatives, One Hundred Fourth Congress, second session, February 28, 1996"

ORGANIZED CRIME AND BANKING 



HEARING 

BEFORE THE 

COMMITTEE ON BANKING AND 
FINANCIAL SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTH CONGRESS 
SECOND SESSION 



FEBRUARY 28, 1996 



Printed for the use of the Committee on Banking and Financial Services 



Serial No. 104-47 



RECEIVED 



SEP 1 1 2C3^ 



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BOSfOM PUBLIC LIB 

GOVERNMENT OOCUMENTS OEFA 




j/j,M 2 3 1997 



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ORGANIZED CRIME AND BANKING 



HEARING 

BEFORE THE 

COMMITTEE ON BANKING AND 
FINANCIAL SERVICES 

HOUSE OP REPRESENTATIVES 

ONE HUNDRED FOURTH CONGRESS 

SECOND SESSION 



FEBRUARY 28, 1996 



Printed for the use of the Committee on Banking and Financial Services 

Serial No. 104-47 




U.S. GOVERNMENT PRINTING OFFICE 
22-802 CC WASHINGTON : 1996 



For sale by the U.S. Government Printing Office 
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 

ISBN 0-16-053608-1 



HOUSE COMMITTEE ON BANKING AND FINANCIAL SERVICES 



MARGE ROUKEMA, New Jersey 

DOUG BEREUTER, Nebraska 

TOBY ROTH, Wisconsin 

RICHARD H. BAKER, Louisiana 

RICK LAZIO, New York 

SPENCER BACHUS, Alabama 

MICHAEL CASTLE, Delaware 

PETER KING, New York 

TOM CAMPBELL, California 

EDWARD ROYCE, California 

FRANK D. LUCAS, Oklahoma 

JERRY WELLER, Illinois 

J.D. HAYWORTH, Arizona 

JACK METCALF, Washington 

SONNY BONO, California 

ROBERT NEY, Ohio 

ROBERT L. EHRLICH, Maryland 

BOB BARR, Georgia 

DICK CHRYSLER, Michigan 

FRANK CREMEANS, Ohio 

JON FOX, Pennsylvania 

FREDERICK HEINEMAN, North Carolina 

STEVE STOCKMAN, Texas 

FRANK LoBIONDO, New Jersey 

J.C. WATTS, Oklahoma 

SUE W. KELLY. New York 



JAMES A. LEACH, Iowa, Chairman 
BILL MCCOLLUM, Florida, Vice Chairman 

HENRY B. GONZALEZ, Texas 
JOHN J. LaFALCE, New York 
BRUCE F. VENTO, Minnesota 
CHARLES E. SCHUMER, New York 
BARNEY FRANK, Massachusetts 
PAUL E. KANJORSKI, Pennsylvania 
JOSEPH P. KENNEDY II, Massachusetts 
FLOYD H. FLAKE, New York 
MAXDJE WATERS, California 
BILL ORTON, Utah 
CAROLYN B. MALONEY, New York 
LUIS V. GUTIERREZ, Illinois 
LUCILLE ROYBAL-ALLARD, California 
THOMAS M. BARRETT, Wisconsin 
NYDIA M. VELAZQUEZ, New York 
ALBERT R. WYNN, Maryland 
CLEO FIELDS, Louisiana 
MELVIN WATT, North Carolina 
MAURICE HINCHEY, New York 
GARY ACKERMAN, New York 
KEN BENTSEN, Texas 
JESSE JACKSON, JR., Illinois 
CYNTHL^ McKINNEY, Geor^a 



BERNARD SANDERS, Vermont 



(II) 



CONTENTS 



Page 

Hearing held on: 

February 28, 1996 1 

Appendix: 

February 28, 1996 83 

WITNESSES 
Wednesday, February 28, 1996 

de Borchgrave, Amaud, Director, Global Oivanized Crime Project, Center 

for Strategic and International Studies [CSIS] 69 

Brody, Clifford L., President, Clifford L. Brody Associates, Inc 72 

Brown, Richard A., District Attorney, Queens County, New York 50 

Hecker, JavEtta Z., Associate Director for International Relations and Trade 

Issues, General Accounting Office 7 

Kelley, Hon. Edward W. Jr., Member, Board of Governors, Federal Reserve 

System , 10 

Memikoff, Boris F., Senior Vice President, Wachovia Corp., on behalf of 

the American Bankers Association 65 

Morris, Stanley E., Director, Financial Crimes Enforcement Network 13 

Owens, Charles L., Section Chief, Criminal Investigative Division, Federeil 

Bureau of Investigation 48 

Rasor, Robert H., Deputy Assistant Director, U.S. Secret Service 43 

Richard, Mark M., Deputy Assistant Attorney General, Criminal Division, 

Department of Justice 54 

Sims, Robert E., Senior Advisor, International Narcotics and Law Enforce- 
ment Affairs, U.S. Department of State 16 

Wankel, Harold D., Chief of Operations, Drug Enforcement Administration, 

Department of Justice 16 

APPENDIX 

Prepared statements: 

Leach, Hon. James A 84 

Flake, Hon. Floyd H 87 

Maloney, Hon. Carolyn B 90 

Royce, Hon. Edward R 92 

Watts, Hon. J.C 93 

de Borchgrave, Amaud 301 

Brody, Clifford L 307 

Brown, Richard A 198 

Hecker, JayEtta Z 94 

Kelley, Hon. Edward W 110 

Melnikoff, Boris F 218 

Morris, Stanley E 123 

Owens, Charles L 179 

Rasor, Robert H 163 

Richard, Marie M 207 

Sims, Robert E 153 

Wankel, Harold D 137 



(III) 



IV 

Page 

Additional Material Submitted for the Record 

Maloney, Hon. Carolyn B., copy of Indictment No.: 4355/95, The People of 
the State of New York against Olushina Godwin Adekanbi et al 319 

Vento, Hon. Bruce F., Pioneer Press, February 27, 1996, "Identity theft' 
can be financial ruin" 317 



ORGANIZED CRIME AND BANKING 



WEDNESDAY, FEBRUARY 28, 1996 

House of Representatives 
Committee on Banking and Financial Services 

Washington, DC. 

The committee met, pursuant to notice, in room 2128, Rayburn 
House Office Building, at 10:02 a.m., Hon. James A. Leach, [chair- 
man of the committee] presiding. 

Present: Chairman Leach, Representatives McCollum, Baker, 
Lazio, Campbell, Royce, Metcalf, Chrysler, Cremeans, Heineman, 
Watts, Kelly, Gonzalez, Vento, Flake, Waters, Orton, Maloney, 
Roybal-Allard, Velazquez, Fields, Hinchey, Bentsen and Jackson. 

Chairman Leach. The committee will proceed to the order of the 
day, which relates to hearings on a very important subject. The 
committee is meeting to review the threat organized criminal 
groups pose to the international banking system. 

Rapid changes in technology, globalization of finance, and politi- 
cal problems m other countries have all put stresses on the inter- 
national financial system. While electronic and international bank- 
ing have provided consumers with more choices and more efficient 
markets, they have also made our financial institutions more vul- 
nerable to fraudulent international schemes. 

Organized crime groups, both in the United States and abroad, 
are engaged in money laundering, counterfeiting of U.S. currency, 
counterfeiting of fake financial documents, access device fraud, and 
financial extortion on a massive scale. 

Yesterday, the General Oversight and Investigation Subcommit- 
tee, under the able leadership of Chairman Bachus, reviewed the 
threat international counterfeiting poses to the integ^ty of the U.S. 
currency. Today, we will focus on other financial crimes. 

As the use of paper currency decreases and gives way to credit 
cards and electronic transfers, fraud associated with access devices 
become more troublesome. This includes the fraudulent use of cred- 
it cards or the fraudulent misuse of electronic banking systems. 
Last year, this concern was made real when the Nation's largest 
commercial bank, Citicorp, was electronically held up by inter- 
national saboteurs. Jesse James may well have met his match. Ap- 
proximately $12 million was transferred, with $400,000 withdrawn 
via Citicorp cash management systems, and the unauthorized 
transfers took place all over the glooe, from Buenos Aires to the old 
Russian capital of St. Petersburg to Israel. 

Given that Citicorp alone moves about $500 billion per day, the 
potential risk to the banking system is clearly staggering. Cur- 
rently, access device fraud costs financial institutions an estimated 

(1) 



$4 billion annually. Nigerian criminal groups, for instance, report- 
edly account for more than $2.5 million in credit card fraud a 
month in Dallas alone. 

Another fraud being perpetrated by organized crime includes so- 
called "desktop publishing" of fake financial documents, sometimes 
referred to as "prime bank notes." Counterfeiting of corporate 
checks, bonds, securities, and other real or fictitious negotiable in- 
struments are being produced to defraud individuals, pension com- 
panies, charities, and financial institutions. 

Two years ago, Federal banking regulators issued a warning to 
the banking industry on the rise in phony prime bank note activity. 
Earlier this month. State banking regulators in the northeast is- 
sued another warning to their State banks, indicating that the 
threat continues. 

Today, I will introduce legislation that will help law enforcement 
agencies combat the financial crimes of counterfeiting, access de- 
vice fraud, and producing bank notes. The legislation will make it 
a Federal crime to pass off fake documents, such as prime bank 
notes. It will allow Federal law enforcement agencies to seize the 
equipment used in committing access device fraud, such as credit 
card embossers. And the bill will increase the penalty for counter- 
feiting to a maximum of 25 years imprisonment. 

Probably the most pernicious crime affecting the banking system, 
however, is money laundering, which, according to some inter- 
national experts, now approaches half-a-trillion dollars a year. 
Criminals have found that technological developments appear to 
have made it easier to launder their illegal gains. For instance, 
smugglers may no longer have to worry about getting cash-flow 
valises from Customs when they can electronically put thousands 
of dollars on stored-valued or Smart cards, no bigger than the aver- 
age credit card. 

With regard to money laundering, there is no shortage of domes- 
tic laws. Since 1986, major anti-money laundering legislation has 
been enacted in every Congress — ^from the Money Laundering Act 
of 1986, which fully criminalized money laundering, to the Anti- 
Drug Abuse Act of 1988, to the Depository Institution Money Laun- 
dering Amendment Act in 1990, to the Annunzio-Wylie Anti-Money 
Laundering Act of 1992, to the Money Laundering Suppression Act 
of 1994. 

But despite increased criminal penalties and reporting require- 
ments, criminal syndicates still have found ways to legitimize the 
proceeds from their illegal activities. Of special concern is the use 
of offshore corporations and banks to skirt tougher U.S. laws. One 
of the questions we'll be exploring today is what the U.S. Govern- 
ment is doing to counter money laundering overseas. 

Let me just end with that and ask unanimous consent to put the 
rest of my statement in the record, and ask if any other members 
would wish to speak at this time. 

[The prepared statement of Mr. Leach can be found on page 84 
in the appendix.] 

Mr. Vento. Mr. Chairman, I commend you and subcommittee 
chairman Bachus for your initiatives on these hearings this week. 
The fact is that at the time that we're advocating and we see the 
evolution of the electronic funds transfer and other types of innova- 



tions in terms of the financial transactions that take place in our 
society, it's a time when there is even greater risk to the consum- 
ers. 

Clearly, as is evidenced by votes in this committee earlier this 
year, we intend to try to protect the consumers that are operating 
and functioning in a responsible manner with regards to the elec- 
tronic transactions, as has been advocated since the late 1970's in 
terms of the Electronic Funds Transfer Act. 

The fact is that the evolution of electronic funds transfer and 
wire payments and so forth is moving in a direction that frequently 
the banking and other laws have served us well and rules in the 
past are being eclipsed by such actions. This, also, I think, 
underlies the importance of sound regulation, not just with regards 
to financial institutions, but to all financial intermediaries and the 
need to have a seamless regulatory fashion in which there is co- 
ordination, consistency and common sense that governs such 
actions. 

We have, of course, many aspects of our financial system, includ- 
ing the insurance and the solvency of institutions, and other factors 
that obviously concern us. There nave recently been headlines that 
are being made this week concerning the tremendous impact of 
crime and drug use and financial transactions as a drain on our 
total economy. 

So I would hope that we would pursue — and I understand from 
the fact that you're introducing legislation that it is your intention 
to continue to pursue a resolution and aggressive policy implemen- 
tation with regards to some of these changes. But it's going to have 
to be something that we continue to work on so it does not spin — 
these policies and these reactions and actions do not spin out of 
control in terms of our economy or the financial institutions which 
we have relied on to, in fact, facilitate this process. 

So I look forward to the hearing and to the continued work on 
this enormously important aspect of our economy and our financial 
future. 

Thank you, Mr. Chairman. 

Chairman Leach. Thank you, Mr. Vento. Yes, Mr. McCollum. 

Mr. McCoLLUM. Thank you very much, Mr. Chairman. As you 
know, I wear two hats, vice chairman of this committee and also 
chairman of the Crime Subcommittee over in Judiciary. Having 
those two hats to wear, this is especially an important set of hear- 
ings that we're embarking upon today. I think that the question of 
what we do about crime in the world of finance is very much inter- 
twined with the modem technology of today and the criminal mind 
that has gone into every aspect of how he or she can manage to 
take resources that belong to legitimate citizens and use them for 
their benefit. 

In many cases, this today is international in nature, not just na- 
tional. I tnink that the threat of international crime probably is not 
appreciated by most Americans to the degree that we should have 
it appreciated. 

The truth is that it's incredible, powerful in its reach. The secu- 
rity of many countries is at stake, not to mention our own concern 
over the integrity of our banking system. We have had testimony 
before our subcommittee over in Judiciary on the issue of Russian 



organized crime and understand from those hearings, from the FBI 
and others, that today we have an incredible amount of extortion 
that goes on in Russia that has spread to the United States, and 
that affects directly the banks in Russia and, through that process, 
also affects the international marketplace. 

According to the National Strategy Information Center's 1993 re- 
port on international organized crime, there are three distinctive 
characteristics of these organizations in contrast with traditional 
criminal enterprises. First, international criminal organizations are 
designed to operate across international boundaries. The largest of 
these groups, such as the Colombian cartels, are structured in a 
fashion similar to any large multilayered global business. 

Second, these organizations have established transnational links 
to other criminal groups, such as terrorists and drug trafficking or- 
ganizations, allowing them to cooperate in specialized activities, 
such as money laundering and terrorist activities. 

And, third, international criminal organizations are a significant 
threat to the authority of civil government and the stability of 
democratic financial, economic and legal institutions. Whereas tra- 
ditional organized criminals, such as La Cosa Nostra, engaged in 
a wide range of criminal activities, they have not normally pre- 
sented a challenge to political order. 

So I think that these hearings today are exceedingly important 
and not just from the domestic standpoint, because having been an 
author of much of the money laundering legislation or a co-author 
of it that we are now dealing with, I'm interested in how that is 
working and how many of our other domestic side issues are going 
with respect to crimes in the financial services community. I'm very 
gravely concerned about the international implications and how 
that affects our banking system. 

Thank you, Mr. Chairman. 

Chairman Leach. Thank you, Mr. McCollum. 

Mr. Vento. Mr. Chairman, I would ask unanimous consent to 
place in the record an article on a report on "60 Minutes" this past 
Sunday, in which a simple change of postal address resulted in a 
rip-off in Rochester, Minnesota. A woman's address was changed 
involuntarily to Brooklyn, New York. It just shows, I think, how 
simple and how profound the changes can occur in terms of the na- 
ture of our society. I would ask to put that article in the record. 

Chairman Leach. Without objection, so ordered. 

Mr. Vento. Thank you, Mr. Chairman. 

[The information referred to can be found on page 317 in the 
appendix.] 

Chairman Leach. Yes, Mrs. Maloney. 

Mrs. Maloney. Thank you, Mr. Chairman. First of all, I would 
like to commend you on your legislative initiative and for holding 
this hearing. The kinds of financial fraud we're going to discuss 
today unfortunately affect every American. At the very least, each 
one of us pays an increased price on everything from credit cards 
to bank fees to make up for the dishonesty of those who don't play 
by the rules, and some citizens pay a much higher price. 

New York City's own Queens District Attorney, Richard Brown, 
who will be testifying here later, has done a great deal in this area. 
His hard work resulted in the indictment of eight Nigerian nation- 



als charged wath running a multi-million dollar nationwide coun- 
terfeit credit card operation. The victims of this scheme had their 
identities stolen, their accounts plundered, and their credit ratings 
ruined. The scary thing is that this could happen to any of us, as 
Mr. Vento just pointed out. By some law enforcement estimates, 
this type of financial fraud alone is a $1.5 billion underground 
business. 

This is one of the reasons why my colleagues, Mr. Schumer and 
Mr. Vento, and I offered an amendment to strike language from the 
banking regulatory bill which would have both increased the maxi- 
mum consumer liability from $50 to $100 on unauthorized ATM 
transfers, which are very easy to take place, as well as transferred 
the burden of proof to the customer on the issue of providing all 
relevant information relating to an unauthorized use. 

With some of the examples of illegal access to financial informa- 
tion and even PIN numbers before us today, which we will be hear- 
ing, I'm pleased for the American consumer that our amendment 
passed this committee. 

In the area of money laundering, I strongly supported the reduc- 
tion in the number of currency transaction reports that banks must 
file. It's the quality, not the quantity of information we gather that 
is important. By blanketing every transaction over $10,000 with a 
reporting requirement, resources were wasted by banks and the 
government alike. It makes no sense to make banks file new paper- 
work on every $10,000 transaction of, say, a nationally reputable 
department store. Instead, know your customers' procedures, target 
limited resources at the problem by spending the time to verify a 
new account holder's business. A bank then has a standard of judg- 
ment to identify what would be a suspiciously high transaction for 
each particular customer. 

In the near future, we are going to have a hearing on electronic 
benefits transfer technology, which could move government bene- 
fits, like social security and food stamps, from checks and coupons 
to electronic benefit and debit accounts. Next week, we have yet 
another in the series of hearings on the future of money. All these 
emerging possibilities of government and business will be asking 
consumers to place their trust in these new forms of currency. So 
as we move into this new era, we need to maintain, not weaken 
our consumer protections, find ways to make our new technology 
both protect privacy and increase access to new services, and work 
with business, regulatory and law enforcement to crack down hard 
on those who seek to defraud American consumers and business. 

Finally, it's important to remember that these financial crimes 
are often vehicles for other criminal activities, whether tax evasion, 
illegal drugs, or even terrorism. As the President said last year, 
and I quote, "Criminal enterprises are moving vast sums of ill- 
gotten gains through the international financial system with abso- 
lute impunity. We must not allow them to wash the blood off 
profits from the sale of drugs, from terror, or organized crime." 

The President underlines the need for more international co- 
operation of a t3T)e the Administration's financial crimes enforce- 
ment network is pursuing in cooperation with private industry and 
international regulators. 



I hope this hearing today can provide us with some new insight 
and ideas to combat criminal activity aimed at our financial insti- 
tutions. 

Thank you, again, Mr. Chairman, for your legislative initiative. 

Chairman Leach. Thank you, Mrs. Maloney. Does anyone else 
wish to make a statement on our side? 

Mr. RoYCE. Yes, Mr. Chairman, if I could. 

Chairman Leach. Mr. Royce. 

Mr. Royce. Thank you, Mr. Chairman. In previous Congressional 
hearings, we've heard that in Russia alone, organized crime encom- 
passes some 1,500 state enterprises, some 500 joint ventures, and 
550 banks. From news reports and research done by various orga- 
nizations, such as the American Foreign Policy Council, we know 
that the most rapid growth of organized crime in Russia is now 
within the financial and banking structure and it is being coordi- 
nated by former Soviet KGB operatives. 

Indeed, according to party documents, in a 1992 Russian par- 
liamentary investigation, the former Soviet First Chief Directorate, 
the KGB's foreign intelligence arm, was instrumental in setting up 
many banking institutions, which are now integrating themselves 
into the western banking system. A parliamentary investigative 
commission concluded that "The Politburo of the Communist Party 
of the Soviet Union Central Committee made several secret resolu- 
tions toward direct concealment in commercial structures of prop- 
erty and monetary resources actually accumulated at the expense 
of the nation. Based on this, at all levels of the Party hierarchy, 
there was a mass founding of party banks, joint enterprises, and 
joint stock companies in 1990 and 1991." 

In fact, published reports in the Russian and western media say 
that 75 to 80 percent of all joint ventures with western companies 
founded between 1989 and 1991 involve officers of the KGB. With 
this type of KGB involvement, the Russian Mafiya has been pro- 
vided with organizational expertise, professional intelligence tech- 
niques, and the manpower to carry out their illegal activities. 

The professionalization of the Russian Mafiya poses new threats 
to U.S. and world financial markets. White collar crimes, counter- 
feiting, fraud, money laundering are the weapons of choice, with 
the money then being used to expand operations into violent 
crimes, such as drug smuggling, murder, extortion, and, most 
alarmingly, trafficking in arms and nuclear weapons-grade pluto- 
nium. 

With ever-expanding increased computer access, with the new 
encryption decoding techniques that new technologies bring, it is 
hardly surprising to find that much organized crime today is being 
carried out through the computer. Offshore operations are being in- 
creasingly used to facilitate illegal activities of organizations not 
only in Russia, but in Afi-ica, the Middle East and South America. 

Information and testimony from previous hearings has shown 
that U.S. institutions, commercial accounts, municipalities, and 
even our country's defense and civil systems are vulnerable. 

Now, the overriding question, that I hope will be addressed by 
each of our witnesses, remains what can we, as legislators, do to 
help? What can we do to provide our institutions and citizens with 
the capability to defend themselves against escalating cyber at- 



tacks and punish those who would seek to conduct their criminal 
activities through financial systems? 

Thank you, Mr. Chairman. 

Chairman Leach. Thank you, Mr. Royce. Mr. Fields, do you want 
to be recognized? 

Mr. Fields. Mr. Chairman, I would simplv request imanimous 
consent to have my statement entered into tne record, as well as 
any other Member who wishes to have his or her statement en- 
tered into the record. I would like to commend you on this hearing 
today and commend your fine group of panelists, because I feel that 
this issue is certainly an issue that pours over into the illegal drug 
activity that we have in our country. So I thank the gentleman. 

Chairman Leach. Thank you, Mr. Fields. Without objection, so 
ordered. 

Mr. Chrysler or Mr. Heineman. No statements. Thank you. Mr. 
Cremeans. No, fine. 

Then we will turn to our panel. Let me introduce our panel, first. 
Our first witness will be Ms. JayEtta Hecker, Associate Director for 
International Trade, Finance and Competitiveness of the GAO; the 
Honorable Edward W. Kelley, Jr., Governor of the Federal Reserve 
Board; Mr. Stanley E. Morris, Director of the Financial Crimes En- 
forcement Network; Mr. Harold D. Wankel, Chief of Operations of 
the Drug Enforcement Administration; Robert Sims, Special Advi- 
sor on International Criminal Justice to the Assistant Secretary on 
International Narcotics and Law Enforcement Affairs of the De- 
partment of State. 

We welcome vou all. Before turning to Ms. Hecker, who is going 
to testify out ot order, we're beginning with the Congressional rep- 
resentative first, which is somewhat unusual. I apologize to the 
other members of the panel, but we thought it would set a frame- 
work. In setting that framework, let me note that the GAO has 
presented a very thoughtful report on this subject which was re- 
quested by our distinguished colleague, Henry Gonzalez. I would 
urge members of the committee to review this report because it is 
a first class report. 

Ms. Hecker. 

STATEMENT OF JAYETTA HECKER, ASSOCIATE DIRECTOR 
FOR INTERNATIONAL RELATIONS AND TRADE ISSUES, 
GENERAL ACCOUNTING OFFICE 

Ms. Hecker. Thank you, Mr. Chairman. We are very pleased to 
be here today. As you said, our work is based on a request by Mr. 
Gonzalez. I'm afraid, while we have briefed your staff, the work is 
not actually complete and this is our first report based on that 
work. 

That request was to provide an overview or a framework of what 
U.S. efforts were overseas. The methodology that we used was to 
talk with foreign banks, foreign regulators, and law enforcement, 
both U.S. and foreign, about their experiences with this problem 
and their perceptions of the significance of the challenge. 

My remarks today will cover five different areas. The first con- 
cerns the distinct European approaches and their experience with 
the "Know Your Customer" rule. The second is obstacles to U.S. 
bank regulators' examinations of overseas branches. The third is is- 



8 

sues regarding coordination of U.S. law enforcement efforts over- 
seas, llie fourth is U.S. participation in diverse international 
agreements to combat money laundering. And the final comment 
will be on the significant challenges, mentioned by several already, 
presented by wire transfers and correspondent banking. 

As a backgpround, though, before I begin, I think it might be use- 
ful to share with you the clear consensus that we heard among the 
more than 50 officials of banks and law enforcement and regulators 
that we met with that money laundering and the infiltration of fi- 
nancial institutions and the misuse of financial institutions is both 
a widespread and challenging problem. 

I can perhaps characterize this with a quote from one law en- 
forcement official, a central unit, that said "No one in the world 
can say they have control over money laundering. No one country 
has come up with a solution to the problem." Thus, while many 
countries share a very serious commitment to overcoming the prob- 
lem and have devoted substantial resources to it, they admit they 
remain vulnerable to being used for money laundering. 

I think this is well supported by a State Department report that 
Mr. Sims may cover. In the last report that was issued in March 
1995, four of the five countries we visited, the United Kingdom, 
Switzerland, Germany and Italy were listed in the highest category 
of risk as vulnerable to money laundering. I might say that they 
were in the same risk category as some countries long considered 
real risks, such as the Ca3rman Islands, Colombia, Panama, Nige- 
ria, and Mexico. 

But to keep it in perspective, perhaps we should recognize that 
this report itself highli^ts the special challenges in the United 
States. In fact, the report notes, and this is a quote from the State 
Department report, "The U.S. financial system continues to be ex- 
ploited at levels probably not approached by any other country." So 
clearly there's a consensus that it is a problem. It's a problem in 
major European countries and not just small island countries who 
are traditionally noted for this. And most notable of all, it remains 
a very serious problem in our own country, despite very serious 
and committed efforts to try to combat the problem. 

Another precursor before I turn to the five points is to tp^ to com- 
ment on your focus today, that is on links to organized crime. I can 
report that virtually all the law enforcement officials we talked 
with commented on the growing problems associated with orga- 
nized crime in Russia, Italy, Colombia, and, perhaps most signifi- 
cantly, increased cooperation between them. For example, we heard 
about the ongoing efforts of organized crime groups to cooperate on 
different ways to split up the focus of organized crime activities in 
different markets rather than having them compete with each 
other. They are functioning, as cartels do, dividing up the market. 

We didn't hear a lot that confirmed your specific focus here on 
infiltration by these organized crime elements to control banking 
institutions. Certainly, there is acknowledgement that their money 
is going into financial institutions, and that's the money laundering 
aspect we have been focusing on, as distinct from your more signifi- 
cant focus on the issue of infiltration. 

The first comment I have today is about the European approach. 
I think what we should note here is that the Europeans have a 



longer and very serious commitment to the "Know Your Customer" 
principle as the linchpin of their operation. And most countries, 
who are very proud of this, believe they have a very well-focused 
effort. They don't believe it's fully effective, but they contrast their 
approach with the burdensome CTR reporting that has been 
the traditional mainstay of the U.S. approach, and they think 
they have a very focused responsibility put on bankers to make 
judgments. 

I think one interesting example that was shared, and this was 
by an investment banker, actually a branch of a U.S. investment 
bank, concerned the challenge of doing business with Russian cli- 
ents. Some said it was so hopeless that they gave up. But this firm 
said there's too much business there and there's got to be some le- 
gitimate businesses, things being produced there, and we don't 
want to refuse to deal with valid businessmen. What they actually 
did was contract a $15,000 study to verify the business of the new 
client. They reported that this approach isn't unusual before they 
accept the business of a Russian client. They went to Russia, 
looked at the business, verified the nature of the operations. They 
note this approach is necessitated because in Russia, they simply 
didn't have any forms they could rely on, such as SEC filings or 
anything that they could consider valid, and that was the measure 
they took of their due diligence to "Know Your Customer." 

Now, I think an interesting contrast that we have is that we also 
visited Hungary and Poland. There we found new units devoted to 
the regulation of the banking sector and each country had recently 
adopted, in full, the EU directive on money laundering, making it 
a crime, and had appropriate laws in place. However, these officials 
acknowledged that their implementation of the money-laundering 
directive is far more limited. They acknowledge that officials in 
their banks accept very limited identification to open accounts to 
meet their obligation to "Know Your Customer." The clients basi- 
cally fill out a card and give their name and address and passport 
number and some documentation that they're a business. This is 
an interesting contrast. 

Chairman Leach. If I could interrupt iust for a second, Ms. 
Hecker. We're going to have a large number of witnesses today, 
and so we're trying to ask people to summarize in 5 or 6 minutes. 
So if I could give you another minute or so, is that possible? 

Ms. Hecker. Absolutely. 

Chairman Leach. Fair enough. 

Ms. Hecker. What I would say is that this approach is some- 
thing we can learn from. The second issue of the bank regulators' 
examination is that Federal regulators, and you'll hear this from 
Governor Kelley, face special challenges overseas. They don't have 
the same access. They work to overcome this, but in a lot of coun- 
tries, they really cannot get in and do the same thorough examina- 
tion. The Fed has some new guidelines and I think that may rep- 
resent an important step forward. 

In coordination of law enforcement, there were basic questions 
raised about the multiplicity of agencies and concern about the lack 
of coordination among them. We learned about an MOU that the 
agencies themselves had put in place, but there's a lot of frustra- 
tion among foreign law enforcement dealing with the multiplicity 



10 

of U.S. agencies. But there is tremendous respect worldwide and 
amone everyone we spoke with, that U.S. law enforcement is in the 
lead, better understands the principles, as well as the leadership 
of FinCEN, understanding the complex nature of the multiple 
channels used to launder money, and that it takes a constant effort 
to stay ahead of that. So there is real respect, but also frustration 
in dealing with the multiple agencies we have involved. 

The next point was our participation in international agree- 
ments. The FATF is a very important initiative that you'll want to 
learn more about, how successful it has been, what its operations 
are. It basically sets a floor for countries to implement core regula- 
tions and laws. They have an important process of peer review to 
try to encourage countries to move forward. That's an important 
initiative and I think Mr. Morris will outline a number of others. 
The key issue there is how coordinated they are, whether they real- 
ly add up to an effective strategy. 

The final area is the special challenges presented by wire trans- 
fers, and that is well known. I think the Fed is trying to work to 
improve some of its efforts in that area. FinCEN is also active 
worldwide in trying to educate and set up units and improve the 
knowledge and focus on this. But it's recognized by almost all of 
the people we spoke with as a weak link in the chain. 

So that completes the overview and I apologize for going over the 
time. 

[The prepared statement of Ms. JayEtta Hecker can be found on 
page 94 in the appendix.] 

Chairman Leach. Thank you, Ms. Hecker. Governor Kelley, we 
welcome you back to the committee. You have now become a par- 
ticularly senior governor. 

STATEMENT OF HON. EDWARD W. KELLEY, JR., MEMBER 
BOARD OF GOVERNORS, FEDERAL RESERVE SYSTEM 

Mr. Kelley. Thank you, sir. I will deliver a somewhat shortened 
version of my testimony. 

Chairman Leach. Maybe better, I should say, a higher percent- 
age of the board governor. 

Mr. Kelley. Yes. I hope that that percentage will go down soon. 
I would request, sir, that my fiill statement be included in the 
record. 

Chairman Leach. Without objection, of course. Without objection, 
all the statements will be put in the record. 

Mr. Kelley. Thank you. Mr. Chairman, I am pleased to appear 
before the committee on behalf of the Federal Reserve. The Board 
places a high priority on providing assistance in deterring, detect- 
ing, and reporting criminal activities directed at banking organiza- 
tions, and we appreciate the committee's interest in this important 
area. I have been asked to address the threat that criminal activity 
poses to the banking system and I'd like to turn initially to that. 

While all bank losses that result from criminal activities are 
completely unacceptable, it is important to put the risks associated 
with criminal activity in the proper context. As of September 30 of 
1995, over 10,000 insured commercial banks in the United States 
had aggregate assets of about $4.2 trillion, with capital of about 



11 

$350 billion and earnings in the first three quarters of about $37 
billion. 

In assessing the current financial strength of the U.S. banking 
system and estimates of the extent of banks' losses resulting from 
criminal misconduct, which include the banking industry's 1994 es- 
timates of $800 million associated with check fi^aud and $700 mil- 
lion associated with credit card fraud, we believe that losses from 
criminal activities do not pose a systemic risk to the banking sys- 
tem. Let me add, we also have no information that suggests that 
any individual U.S. banking organization has been overtaken or 
substantially threatened by criminal organizations or activities. 

While we see no systemic threat to the banking system, we're ob- 
viously concerned about the risks to the reputation and integrity of 
our Nation's banks arising from criminal elements using the bank 
system for their illicit purposes. These risks are best illustrated by 
money laundering, estimates of which range between $300-$500 
billion annually. There is no evidence that the flow of these funds 
through U.S. banks, on their own, in the limited sense of the term, 
pose a systemic risk. 

However, if left unchecked, clearly, such use of our banking sys- 
tem could undermine the reputation of banks or weaken the 
public's confidence in banks as safe-keepers of their funds. 

So what does the Fed do to combat this important threat? The 
Federal Reserve has an important role in ensuring that criminal 
activity does not pose a systemic threat and, also, in improving the 
ability of banks to protect themselves from illicit activities. A 
bank's best protection is its own policies and procedures designed 
to identify and then reject potentially illegal or damaging trans- 
actions. For this reason, the Federal Reserve and other regulators 
have implemented various directives, controls and procedures de- 
signed to detect unusual or suspicious transactions. 

Examiners evaluate the effectiveness of a banking organization's 
controls and procedures and have comprehensive training and in- 
formation to assist them in identifying suspicious and unusual 
transactions. But I do need to emphasize, however, that we do not 
expect our examiners to act as police. The Federal Reserve is a 
bank supervisory agency, not a criminal law enforcement authority. 
We see our role as auxiliary to the legitimate law enforcement du- 
ties of the criminal justice agencies. 

The Board believes that as a safety and soundness matter, bank- 
ing organizations should work to protect themselves from criminal 
transactions through "Know Your Customer" policies and proce- 
dures. Such procedures will allow an organization to identify their 
customers and the transactions they conduct on a regular basis and 
be alert for unusual or abnormal transactions. 

One of the more significant components of this process is identi- 
fication and reporting of suspicious and potentially criminal activi- 
ties. To both reduce the reporting burden and increase the useful- 
ness, the Federal Reserve nas worked with the other bank super- 
visory agencies and the Treasury to revise the criminal referral 
process in several significant respects, and I will be happy to go 
into that, if you'd like, later. 

Over the years, the Federal Reserve has taken the initiative to 
provide timely and useful information to banking organizations 



12 

with regard to ongoing criminal conduct. For example, the Federal 
Reserve and the other banking supervisory agencies have issued 
bulletins on such matters as prime bank fraud schemes and credit 
card fraud. The recent policy of urging banks to monitor so called 
"payable through" accounts is another example of our efforts in 
that area. 

The Federal Reserve does continue to work diligently to address 
money laundering matters. Fed staff has provided training in anti- 
money laundering procedures, both domestically and to foreign gov- 
ernments. We chaired a working group that developed enhanced 
BEink Secrecy Act examination procedures and, of course, we rou- 
tinely coordinate with Federal law enforcement agencies. 

The Fed is a founding member of the Bank Fraud Working 
Group, which consists of representatives of 13 Federal law enforce- 
ment and bank agencies, and the Federal Reserve is also an active 
participant in the Financial Action Task Force, which was estab- 
lished by the G— 7 group of countries and whose mission is educat- 
ing countries around the world on anti-money laundering and fraud 
prevention efforts. 

Because of our work with bank supervisors and law enforcement 
authorities, we recognize that crime is an international activity and 
that criminals do make use of offshore corporations and banks. 
These should be seen as two separate problems that we address in 
different manners. 

Because the Fed cannot control a sovereign nation's laws govern- 
ing the establishment of corporations in its territories, we can only 
address the activities of questionable offshore companies when they 
seek to do business in the United States through banks we super- 
vise, and here the principal tool is the "Know Your Customer" 
policy. 

No regulator or law enforcement agency can possibly monitor 
every transaction. There were, for instance, 76 million Fedwire 
transactions, involving $223 trillion, in 1995. However, we can and 
routinely do measure the internal controls and risk management 
systems implemented by banks to make certain that they are, in 
fact, adhering to their own policies. With regard to foreign banks, 
the Board, since it was given power by the Congress in 1991, care- 
fully scrutinizes any foreign bank seeking to do business in the 
United States. This includes making certain that the bank is sub- 
ject to comprehensive consolidated supervision in its home country 
and a review of its global anti-money laundering procedures. The 
Fed is also working in a number of areas to improve bank super- 
visory standards in other banking centers. 

In conclusion, Mr. Chairman, while we do not see crime as pos- 
ing a systemic threat to the banking system, we have and will con- 
tinue to undertake extensive efforts to combat illegal activities 
involving domestic and international banking organizations. 

Because we have a vital interest in maintaining the reputation 
and integrity of our banking system, and in aiding in the enforce- 
ment of our Nation's laws, we will be continuing our cooperative ef- 
forts with other bank supervisors and the criminal justice agencies 
to develop and implement programs to better detect criminal mis- 
conduct involving banks. 



13 

Again, sir, we appreciate the committee's interest in this most 
important topic and I'll be happy to attempt to respond to any 
questions you may have. Thank you. 

[The prepared statement of Hon. Edward W. Kelley can be found 
on page 110 in the appendix.] 

Chairman Leach. Thank you, Governor Kelley. Mr. Morris. 

STATEMENT OF STANLEY E. MORRIS, DIRECTOR, FINANCIAL 
CRIMES ENFORCEMENT NETWORK 

Mr. Morris. Thank you, Mr. Chairman, members of the commit- 
tee. It's an honor to be here today and the subject of this hearing 
is both a timely and an important one. 

The Financial Crimes Enforcement Network, or FinCEN, is re- 
sponsible for implementing the Treasury's policies to prevent and 
detect money laundering. We provide analytic case support to many 
Federal agencies, including the Secret Service, IRS' Criminal Inves- 
tigative Division, the Customs Service, the Postal Inspection Serv- 
ice, the FBI, and DEA. These are some of our most significant in- 
vestigators in this area. 

We also administer the Bank Secrecy Act, which is a key compo- 
nent of our efforts to combat money laundering. As the chairman 
said in his opening remarks, this committee nas given us very 
strong and powerful money laundering tools over the years and we 
are using these tools to build effective counter-money-laundering 
policies, which is the subject of today's hearing. 

We all know, of course, that the threat of organized crime, both 
domestically and internationally, exists. This morning, I'd like to 
look to the future. Transnational crime and money laundering are 
going to continue to be a challenge to law enforcement agencies 
around the world, and we must respond. I believe the United 
States is taking important first steps toward doing just that. One 
part of that response must be the recognition that Federal law en- 
forcement cannot do the job alone. We must team up with our part- 
ners, the State and local authorities, the bank supervisors, as well 
as the financial services sector, and, most importantly, as Mr. 
McCollum said, we must network globally. 

The past decade has brought unprecedented changes to the 
world's economy and the structures of government. These develop- 
ments are also augmented by rapid advancements in technologies 
that have revolutionized our methods of commerce, as well as our 
capacity to communicate. 

For example, a decade ago, daily trading in currencies was ap- 
proaching the sum of $200 billion. Today, it is more than $1.25 tril- 
lion a day, one hundred times the volume of world trade. Cross-bor- 
der capital flows have exploded during that same period. 

In this environment, finding illegal activity and dirty money is 
ever more difficult. Clearly, there are new opportunities for crimi- 
nals to exploit the revolutionary changes that are occurring in our 
world's financial systems. And because of the evolving world envi- 
ronment, governments are changing the way they look at criminal 
activity, economic development, and foreign trade. 

Traditionally, governments, ours and others, have compartmen- 
talized their strategies for dealing with these subjects. Criminal ac- 
tivity was the domain of law enforcement. Economic development 



14 

and banking were the mission of finance ministries. Foreign trade 
was the realm of foreign affairs offices and trade ministries. The 
private financial systems were just that — separate and apart from 
the governments. 

However, as commerce has globalized, so has crime. Con- 
sequently, governments have come to recognize that they can no 
longer compartmentalize their response to criminal, economic, and 
trade issues. This panel and subsequent panels in today's hearing, 
I think, are a clear recognition of that fact. 

This is what we have been forced to do, for example, even within 
my own organization, FinCEN. Just as we have moved to build 
partnerships with the American banking industry, so, too, have we 
recognized the need to build transnational part,nerships through bi- 
lateral and multilateral initiatives. 

Let me outline five major initiatives which illustrate how the 
United States is trying to rise to the challenge of dramatic change 
in the globalized world economy. As Congress woman Maloney 
pointed out in her opening remarks, at the 50th anniversary of the 
United Nations, just 4 months ago, President Clinton outlined his 
initiatives to combat transnational crime, including drug traffick- 
ing, arms smuggling and terrorism. The President is assigning a 
very high priority to negotiating agreements with those nations 
who are out of compliance with international standards. FinCEN is 
coordinating this initiative in close cooperation with the law en- 
forcement agencies of Treasury and Justice, as well as with the 
bank regulatory agencies and the intelligence community. 

Just a couple of months ago. Secretary Rubin hosted a con- 
ference, a meeting in Buenos Aires, on the first and second of De- 
cember. The purpose of the conference was to fulfill the directives 
set in the Summit of the Americas in Miami to provide effective de- 
tection, prevention and investigation of money laundering. 

The heads of delegation in attendance represented the leaders of 
Interior, Justice, finance ministers, and central banks. The con- 
ference produced an accord, which marks a vital first step in do- 
mestic and international efforts, to track the proceeds of illicit ac- 
tivities and impede criminals from developing the wealth from 
their activities that gives them the power to undermine the fragile 
democracies in our hemisphere. 

As Ms. Hecker said, another multinational effort is the Financial 
Action Task Force, which was established at the direction of the 
G-7 nations in 1989. It is composed of 26 countries, plus the EU 
and the Gulf Cooperation Council. Its purpose is to set a standard 
in the world which all countries should attempt to meet. We have 
worked diligently to increase the global awareness of money laun- 
dering through tnat program. 

This year, the Unitea States is serving as the chairman of the 
Financial Action Task Force, examining some of the issues and try- 
ing to come up with new recommendations that this committee will 
be discussing today. We are having some effect. Even small coun- 
tries, such as Slovenia and the Czech Republic, have enacted or 
have just recently enacted anti-money-laundering legislation. 

In the area of technology, policing a society in the throws of fun- 
damental change means putting change at the top of the agenda. 
The computer lab and squad room may seem worlds apart, but 



15 

they are not. The changing financial world creates vast opportuni- 
ties for criminals. Technology is a critical part of this trend. 

Any individual, using a relatively inexpensive computer and a 
common telephone line, can move enormous amounts of data 
around the world at nearly the speed of light and hide data in ways 
which even a skilled professional cannot detect. New cyberpayment 
systems are coming on-line, some designed by brilliant entre- 
preneurs who know technology, but who do not even come from the 
financial world. We will need partnerships with these industries. 

This committee has provided real leadership in that area and 
many of us were at hearings here just a few months ago discussing 
that subject. 

Last September, FinCEN hosted a day-long colloquium at NYU s 
School of Law to discuss the implications of these technologies, and 
a partnership effort. In attendance were bank regulators, credit 
card companies, CEOs, both from the United States and Europe, as 
well as academics and prosecutors who shared their views. They 
tried to bridge the chasm, the professional different viewpoints that 
exist in this area. 

Another example of partnership is the suspicious activity report- 
ing system that was mentioned by Mr. Kelley. Three weeks ago, we 
turned the switch, implementing the new national system which 
will be administered by FinCEN, but in a unique partnership with 
all of our Federal law enforcement agencies, the Federal Reserve 
Board, who played a major role in developing this, and the other 
bank regulatory agencies. 

In the context of technology, of keeping up with the criminals, 
this new system will significantly improve our ability to detect 
criminal financial activity, to assure that information about that 
activity gets to the proper law enforcement and regulatory authori- 
ties, ana to gain a broader strategic understanding of the national 
and global implications of attempts by international organized 
crime to subvert our banking system. 

One result of the efforts I have described above has been that 
criminals can no longer rely on traditional means of laundering 
their money. Traditional avenues are being closed off. And because 
of efforts lilce the Financial Action Task Force and Summit of the 
Americas and the initiatives by our law enforcement agencies, 
criminals must take greater risks to exploit the financial systems. 
This mgikes them more vulnerable to detection. 

The Customs Service indicates that currency smuggling out of 
the country is up. Many criminal organizations are desperate to 
move their cash out of the country because it is too risky to launder 
it here. Presently, the safest way for criminals to repatriate crimi- 
nal proceeds to Colombia is to sell their U.S. dollars to Colombian 
businesses. This procedure of hiding their money is complicated, in- 
volves many steps, is expensive, and makes them vulnerable to de- 
tection. According to reports, the cost of laundering in criminal or- 
ganizations has risen from 6 percent in the mid-1980's to as much 
as 20 percent today. We are affecting organized crime's day-to-day 
laundering operations, but much more, of course, needs to be done. 

The new era is altering the roles of law enforcement, central 
banks, and financial institutions. Technology makes the globali- 
zation process irreversible. Change is our challenge. Secretary 



16 

Rubin has been leading the Treasury campaign to break out of the 
molds to meet that challenge. Transnational organized crime is al- 
ready exploiting change with the fading of national boundaries. To- 
gether we must send a clear message that money laundering will 
not be tolerated in the world economy. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Stanley Morris can be found on 
page 123 in the appendix.] 

Chairman Leach. Thank you, Mr. Morris. Mr. Wankel. 

STATEMENT OF HAROLD D. WANKEL, CHIEF OF OPERATIONS, 
DRUG ENTORCEMENT AGENCY 

Mr. Wankel. Thank you, Mr. Chairman and members of the 
committee. I am pleased to be here today. I'm going to digress from 
my prepared remarks, because my esteemed colleague, Mr. Morris, 
has said much of what I needed to say, I think, anyway. In the in- 
terest of time, let me just make a few comments here. You have 
the prepared statement of the Drug Enforcement Administration. 

This is truly a global problem of serious magnitude, as, Mr. 
Chairman, you and members of your committee have spoken to as 
we opened this session this morning. It will continue to grow and 
will be a problem. I would submit to you that the monies and the 
attendant corruption attached to this business of the money laun- 
dering and the international crime, transnational crime, does have 
the potential to destabilize or at least negatively impact banking, 
to destabilize economies, and to destabilize governments. 

It is going to be critical that we all work, within this government 
and with other governments, to ensure that we have, in addition 
to a stated commitment, a demonstrated commitment on the part 
of our allies and our partners to move into the enactment of legisla- 
tion, the implementation of legislation, and move forward on this 
progfram. This will require training on our part, obviously, and, 
also, entering into mutual legal assistance treaties. 

I would mention that these adversaries, whether they are inter- 
national drug criminals that we see in the Cali Mafia or the Rus- 
sian organized crime elements, are very worthy adversaries. They 
study law enforcement, they study banking, they study the broker- 
age houses, how they do businesses, they know the systems, they 
know the laws, and they know how to approach, attack, and exploit 
vulnerabilities. We have to remove those and we have to do it, I 
think, with all due fervor. I think it's very appropriate that you're 
having this session today. 

In tne interest of time, I will cease my remarks at this point and 
I will be happy to answer questions. 

[The prepared statement of Mr. Harold D. Wankel can be found 
on page 137 in the appendix.] 

Chairman Leach. Thank you very much, Mr. Wankel. Mr. Sims. 

STATEMENT OF ROBERT E. SIMS, SENIOR ADVISOR, INTER- 
NATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS, 
U.S. DEPARTMENT OF STATE 

Mr. Sims. Thank you very much, Mr. Chairman. I, too, have sub- 
mitted a prepared statement, but I'd like to hit some of the high- 
lights in light of what the other panelists have said. It's also a 



17 

privilege for the Department of State to appear before the commit- 
tee today to discuss what, in the Department's view, is a critically 
important national security problem, and that is the impact of or- 
ganized crime on banking and financial services. 

Mr. Chairman, the Department is deeply concerned about this 
threat basically for two reasons; first, the direct threat to the phys- 
ical safety and economic well being of Americans at home and 
abroad. Money laundering is the life blood of narcotics trafficking 
and organized crime and fuels criminal activity in the United 
States, mcluding violence. 

Second, Mr. Chairman, transnational organized crime threatens 
America's national securitv and foreign policy interests in a num- 
ber of regions of the world, undermining legitimate economies and 
threatening emerging democracies. President Clinton and Secretary 
Christopher have placed the battle against transnational organized 
crime at the forefront of U.S. foreign policy agenda and have com- 
mitted the diplomatic community to work closely with law enforce- 
ment, intelligence, and other relevant agencies to find effective and 
innovative responses to this problem. 

If you'll permit me, a personal note, Mr. Chairman. I'm a small 
example of that commitment myself. I am not a career foreign serv- 
ice officer, but came to State after serving 5V2 years as an Assist- 
ant U.S. Attorney in the District of Maryland. During my time in 
the office, we certainly saw a large influx of organized crime 
groups. The Cali Cartel, Nigerian heroin organizations, Asian 
gangs, among others. These groups move into Maryland, often with 
violent and tragic results. 

Mr. Chairman, if a State like Maryland or the United States, in 
general, with its strong experienced, law enforcement and judicial 
institutions, can feel the negative effects of transnational organized 
crimes, countries without these advantages suffer damage that is 
often much more severe. The economic and political power of Rus- 
sian organized crime groups, the Colombian cartels, Mexican drug 
traffickers, Nigerian organizations, and Asian drug lords could not 
be ignored by the United States, even if they had no direct U.S. 
law enforcement interest or impact on that interest. These organi- 
zations can, through corruption, intimidation or violence, greatly 
inhibit legitimate business activity, erode public confidence, and 
undermine democratic institutions in the countries in which they 
operate. This, in turn, directly undermines U.S. national security. 

The State Department can and must play an important role in 
our effort to combat global money laundering and the threat of 
transnational organized crime. There are three areas of the Depart- 
ment's responsibilities I'd like to focus briefly on today, the first 
being international training and technical assistance; the second, 
foreign policy and national security initiatives; and, finally, over- 
seas coordination. 

Mr. Chairman, the United States is fortunate enough to have the 
best trained and most knowledgeable law enforcement officers in 
the world, and vou'll be hearing from these agencies over the 
course of this nearing. However, as you've heard, in facing 
transnational crime, this is only part of tne battle. We must work 
with effective counterparts overseas in order to accomplish our 
goals. Unfortunately, our law enforcement officers are often called 



18 

upon to work with law enforcement officials in other countries that 
do not benefit fi'om the same level of training and have not devel- 
oped the same expertise we have. This is especially a problem in 
areas such as money laundering and financial crime, which can in- 
volve sophisticated laundering techniques or complex fi-auds that 
require equally sophisticated investigative work. 

Mr. Chairman, the Department is working to develop or help de- 
velop these effective partners overseas by offering training, law en- 
forcement training through our foreign assistance accounts. In un- 
dertaking these international efforts, the Department has two basic 
goals. The first is to build institutional capability overseas and 
allow these foreign countries to place themselves in a better posi- 
tion to work cooperatively with us. The second is to foster close 
working relationships between our law enforcement authorities and 
those in other countries. We do this recognizing that resources are 
limited, so we must work to reduce imnecessary overlap. It is most 
important that these programs be administered with our broader 
foreign policy interests in mind. 

To accomplish these various objectives, the Department is work- 
ing closely with our Federal law enforcement agencies to establish 
priorities and implement effective and coordinated training pro- 
grams. Good examples of that are efforts in the former Soviet 
Union and Central Europe, that I describe more fully in our pre- 
pared statement. 

Another area of the Department's involvement, Mr. Chairman, is 
foreign policy and national security initiatives. There, you have 
heard a number of initiatives, the President's money laundering 
initiative. Treasury's work in the Summit of the Americas, and the 
Financial Action Task Force, and State is involved heavily in all of 
those areas in cooperation with Treasury, Justice, and other 
agencies. 

We also have ongoing discussions with the G^-7 partners and the 
Russian Government, trying to develop a range of recommenda- 
tions for improved international cooperation against money laun- 
dering and financial crimes, and organized crime in general. 

I would also like to mention one of the other initiatives that 
President Clinton announced during his speech before the U.N. 
General Assembly, and that was the use of the International Emer- 
gency Economic Powers Act against the Cali Cartel. lEEPA, which 
is administered, as you know, by Treasury's Office of Foreign Asset 
Control, allowed the President to freeze assets of the designated 
Cali Cartel leaders, their associates and front companies in the 
United States, but, more importantly, prohibits U.S. persons from 
doing business with these individuals and entities. 

This greatly restricts the ability of these front companies to con- 
duct business as usual in or with the United States. Surprisingly, 
published reports in Colombia also suggest that Colombian busi- 
nesses, including financial institutions, have been emboldened by 
the President's action and have been refusing to do business with 
these cartel front companies, as well. 

Mr. Chairman, the use of the lEEPA statute, as well as the 
President's money laundering initiative are the type of innovative 
responses to organized crime we need and, indeed, we're working 



19 

on an interagency basis, as required by the President, to determine 
whether we can use lEEPA to target other criminal organizations. 

The final area I'd like to touch on, Mr. Chairman, is the question 
of overseas coordination. Here, I would note that both the Sec- 
retary of State and the U.S. Chief of Mission have statutory re- 
sponsibilities for coordinating our activities abroad, activities for all 
U.S. Government personnel abroad. As the personal representative 
of the President and country, the role of the Chief of Mission is es- 
pecially important because he or she is charged by the President 
and statutorily responsible for direction, coordination, and super- 
vision of all U.S. Government personnel in the country, except cer- 
tain military personnel. 

The Chief of Mission must, therefore, play an important role in 
our fight against transnational organized crime. We believe, Mr. 
Chairman, that the overseas law enforcement activity and the 
placement of our law enforcement agents overseas is in the vital 
interest of the United States and, indeed, our missions overseas are 
the forward bases for protecting and advancing U.S. national inter- 
ests, including our law enforcement interests. 

Mr. Chairman, my purpose for mentioning these responsibilities 
is I fear the Department's ability to support these important law 
enforcement functions is jeopardized as mission resources are re- 
duced. We currently have some 1,600 law enforcement personnel 
overseas and virtually all of these agencies are seeking to expand 
their presence. Unfortunately, Chiefs of Mission are increasingly 
considering such issues as cost and resource availability when 
making decisions to enhance our law enforcement presence, even 
where they agree that that enhanced presence would be desirable. 

I would, therefore, urge members of the committee, when looking 
at the issues of law enforcement activities overseas, not to forget 
the State Department's responsibilities and the resources it needs 
to support these activities. 

As with other transnational crimes, Mr. Chairman, there is no 
simple solution to the threat of global money laundering and finan- 
cial crime and I believe we have to look at each of the areas I have 
discussed here today, as well as the other issues touched on by the 
panel, as part of a comprehensive response. 

The Department of State looks forward to working with the law 
enforcement and intelligence communities and with the Congress 
to combat this global threat. 

Thank you. 

[The prepared statement of Mr. Robert E. Sims can be found on 
page 153 in the appendix.] 

Chairman Leach. Thank you very much. Before proceeding, I 
would like to take a moment to introduce a distinguished g^est. We 
have with us today a former Attorney General of the United States 
and former Secretary of State, Mr. Bill Rogers. You're welcome, sir. 
I might mention, I think, that the overlap of those two depart- 
ments, as Mr. Sims says, is significant. 

I just have a couple of questions of the panel before turning to 
others. First, it appears that overnight, the magnitude of this 
whole problem has grown. All of these issues, in one form or 
another, have been existent for many years, but suddenly the 



20 

magnitude is upsurged and appears to, in fact, continue to be 
upsurging. 

Mr. Sims mentioned the issues of resources, but when we think 
of the issue of budgeting, whatever the changes in Congress, and, 
frankly, I think they're more modest than the current debate that 
is underway between our two parties, but basically Congresses 
start out with the prior year's spending levels and then they tilt 
them slightly up or down depending on priorities and prejudices. 

But it strikes me that whereas the United States may be well 
ahead of any other country in the world in our sophistication, that 
if we're talking about a half-trillion dollar problem, and that num- 
ber has been thrown out and I don't know if people want to contest 
it or not, that is a problem of a magnitude that makes it a creature 
of a very different dimension than might have been the case 3 
years ago or 13 years ago. 

And as we look at the resources of the government, and it's one 
of the reasons I'm disappointed that the CIA turned down our invi- 
tation to speak, some of the language that has been used today — 
Mr. Wankel talked about that this has the capacity to destabilize 
institutions and governments. Mr. Sims indicates it has a potential 
to undercut democracies. All of a sudden, you're talking about fun- 
damental root problems. 

And then when we look at where we allocate our resources in the 
government, are we allocating them to deal with this magnitude or 
future magnitude problem? It strikes me, in particular, we all 
called for interagency approaches. I have been one that has want- 
ed, frankly, to bring the intelligence services more directly into 
institutional accountability, because I think they have more 
resources, in many ways, at least abroad, than any other set of 
institutions. 

So what I would like to ask all of you is as we look at this, aren't 
we looking at a new creature? If we're looking at a new creature, 
don't we have to give substantially upgraded attention? And if we 
give substantially upgraded attention, where should those re- 
sources be applied? 

Is this another case that the Department of State has to put 
some question marks about its declining resource base? Is it a case 
for the Treasury and the Secret Service? Is it a case for the Federal 
Reserve and some of its activities? How would you respond to that 
question? 

Mr. Morris. Let me try. As at least one member of the panel 
knows here, I've been in the government a long time, over a quar- 
ter of a century, and this issue is driven by the reality of political 
attention first, and then the issue of mobilizing resources. 

I am not aware of any statement about the urgency and impor- 
tance of this problem by a President of the United States for the 
time that I have been in government. The most significant and 
powerful statement was made by the President at the United Na- 
tions in October. It is also very significant that the Secretary of 
State has spoken out in a major address at the Kennedy School. 

The Secretary of Treasury felt it significantly important to spend 
a weekend in Buenos Aires at the summit of the Americas Ministe- 
rial Conference trying to hammer out an issue on money launder- 



21 

ing, because exactly, as you said, the ability of organized crime to 
launder its money means that they can develop economic power. 

There is no free enterprise system that can operate if some peo- 
ple have no cost or low cost of capital. You drive out honest busi- 
nessmen, particularly in countries that don't have a long tradition 
of free enterprise and economic power. 

This is a very serious matter. I don't think the question right 
now is how much money should we be throwing at the problem. I 
think that we are in the process of looking at it more intelligently 
and then we will bring the resources to bear, I believe. I know 
that's the view of the Secretapr and the Attorney General, both of 
whom I have had an opportunity to speak to on this subject. 

But I think that the urgency and importance of it and the value 
of this hearing itself, is the kind of political leadership that will 
drive those of us to bring the resources to bear to deal with it. I 
don't think we have had that level of attention before. 

Mr. Wankel. I agree 100 percent with your lead-in question 
here. We need only look at the cocaine business as it impacts this 
country. Since the mid-1980's, let's sav, the organized cocaine busi- 
ness in the United States is controllea entirely outside the confines 
of the United States. It's from Colombia, now Mexico increasingly. 
That's where the order of business is drawn, that's where the CEOs 
of these cartels sit, if I can use that statement. 

Organized drug crime and increasingly organized crime is truly 
a national security threat to the United States. We only need look 
at President Zedillo in Mexico and what is said in Russia as far as 
the national security threat that it poses to those countries. That 
very much makes it directly a threat to the United States. 

I think, then, that there needs to be, in some sense, a reordering 
of prioritization of assets. I agree very much with Mr. Sims. In this 
day and age, as we are trying to increasingly work with allies, force 
allies to come to the table in the foreign arena, to work in a real 
meaningful sense on these efforts, we have to have the ability and 
the resources, both personnel and, to some degree, additional mon- 
ies probably to be able to make that come about. 

Chairman Leach. Mr. Kelley. 

Mr. Kelley. Mr. Chairman, from the standpoint, and it's a rath- 
er limited standpoint in the broad context that we're discussing 
here, from the standpoint of the banking system, I agree with Mr. 
Morris. It's not so much a matter of any absence of necessary re- 
sources. We have been provided with those in the regulatory re- 
gimes, and there are a number of various pieces of legislation of 
recent years, all of which have helped. 

I would like to mention, however, that the biggest help, from our 
standpoint, was enactment in the Congress several years ago of the 
Foreign Bank Supervision Enhancement Act, what we call FBSEA, 
which was and is a tremendous tool for the Federal regulatory 
agencies in this area. It did involve the dedication of a substantial 
amount of additional resources on the part of the Federal Reserve 
and other agencies to comply with the requirements of that act, 
and we have been supported in that by the Congress and I think 
that it is proving to be quite effective. 

I do agree with Mr. Morris that this is going to be an unending 
problem of trying to work smarter instead of simply harder in the 



22 

sense of pouring an enormous amount of resources into it. Obvi- 
ously, we would support any resources that are needed and the 
Congress has been very good about supporting that, as well. 

But I think it's primarily a matter of just keeping very good peo- 
ple involved and keeping our eye on the ball and trying to stay up 
with this evolving threat as it changes over time. 

Chairman Leach. Thank you, Mr. Kelley. Yes, Mr. Sims. 

Mr. Sims. Thank you, Mr. Chairman. I agree >vith what each of 
the panelists has said, because I think that there is a difference be- 
tween the idea of sort of throwing money or just simply increasing 
budgets as a way to address a problem and doing that sort of 
smartly, sort of targeting resources. 

The reason I raised the question with respect to the Department 
is that I think that there are links that sometimes are not drawn 
whftn we're looking at these problems, and we've talked about sort 
of compartmentalization. On the one hand, we have, at this hear- 
ing, a clear indication that we're facing a significant national secu- 
rity threat that we've got to respond to, and some of that is sort 
of things that we can do internally, unilaterally, and the govern- 
ment is committed and the Administration is committed to doing 
that. 

But there are also things that we need to do internationally, in- 
cluding being on the ground to be able to affect what happens over- 
seas. When those links aren't drawn, if we are then looking at the 
Department's resources — and, in fact, they are being rolled back, so 
the embassies are having more limited operations, consulates are 
closing and the like. That's where I see the need to consider this 
holistically, because we're facing a serious national security 
problem. 

I can give you a real small example of that. I note that Mr. Mor- 
ris is familiar with the situation in the Seychelles. We learned 
some months ago that the Seychelles — as a very small example — 
the Seychelles has passed a law that for a $10 million investment, 
you are given essentially immunity from prosecution for anything 
but a drug crime or a violent crime committed in the Seychelles. 
We were extraordinarily concerned about that, even with a small 
country. It's an extremely bad precedent. 

We talked to our Africa Bureau. We wanted to impact and get 
that turned around and found out the embassy is closing there. 
Within weeks of our attempt to get in to have this discussion, the 
embassy was closing. There was very limited assistance by the 
United States. In fact, I think there was a tracking station, a mili- 
tary operation that was also closing. 

So in essence, as we were trying to get in to sort of stop what 
we viewed as a very serious, thougri small, in the larger scheme of 
things, development, we, in fact, find our resources are going the 
opposite direction. That's what I mean by trying to draw these link- 
ages. If we want to be able to impact the situation on the ground 
overseas, we've got to be there. 

Chairman Leach, Thank you very much, Mr. Sims. Mr. Vento. 

Mr. Vento. Thank you, Mr. Chairman. It doesn't sound like put- 
ting the Marines in charge is going to work, as some have advo- 
cated. Mr. Chairman, I think that very often this testimony evolves 
into the sort of cash transaction or illegal laundering, but I think 



23 

that's a very serious problem, but I think that the issue here, from 
our standpoint, is really that it's being facilitated now on an elec- 
tronic basis and the ability to invade the system. 

Part of this leads to the question that you were pointing out, I 
don't know how closely I was listening, Mr. Chairman, but — and I 
think Mr. Morris was pointing to this — that this can really undo 
the free enterprise or the ability of a nation to move into a more 
democratic or free market type of economy, as we see in central Eu- 
rope and in other places, and, in fact, of course, it's not unknown. 

You really wonder, if you list a country like India or Colombia, 
what the effect would be in terms of the entire ability of that econ- 
omy to function in the context of the type of financial transactions 
that take place between it and other nations, whether it's Britain 
or Prance or the United States. 

I would like to yield to Mr. Bentsen, because he has to go, Mr. 
Chairman, on my time. 

Mr. Bentsen. I thank the gentleman for yielding and I'll just 
take a second. First, I do have to leave to go to a meeting with a 
major institution from Houston, but I wanted to welcome Governor 
Kelley, who is a fellow Houstonian. Actually, I grew up with his 
kids some time ago. I had an economics professor in graduate 
school who said that he held the best job— this was a strict 
monetarist, who said all you had to do was go in in the morning, 
check the money supply, and play tennis the rest of the day. But 
I know Mr. Kelley does a lot more than that. 

I do have two questions, for the record, for Mr. Kelley and for 
the others. 

Chairman Leach, Excuse me, if the gentleman will yield. 

Mr. Bentsen. I will yield to the chairman. 

Chairman Leach. He must also, on a regular basis, see if the 
gold is at Fort Knox. 

Mr. Bentsen. I stand corrected by the chairman on that. The 
first is there are — ^it's my understanding there are six or seven 
Russian banking companies that are of some stature that have 
come about that are — and some that should make it over time, and 
they are having difficulty in establishing agencies in the United 
States. 

And I would just ask, for the record, because I am going to have 
to leave, whether or not there is a problem related to the fraud and 
criminal activity that is a result of their problems or if there are 
other issues. I'd just appreciate that, if you could get back to me 
and also for the record. 

[Governor Kelley subsequently submitted the following informa- 
tion for the record:] 

Applications are currently pending from Promstroybank of Russia, Imkombank 
Bank, and Rossiyskiy Kredit Bank. All are seeking to establish representative of- 
fices in New York. The applications must be evaluated under the standards set forth 
in the Foreign Bank Supervision Enhancement Act [FBSEA], including the extent 
to which the applicant foreign bank is subject to comprehensive consolidated super- 
vision, the financial and managerial resources of the applicant, and whether the ap- 
plicant has provided the Board with adequate assurances that it will have access 
to information necessary to determine and enforce compliance with U.S. law. Fed- 
eraJ Reserve staff are in the process of completing the records on these applications. 
At that point, the Board will decide whether the standards for opening representa- 
tive offices in the United States have been met as specified in the FBSEA. 



24 

Mr. Bentsen. The second question relates to legislation that this 
committee adopted earlier this year, and that has to do with the 
regulatory reform legislation and changing the structure of the 
audit committee for boards of bank companies. Current law, as I 
understand it, requires that audit committees must retain a major- 
ity — the majority of the committee must be outside directors. The 
legislation that this committee adopted would repeal that and 
allow insiders to control the majority of the audit committee. 

I'm just interested, again, for the record, in your comments on 
whether or not you see this as opening another avenue where in- 
siders could be compromised and problems could occur, criminal ac- 
tivity could occur as a result of that. 

I appreciate the gentleman yielding and I yield back my time. 

[Grovernor Kelley subsequently submitted for the record the Fed- 
eral Reserve Board's views of tne independent audit provisions of 
H.R. 1858, which amend section 36 of the Federal Deposit Insur- 
ance Act:] 

As drafted, H.R. 1858 exempts well-capitalized and well-managed institutions 
from all the requirements of section 36 except the requirement for an independent 
audit. The purpose of section 36 is to identify management problems before they 
harm the banks condition; an exemption is inconsistent with this purpose. In par- 
ticular, the requirement in section 36(gXl) of an independent audit committee is im- 
portant because such committees can play a pivotal role in corporate governance 
and provide an additional layer of protection against possible malfeasance. 

Mr. Vento. Thank you. I think that they will answer for the 
record, Mr. Chairman, and if there is time permitting, you might 
want to comment. But my question really related — or one of them 
was — the witness from the GAO, Ms. Hecker, you mentioned that 
there are 40 measures or recommendations by the Financial Action 
Task Force. Did you get any sense of how many of those had been 
implemented or what the status of some of those were? 

Ms. Hecker. The primary mechanism of the FATF to assess 
progress is the mutual evaluations. We didn't personally review 
them although we had reports that people were very satisfied with 
this process. Basically, these reports are not disclosed. They're kept 
private. So I can't accurately summarize their findings for you. 

Mr. Vento. Let me ask our witnesses if they can give us a sense 
of what the status is. I'm interested to know how many prosecu- 
tions you had internationally. Can you get into Buenos ^res if you 
have someone that is doing something or into St. Petersburg if 
somebody is doing this? Are they actually going to be prosecuted? 
Because if not, if there are going to be these delays, I mean, that 
is basically going to continue to foster the type of electronic funds 
transfer problem that really undermines the entire validity and re- 
liability of the financial institutions and our various relationships. 

Mr. Morris wants to answer. 

Mr. Morris. Yes. Let me at least try. First of all, it's important 
to recognize that money laundering itself was criminalized in the 
United States in 1986 and as the chairman pointed out in his open- 
ing remarks, the Congress has given us a number of new tools. 

When the Financial Action Task Force was created in 1990, we 
established 40 recommendations and then went through a process, 
which we call mutual evaluation, in which experts fi-om other coun- 
tries go in and assess the country's performance against those rec- 
ommendations. Great progfress has been made in all of the coun- 



25 

tries of the Financial Action Task Force in putting in place the 
laws and the mechanisms to deter and, if unsuccessful in deterring, 
to prosecute and convict money launderers. 

However, as the committee is all too aware, the laws in them- 
selves are not self-enforcing. New units have been established, 
much like FinCEN, which receive suspicious reports based on 
knowledge of customers in Holland, France, England, Belgium, Ar- 
gentina, and Australia. 

So they're beginning to have the mechanisms, as well, to take in- 
formation from the banks. The bank reporting is getting better. 
They're beginning to identify and make cases. The next phase-— 
we're doing two Uiings. One, which is an issue you brought up, is 
that we're now in the process of changing some of the initial 40 rec- 
ommendations, toughening them up, and, in one case, adding one 
that forces governments to look at new payment systems, new elec- 
tronic technologies that go into new payment systems, so that 
every country covered by the FATF will have to do an affirmative 
examination of the vulnerabilities there. 

We are also going through the mutual evaluation now. The first 
starts with France in a couple of weeks, and looking at not just the 
fact that the laws are in place, because they are in place, they can 
show those to you, now we need to look at whether or not, in fact, 
they're being carried out. That is, of course, the big question. 

But I think in fairness to the process, given the number of coun- 
tries and the different cultures and nature, we've made a lot of 
progress. 

Let me make just one other quick point here, because I think it's 
very important to note that in the world today, there is a different 
attitude about dirty money. I was in Russia for a week as a part 
of a Financial Task Force training program, along with colleagues 
from State, Justice, and the Federal Reserve, and we met with a 
lot of banks and people from the Central Bank and the Finance 
Ministry and all, and we raised the question that they should set 
up a system to report suspicious reports of illegal money coming 
into the bank. 

There was almost unanimous puzzlement as to why anybody 
would not take dirty money into the bank. That has changed. It 
has changed in Russia. It has clearly changed throughout the 
Americas. There is now an understanding that dirty money drives 
out clean money, that, as Mr. Wankel and Mr. Sims have said, that 
raises serious security concerns. 

So the international convention attitude, I think, has changed 
here significantly, as well. But, finally, the proof is in the pudding 
and we're examining now not just whether the laws are in place, 
but whether they are, in fact, being implemented. 

Mr. Vento. ^l^. Chairman, my time has expired, but I'd be most 
interested to know of our technical ability in the United States in 
terms of providing the types of software programs and checks to try 
to keep up with or keep ahead of those that are trying to break the 
system down. I think tiiat is where we need to go to ensure the re- 
liability and the integrity of the electronic funds transfer system. 

Obviously, the whole focus seems to me to be on a laundering of 
money that comes from illicit activities, but the concern here is 
who is getting debited and who is getting credited. An electronic 



26 

system is paperless. And while the issue in terms of illegal trans- 
actions is important, I think the other — Mr. Kelley commented on 
the amount of credit card fraud. I'd be interested in knowing on — 
we could never get an answer on the electronic funds transfer 
fraud or what the problem was. 

What are the changes for consumers? What do we have to do? 
How can we stop that particular system, besides just saying we're 
going to give you all the liability and walk away from it. Thank 
you, Mr. Chairman. 

Chairman Leach. Thank you very much, Mr. Vento. Mr. McCol- 
lum. 

Mr. McCOLLUM. Thank you, Mr. Chairman. Mr. Kelley, the Jan- 
uary 22 issue of the New York magazine carries a very provocative 
story, "The Money Plane." It says that every day, the Russian mob 
gets a shipment of up to a billion dollars in fresh $100 bills. The 
money, flown out of JFK, comes straight from the U.S. Federal 
Reserve. 

Now, inside, they are a little more explicit and talk about a bank 
in New York, called Republic National Bank of New York, and 
$100 million that they have documented leaving a particular time 
of day and going to Russia and so on and so forth. 

What I'm curious about is — I'm sure you are aware of this article. 
To what degree is this article accurate? Is what is being done in 
any way against the law? If you've looked into that. What authority 
do you have, does the Federal Reserve have to stop anything that 
may be improper that is reflected in the passage of this kind of 
money? I don't doubt some of it must be going to the mob, but I've 
heard that story from other sources, not this particular one. 

What can you tell me about, using this at least as a jumping off 
point, what's going on at the Fed in terms of this issue? 

Mr. Kelley. I'd be happy to, sir. Using that article as a jumping 
off point, let me give you a general configuration of how this entire 
business works. There is, of course, a demand around the world for 
U.S. currency and that demand is particularly strong in those na- 
tions where the population has had problems in the past with their 
currency, or perhaps with hyperinflation and so forth, and they see 
the dollar as a haven of value. 

The Federal Reserve meets the demand for currency, both do- 
mestically and overseas, by selling currency to U.S. chartered 
banks, who, in turn, resell it and put it out into circulation. That 
happens routinely through every bank in the United States domes- 
tically. There are relatively few banks, and the one that you men- 
tioned is probably the major single one, who are in the business of 
meeting the demand for U.S. currency overseas. 

Now, Russia is one of the very largest areas where there is a de- 
mand for U.S. currency and there isn't any doubt but that a certain 
amount, and I don't know how much, of that currency does indeed 
go to illicit activity. 

But to put it in context, this is a very large and rapidly expand- 
ing economy and there is an enormous amount of perfectly legiti- 
mate activity that goes on there, certainly including many U.S. 
firms who are doing perfectly legitimate things to help develop that 
economy. 



27 

Also, the dollar is the medium of choice for savings of the aver- 
age Russian household. It's been estimated that up to 70 percent 
of urban households and 40 percent of rural households in Russia 
own some dollars which constitute their family savings, and they 
keep them buried in the backyard against a rainy day. So there is 
a tremendous amount of legitimate activity that requires dollars 
and there is a tremendous amount of savings by the average Rus- 
sian family of American dollars. 

Now, the Russian banking system is a brand new system. They 
had to start from scratch. When the cold war ended, they did not 
have a banking system that was at all suitable to operate in a free 
enterprise or market economy. And there are a lot of good people 
who are working very hard to try to establish a good, sound, legiti- 
mate banking system in Russia. 

Mr. McCoLLUM. I know you want to answer further and I don't 
want to cut you off, but before the yellow light goes off, I want to 
make sure one other point is answered as you're getting into Rus- 
sia right now. To what degree does the Fed have knowledge of 
crime infiltration, organized crime infiltration in the Russian bank- 
ing system? I know I've heard from the FBI concerns they have 
over this issue and I'd like to know, as you describe and finish your 
comments here, what you know about it. 

To what degree are these banks corrupt and do you have powers 
sufficient to deal with the degree of corruption that may come back 
our way fV-om that source? Please, but I just wanted to be sure I 
got that in, if you can answer. 

Mr. Kelley. Yes. If criminal activity comes back our way and is 
reintroduced in some manner or an attempt is made to reintroduce 
it into the U.S. banking system, then we do have a great deal of 
power and a great deal of infrastructure in place to deal with that. 

We certainty do not have the capability of involving ourselves in 
the internal affairs of the nation of Russia. 

Mr. McCoLLUM. But what do you know about that? 

Mr. Kelley. Not a great deaf as to what happens specifically in 
Russia. United States banks sell a relatively small number of Rus- 
sian banks American currency. There are on the order of about 
2,000 commercial banks in Russia now, of which about 800, as I 
understand it, are authorized to engage in foreign exchange type 
activities. 

The bank that you mentioned sells currency to a very small sub- 
set of that and they represent that that's a very carefully selected 
subset. We and the other Federal regulatory agencies supervise 
American banks and they are held to very nigh standards when 
they operate overseas and they are examined against those stand- 
ards. 

We are not the examiner for Republic Bank specifically, but I'm 
very sure that their activities are carefully scrutinized and held to 
the highest standards. But they, I am sure, in turn, are limited in 
their ability to influence what goes on with U.S. dollars after they 
have sold them to their legitimate customers in Russia. 

Chairman Leach. Thank you, Mr. McCollum. Ms. Roybal-Allard. 

Ms. Roybai^Allard. Thank you, Mr. Chairman. It is my under- 
standing that the anti-money-laundering regulations currently 
apply primarily to banks and that many countries have not estab- 



28 

lished similar guidelines for non-bank financial institutions, even 
though there seems to be a growing problem in that area. 

How effective are the current anti-laundering regulations on non- 
bank entities which are involved in financial services and what is 
being done to strengthen the weak links among these non-bank fi- 
nancial institutions? 

Mr. Morris. You're quite correct that our regulatory scheme, 
particularly at the Federal level, is much more effective as it re- 
lates to depository institutions where we have supervisory over- 
sight from the Federal Reserve and the OCC and the FDIC and the 
OTS. 

As it relates to non-bank financial institutions, we, in the United 
States, and this is a problem elsewhere in the world, do not have 
the same effective regulatory oversight. The Congress has given us 
authority to place those entities within the eambit of the same 
kinds of*^ rules. It is important to note, as we define them, right at 
the beginning, however, that that is quite a challenge. 

I got back late last night from Las Vegas, where we're dealing 
with the casino industry and trying to establish anti-money laun- 
dering mechanisms there, which has a fairly mature casino busi- 
ness. Obviously, the kind of regulatory scheme you put in for casi- 
nos is different than you would put into, say, for broker-dealers, 
who we had a meeting with a couple of weeks ago, trying to design 
a suspicion reporting system and a "Know Your Customer" policy 
related to that. That is different, again, when you deal with check 
cashers or money transmitters. 

What we're trying to do is focus on the places where they seem 
to be the most significant. I know the chairman has spent some 
time in another context here dealing with the issues of insurance. 
We hear from some of our colleagues in Europe, in the United 
Kingdom and in France, that they see insurance being increasingly 
used as a device to essentially camouflage the source of illegal 
money. We, of course, have no Federal regulatory mechanisms to 
deal in that area and we are looking very closely at what they're 
doing. 

DEA and Customs have made major cases against currency ex- 
change houses. There have been currency exchange houses along 
the border that have been used for money laundering. 

This is a very difficult area. One requirement under the Money 
Laundering Suppression Act is to set up a registration just to iden- 
tify them and then begin to, in various categories, deal with them. 
The more effective we get with banking, we push the problem into 
new forms of technology and it's something we need to pay more 
attention to. 

Ms. Roybal-Allard. My second and last question is that the 
U.S. Government has been working to establish alliances with the 
private sector experts in order to share information, because it's so 
difficult to keep up with all the changes. Have the alliances be- 
tween the private sector experts on financial crime and the Federal 
regulators been effective in helping regulators and enforcement of- 
ficials keep up with this constant technological change? 

Mr. Morris. I will make a quick comment. We created, some 
years ago, what we call the Bank Secrecy Act Advisory Group and 
it's made up of both non-bank financial institutions, representa- 



29 

tives of the casino industry, and then large representation from 
banking, both the large banks, Citibank, Bank of America, as well 
as smaller community banks. 

It has been the single wisest thing that we have done. It is clear 
that if we do not have, in the money laundering area, an effective 
partnership and that they understand what we're doing and that 
our regulations are sensible, we are going to fail. They really know 
the money business better than any of us in the Federal Govern- 
ment. 

As good citizens and with effective oversight from the regulators, 
I think we've made very good progress. The whole suspicious re- 
porting system that I mentioned in my opening remarks and also 
that Mr. Kelley mentioned, will not work unless the banks know 
what it is we're looking for. Our colleagues at the Secret Service 
and FBI and the like are building those kinds of relationships, as 
well. 

Mr. Kelley. Let me make three points as it would regard the 
banking system. First of all, we are working very hard to improve 
and expand and strengthen this basic approacn of "Know Your 
Customer," and that is the heart of the matter. 

Second, in the area of the ever-more sophisticated electronic 
means that are available to move money, the private sector, who 
is at risk, is spending an enormous amount of attention and re- 
sources on countermeasures to make sure that their internal sys- 
tems cannot be breached. This is going to be a job that is going to 
go on forever, because there are very, very clever criminals out 
there and they, I'm sure, will always be able to come up with new 
schemes. We're just going to have to try to stay ahead of it. 

Which leads me to the last point. I think, as Mr, Morris suggests, 
that one of the most important relatively new developments in this 
whole field has been the establishment and evolution of informa- 
tion sharing networks among government agencies and private sec- 
tor participants, which shares information very efficiently and in 
great detail. 

So when some new scheme shows up, information about that is 
very rapidly and very effectively disseminated and counter- 
measures can be very quickly put into place. I think that has been 
very effective, as well. 

Ms. Roybal-Allard. Thank you. 

Chairman Leach. Thank you, Ms. Roybal-Allard. Mr. Campbell, 
welcome. 

Mr. Campbell. Thank you, Mr. Chairman. It's a pleasure to be 
on the committee and to call you Mr. Chairman. I have two ques- 
tions, but I'll preface it by a comment of welcome to my good 
friend, Stan Morris, with whom I had the honor to serve in the 
Justice Department and note to the chairman and my colleagues 
what a distinguished public servant he is in many different 
capacities. 

The questions I have are two, first to Governor Kelley and then 
to Mr. Sims. So I'll state them both and then the time is yours to 
divide. They are on different subjects. For Governor Kelley, I rep- 
resent a Silicon Valley high tech area and indeed the headquarters 
of Internet and we're very interested in the cyber banks and a nee- 



30 

essary component of any effective cyber bank is the electronic sig- 
nature, the uncounterfeitable, hopefully, electronic signature. 

I'm interested in what guidelines, if any, the Federal Reserve 
has — and this is an information question. It's been 3 years since 
I've been in Congress and I don't know what the answer is. So it's 
not as though I'm setting something up. 

And to Mr. Sims, the question is I grant your point and I wonder 
if the Secretary of State would support an earmark for law enforce- 
ment functions in the foreign ops budget. I sit on the International 
Relations Committee and that would be one way of addressing the 
problem. Traditionally, the Secretary has opposed an earmark and 
I wonder if you might enlighten me on that. Grovernor Kelley. 

Mr. Kelley. Shall I start? The entire area of electronic money 
is developing very rapidly. There are a very wide variety of dif- 
ferent schemes, if you will, as to how to get this thing ^oing and 
how to establish new payment systems and so forth. It is, as yet, 
so much in its infancy and so much in flux that it's very difficult 
to tell what the configuration of this new industry, new system or 
g^oup of systems is going to really look like. 

We don't understand the configuration of how they work because 
none of them are really in place and functioning yet on an oper- 
ational standpoint. It's also very difficult to tell what the mag- 
nitude of the funds that will move over these systems will turn out 
to be and it's very difficult to make an estimate of how rapidly the 
growth is going to occur. 

So we are studying this whole matter very intensively. We are 
extremely interested in it. But we still are very much in the begin- 
ning phases of understanding it because the whole new notion of 
electronic value, electronic stored money and so forth is still so new 
and untried. So we're not very far down the road either in the de- 
velopment of that business or in the identification of what would 
be appropriate regulatory responses to it. 

Mr. Campbell. I'd simply then draw your attention to the fact 
that each State is developing such protocols on its own. I was a 
State Senator just a few months ago and we passed such a provi- 
sion in the State of California. It would be wise to integrate and 
make uniform what those standards may be. 

Mr. Sims. 

Mr. Morris. Could I just add one quick point, Congressman 
Campbell? 

Mr. Campbell. Sure. 

Mr. Morris. I should have mentioned it in my opening remarks. 
I'm sure, in the not too distant future. Gene Ludwig, of the Office 
of the Comptroller of the Currency, has been directed by Secretary 
Rubin to undertake a study just like that. A number of major pa- 
pers are being developed, because, you are quite correct, that this 
is moving with great rapidity in a number of different areas, some 
in terms of even where the government is moving to use these serv- 
ices. Others, those in law enforcement, are concerned about the an- 
onymity that exists there. But, anyway, the Administration is look- 
ing at that very broadly. 

Mr. Campbell. Thank you, Stan. Mr. Sims. 

Mr. Sims. Thank you, Mr. Campbell. Earmarks generally, we 
have opposed those as a matter of policy, and I can give you a cou- 



31 

pie of reasons for that. When I talk about the necessary embassy 
ftinctions and the support for law enforcement, that's got to be kept 
in a broad context. We have a number of important mnctions that 
an embassy overseas has to maintain, important economic inter- 
ests, other security interests, and a variety of those. 

WTiat's happening is that as resources generally decrease, and I 
see this from my perspective and the reason I raise this question 
is I see Chiefs of Mission, in determining whether to add additional 
law enforcement positions, faced with the prospect that they may 
not be able to do that strictly for cost or space limitations or that 
by adding additional law enforcement slots, some other very impor- 
tant function ends up being reduced. 

In that kind of environment, an earmark just for law enforce- 
ment specifically is difficult. The State Department is not a law en- 
forcement agency. What I'm talking about is considering the links 
between what we're trying to do in the law enforcement area and 
especially dealing with a problem like organized crime, drawing 
those links in determining overall resources for our missions over- 
seas, because that's where I see the problem. 

I testified yesterday at the subcommittee hearing on agency 
staffing and related issues in the counterfeiting area and there you 
see the problem crystal clear, the budget given to Secret Service for 
additional posts. They make recommendations. Chiefs of Mission 
are then faced with "I have nowhere to put this person" or "I can't 
pay the associated costs of housing, basic functions." Therefore, 
even apart from the substance, it still can't be done, and that's 
what I'm talking about, being able to draw those links. In that en- 
vironment, an earmark doesn t necessarily help. 

Mr. Campbell. Thank you. Thank you, Mr. Chairman. 

Chairman Leach. Thank you, Mr. Campbell. Ms. Velazquez. 

Ms. Velazquez. Thank you, Mr. Chairman. I want to thank you, 
Mr. Chairman, for holding this hearing on an issue that is not only 
timely, but also of great importance to my district — organized 
crimes' infiltration of the international monetary system. 

Mr. Chairman, this situation has escalated to such a degree that 
today, in an area in my district, in Queens, there are over 300 
money transferring systems operating in an area as small as two 
blocks. Many are good, hard-working businesses. Unfortunately, 
some are used as money laundering firms. 

I also want to take this opportunity to thank Chairman Leach for 
inviting someone with a front-line view of these problems, the Dis- 
trict Attorney from Queens, New York, Richard Brown. 

Mr. Morris, you mentioned before that you have jurisdiction over 
money transferring. I just would like for you to tell me when you 
will be addressing the issue of money transferring services. 

Mr. Morris, There are several different aspects, Congress- 
woman, that we need to deal with. First of all, of course, our inves- 
tigative agencies are making major cases. There are obligations 
and responsibilities in these organizations at present to report 
large amounts of cash and when they fail to do so, it's a crime and, 
in fact, they are prosecuted for that. So there are obligations at 
present for these organizations. So it's not that there is no system. 

We must rely, fi-om a regulatory standpoint, on the Internal Rev- 
enue Service's Examination Division, who does the actual super- 



32 

vision of money transmitters and other nonbanks. There are some 
quarter of a milHon such organizations. So, clearly, this is a re- 
source matter and one step that we must take is, in fact, move to 
register them, require registration, and then begin setting some 
standards. We are, at present, relying on the IRS to do that. 

I know in the State of New York there are requirements for reg- 
istration within the New York Banking Department, but those are 
ignored as much as they are followed. So we will try to have a defi- 
nition in place first, which is not a small problem in terms of who 
is covered, and a registration system before the end of the year. 

Ms. Velazquez. Before the end of the year. I was wondering if 
you could discuss how you would be approaching this and specifi- 
cally how you will balance the need to properly restrict illegal 
money laundering without imfairly penalizing the honest business- 
man. 

Mr. Morris. This is, of course, very difficult in this area because 
we have no Federal regulatory oversight and we have very little 
history in dealing with them. As I mentioned, this includes casinos, 
it includes broker-dealers, it includes money transmitters. And you 
are quite correct that some 20 percent or so of American citizens 
are non-banked; that is, they don't have a checking or an account 
relationship with a depository institution, and their needs are very 
important and they are served by many of these organizations. 

We have very close relations with the Check Cashing Association 
and the Money Transmitters Association. They are members of our 
advisory group and we are working with them to ensure that the 
legitimate functions are done. They are very much concerned, as 
well, that the business is not tainted by this and we're trying to 
work with the honest businessmen in a partnership that will bring 
out those who want to abuse these services. 

Ms. Velazquez. What can be done to enhance the tools of law 
enforcement authorities for the investigation of illegal funds? 

Mr. Morris. On that, I will defer to a law enforcement agency 
here. 

Ms. Velazquez. Mr. Sims. 

Mr. Morris. Mr. Wankel. 

Mr. Wankel. Thank you very much, Mr. Morris. As we come 
across money laundering or people and institutions and these 
money transfer centers, as you refer to, during the course of our 
investigations of major organizations, then we do carry forward our 
investigations to target those individuals that do this. We have no 
mechanism or means of pfoin^ out and regulating or ascertaining 
which of those are in violation. We have to work in the other 
direction. 

We take on the major organizations and as we come to those cen- 
ters, then we do follow through in that investigation. 

Ms. Velazquez. I don't know who could answer this, maybe Mr. 
Morris, but in light of the fiscal constraints that we are facing in 
this Nation, the search for illicit funds is draining the law enforce- 
ment system. What measures can be taken to more effectively mon- 
itor the legal flow of money? 

Mr. Morris. One aspect that becomes very important here is 
that while technology is a risk and the criminal element can use 
it, so can law enforcement. We are trying to apply new software, 



33 

new artificial intelligence systems against various databases so 
that we can basically set our priorities smarter, and I think that's 
probably as important as anything else. 

One step that we are taking is trying to reduce the paperwork 
that's generated by the existent system so that we can focus our 
resources better. Then I think we need to make sure that there is, 
as I think Governor Kelley said, a very clear coordination with all 
of the players, because money laundering, as a crime, doesn't fit 
easily anywhere. All of us have to work together. 

Ms. Velazquez. What type of oversight do you have to detect il- 
legal transactions at the local establishments? 

Mr. Morris. The primary oversight from a civil regulatory stand- 
point is with the Internal Revenue Service Examination Division. 
They devote some 600 to 700 work years to that area. Yesterday, 
in the meetings we had in Nevada, looking at the casino industry, 
which is a somewhat different area, the acting head of Exam was 
there, as well, so they are very important. 

But on the other hand, we have to recognize that the IRS is hav- 
ing serious budget problems. 600 work years appHed to a quarter 
of a million such organizations is a difficult problem for them. 

Ms. Velazquez. What about non-banks? 

Mr. Morris. That's what I mean, that's non-banks. 

Ms. Velazquez. Thank you, Mr. Chairman. 

Chairman Leach. Thank you, Ms. Velazquez. Mr. Royce. 

Mr. Royce. Thank you, Mr. Chairman. Governor Kelley made 
the point that part of the answer is to know your customer. Won- 
dering about money laundering, my colleague from Florida asked 
about the $100 bills, a billion dollars of which is moved per day 
into Russia, and part of the response was that we do not know a 
great deal about what happens in there. 

Well, what we do know is that we have been told repeatedly that 
many former KGB are now involved in either security for Russian 
financial institutions or are directly running the operation of many 
Russian banks. I should ask Mr. Sims of the State Department. 
What has the State Department seen as the extent and nature of 
the former KGB's involvement in Russian banking, the mafia's in- 
volvement there, as a result, and in business and commerce, and 
does the former KGB use these ties to Russian businesses as cover 
for intelligence activity? 

I'd like to make the point that this country's taxpayers send lit- 
erally billions of dollars each year in assistance to Russia and I do 
not know what guarantees the State Department has that this 
money is actually affecting real reforms in Russia and not being 
laundered into private slush funds or accounts set up to enrich cur- 
rent or retired intelligence officers. 

For example, former CIA employee Aldrich Ames received his 
last cash payment of $130,000 from the Russian External Intel- 
ligence Service in new $100 bills and his control officer said the 
money came from U.S. -backed international monetary fund loans 
and other western aid. 

So we don't know our customer that well in this circumstance. 
So if you could respond. 

Mr. Sims. Mr. Royce, this will be an incomplete response and I 
don't want to be incomplete. 



34 

Mr. ROYCE. Sure. 

[The followdng information was subsequently submitted by Mr. 
Sims.] 

I would respectfully refer the committee to the intelligence community for infor- 
mation pertaining to involvement by officials of the former KGB in Russian bank- 
ing, business ana commerce and whether such involvement is used to advance 
criminal activities and enterprises. 

Mr. RoYCE. Then we can come back to that. Let me follow up 
with a second question, then. Last year's international computer 
hacker from St. Petersburg was able to breach Citicorp's computer 
cash management system and transfer approximately $10 million 
illegally. Vmat can you tell the committee about this case, if I could 
ask, and has anyone been convicted and have other less well 
known banks had similar problems and how secure are banks' elec- 
tronic cash management systems? How secure is the Fedwire in 
light of the fact that somehow, from St. Petersburg, there was a se- 
ries of transfers? 

And I think this is the first time, probably the first time that 
that security system has ever been breached. 

Mr. Kelley. Let me first make the point that that was not a 
breach of Fedwire. Fedwire transactions do not come from overseas, 
from other countries into the United States. That was a breach of 
Citicorp's own private system. 

As I understand it, it was done with the use of legitimate pass- 
words and identification systems that were valid and in place. And 
I do not know how that illicit access was generated. 

I do believe I'm correct, and Mr. Morris probably knows much 
more about this than I, but I do believe there have been convictions 
in that case. 

Mr. Morris. This was primarily a case of the Federal Bureau of 
Investigation, and I believe their representative in the next panel 
will give you more detail, more accurately than those here. 

Mr. RoYCE. Thank you, Mr. Chairman. 

Chairman Leach. Thank you, Mr. Royce. Mr. Hinchey. 

Mr. Hinchey. Thank you very much, Mr. Chairman. I just want 
to say that I think at this hearing, particularly following up on the 
one tnat was held yesterday by the subcommittee of your commit- 
tee which specifically focused on the problem of money laundering, 
gives this committee a very important opportunity to focus on a 
problem which is of growing significance and which indeed I think 
affects not just issues of criminal activity and our continuing efforts 
to deal with criminal activity, but also a matter of national 
security. 

It seems to me, also, that we are, at the moment, facing an ex- 
traordinary conflux of circumstances, including the continuing de- 
regulation of banking activities around the world, globalization of 
trade, accompanied by the increasing porosity of international bor- 
ders, and a number of other variables that, in fact, make it easier 
for criminals to function. 

We're creating an environment that facilitates the kind of activ- 
ity that you folks have to deal with on a day-to-day basis. I'm just 
wondering, in a very general way, what kind or comments you 
might have for us. I know that the chairman has introduced what 
looks to me to be a very important bill to try to tighten up on some 



35 

of the things that need to be done. But what, in addition to that, 
do you think that this committee ought to be doing? Where ought 
we be focusing our attention? What kinds of laws and regulations 
ought we to De paying attention to in light of these new cir- 
cumstances? I just make it in a general way to anyone who wants 
to respond. 

Mr. Kelley. I'm not sure that I would be able to make any help- 
ful, positive suggestions there, because I think this committee has 
been doing an excellent oversight job and staying on top of this 
emerging problem, as would be illustrated by these hearings that 
you're having right now. 

We have found that we get superb support from this committee 
and the Congress in the efforts that we are making and with the 
needs that we might have from time to time to enhance our ability 
to be effective in that area. So I think that I would express appre- 
ciation for the support in an absence of any very strong suggestions 
as to what further needs to be done by the committee. 

Mr. Morris. I agree with Mr, Kelley. I think the most important 
thing that the committee can do is what the committee is doing 
today. That is bringing attention to the subject with quite impres- 
sive representation by Members of Congress and the expression of 
interest and concern. That will help all of us. 

The other area, I think, is to recognize, just as you said, Con- 
^essman Hinchey, that the world is changing; the financial serv- 
ices world is changing, both in this country and around the world. 
It is very difficult to fall back into the old patterns of typical regu- 
lation. The questions made by Congresswoman Velazquez about 
non-bank financial institutions is a case in point — what a financial 
institution will really look like in the next century? The hearings 
that I know you've had and that you're planning in the future in 
the area of electronic pajrment systems and the like are critical to 
this process. 

Keeping attention on those subjects is probably the most impor- 
tant thing. I think in many cases, we don't know enough to write 
regulations or even, in some cases, even to try to write legislation, 
but we must keep our eye on the ball, because the world is chang- 
ing with extraordinary rapidity for all the issues that you raise in 
your statement. 

Mr. Hinchey. Ms. Hecker. 

Ms. Hecker. Yes. I have just a couple of observations. One, I 
think, is that there clearly are limits to the reach of U.S. law and 
regulation. Exclusively focusing on what you can regulate or what 
you could pass laws about shouldn't have you lose sight of the ben- 
efit of the international outreach and cooperation of the nature of 
the FATF. 

This cannot be solved without a global effort and requires a kind 
of outreach, where you can't regulate and you don't have reach to 
pass new laws. The kinds of questions being asked here today, 
though, about the adequacy of those efforts, the staffing of those ef- 
forts, the resources and authority of those agencies, and I would 
add another point that I raised in my remarks, the adequacy of the 
coordination and integration of some of those efforts. 

Mr. Wankel. Just to follow on to Ms. Hecker. You're absolutely 
right. You've captured it here, I think, Congressman Hinchey. 



36 

We're not going to be able to do it alone here and it's going to in- 
creasingly be — as I mentioned, our partners now, as in other coun- 
tries, even if they're not our partners now — ^is there has to be bet- 
ter and more international sharing. There has to be better and 
more international cooperative efforts. 

These investigations transcend one nation into another nation. 
They actually end up being multiple nations. I think that we need 
to continue the increased focus in the larger body of Congress here, 
the increased focus on international and transnational crime as a 
foreign policy consideration. That has to continue to be elevated 
and focused on. And other countries have to be more engaged in 
carrying this message. This cannot continue — not strictly this way, 
but it can't be seen as just a human cry from the U.S. Government. 
This impacts the world. This doesn't just impact us. 

We're the first to address it and speak to it, but others have to 
be brought into this battle, as well. 

Mr. Sims. I very much agree with what the rest of the panelists 
have said. For me, what hits home when we talk about new tech- 
nologies or the use of computer technology and the like is that the 
real change in law enforcement cooperation that is brought about 
by the ability of someone with a computer in one country going 
tnrough two or three countries' systems to take money from a bank 
in the United States. Traditionally, in terms of law enforcement co- 
operation and our basic means of being able to work with other 
agencies, that kind of very quick real-time need to be able to get 
to Germany, to know that Germany is linked with Switzerland and 
goes to the United Kingdom, is extremely difficult in our tradi- 
tional method of law enforcement cooperation. 

One of my frustrations as a prosecutor in money laundering 
cases was the extraordinary amount of time that it can sometimes 
take just to get financial records, just to figure out what happened. 
Sometimes we're talking about looking at transactions that are 2 
years old or 3 years old. You couldn't nave any prospective impact 
in the area because you were already behind the eight ball at the 
time you got documents. So that is just an extraordinary challenge, 
I think, for both the law enforcement and the diplomatic commu- 
nity in finding ways to increase cooperation in this changing envi- 
ronment. 

Mr. Henchey. Mr. Kelley, if I may, on that particular point, I 
would just be interested in what the Federal Reserve is doing spe- 
cifically in this regard. You mentioned throughout your testimony 
that you rely particularly upon the theory of knowing your cus- 
tomer, which, of course, is very important and always has been. 

But in these days when electronic transfers can be made so rap- 
idly and can be made, also, not just rapidly, but in very complex 
ways, it seems to me that it is increasingly difficult to know your 
customer, particularly when you're dealing with these international 
transactions. 

I'm wondering what we might be thinking about to try to pro- 
mote ways in which we can know our customer better, those cus- 
tomers that might be trying to put something over on us and are 
operating in the international arena. 

Mr. Kelley. To the extent that U.S. banks are involved in this 
process or could potentially be involved in this process, I think that 



37 

they are doing a better job all the time of learning how to be more 
effective in this area. I'm going to look forward lo learning more 
about what Ms. Hecker's study picked up as far as the European 
banks, because we're constantly trying to learn and to improve and 
I'm sure that there are ways that we can. 

I think that knowing your customer is still quite possible to do 
in the sense that when a relationship with a new customer is es- 
tablished, you can go through various procedures. It is more dif- 
ficult to monitor transactions which come across very rapidly and 
in huge numbers. But even there, there are new provisions that are 
going into place, as has been discussed here today, for record- 
keeping and enhanced ability to trace transactions ex-post. 

But very candidly, it is indeed a problem in the electronic age to 
be able to effectively monitor the enormous numbers of very, very 
rapid transactions that take place. 

Chairman Leach. Thank you, Mr. Hinchey. Mr. Watts. 

Mr. Watts. Thank you, Mr. Chairman. I have no questions. 

Chairman Leach. Mr. Jackson. 

Mr. Jackson. Thank you, Mr. Chairman. I appreciate the oppor- 
tunity to join you and the committee today as we attempt to shed 
light on tne activities of organized crime in our national and inter- 
national banking systems. I know that many of my constituents in 
the 2nd District of Illinois share my concern upon learning of the 
new ways that security of our financial institutions may be 
compromised. 

The threats to the integrity of both international and national 
banking systems certainly have local implications. This is an issue 
that will no doubt affect American families and consumers. 

I have listened closely for the safeguards which protect consum- 
ers in my district and across the Nation. I am particularly inter- 
ested in learning of the impact of computerization and the 
globalization of our Nation's banks. With transactions on the 
Internet becoming more commonplace, I believe this committee 
must most closely scrutinize developments affecting security of 
both consumers and financial institutions. 

Just as technological developments in telecommunications neces- 
sitated major legislation and legislative action to address those de- 
velopments, we must not allow technology and those who abuse it 
to out-pace our vigilance. 

My question really is an extension of what Mr. Hinchey just 
raised moments ago, and that is really how does the "Know Your 
Customer" approach address an environment which is approaching 
an era of less contact between financial institutions and customers, 
including PC-based banking. And I think we should take that ques- 
tion one step further by raising the issue that there is a broad- 
based industry in the financial industry that prides itself in not 
knowing the customer. These industries thrive in low income areas 
where banks do not do business or, in many instances, do not exist. 

I believe it was Mr. Morris, in his testimony, on page 11, where 
he said new cyber-payment systems are coming on-line, some de- 
signed by brilliant entrepreneurs who know technology, but do not 
even come from the financial world. So, obviously, could less rep- 
utable entrepreneurs. 



38 

I'd be interested in hearing from members of our panel today 
what recommendations they could make before this committee so 
that this Congress and the legislation that we would propose from 
this body would put law enforcement on the front side of avoiding 
money laundering not only locally and nationally, but internation- 
ally. 

Thank you very much, Mr. Chairman. 

Mr. Morris. Let me take a first cut at that. It's a very thought- 
ful question. There are two parts to the question, as I see it. The 
first is that we have to look at a financial institution's, whether it's 
banks or non-banks, relationship with its customers differently. We 
designed, 25 years ago, a reporting system for currency that is 
founded largely on a teller providing information to the government 
at the counter on transactions above $10,000. 

Tellers are probably the weakest link in a traditional bank. They 
change; they're hard to train; and, indeed, it's not clear that they 
really know their customer and know their customer's activity. It 
is very unlikely that most tellers could actually identify significant 
suspicious activity. That has to be done back in the central part, 
the back rooms of where the bank has to operate. 

Banks already have risk management systems and the like. I 
know the Bank of America and Citibank and some of the larger 
ones have developed software applications that begin to identify 
the transaction activities of their customers, unusual activity. What 
constitutes a usual transaction or cash activity in a McDonald's? 
And if you've got four or five of them that are doing $20,000 to 
$25,000 a week and you've one of them that's doing $150,000 a 
week, that's unusual and the government should probablv know 
that. We should work with the bank on that. But it has to be done 
in different kinds of ways. 

And the second part of your question is also true, and that is 
particularly in the areas where we have the unbanked and they 
rely on other usually non-regulated services. We have to build a 
regulatory scheme that recognizes their uniqueness, builds certain 
obligations on them, but also recognizes that they're not large de- 
pository institutions. One thing that we say time and time again 
in our regulatory efforts is one size does not fit all. The check 
casher, who also is a money transmitter, who is doing regular busi- 
ness, is an honest businessman, can't be dealt with in the same 
way as First Chicago Bank. 

Mr. Kelley. a point or two that I would add, Mr. Jackson. You 
are quite correct that as technology evolves, the difficulty of know- 
ing your customer is going to increase. But I don't believe that 
there is anything in that that really obviates the ability of banks 
to have a very good handle on who their customers are if they do 
appropriate diligence at the point of time where a relationship with 
a new customer is established. 

We encourage site visits, where that's appropriate; background 
checks, where that's appropriate. And I think particularly relevant 
to your question, we would like our banks to have an understand- 
ing of what type of transactions they should expect to occur from 
a new customer relationship. They will get an answer back that ei- 
ther makes sense and they'll proceed with it, or else there will be 



39 

something there that makes their nose twitch and they will not 
proceed with it. 

Then they should have and do have systems in place that would 
identify transactions that come across their books which are out- 
side of the expected type of transaction that a given customer is ex- 
pected to be involved in. And when that occurs, they are expected 
to investigate it and perhaps report it under the new reporting sys- 
tem that we've discussed a little earlier this morning. 

So the "Know Your Customer" policy will continue to work, even 
though the means by which it is operated are going to definitely 
have to evolve as these relationships evolve. 

Let me add one other point, and that is that the Federal Reserve 
is expanding its electronic format, whereby messages are trans- 
ferred from one financial institution to another, to be able to ac- 
commodate a much larger field of information on those wires as 
they move. This is going to enable us to follow transactions through 
as they go from institution to institution. 

There is a new rule being put into place by the Treasury which 
goes by the name of the Travel Rule, which is going to require that 
certain originating and ultimate destination information goes along 
with a fiinds transfer as it moves from institution to institution. So 
it will be much more difficult for a partv with some illicit objective 
to be able to move funds through and lose the identity of their 
origination along the way. I think that is going to be a big step up. 

Mr. Jackson. Thank you. 

Chairman Leach. Thank you very much. Chairman Gonzalez. 

Mr. Gonzalez. Thank you very much, Mr. Chairman. First, I ask 
unanimous consent that I would be permitted to offer some opening 
statements. 

Chairman Leach. Without objection. 

Mr. Gonzalez. I had one question for Mr. Sims. It's clear from 
today^s testimony that the problem of financial crime is, of course, 
international in scope. It is equally clear that to effectively combat 
international criminals government officials and law enforcement 
agents must work cooperatively with their foreign counterparts. 

With that in mind, I was disturbed to learn from the GAO report 
that many foreign countries still refuse to share information perti- 
nent to money laundering in investigations, despite international 
agreements. The question I have is that I understand that the 
State Department is now completing a 1996 assessment of world- 
wide money laundering. 

I'd like to know if you have detected an improvement in the will- 
ingness of countries to share information in accordance with their 
international agreements. Two, what has the State Department 
done to encourage these countries to live up to their agreements? 
Three, what is tne State Department doing to secure cooperation 
from countries that so far have not signed agreements with the 
United States? 

Mr. Sims. Thank you, Mr, Gonzalez. Let me take a cut at those 
questions. In fact, this relates to Mr. Morris' testimony, as well, 
and I'm sure he'll want to discuss these issues. 

In terms of overall cooperation, there are a couple of areas that 
are problematic for the Department and, I believe, for law enforce- 
ment agencies, as well. Many countries require dual criminality, for 



40 

example. The offense must be criminalized in both countries. Some 
countries require that even for the sharing of information. 

Where that is the case and a country has not criminalized money 
laundering generally or, say, that they've only criminalized narcot- 
ics-related money laundering, but not non-drug money laundering, 
that's a significant interference with the ability to cooperate. 

There are additional problems that are country-specific. We are 
trying to approach this problem in a wide variety of ways, because, 
a^ain, the differences among countries and the problems with indi- 
vidual countries differ quite tremendously. 

One way is the President's money laundering initiative to iden- 
tify the more egregious sanctuaries for laundered proceeds, to enter 
into specific negotiations with those countries to change that sta- 
tus. That's a process that Treasury is leading and I think is ex- 
tremely important, because we're confronted with a range of quite 
serious problems. We are also trying to do that on a bilateral basis 
as these issues come up. 

And as I said in my testimony, we are imdertaking a number of 
initiatives, some in the training area, for example, to increase our 
ability both to get effective partners overseas, but also to make op- 
portunities for our law enforcement officials and officials from other 
countries to work more cooperatively together. 

We have a number of international fora that we're working in to 
improve cooperation specifically in money laundering and financial 
crime, including our G-7 countries, discussions along with the Rus- 
sian Government; the Financial Action Task Force; the work in the 
Summit of the Americas and the like. So it's hard to specifically an- 
swer, because this is such a broad problem, but I think that's the 
range of approaches that we're taking. 

I think it is the case that — and I believe Stan mentioned this in 
his statement at one point. There has been what I think is a sea 
change in terms of the international view of this problem. It struck 
me during the President's speech at the U.N., where he made the 
problem of money laundering and international crime a significant 
portion of the speech, his concerns were echoed by the Secretary 
General of the U.N. and that was something that, in my experience 
both at the State Department and as an Assistant U.S. Attorney, 
you just did not — ^you didn't hear that talk, that sort of recognition 
that this is a true national security threat and it's not just a prob- 
lem for the United States. 

I think that offers some ray of hope that the international envi- 
ronment is changing significantly. So I'd have to say that there has 
been progress, but there are still obviously significant problems. 

Mr. Gonzalez. All and all, is there an improvement in the will- 
ingness of those governments in accordance with the international 
agreements? 

Mr. Sims. I think it is fair to say that there is a net improve- 
ment. However, as I said, there are such significant obstacles that 
it's hard to make that a blanket claim. 

Mr. Gonzalez. What can the State Department do in itself to en- 
courage these countries? 

Mr. Sims. Well, one thing we are attempting to do very aggres- 
sively is make this a priority for our foreign policy. Traditionally, 
the law enforcement component and law enforcement interests 



41 

were not considered. What we have tried very hard to do, and Sec- 
retary Christopher has really been a leader in this, is to make this 
an important element for our foreign policy. So that we're on the 
ground dealing with higher level officials, that they understand 
that this is a significant concern to the United States as a foreign 

Eolicy and national security issue and not just, as traditionally has 
een the case, that these law enforcement concerns were local cop 
issues and why should we be dealing on a government-to-govem- 
ment basis. Certainly, that was the attitude with some countries. 

So part of what we're trying to do is, both internally and in our 
dealings with foreign governments, to make it clear tnat that is a 
priority for the United States. I think that that has helped change 
or started to change this international environment. 

Mr. Gonzalez. Do you think that has helped to encourage these 
countries? 

Mr. Sims. That, plus the other range of initiatives. 

Mr. Gonzalez. They've entered into the agreements, have they 
not? 

Mr. Sims. Yes. There are several countries for which — I think 
that that is true, that we've had sort of problems with performance 
and previous commitments. There, as I said, we've got this range 
of responses that we're attempting to use. 

Mr. Gonzalez. What about those countries that have not signed 
agreements with the United States? 

Mr. Sims. There, as part of our overall initiative, the President's 
initiatives, we're targeting those coxmtries to do just that, to have 
very specific — where we find sort of egregious money laundering 
and specific kinds of problems with country performance. 

Once we have identified that range of countries, to open up a 
new round of negotiations to specifically do that. That's part of the 
initiative that Mr. Morris discussed and the Treasury is leading 
and we view that as critically important. 

Mr. Gonzalez. I believe some of the other questions I had have 
been anticipated. Thank you. 

Chairman Leach. Thank you. Mr. Flake, did you want to ask 
questions? 

Mr. Flake. No, Mr. Chairman. I merely ask unanimous consent 
to have my statement placed in the recora and since I was not here 
for the entire testimony, I will wait for the next panel. Thank you. 

Chairman Leach. Without objection, so ordered. 

[The prepared statement of Hon. Floyd H. Flake can be found on 
page 87 in the appendix.] 

Before dismissing the panel, I would like to ask just one ques- 
tic^n, because it relates to some legislative endeavors we're cur- 
rently contemplating. As you all know, Interpol resulted fi*om a 
1929, I believe, counterfeiting convention. As we look at the inter- 
national environment, is there a need for a new Interpol-like insti- 
tution in financial crime or a division within Interpol or a new 
international arrangement that goes beyond the current inter- 
national arrangements that exist? 

Have you given thought to that? I'd like particularly Mr. Morris 
and Mr. Wankel to address this. 

Mr. Morris. Yes, we have given some thought to this. If there 
was one point I was trying to make in my opening remarks, it was 



42 

that money laundering is very unique as an activity, at least in 
terms of how governments need to deal with it. It is not just an 
issue of law enforcement, as you can see by the panel here. 

The bank supervisors have major responsibilities, in many ways 
as important as anything that can be done on the law enforcement 
side. Clearly, law enforcement has a major role. It's also a part of 
the foreign affairs issue. This became crystal clear in Secretary 
Rubin's efforts in Buenos Aires at the Summit of the Americas 
Ministerial Conference. I remember sitting with him, initially brief- 
ing him, and some of his staff who were concerned that there was 
kind of a varied group of representatives of the respective nations. 
It wasn't the normal meeting of finance ministers that Secretaries 
of the Treasury are used to dealing with. The Attorney General has 
the same problem. 

You're dealing suddenly beyond the normal way that we conduct 
business. So it's not so easy to try to figure out a new convention 
to do that. The Financial Action Task Force comes as close as we 
have, because we have observers there from the United Nations, 
which plays a very significant role; from Interpol, as you point out, 
who just passed a resolution in Beijing in October on this subject; 
and from the World Customs Organization. 

The representatives of the countries come from the central banks 
or the finance ministries and, in some cases, it's the only time they 
really come together to discuss issues. We've been trying to move 
to create a regional financial action task force. We have established 
one in the Caribbean. We're about to establish one in Asia and 
we've had some discussions with the Consul of Europe to try to do 
the same thing in eastern Europe and the former Soviet Union. 

We have thought about a way of bringing what you're trying to 
accomplish, but this is more difficult because of the complexity of 
governmental entities that have to deal with it. If we come up with 
some order to do that, it's going to break down a lot of the existing 
barriers and that, I think, is much more difficult. But I think, 
clearly, the level of importance that this committee has evidenced 
both today and over the last few years, and Chairman Gonzalez be- 
fore you, suggests that we should try. 

I'm sure, that given the overview that GAO did and their effort, 
I would be surprised if they didn't feel the same way. 

Mr. Wankel. I agree completely with Mr. Morris. There is no 
doubt that we need to work hard as the U.S. Government with the 
various entities represented at this table, to increase the awareness 
and the cooperative efforts in the international arena. Whether or 
not establishing or proposing something along the lines of either 
Interpol on financial or a segment or something under Interpol, I 
don't know if that would become more a part of a problem as op- 
posed to part of the solution. I don't know, given some of the his- 
tory over there. 

But it is something that has to, I think, measure, evaluate and 
consider what the options are, but I don't really have a position 
myself as far as a recommendation right now. 

Chairman Leach. Mr. Kelley. 

Mr. Kelley. Mr. Chairman, to the extent that you're focusing on 
law and/or legal and criminal interrelationships directly, it is a lit- 



43 

tie bit beyond my portfolio and I'm not sure that I have anything 
constructive to add there. 

Insofar as central banks are concerned, I believe it has come out 
already this morning, that central banks are cooperating much 
more extensively in recent years and I think quite effectively. I 
would like to give some thought to and respond to you as it would 
relate to potential additional legislation that would help that proc- 
ess, but I am not immediately clear that we need any further legis- 
lative authority to be able to work more effectively with the central 
banks in our areas of responsibility. 

Chairman Leach. Good. Thank you. Well, I appreciate all of your 
comments. We are open to suggestions, informally as well as for- 
mally. So we hope we could have continued contact with each of 
your offices. Thank you very much. We'll take a 1-minute recess as 
the next panel comes up. 

[Recess.] 

Chairman Leach. I would like to make an announcement. They 
have placed a vote on the floor and I think it would be wise, given 
the timing of the vote, and my apologies to the panel, but that we 
would recess, pending the vote, probably until 1:00. So we'll begin 
precisely at 1:00. The committee is in recess. 

[Recess.] 

Chairman Leach. If the committee will reconvene. Our second 
panel will be of law enforcement and financial crimes experts. Our 
witnesses will be, from the Department of Justice, Mr. Mark Rich- 
ard, who is the Deputy Assistant Attorney General, and Mr. Rich- 
ard is on his way; from the Secret Service, Mr. Robert Rasor, who 
is Deputy Assistant Director, and, I might say, is particularly well- 
educated, having been a graduate of Iowa Wesleyan College, upon 
whose board I have served; from the Federal Bureau of Investiga- 
tion is Mr. Chuck Owens, who is a Section Chief in the Criminal 
Investigative Division of the Financial Crimes Section; and, our 
fourth witness is Mr. Richard A. Brown, who is with the U.S. Dis- 
trict Attorney's Office of Queens. You're welcome, Mr. Brown. 

Why don't we begin, then, in the order we have it, with the Se- 
cret Service, Mr. Rasor. 

STATEMENT OF ROBERT H. RASOR, DEPUTY ASSISTANT 
DIRECTOR, U.S. SECRET SERVICE 

Mr. Rasor. Mr. Chairman, thank you for the opportunity to ad- 
dress this committee on the threat posed by organized criminal 
groups to financial systems and, I might add, also, to commerce 
systems and countless individual victims, both in the United States 
and abroad. 

In your opening statement this morning, you made it clear that 
you and this committee have identified really the crime of the 
1990's and beyond, that being organized financial crimes. We are 
extremely pleased to be here because as an agency that is fiilly en- 
gaged in that fight, we think it's a great opportunity. 

I'm representing the U.S. Secret Service today in my capacity as 
Deputy Assistant Director for the Office of Investigations. I have 
with me today Mr. Michael Stenger, who is the agent in charge of 
our Financial Crimes Division; Rich Caruso and Craig Spraggins, 
who are also members of the Financial Crimes Division. 



44 

As you know, the U.S. Secret Service was originally established 
in 1865 solely to suppress counterfeit currency in the United 
States. Today, the Secret Service has investigative jurisdiction for 
a host of core financial crimes commonly used by organized groups 
to attack financial systems on a national and international scale. 

The U.S. Secret Service has seen an emergence of several major 
international organized criminal groups, systematically attacking 
the financial systems through financial institution fraud, counter- 
feiting of U.S. currency, credit card fraud, advanced fee fraud, com- 
puter fraud, and telecommunications fraud. All of those violations 
are investigative program areas within the U.S. Secret Service in 
which we have accumulated specific expertise and ongoing 
proactive initiatives. 

I have a formal statement that I would like to introduce for the 
record at this time and then I would like to go on and summarize 
some of those comments, particularly focusing today on identifica- 
tion of the groups, current trends of the groups, Secret Service 
response, and what we can do specifically about some of the 
problems. 

Chairman Leach. Without objection, your statement and the 
statement of all the witnesses will be placed in the record. 

Mr. Rasor. Thank you, Mr. Chairman. In identifying the groups, 
it almost comes to a situation where you're reminded of trying to 
thank everybody in an audience and not being sure that you have 
thanked everybody, but you try. With that in mind, I'll mention 
some of the groups that are more prolific and more problematic. 

At the onset, the Secret Service distinguishes between structured 
traditional organized crime, such as La Cosa Nostra, and what is 
now commonly referred to as organized criminal groups. These 
groups include Nigerian cells, Asian triads, Russian criminal net- 
works. Middle Eastern organized crime groups, and South Amer- 
ican cartels. 

Other domestic groups have been associated along philosophical 
lines, such as Posse Comitatus, the Aryan Nation and/or white su- 
premacist groups. Many of these groups do not follow prior pat- 
terns associated with organized crime in relation to structure. How- 
ever, these groups do support themselves internally through ethnic 
association, while externally creating enclaves for criminal oper- 
ations, both on a domestic and international scale. 

It is apparent to the Secret Service that traditional investigative 
techniques are difficult to use and there needs to be new ways to 
deal with the organized and diverse criminal elements. In the trend 
area, probably one of the most common trends that we've been able 
to notice is that these groups have become experts in their criminal 
fields. In short, they do their homework on the financial systems 
and identify weaknesses in systems that allow them fraudulent ac- 
cess to millions of dollars. 

The attacks and criminal successes of the organized groups are, 
more often than not, a result of careful planning, precise execution 
of the scheme, and ultimately taking advantage of financial sys- 
tems originally designed to be consumer or customer-friendly. That 
will be one of the weaknesses that I'm going to talk about and 
some of the things that we can probably do to strengthen our 
resolve. 



45 

Many people still believe that white collar crime is an end unto 
itself. We have noticed that one of the trends is that that's not nec- 
essarily true. What these g^roups are doing, they're committing fi- 
nancial crimes in order to support a criminal lifestyle. We have no- 
ticed a very close association between these types of crimes and 
violent activities, such as murder, drug trafficking, extortion, pur- 
chase and exchange of firearms and explosives, money laundering, 
alien smuggling, car theft, and prostitution, just to name a few. 

It must be understood that when we're talking about trends, al- 
though we may not specifically be talking about collapse of sys- 
tems, we are talking specifically about responsibility for systems al- 
lowing massive fraud and massive funneling of monies into the 
criminal environments of this country and countries around the 
world. 

I'd like to just make a couple of comments on the responses to 
the problems. The responses reminds me of another adage — there's 
just so many groups and so little time to discuss them. For this 
morning's presentation, I have chosen to talk about responses to 
two major areas of problems, that being in Nigerian organized 
criminal activity and Asian organized criminal activity, although 
there are many others and in my statement we have outlined 
those. 

The Secret Service took a proactive approach in 1984 to West Af- 
rican organized crime by establishing and maintaining task forces 
throughout the United States whose focus includes the investiga- 
tion of Nigerian perpetrated fraud. The Secret Service has task 
forces located in Boston, Newark, Baltimore, Washington, DC, At- 
lanta, Miami, Charlotte, Houston, Dallas, and Chicago. Members of 
these task forces include U.S. Customs, Immigration and Natu- 
ralization Service, U.S. Postal Inspectors, as well as members of 
local, county, and State police agencies. 

Currently, the most prolific fraud scheme being perpetrated by 
Nigerian organized criminal groups is what is known as "advanced 
fee fraud" or "419 fraud." The 419 nomenclature refers to a Nige- 
rian fraud statute that's used to make these activities illegal in Ni- 
geria. Nigerians purporting to be officials of their government, 
banking system or oil export^import companies have mailed or 
faxed letters to individuals and businesses alike in the United 
States and around the world, enticing citizens to partake in million 
dollar windfalls, if they would respond with personal identifiers, 
such as social security numbers, bank accounts, and phone num- 
bers. 

The individual becomes a victim when they fall for the scheme 
and wire transfer fees up front to pay for the bribes, taxes, and 
legal fees, which the Nigerians have said must be paid prior to the 
deal being consummated. 

I have brought today a number of examples of those, which I 
have sitting to my right, which we can discuss if you would have 
any questions relative to that. 

It has become so prolific that the U.S. Secret Service has insti- 
tuted an operation that tracks these letters and victims. There are 
currently over 20,000 entries in this database and indications that 
there are American citizens who have lost millions of dollars. 



46 

Americans have gone to Nigeria in hopes of recovering their money 
and have been found murdered after being reported missing. 

It is interesting to note that in that database, I just did a quick 
check before I came up here, and we have cases, referrals or prob- 
lems that touch every single member of this full committee. Each 
and every State has letters in that bin where their citizens are 
being attacked by this particular problem. So it's pretty large in 
scope. 

On the success side in the response, just as an example, two of 
our cases most recent in the Newark area ended up with arrests 
and losses detailing $5 million one case, $12 million on another 
case. I have highlighted in my testimony murdered American citi- 
zens. What we nave found is that this has turned to an ugly busi- 
ness. People from around the world are going to Nigeria and end 
up being murdered or missing. We saw that as a problem. So we 
created a pilot project in 1995, where we now periodically send 
agents to the U.S. Embassy in Lagos to assess the problem. 

While they were there last time, they assisted in taking out 
seven Americans who were there for the purpose of being enticed 
into the 419 schemes and were probably in harm's way. The Em- 
bassy reported that before we started that process, they were see- 
ing about 40 Americans a month coming into Lagos in search of an- 
swers to the question. That now has been reduced to somewhere 
around four per month. 

We're most proud probably on the proactive side of the interdic- 
tion that we've done in this process. We've probably saved 400 peo- 
ple that we know of from becoming further involved in these 
schemes or putting themselves in harm's wav. As recently as last 
night, I believe it was Houston, we took people basically off an air- 
plane thai, hsd already lost somewhere around $40,000, were ready 
to commit another $70,000 to the process, and, again, probably 
would have been in harm's way. 

In Asian organized crime, I've just put up two brief examples of 
what goes on relative to paper cases and plastic cases. One is called 
Operation Plastic Dragon. It's a case where Asian organized crime 
had successfully done about 65 million dollars' worth of damage 
through counterfeit credit cards. The other one is Paper Dragon, 
which is an ongoing case relative to the desktop publishing of coun- 
terfeit commercial and payroll checks around the United States. 
Losses in that case are somewhere around $20 to $25 million. 

In addition to that, we have an ongoing case in Santa Ana that's 
called Operation Repayment. Kind of an interesting concept. The 
losses in that case were somewhere around $40 million at the time 
of arrest and the banks and institutions involved believe those 
losses are going to soar to somewhere in the neighborhood of $100 
million. 

The basic scheme there was they repaid or prepaid existing cred- 
it card accounts with bad checks. The way the system was de- 
signed, the system would credit that amount before it made a de- 
termination that the check was bad. In the meantime, they paid 
true account holders up to a 50/50 split to then go do cash ad- 
vances on those cards. When it all folded in together, they all 
claimed bankruptcy. An interesting scheme. 



47 

That kind of highlights some of the trends, some of the activities 
of the Secret Service. I'd Hke to focus now on recommendations to 
the problem. The U.S. Secret Service believes the solution to the 
problem is found in one of the core responsibilities of the Depart- 
ment and the agency, and that is, in quotes, "protection of the U.S. 
economic and financial systems." 

The Secret Service believes that our law enforcement role must 
and does transcend normal reactive arrest and prosecution re- 
sponses. The proactive approach must be utilized to analyze defects 
and prevent attacks on financial systems. The U.S. Secret Service 
has testified before a number of committees during the last 2 years 
on the issues of financial and electronic crimes, counterfeiting of 
checks and currency, false identification, desktop publishing, and 
organized criminal activities in these areas. Our message remains 
the same. 

We must collectively look at the systems that are being attacked 
and fix the systems in order to diminish criminal activity. The Se- 
cret Service employs a very successful process of linking risk analy- 
sis with our criminal investigations to not only arrest the individ- 
uals, but to identify the weaknesses or the cause of the problem 
and then, through either regulatory review or through business 
partnerships with industry, go back and actually fix these systems 
so we don't have repetitive type violations. 

The Department of the Treasury promotes a concept of "Know 
Your Customer." We believe that concept, when applied correctly, 
is a tremendous deterrent to financial fraud schemes. The U.S. Se- 
cret Service, through previous testimony, has stated that biometric 
identification would be an even greater deterrent. It's important to 
not only know your customer. You need to know and protect your 
system. 

As most financial crimes and losses occur by criminals assuming 
false identities and penetrating accounts with stolen access codes, 
biometric identification would be a solution to the problem. I am 
pleased to report that the financial community and the Federal, 
State and local governments are beginning to adopt biometric iden- 
tification as a proactive solution to financial crimes and losses. 

Bottom-lining out my comments, I would say that you've heard 
testimony here this morning from the first panel relative to regu- 
latory discussions. A number of questions came up of what should 
we do about the problem. I would say this — these are smart crimes 
and we have to be smarter than the Dad guy. Really, we are smart- 
er. The representative group at this table today is clearly smarter 
than the bad guys. But collectively, what we have to do is focus our 
attention on how these crimes continue to occur and realize the se- 
riousness of the crime is in the ability of this money to then be 
rechanneled into the violent criminal element in society here in the 
United States and around the world. 

This is how the bad g^ys live. If we want to stop the bad guys, 
one of the quickest ways to do that is cut off their money supply. 
These things are not done as an end to themselves. They're done 
to proliferate a criminal lifestyle. 

Finally, we must understand that there is a responsibility, both 
in government and in industry, to appreciate that problem. It's not 
enough to say that these losses become insignificant in the overall 



48 

scope and magnitude of commerce. What has to be reahzed is that 
there is responsibility to make these changes, to stop this type of 
activity, to protect the individuals on the street and to stop the vio- 
lence that you see on television every night. That's how those 
things are accomplished. In short, we have to fix the system. 
Thank you very much. 

[The prepared statement of Mr. Robert H. Rasor can be found on 
page 163 in the appendix.] 

Chairman Leach. Thank you, Mr. Rasor. Before turning to Mr. 
Owens, I would like to recognize the distinguished lady from New 
York, Mrs. Maloney, who has a conflicting circumstance. 

Mrs. Maloney. Thank you, Mr. Chairman. I have an unavoid- 
able time conflict, but I would like to have the opportunity to pub- 
licly recognize and thank Mr. Brown, Queens' District Attorney, my 
own District Attorney, for cracking the credit card fraud ring oper- 
ating in New York City. I would like to request, Mr. Chairman, if 
we could put the indictment in the record and I just wanted to 
thank you for all that you have done. We are very proud of you in 
New York City and the Nation is, too. Thank you. Thank you, Mr. 
Chairman. 

Chairman Leach. Thank you, Mrs. Maloney. We appreciate it. 
And when you say he's your District Attorney, you're not saying it 
in the way that the cabinet is saying they have their own. 

Mrs. Maloney. Well, he represents me and he does a fine job. 

Chairman Leach. Yes, very well. 

Mrs. Maloney. And working on this particular problem that 
we're looking at today. 

Chairman Leach. Thank you. We will turn to Mr. Brown, but 
first, Mr. Owens. 

STATEMENT OF CHARLES H. OWENS, SECTION CHIEF, 
CRIMINAL INVESTIGATIVE DIVISION, FEDERAL BUREAU OF 
INVESTIGATION 

Mr. Owens. Thank you, Mr. Chairman. It's a pleasure to appear 
before this committee today as a representative of the FBI as you 
discuss emer^ng financial crimes and organized criminal groups. 

This committee is well aware of the extensive commitment of the 
FBI to the investigation of white collar crime, which is the FBI's 
largest criminal investigative program. At present, the FBI 
has over 22,500 active investigations in the white collar crime pro- 
gram, which is an extremely diverse program, addressing not only 
financial institution fraud and national and international fraudu- 
lent schemes, but health care fraud, governmental fraud, bank- 
ruptcy fraud, environmental crimes, computer crimes, and money 
laundering. 

Our current assessment of the financial institution crime prob- 
lem is that while the institutions were suffering from insider prob- 
lems in years past, the extent of outsider fraud has been rising in 
recent years. These outsider fi*auds, which are victimizing financial 
institutions as well as other businesses and individuals, include ne- 
gotiable instruments fi^aud, and credit card fraud. Money launder- 
ing is also of growing concern as criminals devise new and complex 
ways to disguise and make use of proceeds of criminal activity and 
computer crimes will challenge law enforcement for years to come. 



49 

Of particular interest to the FBI is the high incidence of orga- 
nized criminal groups perpetrating such crimes in the United 
States and from outside the United States. Numerous cases have 
been investigated by various FBI field offices in which counterfeit 
negotiable instruments, such as prime bank notes, certified money 
orders, and bonds, purportedly issued by foreign governments have 
been utilized. 

While the attempted use of counterfeit negotiate instruments in 
various fraud schemes has risen in recent years, many of these at- 
tempts, fortunately, result in minimal actual losses. WTien losses do 
arise, working with the U.S. Attorneys and other agencies, as ap- 
propriate, the FBI is aggressive in pursuing such matters. As an 
example, the FBI's New York Field Office has utilized various in- 
vestigative techniques in one operation, code named Prime Note, 
investigating multiple criminal groups, many with international 
connections involved in stolen and counterfeit negotiable instru- 
ments, bank fraud, credit card fraud, and money laundering. 

This operation has resulted in 79 arrests and 42 indictments, 
with $2 million recoveries and $6.75 million in losses prevented. In 
Operation DERAILED, in the northern district of Georgia, the FBI 
and IRS, along with other agencies and local police departments, 
investigated an organized group which had relocated to the Atlanta 
area from New Jersey and was involved in multiple types of finan- 
cial crimes. 

This group recruited bank employees and others to assist in ne- 
gotiation of counterfeit and stolen checks, credit card fraud, 
telemarketing fraud, insurance fraud, and other crimes. The total 
losses attributable to this group exceeds $10 million and to date 20 
individuals have been convicted. 

In view of the increasing incidents of international financial 
crimes, the FBI has taken steps to improve our ability to success- 
fully prosecute offenders. The key to success in combatting inter- 
national crimes is developing close working relationships with for- 
eign law enforcement. The FBI has recently added legal attaches 
in several foreign countries, including Russia, and has representa- 
tion in Beijing, China. 

By agreement between the governments of the United States and 
the United Kingdom, the first-of-its-kind joint investigative team, 
comprised of FBI agents and British police officers, has been estab- 
lished, working from the Miami FBI office, addressing financial 
crimes in the British dependent territories in the Caribbean. The 
FBI is also providing direct assistance to certain countries in finan- 
cial crimes investigations impacting multilaterally. 

One such matter we are conducting, as requested by the Depart- 
ment of State, is the investigation of a major bank failure in the 
new Latvian Republic. Just 1 week ago, the FBI coordinated strat- 
egy sessions held in Grermany with law enforcement from five coun- 
tries involved in this investigation. 

Computer crimes, principally threats to the national information 
infrastructure, are a high priority of the FBI. We have established 
dedicated regional computer crime squads in Washington, DC, San 
Francisco and New York, and the Director has recently approved 
the establishment of the Computer Investigation and Threat As- 



50 

sessment Center to coordinate computer crimes investigations, in- 
cluding those which impact national security. 

I also noted in the earlier testimony that Congressman Royce 
asked about the Citibank case and while I didn't have it in my ini- 
tial remarks, I can certainly respond to that, if you wish. 

But let me close by saying that the FBI's efforts to combat 
emerging financial crimes inside the United States and outside its 
borders are extensive. I look forward to responding to any ques- 
tions that you have. 

[The prepared statement of Mr, Charles H. Owens can be found 
on page 179 in the appendix.] 

Chairman Leach. Thank you, Mr. Owens. Mr. Brown. 

STATEMENT OF RICHARD A. BROWN, DISTRICT ATTORNEY, 
QUEENS COUNTY, NEW YORK 

Mr. Brown. Thank you, Mr. Chairman. I thank you and your 
distinguished colleagues for the opportunity to be here today. 

As the District Attorney of Queens County in New York City, I 
represent a constituency of almost 2 million people. I have the re- 
sponsibility of prosecuting some 60,000 arrest cases every year and, 
in addition, I have a rather significant investigative role in such 
areas of criminal conduct as narcotics trafficking and organized 
crime, labor racketeering, economic crime, and criminal activity at 
both Kennedy and LaGuardia Airports, which are located in our 
county. 

I furnished your staff with copies of my formal testimony and I'm 
pleased that you are good enough to incorporate those remarks in 
your record. In the brief time allotted to me this afternoon, I want 
to try, if I can, to summarize that which is contained in that formal 
submission, which deals with a national problem of growing, indeed 
alarming, proportions; namely, credit card fraud and the financial 
abuses that arise therefrom. I would also like, if I might, to re- 
spectfully suggest how it is that I believe that we might at least 
partially respond thereto. 

I have with me Senior Executive Assistant District Attorney for 
Investigations in my office, John M. Ryan, and the Chief of our 
Economic Crimes Bureau, Mike Mansfield, and Jeff Horblitt, who 
is an Assistant District Attorney with our Economics Crimes Bu- 
reau and, I would note, a former member of the Bureau. 

Let me just take you back, if I might, for just a couple of seconds. 
Last September, we arrested a woman who was attempting to use 
a counterfeit credit card to purchase a fax machine and a 
computer. Store employees suspected that the card was counterfeit, 
notified the authorities, and rather than simply charge her with at- 
tempted grand larceny and put her into the criminal justice sys- 
tem, she was debriefed and an investigation was conducted, an 
investigation that ultimately led to an apartment on a quiet resi- 
dential street in Queens County. 

Pursuant to search warrant, a team of investigators from my of- 
fice, the U.S. Secret Service, the U.S. Postal Inspection Service, 
New York City Police Department, raided that apartment and we, 
I think all of us, I was there that evening, were absolutely amazed 
with what it was that we found. 



51 

We found in that apartment hundreds of counterfeit and stolen 
Visa, Master Card, Discover Card, American Express credit cards. 
We found stacks of plastic cards in various stages of being counter- 
feited. We found hundreds of U.S. Postal Service change-of-address 
forms, holographs, magnetic tape, all kinds of other equipment 
used to manufacture counterfeit credit cards, including an encoding 
machine, which is used to insert data on a magnetic strip that is 
contained on the card, an embossing machine that presses out the 
raised letters on credit cards, a tipping machine for applying the 
gold colored ink to the raised letters. 

We also found quantities of access numbers for credit cards, bank 
accounts, as well as computers and cell phones, beepers, a great 
deal of personal information about people all over the country, 
some of which was stored in computerized databases that were con- 
tained within the apartment. 

Following that raid and the accumulation of all of that evidence, 
we put together a team of experts and we began, over a 5-month 
period, to go through every invoice, every credit statement, every 
change of address form that we had acquired, all of the records 
found in the apartment. And as a result, earlier this month, we 
were able to file, in the Supreme Court in Queens County, a 200- 
count indictment under New York's Organized Crime Control Act, 
which is the equivalent of the Federal RICO Act, which charges 
eight Nigerian nationals with operating a multi-million dollar coun- 
terfeit and stolen credit card ring out of that apartment, a ring 
that specialized in the theft of credit identities of thousands of indi- 
viduals across the United States and that had contacts throughout 
the entire world. 

Just to try to briefly explain to you how it is that this ring oper- 
ated, as we have alleged in this indictment, let me just say that, 
in the first instance, these ring members take advantage of their 
positions as employees of retail establishments. They steal credit 
card receipts and invoices. They take the names, the addresses, the 
credit card numbers of their customers off those invoices. 

The search warrant, for example, in our case, produced boxes 
upon boxes of invoices stolen, for example, from a Watertown, Mas- 
sachusetts appliance store, a storage facility of Budget Rent-a-Car 
up in Warwick, Rhode Island, from a Shell gasoline station in 
Evanston, Illinois. 

We also found that the stolen credit card receipts and invoices 
were delivered to others within the ring and they, in turn, would 
go out and obtain additional data about the cardholder. They'd gain 
access to his or her credit identity and with that information, 
they'd go ahead and make up fake photo ID cards and driver's li- 
censes, all of which were used to obtain and purchase goods and 
services. 

And they didn't stop there. They just kept going on and they'd 
get into the credit reporting services, like Equifax or TRW. They'd 
go to a mortgage company, they'd go to a car dealership, and they'd 
begin to accumulate other credit accounts, learn additional per- 
sonal information, data that is contained within the kind of credit 
background check, and then the information is, again, used to cre- 
ate all of these other means of identification and the ability to get 
into credit card accounts. 



52 

Another tactic that was used with great frequency was to divert 
the cardholder's mail to mail drops in other cities that were con- 
trolled by the ring in order to obtain information about their vic- 
tims. This was done simply by filling out and submitting a forged 
U.S. Postal Service change of address form at a local post office, 
based upon personal information that they had gathered about 
their particular victim. No identification is apparently required by 
the Postal authorities to change your mail address. 

Indeed, these change of address forms can simply, as I under- 
stand it, be mailed to a local post office. The mail will be inter- 
cepted and it will be diverted to another address or to a post office 
box or a mail drop that's rented by the thieves in other cities. 

Another thing that they do is they are very much involved in 
stealing valid credit cards, pre-approved credit from the mail or in 
batch thefts. For example, in our case, in that apartment were 
many Bank One and AT&T Universal cards that were stolen from 
the airport at Houston, Texas in 1995. And once in the possession 
of a victim's mail or their stolen card, the ring members can readily 
activate the cards. They can request new PIN numbers on existing 
cards. They could access the victims' funds to the extent of their 
credit limit. 

Another example that I would tell you astounded me was the fact 
that they're into the thefl of credit information directly from finan- 
cial institutions. In our case, for example, we found computer 
sheets that were stolen last year from the Chemical Bank in New 
York City, on which appear the name, the address, the social secu- 
rity number, the personal data, the credit limits, the tracking infor- 
mation, and the PIN numbers for Chemical Bank Visa and Master 
Card holders. That information on those computer sheets, believe 
it or not, just the stuff that we seized, provided access to some $600 
million in credit. 

So that gives the committee some idea of the size and the mag- 
nitude of me problem. Worldwide, it's estimated that credit card 
fraud right now is running about $3 billion, half of that in the 
United States. Of course, the damage is irreparable and particu- 
larly the victims of credit card fraud, because it takes them months 
and ofttimes years to restore their own credit status and their own 
reputations. 

While the industry seems to have taken a number of steps in re- 
cent years to cut down on credit card fraud and certainly the law 
enforcement community has been doing its share, I would argue 
that there is much that remains to be done, and I would like to 
just run through a couple of quick thoughts that I have in terms 
of things that can be done. 

I think, first and foremost, the U.S. Postal Service should be re- 
quired to immediately take action to prevent the fraudulent diver- 
sion of mail. The Postal Service, I would argue, makes it relatively 
easy for credit card thieves to divert mail today. These change of 
address cards can be sent in by m.ail with no questions asked. No 
personal appearance is required, no photo ID is required. The post 
office will simply go ahead and forward your mail, including your 
bank statements, your investment account reports, your credit card 
bills, pre-approved credit, which is out there in great numbers, to 



53 

whatever location or whatever mail drop the thieves ask that it be 
sent to, and no questions are asked. 

It seems to me that we've got to do something more than what 
is being done at the present time in that regard. And I have, I 
think, a relatively simple solution and I can't quite comprehend 
why it can't be done, and that would be simply to require a per- 
sonal appearance with proper photo ID or other means of identi- 
fication before we go ahead and allow somebody's mail to be di- 
verted. And thereafter, I would suggest that the Postal Service can 
send out a confirmation notice to the consumer, asking that he or 
she confirm, in writing, the fact that they want their mail sent to 
another location. 

That, together with a number of the other suggestions that I've 
made that are contained in the testimony that I have provided you 
with, are things that I would argue ought to be done. There are a 
number of other suggestions that are contained in my formal testi- 
mony, educational initiatives, for example, to help legitimate mer- 
chants and their employees to spot counterfeit cards, strengthening 
our efforts to deter deported criminals from reentering the country. 

The lead defendant in our case, for example, was deported in 
1992, after a previous criminal conviction for credit card fraud, and 
he was able to return to this country about a year later under an 
assumed identity and I have little doubt that his trip was paid for 
on a stolen or a counterfeit credit card or perhaps with frequent 
flyer mileage that had been accumulated on a legitimate card. 

Most importantly, I would argue that we have somehow or other 
got to change the mind set of the credit card and banking indus- 
tries and that of the consumer, as well. It seems to me that secu- 
rity enforcement is taking a back seat to those who market and use 
credit cards. The view seems to be that if we tighten security too 
much, if we make it more difficult for the consumer to use his or 
her credit card, the card will be used less, that the losses from 
credit card fraud can easily be absorbed as long as credit cards are 
easy to acquire and to use, as well. 

The other thing, of course, that is most disturbing is in terms of 
where all of this is going. It's now reached the point where it is no 
longer just credit card fraud. Last Sunday night, CBS Television's 
"60 Minutes" program reflected upon this particular problem. They 
found a staff doctor at the Mayo Clinic in Rochester, Minnesota 
and not only was she the victim of credit card fraud, but they found 
a way to tap into her retirement fund, to her doctors investment 
account, and they even went so far as to access her daughter's col- 
lege fund. 

So this whole problem is growing. I would argue that all of us 
have an obligation to see what it is that we can do, more than 
we're doing at the present time. Certainly, our colleagues in the 
law enforcement community, some of whom are here today, have 
been most helpful to us and we to them. We've put together teams 
of people in an effort to go ahead and aggressively investigate and 
prosecute these kinds of cases and we must continue to do that. 
With the assistance that we've been getting of late from the credit 
card and the banking and the financial industries, with the support 
of your distinguished committee, Mr. Chairman, I'm confident that 

/ 



54 

we'll be able to do a great deal more as people begin to understand 
and realize the depth of this problem. 

[The prepared statement of Mr. Richard A. Brown can be found 
on page 198 in the appendix.! 

Chairman Leach. Thank you very much, Mr. Brown. Mr. Mark 
Richard. 

STATEMENT OF MARK M. RICHARD, DEPUTY ASSISTANT 
ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT 
OF JUSTICE 

Mr. Richard. Thank you very much, Mr. Chairman. At the out- 
set, Mr. Chairman, members of the committee, let me apologize for 
my late appearance. I was unavoidably detained north of the city. 

As Deputy Assistant Attorney Greneral in the Criminal Division 
of the Department of Justice, I have principal responsibility for 
overseeing the criminal enforcement effort directed at, in particu- 
lar, international organized crime and international law enforce- 
ment problems. In that capacity, I have the opportunity to deal and 
witness both the strengths and the weaknesses of our relationships 
within foreign law enforcement agencies and foreign governments 
in their efforts to respond to all of the manifestations of inter- 
national organized crime. 

With your permission, Mr. Chairman, I'd like to just summarize 
some points and submit my formal testimony for the record. 

Chairman Leach. Without objection, of course. 

Mr. Richard. In approaching this problem, I would suggest that 
we might analytically look at it in terms of efforts to prevent and 
deter, efforts to detect, efforts at investigation, prosecution, and 
then punishment. I would suggest we have deficiencies at all levels 
along this spectrum. 

I would like to highlight one area where I think we are dealing 
with new problems, problems that we have never before encoun- 
tered and problems that we all have to come to grips with if we're 
going to respond to the full dimensions of the problem. That is re- 
sponding to crime, organized crime, very sophisticated crime, gen- 
erated through or involving foreign institutions, foreign public offi- 
cials, and foreign transactions. 

And how do we respond to that in the context of the realities 
that we are encountering, whether it be in eastern Europe, in Rus- 
sia, South America, Asia? These are, I suggest, challenges that are 
facing the Nation — in particular, the law enforcement community — 
as never before, and I look forward to working with the committee 
in responding to those challenges in the years ahead. 

We must recognize that with respect to developing countries es- 
pecially, we are dealing with oftentimes weak and corrupt judicial 
systems, as well as poorly equipped and trained police forces. These 
systems and institutions are easy prey for organized criminal 
groups. 

Similarly, countries facing difficult transitions into democracy 
and privatization, coupled with advances in technology, are ripe for 
exploitation by organized criminals. The results not only increase 
the instability in these countries, but, unfortunately, increase risk 
of crime reaching our shores, and our inability to respond to it in 
an effective way, not only to deter, to detect, but also to investigate 



55 

and, very significantly, bring to justice the culprits. International 
cooperation is crucial to combatting this phenomenon. 

One of the most important steps we must take in fighting these 
international financial crimes is increasing our efforts to assist and 
train foreign law enforcement officials. An added benefit through 
this process is not only the training that we convey and the exper- 
tise that we communicate, but it's also the establisnment of regular 
channels for exchanging information and to identify the members 
of institutions that are competent, that we have confidence in, and 
that can assist us in developing cases that ultimately we can bring 
into court and prosecute. 

In this connection, the FBI and the Drug Enforcement Agency, 
together with our colleagues at the Treasury Department, are all 
involved in extensive police training throughout the world. We 
have embarked on a very significant effort in establishing an inter- 
national law enforcement academy in Budapest to provide such 
training, especially to mid-level managers in eastern Europe. 

I would also like to highlight what we have been doing and, in 
particular, our efforts to create a network of mutual legal assist- 
ance arrangements with eastern Europe and the newly independ- 
ent states. Earlier this month, we concluded a formal mutual legal 
assistance arrangement with Russia to provide a mechanism for ex- 
changing information in such a fashion to enable us to go into court 
with the information and produce in the course of prosecution. 

We are engaging in negotiations with various other countries in 
order to accomplish that. We are also examining those countries 
where we can begin to consider enhancing our existing extradition 
relationship, as well as to establish new relationships where their 
country's judicial system warrants such a relationship. 

We have an enormous challenge before us. It is a challenge that 
has multiple aspects to it and there is a high degree of urgency to 
it because we are, admittedly, all very vulnerable at this time. 

Thank you, Mr. Chairman, and I'd be glad to answer any ques- 
tions you may have. 

[The prepared statement of Mr. Mark M. Richard can be found 
on page 207 in the appendix.] 

Chairman Leach. I want to thank all of the panel for their excel- 
lent testimony. Let me just begin with this problem of international 
cooperation. Do you think there is a case for the establishment or 
upgrading of Interpol for financial crimes or the establishment of 
a new international institution? Does that make sense to you? Mr. 
Richard. 

Mr, Richard, Mr. Chairman, that is an excellent question and 
one that we have been addressing in a variety of fora. It is appar- 
ent that we have to establish a more productive exchange base 
with these countries. There are several structural options that ap- 
pear to be possible for doing this, and the utilization of Interpol is 
one of the possible mechanisms that we are considering. 

The difficulty, of course, that we have to be concerned about is 
not only the rapidity of the communication network, but also its se- 
curity, its ability to ensure that the appropriate agencies get the 
information in a timely way, and that we have the ability to, in 
effect, manage dissemination of information that we put into the 
system. 



56 

So I can't give you a definitive answer at this time, but it is an 
area that we are, I think, collectively looking at and will be exam- 
ining very intensely in the months ahead. 

Chairman Leach. Does anyone else want to comment on that? 

Mr. Brown. Well, I don't know that I'm sufficiently expert in 
terms of international matters, but I would tell you that in our par- 
ticular case, we found that the members of this ring, this credit 
card — ^the stolen credit card and counterfeiting ring, had contacts 
in London, in Amsterdam, in Singapore, as well as through many 
of the States of the Union. 

As a matter of fact, some of our credit cards showed up at the 
airport in London. Scotland Yard was involved in our case in help- 
ing to put it together. 

So I have little doubt, in my own mind, that the problem is not 
just a localized problem, by any stretch of the imagination. Cer- 
tainly this is one of the reasons why I'm so delighted that we have 
the kind of relationship that we do with all the Federal law en- 
forcement agencies in Queens County and we're all on the same 
page and we all seem to be working together and doing so well. 

Mr. Owens. I would just say, Mr, Chairman, that you may be 
aware that there is a financial crime section or directorate within 
Interpol in Leone and I know they have greatly expanded the train- 
ing that they have conducted over the last several years in an at- 
tempt to acquaint police agencies from around the world with some 
of these new and emerging crimes, and certainly that has been 
helpful. 

But I think there is also discussion ongoing about whether or not 
that might be an appropriate vehicle to facilitate the exchange of 
information. 

Chairman Leach. How many people are involved? 

Mr. Owens. Unfortunately, it's a fairly small section right now, 
but I think there is a recognition there and certainly 

Chairman Leach. You're talking about half a dozen people. 

Mr. Owens. Yes, it's a small amount. But the more important 
thing would be the facility to exchange information, if that can be 
appropriately equipped. 

Mr. Richard. Mr. Chairman, may I? 

Chairman Leach. Yes. 

Mr. Richard. One of the models that is under consideration is 
utilizing a joint FinCEN-Interpol linkage as a possible structure for 
disseminating — for receiving and disseminating within the U.S. law 
enforcement community, financial information abroad. 

Like I said, it is a possibility that is being closely examined by 
the agencies. 

Chairman Leach. Let me ask — and I'll come back to some other 
questions — ^but a very precise couple of questions. It's been alleged 
that, going to specifics, that the former President of Mexico, Mr. 
Salinas, transferred money illegally out of Mexico during the peso 
crisis. Is that under investigation? 

Mr. Richard. Mr. Chairman, it is difficult for me to comment on 
the matter. 

Chairman Leach, Excuse me. Let me be precise. His brother. 
But go ahead. 



57 

Mr. Richard. Again, as you know, the Department of Justice 
doesn't identify active ongoing matters or comment on them one 
way or the other in a public forum and I'd appreciate not having 
to respond at this point. We are in communication with the Mexi- 
can Government on the matter. 

Chairman Leach. Well, I have some more questions, but I'd like 
to turn to Mr. Vento. 

Mr, Vento. Thank you very much, Mr. Chairman. I specifically 
want to commend my colleague, Richard Brown, the District Attor- 
ney of Queens. I know that my colleague will have some comments 
but I took a little of your information, "60 minutes," and put it in 
the record. I don't think the members necessarily were following 
that as closely. 

But I would point out in that case that the Postal Service not 
only did not use a standard of care, the individual actually that 
signed it and got the mail transferred signed the name incorrectly. 
Not only didnt they ask for a photo but the common practice is, 
of course, to mail back to the former address the fact that there 
had been an address change. But very often, that is defeated by the 
fact that we do it so late in the cycle that in fact we are not there 
to receive it. 

In this case, there were other complicating factors; I don't know 
what they all are. But one of the issues was that the constituent, 
this Minnesotan, not my constituent but one from Rochester, called 
the FBI on two occasions and was told that since it didn't involve 
a crime of over $50,000 that the FBI would not be involved in it, 
would not get involved. Mr. Owens, do you have any comment 
about that? Is there some statutory limit or is that a policy deci- 
sion? 

Mr. Owens. Well, most of the judicial districts have prosecutive 
guidelines and typically investigators react to those. Many times 
early on in an investigation it is difficult to determine the extent 
of the crime. I think in order to respond specifically, I would have 
to know exactly what was conveyed at that time. 

Mr. Vento. No, I know. I mean, you may want to add to it, but 
I want to — it would be likely that someone would say if it is not 
over a certain amount, you know. One of the problems they faced, 
they called New York said, well, we got all sort of violent crimes, 
we haven't got time for this white collar crime type of thing. 

Mr. Owens. Typically, though, the U.S. attorneys have a certain 
amount of discretion there. I mean, if it is an insidious type of 
crime, if personal injury, if a major skill is involved. Sometimes 
they will consider. Again, it is very difficult early on in an inves- 
tigation to determine the scope of the problem. 

Mr. Vento. Well, I mean, these, I think, we are looking at the 
tip of the iceberg here. 

For one thing, Mr. Chairman, I think one of the problems that 
haridicaps this entire issue is that banks sell safety and soundness, 
they don't sell vulnerability. They don't sell, you know, that you are 
going to get electronically mugged. I mean, it has been noted here 
and, in fact, of course, what the efforts that were so far this year 
was to increase the penalty for the liability to the individual on a 
debit or credit card and remove it from the bank so they could mar- 
ket it, you know, more broadly. We are not talking about fraud or 



58 

someone that did something wrong and that was, fortunately, de- 
feated in this committee. 

But that's the problem, I mean, that we are facing in terms of 
what standard of care should a consumer use? I mean, I don't think 
that they know it. I can give some suggestions here. 

I recall myself losing a couple of cards including a Bell Atlantic 
card, Mr. Chairman, And so I called up the Visa and they took care 
of it. And I called up Bell Atlantic, it was late on Friday, they said, 
call back Monday. Of course, I suppose they don't have such things 
as voice mail and other products that they are so eager to sell to 
everyone else, you know! I was a little perplexed. But, I mean, it's 
the truth. I mean, that's the East Coast. That's all of you that are 
out here. If you lose that card, good luck. 

You know, and you point out the rise in this amount like from 
1.6, it is maybe one-third of 1 percent, but if it happens to you, if 
you get electronically mugged, you know, your credit rating is up 
in the air for days. In fact, of course, this particular woman, they 
were successful in withdrawing $15,000 from her retirement ac- 
count but tYra check went back to her Rochester address, not to 
New York. But that saved her from losing that $15,000 but, to me, 
it is an indication. 

I mean, my question is, how many people have you prosecuted. 
How many convictions do we have with regards this? You know, all 
of this attention on money laundering and so forth because that's 
where the laws are, but nobody is talking about some of the other 
issues. 

Now, you are suggesting that there are certain inhibitions be- 
cause of national concerns and autonomy and so forth but the fact 
of the matter is that you know within the context of what we are 
talking about here that basically a lot of places are eating this par- 
ticular loss. And it is affecting consumers. It is affecting the very 
solvency of the system. I would say the validity and integrity of the 
entire financial system is what's at stake here. 

And how many prosecutions, Mr. Owens, has the FBI been in- 
volved with, with this? Mr. Brown, I commend you for putting this 
together but this is atypical, I suspect. Mr. Rasor, Mr. Mark Rich- 
ard, you commented, I paid close attention, good testimony, lots of 
plans, you know, everyone is going to cooperate and collaborate, 
you know. How many prosecutions have we got? 

Mr. Owens. If I can comment there, I believe my statement gave 
some specific figures on prosecution. They were overall figures for 
the white collar program. But one of the things it also mentioned 
was, and I said in my introductory comments, that we have 22,500 
cases under investigation now. We also have in the range of 4,000 
cases where the losses exceed $100,000. 

Mr. Vento. Do we have underreporting in some of these losses? 

Mr. Owens. I'm sorry? 

Mr. Vento. A lot of financial institutions, credit card companies, 
financial intermediaries eat this? 

Mr. Owens. Many times they do. 

Mr. Richard. Historically, I mean, this, Mr. Congressman, has 
long been a problem in this field of underreporting, and, as you 
pointed out, there is an incentive for many of these institutions not 
to, if you will, bring this to the surface. Obviously, without regu- 



59 

latory requirements there would be a greater incentive not to re- 
port it in many instances. 

So underreporting, or hesitant reporting, has been a systemic 
problem in this area but, if I may, I would just add to Mr, Owens's 
comments that in setting prosecutive guidelines, U.S. attorneys 
have been encouraged to work with their State and local counter- 
parts to draw up a comprehensive response capability so matters 
like this don't fall between the cracks, if you will. I am not suggest- 
ing they don't, but at least that is not just done in a vacuum and 
an effort is made to — to devise a comprehensive district response. 

Mr. Vento. I have no doubt about the good intentions of public 
servants that are serving with limited dollars in terms of trying to 
accomplish what we are doing but, you know, I mean I am just 
talking about the reality of what's happening. You know, we have 
to at least address that and, you know, anyone can guess right or 
wrong in terms of this. That's a synch. But Mr. Chairman, I just 
think whatever the tools are that are necessary, I think as an ex- 
ample in the international scene is we simply have to set a stand- 
ard and say if you don't meet that in Italy or if you don't meet that 
in France, we are going to treat it accordingly. You are not going 
to be able to deal with us. That's the problem. 

And I think we need to step up to it and deal with this because 
in my estimation it is the sort of activity that is worrisome, espe- 
cially in emerging democracies. I think Mr. Richard's testimony, 
Mr. Chairman, is right on in terms of causing an elemental weak- 
ness in the entire economy based on that type of activity that is 
persisting and we have to, obviously, do something to safeguard it. 

Obviously, adequately funding the State Department and others 
that are involved would be a good start. But, Mr. Chairman, I ap- 
preciate your tolerance of my going over time. 

Thank you. 

Chairman Leach. Well, thank you. 

Mr. Brown. Might I, with your permission, Mr. Chairman? 

Chairman Leach. Of course, Mr. Brown. 

Mr. Brown. I alluded in my testimony before to something that 
I know troubled me as we were putting this case together and that 
is the level of frustration amongst the security people, if you would, 
within the banking and credit card industry, with the marketing 
people on the other side, all of us, for example, I mean, we get 
these preapproved credit forms in the mail. It seems to me that the 
industry wants to make it as easy as it possibly can be for you to 
use your card or me to use my card. I mean, I've heard stories for 
example that Gold cards are not to be challenged by cashiers in 
terms of identity of a particular individual, simply to allow the card 
to be used in commerce. 

And what seems to be happening here is that, you know, the the- 
ory is, you know, if one card out of 10 is counterfeit or stolen, so 
what, we'll go ahead and absorb it in the nine other cards that are 
used to make purchases. And that is terribly, terribly frustrating, 
I think, to all of us. I think there has got to be a much greater bal- 
ance within the industry as between security and fraud control as 
against those who market the cards. 

Mr. Vento. Mr. Chairman, I would point out but for the fact that 
this Congress said you can't send these cards out through the mail 



60 

without application or without formal financial relationship, they 
would be coming in the mail unsolicited. But Congress decided that 
they had to bar that practice. 

Chairman Leach. Ms. Velazquez. 

Ms. Velazquez. Thank you, Mr. Chairman. 

Yesterday, my oversight committee held a hearing on counterfeit 
and I didnt have time to ask a question and I would like maybe 
to see if any of you has done any work with Interpol? 

Mr. Rasor. In terms of actually having investigations conducted? 

Ms. Velazquez. Yes, financial. International financial crimes. 

Mr. Rasor. To some extent, yes. 

Ms. Velazquez. Have you ever heard anyone say that Interpol 
has a problem with information leaks? 

Mr. Rasor. No. 

Ms. Velazquez. OK, thank you. 

Well, now I would like to ask some questions to my district attor- 
ney from Queens. I just also would like to thank him on behalf of 
the New York Congressional Delegation that sits on this panel and 
particularly to acknowledge the creative way in which he has been 
fighting financial crime in the county of Queens despite the limited 
resources and assistance that he is getting from the Federal 
Government. 

Mr. Brown, I would like to ask you, are there financial crimes 
other than credit card fraud that pose significant problems for your 
county? 

Mr. Brown. I think the biggest one is one which has been al- 
luded to here today, and I am sure in your hearings of yesterday, 
that is the basic money laundering problem. I mean we, in Queens, 
for example, have what has often times been called the cocaine cap- 
ital of the world in the heart of Queens, Jackson Heights, Corona, 
East Elmhurst, areas such as that, a portion of which you rep- 
resent, and we have been spending a great deal of time and a great 
deal of effort, together with all of our colleagues in the law enforce- 
ment community in targeting narcotics trafficking. 

Last year, as a matter of fact, over a ton of cocaine was taken 
off the streets of Queens County and, of course, in addition, we 
have the problem that arises out of the presence within the county 
of Kennedy Airport where large quantities of narcotics come in and, 
as a matter of fact, last year I was told by Customs that the 
amoimt of heroin seized, heroin now, at Kennedy Airport was 

freater than in all of the other airports of the United States com- 
ined. That perhaps ^ves you some idea of the magnitude of the 
problem, of the narcotics problem. 

But it has only been recently, it seems to me, that we have been 
reflecting upon the fact that all of this — all of these narcotics are 
coming in and they are being sold on the streets of not only our 
communities but throughout the entire United States and, of 
course, the money has got to go back out. You know, we in Queens 
have had just — I was just looking the other day at the number of 
seizures that we have had of money, and I have a little list of them 
here, $2.1 million in a Jamaica apartment, car stops $210,000, 
$199,000, $800,000 was seized on a street in Corona, in your dis- 
trict, last August. November 9 we confiscated $1.3 million from a 
Bayside car stop which led into an apartment. We seized, just off 



61 

the Grand Central Parkway near LaGuardia Airport, only recently, 
$478,000, and 2 weeks ago we got $514,000 out of a car. 

We, out of Queens County last year, particularly out of Kennedy 
Airport, seized $10 million. We, the law enforcement community. 
Federal, State, local. As a matter of fact, just earlier this month, 
we announced the seizure of $4 million in cash at Kennedy Airport 
that had been secreted in a shipment of household goods bound for 
Cali, Columbia. So, obviously, the whole issue of money laundering 
is one that all of us are taking very, very seriously and trying to 
get a handle on. 

Ms. Velazquez. And one way that that money is sent abroad is 
through monies transmitted? 

Mr. Brown. Yes. 

Ms. Velazquez. What recommendations, Mr. Brown, do you have 
for addressing the problem of money launderings in Queens or in 
any other part of the Nation? 

Mr. Brown. Well, one of the things I think that, again, troubles 
us is the fact that while we have registration now of these tele- 
communication entities, if you will, that that registration does not 
flow down to the subcontractors. Just, for example, if I had a real 
estate license, everybody that worked for me would have to have 
a license off my license. That apparently does not happen under 
your existing legislation. So I would argue that one of the things 
we could do is, we can go ahead and think in terms of registering 
the individuals beneath the major player in terms of those monies. 

Of course, the entire problem is one, again, that so often a local 
prosecutor is just ill-equipped to go after without being part and 
parcel of a team, if you would. Just as we have a Federal High In- 
tensity Drug Trafficking Team [HIDTAl, for example, that has re- 
sponsibility for narcotics trafficking in particular areas, the high- 
intensity drug enforcement units that are combining people from 
all of law enforcement, the DEA and the FBI and joint task forces, 
the NYPD, and so forth. We get ourselves involved in them, we do 
a lot of eavesdropping warrants for them, and so forth. I would 
argue that that concept, that basic team concept, ought to be ex- 
tended to the area of money laundering as well. With that and, ob- 
viously, some funding for that kind of a team approach, I think we 
can get a much better handle on the problem. 

Ms. Velazquez. Thank you, Mr. Brown. 

Mr. Chairman, I would like to ask unanimous consent to insert 
my opening statement into the record. 

Chairman Leach. Of course, without objection. 

Mr. Royce, and I apologize I skipped over you in the order. 

Mr. Royce. Thank vou, Mr. Chairman. 

I just wanted to ask, in a previous committee we heard from Ar- 
nold de Borchgrave who gave testimony that FBI Director Louis 
Freeh had cited that Russian organized crime has established rela- 
tions with counterparts in 29 countries, and operates in 17 U.S. 
cities and in 14 states here, and I would like to ask Mr. Owens and 
Mr. Rasor to what extent has Russian organized crime set up oper- 
ations or contacts in the United States, and what is the FBI and 
Secret Service doing to monitor these groups or close them down, 
and how dangerous are these groups to American citizens, more 



62 

specifically how dangerous are they to our financial system now 
that they are operating in the United States. 

I brought up earlier the question of the Citicorp system which 
was raided fi-om St. Petersburg, and just quoting fi-om the Wall 
Street Journal at the time, they said, Citicorp's system is so ringed 
with security that breaking in like a computer hacker is considered 
by industry experts almost impossible. So it looks like more than 
a simple hacker problem to get past that system and transfer $12 
million. 

So I guess those are my questions, and then what could we do 
as legislators to help you, in your duties, to protect American 
citizens and protect our financial systems from foreign criminal 
activity? 

Mr. Owens. It's a very broad question. I will make an effort to 
address some of the points. Certainly with regard to the specific 
numbers that the Director testified to, I won't attempt to address 
that, I will defer to his testimony on that. 

With regard to our efforts conducting specific investigations of 
these groups, there have been a number of successes. There are a 
number of identified groups in the United States that are involved 
in various types of financial crimes as well as extortion schemes, 
other things that typically are addressed under our Organized 
Crime Program, and we do have initiatives underway both within 
our White Collar Crime Pro-am and our Organized Crime Pro- 
gram to address these Russian groups. So with regard to that, 
there have been successes. 

With regard to the Citibank case, you had asked earlier, too, 
whether or not there have been any convictions there. There have 
been four convictions to date in that case, and there still are a cou- 
ple of outstanding cases. One individual is under arrest in London 
and is awaiting extradition. So that case is ongoing. 

With regard to the vulnerability there, and I am certainly not a 
banking expert, and I only speak from a law enforcement perspec- 
tive, but I will say that the Bank Fraud Working Group, which has 
been discussed certainly in the prior panel, has nad some consider- 
able discussion about what the vulnerabilities are. Obviously, from 
a law enforcement perspective, we are concerned about that, too. I 
don't think there are a lot of specific examples of intrusion, success- 
ful intrusions like the Citibank case, fortunately, so I don't know 
the full extent of the vulnerability. But within the Bank Fraud 
Working Group, we have established a subgroup which the FBI 
chairs looking at that very issue. 

Mr. ROYCE. Let me ask you also a followup. In other committees 
we have learned that there is an extreme capital flight from Russia 
and other East European countries to the west. Can you tell us 
where this capital is coming from? Is it monies that have been sent 
from the United States or the IMF, or is it money that is being 
laundered from illegal activities, or do we know the sources? 

Mr. Owens. Well, I would say it is still being looked at. I think, 
as well as coming here, there is a lot that's going the other way 
as well. So I don't think we know the full extent of that, yet, nor 
do we know the purpose, whether it is dispersing ill-gotten gains 
or whether it is for some economic purpose to convert rubles to dol- 
lars or whatever, all that is still being looked at. 



63 

Mr. ROYCE. If I could just ask one last question of Mr. Richard 
because he brought up the ILEA. Could you tell me, this new orga- 
nization, whether it has helped U.S. authorities to track or detect 
money laundering or other financial crimes coming from Russia or 
other former Eastern Bloc countries? 

Mr. Richard. ILEA is a training academy. It has not focused ex- 
clusively on money laundering, but it has, it is my understanding, 
engaged in some sponsorship of money laundering programs, train- 
ing programs there. It is designed to provide mid-level managers 
with basic appreciation of the problem and how their experience 
has suggested one can respond to it. So I am not sure that it is 
easily translatable into actual results in responding. 

Mr. RoYCE. I bring up these questions because when Russian 
democrats are here it is of great concern to them, the issue of 
money laimdering, and what is happening in terms of the flight of 
capital from Eastern Europe, from Russia, and I am just trying to 
get some handle on what we do know. 

Mr. Richard. If I may just respond, you had asked about sug- 
gested legislative responses to the problem. As you may recall, the 
President did direct the Attorney General to establish an inter- 
agency task force to look at just this question: Whether new legisla- 
tive authorities are needed to respond to any aspect of the problem. 
Under her direction, we are in the process of examining that across 
the whole spectrum, and I anticipate that in the near future we 
will be suggesting some legislative proposals to address the 
problem. 

Mr. RoYCE. Thank you. 

Thank you, Mr. Chairman. 

Chairman Leach. Thank you very much, Mr. Royce. 

Before bringing this to a halt, I want to ask a couple of questions 
that go to kind of a premise of Mr. Rasor. Mr. Rasor made some 
comments earlier on about the good guys are smarter than the bad 
guys. You know, when self-interest is at stake and criminal intent 
is underway, I am not always convinced that's the case. We have 
an Office of Technology Assessment, for example, report that indi- 
cates that it is not at all clear that we have a very good handle 
on how to use money transfers, and how criminal elements do. It 
is even sometimes suggested that technologically law enforcement 
may be behind the curve. Do you suggest that's conceivable? 

Mr. Rasor. Mr. Chairman, financially, law enforcement is behind 
the curve and also probably in the ability to have the availability 
of equipment that the bad guys can routinely get either by legal 
or illegal means. But I think in relationship to being smarter than 
the bad guys and using that philosophy to stop the problem I think 
that we are smarter if we spend the time, as I mentioned before, 
to understand our systems and realize — and this comes to a ques- 
tion that was asked a moment ago too — ^how many people are you 
arresting? 

We could never arrest enough people to stop this problem — col- 
lectively we couldn't do that. 

The repetitiveness of the problem, the ability of the criminal ele- 
ment to analyze the system and know where those weaknesses are 
and then respond to it is where the problem is. 



64 

From a technological standpoint, almost every one of these 
crimes have a systemic or technological fix attached to it once you 
break the crime down, see what made it happen. Now it's the abil- 
ity of things like this committee's hearings and the education proc- 
ess to allow those fixes once they are detected to occur that is going 
to take us over the hump. 

Chairman Leach. Let me just say that I'm very impressed with 
the case Mr. Brown has brought, but I also suspect in his jurisdic- 
tion that you are dealing with a percentage and I suspect there's 
no great feeling that you have whether you are dealing with 5 per- 
cent of the problem or 75 percent of the problem. Nationwide, when 
I look at the letters that come into my district on the Nigerian 
fraud scheme. I have to be rather impressed that there are an 
awful lot of people involved and not an awful lot of arrests, but 
that's just a suspicion. I mean this is rampant. 

What is impressive about it is that once there is notification it 
ought to stop instantly. So one of the questions is, what kind of 
communications are being made to consumers? I would think every 
bank in America ought to be sending their customers a warning 
about it. 

Then we have this problem, does the bank want to make people 
think things are a little shaky? I don't know. 

I am not terribly impressed that we have got a handle institu- 
tionally on the problem in our country or abroad. I mean, clearly 
we have some of the very best people in the world. Clearly we have 
done more thinking about it probably than anywhere else, but I am 
not convinced we have got the strike force capacities here. I am 
also not convinced we have got an international setup abroad that 
people trust and have confidence in and want to use. That is one 
of the reasons that I think that a financial crimes entity ought to 
be the subject of an international treaty. We ought to be moving 
in that direction with some sort of entity that is of comparable sig- 
nificance to Interpol. 

If these numbers are valid, the types of crimes we are dealing 
with are of a far larger magnitude than Interpol deals with, except 
that this is technically under Interpol to a degree now. Mr. 
Richard? 

Mr. Richard. May I respond, because you raise a problem that 
is a real one, and one that we are coming to grapple with. The Ni- 
gerian situation is very illustrative of the problem. 

Several years ago when we had a higher degree of confidence in 
the commitment of the Nigerian government to respond to this, we 
engaged their institutions and came up with an agreement for pro- 
viding mutual legal assistance in order to respond to the Nigerian 
drug problem and the Nigerian fraud problem and what have you, 
and we negotiated an agreement which we had hoped would facili- 
tate the collection of information and lead ultimately to the appre- 
hension, whether it be in Nigeria or the United States, of the 
culprits. 

Frankly, with changing political situations there and the treaty 
is before the Senate Foreign Relations Committee and we have 
asked that it not proceed at this moment because of a change in 
political will, as we perceive it, there. 



65 

We are in effect dependent to some degree on the cooperation of 
the foreign government to assist us in collecting the evidence and 
apprehending their nationals who keep on bouncing back and forth 
between countries. 

Where there is no willing^ness, no capability, no will, no commit- 
ment to address this on an international level, it becomes an ex- 
tremely difficult problem to respond to. 

Chairman Leach. Let me just conclude by saying I am very im- 
pressed that what we have here is the impersonalization of crime — 
that is, the idea that instead of having someone with a gun at 
someone's face, that one uses a number, potentially from another 
city, with a system that provides resources, and that we have taken 
the eye oflT the ball because it doesn't seem as dramatic, and then 
we are numbed by the numbers. 

We all know around here that the word **binion" lacks meaning 
and so when you get into those figures and then you get into mul- 
tiples of a billion and then this concept that there was half a tril- 
lion in some sort of illegal money flow is a figure that is, you know, 
quantitatively more mind-boggling, but the numbing aspects of the 
numbers I think mean we are going to have to put a lot more per- 
sonal attention to figuring it out and possibly consider some very, 
very new institutional arrangements. 

I am personally one as we think about the budgets and the dif- 
ficulties of it, it's one of the reasons why again I come back — I 
think the intelligence communities are going to have to be at a 
much higher degree of priority involved in this process, but that is 
just a personal view. 

Anyway, thank you very much. I appreciate all of your testimony 
and your dedication to public service. 

Recess for 2 minutes for the new panel to take its seats. 

[Recess.] 

Chairman Leach. The committee will reconvene. 

Our three witnesses on the final panel of private witnesses are 
from the American Bankers Association, Boris F. Melnikoff, who is 
Senior Vice President of Wachovia Corporation; then from the Cen- 
ter for Strategic International Studies, Amaud de Borchgrave — and 
we welcome you, Amaud; and then a private banking consultant, 
Mr. Clifford Brody. 

Before beginning, I want to extend my condolences, and I hope 
I am not mistaken in this from reading an obituary in the New 
York Times. Your wife's father died, Arnaud? I am sorry to hear 
that. 

Mr. DE Borchgrave. Thank you. 

Chairman Leach. Mr. Melnikoff. 

Mr. Melnikoff. Thank you. 

STATEMENT OF BORIS F. MELNIKOFF, SENIOR VICE PRESI- 
DENT, WACHOVIA CORP., ON BEHALF OF THE AMERICAN 
BANKERS ASSOCIATION 

Mr. Melnikoff. Good aflemoon, Mr. Chairman and members of 
the committee. I am Boris F. Melnikoff, as introduced by the chair- 
man, with Wachovia Corporation and I also serve as the ABA's 
Money- Laundering Task Force Chairman. 



66 

The ABA has been asked to discuss money-laundering trends and 
other types of financial fraud, both domestically and internation- 
ally, and we welcome this opportunity to outline to the committee 
the banking industry's efforts in deterring all types of financial 
fraud. ABA believes that our response to this problem has been 
strong and an ongoing effort which clearly has been successful and 
we hope to spell that out a little further in my comments. 

The committee has indicated concerns with the threat of orga- 
nized criminal groups to the international financial system, and 
while the ABA snares their concerns, we also must empnasize that 
the U.S. financial industry addresses fraud whether committed by 
groups or individuals on an ongoing basis in a variety of ways. 

The industry is working diligently with government counterparts 
to ensure that the financial community has all the appropriate 
tools to combat all types of bank fraud. 

The committee seeks comments on various types of financial 
crimes associated with organized groups. However, many of the 
crimes can occur on a random basis so trends will be the same re- 
gardless as to who commits the crimes. 

For example, the major crimes committed against banks and 
other businesses, one, is check fraud; two, credit card fraud; three, 
telemarketing fraud relating to drafts. 

The survey, which was conducted by the ABA, told us that check 
fraud can be perpetrated with forged signatures, forced endorse- 
ments, check kiting, or counterfeit checks. This may indeed occur 
through organized efforts but it's not limited to those activities. 

We have such a thing known as "friendly fraud" which actually 
involves a legitimate holder of the account, so to address the prob- 
lem the banks have, among other things, indicated a need to edu- 
cate the corporate customers in their responsibilities to help us pre- 
vent the frauds. 

Many systems, both software and procedurally, have been insti- 
tuted by the financial industry and shared with the corporate cus- 
tomers in order that we may reduce that segment of check fraud. 

The ABA continually provides information to members on how to 
protect against being a victim of fraud but vigilance is the key. As 
we continue to discuss the industry's response to fraud, it must be 
emphasized that there is one common thread to all the deterrents, 
and that is what you have heard today: know your customer. 

We will amplify this concept later on in the statement. 

Mr. Chairman, ABA generally does not believe that the enact- 
ment and updating of banking and criminal laws will be a better 
method to combat fraud throughout, but we would be happy to 
comment on any specific proposal that the committee may be con- 
sidering including the bill you are introducing today, Mr. Chair- 
man, wnich we feel is necessary at this time. 

Money laundering and the U.S. response — the ABA has long sup- 
ported the efforts of Congress and the U.S. Government in its drive 
to address money-laundering activity throughout the world. The 
ABA was pleased to support the Money Laundering Suppression 
Act of 1994, which was enacted to improve the regulatory process 
covering the Bank Secrecy Act. Due to that legislation, FinCEN has 
successfully reduced the size of the currency transaction report and 
are close to further streamlining the whole entire cash-reporting 



67 

process, which I might add, we personally thank FinCEN im- 
mensely for that help. 

All of these initiatives will assist the industry and the govern- 
ment in their efforts to help stop money-laundering by refocusing 
the efforts from routine reporting to suspicious transaction report- 
ing and FinCEN deserves much of the acclaim for spearheading the 
regulatory burden reduction process that benefits both the bankers 
and law enforcement. 

To continue on the point of reducing the amount of cash reports, 
ABA would like to re-emphasize the partnership developed in the 
past several years between the government and the banking indus- 
try. This alliance needs to be highlighted because the same rela- 
tionship is not common nor found in many foreign countries. 

In the international arena, the Financial Action Task Force 
serves as forum for ideas and recommendations on how to elimi- 
nate money-laundering activities not only in our own country but 
in other neighbors throughout the world. FATF is to be commended 
for its dedication to the worthy goal and it is imperative that the 
private sector lend its expertise and energy to increasing the obsta- 
cles for narcotic traffickers and other criminals who illegally use 
our financial institutions to move their ill-gotten gains. 

The ABA has supported these efforts but as we previously men- 
tioned, the record of our international counterparts have been 
mixed at best, and I might add from personally attending the meet- 
ing in Paris last month, in talking to some of my associates there, 
what was alluded to earlier this morning with respect to the "know 
your customer" rule in foreign countries, I think you will not find 
that necessarily true in all foreign nations that attended the FATF 
meeting. Their main concern obviously was receiving deposits. 

The ABA stands ready to continue its decade-long involvement in 
educating bankers and other private sector representatives on the 
need for compliance and vigilance with money-laundering laws and 
activities, and we have worked with FATF and its members so that 
one day we can all trumpet the end of money-laundering and finan- 
cial institutions everywhere will celebrate a great victory. 

The trends in money laundering must by definition be discovered 
by law enforcement and State and Federal bank regulators since 
those entities are better equipped than bank officials to discover 
new forms of criminal activities and to distribute this information 
to all concerned parties. 

The government has been working toward an improved alliance 
with the private sector to share information on new trends and 
schemes and we are optimistic that this will continue. 

Mr. Chairman, I would just like to briefly share with you two ex- 
amples of how the banking industry has accepted and worked very, 
very closely with law enforcement. 

A financial institution employee contacted the Financial Task 
Force in Oklahoma concerning a new account which was receiving 
wire transfers from California and then the money being with- 
drawn in U.S. currency. Each wire was approximately $50,000. 
This information uncovered a theft ring that had stolen almost $4 
million in microchips from a business in Oklahoma. 

Another interesting situation was a bank compliance officer 
called the Financial Task Force when he became suspicious that an 



68 

elderly gentleman began taking large cash advances on a number 
of credit cards. Because of this call, an investigation ensued and 
uncovered fraudulent telemarketing schemes in Las Vegas, Nevada 
and fortunately prevented the gentleman from losing everything. 

Additionally, many, many banks in this country work very, very 
closely with all law enforcement agencies with respect to maintain- 
ing certain accounts when necessary as Operation DERAILED, 
which was addressed earlier, and many other operations — Oper- 
ation Polar Cap, Operation Dinero — ^the banks have played a sig- 
nificant role in assisting law enforcement in tracking records, mon- 
ies, and things of that nature, so the banks in that regard have 
done I believe an outstanding job. 

Countermeasures, another area we have been asked to coyer, 
concerns what countermeasures have the U.S. financial institutions 
developed in order to both comply with regulatory responsibilities 
and to develop appropriate proactive responses to money launder- 
ing while the United States does not now have a regulation in 
place, although we expect one in 1996, the ABA has long supported 
the concept of formalizing and "Know Your Customer." 

In a survey that ABA has conducted, over 86 percent of the re- 
spondents have a program at their institutions in place that will 
assist us in that piece of legislation in "Know Your Customer." So 
the industry is trying to be ahead of the curve. We are putting the 
horse before the cart now, rather than the cart before the horse 
and 86 percent of the industry is there now, so we are excited and 
hopefully we'll have 100 percent before any legislation is enacted. 

Recommendations as the committee continues to review its global 
financial crimes, how best to address fraud, our association would 
ask that you consider the level of resources available to law en- 
forcement in the United States. Due to the lack of funds in many 
agencies, frauds are committed under certain thresholds. Example 
mentioned earlier— $100,000, New York City, other cities, $50,000, 
$25,000. In theory, these frauds can go unprosecuted and individ- 
uals will walk, so we urge the committee to take and give that 
some consideration. 

In conclusion, the American Bankers Association has long advo- 
cated adherence to "Know Your Customer" principles as a means 
to deter fraud and protect the banking industry. 

I might add, Mr. Chairman, that the industry in this regard has 
spent and invested huge amounts of money in artificial intel- 
ligence, all kinds of profiling techniques to profile and monitor ac- 
counts to reduce the exposure to credit card fraud, and things of 
that nature. 

A lot of research is being done now through techniques to iden- 
tify and positively identify people. I see that coming in the next 5 
to 6 years that we will have the technology and the ability to iden- 
tify a customer not by account number, not by a PIN number, but 
by some part of the anatomy and I suggest to you that that will 
become the retina in the human as positive means of identifica- 
tion—so there is an awful lot going on and we are just proud to 
participate and we thank you for the opportunity to be here and 
I'll be nappy to answer any questions. , /. j 

[The prepared statement of Mr. Boris F. MelnikoflF can be found 
on page 218 in the appendix.] 



69 

Chairman Leach. Thank you, Mr. Melnikoff. 
Mr. de Borchgrave. 

STATEMENT OF ARNAUD DE BORCHGRAVE, DIRECTOR, GLOB- 
AL ORGANIZED CRIME PROJECT, CENTER FOR STRATEGIC 
AND INTERNATIONAL STUDIES [CSIS] 

Mr. DE Borchgrave. Thank you, Mr. Chairman. 

About 4 years ago, Mr. Chairman, a wealthy friend of mine in 
New York who has very good contacts in Moscow was called by 
these Russian friends asking for help when they got to New York. 
When they got to New York, they wanted contacts in Nassau, Ba- 
hamas, as they realized that my friend also had a residence there. 
He called the Swiss banker in question and a week later got a call 
back from the banker who said, do you realize what your Russian 
friends wanted? And he said, yes, I assume they wanted to open 
a bank account. He said, do you know for how much? He said, I 
assume it was for a few million. He said, no it was $2V2 billion and 
that was turned down by the Zurich headquarters of the Swiss 
bank. 

A few weeks later, I was recounting this anecdote to a Swiss 
banker in the south of France headquartered in Monte Carlo and 
he said — ^he volunteered the following stoiy. He said, well the day 
before yesterday, I had a walk-in, a Russian walk in without any 
introductions at all and he wanted to deposit $400 million but he 
wanted to make sure that it was untraceable through a variety of 
offshore accounts. 

These two incidents, of course, grabbed my attention and led to 
the program that we nave startea at CSIS, which we call Global 
Organized Crime. It is chaired by Judge William Webster, the 
former DCI and former FBI director. We have a steering group 
made up of 30 people from law enforcement, corporate security and 
intelligence, all very prominent figures. This, in turn, has spawned 
seven task forces that deal with everything from money laundering 
to counterfeiting to nuclear materials smuggling to illegal alien 
smuggling, cybercrime, cyberterrorism, and all these other things. 

After 18 months on the job, there is no doubt in our mind what- 
soever, and I am talking about 150 people involved, that the di- 
mensions of transnational crime, which of course include money 
laundering and counterfeiting present a far greater international 
security challenge than anything Western democracies had to deal 
with during the cold war. 

President Yeltin, as I think we all know by now, has described 
his own country, which still spans 11 time zones, as the biggest 
mafia state in the world. He called it the superpower of crime. He 
has accused his own officials of turning a blind eye to what is going 
on to the criminal penetration of the MVD, the very organization 
that is tasked with fighting organized crime. 

As the head of the German BKA pointed out right here in Wash- 
ington a year-and-a-half ago, the collapse of the Soviet Union also 
brought about a lethal mix of intelligence services, banks and orga- 
nized crime. 

I personally have investigated and, in many cases, witnessed 
what Russian thieves-in-law or mafia dons were doing all over the 
Western world. North America and Latin America, carrying, as I 



70 

think we have all heard these stories, but I have witnessed them, 
carrying from $5 to $10 million around in $100 bills in suitcases 
and buying choice properties all the way from Buenos Aires to Ber- 
lin and from Marbella, Spain, to Monte Carlo, Monaco. Tiny, little 
C)T)rus receives 100,000 Russian visitors a year at the present time 
versus about 200,000 to the United States. 

We can see a growing crisis of law and order over an increasingly 
large part of the globe. The collapse of the Soviet Empire has led 
to a breakdown of discipline generated by a fear that we no longer 
fear but this has in turn been replaced by another fear that people 
like Pat Buchanan are tapping into and that is the fear that the 
human being is gradually becoming redundant. 

There are today 820 million unemployed in a world of 5.7 billion 
people and with almost 100 million new babies a year, 40 percent 
of them born into the megaslums of the developing world and with 
an average age of 21 or less, we have entered, as we see it, an era 
of rising inequities between nations and within nations. There are 
also now the haves and the have-nots of the information age. 

In our banking sector alone, an estimated 450,000 employees will 
be laid off in the next few years, displaced by megamergers and 
displaced by on-line banking which is expected to shut down half 
the branches in this country. And this new cashless society will 
have created a ready-made army of disgruntled people, potential 
recruits as purveyors of inside information. 

Our GOC study at CSIS has also established a direct correlation 
between the exponential gprowth of transnational crime and the 
computer revolution. The traditional prerogatives of national sov- 
ereignty have not only been challenged in cyberspace, as I think we 
all realize, they have ceased to exist. In order to test, and we had 
a meeting this morning, all morning, of the President's National 
Security Telecommunications Advisory Committee and the head of 
DISA was there, in order to test the security and vulnerability of 
DOD's communications systems, the ASSIST center of DISA, the 
Defense Information Systems Agency, was tasked to penetrate the 
Pentagon's worldwide operations. They did not use sophisticated 
software, but software available to anyone, namely SATAN, 
R-BONE or ROOTKIT on INTERNET. 

And the long and the short of it is, Mr. Chairman, is that they 
managed to penetrate 96 percent of their own systems that had 
been targeted. Only 4 percent realized that they had been success- 
fully penetrated and of those 4 percent, only 5 percent of the 4 per- 
cent did report this to superior offices. 

Substate or nonstate criminal actors are using the same meth- 
ods. Although not verifiable, briefers have told us in ofif-the-record 
sessions — and these are briefers representing industry and govern- 
ment — that at least 400 of the Fortune 500 corporations have been 
penetrated and, again, only 5 percent were aware of these penetra- 
tions. 

In many instances, the objective was passive economic intel- 
ligence collection, setting off few, if any, alarms. We have no early 
warning capability in cyberspace and in mock information warfare 
scenarios, we have seen the telephone signalling systems and 
switches can suddenly curdle, jamming communications, that trad- 
ing on the New York Stock Exchange can be paralyzed, that auto- 



71 

mated teller machines can go haywire, crediting and debiting erro- 
neous amounts at random, that the Social Security System and its 
1,325 field offices could no longer function and that air traffic con- 
trol centers and railroad and shipping computers can be disabled 
quite easily. 

The order of magnitude of transnational crime, as our experts 
have put it all together, and we deal with foreign intelligence serv- 
ice as well, the order of magnitude is staggering. The National 
Criminal Intelligence Service in London has upped its estimate of 
annual money laundering to about $1.3 trillion a year. NCIS in 
London receives about 12,000 confidential money laundering tips 
every year from public spirited citizens but not one of these has yet 
led to a conviction because the evidence simply vanishes in 
cyberspace in nanoseconds. 

PDD-42, which we are all aware of that President Clinton issued 
last October was designed to come to grips with transnational 
crime and money laundering. It is at least a good beginning but, 
in our judgment, it is woefully inadequate in that it assumes that 
we can negotiate the closing of some 50 major money laundering 
centers that span the globe, many of them tiny island nations, and 
if unsuccessful then punish them by taking them out of the U.S. 
financial loop. There is no such loop. It is now a global one but law 
enforcement still has to stop at meaningless borders. 

The Seychelles will give anyone depositing $10 million a diplo- 
matic passport; that is, immunity from prosecution. A St. Kitts 
passport can be had in return for the purchase of a $150,000 condo 
and I, personally, know several American citizens who have given 
up their citizenship and who are now citizens of St. Kitts in ex- 
change for $150,000 in order to evade taxes. 

We must be prepared to address the many new issues raised by 
the development oi cybercash, new payment systems such as stored 
value cards or electronic wallets. Ron Noble, the outgoing Under- 
secretary for Enforcement at Treasury said we have to be con- 
cerned as an organization to come up with principles which recog- 
nize that technologies could pose a threat but do not define them 
in such a way that you are dated as soon as you publish them. 

Law enforcement officials feel strongly that the developers of new 
financial technologies should think about their criminal potential 
before they launch them so that governments do not have to clamp 
down on them afterwards with draconian rules. Safeguards now 
being discussed against the misuse of electronic stored value cards 
could include limiting their maximum value or restricting their use 
to certain closed systems. 

The professionals on our own CSIS task forces believe that elec- 
tronic financial crimes are now the principal threat to the world's 
financial infrastructure. We are facing a new breed of transnational 
criminals with high tech methodologies and that was discussed all 
morning today at these off-the-record meetings with the top experts 
in this country. 

Individuals and corporations are only dimly aware of the risks. 
Electronic commerce is expected to reach about $3 trillion a year 
in 4 years' time when on-line banking will become the norm and 
checkbooks the exception. Our real assets, Mr. Chairman, are in 
electronic storage, not in Fort Knox, including most of the propri- 



72 

etary and intellectual property. And in this global electronic envi- 
ronment, there are no cops to protect you, your assets or your se- 
crets or your reputation in personnel or court records that can be 
doctored by remote control. 

As "60 Minutes" demonstrated last Sunday, transnational crimi- 
nal gangs are now routinely stealing the identities and retirement 
accounts of American citizens. We all know that successful counter- 
feiting is also a global plague. If 14 out of the 15 French banks 
forewarned that it might be a forgery guaranteed the authenticity 
of a $100 bill, we know that the superbill is not a journalistic 
fantasy. 

Russians now hold tens of billions of dollars in $100 bills, obvi- 
ously not all counterfeits, and about $100 million, as you well 
know, in $100 bills is shipped daily to Russia where they are 
bought for rubles. Topic A among Russians these days is what the 
new $100 bill will do to their hoard of old bills. The U.S. embassy 
hotline tells them that they have nothing to worry about, that the 
old bills will be valid tender for the indefinite future, but there is 
no question that regimes such as Iran, Libya, and Iraq have a vest- 
ed interest in destabilizing confidence in the dollar. They have also 
been using counterfeit dollars for subversive purposes. The global 
reach of the Superbill is yet another example of how law enforce- 
ment and intelligence have no alternative but to pool, not share, 
their resources. 

You might ask, Mr. Chairman, what does an organization like 
CSIS hope to do about global organized crime. First of all, we have 
established, and this was confirmed again this morning, there is no 
central clearinghouse in this city for information about activities in 
all fields of transnational crime. CSIS has collected and continues 
to collect this information from a wide variety of sources all over 
the world. Our mandate is quite simply to act as a catalyst to raise 
the level of awareness that hopefully will provide the building 
blocks for the kind of high tech transnational cooperation and legal 
structures that are essential in order to level the playing field be- 
tween law enforcement and transnational crime syndicates. 

Countries under attack including all the democratic nations of 
the world have no choice but to pool their resources to create the 
kind of countervailing force that transnational crime syndicates 
will have to take seriously. And, unless that happens, global orga- 
nized crime will continue to supplant national entities and under- 
mine the world's financial infrastructure. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Amaud de Borchgrave can be 
found on page 301 in the appendix.] 

Chairman Leach. Thank you. 

I think I should breathe a collective sigh, if everyone present will 
sigh. 

Mr. Brody. 

STATEMENT OF CLIFFORD L. BRODY, PRESIDENT, CLIFFORD 

L. BRODY ASSOCIATES, INC. 

Mr. Brody. Mr. Chairman, I am pleased. I am, indeed, honored 
to be asked to testify before the committee today on the whole 



73 

question of money laundering, and the role of Russian banks and 
Russian institutions fostering it. 

I have prepared written testimony, and I ask that it be included 
in the record. 

Chairman Leach. Without objection, all the statements will be in 

the record. 

Mr. Brody. And, with your permission, I would like to digress 
a little bit from my prepared oral statement as well. 

Chairman Leach. Please. 

Mr. Brody. I do benefit from the excellent, and I mean excellent, 
testimony of the speakers that have appeared before me today, 
both on this panel and on the preceding panel, and it has caused 
me to think a little bit about the recommendations I have made 
which I stand by, and also to want to comment a little bit on the 
framework for not only what is going wrong, but how we might ad- 
dress it because that seems to be the problem, number one. 

My recommendations were, and still are, that the U.S. Govern- 
ment and other governments sit down somehow in an effective sort 
of way with the Russian Government and Russian Central Bank to 
cause the Central Bank of Russia to make available on a confiden- 
tial basis to banks and other appropriate agencies those organiza- 
tions inside of Russia that are legally licensed to have accounts 
outside of Russia. That builds on the whole question of, know thy 
customer. We can't know who all the customers are from Russia, 
but there is a licensing system, it is formal, it is maintained, and 
it should be available. 

I stand by my second recommendation, which is that the Con- 
gress secure a commitment of some sort from the executive branch 
to act with other governments to begin focusing on some specific 
rules of the road, be they legislative or regulatory or central bank 
in nature, governing the use by banks of all kinds of stored-value 
card technology, particularly as it is used for transferring or trans- 
mitting value, money, on cards. 

I also believe that this committee should sit down carefully and 
quickly with the banking industry to define where the common 
ground is between the committee and the Congress and the indus- 
try to make sure that stored value on these cards has some way 
of telling the institutions that process this value where large values 
have come from. I will come back to these recommendations in a 
moment. 

My informal comments, they do digress a little bit fi"om my oral 
statement, begin with the statement that Mr. Royce made at the 
beginning of the hearings today. Mr. Royce's statement struck me 
not only as correct factually, but also well -structured in the sense 
that he has correctly identified the nature of the problem, the par- 
ticipants in the problem, essentially the cause of the problem. If 
anything, the statistics of a more recent nature buttress the points 
that you have made, Mr. Royce. 

I believe that this is happening because lawlessness really is 
rampant in Russia and some of the other former Soviet Union Re- 
publics. I think it is a special form of lawlessness that we are not 
accustomed to seeing in the United States, nor do we find in West- 
ern Europe. It is an individual sort of lawlessness. It is an institu- 
tional form of lawlessness, but it is reflected in the activities of peo- 



74 

pie who are simply players in a system that is unlike ours. These 
people, particularly from institutions or from governments or from 
the central bank of Russia, often say that they are speaking for 
their institutions, but they are really not. They are speaking their 
hopes, their aspirations, particularly the ones that would like to 
see the system improved, but they really do not have the cachet of 
their organizations and, sometimes, even at the top, they do not 
even know what their organizations are doing. 

As a result, if we bank on the signature or the word of a Russian 
banker, or a Russian Central Banker, or a Russian Minister, or 
even a Russian Parliamentarian, we really do not know if he 
stands for his institution or whether the institution will deliver. In 
fact, the experience is that somewhere in that institution there are 
people who are corrupt and who will use the name of the institu- 
tion for their own financial and personal gain. 

I believe in Russia that the political level does not care whether 
this problem is solved, it is pure and simple. Unlike here, and un- 
like the witnesses, particularly the official witnesses, they just 
don't care. I think you are correct that the real threat is that with- 
out some kind of political accord, agreement, among central banks 
and among governments, that these problems be addressed, par- 
ticularly not in hindsight, but with some foresight, particularly re- 
garding electronic monev and stored value cards. Without that kind 
of accord, we will not solve the problem. 

I think that the opportunity is growing, as everyone else here 
has documented with more technical skill than I can, for system- 
atic thwarting of all forms of money laundering control, watching, 
monitoring, filing, reporting that we know of today. But, by the 
same token, because it is becoming computerized, and because the 
technology is available to everybody, and because the banking in- 
dustry in this country and many others, is investing so much 
money in trying to agree on standards, that out of the development 
of electronic money and the movement of money electronically, we 
will see a form of uniformity, at least on standards, that will offer 
us the opportunity to see where money is coming from and see 
where it is headed, out of the problem comes the solution. 

I am a process person. I think that we have heard an excellent 
discussion from many different perspectives of what is wrong. The 
real question is, how do we solve it? I believe we solve it by a sys- 
tematic approach and a systematic solution. It will be techno- 
logically-based, based on these new forms of moving money. 

It needs negotiation, it needs negotiation with the banking indus- 
try between this committee and this Congress and the industry to 
see what the industry is developing in the way of a systematic solu- 
tion which can be used with the convenience of those stored-value 
cards that we customers want, to figure out where inordinate 
amounts of money are coming from, where it has travelled through, 
and where it is headed. 

I think it needs some negotiation between our government and 
other governments to agree on some uniform standard. I think it 
needs some negotiation oy the Federal Reserve with the Bank for 
International Settlements, and with other central banks on uni- 
form standards for understanding how this money should move. I 
think the committee has the role with the industry, the State De- 



75 

partment has the role with the foreign governments, and I think 
the Fed really does have a role with the Bank for International 
Settlements. 

I think the KGB is in banks, to answer a question that you have 
posed, Mr. Royce, not because the KGB as an institution decided 
that it was going to get into banks, but because when banks were 
effectively cut off from their domestic subsidy inside Russia in 
1987, that's when they first started doing it, and when the Soviet 
Union dissolved, effectively at the end of 1991, the banks needed 
fixers. They needed people who knew the Russian political system, 
particularly the domestic system, so that they could get around the 
whole function of filing forms, and they dia have some reporting 
systems, get around tax compliance, get around currency reporting, 
even in the rudimentary form that it existed there, and the KGB 
people, particularly retirees, were very, very well informed on how 
to beat the domestic Russian system. They brought extra value- 
added to the extent that they knew from an intelligence or profes- 
sional standpoint how foreign banking systems worked, but that 
was not their primary value-added to tne banks. 

The people inside Russia and inside the banking systems there 
are corrupt by our standards, but they are not corrupt by their 
standards. It is OK to accept money wnere we would never think 
of a government official accepting money. It is OK to make an 
inter-bank clearing system available for companies that are trying 
to hide their income, their revenues, cut their taxes, which is what 
Russian companies do a lot. We don't think it is OK. It is tolerated, 
it is acceptable. 

I believe, and I will conclude on this point, that although it is 
understandable that we speak of more law enforcement, that it is 
misleading to talk about more law enforcement. I was particularly 
puzzled that the Department of State has suggested they need 
more space, more law enforcement people. As you know, I am a 
former foreign service officer, I think the foreign service works now 
kind of like it did before. To the extent that we have yet more peo- 
ple in embassies delegated the responsibility of dealing with these 
matters at an operational level, we remove the incentive for the 
Chief of Mission, for the Ambassador, to make this a political issue, 
number one, and deal with that at a political level with the oppos- 
ing government, or the, shall we say, the host or home country 
government. 

I don't know that we need more law enforcement people overseas. 
I think we need to make this more of a political priority, and I may 
add, Mr. de Borchgrave, I agree with you fundamentally that the 
threat to the future is financial destabilization. 

Let me suggest this, and this may be a flight of fancy but, none- 
theless, it is worth some thought; because if 20 percent of it is val- 
uable and 80 percent of it has to be thrown away, well, so be it. 
We have within our power — using plain off-the-shelf software that 
we can buy at any computer store — to put a scenario in a single 
laptop computer and to take it around and to show it to some 
central banks and to some governments, some leaders of Finance 
Ministr^s, what would happen if something akin to the pounding 
that the Pound took several years ago took place today as a result 
of a purposeful destabilization effort by some organization some- 



76 

where, I think once we see it graphically, once it is in color, once 
it is on a computer screen, and once it is reduced to elemental sin- 
gle-syllable forms, we can get a sense of the problem and we may 
be able to excite some political will to negotiate some accord, agree- 
ment, among governments to get uniform approaches, at least to 
identify where the dirty players are coming from. We should do it 
with Russia. We should start there, and we should look to the polit- 
ical leaders of our government to negotiate this and to show this, 
and even to understand it. 

I will stop there, and I will be pleased to answer your questions. 

[The prepared statement of Mr. Clifford L. Brody can be found 
on page 307 in the appendix.] 

Chairman Leach. Thank you very much. 

Let me begin with Mr, Royce since I skipped him earlier. I will 
come back. 

Mr. Royce. Thank you, Mr. Chairman. 

I guess the first question that comes to mind is how do we im- 
pose, how do we impose on these other countries, how does the Ad- 
ministration or how do we in Congress begin to impose on Switzer- 
land and other nations? I mean, Mr. de Borchgrave, you explained 
the circumstances there with the Seychelles. Governments around 
the country, around the world that basically are the beneficiaries 
of the importation of funds from illegal activities that are basically 
working hand in glove with people involved with organized crime. 

So what do we do in order to force these governments to capitu- 
late and begin to operate on these systems that we would like to 
impose? So if I could just have a response to that question? 

Mr. DE Borchgrave. Well, are you suggesting — are you referring 
to PPD-42, Mr. Royce, of last October which I suggested in my tes- 
timony does not go far enough? Given national sovereignties, that 
is about as far as you can go today to try to close these loopholes. 

The PPD-42 thinks that we can negotiate the closing of these tax 
havens or offshore banking centers if they are involved in wide- 
scale money laundering but I don't know if our banking experts 
would agree with me, I'm not sure how that works technically, as 
I cannot detect anything called an American financial loop. If you 
think that the New York Federal Reserve alone transfers $2.3 tril- 
lion a day, $980 billion of which goes abroad, what does national 
sovereignty mean in that context, yet we still have to address this 
problem, given the givens, as a problem of national sovereignty, 
whether you're dealing with St. Kitts, the Seychelles or Switzer- 
land or Liechtenstein. I don't know if you would agree. 

Mr. Melnikoff. If I might, Mr. Royce, I will be going to the Re- 
public of Panama for the first Congress of South American bankers 
and I think here is a starting point. As a matter of fact, these ques- 
tions are going to be posed during this congress, which will last 4 
days, and we will be very, very interested in the response that we 
get because it is, indeed, a significant problem. 

Similarly, to the comments I received in Paris back in January 
when I posed the question, know your customer. I thought it was 
universally accepted, especially with the G-7 nations, and that is 
not totally accurate. So it will be interesting to get feedback from 
these South American countries. 



77 

Mr. ROYCE. I am not sure what feedback we are going to get be- 
cause their benefit Hes in not knowing their customers. Their bene- 
fit lies in the fact that these foreign countries have no money laun- 
dering laws whatsoever and therefore have a welcome mat out for 
the massive cash flows that come through their system fi-om orga- 
nized crime and round table discussions with nations that are the 
beneficiary of our inability to impose any standards on the conduct 
of their banking institutions isn't likely, I think, to get to the root 
of the problem. 

It is going to take — ^it is going to take the development of some 
stick, some incentive to get foreign governments to develop this 
body of law. 

Mr. Brody. Mr. Royce, if I may, it would seem to me that if the 
regulatory community here, together with the banking industry 
here in this country, took the — took a very careful look at the tech- 
nological development and going into electronic cash and came up 
with a set of standards, you might say three things about those 
standards. Number one, they would be terrific, technologically, be- 
cause our banks are in the forefront of developing this technology. 
It is not just the banks; it's the communications companies and the 
computer companies as well. 

Number two, if we were really going to use them and they of- 
fered a degree of protection and regulatory capacity to the regu- 
latory agencies, as you say, there might be an incentive in there 
to some of the other central banks to adopt them. There is a par- 
ticular problem in Europe because the European approach to some 
of these regulatory standards is different than ours. 

But our industry is really putting a lot of muscle, a lot of money 
and a lot of intellectual capacity into developing systems that will 
actually work and what we can say is that if they are good, if these 
systems are good, these other governments, tnese other central 
banks should adopt them and at the end of the day, the rails have 
got to match. If they want to work with the system, they've got to 
work with the system as we are doing it because this is the way 
the picture is going to be painted on the screen. 

The real issue is, can banks go forward to other banks and, say, 
in Europe or anywhere else, say "this is how we do it." And I think 
the answer is, "no." It really has to be the central bank that goes 
to the central bank and says, "this is how we are going to do it and 
it is a good system and you may not like it but unless you want 
the baggage or the fi-eight or the cost of unloading the cars as you 
do at some borders between eastern and western Europe and then 
reshipping it on and us having to check — whoever the 'us' may be, 
probably the banks themselves — and add the cost to that, this is 
how we ought to do it." And if we've got the best product, they 
should want to buy it. 

Mr. RoYCE. I will follow up with one other question, just because 
I wanted to ask Mr. de Borchgrave, and this has to do with the 
IMF money that the United States basically — ^from what we have 
learned about the lack of controls on the system there, from what 
we know from the people that we have talked to, what are our 
guarantees that billions of dollars in IMF loans, international 
loans, multinational loans that go to that — to Russia end up where 



78 

they are supposed to be and don't end up partially being shifted 
outside the country? Do you have any information? 

Mr. DE BoRCHGRAVE. There are no guarantees, Mr. Royce. There 
are, built into the IMF agreement as I am sure you have read, 
monthly monitoring processes. How good that is going to be, I have 
no idea. What I can tell you is that the estimates of our experts 
including Dr. Brezezinski and also headquarters of the CSIS, is 
that of the $110 billion that has been extended to Russia by West- 
ern countries, principally Germany and Western lending institu- 
tions, from 60 to 70 percent of that has returned to secret accounts, 
private accounts all over the world, in flight capital from Russia. 

Do you directly relate that to the $110 billion? I don't know, but 
that is the estimate of the experts in terms of what thev believe 
to be moving abroad. But now you've got $100 million a day going 
back into Russia, buying rubles, so it seems to me it requires a lot 
better intelligence than what we have obtained so far. 

Mr. Royce. Thank you, Mr. Chairman. 

Chairman Leach. I do not know what is possible or not, but in 
some ways there might be a role for exposure or disclosure in this 
sense, that it strikes one, when one looks at the Russian cir- 
cumstance, they have two financial problems of classic proportions. 
One, they have no honest intermediary financial system where 
someone can — wants to voluntarily put their money and save it. 
And, second, they have no lending system at fair rates in which 
one can desire a loan. 

Beyond that, they have the capital flight issue which makes the 
Latin American circumstance of a decade ago look fairly slight. If, 
in theory, one had to report to Russia, everybody that takes money 
out, if in theory in Russia that was a crime, at some point someone 
might enforce it. I mean, it might be a very interesting phenome- 
non. And so I don't — so what I am asking here is what is the role 
of disclosure in an exposure sense? 

Mr. DE BoRCHGRAVE. Mr. Chairman, as we have analyzed what 
has happened in Russia since the demise of the Soviet Union, there 
has been a literal plundering of that country that has been going 
on at every level. We are dealing not with a normal state, as you 
have already heard, but as our KGB defectors will tell you, we are 
dealing with a state that is criminally focused from top to bottom. 

Chairman Leach. I share that. In fact, it is a state that has 
plundered itself. And then the question is, do they use those re- 
sources to plunder others. But I think that the first is occurring 
and is continuing to occur. The second is one of the more interest- 
ing questions. 

Our prior panel, I mean with some confidence, talked about the 
talent in our government. One of the oddities in Russia is they 
have one of the poorest social organizations in the history of man- 
kind but they have an extraordinarily well educated populace en 
masse and an extraordinary number of people with nothing to do 
that is constructive. And so when our people say we are at the fore- 
front of knowledge in this area, I am — when I look at the history 
of Russian mathematicians from the 19th century on, it strikes 
me there is a lot of talent there that probably exceeds some of the 
people that would be — we would honor very much in our own 
bureaucracy. 



79 

If that gets directed in a sufficient enough fashion, you've got dif- 
ficulties. There are lots of reports that the Russians have opened 
windows of look-ins into all sorts of circumstances in America that 
they have done nothing with. And then the question is how do 
you — what does that mean? I mean, I mean, it looks as if they are 
looking at the possible capabilities of tapping in but they haven't 
really done the tapping. 

I think it is a very dangerous circumstance and I don't know how 
to respond other than to say whatever priority we have placed on 
it, it is clearly insufficient and so that comes back to looking at our 
own organization, our own government. How do we reorganize for 
it and now do we motivate the international community when so 
many of the parties have a vested interest not to participate? 

Do you have any advice in that regard? I assume CSIS is looking 
at these? 

Mr. DE BoRCHGRAVE. We are indeed, Mr. Chairman, and I guess 
our bottom line conclusion at this particular stage at this juncture 
is intelligence and more intelligence and we don't, in my judgment, 
have those capabilities. 

I have asked everyone, do you have any idea of how much is com- 
ing into Europe every day? What is being bought? 

I was in the lobby of a hotel in Greneva and I happened to know 
from back in my Newsweek days the concierge of that particular 
hotel, and I saia how is the season going? He said, "Thank god for 
the Russian Mafia. It would be a disaster without the Russian 
Mafia." 

We know that all these things are going on. We know what they 
are bu)dng. I have a friend the other day who got a call here in 
Washington fi-om a Russian zillionaire who wanted to buy an 
oceanfront property in Palm Beach, Florida, and he said, well, I 
happen to have one on my desk worth $1.7 million — ^it's a good 
buy — and he said, Edward, you are insulting me. I wouldn't look 
at anything under $5 milHon. He thought that $1.7 million was 
tacky. 

All these things are going on, Mr. Chairman, all over the West- 
ern world and no one has a handle on them. 

Mr. Brody. Mr. Chairman? 

Chairman Leach. Mr. Brody. 

Mr. Brody. Thank you. In August of 1991 when the Generals 
were locking Mr. Gorbachev up at his country cabin and Mr. 
Yeltsin was standing on top of a tank, the Grenerals had removed 
Mr. Gerashenko as the head of the Central Bank. 

It's very interesting what happened, because he came back on 
the job within 3 days. He was re-appointed. The international com- 
munity of commercial banks somehow got a message to the Gen- 
erals saying that if you didn't put this guy back in, and we won't 
get into the reasons why — not that he was a terrifically competent 
Central Banker but he certainly was predictable — were basically 
going to cut the spigot on currency flows, money flows to and from 
Russia — he was re-appointed and they actually did apparently shut 
off the flows for about 12 hours. 

It is an awful thing to say about a whole country, and of course 
you can't paint totally with a broad brush, but money talks there. 
The way you get the attention of people there is to tell them how 



80 

their raw profit will be affected negatively or their money will be 
lost. 

It would seem to me that although someone may come along 
some day with a PC and try to destabilize our pajrment system or 
a part of it just to experiment to see if it can be done that a bright 
mind, for example, at CSIS ought to be able to put together a hypo- 
thetical scenario which points out that when the shell goes off, 
some of the shrapnel lands inside Russia. 

At the end of the day if our system is destabilized, so is Russia's. 
At the end of the day if our financial system is destabilized, so is 
the Cayman Islands' because people cannot spend the value that 
thev have stored up either in their mattress or in their electronic 
cash card. 

We can quantify this. Of course, it takes some assumptions but 
all forecasts take assumptions including budget deficits of the U.S., 
investment by the banking industry in electronic cash cards or 
whatever — any company does. We make some assumptions, but we 
can quantify that and we can deliver it into the hands of the au- 
thorities — a picture, because most smart people understand pic- 
tures. Words get too complicated. We can point out to the Central 
Bank of Russia and to the Finance Minister of Russia, whoever it 
may be after the elections, that if they don't clamp down — because 
I do believe we know, even though we don't know the exact num- 
bers, we know what is going on, but if we don't clamp down and 
if they don't clamp down and if some of it is not born and bred in- 
side Russia in the way of monitoring, they will suffer with the re- 
sidual of the way we suffer. 

When they see their interests affected directly, and when some- 
one puts some dollar figure next to it, you'll get their attention and 
they will respond. We need perhaps a skilled diplomat, a skilled 
Central Banker, whoever it may be, but not many people, just to 
lay it out and say it won't quite work in a way to insulate Russia 
from the devastating effects, and that is why they need to control 
their own system: their own self-interest is involved. 

Mr. DE BORCHGRAVE. Mr. Royce — with your permission, Mr. 
Chairman 

Chairman Leach. Yes. 

Mr. DE BoRCHGRAVE. Mr. Royce, I think the issue that you raised 
before goes much further than legislation. Many of the countries do 
have these laws on the books right now. There are the OECD rec- 
ommendations. There are laws against money laundering in a wide 
variety of Western countries, if not all of them, but the issue is how 
do you enforce these laws. 

That is the national approach to a transnational problem. I con- 
tend that it is never going to work as long as we go on thinking 
nationally. One day perhaps we are all going to start thinking 
transnationally. How do we move from the national thinking to the 
transnational thinking without falling into the multinational think- 
ing which of course means the U.N., one world, and so forth, and 
immediately people think that you are off the wall. 

Chairman Leach. Well, we're glad that you are in the chair. Mr. 
Royce, do you have more questions? 

Mr. Royce. No, that concludes my questions, Mr. Chairman. 



81 

I would just like to thank the panelist and thank Mr. de 
Borchgrave and I also want to urge, Mr. Chairman, that maybe we 
could take the testimony of our last three witnesses and send it 
under separate copy to the members of the full committee with a 
note from you urging them to read that testimony, because I think 
it is one of the most important subjects that we have covered this 
year. 

Thank you, Mr. Chairman. 

Chairman Leach. I appreciate your comments and I want to 
thank the three witnesses and your participation is very impres- 
sive. Mr. Brody comes from a background that he knows Russia 
well. Mr. de Borchgrave is heading an effort of a very responsible 
institutional arrangement of a nature that I think is unprece- 
dented. Mr. Melnikoff, representing one of the great American 
banks — as you mav know, I have a great preiudice for oddly named 
institutions and they seem to have particularly good reputations 
and we are appreciative of your participation. 

Mr. Melnikoff. Thank you, sir. 

Chairman Leach. The committee is adjourned. 

[Whereupon, at 3:35 p.m., the hearing was adjourned, to recon- 
vene at the call of the Chair.] 



83 



APPENDIX 



February 28, 1996 



84 




Currency 

News from th« , ^/ 

Committee oo BiokJog and Floancial Services 



KMihCoDgrtu 



U.S. House of RepreseoUtivea 
James A. Uaeh, Chairman 



Opening Statement 

By Rep. James A. Leach 

Chairman, House Banking and Financial Services Committee 

Hearing on Organized Crime 

and the International Banking System 

Feb. 28, 1996 

The Committee is meeting today to review the threat organized 
criminal groups pose to the international banking system. 
Rapid changes in technology, globalization of finance and political 
problems in other countries have all put new stresses on the 
international financial system. While electronic and international 
banking have provided consumers more choices and more efficient 
markets, they have also made our financial institutions more 
vulnerable to fraudulent international schemes. 

Organized crime groups both in the United States and abroad are 
engaged in money laundering, counterfeiting of U.S. currency, 
counterfeiting of fake financial documents, access device fraud, 
and financial extortion on a massive scale. Yesterday, the General 
Oversight and Investigations Subcommittee, under the able 
leadership of Chairman Bachus, reviewed the threat international 
counterfeiting poses to the integrity of the U.S. currency. Today 
we will focus on other financial crimes. 

As the use of paper currency decreases and gives way to credit 
cards and electronic transfers, fraud associated with access 
devices becomes more troublesome. This includes the fraudulent use 
of credit cards or fraudulent misuse of electronic banking systems. 
Last year this concern was made real when the nation's largest 
commercial bank, Citicorp, was electronically held up by 
international saboteurs. Jesse James has finally met his match. 

Approximately, $12 million was illegally transferred (with $400,000 
actually withdrawn) via Citicorp cash management systems and the 
unauthorized transfers took place all over the globe — from Buenos 
Aires to the old Russian capitol of St. Petersburg to Israel. 
Given that Citicorp alone moves about $500 billion per day, the 
potential risk to the banking industry is staggering. 

more 



85 



Page 2 Leach Statement on Organized Crime 

Currently, access device fraud costs financial institutions an 
estimated $4 billion annually. Nigerian criminal groups reportedly 
account for more than $2.5 million in credit card fraud a month in 
Dallas alone. 

Another fraud being perpetrated by organized groups include so- 
called "desk-top" publishing of fake financial documents, sometimes 
referred to as prime bank notes. Counterfeiting of corporate 
checks, bonds, securities and other real or fictitious negotiable 
instruments are being produced to defraud individuals, pension 
companies, charities and financial institutions. Two years ago 
federal banking regulators issued a warning to the banking industry 
on the rise in phony prime bank note activity. Earlier this month 
state banking regulators in the Northeast issued another warning to 
their state banks, indicating that the threat continues. In 
addition, approximately 40 victims per month of a Nigerian Advance 
Fee Fraud come to the attention of government officials, with these 
victims losing on average $4 00,000. 

Today I will introduce legislation which will help law enforcement 
agencies combat the financial crimes of counterfeiting, access 
device fraud, and producing bank notes. First, the legislation 
will make it a federal crime to pass off fake documents, such as 
prime bank notes. Second, it will allow federal law enforcement 
agencies to seize the equipment used in committing access device 
fraud, such as credit card embossers. Thirdly, the bill will 
increase the penalty for counterfeiting to a maximum of 25 years 
imprisonment. 

Probably the most pernicious crime affecting the banking system, 
however, is money laundering, which according to some international 
experts now approaches a half trillion dollars a year. Criminals 
have found that technological developments appear to have made it 
easier to launder their illegal gains. For instance, smugglers may 
no longer have to worry about getting cash-full valises through 
Customs when they can electronically put thousands of dollars on 
stored-valued, or Smart cards, no bigger than the average credit 
card. 

With regard to money laundering, there is no shortage of domestic 
laws. Since 1986, major anti-money laundering legislation has been 
enacted in every Congress — from the Money Laundering Act of 1986 
which first fully criminalized money laundering to the Anti-Drug 
Abuse Act of 1988, to the Depository Institution Money Laundering 
Amendment Act of 1990, to the Annunzio-Wylie Anti-Money Laundering 
Act of 1992 to the Money Laundering Suppression Act of 1994. But 
despite increased criminal penalties and reporting requirements, 
criminal syndicates still have found ways to legitimize the 
proceeds from their illegal activities. Of special concern is the 
use of off-shore corporations and banks to avoid and skirt tougher 

center 



86 



Page 3 Leach Statement on International Crime 

U.S. laws. One of the questions we will be exploring today is what 
the U.S. government is doing to counter money laundering overseas. 

Off-shore corporations and banks are increasingly being used to 
facilitate the transnational illegal activities of organized 
criminal groups, such as the Nigerian cells, Asian Triads, Russian 
criminal networks, Middle-Eastern organized crime groups and South 
American cartels. Many of these off-shore banks face little 
regulation and supervision. In fact, some countries have 
encouraged the creation of these entities on their shores by 
adopting strict bank secrecy laws. The Indian Ocean nation of the 
Seychelles was recently chastised by the international community 
for setting up an off-shore banking haven tailored for the 
international Al Capones. 

However, the problems of banking and organized crime are not 
isolated to small island countries, but have infected some of the 
biggest economies in the world. According to the Russian Ministry 
of Interior, 700 banks have been implicated in organized criminal 
activity, with 84 Russian commercial bankers being assaulted since 
1991. In Japan, recent press accounts have noted a number of 
connections between the Japanese mafia, Yakuza, and Japan's 
beleaguered banking system; again with numerous assaults against 
senior bankers, including two executives being murdered. As U.S. 
banking becomes more intertwined with the banking systems of Japan 
and Russia, we must be careful not to allow our banks from becoming 
infected by the organized crime contagion. 

Finally, the activities of these criminal organizations are not 
limited to financial crimes. Law enforcement agencies believe that 
a clear relationship exists between these "white collar" crimes and 
the more violent crimes associated with drug dealing, illegal arm 
trafficking, murder, extortion, and alien smuggling. By stopping 
the financing and money laundering aspects of their illegal empire, 
it is hoped that we will be able to deter the more violent criminal 
activity. 

Today, the Committee will hear from law enforcement agencies, a 
bank regulator, and private experts about the threat these 
financial crimes pose to the banking system. The Committee will 
look at ways our money laundering, electronic banking, 
counterfeiting and bank fraud laws are being implemented and may 
need to be updated to combat these crimes. The Committee will also 
review the legal framework surrounding the supervision and 
regulation of offshore banking. 

Because of the breadth and complexity of the problem, today's 
hearing can only begin to provide Members and the public a bare 
overview of the problem and how the U.S. and local governments are 
responding to it. But nevertheless it is intended to provide a 
blueprint for further Committee inquiries into the extent and 
magnitude of the problem. ************** 



87 

STATEMENT OF FLOYD H. FLAKE 

BEFORE THE HOUSE COMMITTEE 

ON BANKING & FINANCL\L SERVICES 

FEBRUARY 28, 1996 

Thank you Chairman Leach for convening this 
important hearing, and for inviting such an impressive 
panel of witnesses. I would also extend a warm welcome 
to the Honorable Richard A. Brown, the Queens' county 
District Attorney. 

Mr. Chairman, under the guidance of Mr. Castle, the 
Subcommittee on Domestic and International Monetary 
Policy has spent the last year examining the future of 
money in America. Throughout this endeavor, the 
subcommittee has often focused on the criminal aspects 
of electronic banking, and the potential for fraud in credit 
card, smart card and stored value card technologies. 

The potential for fraud in the credit industry is an 
especially sensitive subject for me today, both personally 
and professionally. As we will hear from Mr. Brown, the 



88 

largest credit fraud ring in the nation was recently 
uncovered in my district. This organized criminal 
operation had contacts on three continents, stole over a 
half million dollars in cash advances, and had access to 
nearly $8 million. Mr. Brown announced indictments for 
eight co-conspirators, with over two-hundred counts, on 
February 7, of this year. 

The media frenzy following this discovery revealed 
that the criminal activity was part of an alleged 'Nigerian 
mafia. The arrests also shed light on the fact that banks 
and credit card companies lose an estimated $3 billion 
worldwide from counterfeit and stolen credit cards. But 
for an accidental discovery of a fraudulent oar^, the 
talented investigators of the New York Cit^' Police 
Department and the Queens County D.A.'s office might 
not have discovered the operation in my district. 

Again Mr. Chairman, I must stress the importance of 
this hearing, and thank you for providing the committee a 



89 



broad spectrum of witnesses with expert opinions. I look 
forward to today's testimony. 



90 



CAROLYN B. MALONEY 
14TM District, New Vork 

1S04 LONGwonTH Building 

Washington, DC 20515-32U 

1202) 225-7944 

COMMITTEES 
BANKING AND F^tNANCIAL 




DISTRICT Of nets 

10E»ST 59tm Street 

2no Floor 

w VoB», NY 10022 

12121832-6531 



Ne 



GOVERNMENT REFORM AND 
OVERSIGHT 



Congrcgs of tbe ©nitetJ ^tateg 

^ousc of i^cpresientattbesi 

SSaaStimgton. 23C 20315-3214 



Q 28-11 Astoria Boulevard 
Astoria, nv 11102 
[718)932-1B04 



619 LoniMEo Street 

BfiOORLVN NV 11211 

17181349-1260 



OPENING STATEMENT 

THE HON CAROLYN B MALONEY 

HEARING ON ORGANIZED CRIME 

FEBRUARY 28, 1996 



Thank you, Mr Chairman 

The kinds of financial ft'aud we are going to discuss today unfortunately effect every 
American At the very least, each one of us pays an increased price on everything from credit 
cards to bank fees to make up for the dishonesty of those who don't play by the rules. 

And some citizens pay a much higher price. 

New York City's own Queens District Attorney Richard Brown, who will be testifying 
here later, has done a lot to drive that point home publicly His hard work resulted in the 
indictment of eight Nigerian Nationals, charged with running a multi-million-dollar nationwide 
counterfeit credit card operation 

The victims of this scheme had their identities stolen, their accounts plundered, and their 
credit ratings ruined The scary thing is, this could happen to any of us By some law 
enforcement estimates, this type of financial fi-aud alone is a $1 5 billion underground business. 

This is one of the reasons why my colleagues Mr Schumer, Mr Vento and I offered an 
amendment to strike language from the Banking Regulatory bill which would have both increased 
the maximum consumer liability from $50 to $500 on unauthorized ATM transfers, as well as 
transferred the burden of proof to the customer on the issue of providing all relevant information 
relating to an unauthorized use 

With some of the examples of illegal access to financial information and even PIN numbers 
before us today, I'm pleased for the American consumer that our amendment passed this 
committee This is a time to maintain, not weaken, consumer protections 

I spend a lot of time on my other committee. Government Reform, working to make our 
government more responsive to the problems law-abiding Americans and businesspeople face. 



"■NTEO 0»* MCVCICD PAPtB 



91 



That's why I authored the legislation to make full and open competition the law of the 
land in our bidding process; and that's why I drafted a bill to give our government the tools it 
needs to collect on the biUions of dollars in bad debt owed to the American taxpayers 

These reforms are about targeting the solution to fit the problem: That's what we need to 
combat these financial crimes. 

In the area of money laundering, I strongly supported the reduction in the number of 
currency transaction reports that banks must file It's the quality, not the quantity of information 
we gather that is important By blanketing every transaction over $10,000 with a reporting 
requirement, resources were wasted by banks and the govenunent alike It makes no sense to 
make banks file new paperwork on every $10,000 transaction of, say, a nationally reputable 
department store. 

Instead, Know Your Customer procedures target limited resources at the problem By 
spending the time to verify a new account holder's business, a bank then has a standard of 
judgment to identify what would be a suspiciously high transaction for each particular customer 

In the near future, we are going to have a hearing on Electronic Benefits Transfer 
technology, which could move government benefits like social security and food stamps from 
checks and coupons to electronic benefit and debit accounts. And last year, we held several 
hearings on the future of money 

With all these emerging possibilities, government and business will be asking consumers to 
place their trust in these new forms of currency 

So as we move into this new era. we need to maintain, not weaken, our consumer 
protections, find ways to make our new technology both protect privacy and increase access to 
new services, and work with business, regulators and law enforcement to crack down hard on 
those who seek to defraud American consumers and business 

Finally, it's important to remember that these financial crimes are often vehicles for other 
criminal activities, whether tax evasion, illegal drugs, or even terrorism As the President said last 
year "Criminal enterpnses are moving vast sums of ill-gotten gains through the international 
financial system with absolute impunity We must not allow them to wash the blood off profits 
from the sale of drugs from terror or organized crime." 

The President underlines the need for more international cooperation of the type the 
Administration's Financial Crimes Enforcement Network is pursuing, in cooperation with private 
industry and international regulators 

I hope this hearing today can provide us with some new insight and ideas to combat 
criminal activity aimed at our financial institutions 

Thank you. Mr Chairman. 



92 



U.S. REPRESENTATIVE ED ROYCE 

House Committee on Banking and Financial Services 

Crime & International Banking Hearing 

2/28/96 

Thank you Mr. Cbainnan. I commend you for holding this hearing and I welcome 
our wimesses today. This is the third hearing that Congress has held regarding the issue of 
transnational organized crime and the threat posed to international fmancial systems by these 
oiganizations. 

In previous hearings, we have heard that in Russia alone, organized crime 
encompasses some 1,500 state enteiprises, 4,000 share holding societies, 500 joint ventures 
and 550 banks. From news reports and research done by various organizations, such as the 
American Foreign Policy Council, we know that the most rapid growth in organized crime in 
Russia is now within the financial and banlcing structure, and it is being coordinated by 
former Soviet KGB operatives. 

Indeed, according to party documents and a 1992 Russian parliamentary investigation, 
the former Soviet First Chief EHrectorate, the KGB's foreign intelligence arm, was 
instrumental in setting up many banking institutions, which are now integrating themselves 
into the western banking system. 

A parliamentary investigative commission, led by Lev Ponomarev and Aleksei 
Sutkov, concluded the following: "The Politburo of the Communist Party of the Soviet 
Union Central Committee made several secret resolutions toward direct concealment in 
commercial structures of property and monetary resources actually accumulated at the 
expense of the nation. Based on this, at all levels of the Party hierarchy, there was a mass 
founding of party banks, joint enterprises, and joint stock companies in 1990 and 1991." 

Published rqmtts in the Russian and Western media say that 75 to 80 percent of all 
joint ventures with western companies founded between 1989 and 1991 involve officers of 
the KGB. With this type of KGB involvement, the Russian Mafiya has been provided with 
organizational experience, professional intelligence techniques and the manpower to carry out 
their illegal activities. 

This professionalization of the Russian Mafiya poses new threats to U.S. and world 
financial markets. White collar crimes, counterfeiting, fraud, and money laundering are the 
weapons of choice, with the money then being used to expand operations into violent crimes 
such as drug smuggling, murder, extortion and -- most alarmingly — trafficking in arms and 
nuclear weapons-grade plutonium. 

With ever-expanding increased computer access and encryption decoding techniques 
that new technologies bring, it is hardly surprising to find that much organized crime today is 
being carried out via the computer. Offshore operations are being increasingly used to 
facilitate illegal activities of organizations not only in Russia, but also in Africa, the Middle 
East and South America. Information and testimony from previous hearings has shown that 
U.S. institutions, commercial accounts, municipalities and even our country's defense and 
civil systems are all vulnerable, if not under attack right now. 

Today, we will hear from witnesses who will again stress the vulnerabilities of 
American institutions and government to these escalating "cyber-attacks, " and we will 
hopefully hear what progress is being made to develop international laws, technologies and 
procedures to blunt money laundering and criminal activities in the financial sector. 

But the overriding question that I hope will be addressed by each of our witnesses 
remains: What can we as legislators do to help? What can we do to provide our institutions 
and citizens with the capability to defend themselves and to punish those who would seek to 
conduct their criminal activities through financial systems? 

We cannot allow ourselves to be complacent and we cannot allow a major failure or 
financial catastrophe to occur because we were not willing to take preventative measures. 

Thank you Mr. Chairman, I look forward to the testimony of our witnesses. 

# # # 



93 

Opening Statement of the 

HON. J.C. WATTS, JR. 

Before the House Committee on Banking & Financial Institutions 

February 28, 1996 



Organized crime is an oxymoron. Crime, by its very nature, is disorganization ~ 
sick organization that creates havoc and destroys lives in its wake. 

When we tackle the issue of organized crime both nationally and internationally, 
we are looking at a huge network of disease. We are looking at an underground economy 
that gets better rewards than those trying to conduct legitimate and honest business. Illicit 
capitalism on the streets rewards the criminal more than the family willing to risk their 
savings and take $5000 to start a family business. 

Billions ~ maybe even trillions of dollars illegally go through an unwEished system. 
While legitimate people in legitimate businesses pay more that their fair share of taxes 
and fees, the criminals circumvent the system and exploit it for their own benefit. 

Folks, it is time that we strengthen our grip on financial terrorists. By their very 
definition, criminals are hard to catch but that does not mean we should stop trying. Mr. 
Chairman, I salute you for bringing this issue to the fore. I am also anxious to hear and 
support our FBI agents. Secret Service agents and others involved in stopping these 
financial bandits from wreaking havoc on our domestic tranquility. 



94 



United States General Accounting Office 



GAO 



Testimony 

Before the Committee on Banking and Financial Services, 
House of Representatives 



For Release on Delivery 
Expected ai 
10:00 a.m.. EST 
Wednesday, 
February 28. 1996 



MONEY LAUNDERING 

U.S. Efforts to Combat Money 
Laundering Overseas 



Statement of JayEtta Z. Hecker, Associate Director 
International Relations and Trade Issues 




GAO/T-GGD-96-84 



95 



MONEY LAUNDERING: 
U.S. EFFORTS TO COMBAT MONEY LAUNDERING OVERSEAS 



SUMMARY OF STATEMENT BY JAYETTA Z. HECKER, ASSOCIATE DIRECTOR 
INTERNATIONAL RELATIONS AND TRADE ISSUES 

Money laundering is a global problem requiring collective 
international efforts to combat. GAO's testimony describes U.S. 
efforts to deter this activity, including: (1) U.S. and seven 
European countries' regulation of financial institutions in regard 
to money laundering, (2) U.S. bank regulators' oversight of money- 
laundering controls at overseas branches of U.S. banks, (3) U.S. 
law enforcement agencies' efforts to coordinate their overseas 
ant i -money- laundering activities with host countries' law 
enforcement agencies, and (4) U.S. participation in international 
anti-money-laundering arrangements . 

U.S. banking regulators' previous domestic anti-money-laundering 
efforts relied mainly on reporting regulations that require 
financial institutions to report currency transactions above 
certain thresholds. Current approaches include an increased 
reliance upon reporting suspicious transactions. Also, most U.S. 
banks have adopted "know your customer" policies to help identify 
suspicious transactions, according to the American Bankers 
Association. European countries GAO visited have relied on 
suspicious transaction reports as well as on know your customer 
policies to combat money laundering through financial institutions. 

U.S. bank regulators may face impediments in overseeing money- 
laundering controls at branches of U.S. banks abroad. These 
branches are subject to host countries' anti -money- laundering laws 
rather than U.S. anti -money- laundering laws. As a result, U.S. 
regulators' exciminations of these branches are more narrowly scoped 
than comparable examinations of branches in the United States. In 
addition, host country bank privacy and data protection laws may 
serve to prevent U.S. regulators from performing on-site 
examinations of U.S. branches in certain countries. However, 
regulators can rely on other means to counteract or prevent money- 
laundering activities at these overseas branches. 

Several U.S. law enforcement agencies are responsible for 
investigating crimes involving money laundering. Law enforcement 
officials from two European countries expressed concern to GAO 
about the difficulties of dealing with multiple U.S. agencies. 
U.S. law enforcement agency officials, however, prefer not to 
designate a single agency as a focal point on overseas money- 
laundering inquiries because of jurisdictional problems. Instead, 
a number of U.S. agencies have adopted a July 1994 Memorandum of 
Understanding that aims to improve overseas coordination. 

Also, the United States is working with other countries through 
treaties and arrangements to establish global anti-money-laundering 
policies, mainly through the Financial Action Task Force. 



96 



Mr. Chairman and Members of the Committee: 

I am pleased to be here today to discuss money laundering, a global 
problem that needs to be fought collectively by the international 
community. Increased attention to U.S. efforts to combat money 
laundering abroad is important, particularly as U.S. efforts have 
made it more difficult for individuals to launder money 
domestically. 

My testimony today will discuss (1) U.S. and selected European 
countries' approaches to combating money laundering through 
regulation of financial institutions," (2) U.S. bank regulators' 
oversight of money- laundering controls at overseas branches of U.S. 
banks, (3) U.S. law enforcement agencies' efforts to coordinate 
their overseas anti-money-laundering activities with host 
countries' law enforcement agencies, and (4) U.S. participation in 
international arrangements to combat money laundering abroad. 
Our work was designed to provide a framework for understanding U.S. 
international efforts to combat money laundering rather than an 
assessment of U.S. activities in this area. 

My remarks today are based on the work that we performed for 
Ranking Minority Member Henry B. Gonzalez over the past year and a 



'Treasury regulations implementing the Bank Secrecy Act (Public 
Law 91-508, Oct. 26, 1970) define the term "financial 
institution" to include banks, federally regulated security 
brokers, currency exchange houses, funds transmitters, check- 
cashing businesses, and persons subject to supervision by state 
or federal bank supervisory authorities. 



97 



half on U.S. efforts to combat overseas money laundering. Most of 
our work will be more comprehensively summarized in a report we 
plan to release shortly. In doing our work, we obtained views and 
material from (1) U.S. bank regulatory officials, including the 
Department of the Treasury's Office of the Comptroller of the 
Currency (OCC) and the Federal Reserve Board (FRB) ; (2) U.S. law 
enforcement officials in the United States and abroad, including 
the Department of the Treasury's Customs Service, and Internal 
Revenue Service (IRS), and the Department of Justice's Criminal 
Division, Federal Bureau of Investigation (FBI) , and Drug 
Enforcement Administration (DEA) ; (3) Treasury's Financial Crimes 
Enforcement Network (FinCEN) and the Department of State; (4) law 
enforcement, bank regulatory, and financial institution officials 
we visited in England, France, Italy, Germany, Hungary, Poland, and 
Switzerland; (5) Interpol (the international criminal police 
organization) ; and (6) the Secretary of the multilateral Financial 
Action Task Force (FATF) . 

BACKGROUND 

Money laundering, which is the disguising or concealing of illicit 
income in order to make it appear legitimate, is a problem of 
international proportions. Federal law enforcement officials 
estimate that between $100 billion and $300 billion in U.S. 
currency is laundered each year. 



98 



Numerous U.S. agencies play a role in combating money laundering. 
Law enforcement agencies within the Departments of Justice and the 
Treasury have the greatest involvement in domestic and 
international money- laundering investigations. FRB and OCC have 
the primary responsibility for examining and supervising the 
overseas branches of U.S. banks to ascertain the adequacy of the 
branches' anti -money- laundering controls. FinCEN provides 
governmentwide intelligence and analysis that federal, state, 
local, and foreign law enforcement agencies can use to aid in the 
detection, investigation, and prosecution of domestic and 
international money laundering and other financial crimes. In 
addition, other U.S. agencies play a role, including the State 
Department, which provides information on international money 
laundering through its annual assessment of narcotics and money- 
laundering problems worldwide.^ 

I]..q. AND FUROPEAN APPR0ACH K.9 TO COMBATING 
MONEY LAUNDERING THROUGH F INANCIAL TN.qTITUTIONS 

Until recently, U.S. banking regulators' anti-money- laundering 
efforts relied heavily on regulations requiring financial 
institutions to routinely report currency transactions that exceed 
$10,000, primarily through filing currency transaction reports 



^See International Narcotics C ontrol Strategy Report, U.S. 
Department of State, Bureau for International Narcotics and Law 
Enforcement Affairs (Washington, D.C.: Department of State, Apr. 
1995) . 



99 



(CTR) with the IRS. U.S. banking regulators have also relied on 
approaches in which financial institutions report financial 
transactions involving known or suspected money laundering.^ 
According to a senior Treasury official, U.S. regulators' anti- 
money- laundering efforts in coming years are expected to rely more 
on the reporting of financial transactions involving known or 
suspected money laundering. U.S. regulators will also be expected 
to continue relying on CTRs, but to a lesser extent. 

Most U.S. banks have adopted so-called "know your customer" 
policies over the past few years to help them improve their 
identification of financial transactions involving known or 
suspected money laundering, according to the American Bankers 
Association. Under these know your customer policies, which are 
currently voluntary but which the Treasury plans to make mandatory 
in 1996, financial institutions are to verify the business of a new 
account holder and report any activity that is inconsistent with 
that type of business. According to the American Bankers 
Association, these policies are among the most effective means of 
combating money laundering, and the majority of banks have already 
adopted such policies. 

The seven European countries we visited have tended to model their 



^On February 5, 1996, the Treasury and banking regulators 
finalized rules to require, in general, that banks and other 
depository institutions file a single report, known as the 
suspicious activity report, to FinCEN for suspicious transactions 
at or above $5, 000 . 



100 



anti-money- laundering measures after a 1991 European Union (EU)* 
Directive^ that established requirements for financial institutions 
similar to those that financial institutions conducting business in 
the United States must follow. However, instead of relying on the 
routine reports of currency transactions that the United States has 
traditionally emphasized, European countries have tended to rely 
more on suspicious transaction reports and on know your customer 
policies. These know your customer policies are somewhat more 
comprehensive than comparable U.S. ones, according to European bank 
and regulatory officials. 

While Hungary and Poland have adopted anti-money- laundering 
measures following the EU Directive, banking and government 
officials in these two countries told us that the implementation 
and enforcement of their ant i -money- laundering measures have been 
hindered. They attributed problems to such factors as resource 
shortages, inexperience in detection and prevention, and in Poland, 
conflicts between bank secrecy laws and recently adopted anti- 
money- laundering statutes. 

FinCEN and INTERPOL have recently initiated Project Eastwash, to 



*EU includes 15 member nations: Austria, Belgium, Denmark, 
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the 
Netherlands, Portugal, Spain, Sweden, and the United Kingdom 
(U.K. ) . 

^Council Directive of 10 June 1991 on the Prevention of the Use 
of the Financial System for the Purpose of Money Laundering 

(91/308/EEC) . 



101 



attempt to assess money laundering in 20 to 30 countries throughout 
East and Central Europe and the former Soviet Union. According to 
FinCEN officials, as of late 1995 on-site visits had been made to 
five countries to assess the law enforcement, regulatory, 
legislative, and financial industry environment in each nation. 
Information from these visits is to be used for policy guidance and 
resource planning purposes for both the countries assessed and U.S. 
and international anti-money-laundering organizations, according to 
these officials. 

U.S. BANK REGULATOR.^' OVERSTCiHT OF M ONEY -LAUNDERING CONTROLS AT 
OVERSEAS BRANCHES OF U.S. BANKS 

U.S. banks had over 380 overseas branches located in 68 countries 
as of August 1995. These branches, which are a direct extension of 
U.S. banks, are subject to host countries' anti-money- laundering 
laws rather than U.S. ant i -money- laundering laws, according to OCC 
and FRB officials. In some cases, U.S. banking regulators have not 
been allowed to perform on-site reviews of these branches' anti- 
money- laundering controls. 

U.S. Review of Some Over seas Bank 
Branches Faces Obstacles 



According to U.S. banking regulators, bank privacy and data 



102 



protection laws in some countries serve to prevent U.S. regulators 
from examining U.S. bank branches located within their borders. Of 
the seven European countries we visited, U.S. regulators were not 
allowed to enter Switzerland and France to examine branches of U.S. 
banks because of these countries' strict bank secrecy and data 
protection laws. U.S. regulators, however, have other means 
besides on-site examinations for obtaining information on U.S. 
overseas branches' ant i -money- laundering controls, according to FRB 
and OCC officials. For example, U.S. regulators can and do 
exchange information- -excluding information requested for law 
enforcement purposes- -with foreign banking regulators on their 
respective examinations of one another's foreign-based branches. 
In addition, FRB can deny a bank's application to open a branch in 
a country with strict bank secrecy laws if it does not receive 
assurance that the branch will have sufficient anti-money- 
laundering controls in place, according to FRB officials. 

Exaninanons of Overseas Branches 
Tend to Be Nar rowlv Scoped 

OCC and FRB officials said that in countries that allow them to 
examine ant i -money- laundering controls at overseas branches of U.S. 
banks, such examinations are of a much narrower scope than those of 
branches located in the United States. One reason is that host 
country anti -money laundering measures may not be as stringent as 
U.S. anti-money-laundering requirements and, thus, may not provide 



103 



the necessary information for U.S. examiners. OCC and FRB 
officials also said that the expense of sending examiners overseas 
limits the amount of time examiners can spend reviewing the anti- 
money- laundering controls of the bank. However, according to these 
officials less time is needed to conduct an anti-money- laundering 
examination at some overseas branches because of the small volume 
of currency transactions. FRB officials told us that they have 
recently developed money- laundering examination procedures to be 
used by its examiners to address the uniqueness of overseas 
branches' operations and to fit within the short time frames of 
these examinations. Although these procedures have been tested, 
they have not been implemented and, thus, we have not had the 
chance to review them. 

U.S. LAW ENFORCEMENT AGENCIE .'^ ' OVERSEAS EFFORTS 

Responsibilities for investigating both domestic and international 
crimes involving money- laundering are assigned to numerous U.S. law 
enforcement agencies, including DEA, FBI, IRS, and the Customs 
Service. While European law enforcement officials acknowledged the 
important role U.S. law enforcement agencies play in criminal 
investigations involving money laundering, some commented about the 
difficulties of dealing with multiple agencies. 

Some British and Swiss law enforcement officials we spoke with said 
that too many U.S. agencies are involved in money- laundering 

8 



104 



inquiries. This overlap makes it difficult, in some 
money- laundering inquiries, to determine which U.S. agency they 
should coordinate with. These European officials indicated that 
designating a single U.S. office to serve as a liaison on these 
money- laundering cases would improve coordination. 

According to U.S. law enforcement agency officials, however, 
designating a single U.S. law enforcement agency as a focal point 
on overseas money- laundering cases could pose a jurisdictional 
problem because money- laundering cases are usually part of an 
overall investigation of another crime, such as drug trafficking or 
financial fraud. Nevertheless, U.S. law enforcement agencies have 
taken recent steps to address overseas money-laundering 
coordination. In particular, a number of U.S. agencies adopted a 
Memorandum of Understanding (MOU) in July 1994 on how to assign 
responsibility for international drug money- laundering 
investigations. Law enforcement officials were optimistic that the 
MOU, which was signed by representatives of the Secretary of the 
Treasury, the Attorney General, and the Postmaster General, would 
improve overseas ant i -money- laundering coordination. Although law 
enforcement is optimistic about improvements in coordination, we 
have not assessed how well U.S. international investigations are 
being coordinated. 

INTERNATIONAL ARRANGEMENTS TO COMBAT 
OVERSEAS MONEY LA UNDERING 



105 



The United States works with other countries through multilateral 
and bilateral treaties and arrangements to establish global anti- 
money- laundering policies, enhance cooperation, and facilitate the 
exchange of information on money- laundering investigations. 

Multilateral Effo rts to Establish Global 
Anti-Monev-Laund erina Policies 

The United States' multilateral efforts to establish global anti- 
money- laundering policies occur mainly through FATF,' an 
organization established at the 1989 economic summit meeting in 
Paris of major industrialized countries. The United States, 
through the Treasury Under Secretary for Enforcement, assumed the 
presidency of FATF in July 1995 for a one-year term. FATF has 
worked to persuade both member and nonmember countries to institute 
effective anti-money-laundering measures and controls. In 1990, 
FATF developed 40 recommendations that describe measures that 
countries should adopt to control money laundering through 
financial institutions and improve international cooperation in 
money- laundering investigations. 

During 1995, FATF completed its first round of mutual evaluations 



'FATF consists of the following members: Australia, Austria, 
Belgium, Canada, Denmark, the European Commission (representing the 
EU) , Finland, France, Germany, Greece, the Gulf Cooperation 
Council, Hong Kong, Iceland, Ireland, Italy, Japan, Luxembourg, the 
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, 
Sweden, Switzerland, Turkey, the U.K., and the United States. 

10 



106 



of its members' progress on implementing the 40 recommendations. 
FATF found that most member countries have made satisfactory 
progress in carrying out the recommendations, especially in the 
area of establishing money- laundering controls at financial 
institutions. FATF has also continued to identify global money- 
laundering trends and techniques, including conducting surveys of 
Russia's organized crime and Central and East European countries' 
anti-money-laundering efforts. In addition, FATF has expanded its 
outreach efforts by cooperating with other international 
organizations, such as the International Monetary Fund, and by 
attempting to involve nonmember countries in Asia, South America, 
Russia, and other parts of the world. 

A more recent multilateral effort involved the United States and 
other countries in the Western Hemisphere. On December 9-11, 1994, 
the 34 democratically elected leaders of the Western Hemisphere met 
at the Summit of the Americas in Miami, Florida. At the summit, 
the leaders signed a Declaration of Principles that included a 
commitment to fight drug trafficking and money laundering. The 
summit documents also included a detailed plan of action to which 
the leaders affirmed their commitment. One action item called for 
a working- level conference on money laundering, to be followed by a 
ministerial conference, to study and agree on a coordinated 
hemispheric response to combat money laundering. 

The ministerial conference, held on December 1-2, 1995, at Buenos 
11 



107 



Aires, Argentina, represented the beginning of a series of actions 
each country coiranitted to undertake in the legal, regulatory, and 
law enforcement areas. U.S. Department of Justice officials told 
us that these actions are designed to establish an effective anti- 
money- laundering program to combat money laundering on a 
hemispheric basis. Further, the officials told us that the 
conference created an awareness that money laundering is not only a 
law enforcement issue, but also a financial and economic issue, 
requiring a coordinated interagency approach. 

As part of another multilateral effort, FinCEN is working with 
other countries to develop and implement Financial Information 
Units (FIU) modeled, in large part, on FinCEN operations, according 
to FinCEN officials. FinCEN has also met with officials from other 
countries' FIUs to discuss issues common to FIUs worldwide. The 
most recent meeting was held in Paris in November 1995, during 
which issue-specific working groups were created to address common 
concerns such as use of technology and legal matters on exchanging 
intelligence information. 

Bilateral Agreements to Improve Cooperation 
in Inter national Money- laundering Cases 

U.S. Treasury officials said that in recent years, the United . 
States has relied on bilateral agreements to improve cooperation in 
international investigations, prosecutions, and forfeiture actions 

12 



108 



involving money laundering. These bilateral agreements, consisting 
of mutual legal assistance treaties, financial information exchange 
agreements, and customs mutual assistance agreements with 
individual countries, also help to facilitate information exchanges 
on criminal investigations that may involve money laundering. 
However, the State Department's 1995 annual report on global 
narcotics crime concluded that many countries still refuse to share 
with other governments information about financial transactions 
that could facilitate global money- laundering investigations. 



Mr. Chairman, this concludes my prepared statement. I would be 
pleased to try to_ answer any questions you or the Committee may 
have . 



13 



109 



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™n"H) ON 0]S RECTCUED PAPER 



110 



For release on delivery 
10:00 a.m. E.S.T. 
February 28, 1996 



Statement by 

Edward W. Kelley, Jr. 

Member, Board of Governors of the Federal Reserve System 

before the 

Committee on Banking and Financial Services 

U.S. House of Representatives 



February 28, 1996 



Ill 



Mr. Chairman, I am pleased to appear before the Banking 
Committee on behalf of the Federal Reserve to discuss the impact 
of crime on the stability of the banking system and the Federal 
Reserve's efforts to assist banks and law enforcement officials 
in countering criminal activity. As a bank supervisory agency, 
the Federal Reserve Board places a high priority on providing 
assistance in deterring, detecting and reporting criminal 
activities directed at banking organizations, and we appreciate 
the Committee's interest in this important area. 

Mr. Chairman, your letter of invitation asked me to 
address the threat criminal activity poses to the banking system, 
and I would like to turn initially to that issue. While all bank 
losses that result from criminal activity are unacceptable, it is 
important to put the risks associated with criminal activities 
affecting banks in the appropriate context. As of September 30, 
1995, the over 10,000 insured commercial banks in the United 
States had total aggregate assets of about $4.2 trillion, 
combined capital of approximately $350 billion, and earnings of 
$37 billion for the first three quarters of 1995. 

In view of the current financial strength of the U.S. 
banking system and estimates of the extent of banks' losses 
resulting from criminal misconduct, which include the banking 
industry's 1994 estimates of approximately $800 million in losses 
associated with check fraud and $700 million from credit card 
fraud, we believe that losses from criminal activities do not 
pose a systemic risk to the banking system. Also, we have no 
information that suggests that any individual U.S. banking 



112 



organization has been overtaken or substantially threatened by 
criminal organizations or activities. 

While we see no systemic threat to the banking system, 
we obviously are concerned about the risks to the reputation and 
integrity of our nation's banks arising from criminal elements 
using the banking system for illicit purposes. These risks are 
best illustrated by money laundering, estimates of which range 
between $300 and $500 billion annually. While no amount of money 
laundering is acceptable, there is no evidence that the flow of 
these funds through U.S. banks on its own poses a systemic risk. 
However, if left unchecked, the use of our banking system by 
criminal elements could undermine the reputation of banks or 
weaken the public's confidence in banks as safekeepers of their 
funds. For this reason, and to support our law enforcement 
agencies in their efforts to combat crime, the Federal Reserve's 
efforts to attack the money laundering problem continue to be one 
of our highest bank supervisory priorities. 

Federal Reserve Role 

As banking supervisors, the Federal Reserve has an 
important role in ensuring that criminal activity does not pose a 
systemic threat, and, as importantly, in improving the ability of 
individual banking organizations in the United States and abroad 
to protect themselves from illicit activities. Because bank 
systems and bank employees are the first and strongest line of 
defense against financial crimes, the Federal Reserve places a 



113 



high priority on ensuring that banking organizations have 
appropriate controls in place to protect themselves and their 
customers from criminal activities. The Federal Reserve places 
an equally high priority on supporting efforts by U.S. law 
enforcement agencies to apprehend criminal enterprises before 
they can cause harm to consumers and banking organizations. 

A banking organization's best protection against 
illicit activities is its own policies and procedures designed to 
identify and then reject potentially illegal or damaging 
transactions. For this reason, the Federal Reserve and other 
regulators have implemented various directives for banks to 
establish internal controls and procedures designed to detect 
unusual or suspicious transactions that, if unchecked, could lead 
to fraud, money laundering, or other types of criminal 
misconduct . 

To understand and properly evaluate the effectiveness 
of a banking organization's controls and procedures, we have 
developed extensive examination procedures and manuals, and our 
bank examiners are provided with comprehensive training and with 
timely information to assist them in identifying suspicious or 
unusual transactions. I need to emphasize, however, that we do 
not expect our examiners to act as police. The Federal Reserve 
is a bank supervisory agency, not a criminal law enforcement 
authority; we see our role as auxiliary to the legitimate law 
enforcement duties of criminal justice agencies. Our examiners 
do not, nor should they, possess the necessary tools required to 



114 



fully investigate and prosecute criminal conduct. This is a 
function ably handled by our law enforcement colleagues. 
In recent years, however, the Federal Reserve 
determined that in some instances it is necessary to go beyond 
the scope of an ordinary bank examination to determine if 
violations of law or regulation have occurred. For this reason, 
in 1993 the Special Investigations and Examinations Unit was 
created in the Board's bank supervision division. This unit's 
function, in part, continues to be that of taking information 
developed during the course of an examination and conducting a 
specialized investigation or examination to determine what, if 
any, laws have been violated through activity conducted at a 
bank. The Unit notifies the appropriate law enforcement agency 
when apparent criminal violations are detected, and works hand in 
hand with them whenever necessary. 

Knowing Your Customer and SuBpicious Transaction Reporting 

The Federal Reserve believes that the most prudent 
method for banking organizations to protect themselves from 
allowing criminal transactions to be conducted at, or through, 
their institutions is to adopt what has become known as "Know 
Your Customer" policies and procedures. Safety and soundness 
considerations dictate that banking organizations have adequate 
policies and procedures in this area, including procedures to 
ensure compliance with the rules and regulations designed to 
assist in the detection of criminal activity; decrease illegal 



115 



activity through increased awareness by employees; protect the 
reputation of a banking organization; and promote good, as 
opposed to unsavory, customer relationships. 

"Know Your Customer" procedures, which are applied to 
all facets of a banking operation, allow the organization to 
identify their customers and the transactions that they conduct 
on a regular basis, be alert to transactions that may be 
irregular or abnormal for a particular customer, determine 
whether there is an apparent valid or lawful purpose for the 
transactions, and report to the appropriate authorities those 
transactions which appear to be suspicious or criminal in nature. 
One of the more significant components of "Know Your Customer" 
procedures is the ability of banking organizations to identify 
and report suspicious or potentially criminal activities. For 
the past ten years, the Federal Reserve and the other federal 
bank supervisory agencies have required banking organizations to 
report suspected criminal activities to us, as well as various 
federal law enforcement agencies. In 1995, there were over 
70,000 criminal referrals filed. 

In order to reduce the burden on financial institutions 
while increasing the usefulness of the information provided on 
suspected criminal conduct, the Federal Reserve, together with 
the other federal bank supervisory agencies and the Department of 
the Treasury, revised the criminal referral process in several 
significant respects. First, effective on April 1 of this year, 
the new process combines the current criminal referral rules of 



116 



the bank supervisory agencies with Treasury's suspicious activity 
reporting requirements related to money laundering offenses. 
Second, a uniform interagency reporting form has been developed 
for purposes of referrals to all agencies. Third, we have 
provided for the filing of the uniform form in one location as 
opposed to the current requirement of filing six or seven copies, 
and banks will have the ability to use computer software, to be 
distributed by us, to assist in the preparation and magnetic 
filing of the reports. 

Another important improvement is the statutory 
protection recently afforded banking organizations that report 
suspicious or criminal conduct, which provides banking 
organizations and their employees with immunity from civil 
liability for reporting known or suspected criminal offenses or 
suspicious activities. This protection, long sought by the 
banking community and supported by the Federal Reserve, gives 
great comfort to banking organizations that they will not be held 
liable for providing timely and useful information to law 
enforcement authorities. 

Federal Reaerve Information ABBistanee 

Over the years the Federal Reserve also has taken the 
initiative to provide timely and useful information to banking 
organizations with regard to ongoing criminal conduct or 
potential schemes that may have an adverse impact on them. In 
the last few years, the Federal Reserve and the other federal 



117 



banking supervisory agencies have issued bulletins on such 
matters as "Prime Bank Fraud" schemes and credit card fraud. 
Such notices to the banking industry are intended to alert banks 
of the potential dangers of such schemes and practices. 

From time to time, the Federal Reserve has also 
developed and issued policy statements with regard to activities 
occurring in banking organizations that we have determined could 
pose a threat to the integrity of a bank. One such example was 
the Federal Reserve's development and issuance of a policy 
statement on "payable through accounts" in 1994. The purpose of 
the policy statement was to ensure that banks that engage in 
payable through activity- -which basically involves the use of a 
checking account at a bank in the United States by an individual 
who resides outside of this country- -have appropriate procedures 
in place to ensure that no illicit activities are being conducted 
through these accounts. 

Also, in accordance with section 404 of the Money 
Laundering Suppression Act of 1994, the Federal Reserve has been 
working with the Treasury to establish a process whereby the 
federal law enforcement community will provide, on a regular 
basis, information with regard to new or emerging money 
laundering schemes, which will then be disseminated to financial 
institutions . 



118 



Anti -Money Laundering Efforts 

The Federal Reserve continues to be a leader among the 
federal banking supervisory agencies in addressing money 
laundering-related matters. Staff of the Federal Reserve has 
been in the forefront of the battle to deter money laundering 
through banking organizations by, among other things, developing 
anti -money laundering guidelines, conducting money laundering 
investigations, providing expertise for law enforcement 
initiatives, and providing training to various government 
agencies. 

Training provided by Federal Reserve staff to law 
enforcement agencies has included programs at the FBI Academy and 
the Treasury's Federal Law Enforcement Training Center. 
Additionally, Federal Reserve staff has provided training in 
anti -money laundering procedures to foreign governments, such as 
Russia, Poland, Hungary, the Czech Republic, Brazil, Ecuador, 
Argentina, and several other countries in the Middle and Far 
East . 

In accordance with section 4 04 of the Money Laundering 
Suppression Act of 1994, the Federal Reserve chaired a working 
group that has developed enhanced examination procedures to 
identify appropriate anti -money laundering procedures initiated 
by banking organizations. Along with these enhanced money 
laundering procedures, the Federal Reserve will very shortly 
release newly revised Bank Secrecy Act examination procedures 



119 



that will allow examiners to determine more efficiently and 
effectively compliance with the Bank Secrecy Act. 

Coordination Activities 

The Federal Reserve routinely coordinates with federal 
law enforcement agencies with regard to potential criminal 
matters, including anti-money laundering activities. The scope 
of this coordination ranges from our work on the criminal 
referral process to specific, case-by-case assistance to law 
enforcement agencies resulting from examinations of banking 
organizations . 

The Federal Reserve is a founding member and active 
participant in the well regarded interagency Bank Fraud Working 
Group, which consists of representatives of thirteen federal law 
enforcement and bank supervisory agencies. Among other things, 
this group, which has been meeting on a monthly basis since the 
mid-1980s, has coordinated the dissemination of relevant and 
timely information on such matters of mutual interest or concern 
as: Asian gangs' use of check fraud and check counterfeiting; 
West African advance fee schemes and credit card fraud; and asset 
forfeiture of criminally derived funds. 

The Federal Reserve is also an active participant in 
the Financial Action Task Force (FATF) , which was established by 
the G-7 group of countries. Board staff has contributed 
significantly to the FATF's mission of educating countries around 
the world in anti -money laundering and fraud prevention efforts. 



120 



Off -Shore CorporationB and Banks 

As a result of our staff's work with law enforcement 
authorities, we recognize that crime is an international activity 
that is increasingly making use of off-shore corporations and 
banks. These are two separate problems that we address in 
different manners. 

With regard to off-shore corporations, because the 
Federal Reserve cannot control a sovereign nation's laws 
governing the establishment of corporations in its territory, we 
can only address the activities of these companies when they seek 
to do business in the United States through banks we supervise. 
In this regard, our principal tool is the "Know Your Customer" 
policy. As I said before, every domestic and foreign banking 
organization supervised by the Federal Reserve should have 
adequate policies in this area. This means, for example, that if 
a state member bank or a U.S. branch of a foreign bank maintains 
a deposit relationship with a corporate entity, wherever it is 
chartered, it should take steps to identify its business and the 
nature of its routine transactions in order to evaluate better 
whether it is engaging in any suspicious activities. While no 
federal bank regulator or law enforcement agency can monitor 
every transaction undertaken by every corporation doing business 
with a U.S. financial institution, we can, and we routinely do, 
measure the internal controls and risk management systems 
implemented by the banks to make certain that the banks are in 
fact adhering to their policies and are aware of the business of 



121 



their customers, including any that may use off-shore 
corporations . 

With regard to foreign banks, the Board, since it was 
given the power by Congress in 1991, carefully scrutinizes any 
foreign bank seeking to do business in the United States. This 
includes making certain that the bank is subject to comprehensive 
consolidated supervision in its home country, reviewing the 
bank's global anti -money laundering procedures, and conducting 
background checks with U.S. law enforcement and other agencies. 
In addition, as I mentioned, we thoroughly review the operations 
of these banks in the United States to make certain their 
activities here fully comply with U.S. laws and regulations. The 
Federal Reserve is also working in a number of areas to improve 
the bank supervisory standards in other banking centers and to 
make certain that there is adequate cooperation among supervisors 
so that gaps do not occur in the consolidated supervision of 
international banking organizations. 

Conclusion 

In conclusion, we have undertaken extensive efforts and 
have used significant resources to combat illegal activities 
involving domestic and international banking organizations. I 
believe that the Federal Reserve has made significant 
contributions to the federal government's law enforcement 
endeavors. Because we have a vital interest in protecting the 
banking system from criminal elements, we will be continuing our 



122 



cooperative efforts with other bank supervisors and the criminal 
justice agencies to develop and implement programs to better 
detect criminal misconduct involving banks. 



123 



Statement 

o£ 

Stanley E. Morris 

Director 

Financial Crimes Enforcement Network 
(rmCEN) 

before 

the 

Committee on Bankine and Financial Services 

House of Representatives 

Wednesday 

February 28. 1996 



124 

Mr. Chairman and Members of the Committee, it is an honor and a pleasure to be here 
today to testify about the increasing threat posed by international organized crime to the world's 
financial systems. The Committee, which has given us major anti-money laundering tools in the 
past, is now giving us an excellent opportimity to discuss the evolution of international criminal 
organizations and their impact as economic powers. 

Before I discuss the issue of organized crime, let me describe the mission of the Financial 
Crimes Enforcement Network—FinCEN. FinCEN establishes, oversees, and implements 
Treasury's policies to prevent and detect money laundering. It provides analytical case support 
to many federal agencies, including the U.S. Secret Service, IRS's Criminal Investigations, U.S. 
Customs Service, FBI, and the Drug Enforcement Administration which are significant 
investigators in the area of financial crime. FinCEN also administers the Bank Secrecy Act, 
which is a key component of Treasury's efiforts to fight money laundering. In addition, FinCEN 
is a leader in international efforts to build effective counter money laundering policies and 
cooperation. I'll describe that part of our mission in more detail later. 

During my statement I would like to talk less about the past— we all know that the threat 
of organized crime exists. Rather, I would like to look to the future and engage you in a dialogue 
about where we go from here, about change and the risks and opportunities change presents. It is 
absolutely clear that transnational crime and money laundering are going to continue to be a 
challenge to law enforcement agencies around the world. We must move quickly to redesign our 
strategies. I believe in the United States we have taken an important first step toward doing just 
that. We in federal law enforcement have recognized that we cannot do the job alone. We must 
team up with our partners ~ state and local authorities, as well as the financial services sector. 
And, most importantly, we must network globally. 



125 



Review these two statements. You will leam later who said them, but look for the 
overriding concern— 

Quotation #1 : "This (killing of bankers) continues and it will continue in the future. The 
economic situation is such that the criminal world keeps trying to win control over the 
banking sphere. It was not an unmotivated murder. It was linked to big money." 
Quotation #2 : "We must act firmly, quickly and effectively to protect our economies and our 
societies and ensure that our financial centers attract honest business and long-term 
investment. We must not let bad money drive out good." 

Neitherofthesestatements were made by a law enforcement official. The first quotation 
did not come from the Russian Minister of Internal Affairs but was a statement from the Russian 
Association of Banks. The second quotation was not issued by the head of Scotland Yard, but 
was part of a speech given by Kenneth Clarke, the British Chancellor of the Exchequer. Clearly 
something unique is occurring in the area of money laundering. It is no longer a law 
enforcement issue alone. It is becoming clearer that the problems we are facing require broader 
and more sophisticated solutions. 

The past decade has brought unprecedented changes to the world's economy and the 
structures of government. National boimdaries no longer have the same meaning as they did 
during the Cold War. For example, the development of the European Community has forever 
changed the social, financial and commercial nature of Eastern and Western Europe. Trade 
agreements, such as NAFTA, have nullified traditional obstacles and increased the flow of goods 
and capital between the nations of this hemisphere. 



126 

Intensifying this trend of globalization is the unprecedented spread of democracy and free 
markets throughout the world. These developments are also augmented by rapid advances in 
technology that have revolutionized our methods of commerce as well as our capacity to 
communicate. 

Global Finance magazine reports that a decade ago, daily trading in currencies was 
approaching the sum of $200 billion. Today it is more than six times as much ~ $m trillion a 
day, or 100 times the volume of world trade. In addition, cross-border capital flows have 
exploded during the same period. The outflow alone from the Organization for Economic 
Cooperation and Development countries was as much as $654 billion in 1993. Fmding illegal 
activity and dirty money is placing severe strains on law enforcement's capabilities. 

While there are inherent risks in this rapid pace of change, it is also evident that there are 
many benefits stemming from this new world environment. Clearly there are many new 
opportunities for criminals to exploit the revolutionary changes that are occurring in the world's 
financial systems. 

Colombia, Russia and Italy are only three examples where organized crime has 
successfiilly infiltrated governments and legitimate institutions. Organized criminal entities have 
hidden within these institutions, using technology to avoid detection, while building influence 
and power at the citisten's expense. News reports provide a chronicle of organized crime's 
growing infiltration of the Russian banking system. 

Because of the evolving world environment, governments are changing the way they look 
at criminal activity, economic development and foreign trade. Traditionally, governments have 
compartmentalized their strategies for dealing with these subjects. Criminal activity was the 



127 



domain of law enforcement. Economic development was the mission of fmance ministries. 
Foreign trade was the realm of foreign affairs and trade ministries. The private financial systems 
were separate and apart from the governments. 

As commerce is globalized, so is crime. Consequently, governments can no longer 
compartmentalize their response to criminal, economic and trade issues. This new environment 
has forced governments to think creatively, outside the envelope, to address this trend. 

This is what we have been forced to do, for example, within my own organization- 
FinCEN. Just as we have moved to build partnerships with the American banking industry-and 
I'll talk in more detail later about some of the key components of this new relationship~so too 
have we recognized the need to build transnational partnerships through bilateral and multilateral 
initiatives with our counterparts. The proceeds of crime generated here in the United States 
move quickly across national boundaries and into the world's financial systems. International 
organized crime is just that-international. The federal law enforcement cases involving 
international organized crime that FinCEN supports frequently spill over into multiple national 
jurisdictions and the web of global financial services. The only way we can adequately assist our 
federal law enforcement counterparts in following the trail of the multinationeil money launderer 
is through our linkages with multilateral arrangements such as the G-7 Financial Action Task 
Force and FinCEN-type organizations worldwide. 

Today, I would like to outline for you five major initiatives which illustrate how 
govenunents are trying to rise to the challenge of dramatic change in the globalized world 
economy. 
1. Presidential Initiatives 



128 

At the 50th Anniversary of the United Nations on October 22, 1995, President Clinton 
outlined his initiatives to combat transnational crime including drug trafficking, arms smuggling 
and terrorism. President Clinton said: 

" ...I directed our government to identify and put on notice nations that tolerate money 
laundering. Criminal enterprises are moving vast sums of ill-gotten gains through the 
international financial system with absolute impunity. We must not allow them to wash the 
blood off profits fi-om the sale of drugs, fi-om terror or organized crime." 

He fiirther urged the members of the United Nations to: 
"...join in negotiating and endorsing a declaration on international crime and citizen safety, a 
declaration which would first include a no-sanctuary pledge, so that we could say together to 
organized criminals, terrorists, drug traffickers and smugglers, you have nowhere to run and 
nowhere to hide." 

In order to implement his goals, the President is assigning a very high priority to 
negotiating agreements that ensure governments' compliance with internationally accepted anti- 
money laundering standards. FinCEN is coordinating this initiative and working with the 
Departments of State and Justice, the bank regulators and the intelligence community to 
complete this process. 

The President's initiative recognizes that money laundering limits economic 
development, foreign trade and the democratization of nations. Most importantly, his initiative 
provides a fi^mework for the world community to begin confi-onting this problem. Without the 
cooperation of all our global neighbors, money launderers will always have a safe haven. 
2. Summit of the Americas 



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In December 1994, President Clinton hosted the Summit of the Americas in Miami. As a 
result of this conference, the leaders of this hemisphere's democratic nations directed their 
govermnents to work on a cooperative plan to counter the growing economic and legal problems 
of money laundering. These governments recognized the dangerous and destructive effect 
money laundering has on our economies and on private and public institutions. Money 
laundering is central to profit making in the drug trade. 

On December 1-2, 1995, Secretary of the Treasury Robert Rubin chaired a conference in 
Buenos Aires, Argentina that was attended by Ministers from the 34 Summit of the Americas 
participating nations. This conference fulfilled the directive set in Miami to promote the 
effective detection, prevention and investigation of money laundering. The heads of delegation 
in attendance represented the leaders of Interior, Justice, and Finance Ministries as well as the 
heads of Central Banks. After two days of discussions, the conference produced an agreement 
among nations. FinCEN coordinated the U. S. efforts. This accord marks a vital step forward in 
domestic and international efforts to track the proceeds of illicit activities and impede criminals 
from developing the wealth from their activities that can give them the power to undermine the 
fragile democracies in our hemisphere. 

Among other things, the agreement formalizes the member nations' agreement to: 

• criminalize the laundering of the proceeds from drug trafficking and other serious crimes, 
and promote other laws that allow for the seizure and forfeiture of such proceeds; 

• take actions to promote an effective working relationship between financial regulatory 
authorities and the institutions that they oversee; 



130 



• enhance the tools available to law enforcement authorities as they investigate money 
laundering. Included among such enhancements would be the creation of fmancial 
intelligence units, similar to FinCEN, that specialize in the collection and analysis of 
pertinent fmancial records in order to help track criminals' financial activities. It also 
allows for cooperative methods for the reporting of suspicious fmancial transactions. 
As the conference in Buenos Aires drew to a close , Secretary Rubin stated: 
"Today, the nations of this hemisphere have declared there can be no sanctuary for money 
launderers.... In a truly international economy, when technology allows the rapid 
movement of large sums of money around the world, we must not ~ as the President said 
~ allow criminals to wash the blood off the profits of drug sales, or fmance terrorism or 
imderwrite all maimer of crime, by leaving open avenues for the laundering of the 
proceeds of crime." 

President Clinton issued a statement on the Summit in which he noted: 
"America will fight the war on drugs and crime on all fronts, both at home and abroad.... 
With our neighbors in the region, we are taking an important step by targeting the cartels 
and criminals who, until now, have moved vast sums of ill-gotten gains through 
international fmancial systems with absolute impunity. Finally, the nations of this 
hemisphere are standing as one to say 'No more.'" 
3. Financial Action Task Force 

The Financial Action Task Force (FATF) was established at the direction of the 1989 
G-7 Economic Summit in Paris, France. FATF has become one of the key organizations that 
addresses the global problem of money laundering. It is composed of 26 countries, the European 



131 



Community and the Gulf Cooperation Council. The task force includes representatives not only 
of member nations' law enforcement agencies, but representatives of central banks and finance 
ministries. In July 1995, the U.S. assumed the Presidency of FATF for a one year term and 
FinCEN is serving as the lead agency for coordinating the U.S. role within FATF. 

FATF has worked diligently to increase the global awareness of money laundering as 
well as to establish international anti-money laundering standards. It is dedicated to promoting 
the development of effective anti-money laundering controls and enhancing cooperation against 
money laundering among its membership and around the world. Further, FATF provides a 
forum for the exchange of information and intelligence on prevailing typologies and trends m 
money laundering. Since the creation of FATF, more than two dozen countries have enacted 
counter money laundering laws. Small countries, such as Slovenia have enacted legislation, and, 
in fact, just last week, the Czech Republic strengthened its counter money laundering law. In 
addition, several offshore banking centers, such as the Bahamas and Panama, adopted broad, 
new anti-money laundering policies and/or laws last year. 

While FATF is not a legislative body or investigative task force, it serves as a policy 
making body designed to generate political will. And there are very solid examples of FATF's 
influence. In mid-1994, a U.S. Customs Service investigation revealed that 100 businesses in 
South America and Europe were involved in a money laundering network. The network was 
considered one of the largest used by the Cali cartel. The investigation spread from the U.S. to 
France, Spain and Italy. It resulted in the arrest of 91 people, the seizure of $15 million in cash 
along with 43 kilos of cocaine. The impact of FATF can be seen in the arrest of the Italian 



132 



suspects. They were arrested pursuant to a law which had been enacted in order to comply with 
FATF's internationally recognized standards. The influence of FATF bore results. 

FATF efforts, in part, have also resulted in the establishment of Financial Intelligence 
Units (FIUs) in various nations around the world to protect the banking community, to detect 
criminal abuse of its financial system and to ensure adherence to its laws against financial crime. 
The Financial Crimes Enforcement Network is one model of an FIU and others exist in such 
countries as Great Britain, France, Belgium, the Netherlands, Argentina and Australia. Where 
five years ago, there were fewer than five FIUs in the world, today there are more than 15 
countries with financial intelligence units focused on money laundering issues. As world policy 
efforts intensify in addressing international crime. Treasury, State and Justice are assisting with 
the establishment of FIUs in countries such as Poland, Panama and Ecuador. 

Perhaps one of the most significant qualities of the FIUs is that many operate separately 
firom the Justice Ministries in their respective countries. The FIUs have independent and unique 
relationships with banks, central banks and law enforcement. These relationships allow FIUs to 
foster the partnerships that are essential to combating money laundering and financial crime. 
They bridge the private and governmental sectors in an effort to force attention to this problem 
outside of the narrow bureaucratic thinking of the past. 

FATF also encourages the development of partnerships with the private sector. Last 
month it held its first ever Financial Services Forum. The forum was initiated as part of FATF's 
mandate to foster greater international cooperation in combating money laundering by reaching 
out to the fmancial services industry. 



133 

Attended by nearly 70 representatives from the financial services sector in each of the 26 
member nations of FATF, the Forum focused on issues of mutual interest including new money 
latmdering techniques, the use of emerging technologies, and the financial sector's views of the 
FATF standards. 

We are hopeful that the Forum will result in further initiatives between FATF and the 
private sector. 
4. Asia Pacific Economic Council 

As you know the Asia Pacific Economic Council (APEC) is a forum designed to facilitate 
trade and economic development in the region. Coimtries such as China, Singapore, Japan, 
Canada and the US are members of APEC. FinCEN has worked closely with Treasury's Office 
of the Assistant Secretary for International Affairs to inject an awareness of the economic 
consequences of money laundering and other financial crime into the APEC process. 

At the APEC Finance ministers meeting in Bali, Indonesia in April 1995, a Joint 
Ministerial Statement noted: 

"It is important, in the context of strengthening capital markets, that we support international 
anti-money latmdering efforts in the region and encourage adherence to the international 
standards and reconunendations which have been developed in this area." 

That statement marks the first time the APEC Ministers formalized their support for anti- 
money laundering programs in Asia. This event further raised the issue of money laimdering to a 
macro economic level meaning that member countries will consider this issue when formulating 
economic policy. Specifically, when considering capital flows between APEC nations, 
governments will take into account that some of this money may come from illegitimate activity. 



10 



134 



Again APEC is not a law enforcement organization. Finance and trade ministries in the 
burgeoning economies of the Pacific Rim are beginning to recognize their responsibilities to 
address the threats that c riminals pose to the new economic world order. 

In addition, FATP nations hope that APEC will support the creation of an Asian 
Financial Action Task Force (AFATF). APEC's endorsement of this organization will build 
awareness of financial crime issues and would potentially sway new nations to join AFATF. It is 
imperative to have the cooperation of as many nations in a region as possible to thwart money 
laundering. 
5. Technology 

Policing a society in die throes of fimdamental change means putting that change at the 
top of the agenda. The computer lab and squad room seem worlds apart, but they're not. As I 
have said, the changing financial world creates vast opportunities for criminals. Technology is a 
critical part of this trend. Any individual using a relatively inexpensive computer and a common 
telephone line can move enoimous masses of data around the world at nearly the speed of light 
and hide data in ways that even a skilled professional cannot detect. New cyberpayments 
systems are coming on line, some designed by brilliant entrepreneurs who know technology but 
do not even come fitjm the financial worid. So could disreputable entrepreneurs. We will need 
partnerships with these new industries. We have begun. 

Last September, FinCEN hosted a day-long Colloquium at the New York University 
School of Law to discuss the implications of these technologies. Bank regulators, credit card 
companies, CEOs fiom Ae United States and Europe, as well as academics and prosecutors 
attended and shared their views. 



11 



135 

Another example of a partnership is the Suspicious Activity Reporting System. Last 
month we "turned the switch" implementing the new national System, administered by FinCEN 
in a unique partnership with the IRS Detroit Computing Center, federal law enforcement and the 
five bank regulatory agencies. In the context of technology and keeping up with the criminals, 
this Suspicious Activity Reporting System will significantly improve our ability to detect 
criminal financial activity, to assure that information about the activity gets to the proper law 
enforcement and regulatory authorities, and to gain a broader, strategic understanding of the 
national and global implications of attempts by international organized crime to subvert our 
banking systems. 

In addition, we are reaching out through authorities provided under the Bank Secrecy Act 
to strengthen potential weak links among our non-bank financial institutions-broker dealers, 
casinos, money transmitters, for example-which we have learned by experience can be used to 
obscure the movement of criminal proceeds. And we are doing it in a way that actually reduces 
the reporting burdens placed on private industry, and that makes the industry an equal and vested 
partner in combating money laundering and other fuiancial crime. 

One result of the efforts I described above has been that criminals can no longer rely on 
traditional means of laundering their money-traditional avenues are being closed off. Because 
of efforts like the Financial Action Task Force and the focus on non-bank financial institutions, 
criminals must take greater risks to exploit the financial systems which in turn makes them more 
vulnerable to detection. 

The U.S. Customs Service has reported that currency smuggling is on the rise. The 
smuggling of cash out of the United States has also become more expensive as criminal 



12 



136 



organizations have had to establish business relationships with companies involved in commerce 
to source countries. In some cases they have had to purchase companies outright. 

Many criminal organizations are desperate to move their cash out of the country because 
its just too risky to launder it here. Presently, the safest way for criminals to repatriate criminal 
proceeds to Colombia is to sell their U.S. dollars to Colombian businesses. This procedure of 
hiding their money is complicated, involves many steps and is therefore expensive. According 
to reports, the cost of laimdering has risen from six percent in the mid 80' s to more than 20 
percent today. We are having an effect on the day-to-day laundering operations. 
Conclusion - Cooperation 

This new era is altering the roles of law enforcement, central banks and financial 
institutions. No single gtoxsp alone can protect the financial system from abuse. We must find 
new ways to work together to ensure that criminals do not exploit the very systems that are 
essential to legitimate businesses and consumers. We must £dl take some responsibility during 
this age of globalization. 

Technology makes the globalization process irreversible. Change is our challenge. 
Secretary Rubin has been leading the Treasury campaign to break out of the old molds and meet 
the challenge. Transnational organized crime is already exploiting change and the fading of 
national boundaries. Together, we must send a clear message that money laundering will not be 
tolerated in the new world economy. Only together do we have a chance of succeeding. Thank 
you. 



13 



137 



/ ^^ °°^ '^ ^ '^ ^ 



Remarks by 



Special Agent Harold D. Wankel 

Chief of Operations 

Drug Enforcement Administration 
United States Department of Justice 



before the 

House Banking and 
Financial Services Committee 




Rayburn House Office Building 

Room 2128 

Washington, D.C. 

February 28, 1996 



NOTE: This it die piqMfed text md may not reflect change* made in actual delivery. 



138 



Remarks by Special Agent Harold D. Wankel 

DEA Chief of Operations 

House Banking and Financial Services Committee 

Washington, D.C. 

February 28, 1996 



Mr. Chairman, Members of the Committee: I'm pleased to appear 
before you today to discuss the threat organized criminal groups pose to 
the international banking system. Perhaps the most notorious and 
dangerous of these criminals are intemational drug traffickers, who 
launder their illegal drug money through a variety of financial systems, 
including the legitimate banking industry. 

The Drug Trade: An International Business 

As you know, the laundering of illegal drug profits is an integral 
part of drug trafficking, as important and essential to drug trafficking 
organizations as the distribution of the illegal drugs themselves. 

Drug organizations are truly intemational businesses, and like any 
business, these organizations are fueled and motivated by huge profits that 
are their hfeblood. 

Drug trafficking is a multi-billion dollar cash business, and drug 
money is essential to these enterprises. Without it, they caimot finance the 
manufacturing, the transportation and the smuggUng, the distribution, the 
murder and the intimidation that are essential to their illegal trade. Drug 
money laundering organizations are established to ensure the cash flow to 
diese illegal businesses. 

Profits from the sale of illegal drugs are recycled through laundered 
investments, which take place across many borders — and often involve 
intemational financial institutions — banks and money exchange houses. 
With today's sophisticated banking techniques, including die electronic 
transfer of money, once the money enters into the banking system, it can be 



139 



transferred among dozens of banks within a 24-hour period, making the 
paper trail either impossible or extremely time-consuming to follow. 
Globalization of the drug trade has necessitated an expansion and 
sophistication of the laundering of illegal drug profits. 

As the international drug markets have been expanded across all 
continents and into virtually every nation, so too have methods used to 
launder — or make legitimate — illegal profits of the global drug trade. 
Methods of laundering dmg money vary by country and region of the 
world driven by a number of factors, including the sophistication of 
banking and financial centers, the existence of undergroimd banking 
systems that operate largely along ethnic lines, and strength of enforcement 
pressure. 

This morning, I'd like to give you an idea of the magnitude of the 
problems law enforcement officers face with intemational drug money 
laundering and the progress we've made with our intemational partners 
toward putting a choke hold on the flow of profits back to the illegal dmg 
trafficking enterprises. I will concentrate my discussion on those countries 
and areas of the world where law enforcement is seeing the majority of 
drug money laundering activities, beginning with the epicenter of the 
cocaine trade, Colombia. 

Colombia 

The Call mafia is still one of the primary recipients of drug proceeds 
from the United States. Until just recently, they were responsible for 80 
percent of the cocaine sold on the streets of the United States. Colombian 
economists conservatively estimate that each year $4.5 billion is repatriated 
to Colombia by drug traffickers. The arrests of the Cali leaders in 1995 
and the emergence of crime syndicates from Mexico have impacted 
somewhat the amount of U.S. dollars flowing back to Cali, but the long- 
term impact has not yet been determined. 

These dollars are controlled by a cadre of well-educated, skilled 
accountants, who follow the rules of business drawn up by Cali mafia 



140 



leaders to literally keep track of every dollar in their worldwide 
trafficking network. The city of Cali stands as a monument to the billions 
of narco-dollars the Cali mafia has returned to Colombia. Majestic, 
modem skyscrapers fill the skyline of the city — many of which remain 
unoccupied — ^none of which has outstanding mortgages. 

The alliance of the Cah mafia with the trafficking organizations in 
Mexico has created a highly effective method of repatriating Cali profits. 
Money laundering has evolved from the late 1970's and early 1980's when 
traffickers simply showed up at U.S. banks with suitcases full of money, 
deposited it in accounts, and then had it transferred eidier back to 
Colombia or to safe havens in Europe and offshore banks. 

After legislation in the U.S. forced the reporting of deposits over 
$10,000, "structuring" became the mediod of choice for many money 
launderers. One form of structuring is "smurfing," in which individuals 
recruited by the Colombians run from bank to bank and deposit just under 
$10,000 in cash. An organization of ten smurfs, each hitting ten banks a 
day can convert about $1 million in cash each day into a small stack of 
cashier checks of $9,000 to $9,900 each, which is much easier to get out of 
the United States. 

This system was cumbersome, however, and not without substantial 
risk. As the Cali mafia began to monopolize the cocaine trade in the 1990's 
and their profits began to soar, they turned to bulk transfers of cash in 
commercial shipments. 

To solve some of their money transfer problems, Colombian 
traffickers bought a fleet of large planes, such as Boeing 727s, Caravelles, 
and the Turboprop Lockheed Electras, gutted them and used them to 
transport multi-ton loads of cocaine to Mexico, Canada, Portugal and West 
Africa for sale in the U.S. and Europe. Once they offloaded the cocaine, 
they reloaded the planes with U.S. cash, sometimes as much as $20 to $30 
million in drug profits, to remm to Colombia. 



141 



Bulk shipments of cash, whether in cargo planes or commercial 
shipments continue to be the primary method of smuggling cash; however, 
another increasingly popular method of laundering dmg proceeds is 
"dollar discounting." This method involves a broker approaching a 
legitimate businessman in Colombia that needs U.S. dollars to buy goods in 
the United States. The money broker simply sells the drug proceeds, which 
are already in the United States, to the businessman at a discoimted rate up 
to 20 percent. The businessman then deposits the equivalent sum in pesos 
in the trafficker's bank account in Colombia and his or her agent in the 
U.S. picks up the U.S. dollars. The discount rate of 20 percent is a 
dramatic increase in the cost of doing business for Call money launderers. 
Previously, Colombian brokers paid between 6 and 10 percent to move 
funds into Colombian accounts. 

We've also seen an increase in the shipment of large quantities of 
postal money orders. The money orders, with names left blank, are sent 
directly to Colombia and Panama. There, the funds are sold to "casas de 
cambio" — or money changing houses — ^for cash that will be deposited into 
the traffickers' accounts. The money orders are then sold and resold 
through the networks of casas. They are finally redeemed at banks outside 
of Colombia. When the U.S. Post Office began to detect this money 
laundering pattern and began to seize these funds, the money movers began 
to send the money orders back to the United States to be deposited into 
bank accounts. 

More sophisticated altematives to the banking system have also 
surfaced, such as the laundering of drug money through import-export 
businesses and other front companies. Elaborate import-export schemes 
are being used to make drug proceeds appear as legitimate income. 
Falsified export documents, bills of lading, and invoices for goods being 
shipped out of Colombia to the United States are used to justify large 
payments sent to Colombia. 

The use of payable-through-accounts held in U.S. banks by foreign 
banks makes it difficult for law enforcement to trace the money. These 
accounts can have himdreds of sub-account holders in foreign countries 



142 



who have complete access to these accounts but who are unknown to the 
U.S. bank and maybe even to the foreign bank. 

The goal of all these schemes is to get the money into the banking 
system, unchallenged. Last year, Colombia passed a law requiring 
Colombian banks to report large currency transactions; however, once in 
the system, the money can be wire transferred into a labyrinth of 
worldwide accounts at a moment's notice. 

The arrest and continued incarceration of major Cali dmg lords have 
disrupted the financial safe haven status Colombian traffickers have 
enjoyed at home for many years. The enforcement of currency 
requirements and anti-corruption police efforts have also placed drag assets 
at risk in Colombia. 

The intemational net is continually drawn tighter, limiting 
opportunities for Colombian traffickers to conceal their assets with a 
minimum of risk. For example, organized crime is believed to control 20 
percent of the commercial banks in Russia, however, the lack of stability in 
the country, as well as no long-standing basis of tmst, has precluded major 
investment in that alternative. Recent seizures and forfeitures in Europe, 
particularly the $142 million seizure from Colombian trafficker Julio 
Nasser-David in Switzerland has caused considerable concern on the part of 
Colombian drug lords about putting their illegal money into European 
banks. 

The key to our future success in Colombia and Mexico, as well as the 
Far East, is promoting strong money laundering laws that are strictly 
enforced in all countries, and maintaining strong ties with foreign officers 
in the financial centers around the world. Under Presidential Directive 
Decision (PDD) 42, we are addressing those countries that are the most 
egregious in offering safe havens to traffickers' illegal money. 

On October 21, 1995, President Clinton used the authority given him 
by the Intemational Emergency Economic Powers Act to invoke economic 
sanctions against 97 companies and individuals who are involved with four 



143 



members of the Call drug mafia. It is now illegal for any U.S. company to 
trade with these businesses or individuals. This is another tool we can use 
against the drug traffickers and their illegal wealth, and we are encouraged 
by the positive results we are seeing. 

Mexico 

As drug organizations from Mexico become more powerful in the 
intemational drug trade, so too does their influence in money laundering. 
Mexico returns more surplus currency to the United States than any other 
country. We are now seeing millions of dollars laundered by Mexican 
organizations. The primary reason for this is that the Colombians are now 
paying the Mexican transportation organizations in cocaine. Considering 
80 percent of the cocaine smuggled into the United States comes through 
Mexico, the Mexican Federation is indeed a major player in the drug trade 
and must find ways to launder and conceal the profits from their cocaine 
sales. 

Because of the difficulty of laundering money through traditional 
financial institutions and the proximity of Mexico to the United States, 
Mexican drug traffickers simply smuggle bulk shipments of cash across the 
U.S.-Mexico border. In Mexico, between April and October 1995, 
Mexican authorities made three seizures of U.S. currency which totalled 
nearly $20 million. Last April, $6.2 million was discovered inside in a 
shipment of air conditioners at the Mexico City Airport. The following 
month, Mexican authorities seized $1.5 million from a Colombian money 
laimderer at the Mexico City Airport. And in October, Mexican officials 
found $12 million inside suitcases taken from a private plane that is 
believed to belong the Carrillo-Fuentes drug organization. 

Each year, over 500,000 bank drafts dravm on Mexican banks enter 
the U.S. One bank in Arizona determined that the average Mexican bank 
draft was valued at $65,000, but that it was not unusual to clear drafts in 
excess of $200,000 to $400,000. Mexican bank drafts which were not 
subject to U.S. reporting requirements now must be reported and the 
implementing regulations are being written. Previously, this was a 



144 



significant method of reintroducing drug profits back into the United 
States. 

Although illicit enrichment is illegal and money laundering is a fiscal 
offense in Mexico, money laundering is still prevalent and not a criminal 
act. Banks are also required to keep records of transactions and make them 
available to law enforcement authorities upon request. However, DEA 
sources report that many Mexican traffickers have purchased large shares 
of banks and placed members on boards of directors. As a result, many 
banks keep two sets of books and bank examiners are paid off by corrupt 
bank officials. In addition, much of the money that is going back into 
Mexico is being invested in the infrastructure of the Mexican economy and 
is not subject to seizure. Money is also invested in U.S. institutions, as well 
as fmancial institutions throughout the world. 

As a fiscal offense, money laundering charges provide for fines and 
sentences of up to 5 years. In Mexico, the money laundering law targets 
any illegal act, including tax evasion, illicit enrichment, corruption, as well 
as drug trafficking. 

In May 1995, Mexican Attomey General Antonio Lozano announced 
that his office would be drafting a new money laundering law aimed 
specifically at Mexico's major drug trafficking organizations. The bill, 
which is to be presented before Congress sometime in 1996, criminalizes 
money laundering under the penal code. 

Currency Transaction Reporting (CTR) requirements unfortunately 
are not part of the proposed legislation, however, the pending bill attempts 
to fill some of the loopholes of the existing law. For example, it provides 
for penalties for banks who fail to report suspicious transactions. The bill 
would also reverse the burden of proof in asset forfeitures related to drug 
cases. As in the United States, the defendant would have to prove that his 
or her possessions were derived from legitimate sources. The primary 
opposition to this proposed legislation comes from the banks and fmancial 
institutions, as well as the close-knit community within Mexico that has 
controlled the vast majority of business in Mexico for years. 



145 

Southeast Asia 

Unlike cocaine organizations, which are largely Latin-based and 
concentrated in the Western Hemisphere, heroin traffickers are more 
diverse and they operate from bases all over the world, including Southeast 
Asia, Southwest Asia, the Middle East and now Colombia. 

International law enforcement efforts are frustrated by the fact that 
opium cultivation and heroin manufacturing primarily takes place in 
countries with extreme political turmoil and developing governments. 
Because of this, our nations have limited access and influence in the key 
heroin source countries of Southeast and Southwest Asia. 

Money laundering in this area of the world is conducted through a 
complicated maze of trusted confidantes who have done business together 
for generations. These underground banking systems go back years and 
years to a time when family members worked away from home and needed 
to get their wages back to their families in other provinces. That same 
system exists today and is used to launder millions of dollars in drug 
money for Southeast Asian traffickers. 

I'll confine my remarks to the most active of the money laundering 
coimtries in Southeast Asia — Singapore, Thailand, and Hong Kong. 

Singapore 

Although there is neither cultivation nor processing of drugs in 
Singapore, it is an important financial center for narcotics-related 
proceeds. Along with Hong Kong, Singapore plays a key role in the 
transfer and concealment of proceeds from the sale of Southeast Asian 
heroin. 

While Singapore is a not a signatory to the Vienna Convention, it is a 
member of the Financial Action Task Force (FATF) and continues to 
maintain a tough stance towards drug trafficking. In 1993, Singapore 



8 



^ 



146 



passed The Drug Trafficking (Confiscation of Benefits) Act, which 
provides for 7 years incarceration and a fine of $100,000. 

A recent case involving the RCMP and DEA demonstrates their 
commitment. In what has been called Singapore's biggest money 
laundering case, between 1992 and 1995, law enforcement authorities ^ 
seized $5.4 million in Singapore currency, equal to $3.8 million in 
U.S.dollars. Officials in Singapore believe that between 1989 and 1992 a 
drug trafficking group fuimelled approximately $100 million in U.S. 
currency through one underground bank in Singapore to Bahrain and 
ultimately to the organization's worldwide bank accounts. Singapore's 
Commercial Affairs Department has frozen the equivalent of $20 million 
U.S. dollars from previously arrested and convicted members of this 
hashish and marijuana organization. 

Thailand 

Thailand has an extensive and efficient network of banks and 
financial institutions which are used by drug traffickers to move and hide 
their proceeds throughout Asia. 

Thailand had a number of significant accomplishments in the past 
year in terms of fighting drug-related money laundering. Last year, 
approximately 1 38 investigations were initiated under Thailand's asset 
seizure law, and last fall, the first criminal convictions and forfeiture 
actions were handed down. As of mid-December, over $9 million had 
been frozen compared to $1 million just one year ago. 

Thailand has enacted narcotics conspiracy and asset forfeiture laws. 
The asset forfeiture law stipulates that the suspects are required to prove 
their assets have been acquired through legal means. 

Thailand has taken major steps to become a major financial center in 
Asia. The country has established offshore banking and has issued a 
number of licenses. Those banks can take deposits in foreign currencies 
and borrow in foreign currencies from local and foreign institutions. 



147 



Thailand has proposed a new money laundering law which addresses 
only drug proceeds. The law will require recording and reporting of 
significant and suspicious transactions, as well as provisions that protect 
bank employees who comply with the law from retribution. 

Real estate continues to be a widely used means for investing drug 
proceeds. Drug traffickers have also invested in companies involved in 
rubber processing, seafood packing, food products, import-export 
businesses hotels, and jewelry shops. Underground banking uses these 
businesses to send money around the world. 

Hong Kong 

With its flexible corporate laws, sophisticated banking industry and 
currency and exchange controls, Hong Kong is a prime location for the 
laundering of illicit proceeds by narcotics traffickers. Hong Kong, 
however, has implemented asset seizure, money laundering and organized 
crime legislation. The law requires that bankers notify authorities of 
suspicious transactions. After bankers received training about what to look 
for, the reporting of suspicious transactions rose by 288 percent in one 
year, however, no existing legislation regulates the extensive network of 
underground bankers operating throughout the country. 

Other legislation allows the U.S. to request civil forfeiture of 
identified proceeds of drug trafficking. Another law allows the Hong 
Kong government to identify and seize proceeds generated from any crime, 
not just those linked to drug trafficking. 

Money laundering is a criminal offense, and the law allows the 
government to trace, freeze and confiscate proceeds from convicted drug 
traffickers. In 1995, Hong Kong concluded its first successful money 
laundering prosecutions. Two members of a Chinese Triad were convicted 
of laundering approximately $56 million of heroin trafficking proceeds. 



10 



148 



We don't know what the impact on drug trafficking and money 
laundering will be when Hong Kong reverts to the People's Republic of 
China (PRC) in 1997. 

Emerging Threats 

Nigeria 

Nigeria is a home base for major trafficking groups who smuggle 
Southwest Asian and Southeast Asian heroin into the United States and 
Europe. The Nigerians are using South Africa as transshipment point as 
well. 

Although Nigeria is neither a significant regional or international 
financial center, nor an important tax haven or offshore banking center, 
drug traffickers have laundered money in Nigerian financial institutions. 
Drug profits are being pumped into the economy, as well as being 
laimdered for reuse in other countries. 

The Nigerians use a variety of methods, including bulk smuggling in 
electronic car traps, refrigerators and other merchandise which is later 
sold; wire transfers to Hong Kong and Thailand; couriers; and the purchase 
of "junk commodities" that are later sold for high prices. 

Foreign currency accounts in Nigerian financial institutions are not 
prohibited, nor do banks have to disclose the source of the funds. 

Nigerian law prohibits attempts to hide drug proceeds as well as the 
transport of drug profits intemationally. Money laundering is also illegal 
and carries prison terms of 15 to 25 years. 

Nigerian heroin traffickers appear to be capitalizing on the 
vulnerability of South African borders to create a new drug pipeline for 
heroin coming out of Southwest Asia destined for the United States. 
Nigerian criminal groups with histories of drug running are immigrating 
into South Africa and using that country as a staging area for smuggling 

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heroin into the U.S. DEA beUeves that South Africa may also be targeted 
by drug lords from Brazil and Colombia as a potential market for cocaine 
and other drugs. 

Nigerians are involved in smuggling cocaine into Europe and 
distributing it to middlemen who sell it in South Africa. According to 
INTERPOL, an increasing number of South Africans are being arrested 
throughout Europe and Africa for dmg offenses. We should anticipate that 
South Africa will be used by money laimderers, as well. 

Middle East 

There is minimal reporting regarding criminal groups involved in 
drug money laundering native to or based in the Middle East, in such 
countries as Syria, Jordan, Saudi Arabia, Qutar, Bahrain, Kuwait, Iran, 
Iraq, Cypms, United Arab Emirates, Yemen, or Oman. However, 
countries such as Cyprus, Bahrain, and the United Arab Non-indigenous 
ethnic groups take advantage of offshore banking centers to launder dmg 
proceeds. 

Russia 

Over the past several years there has been an increase in dmg 
trafficking by organized crime elements in Russia. The country has 
emerged as a transit route for heroin from Southwest and Southeast Asia to 
Europe and the United States, as well as for cocaine from South America to 
Europe. There is an increased threat of international drug money 
laimdering by criminals elements in Russia as well as by criminal elements 
among Russian emigres located in such areas as Europe and the United 
States. 

The enormous amoimt of money associated with the drug trade has 
attracted Russian organized crime elements who now are involved in all 
aspects of the opiimi and hashish industries, including cultivation, 
production, distribution, and money laundering operations. Criminal 
groups in Russia are exploiting the open access to the West and the lack of 

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regulations in the banking, financial and commercial sectors of their 
country. 

The lack of regulatory controls and legislation inhibits Russian 
Government efforts to target drug money laundering operations. Russian 
officials speculate that criminals have taken control of some banks and are 
laundering proceeds from a wide variety of criminal activities, including 
drugs. Some experts estimate that 25 percent of Moscow's commercial 
banks are controlled by Organized Crime and there is speculation that 
Colombian cocaine traffickers and Sicilian mafia may be using Russian 
banks to launder funds. 

Conclusion 

Mr. Chairman, each year criminal drug organizations accumulate 
war chests of billions of dollars from the sale of drugs in the United States. 
This money equates to power, and the ability to produce more illegal 
drugs, which are sold in our country — and countries around the world. 

Over the years, one of the things we have learned is the power of 
financial investigations. Drugs are a cash business and drug traffickers 
must find ways to make their vast wealth appear legitimate — and money 
laundering is the only way they can do that. The drug trade is a vicious 
cycle, and by attacking the financial base of these organizations, we can 
have a direct impact on their ability to do business. 

We've seen the potential of financial investigations in two recent 
global law enforcement operations to disrupt the financial operations of the 
Colombian cocaine cartels — in Operation Green Ice in 1992 and Operation 
Dinero in 1994. 

In Operation Green Ice, law enforcement from Italy, Colombia, the 
United Kingdom, Canada, Spain, Costa Rica, the Cayman Islands, and the 
United States cooperated together to expose the financial infrastructure of 
the Call mafia. During the first phase of Operation Green Ice, over $50 
million in cash and property were seized and almost 200 people were 

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arrested worldwide, including seven of Call's top money managers. In 
addition, valuable information was obtained when we gained access to 
financial books and records, as well as computer hard drives and discs 
containing fmancial transactions and bank account information. During the 
second phase of Green Ice, nearly 14, 000 pounds of cocaine, 16 pounds of 
heroin, almost $16 million in cash were seized, and over 40 people were 
arrested. 

During Operation Dinero — a two-and-a-half year undercover 
investigation involving DEA and die IRS, as well as law enforcement and 
police organizations in Italy, Spain, Canada, and the United Kingdom — we 
penetrated the drug money laundering networks and followed the money 
trails that led us to the top echelons of the Cah cocaine organizations. 

Through this investigation we further established direct links among 
the criminal organizations of the Itahan Mafia and the Colombian cocaine 
mafia. This was an historical operation also because it was the first time a 
law enforcement agency established a private bank — operated by 
undercover agents — as an investigative tool to gain insight into the seamy 
netherworld of drug money laundering. 

The results of Operation Dinero made it an overwhelming success. 
Over $52 million and 9 tons of cocaine were seized, and 88 people were 
arrested worldwide. This was cocaine that did not end up on the streets of 
our cities. This is money that will not be used to further the production 
and distribution of more illegal drugs. And, these are criminals who wiU 
not continue to pursue the deadly cycle of drug-related crime and violence. 

But the major result of both Operations Green Ice and Dinero was 
the message it sent to the drug mafias — that the number of safe havens for 
their drug money is quickly dwindling. Law enforcement agencies will 
continue to use financial investigations like these two highly-successful 
operations against traffickers and money launderers. 

As is the case with all crime, money is the motivating factor. For 
law enforcement to be effective, we must attack the money of these multi- 
billion drug enterprises. We must continue to work with — and 

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strengthen — our international partnerships, and maintain strong ties with 
our counterparts in the financial centers of the world. We must continue to 
urge all countries to ratify the U.N. Convention and to pass more effective 
money laundering and forfeiture laws. Above all, we must continue to 
identify the points where the money is most vulnerable and identify what 
we can do to separate traffickers from their ill-gotten gains. 

Mr. Chairman and Members of the Committee, that concludes my 
remarks. I'll now be happy to answer any questions you may have. 



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STATEMENT OF ROBERT E. SIMS 

SENIOR ADVISER 

INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT AFFAIRS 

U.S. DEPARTMENT OF STATE 



HEARING ON ORGANIZED CRIME AND BANKING 

COMMITTEE ON BANKING AND FINANCL\L SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

FEBRUARY 28, 1996 



HSEBKC . TES 



154 



Thank you, Mr. Chairman. Good morning to you and to the members of the 
Committee. My name is Robert E Sims I am currently serving as Senior Adviser to 
Robert S. Gelbard, the Assistant Secretary for International Narcotics and Law 
Enforcement Affairs at the U.S. Department of State. It is a privilege to appear before 
this Committee today to discuss what in the Department's view is a critically important 
national security problem — the impact of organized crime on banking and fmancial 
services. 

Mr. Chairman, money laundering and fmancial crime have grown to become global 
phenomena. Around the world we see organized criminal groups taking advantage of new 
technologies, lower trade barriers, greater freedom of movement, and a global fmancial 
system to further their criminal activities ~ activities that only a short time ago would have 
been addressed by domestic law enforcement activity alone. Increasingly, domestic 
criminals use the international fmancial system to conceal the proceeds of crimes 
committed in the US. Of course, Mr. Chairman, crimes such as narcotics trafficking and 
alien smuggling have always been transnational in nature. And the huge profits of the 
drug trade continue to flow through the global fmancial system. But increasingly we see 
non-drug crimes, including white collar fmancial crimes, making up a larger share of the 
illicit proceeds laundered around the world. Often drug and non-drug proceeds are 
commingled by launderers making it more difficult to trace proceeds to specific criminal 
activities. 

Mr. Chairman, the U.S. Department of State is deeply concerned about the threat 
of transnational organized crime for two basic reasons. First, it is a direct threat to the 
physical safety and economic well-being of Americans at home and abroad Money 
laundering is the lifeblood of narcotics trafficking and organized crime and fuels criminal 



155 



activity in the United States, including violence. Second, transnational organized crime 
threatens America's national security and foreign policy interests in a number of regions of 
the world, undermining legitimate economies and threatening emerging democracies. 
President Clinton and Secretary Christopher have placed the battle against transnational 
organized crime at the forefront of the U.S. foreign policy agenda and have committed 
the diplomatic community to work closely with law enforcement, intelligence and other 
relevant agencies to fmd effective and innovative responses to this problem. I am a small 
example of that commitment myself, Mr. Chairman. I am not a career foreign service 
officer, but came to State after serving 5 Yi years as an Assistant U.S. Attorney in the 
District of Maryland; not only one of this country's finest U.S. Attorney's offices, but a 
district in which the serious impact of transnational crime can be seen firsthand. During 
my time in the office we saw an influx of organized crime groups — the Cali Cartel, 
Nigerian heroin organizations and Asian gangs, among others ~ move into Maryland, 
often with violent and tragic results. 

Mr. Chairman, if a state like Maryland or the U.S. in general, with its strong, 
experienced law enforcement and judicial institutions, can feel the negative effects of 
transnational organized crime; countries without these advantages suffer damage that is 
often much more severe. The economic and political power of Russian organized crime 
groups, the Colombian cartels, Mexican drug traffickers, Nigerian organizations and Asian 
drug lords could not be ignored, even if they had no direct impact on United States law 
enforcement interests. These organizations can through corruption, intimidation or 
violence greatly inhibit legitimate business activity, erode public confidence, and 
undermine democratic institutions in the countries in which they operate This in turn 



HSESC.TES 



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undermines U.S. national security. We are deeply concerned, for example, about reports 
that Russian organized crime groups are gaining control of significant sectors of the 
country's economy, including actual control of certain fmancial institutions. Mr. 
Chairman, we must continue and indeed redouble our efforts to eliminate these criminal 
organizations and our battle against global money laundering and fmancial crime are an 
important part of this work. 

The State Department can and must play an important role in our effort to 
combat global money laundering and the threat of transnational organized crime. There 
are three areas of the Department's responsibilities I would like to focus on today: 1) 
international training and technical assistance, 2) foreign policy and national security 
initiatives, and 3) overseas coordination. 
TRAINING AND TECHNICAL ASSISTANCE 

The United States is fortunate enough to have the best trained and most 
knowledgeable law enforcement officers in the world. However, in facing transnational 
crime this is only part of the battle. We must work with effective counterparts overseas in 
order to accomplish our goals. Unfortunately, our law enforcement officers are often 
called upon to work with law enforcement officials in other countries that do not benefit 
from the same level of training and have not developed the expertise we have. This is 
especially a problem in the areas of money laundering and financial crime which can 
involve sophisticated laundering techniques or complex frauds that require equally 
sophisticated investigative work. When you consider that U.S. law enforcement officers 
overseas generally operate subject to the laws and ground rules established by the host 
country, restrictions that generally limit their ability to investigate and prosecute criminal 



157 



activities overseas as they would in the United States, it becomes readily apparent why 
international law enforcement training is such an important part of our overall effort. 

Mr. Chairman, we must work to develop effective working partners overseas in an 
era in which international cooperation against crime is vital. Any weak leak in the money 
laundering chain, for example, limits the effectiveness of the rest of the chain. Strong and 
effective regulation and enforcement in the U.S., to take one example, have forced some 
money launderers to ship bulk cash out of the US. to cQuntries in which it can be 
disposed of more easily, without fear of detection. These funds can then be repatriated to 
the U.S. using methods that are much more difficult for our law enforcement and 
regulatory officials to detect. Unless these other countries become full and effective 
partners with the U.S., our domestic efforts will continue to be undermined. 

The Department is working to develop more effective partnerships with foreign 
countries in part by funding a range of law enforcement training programs through our 
foreign assistance accounts. In undertaking international training efforts, the Department 
has two basic goals in mind. The first is to build institutional expertise and capability in 
foreign countries to put these countries in a better position to work cooperatively with us. 
The second is to foster close working relationships between our law enforcement 
authorities and those in other countries. We do this recognizing that resources are limited, 
so we must work to reduce uimecessary overlap. This is especially important in the areas 
of money laundering and financial crime because investigative and regulatory authority is 
spread among a number of agencies in the U.S., as well as many foreign countries. It is 
also important, of course, that these programs be administered with our broader foreign 
policy interests in mind. To accomplish these objectives, the State Department is working 



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very closely with federal law enforcement agencies to establish priorities and implement 
effective and coordinated training programs. 

A good example of this effort is our current training program in the former Soviet 
Union and Central Europe The State Department chairs a woricing group on law 
enforcement training consisting of all of the relevant federal law enforcement and 
regulatory agencies. This group conducts needs assessments, analyzes U.S. priorities and 
develops training programs that serve both U.S. interests as well as those of the various 
countries in the region Using Freedom Support Act (FSA) and Supporting Eastern 
European Democracy Act (SEED) funds. State is planning to fund a number of money 
laundering and fmancial crime training in Russia, Estonia, the Czech Republic, Poland and 
elsewhere this year. 

Mr. Chairman, as you may know, the State Department also helped to establish 
an International Law Enforcement Academy in Budapest last year, working with the FBI 
and other federal law enforcement agencies. We will also be funding money laimdering 
and fmancial crime training courses for the academy this year. ILEA is another good 
example of the State Department and federal law enforcement working together to 
improve international cooperation. 

While the Department will likely not have the resources we had hoped this year, 
we nonetheless plan to work with federal law enforcement to expand our money 
laundering and fmancial crime efforts to key countries outside of the NIS and Central 
Europe. In doing so, we will use our successful work in the NIS and Central Europe as 
the model 



159 



FOREIGN POLICY AND NATIONAL SECURITY INITLVTIVES 

Mr. Chairman, we are also using the full foreign policy and national security 
apparatus to advance our law enforcement and national security interests. We are raising 
the issue of money laundering and fmancial crime at the bilateral and multilateral level to 
help improve international cooperation in these areas. Indeed, improving law enforcement 
cooperation on a bilateral and multilateral basis is one of our primary foreign policy 
interests. One example of this effort is our ongoing discussion with the G-7 countries and 
the Russian government (i.e., the P-8). At last year's G-7 Summit in Halifax, the U.S. 
advocated strong positions on transnational crime, including the establishment of an 
experts group to examine international responses and make specific recommendations to 
improve law enforcement cooperation internationally. An interagency team, led by State 
and including most of the agencies you will hear from today, has participated in the 
resulting talks with their foreign counterparts over the course of the last year. And though 
the talks have at times been difficult, we are making real progress in a number of areas. 
We are considering a range of recommendations that should improve international 
cooperation against money laundering and fmancial crimes. 

State has worked very closely, Mr. Chairmaq with Treasury, Justice and other 
agencies in a full range of international initiatives. For example, we worked closely with 
Treasury in the Summit of the Americas process and were pleased with the progress we 
made. We intend to continue our joint efforts to ensure that what the nations of this 
hemisphere agreed to on paper will become a reality on the ground. We are also 
continuing our efforts with Treasury to support the work of the Financial Action Task 
Force. Indeed, FATF, as the leading anti-money laundering organization in the world is a 



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very important source for our bilateral and multilateral efforts to control money 
laundering It provides international standards against which even non-members can be 
measured. Treasury's efforts to ensure that the FATF recommendations fully reflect the 
best advice the international community can give on money laundering countermeasures is 
an important reform State will fully support. We are also pushing a reform agenda in the 
United Nations Crime Commission to help it become a more effective voice for reform 
and international cooperation in the money laundering and financial crime areas. 

You have heard, Mr. Chairman, about the President's important money laundering 
initiative. We have been working closely with Treasury and other agencies to develop this 
initiative and we plan to work vigorously to implement it. I wanted also to mention 
another of the President's important and innovative initiatives in this area — the use of the 
International Emergency Economic Powers Act against the Cali Cartel. lEEPA allowed 
the President to freeze assets of the designated Cartel leaders, their associates and front 
companies in the U.S., but more importantly, it prohibits U.S. persons from doing business 
with these individuals and entities. This greatly restricts the ability of these front 
companies to conduct business as usual in or with the United States. Surprisingly, 
published reports also suggest that Colombian businesses, including financial institutions, 
have been emboldened by the President's action and have been refusing to do business 
with these Cartel front companies as well. Mr. Chairman, the use of lEEPA and the 
President's money laundering initiative are the type of innovative responses to organized 
crime we need. Indeed, we are working on an interagency basis, as required by the 
President, to determine whether we can use lEEPA to target other criminal organizations. 



161 



OVERSEAS COORDINATION 

Finally, Mr. Chairman, I would like to address the issue of overseas coordination 
especially State support for overseas law enforcement activity. Whether they seek to 
enforce U.S. law overseas as authorized by law or serve in a liaison capacity with 
counterpart agencies abroad, the placement of U.S. law enforcement personnel abroad is 
an important response to the growing threat of transnational organized crime. Indeed, Mr. 
Chairman, our missions overseas are the forward bases for protecting and advancing U.S. 
national interests, including our law enforcement interests. 

Both the Secretary of State and the U.S. Chief of Mission have statutory 
responsibilities for coordinating the activities of U.S. government personnel abroad. As 
the President's personal representative in country, the role of the Chief of Mission is 
especially important because he or she is charged by the President and statutorily 
responsible for the direction, coordination and supervision of all USG personnel in 
country, except certain military personnel. The Chief of Mission must play an important 
role in our fight against transnational organized crime. 

Mr. Chairman, my purpose for mentioning these responsibilities is that I fear the 
Department's ability to support these important law enforcement functions is jeopardized 
as mission resources are reduced. We currently have some 1600 law enforcement 
personnel overseas and virtually all of these agencies are seeking to expand their presence. 
DEA, FBI, Secret Service, INS, Customs, IRS, ATF, FAA, and a number of other 
agencies have important law enforcement functions to perform abroad. Unfortunately, 
Chiefs of Mission increasingly must consider cost and resource availability in making 
decisions to enhance our law enforcement presence overseas. Because the Department's 



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own resources are shrinking even as law enforcement agencies seek to expand their 
presence in U.S. missions. Chiefs of Mission must carefully consider such issues as space 
limitations, costs and manageability when assessing whether to approve new positions, 
even where they agree that enhanced numbers would otherwise be desirable. I therefore 
urge the members of the Committee, when looking at the issue of law enforcement 
activity overseas, not to forget the State Department's responsibilities and the resources it 
needs to support these activities. . 
CONCLUSION 

As with other transnational crimes, Mr. Chairman, there is no simple solution to 
the threat of global money laundering and fmancial crime. I believe we have to look at 
each of the areas I have discussed here today ~ international training, foreign policy 
initiatives and overseas law enforcement activity — as part of a comprehensive response. 
The Department of State looks forward to working with the law enforcement and 
intelligence communities and with the Congress to combat global money laundering and 
fmancial crime. 



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DEPARTMENT OF THE TREASURY 

UNITED STATES SECRET SERVICE 



Robert H. Rasor 
Deputy Assistant Director 
Washington, D. C. 
(202) 4355716 



Mr. Rasor is the Deputy Assistant Director for Investigations at the U.S. Secret Service 
Headquarters in Washington, D. C, responsible for coordination and administration of Investigative 
Operations, both Foreign and Domestic. Mr. Rasor received a Bachelor of Arts Degree from Iowa 
Wesleyan College and a Juris Doctor Degree from Memphis State University. Further, Mr Rasor most 
recently completed the Senior Executive Fellov^s Program at Harvard University and the Contemporary 
Executive Development Program at George Washington University. 

Mr. Rasor's previous assignment was Special Agent in Charge of the Financial Crimes Division, 
where he was responsible for the world-wide oversight, direction and coordination of criminal 
investigations pertaining to: Financial Institution Fraud, Access Device/Credit Card/Telemarketing 
Fraud, Telecommunications Fraud, Computer Fraud, Electronic Funds Transfer, Nigerian/Asian 
Organized Crime, False Identification, Government Program Fraud and other related crimes. 

Mr. Rasor has also served as Special Agent in Charge of the Special Investigations and 
Security Division at Secret Service Headquarters where he was responsible for internal security 
matters relating to physical and technical security. This Division was responsible for security surveys 
of the White House Complex, U.S. Mints, Ft. Knox, and other sensitive locations throughout the 
world. Mr Rasor has had extensive experience as a Special Agent in St. Louis and New York City, 
having been in charge of the Fraud, Forgery, Special Investigations, Intelligence and Protection Squads 
and serving as Assistant to the Special Agent in Charge of the New York Field Office. 

During Mr. Rasor's tenure he has traveled extensively overseas while assigned to the White 
House Presidential Protective Division, providing advance and on site protection for numerous 
Presidents and Vice Presidents of the United States and foreign heads of state visiting the United 
States. 

Mr. Rasor serves on the Board of Advisors for the International Association of Credit Card 
Investigation, Board of Directors of the Economic Crimes Institute at Syracuse University, American 
Society for Industrial Security White Colrar Crimes Committee, American Bankers Association Security 
Committee, the International Association Chiefs of Police Financial Crimes Committee and the National 
Performance Review Electronic Benefits Transfer Task Force. Mr. Rasor has received numerous 
awards from government, law enforcement agencies and industry for his leadership contributions. 

In October 1994, Mr. Rasor received the Secretary's Annual Award for Outstanding 
Performance in the area of Financial Crimes from U.S. Treasury Secretary Lloyd Bensten. In October 
1995, Mr. Rasor received the Vice President's award for excellence in Financial Crimes Management 
from Secretary of the Treasury Robert E. Rubin. 



164 



TESTIMONY OF ROBERT H. RASOR 

DEPUTY ASSISTANT DIRECTOR 
UNITED STATES SECRET SERVICE 

COMMITTEE ON BANKING AND FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

FEBRUARY 28, 1996 

MR. CHAIRMAN, THANK YOU FOR THE OPPORTUNITY TO ADDRESS THIS 
COMMITTEE ON "THE THREAT POSED BY ORGANIZED CRIMINAL GROUPS TO 
FINANCIAL SYSTEMS " , COMMERCE SYSTEMS , AND COUNTLESS INDIVIDUAL 
VICTIMS, BOTH IN THE UNITED STATES AND ABROAD. 

I AM REPRESENTING THE UNITED STATES SECRET SERVICE TODAY IN 
MY CAPACITY AS DEPUTY ASSISTANT DIRECTOR FOR THE OFFICE OF 
INVESTIGATIONS . 

AS YOU KNOW, THE UNITED STATES SECRET SERVICE WAS ORIGINALLY 
ESTABLISHED IN 1865, SOLELY TO SUPPRESS COUNTERFEIT CURRENCY IN 
THE UNITED STATES. TODAY THE SECRET SERVICE HAS INVESTIGATIVE 
JURISDICTION FOR A HOST OF CORE FINANCIAL CRIMES COMMONLY USED BY 
ORGANIZED GROUPS TO ATTACK FINANCIAL SYSTEMS ON A NATIONAL AND 
INTERNATIONAL SCALE. 

THE UNITED STATES SECRET SERVICE HAS SEEN THE EMERGENCE OF 
SEVERAL INTERNATIONAL ORGANIZED CRIMINAL GROUPS SYSTEMATICALLY 
ATTACKING THE FINANCIAL SYSTEMS THROUGH FINANCIAL INSTITUTION 
FRAUD, COUNTERFEITING OF U.S. CURRENCY, CREDIT CARD FRAUD, 



165 



ADVANCE FEE FRAUD, COMPUTER FRAUD, AND TELECOMMUNICATIONS FRAUD. 
ALL OF THOSE VIOLATIONS ARE INVESTIGATIVE PROGRAM AREAS WITHIN 
THE UNITED STATES SECRET SERVICE, IN WHICH WE HAVE ACCUMULATED 
SPECIFIC EXPERTISE AND ONGOING PRO- ACTIVE INITIATIVES. 

I WOULD LIKE TO FOCUS OUR DISCUSSION TODAY ON (1) 
IDENTIFICATION OF THE GROUPS, (2) CURRENT TRENDS OF THE GROUPS 
(3) SECRET SERVICE RESPONSE AND (4) RECOMMENDATIONS. 

GROUPS : 

AT THE ONSET THE SECRET SERVICE DISTINGUISHES BETWEEN 
STRUCTURED, TRADITIONAL ORGANIZED CRIME SUCH AS LA COSTA 
NOSTRA (LCN) , AND WHAT ARE NOW COMMONLY REFERRED TO AS ORGANIZED 
CRIMINAL GROUPS. THE GROUPS INCLUDE: NIGERIAN CELLS, ASIAN TRIADS, 
RUSSIAN CRIMINAL NETWORKS, MIDDLE - EASTERN ORGANIZED CRIME GROUPS 
(LEBANESE, SYRIAN, IRANIAN, ISRAELI ETC.) AND SOUTH AMERICAN 
CARTELS. OTHER DOMESTIC GROUPS HAVE BEEN ASSOCIATED ALONG 
PHILOSOPHICAL LINES, SUCH AS POSSE COMITATUS, AND THE ARYAN NATION 
AND/OR WHITE SUPREMACISTS. MANY OF THESE GROUPS DO NOT FOLLOW 
PRIOR PATTERNS ASSOCIATED WITH ORGANIZED CRIME IN RELATION TO 
STRUCTURE. HOWEVER, THESE GROUPS DO SUPPORT THEMSELVES INTERNALLY 
THROUGH ETHNIC ASSOCIATION WHILE EXTERNALLY CREATING ENCLAVES OR 
CELLS FOR CRIMINAL OPERATIONS ON A DOMESTIC AND INTERNATIONAL 
SCALE. 

IT HAS BECOME APPARENT TO THE SECRET SERVICE THAT TRADITIONAL 
INVESTIGATIVE TECHNIQUES ARE DIFFICULT TO EMPLOY. THEREFORE, NEW 



166 



TECHNIQUES ARE NEEDED TO ADDRESS THE PROBLEM OF THE MANY AND 
DIVERSE ORGANIZED CRIMINAL ELEMENTS ATTACKING U.S. FINANCIAL 
SYSTEMS. THE GROUPS ARE INVOLVED IN: THE MANUFACTURE AND 
DISTRIBUTION OF COUNTERFEIT CREDIT CARDS AND FALSE IDENTIFICATION 
DOCUMENTS; DESK TOP PUBLICATION OF COUNTERFEIT U.S. GOVERNMENT, 
FOREIGN, AND COMMERCIAL OBLIGATIONS AND SECURITIES; INTRUSIONS INTO 
THE INTERNATIONAL COMPUTER NETWORKS ( INTERNET) ; THE LAUNDERING OF 
ILLICIT PROCEEDS THROUGH INTERNATIONAL WIRE TRANSFERS; AND THE 
ALTERATION OF CELLULAR PHONE MICROCHIPS JUST TO NAME A FEW. 

TRENDS: 

ONE COMMONLY RECOGNIZED ASPECT OF THESE ORGANIZED CRIMINAL 
GROUPS IS THAT THEY HAVE BECOME "EXPERTS" IN THEIR CRIMINAL FIELD. 
IN SHORT, THEY DO THEIR HOMEWORK ON FINANCIAL SYSTEMS AND IDENTIFY 
WEAKNESSES IN SYSTEMS THAT ALLOW THEM FRAUDULENT ACCESS TO MILLIONS 
OF DOLLARS. THE ATTACKS AND CRIMINAL SUCCESSES OF THE ORGANIZED 
GROUPS ARE MORE OFTEN THAN NOT, A RESULT OF CAREFUL PLANNING, 
PRECISE EXECUTION OF THE SCHEME, AND ULTIMATELY TAKING ADVANTAGE OF 
FINANCIAL SYSTEMS ORIGINALLY DESIGNED TO BE CONSUMER OR CUSTOMER 
FRIENDLY. 

WHILE THE SOPHISTICATION AND ORGANIZATIONAL LEVEL OF 
THESE GROUPS INCREASE IN ALL AREAS OF FINANCIAL CRIMES, ONE OF THE 
MOST DISTURBING ASPECTS THE SECRET SERVICE HAS OBSERVED IS THE 
PROLIFERATION OF THE SO CALLED "WHITE COLLAR" CRIMINAL GROUPS' 
INVOLVEMENT IN THE MORE VIOLENT TYPES OF CRIMINAL ACTIVITIES. THE 
SERVICE BELIEVES IT IS A COMMON MYTH THAT CREDIT CARD FRAUD, BANK 

3. 



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FRAUD, AND THE COUNTERFEITING OF U.S. CURRENCY ARE COMPLETELY 
"WHITE COLLAR" CRIMINAL OFFENSES WITH NO RELATIONSHIP TO THE 
VIOLENCE VIEWED ON NIGHTLY NEWS PROGRAMS. 

MANY PEOPLE STILL BELIEVE THAT THE MAJORITY OF THESE "WHITE 
COLLAR" SCHEMES ARE BEING PERPETRATED BY INDIVIDUALS AS AN END IN 
THEMSELVES. IN FACT, THE SECRET SERVICE AND OTHER LAW ENFORCEMENT 
INVESTIGATORS ARE CONSTANTLY ENCOUNTERING ORGANIZED CRIMINAL GROUPS 
WHO ARE TARGETING U.S. AND OTHER NATIONS FINANCIAL SYSTEMS WITH A 
MULTITUDE OF FRAUDULENT SCHEMES DESIGNED TO SUPPORT VIOLENT 
CRIMINAL LIFESTYLES. THE SECRET SERVICE HAS COME TO RECOGNIZE THE 
CLEAR RELATIONSHIP BETWEEN "WHITE COLLAR" CRIME AND THE 
PERPETRATORS OF INHERENTLY VIOLENT ACTIVITIES SUCH AS MURDER, DRUG 
TRAFFICKING, EXTORTION, PURCHASE AND EXCHANGE OF FIREARMS AND 
EXPLOSIVES, MONEY LAUNDERING, ALIEN SMUGGLING, CAR THEFT AND 
PROSTITUTION. 

FALSE IDENTIFICATION IS A KEY ELEMENT IN THE SUCCESS OF 
ORGANIZED CRIMINAL GROUPS IN ATTACKING FINANCIAL SYSTEMS ON A 
GLOBAL SCALE. THE USE OF FALSE IDENTIFICATION AS A VEHICLE TO 
COMMIT FINANCIAL CRIMES HAS BECOME A PRIORITY CONCERN TO THE SECRET 
SERVICE AND THE FINANCIAL COMMUNITY. IN 1994, THE SECRET SERVICE 
INVESTIGATED FINANCIAL CRIMES CASES TOTALING $1.5 BILLION. A 
MAJORITY OF THESE CASES INVOLVED FALSE IDENTIFICATION AS A 
PREREQUISITE TO THE CRIME. 

IN THE FINANCIAL CRIMES ARENA, THE NUMBER ONE CONCERN OF BANKS 



168 



TODAY IS THE USE OF COMPUTERS, DOCUMENT SCANNERS, LASER PRINTERS, 
AND DESKTOP PUBLISHING SOFTWARE PROGRAMS TO COUNTERFEIT FALSE 
IDENTIFICATION, CORPORATE CHECKS, LETTERS OF CREDIT , AND OTHER 
COMMERCIAL BANKING DOCUMENTS . ORGANIZED CRIMINAL GROUPS USE FALSE 
IDENTIFICATION TO OPEN BANK ACCOUNTS TO CONDUCT FRAUDULENT 
ACTIVITY, TO APPLY FOR GOVERNME^ BENEFITS, OR TO NEGOTIATE 
COUNTERFEIT OR STOLEN CHECKS. 

ALTHOUGH COUNTERFEITED "BREEDER" DOCUMENTS, SUCH AS BIRTH 
CERTIFICATES AND SOCIAL SECURITY CARDS, ARE USED TO ESTABLISH 
IDENTITY IN THE COMMISSION OF FINANCIAL CRIMES, IT IS THE 
COUNTERFEIT DRIVERS LICENSE THAT IS MOST OFTEN USED. THAT IS DUE TO 
THE FACT THAT DURING THE COURSE OF BUSINESS THE DRIVERS LICENSE IS 
THE MOST POPULAR AND WIDELY ACCEPTED CREDENTIAL IN SUPPORT OF A 
FINANCIAL TRANSACTION. 

SECRET SERVICE RESPONSE: 

IN 1984, AFTER THE SECRET SERVICE RECEIVED ADDITIONAL 
JURISDICTIONAL RESPONSIBILITY FDR CREDIT CARD FRAUD AND FALSE 
IDENTIFICATION, WE BEGAN TO ENGAGE THE NIGERIAN CRIMINAL NETWORK 
ON A REGULAR BASIS. THESE ORGANIZED CRIMINAL GROUPS PROVED TO BE 
ADEPT AT DEVELOPING COMPLEX SCHEMES TO DEFRAUD FINANCIAL 
INSTITUTIONS AND THE GENERAL PUBLIC. THE U.S. SECRET SERVICE 
FIRST ENCOUNTERED MEMBERS OF THESE GROUPS IN THE COURSE OF 
ENFORCING OUR TRADITIONAL JURISPICTIONS OVER THE COUNTERFEITING 
OF U.S. CURRENCY AND THE FORGING OF GOVERNMENT SECURITIES. 
NIGERIAN INVOLVEMENT IN ALL TYPES OF FRAUD AND THEIR ABILITY TO 

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USE MULTIPLE IDENTITIES AND CREATE FALSE DOCUMENTATION HAS MADE 
THE WEST AFRICAN CRIMINAL ELEMENT A SIGNIFICANT FACTOR FOR LAW 
ENFORCEMENT AUTHORITIES. WEST AFRICAN ORGANIZED CRIME WAS 
RECOGNIZED TO BE A RAPIDLY GROWING PHENOMENA THROUGHOUT THE 
WORLD. IN 1986, THE SENATE PERMANENT SUBCOMMITTEE ON 
INVESTIGATIONS DETERMINED, AS A RESULT OF HEARINGS ON EMERGING 
ORGANIZED CRIMINAL GROUPS, THAT A FORMIDABLE CRIMINAL NETWORK WAS 
FORMING WITHIN THE LARGE COMMUNITY OF NIGERIAN NATIONALS LIVING 
IN THE UNITED STATES. IN FY 1992, THE TREASURY, POSTAL SERVICE 
AND GENERAL GOVERNMENT APPROPRIATIONS SUBCOMMITTEE PROVIDED FUNDS 
TO THE SECRET SERVICE, WHICH WERE EARMARKED FOR A WEST AFRICAN 
TASK FORCE INITIATIVE. THE RESULTING TASK FORCES REMAIN IN 
EXISTENCE. 

IN ADDITION TO THE TRADITIONAL FRAUD SCHEMES USED BY THE 
WEST AFRICAN CRIMINAL ELEMENT, THEY ARE NOW RECOGNIZED FOR THEIR 
ABILITIES TO TRANSPORT CURRENCY AND HEROIN IN AND OUT OF THE 
UNITED STATES. IT IS SUSPECTED THAT MUCH OF THE MONEY OBTAINED 
THROUGH THE FRAUDIrtjENT ACTIVITY CONDUCTED BY THE WEST AFRICANS IS 
IN SUPPORT OF THEIR DRUG TRAFFICKING. 

THE SECRET SERVICE HAS TAKEN A PROACTIVE APPROACH TO THE 
WEST AFRICAN ORGANIZED CRIME PROBLEM BY ESTABLISHING AND 
MAINTAINING TASK FORCES THROUGHOUT THE UNITED STATES WHOSE FOCUS 
INCLUDES THE INVESTIGATION OF NIGERIAN PERPETRATED FRAUD. THESE 
SECRET SERVICE LED TASK FORCES ARE LOCATED IN BOSTON, NEW YORK, 
NEWARK, BALTIMORE, WASHINGTON, p.C, ATLANTA, MIAMI, CHARLOTTE, 



170 



HOUSTON, DALLAS, AND CHICAGO. MEMBERS OF THESE TASK FORCES 
INCLUDE U.S. CUSTOMS, IMMIGRATION AND NATURALIZATION SERVICE, 
U.S. POSTAL INSPECTORS, AS WELL AS MEMBERS OF LOCAL, COUNTY AND 
STATE POLICE AGENCIES. 

TO ASSIST THE TASK FORCES IN THEIR INVESTIGATIONS, THE 
SECRET SERVICE ACTIVELY PARTICIPATES IN THE COMBINED AGENCY 
BORDER INTELLIGENCE NETWORK (CABINET) , THE FINANCIAL CRIMES 
ENFORCEMENT NETWORK (FINCEN) , AND THE MID -ATLANTIC, GREAT LAKES 
ORGANIZED CRIME ENFORCEMENT NETWORK (MAGLOCLEN) . THESE DATA 
BASES, AS WELL AS THE SECRET SERVICES' INVESTIGATIVE SUPPORT 
DIVISION, THE DRUG ENFORCEMENT AGENCY, AND THE U.S. CUSTOMS TECS 
SYSTEM PROVIDE AN EXCELLENT BASIS FOR OBTAINING INFORMATION AND 
ANALYSIS OF DATA TO HELP OUR STREET AGENTS TAKE A PROACTIVE 
APPROACH TO TARGETING WEST AFRICAN ORGANIZED CRIMINAL GROUPS. 

CURRENTLY, THE MOST PROLIFIC FRAUD SCHEME BEING PERPETRATED 
BY NIGERIAN ORGANIZED CRIMINAL GROUPS IS WHAT IS KNOWN AS ADVANCE 
FEE FRAUD, OR "419" FRAUD. THE "419" REFERS TO A NIGERIAN FRAUD 
STATUTE. NIGERIANS, PURPORTING TO BE OFFICIALS OF THEIR 
GOVERNMENT, BANKING SYSTEM, OR OIL IMPORT/EXPORT COMPANIES HAVE 
MAILED OR FAXED LETTERS TO INDIVIDUALS AND BUSINESSES ALIKE IN 
THE UNITED STATES ENTICING CITIZENS TO PARTAKE OF MILLION DOLLAR 
WINDFALLS, IF THEY WOULD RESPOND WITH PERSONAL IDENTIFIERS SUCH 
AS SOCIAL SECURITY NUMBERS, BANK ACCOUNT NUMBERS, AND PHONE 
NUMBERS. THE INDIVIDUAL BECOMES A VICTIM WHEN THEY FALL FOR THE 
SCHEME AND WIRE TRANSFER FEES "UP FRONT" TO PAY FOR BRIBES, 



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TAXES, AND LEGAL FEES, WHICH THE NIGERIAN HAS SAID MUST BE PAID 
BEFORE THE DEAL CAN BE CONSUMMATED. THIS TYPE OF FRAUD HAS BECOME 
SO WIDESPREAD THROUGHOUT THE UNITED STATES AND INTERNATIONALLY, 
THAT THE SECRET SERVICE HAS INSTITUTED AN OPERATION THAT TRACKS 
THESE LETTERS AND VICTIMS. THERE ARE CURRENTLY OVER 20,000 
ENTRIES IN THIS DATA BASE AND IJTOICATIONS ARE THAT AMERICAN 
CITIZENS HAVE LOSSES IN THE MILLIONS OF DOLLARS. AMERICANS HAVE 
GONE TO NIGERIA IN HOPES OF RECOVERING THEIR MONEY AND HAVE BEEN 
FOUND MURDERED AFTER BEING REPORTED MISSING. 

AGENTS ASSIGNED TO OUR TASK FORCE IN NEWARK RECENTLY 
COMPLETED A JOINT INVESTIGATION WITH THE DRUG ENFORCEMENT 
ADMINISTRATION WHERE THEY PROVED THAT PROCEEDS FROM THIS TYPE OF 
FRAUD WERE BEING USED TO FUND A HEROIN DISTRIBUTION RING AND A 
STOLEN CAR OPERATION IN THE NEW JERSEY/NEW YORK METROPOLITAN AREA 
WITH TIES DIRECTLY INTO LAGOS, NIGERIA. LOSSES IN THIS CASE 
TOTALED $5 MILLION DOLLARS. ANOTHER RECENT "419" CASE RESULTED 
IN THE ARREST OF ANOTHER NIGERIAN NATIONAL ACCUSED OF INVOLVEMENT 
IN HEROIN TRAFFICKING WITH THE ASSISTANCE OF FUNDS DERIVED FROM 
"419" FRAUD. THE 419 FRAUD ACTIVITY RESULTED IN A $12 MILLION 
LOSS TO INTERNATIONAL VICTIMS. 

MOHDERED AMERICAN CITIZENS 

AN AMERICAN CITIZEN WAS SHOT TO DEATH IN LAGOS LAST SUMMER 
IN RELATION TO "419" FRAUD. HIS PARTICULAR CASE CENTERED AROUND 
THE PURCHASE OF NIGERIAN CRUDE OIL FOR A DRASTICALLY REDUCED 
RATE, THE SUBJECT HAD $92,000 IN NEGOTIABLE INSTRUMENTS IN A 

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SAFETY DEPOSIT BOX THAT WAS NOT COMPROMISED. THE SUBJECT DID NOT 
HAVE A VALID VISA WHICH INDICATES HE WAS SMUGGLED INTO LAGOS BY 
HIS NIGERIAN HOSTS. OTHER GOVERNMENTS HAVE REPORTED THEIR 
CITIZENS MURDERED OR MISSING IN PAST YEARS. 

AMERICAN EMBASSY - LAGOS 

A PILOT PROJECT INITIATED BY THIS SERVICE IN 1995, TO 
PERIODICALLY ASSIGN AGENT PERSONNEL TO THE AMERICAN EMBASSY IN 
LAGOS TO ASSESS THE MAGNITUDE OF THE "419" ISSUE RESULTED IN THE 
ASSISTED EXTRICATION OF SEVEN AMERICAN VICTIMS IN JUST ONE MONTH. 
SOME OF THE VICTIMS WERE 60 AND 70 YEARS OF AGE AND WOULD HAVE 
MOST PROBABLY FACED SOME FORM OF INTIMIDATION TO CONTINUE THEIR 
PARTICIPATION IN THIS SCAM. FIGURES PROVIDE BY THE AMERICAN 
EMBASSY INITIALLY INDICATED UP TO 40 AMERICAN CITIZENS PER MONTH 
COMING TO THE ATTENTION OF THE EMBASSY SEEKING RELIEF FROM 419 
SCHEMES. SINCE THIS SERVICE'S AGGRESSIVE STANCE TOWARD THIS 
PROBLEM THAT FIGURE HAS BEEN REDUCED TO AN AVERAGE OF ONLY 4 PER 
MONTH. 

INTERDICTION AND EDUCATION 

THROUGH OUR CONTINUING EFFORTS TO BRING THE "419" SCHEMES TO 
THE ATTENTION OF THE GENERAL PUBLIC, FINANCIAL COMMUNITY, AND THE 
LAW ENFORCEMENT COMMUNITY WE HAVE BEEN SUCCESSFUL IN INTERDICTING 
APPROXIMATELY 400 INDIVIDUALS FROM BEING VICTIMIZED BY "419" 
SCHEMES . 



173 



OUR AGENTS HAVE LOCATED VICTIMS IN FOREIGN VENUES AND HAVE 
ASSISTED IN THEIR REMOVAL FROM A POTENTIALLY DANGEROUS 
ENVIRONMENT, AND THEIR RELOCATION BACK TO THE UNITED STATES. 
WE HAVE EVEN GONE TO AIRPORTS AND STOPPED VICTIMS WITH 
THOUSANDS OF DOLLARS IN THEIR POSSESSION FROM EMBARKING ON 
FLIGHTS THAT WOULD EVENTUALLY PLACE THEM IN HARMS WAY. WE 
CONTINUE TO WORK CLOSELY WITH TJIE U.S. STATE DEPARTMENT, THE 
AMERICAN EMBASSY IN NIGERIA, INTERPOL, SCOTLAND YARD AND LAW 
ENFORCEMENT OFFICIALS THROUGHOOT" THE WORLD IN AN ATTEMPT TO END 
THESE FRAUDULENT PRACTICES. 

ASIAN ORGANIZED CRIMINAL GROUPS CONTINUE TO BE A SIGNIFICANT 
PROBLEM IN THE UNITED STATES. THE U.S. SENATE PERMANENT' 
SUBCOMMITTEE ON INVESTIGATIONS HELD HEARINGS LAST YEAR ON THE 
PROBLEMS ASSOCIATED WITH VARIOUS ASIAN TRIADS, SUCH AS THE BIG 
CIRCLE GANG, 14K, AND SUN YEE ON. THE COMMITTEE IDENTIFIED 
HEROIN TRAFFICKING, MONEY LAUNDERING, AND CREDIT CARD FRAUD AS 
ILLEGAL ACTIVITIES IN WHICH THE TRIADS PARTICIPATED. 
INVESTIGATIONS INVOLVING ASIAN GANGS CONTINUE TO GROW AT A RAPID 
PACE WITH THE MAJORITY OF THE INVESTIGATIONS CENTERED ON THE WEST 
COAST AND NEW YORK CITY. THE SECRET SERVICE HAS WORKED CLOSELY 
WITH THE ROYAL HONG KONG POLICE AND OTHER INTERNATIONAL POLICE 
AGENCIES IN ATTEMPTING TO STEM ASIAN ORGANIZED CRIMINAL ACTIVITY 
AS IT RELATES TO TREASURY VIOLATIONS. 

RECENTLY, THIS COOPERATIVE EFFORT LED TO THE ARREST OF TAM 
WEI-KEUNG IN THE UNITED STATES (OPERATION PLASTIC DRAGON) . KEUNG 

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WAS THE LEADER OF THE 14 K ASIAN TRIAD AND WAS INVOLVED IN 
INTERNATIONAL CREDIT CARD FRAUD. LOSSES ATTRIBUTED TO TAM AND HIS 
TRIAD HAVE EXCEEDED $65 MILLION. THE SECRET SERVICE HAS WORKED 
EXTENSIVELY WITH THE ROYAL CANADIAN MOUNTED POLICE TARGETING 
ASIAN ORGANIZED CRIME TRIADS SUCH AS THE "BIG CIRCLE BOYS", "THE 
FLYING DRAGONS", AND THE LOTUS CHINESE GROUP. THESE TRIADS HAVE 
BEEN EXTREMELY ACTIVE IN COUNTEflFEITING U.S. CURRENCY, FINANCIAL 
INSTITUTION FRAUD, CREDIT CARD FRAUD, AS WELL AS NARCOTICS 
TRAFFICKING, GUN RUNNING, AND OTHER VIOLATIONS. 

CURRENTLY, OUR SANTA ANA, CALIFORNIA OFFICE CONTINUES TO 

INVESTIGATE AN ORGANIZED GROUP OF VIETNAMESE NATIONALS (OPERATION 

PAPER DRAGON) WHO ARE RESPONSIBLE FOR COUNTERFEITING CORPORATE 

CHECKS IN WHICH FINANCIAL INSTITUTIONS HAVE SUFFERED IN EXCESS OF 
»• 

$20 MILLION IN LOSSES. OVER 100 ARRESTS HAVE BEEN MADE BY THE 
SECRET SERVICE IN CONNECTION WITH THIS INVESTIGATION. IN ANOTHER 
CASE "OPERATION REPAYMENT" ANOTHER ORGANIZED GROUP OF VIETNAMESE 
NATIONAL WERE ARRESTED IN A CASE INVOLVING $40 MILLION IN LOSSES 
TO THE SYSTEM. FINANCIAL INSTITUTIONS INVOLVED BELIEVE THAT THE 
LOSSES WILL SOAR TO 100 MILLION DOLLARS AS A RESULT OF THIS SCAM. 

THE SECRET SERVICE HAS A LONG HISTORY OF COMBATING DOMESTIC 
CRIMINAL ACTIVITY BY INDIVIDUAL^ OF RUSSIAN DESCENT. GOING BACK 
15 YEARS, AGENTS IN THE NEW YORK FIELD OFFICE WERE INVESTIGATING 
SMALL RUSSIAN GROUPS COUNTERFEITING U.S. CURRENCY. THESE GROUPS 
WERE CENTERED IN THE BRIGHTON BEACH AREA OF BROOKLYN, NY, BUT 
WERE LINKED TO OTHER RUSSIANS IN AREAS SUCH AS PHILADELPHIA, 

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PA. IN SOME OF THESE CASES, THE IMPORTATION AND DISTRIBUTION OF 
ILLEGAL NARCOTICS WENT HAND IN HAND WITH THE PRODUCTION AND 
DISTRIBUTION OF COUNTERFEIT CURRENCY. 

ALTHOUGH WE CONTINUE TO OBSERVE RUSSIAN CRIMINAL GROUPS 
INVOLVED WITH COUNTERFEIT CURREJJCY, WE HAVE ALSO ENCOUNTERED 
RUSSIAN GROUPS PARTICIPATING IN CREDIT CARD FRAUD, BANK FRAUD, 
TELECOMMUNICATION FRAUD, INSURANCE FRAUD, AND MONEY LAUNDERING. 
WE HAVE OBSERVED THESE GROUPS ROUTINELY UTILIZING FALSE 
IDENTIFICATION DOCUMENTS TO C0MJ4IT THEIR FRAUDULENT ACTIVITIES AS 
WELL AS UTILIZING THESE DOCUMENTS TO ASSUME NEW IDENTITIES AND 
MOVE MORE FREELY BETWEEN THE U.S. AND OTHER COUNTRIES. 

IN THE TELECOMMUNICATIONS FRAUD ARENA, THE SECRET SERVICE 
HAS SEEN AN INCREASE OF INVOLVEMENT BY RUSSIAN ORGANIZED CRIME 
MEMBERS. IN THE PAST TWO YEARS WE HAVE INVESTIGATED SEVERAL 
TELECOMMUNICATIONS FRAUD CASES INVOLVING "CLONED" CELLULAR 
TELEPHONE/CALL SELL OPERATIONS IN LAS VEGAS, NEW ORLEANS, AND 
CHICAGO. UTILIZING CLONED TELEPHONES, THE CHARGES ARE 
FRAUDULENTLY BILLED TO THE TRUE CELLULAR TELEPHONE NUMBER HOLDER. 
CALLS ARE BEING PLACED FROM THE U.S. TO LOCATIONS IN ARMENIA, 
RUSSIA, AND SOME OF THE NEWLY INDEPENDENT STATES. LOSSES DUE TO 
CLONED CELLULAR TELEPHONES ARE REPORTED AT $1 MILLION DOLLARS A 
DAY COLLECTIVELY. 

IF LEFT UNCHECKED, THE RUSSIAN ORGANIZED CRIME GROUPS HAVE 
THE POTENTIAL TO INFLICT SIGNIFICANT FINANCIAL DAMAGE TO U.S. 
INTERESTS. TESTIMONY BY COOPERATING DEFENDANTS INDICATES THAT THE 

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RUSSIANS ARE MOVING AWAY FROM TRADITIONAL ACCESS DEVICE FRAUD AND 
EXPANDING THEIR OPERATIONS IN THE AREA OF FINANCIAL INSTITUTION 
FRAUD. CURRENTLY, WE HAVE ACTIVE INVESTIGATIONS OF RUSSIAN 
ORGANIZED CRIME IN NEW YORK CITY, MIAMI, PHILADELPHIA, 
PITTSBURGH, AND DENVER. 

SECRET SERVICE RECOMMENDATIONS: 

THE U.S. SECRET SERVICE, AS A MAJOR INVESTIGATIVE COMPONENT 
OF THE DEPARTMENT OF THE TREASURY, BELIEVES THE SOLUTION TO THE 
PROBLEM IS FOUND IN ONE OF THE CORE RESPONSIBILITIES OF THE 
DEPARTMENT AND THE AGENCY: PROTECTION OF THE U.S. ECONOMIC AND 
FINANCIAL SYSTEMS. 

FURTHER, THE SECRET SERVICE BELIEVES THAT OUR LAW 
ENFORCEMENT ROLE MUST, AND DOES, TRANSCEND NORMAL REACTIVE ARREST 
AND PROSECUTIVE RESPONSES. THE PROACTIVE APPROACH MUST BE 
UTILIZED TO ANALYZE DEFECTS AND PREVENT ATTACKS ON FINANCIAL 
SYSTEMS. THIS PHILOSOPHY, INSTITUTED BY THE SECRET SERVICE IN 
1990, HAS BEEN ADOPTED BY THE TREASURY DEPARTMENT AND IS 
CURRENTLY BEING FURTHER DEVELOPED IN OTHER TREASURY OFFICES AND 
BUREAUS. THE UNITED STATES SECRET SERVICE HAS TESTIFIED BEFORE A 
NUMBER OF COMMITTEES DURING THE LAST TWO YEARS ON THE ISSUES OF 
FINANCIAL AND ELECTRONIC CRIMES, COUNTERFEITING OF CHECKS AND 
CXniRENCY, FALSE IDENTIFICATION, DESKTOP PUBLISHING, AND ORGANIZED 
CRIMINAL ACTIVITY IN THESE AREAS. OUR MESSAGE REMAINS THE SAME. 
WE MUST COLLECTIVELY LOOK AT THE SYSTEMS THAT ARE BEING ATTACKED 

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177 



AND "FIX THE SYSTEMS" IN ORDER TO DIMINISH THE CRIMINAL ACTIVITY. 
THE SECRET SERVICE EMPLOYS A PROCESS OF LINKING RISK ANALYSIS TO 
OUR CRIMINAL INVESTIGATIONS TO IDENTIFY HOW THE FRAUDS ARE 
COMMITTED AND, THEN THROUGH EITHER REGULATORY REVIEW OR INDUSTRY 
PARTNERSHIPS, SET ABOUT TO CORRECT THE SYSTEM WEAKNESSES. 
AS PREVIOUSLY STATED IT IS EVIDENT FROM OUR INVESTIGATIONS THAT 
CRIMINAL GROUPS STUDY THE FINANCIAL SYSTEMS AND DEVELOP SCHEMES 
BASED ON KNOWLEDGE OF THE SYSTE^IS AND WEAKNESS IN THESE SYSTEMS. 
IN SHORT THE ORGANIZED GROUPS BECOME "EXPERTS" AND THEIR GOAL IS 
RAPID WIDESPREAD FRAUD, THAT NETS PROFITS IN THE MILLIONS. THEY 
ARE INDEED A FORMIDABLE ADVERSARY. 

THE DEPARTMENT OF THE TREASURY PROMOTES A CONCEPT OF "KNOW 
YOUR CUSTOMER" WHICH WHEN APPLIED CORRECTLY, IS A TREMENDOUS 
DETERRENT TO FINANCIAL FRAUD SCHEMES. THE UNITED STATES SECRET 
SERVICE THROUGH PREVIOUS TESTIMONY HAS STATED THAT BIOMETIC 
IDENTIFICATION WOULD BE AN EVEN GREATER DETERRENT, AS MOST 
FINANCIAL CRIMES AND LOSSES OCCUR BY CRIMINALS ASSUMING FALSE 
IDENTITIES AND/OR PENETRATING ACCOUNTS WITH STOLEN ACCESS CODES. 
I AM PLEASED TO REPORT THAT THE FINANCIAL COMMUNITY AND 
FEDERAL, STATE AND LOCAL GOVERNMENTS ARE BEGINNING TO ADOPT 
BIOMETIC IDENTIFICATION AS A PRDACTIVE SOLUTION TO FINANCIAL 
CRIMES AND LOSSES. 

THE UNITED STATES SECRET SERVICE TODAY REMAINS ACTIVELY 
ENGAGED AND COMMITTED TO NOT ONLY AGGRESSIVELY REACTING TO THE 
PROBLEM BY INVESTIGATION AND ARREST OF VIOLATORS, BUT ALSO TO A 

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FULL PARTNERSHIP WITH CONGRESS, INDUSTRY, OTHER FEDERAL, STATE 
AND INTERNATIONAL AGENCIES TO HELP SOLVE THE PROBLEM. TO THAT 
END, THE UNITED STATES SECRET SERVICE SUPPORTS AND APPRECIATES 
THE EFFORTS OF THE CHAIRMAN IN CALLING THIS HEARING. WE LOOK 
FORWARD TO WORKING WITH YOU, AND OTHER MEMBERS, AS LEGISLATIVE 
INITIATIVES DESIGNED TO ADDRESS THE VOIDS ARE EXPLORED. 
LEGISLATION INTENDED TO ASSIST LAW ENFORCEMENT IN COMBATING 
FINANCIAL CRIMES AND COUNTERFEITING WILL CERTAINLY BE BENEFICIAL 
IN THE OVERALL PARTNERSHIP EFFORT. 

THIS CONCLUDES MY REMARKS, MR. CHAIRMAN. I WOULD BE HAPPY 
TO ANSWER ANY OF YOUR QUESTIONS, OR THOSE OF THE COMMITTEE. 



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179 



OPENING STATEMENT 

OF 

CHARLES L. OWENS 

SECTION CHIEF, CRIMINAL INVESTIGATIVE DIVISION 

FEDERAL BUREAU OF INVESTIGATION 

BEFORE THE 

COMMITTEE ON BANKING AND FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

WASHINGTON, D.C. 

FEBRUARY 28, 1996 



180 



HOUSE BANKING AND FINANCIAL SERVICES COMMITTEE 
HEARING ON EMERGING INTERNATIONAL FINANCIAL CRIMES 



Good Morning. I am pleased to appear today on behalf of the FBI and provide you with 
some information related to emerging financial crimes matters. 

The FBI White-CoUar Crime Program is the largest and most diverse of all FBI Criminal 
programs. During Fiscal Year (FY) 1995 (10/1/94-9/30/95), the White-Collar Crime Program 
utilized approximately 25.59% of FBI agent work years and achieved 18.2 % of the FBI's total 
convictions and pretrial diversions. Approximately 2,600 agents were dedicated to this program. 
The White-Collar Crime Program was identified as the number one or number two priority in 53 
of the 56 FBI field offices (95%). 

In terms of workload, the White-CoUar Crime Program encompasses approximately 
22,645 pending matters. Of this total, Financial Institution Fraud constitutes 8,613 cases and 
other national fi'audulent schemes total 4,090. 

By any measure, this is a healthy, robust program which has experienced explosive growth 
and globalization in recent years. The White-CoUar Crime Program maintains an inventory of 
some of the most complex cases in the FBI. Resources have increased more than 65% since 
1985. White-collar crime is of significant interest to the public as well as the Congress. Our 
investigative arsenal includes an abundance of investigative techniques, including undercover 
operations and court-ordered electronic surveillance. 

Prior to the 1980s, financial institution fi-aud investigations were primarily routine in 
nature. Bank fi'auds generally involved only a few transactions, were perpetrated by a single 
individual or small group, and generated losses that averaged less than $100,000 to the viaim 

1 



181 



institution. 

Following deregulation of the savings and loan industry in 1982, and the initiation of more 
speculative, risk-enhanced ventures by those in charge of these institutions, a new wave of fraud 
investigations emerged. During the late 1980s and early 1990s, FBI efiforts were focused on 
large-scale frauds perpetrated by institution insiders and those held in trust within the banking 
industry. Some impressive results were achieved from these large-scale investigations, some of 
which were task force-oriented investigations, and the banking industry as a whole has stabilized 
and continues its efiforts to minimize insider abuse. FBI bank failure investigations peaked in July 
1992, with 758 active cases. As of the conclusion of Fiscal Year 1995, there were 395 pending 
failure cases, mostly in the New England and southern California regions. With a reduction in the 
number of manpower-intensive &ilure investigations, the FBI has been able to refocus its efforts 
in other high priority Financial Institution Fraud and financial crimes matters. 

Even though the number of &ilure investigations has declined, the number of major 
financial institution fraud investigations, defined as those involving sustained losses over 
$100,000, has continued to increase, from 3,026 during December 1991 to 4,018 as of September 
1995. Outsider fraud now accounts for more than 60% of the criminal referrals provided to the 
FBI by the financial institutions. Fraud as perpetrated by outsiders, especially organized 
international groups, has risen dramatically since 1987. 

During the past several years, a number of new and complex financial crimes have 
developed, including negotiable instrument fraud, credit card fraud and money laundering. These 
schemes often involve sophisticated counterfeiting techniques. Additionally, computer crime is a 
growing problem which will continue to challenge law enforcement well into the next century. 



182 

These crimes involve both organized ethnic groups operating in this country and outsiders 
conducting illegal transactions between U.S. and foreign institutions. 

In their 1994 Check Fraud Survey, the American Bankers Association (ABA) indicates 
that the occurrences of check fraud within financial institutions have increased by 136% from 
1991 to 1993. During this same period, dollar losses increased 44% from $568 million to $850 
million. The country's major financial institutions believe that 50% of all check fraud, to which 
they fell victim, can be attributed to professional and organized group efforts. 

In addition to fraud committed against financial institutions, for the past two years the 
Forensic and Investigative Services division of KPMG has compiled an aimual fraud survey of the 
2,000 largest U.S. corporations. These companies reported check fraud and credit card fi^ud as 
their most problematic losses during 1994. The responding companies suffered an average annual 
check fraud loss of $360,000, an increase of 38% from 1993. Alarmingly, 67% of corporate 
executives believe these losses will continue to mount over the next several years. In sum, total 
check fraud losses incurred by financial institutions, businesses and individuals during 1993 
amounted to more than $5 billion, a $1 billion increase from 1992. More than 1.2 million 
worthless checks are accepted for payment every day. 

The technological improvements that have fueled the growth in check fraud schemes have 
made it difficult for law enforcement to combat the problem. Forbes magazine reported on the 
trend in 1989, stating "...the desktop computer did not create the crime of forgery. All it did was 
make the tools user-fiiendly." With the prevalence of laser printers and advanced duplication 
systems, the production of quality counterfeit checks has become commonplace. 

Presently, a sizable portion of this annual check fraud activity is being perpetrated by 



183 

organized ethnic and international groups located regionally throughout the country. There are - 
80 billion checks written worldwide annually, 60 billion of which are written in the United States. 
Numerous criminal ethnic groups which have immigrated to this country have taken the time to 
study and analyze American banking, noting the deficiencies in the banking system relative to 
negotiable instruments, and the inherent fi^udulent opportunities underlying this system, including 
check theft, manipulation and counterfeiting. 

Regardless of ethnic origin, groups involved in check fi"aud maintain certain universal 
characteristics. Unlike other organized criminal organizations (La Cosa Nostra, Bloods, Crips, 
etc.), these groups are usually loosely organized with members networking amongst several 
organizations. Such groups usually maintain close ties with their overseas counterparts and often 
conduct their fi'audulent activities over several continents. 

These organizations tend to be distrustful of anyone outside their own ethnic heritage, 
making it diflBcull for law enforcement to proactively investigate the extent of their activities. 
Check passers are fi-equentiy arrested throughout the country but possess little information 
concerning upper echelon members. 

The principal ethnic enterprises involved in illegal check fraud schemes include Nigerian, 
Asian (particularly Vietnamese), Russian, Armenian and Mexican groups. The majority of the 
Vietnamese, Armenian and Mexican organizations are based in California, especially in the 
Orange County, San Francisco and Sacramento areas, but have networked their operations 
throughout the country with additional concentrations in Chicago, Houston, Dallas and 
Washington, DC. The Nigerian and Russian groups, with bases in the north and eastern areas of 
the country, are more nomadic in nature, tending to roam throughout the U.S., passing stolen or 



184 

counterfeit instruments, before moving on to new locations. 

Nigerian groups often solicit legitimate identification and account information in 
furtherance of their fi'aud schemes and have recently been noted to be working interactively with 
Vietnamese organizations in the Chicago and Houston regions. In the northeast, Nigerian rings 
have been opening investment accounts within various brokerage houses, depositing large sums of 
money with stolen and counterfeit corporate checks. 

Most west coast Asian gangs began to organize their bank fi'aud activities during the 
1980s and have continued to expand and develop these sometimes sophisticated operations. 
Many such groups originated in Taiwan, Hong Kong and Vietnam and include the Viet Ching, the 
Big Circle Boys, the V-Boyz, Wo Hop To, Wah Ching and Red Door. Additionally, these groups 
are often involved in the counterfeiting of credit cards, other marketable items, and computer 
software. Microsoft Corporation alone, estimates their 1994 losses fi^om counterfeit software at 
SI 79 million. Current investigations indicate that some Asian groups have been dealing with 
Russian counterparts. 

Although it is impossible to summarize all of the check fi-aud schemes currently operating, 
the following examples represent common fi-auds being tracked by bank security officials and law 
enforcement authorities throughout the nation: 

1) Large Scale Counterfeiting - The most notorious groups engaged in large scale 
counterfeiting operations, and being investigated by the FBI, are the Vietnamese triads originating 
out of Orange County, California. Members are routinely placed within local financial institutions 
in order to collect master original bank checks, money orders and corporate/payroll checks for 
counterfeiting purposes. Once the counterfeiting process is completed, the instruments are 



185 

subsequently negotiated in a variety of ways. A portion of the counterfeits is directly negotiated 
through financial institutions, by check passers. The fi-audulent checks are deposited, often into 
new accounts, and the funds are withdrawn before the clearing process has concluded and the 
fraud is discovered. 

2) Identitv Assumption - This scheme has been seen in various metropohtan areas and 
often involves Nigerian and Vietnamese criminal organizations. Group members often obtain 
employment or develop sources in local banks and credit agencies in order to acquire otherwise 
confidential information on bona fide bank customers. The groups then create counterfeit 
identification, to include drivers licenses, social security cards and credit cards, to effect an 
assumption of the innocent person's identity. 

This identity is used to open new bank accounts, used for the deposit and subsequent 
withdrawal of funds from fi-audulent checking activity, and for securing personal loans and lines of 
credit. Once the identity has been assumed and bank accounts have been established, the financial 
institutions are open to be defrauded in a variety of ways. Prior to depositing fraudulent checks 
and withdrawing the proceeds, the "customer" is likely to obtain a Visa and/or MasterCard 
account with a substantial credit line. Funds are withdrawn against the credit line and distributed 
within the criminal organization, along with any bogus loan proceeds that have been procured. 
After withdrawing monies pursuant to the deposit of fraudulent checks, the "customer" leaves 
town with the bank sustaining a substantial loss. The innocent person whose identity was 
assumed also becomes a victim, finding that their credit history has been ruined, inhibiting their 
fiiture financial activities. 

3) Payroll Check Fraud - A variation of the above scheme involves placing group 



186 

members within payroll check processing companies engaged to compile and distribute payroll 
checks on behalf of their corporate clients. These employees will print duplicate payroll checks 
for various client employees, which are subsequently stolen from the premises and duplicated for 
negotiation. Concurrently, the group now has full background identifying data for actual client 
employees which can be used in future schemes. 

The following international fraud scheme was recently investigated by the FBI: 

During early 1995, the Los Angeles Police Department notified the FBI concerning 
information that subject Cuong Thoai Diep was attempting to recruit a U.S. banker to steal more 
than $10,000,000 in bank and cashier's checks as part of a loan fraud scheme based in Hong Kong 
and Beijing, China. An FBI undercover Agent posed as a local banker who agreed to provide 
Diep and his associate Tony WingYu with $13,500,000 in counterfeit and stolen cashier's checks. 
These checks were to then be used as collateral in fraudulently obtaining a series of Chinese loans 
totaling more than $50,000,000. The scheme also involved the corruption of a People's Republic 
of China bank official and several Asian organized crime subjects. 

During February 1995, subjects Diep and Yu, who had been successfully lured from Hong 
Kong, were arrested on various bank fraud charges; Diep was eventually sentenced to 15 months 
in prison, while Yu was sentenced to 24 months. 

Of the approximate 193 million people in the United States over seventeen years of age, 
124 million owned at least one credit card in 1994. Worldwide bank card (Visa and MasterCard) 
fraud losses have increased from $110 million in 1980 to an estimated $1.63 billion in 1995. The 
United States has suffered the worst of these losses at approximately $875 million for 1995, not 
surprising since 71% of all worldwide revolving credit cards in circulation were issued in this 



187 

country. 

Law enforcement authorities are continually confronted with new and complex schemes 
involving credit card frauds committed against financial institutions and bank card companies. 
Perpetrators run the gamut from individuals with easy access to credit card information, such as 
credit agency officials, airline baggage handlers and Postal Service employees, to organized 
groups involved in large-scale card theft, manipulation and counterfeiting activities. 

Visa and MasterCard account for approximately 65% of all outstanding revolving credit, 
and most substantive fraud cases involve schemes centered on one or both of these bank cards. 
While losses to Visa, MasterCard and the financial institutions issuing these cards continue to 
mount, several basic schemes have been identified as most prevalent throughout the nation. 
Additionally, law enforcement authorities are continually encountering various ethnic groups and 
organizations involved in multi-level bank card fi^ud operations. It should be noted that neariy 
one fifth of all U.S. credit card losses occur in California, close to the combined total for the other 
five identified problem areas woridwide: Florida, Texas, New York, Asia and Great Britain. 

Following are three of the most common credit card schemes currently operating: 

1) Mail/Credit Bureau Theft - One of the simplest ways to obtain account information or 
actual bank cards is through Postal theft. Numerous Nigerian fraud rings operate sophisticated 
theft operations throughout the eastern and southern regions of the U.S. Having obtained a 
legitimate bank card or account information, the group will then create a portfolio of fictitious 
identification, including drivers licenses, social security cards and other materials, to support the 
purchasing power behind those cards At the direction of group leaders, "runners" will be 
employed to purchase merchandise from a variety of sources, until the cards are reported as stolen 

8 



188 

or confiscated. These organizations also take advantage of contacts within the various credit 
bureaus to obtain legitimate bank card account information for counterfeiting or telephone order 
purchasing. The groups commonly mail stolen cards and information, via an overnight courier, to 
other factions located throughout the country. 

2) Advance Pavment Schemes - Federal consumer credit regulations require credit card 
issuers to credit a customer's account as soon as payment is received; i.e., before the payment 
instrument has cleared the bank. This scheme is simple. Using a counterfeit or stolen credit card, 
the individual or group will either make an advance payment on the card or overpay an existing 
balance using a bogus check. Since the account is credited upon receipt of payment, cash 
advances can immediately be drawn against the bank card before the payment check has cleared. 
Through hundreds of like payments, an organization can realize profits in excess of $1 million 
within a relatively short period of time. 

3) Counterfeiting - The fastest growing type of bank card firaud, in both fi-equency and 
severity, involves the illegal counterfeiting of Visa and MasterCard. New technology has aided 
criminals in producing exact replicas of existing cards and in creating fictitious cards fi^om scratch. 
Illegal counterfeiting is primarily responsible for the overall surge in credit card fi'aud, particularly 
in California, a hotbed for Asian gang counterfeiting activity, where occurrences of credit card 
fi-aud increased by 370% fi-om 1991 to 1993, fi-om $60 million to $282 million, according to an 
Intelligence Operations Bulletin prepared by the OflBce of the Attorney General, California 
Department of Justice, Vol. 47, dated December 1994. 

The industry foresees a time when members will be able to use a single card to 
accommodate a variety of transactions, including international automatic teller machine (ATM) 



189 

withdrawals, credit purchases, direct bill payments and purchases against predetermined stored 
value levels. 

Several companies are currently working with Visa and MasterCard on these services, and 
prototypes of stored value and debit/credit combination cards are being test-marketed and issued 
throughout the world. The goal is to create a single card through which customers can administer 
all their financial needs, fi'om paying bills via electronic transfer of funds to buying and trading 
securities over the New York Stock Exchange. 

In addition to these services, financial institutions are beginning to implement Automatic 
Loan Machines (ALMs) which can be accessed by customers or potential customers using their 
bank cards. These machines offer individuals the opportunity to obtain various types of financial 
loans without having to personally meet with a bank representative. Although the system is still in 
its infancy, bank officials envision ALMs becoming as commonplace as current ATMs in this 
country. 

Several cases have been investigated by various FBI field ofQces in which counterfeit 
negotiable instruments such as prime bank notes, certified money orders and bonds purportedly 
issued by foreign governments have been utilized. Often, these counterfeit instruments are 
presented for sale by con artists who state that the instruments can be used to collateralize loans 
or perpetrate other fi-auds. Although the dollar denominations of these instruments can be large, 
they are typically sold for a percentage of their stated value. The attempted use of counterfeit 
negotiable instruments in various fi^aud schemes has risen dramatically. However, many of these 
attempts result in actual losses that do not meet federal prosecutive guidelines. 

White-collar crimes such as those mentioned previously, produce billions of illicit dollars 

10 



190 

annually. To enjoy the fruits of these criminal activities without raising suspicions, the ill-gotten 
gains must be laundered to make it appear that they were obtained legitimately. The general 
nature of white-collar crime is the production and concealment of assets for financial gain; 
accordingly, money laundering is an inherent part of white-collar crime. 

The money laundering statutes. Title 18, USC, Sections 1956 and 1957, were designed to 
address monetary transfers and monetary transactions undertaken using proceeds and/or property 
acquired through various unlawful activities. The money laundering statutes have numerous 
"Specified Unlawful Activities" or predicate oflfenses which serve as a jurisdictional basis for 
pursuing money laundering investigations The vast majority of these SUAs fall within the 
investigative purview of the FBI. 

The FBI investigates money laundering activities in connection with more than 50% of its 
substantive ofiFense investigations. For fiscal year 1995, investigations leading to the filing of 
money laundering charges were as follows: White-collar crime cases (57%), drugs/organized 
crime cases (33%) and violent crimes cases (10%). The money laundering statutes have been 
powerful weapons in addressing white-collar crime; particularly, as forfeiture provisions have 
allowed for the dismantling of criminal enterprises. 

The FBI has identified money laundering havens aroimd the world and developed 
initiatives to address these criminal activities. For example, the FBI has teamed with United 
Kingdom authorities and formed the White-Collar Crime Investigative Team. WCCIT 
investigates fraud and non-narcotics money laundering activities that impact upon the U.S., the 
United Kingdom and its Caribbean dependent territories. Highly experienced FBI Agents and 
British police oflScers who have investigative jurisdiction on the British dependent territories 

II 



191 

jointly investigate complex and multinational fraud and white collar crime money laundering 
cases. This structure provides the necessary investigative prowess and access to pertinent 
evidence. The FBI has been approached by law enforcement representatives from other countries 
to discuss expanding this team to other parts of the Caribbean. 

The FBI investigates computer crimes under the Computer Fraud and Abuse Act of 1986 
(Section 1030). The focus of the FBI's Computer Crimes Initiative is on intrusions mto major 
computer networks, with emphasis on intrusions into the networks constituting the National 
Information Infrastructure. 

In February 1992, the FBI established a National Computer Crimes Squad to address 
substantive investigations of significant computer crimes on a nationwide basis, particularly those 
involving intrusions into major computer networks, such as the Public Switch Network (PSN). 
The PSN is an integrated computer-based system managed by the long-distance carriers and the 
regional Bell operating companies. Currently, within the United States, almost all 
communications and transactions generated by the public and private sector, including the U.S. 
military, are, or will become, dependent upon the telecommunications services provided by the 
PSN. Other networks, such as the Internet, also depend in part or in whole upon the PSN. 

The government and our society as a whole are heavily reliant on computers. Computer 
systems store and process our most sensitive national and industrial secrets. The threat to this 
information is very real. Designing appropriate computer security is a vital component to 
preventing computer crime. This includes not only security programs connected with systems, but 
physical security, personnel security, operational security, and communication security. The most 
visible threat is the hacker, responsible for many of the reported intrusions into government and 

12 



192 

private networks. Considering most intrusions go undetected and/or unreported, the hacker's 
true impact is undeterminable particularly when their specific objectives are unknown. 

The Computer Emergency Response Team, known as CERT, based at the Carnegie- 
Mellon University, in Pittsburgh, Pennsylvania, reports that the number of reported intrusions into 
U.S.-based computer systems rose fi-om 773 in 1992 to more than 2,300 by 1994, a 197 percent 
increase in two years. Additionally, CERT reported the number of sites attacked rose more than 
89 percent during the same period. Although the statistics are not comprehensive, they 
nevertheless are indicative of a significant rise in the crime problem. The estimated cost of 
intrusions is astronomical considering the hackers ability to steal, modify, or destroy sensitive 
data. A recent survey, conducted by the Computer Security Institute of San Francisco, California 
found that break-ins, unauthorized access, and other security breaches cost them a staggering $63 
million over the past several years. However, only 12 percent of respondents surveyed placed a 
dollar value on their losses. Thus, the actual dollar loss to the nation is significantly understated 
with estimates ranging as high as $5 billion annually. 

In addition to attacking this crime problem, our investigative efiforts have served as a 
deterrent factor. An early example of this is a joint investigation in which the FBI participated, 
involving a group of computer hackers known as the "Masters of Disaster." Following the 
announced indictments and arrests of seven individuals in the group, security oflScials fi"om 
various computer networks subsequently advised the FBI of a significant temporary reduction in 
intrusion attempts. 

The Washington Metropolitan Field OflBce's National Computer Crime squad, created in 
1992 to address national and international computer crimes, has been augmented by creating two 

13 



193 



additional regional computer crime squads with similar responsibilities in the FBI's New York and 
San Francisco Divisions. These squads will work closely with the "High Technology Crime" 
Squad previously established in San Francisco to respond to related high technology crime 
matters, i.e., theft of computer chips, economic espionage, computer intrusions and the illegal 
copying of computer software, in the Silicon Valley. 

An emerging trend in the banking arena is that of "Cyberbanking". Recent technological 
advances in telecommunications and the computer have brought about a circumstance where 
banks can offer many of the same services on a much wider scale without having to invest vast 
sums into the brick and mortar of additional banks and branches. The growing user-friendliness 
of the Internet now allows inexpensive, instant telecommunications around the globe. With this 
ability also comes the potential for new avenues of fraud to be perpetrated by computer savvy 
criminals. There are currently more than 35 million Internet users woridwide. Since 1990, 
Internet use has grown more than tenfold. One business group estimates that more than 21,000 
businesses are now connected to the Internet, compared to only 1,000 in 1990. Criminal Internet 
users can remain anonymous and evade detection by using aliases. They can also obscure their 
trail by routing their activities through other computers. Criminals can use encryption to protect 
their communications from anyone, law enforcement included. 

The impact of this emerging technology on financial institutional fraud is evidenced by an 
FBI investigation regarding attempts to illegally wire transfer millions of dollars from Citibank. 
Between June and October 1994, 40 wire transfers were attempted from Citibank Cash 
Management System (CCMS). Access was gained by compromising the password and user 
identification code system through the use of a computer and phone line located in St. Petersburg, 

14 



194 



Russia. Citibank was successful in blocking most of the transfers, or recovering the funds from 
recipient banks, before funds were withdrawn. As a result, losses were limited to approximately 
$400,000. With the assistance of the Russian MVD, computer software was seized in St. 
Petersburg and was analyzed in Russia by representatives of the FBI's Computer Analysis and 
Response Team, established to conduct in-depth forensic analysis of computer evidence. The 
investigation has resulted to date in four subjects pleading guilty. 

As indicated above, the FBI is actively addressing multiple types of crimes which 
significantly impact financial institutions. However, the FBI does not believe that the activities of 
organized criminal groups perpetrating external frauds threaten the integrity of the banking 
system. 

While these crime groups are a significant problem, the FBI believes that the greatest 
threat to the stability of the financial industry continues to be conspiracies perpetrated by industry 
professionals. Bank fraud as perpetrated by banking insiders greatly overshadows, in terms of 
dollar losses and public confidence, those external frauds perpetrated by organized criminal 
groups. 

One has only to look at examples of the losses incurred in two recent incidents of insider 
fraud that resulted in substantial bank losses and failures. Japan's Daiwa Bank lost approximately 
$1.1 billion in bond trading and has been ordered to cease operations in the U.S. The other 
incident involves the British trader Nicolas W. Leeson who was charged with fraud and forgery 
related to $ 1 .4 billion in losses to the Barings P.L.C. merchant bank. Leeson, a derivatives trader, 
handled contracts worth millions of dollars on the Singapore International Monetary Exchange. 
These losses resulted in the collapse of the bank. 

15 



195 



To address the above crime problems, the FBI has utilized a vast array of federal criminal 
statutes (See attachment #1). These statutes have provided us with the tools to adequately 
address the crime problems and have significantly contributed to our success. 



16 



196 



ATTACHMENT #1 
FINANCIAL INSTITUTION FRAUD VIOLATIONS 



VIOLATION 

Bribery 

Conspiracy 

Counterfeit State and 
Corporate Securities 

Embezzlement, Theft or 
Misapplication 

False Entries, Reports 
and Transactions 

False Statements - Loan 
and Credit Applications 

Fraud and Related Activity 
in connection with access 
devices 



FEDERAL LAW 
T18 use 215 
T18 use 371 
T18 use 513 



ri8 use 656, 
657 

T18 use 1005, 
1006, 1007 

T18 use 1011, 
1013, 1014 

T18 use 1029 



Fraud and Related Activity T18 USC 1030 
in connection with computers 



Mail Fraud 



Wire Fraud 



Bank Fraud 



Money Laundering 



T18 use 1341 

T18 USC 1343 

T18 USC 1344 

T18 USC 1956, 
1957 



MAXIMUM PENALTY 
30 Yrs/$1 Million 
5 Yrs/$10,000 
10 Yrs/$250,000 

30 Yrs/$1 Million 

30 Yrs/$1 Million 

30 Yrs/$1 MiUion 

20 Yrs/$100,000 

10 Yrs/Fine 

5 Yrs/$1,000 

5 Yrs/$1,000 

30 Yrs/$1 MilUon 

20 Yrs/$500,000 
Plus Forfeiture 



197 



Racketeer Influenced 
Corrupt Organizations 
(RICO) 

Bank Larceny 

Interstate Transpor- 
tation of Stolen Property 



T18 use 1961 

T18 use 2113 
T18 use 2314 



20 Yrs to Life 
Plus Forfeiture 



20 Yrs/$5,000 
10 Yrs/$10,000 



198 




Richard A. Brown 

DIstrici Attorney 



District Attorney 
QUEENS COUNTY 

■25-«l QUEENS BOULEVARD 
KEW GARDENS. NEW YORK I MIS-ISM 

(7IS|] 



Testiacmy of 

RICHARD A. BROWN 
DISTRICT ATTORNEY, QUEENS COUNTY 

before the 

UNITED STATES BOOSE OF REPRESENTATIVES 
OMMITTEE OH BANKING AND FINANCIAL SERVICES 



10:00 A.M. Wednesday 
February 28, 1996 



2129 Raybum House Office Building 
Washington, D. C. 20515-6050 



199 



TESTIMONY OF DISTRICT ATTORNEY RICHARD A. BROWN 

BEFORE THE UNITED STATES HCNJSE OF REPRESENTATIVES 

COMMITTEE ON BANKING AND FINANCIAL SERVICES 

FEBRUARY 28, 1996 

iKJSses resulting from credit card fraud worldwide are 
estimated to amount to almost three billion dollars each year — 
half of that amount in the United States. The apparent ease with 
which credit card fraud rings take over the identity of legitimate 
cardholders and rip off banks and credit card ccnipanies and create 
financial havoc for legitimate cardholders is alarming. The losses 
£ire, of cotirse, paid for in the last analysis by the consuming 
public. And, it takes months — often years — for the victims of 
credit card fraud to undo the damage done to their reputations and 
to restore their credit status. 

Indeed, the problem has become so widespread that it has begun 
to draw the attention of the national media. Over the past few 
weeks, it has been the subject of a number of newspaper and 
magazine articles, including one two weeks ago in Time Magazine — 
and this paist Sunday evening it was the fociis of a segment of CBS 
Television's "60 Minutes." 

Three weeks ago, after a five month investigation, our office 
filed a 200 coiint indictment in New York's Supreme Court under our 
State's Organized Crime Control Act — our State's equivalent of 
the Federal RICO statute — charging eight Nigerian nationals with 
operating a multi-million dollar counterfeit and stolen credit card 
ring in the New York metropolitan area — a ring that specialized 
in the theft of the credit identities of thousands of people across 
the United States and that had contacts throughout the world. 

The indictment alleges the existence of a very sophisticated, 
highly structured ring of credit card and credit identity thieves 
whose members were masters at accessing credit and financial 
information — and at evading detection by law enforcement. Just 
as they assumed the credit identities of their victims, those 
involved took new and different identities of their own to avoid 
apprehension . 

The ring — and we believe that there are many more like them 
operating across the country — is alleged to have operated on 
three levels or tiers. At the head of the organization was 
Olushina Adekanbi, known as "Shina." He and several other upper 
level managers are alleged to have directed the entire operation 
and to have obtained and possessed the equipment and technical 
skills required to produce counterfeit credit cards and to access 
confidential credit and financial information. 

The second tier consisted of middle level managers who were 
responsible for recruiting and paying street level members of the 
ring or soldiers who used the stolen and counterfeit cards to 
obtain cash advances and purchase goods — usually to be shipped to 



200 



Nigeria. The managers also are alleged to have located customers 
wishing to purchase stolen or counterfeit credit cards and having 
steered them to the principals. 

The soldiers allegedly stole credit card receipts and invoices 
from businesses suid retail establishaents in which they worked or 
to which they had access and then passed the stolen documents up 
the chain of command to the top. They also allegedly bought and 
sold stolen credit cards on behalf of the ring and acted as 
"shoppers" who actually purchased goods and services with the 
stolen and coxuiterfeit cars. 

While most of the alleged members of the criminal enterprise 
are alleged to have resided in and operated out of the New York 
metropolitan area, it is alleged that they had well-established 
contacts in Texas, Illinois, California, Connecticut, Rhode Island, 
Massachusetts and New Jersey as well as in London, Tokyo, Singapore 
and Amsterdam. The web of contacts enabled the enterprise to 
operate in one or miany locations and to execute fraudulent 
transactions in many states and abroad. 

The workings of the ring are best explained by describing how 
their members obtained access to credit and personal information 
about their victims and thereafter used that information to their 
advantage. According to the indictment, in some instances the 
soldiers took advantage of their positions as employees in retail 
establishments in cities across the country and stole credit card 
receipts and invoices containing the names, addresses and credit 
card numbers of their customers. The search warrant that was 
executed at the apartment out of trtiich the ring in our case 
operated resulted in the seizure of invoices stolen, for example, 
from a Watertown, Massachusetts appliance store, a storage facility 
of Budget Car and Truck Rental in Warwick, Rhode Island and from a 
Shell gasoline station in Bvanston, Illinois. 

The credit card receipts and invoices stolen by the ring ' s 
soldiers would be delivered to the middle nianagers who would use 
the information thereon — name, address, credit card number, 
telephone number — to obtain additional data about the cardholder 
and to gain access to his or her credit identity. Using this 
information, Adekanbi and his confederates are alleged to have 
m£uiufactured thousands of counterfeit credit cards using the 
victim's credit card or access number and a fictitious name that 
could be used by low or middle level members, ofttimes with a fake 
photo ID card or driver's license, to obtain money or purchase 
goods and services. 

But they didn't stop there. The organization's members would, 
it is alleged, look to obtain even more information about their 
victim. Sometimes, for example, they tiould contact credit 
reporting services — like Equifax or TRW — or a mortgage company 



201 



or a car dealership to obtain their victin's credit history and 
credit limits, to detemine the existence of other credit card 
accounts and learn additional personal data about their victim. 
This information would then be used to create additional credit 
cards, fake drivers' licenses and other forms of identification 
that would be used in turn to obtain more cash advances and more 
goods and services — even convenience checks to be used to 
withdraw funds from their victim's account or to increase the 
credit limit thereon by writing a check on an account already 
cleauied out. 

Another tactic used by the ring was to divert the cardholder's 
mail to mail drops in other cities controlled by them. This would 
be done simply by filling out and submitting a forged United States 
Postal Service change of address form at a local post office based 
on personal information about the victim taken from the stolen 
cards and invoices. No identification is apparently required by 
the postal authorities. Indeed, change of address forms can simply 
be mailed to the local post office and their mail will be 
intercepted and diverted to another address or to a post office box 
or mail drop rented by the thieves. 

In other cases, ring members are alleged to have stolen valid 
Visa and MasterCard credit cards from the mail or in "batch thefts" 
from the airports and then used or sold them. Typically, banks and 
credit card companies mall out large quantities of credit cards in 
single shipments destined for cardholders living in particular 
areas of the country. Such batches would be stolen at airports or 
other points of shipment. For example, there were seized in our 
case many Bank One and ATftT Universal cards stolen froo the 
Houston, Texas airport in 1995. Once in possession of a victim's 
mail or stolen card, ring members can activate cards or request new 
PIN numbers on existing cards and obtain access to their victim's 
funds to the extent of their credit limit. 

Another example of that which occurs is the theft of credit 
information directly from financial institutions. Thus, in our 
case investigators seized computer sheets stolen Isist year from 
Chemical Bank in New York City on which were provided the name, 
address, social security number, personal data, credit limits, 
tracking information and PIH numbers and other infomation for 
Chemical Bank Visa and MasterCard cardholders. 

Stolen cards are generailly sold to soldiers or outside 
customers for ten percent of the access number's credit limit (e.g. 
$500 would be the fee for a stolen credit card with a credit limit 
of $5,000.) Counterfeit cards are generally sold for a flat fee of 
$650 and, because the resale value of a stolen card depends on the 
victim's credit limit, ring members are eager to ensure that their 
victim maintains a good credit rating while they are being 
victimized. Accordingly, they use counterfeit cards to pay off 



202 



account balances on their victia's legitiaate cards so that they 
can be used to the full extent of their victia's credit limit. 

The business of these criminal organizations is conducted on 
cellular telephones. To further the goals of the enterprise, the 
ring members possess and use cloned cellular telephones and 
fraudulently apply for cellular telephone service using the names 
and identities of their victims. By using cloned phones and 
fraudulent applications, many thousands of dollars of cellular 
phone calls can be placed and received without the ring members 
paying any monies to the cellular phone carrier and, by so doing, 
detection by law enforcement is made much more diffictilt. 

In our case, the ring seems to have operated for scxne time 
without being disturbed. It had great success and its members were 
extremely knowledgeable and industrious. One worker had 32 
successful ATM transactions in Connecticut during a ten-day period, 
each with an average payoff of $1 , 000 . So successful were Adekanbi 
and his organization that Adekanbi was known in Nigeria as the 
"King of New York." Part of the reason for his success was that he 
was very careful to avoid detection, having those who worked for 
him switch identities and by regulating and controlling the number 
of cards entering the stream of coomerce at any given time as well 
as by having his employees operate in a number of different cities 
rather than in a single location. 

But in September of last year, something happened that changed 
the ring's luck. One of its soldiers, a Nonan known as Florence 
j£uneson, attempted to use a counterfeit credit caurd to purchase a 
$2,000 fax machine, a $1,200 computer and other items at a business 
supply store in Bay Ridge, Brooklyn. A store employee realized 
that the card was counterfeit and notified authorities. The woman 
was arrested and debriefed and the information obtained ultimately 
led to Mr. Adekanbi 's apartment in an apartment house on a quiet 
residential street in Jamaica, Queens. Search warrants were 
obtained and executed at that apartment and the results were 
amazing. 

We discovered a stolen and counterfeit credit card factory 
that could manufacture unlimited quantities of counterfeit credit 
cards. A team of investigators from my office, the United States 
Secret Service, United States Postal Inspection Service and the New 
York City Police Department seized hundreds of counterfeit and 
stolen Visa, MasterCard, American Express and DiscoverCard credit 
cards. There were stackis of blank plastic cards and other cards in 
various stages of being counterfeited. The investigators also 
discovered hundreds of United States Postal Service change of 
address forms, holographs, magnetic tape and other equipment used 
to manufacture coiuiterfeit credit cards including an encoding 
machine used to insert data on a card's magnetic strip, an 
embossing machine that presses out the raised lettering on a czo'd 



203 



and a tipping machine for applying gold-colored ink to the raised 
letters. Also seized were a large quantity of access numbers for 
credit cards and bank accounts — numbers that could alone access 
some $8 million in credit. Also seized were computers, cellular 
phones and beepers as well as extensive computerized information 
stored in the ring's computer data base and other records and 
information relating to its illegal activities. 

Months of hard work followed. A team of experts — financial 
fraud investigators, detectives and assistant district attorneys 
began the painstaking ifork of sorting through every piece of paper 
seized — every invoice, every credit statement, every change of 
address form and all of the books and records that the organization 
kept — in order to determine the full nature and scope of the 
criminal enterprise and put together a case for criminal 
prosecution against the principals. As the investigative team 
found documents relating to out of state transactions, local law 
enforcement agencies in each jurisdiction were contacted and their 
cooperation and assistance were sought. They, in turn, were able 
to provide invaluable assistance. Because they were involved in 
the local investigation and prosecution of even small transactions 
in their jurisdiction, they were often able to provide key 
witnesses and missing pieces that helped explain the larger 
picture. Every lead was followed up until we felt that we had 
legally sufficient evidence to charge Adekanbi and his confederates 
under our State Organized Crime Control Act statute. 

The investigation leading to last nionth's indictment could not 
have been successfully conducted without the cooperation and 
support received from the Special Investigations Division of the 
New York City Police Department, the United States Postal 
Inspection Service, the United States Secret Service and the credit 
card and banking industries as well as from KTT Wireless/Cellular 
One and Bell Atlantic/NYNEX Mobile. Because of the interstate and 
international reach of the ring, we also sought and received 
assistance from the Waterford, Connecticut, Fort Lee, New Jersey 
and Evans ton, Illinois Police Departments, the Metropolitan Police 
Service (Scotland Yard), the Bronx, Nassau and Kings County, New 
York District Attorney's Offices and the Connecticut and Maryland 
State Attorney's Offices. 

And none of that which we accomplished could have occurred 
without the leadership, professionalism and dedication of my office 
team lead by Senior Executive Assistant District Attorney for 
Investigations, John M. Ryan, and the Chief and Deputy Chief, 
respectively, of our EcoooDic Crimes Bureau, Michael J. Mansfield 
and Edward J. McGovem. Assistant District Attorneys Diana M. 
Peress and Jeffrey P. Horblitt did yeoman work on the case as did 
so many others including Detectives George Byrd, Frank O'Rourke and 
Russell Gaska of oiir Detective Bureau. 



204 



It is my hope that the indictaent that has been filed by us in 
New York, the national publicity that has been received with 
respect to the issue of credit card fraud and the holding of this 
hearing by your distinguished ccanittee will alert consumers to the 
existence of these criminal rings and encourage consumers — and 
banks and credit card cooipanies and merchants as well — to take 
greater precautions in the issuance, use and acceptance of credit 
cairds . 

While some steps — such as the discontinuance of the use of 
cairbons of card imprints, known as "black gold" among thieves 
because of their value — have been taken to cut down on credit 
card fraud, there is much more that must be done. 

Additional educational initiatives should be required to help 
legitimate merchants and their employees to spot counterfeit cards. 
Consumers must be made aware of the possibility of mail diversion 
and urged to contact their credit card companies and local post 
offices if they fail to receive their bills or other expected 
materials on time. 

The United States Postal Service must begin to build into 
their system security safeguards before they allow mail to be 
diverted. The Postal Service makes it is much too easy to divert 
one's mail today. Change of address cards can be sent in by mail 
with no questions asked. No personal appearance nor photo ID is 
required. The post office will simply forward your mail — 
including bank statements, investment account reports, credit card 
bills — to whatever location or mail drop thieves ask that it be 
sent. And no questions are asked. 

And how does the Postal Service respond? Leslie Stahl said 
last Sunday night on "60 Minutes" that they initially said "the 
problem was insignificant" but that later they called back and said 
"No, you're right, we do have a probloa. We have a huge hole in 
our system." Somehow that hole must be closed. 

Two suggestions I would make toward closing that hole. I'm 
sure there are more. Firstly, I would require a personal 
appearance with proper photo ID before one's mail is diverted. And 
secondly, I would require the sending of a confirmation notice by 
the Postal Service to the consumer before diverging any mail from 
his res idence . 

Another step would be to encourage law enforcement and 
security personnel to debrief "shoppers" %fho use stolen and 
counterfeit cards in order to determine if they are part of a 
larger ring. Prosecutors can be more aggressive by not just going 
after the individuail who uses the phony card but rather — as was 
done in our case — by using our State's Organized Crime Control 
Act with its enhanced penalties of up to 25 years in jail to get at 



205 



the entire ring and all of its niembers. 

In our case, Mr. Adekanbi's history also suggests that we must 
strengthen our efforts to deter deported criminals from re-entering 
the country. Mr. Adekanbi was deported in 1992 after a previous 
criminal conviction for credit card fraud, but was able to return 
to this country about a year later under an assiimed identity. And 
his trip was probably paid for on a stolen or counterfeit card — 
or perhaps with frequent flyer Diileage accumiilated on a legitimate 
credit card. 

And to facilitate the investigation and prosecution of credit 
card fraud cases, banks should be required to retain their bank 
surveillance photos for a longer period of time than they now do. 
Because there is at least a 30 day lag before a consiimer discovers 
that his or her credit identity has been stolen, bank surveillance 
photos should be retained at least that long and probably longer. 
And banks should provide the same documentation to investigators in 
credit card cases as they do in bank robbery cases. That does not 
always happen now even though banks lose much more money through 
credit card fraud than they do as a result of bank robberies. 

But most importantly, I would argue that we've got to change 
the mindset of the credit card and banking industries — and that 
of the consumer as well. Security and fraud enforcement are taking 
a back seat to those who market and use credit cards. The view of 
the industry marketing people seems to be that if we tighten 
seciirity too much and make it more difficult for the consumer to 
use his or her credit card, the card will be used less — that 
losses from credit fraud can easily be absorbed as long as credit 
cards are easy to acquire and to use and gross sales continue to 
grow. Their theory is to make it as easy as possible for the 
consumer to acquire and use his or her card — send him pre-approved 
credit in the mail, give him a gold card and don't allow cashiers 
to question his identity, let him get a new card over the telephone 
or replace an allegedly lost PIN number simply by calling. If one 
transaction out of ten is fraudulent, so what. The other nine will 
absorb the loss. 

I would argue, however, that to allow credit card fraud to 
continue to flourish as it now does — is pennywise and pound 
foolish. Credit card fraud rings such as those involved in our 
case 2ure becoming much more sophisticated. Ifosses will continue to 
grow. These rings will not limit themselves merely to credit card 
fraud but will expand into all other types of financial abuses. 
Consiimers will become less and less willing to pay the high 
interest rates that are required to cover the losses generated by 
these credit card and financial fraud enterprises. 

Last Sunday night's "60 Minutes" program focused on a staff 
doctor at the Mayo Clinic in Rochester, Minnesota. Not only was 



206 



she the victim of credit card fraud, but the thieves found a ifay to 
tap into her retirement fund — they asked for a redistribution 
form and then sought a lump sum distribution with penalty and sent 
it in. They attempted to get a $15,000 check out of the doctor's 
investment account and even accessed her daughter's college fund. 

All sorts of other types of financial fraud 
money laundering, for example, and other economic crimes — crimes 
which facilitate criminal activity and have a devastating impact on 
our citizens are growing by leaps and bounds. As o\ir indictment in 
New York demonstrates, we — and local and state prosecutors like 
us — stand ready to aggressively investigate and prosecute these 
crimes. However, to do so effectively, we need the continuing 
cooperation of our colleagues in federal law enforcement and access 
to intelligence gathering resources like, for example, FINCEN which 
offers invaluable assistance in the area of money laundering . And 
we need to see implemented the kinds of suggestions that I have 
made here today. 

By so doing and by pooling the vast resources of law 
enforcement expertise available at the local, state and federal 
level — including that available from the security people in the 
credit card, banking and financial industries — I am confident 
that we can do a great deal to effectively respond to the growing 
problem of organized criminal enterprises involved in multi- 
jurisdictional and international financial crimes. 



207 




department of STusftice 



STATEMENT OF 

MARK M RICHARD 

DEPUTY ASSISTANT ATTORNEY GENERAL 

CRIMINAL DIVISION 



BEFORE THE 



COMMITTEE ON BANKING AND FINANCIAL SERVICES 
UNITED STATES HOUSE OF REPRESENTATIVES 



CONCERNING 

THE THREAT ORGANIZED CRIMINAL GROUPS POSE TO THE 
INTERNATIONAL FINANCIAL SYSTEM 

ON 
FEBRUARY 28, 1996 



208 

Mr. Chairman and Members of the Committee, thank you for the 
opportunity to appear with fellow law enforcement colleagues before 
you today to discuss the threat organized criminal groups pose to 
the international financial system and some of the steps the United 
States must take to combat international organized crime. 
1. International crime poses an increasing threat: 

The United States must do all it can to counter foreign 
countries' becoming havens for organized crime and criminals that 
can, in the modern era, so easily victimize our citizens. Vfe are 
concerned about the impact of international organized crime on 
United States financial and commercial institutions, especially 
since the United States goes to great lengths to encourage free 
trade throughout the world. In fact, in response to the growing 
threat to the United States posed by international crime, in his 
October address to the United Nations General Assembly, the 
President announced a number of steps we will be pursuing to combat 
international crime: maintaining strong sanctions against states 
that sponsor terrorism; pressing nations which are most egregious 



209 

in facilitating money laundering to conform to international 
standards; and working with foreign governments to help prevent 
their penetration by organized crime. 

We must recognize that developing countries, with weak 
judicial systems and poorly equipped and trained police forces, are 
easy game for organized criminal groups. Similarly, countries 
facing difficult transitions into democracy and privatization, 
coupled with the advances in technology, are ripe for exploitation 
by organized criminals. The results are not only increased 
instability within those countries, but an increased risk of crime 
reaching our shores . 

Specifically, the rise of organized crime in Russia, the Newly 
Independent States, and Central Europe is a growing concern to the 
U.S. law enforcement community. The Federal Bureau of 
Investigation reports that money laundering is one of the most 
serious concerns of Russian and Eastern European law enforcement. 
This activity is not confined to the region. According to FBI 
reports, certain Russian and other Eurasian emigres are converting 



210 

millions of dollars worth of rubles into U.S. currency, through 
transactions with U.S. financial institutions and businesses. 
While some transactions may involve legitimate movement of funds, 
there are many indications that other of these funds originate from 
fraud, theft, and organized crime within Russia and other former 
Soviet Republics. 

2 . We must train our foreign law enforcement counterparts in 
investigating and prosecuting financial crimes: 

International cooperation is crucial to combatting transnational 
organized crime. One of the most important steps in we must cake 
in fighting international financial crime is increasing our efforts 
to assist and train foreign law enforcement officials. By so 
doing, we establish regular channels for exchanging information 
that identify the members of organized criminal groups and their 
modus operandi . 

As you may know, the Federal Bureau of Investigation ("FBI") , 
the Drug Enforcement Agency ("DEA"), and other United States law 
enforcement agencies are all involved in extensive police training 



211 

initiatives in Central Europe, Russia and the Newly Independent 
States ("NIS") , which are funded by the Freedom Support Act ("FSA") 
and the Support Eastern European Democracy Act ("SEED") . These and 
other agencies, with significant support from the State Department, 
are also actively involved in an exciting new project, the 
International Law Enforcement Academy in Budapest ("ILEA"), which 
the FBI spearheaded, and which is already providing important 
training to mid- level police managers in the region. 

ILEA trains managers from Eastern European law enforcement 
bodies on investigative techniques and philosophies relating to all 
types of crimes, including white collar crime and organized crime. 
These law enforcement managers can then take what they have learned 
back to their own countries and apply it to their own 
investigations. In addition to the regular training sessions, the 
center is used for various international working groups, wherein 
case-specific issues are discussed and information is shared among 
the various countries' law enforcement representatives. 



212 

Also, under a program funded by the U.S. Agency for 
International Development ("USAID"), we have two prosecutors 
working in Moscow. They are assisting with reform of criminal 
laws, including much needed legislation to combat organized crime. 
At the invitation of the Russian Procuracy and Ministry of Justice, 
they have provided specialized training to Russian prosecutors and 
judges. They have also begun to act as instructors in training 
programs organized by the FBI and other law enforcement agencies. 

Through these types of efforts, we are able to build 
relationships with foreign law enforcement officials that enhance 
our ability and their ability to fight international organized 
crime . 

3 . We must do everything possible to ensure that the United Sates 
and foreign countries are not safe havens for criminals: 

Not only do we need to increase our efforts to assist and 
train foreign law enforcement officials in investigating financial 
crimes, we also must do everything possible in this area to secure 
mutual legal assistance agreements and treaties that permit the 



213 

sharing ot crimxnal intelligence. Some toreign law entorcement 
officials need the legal authority -- as we now have --to exchange 
information currently protected from dissemination. 

Just as the international financial community needs honest and 
accurate information if it is to function properly, so we 
prosecutors need accurate information about criminals who have 
infiltrated that community. This is particularly important in a 
world where the criminal and his victim may be linked only by two 
computer terminals thousands of miles apart, and where crime may be 
committed with stolen access codes or counterfeited credit cards. 
Obviously, the investigation of such crimes becomes more difficult 
when the perpetrator and the victim reside in different countries; 
are governed by widely disparate financial laws; and have never met 
one another. 

It is not uncommon, for example, for United States law 
enforcement agencies to learn of the electronic --or even physical 

movement of huge sums of money said to be the proceeds of 

criminal activity into or through United States banks from Eastern 



214 

Europe. However, the documentation and witnesses necessary to 
demonstrate, first, that a fraud or theft has occurred under the 
laws of another country and , second, that the monies being passed 
through United States banks are the proceeds of such crimes are 
quite often unavailable. As you know, our criminal money 
laundering statutes apply only where there is evidence of 
"specified unlawful activity," that is, unlawful activity 
enumerated in the money laundering statute, 18 U.S.C. §1956. 
Consequently, what may or may not be a money laundering transaction 
can be determined only through a full exchange of information and 
documentation between the affected countries. 

One sign of progress in this area is the mutual legal 
assistance agreement between the United States and Russia, which 
took effect on February 5 of this year. This agreement provides in 
part for: 

I. Mutual assistance in providing testimony, 
documents, locating and identifying persons, and 
executing searches and seizures; and 



215 

II. Forfeiting assets. 
We hope this agreement will generate significant cooperation as 
well as the disclosure of financial records needed to detect or 
confirm the illegal infiltration or abuse of our respective 

financial communities. 

I 
Just as mutual legal assistant treaties provide prosecutors 

with the information necessary to identify and pursue criminals, 

extradition treaties constitute the primary means by which 

prosecutors secure the return of international criminals for 

prosecution. We are, in partnership with the State Department, 

actively negotiating extradition treaties where they do not exist, 

and are also updating those which do not, as drafted, provide a 

reliable means for obtaining the return of fugitives. We must work 

with the other nations of the world toward the goal of ensuring 

that criminals have nowhere to hide. 

Also, we must encourage foreign countries to adopt criminal 

laws that will enable them to prosecute financial fraud and access 

device schemes and recover the proceeds of those schemes . For 



216 

example, we must continue to work aggressively to ensure that other 
countries pass money laundering laws that will remove these 
countries as "safe havens" for financial crimes. 

Additionally, we must also make sure that our laws stay 
current with the rapid technological advances that are being used 
in the financial fraud and access device schemes. Moreover, we 
should ensure that we have the mechanisms necessary to strip 
financial fraud schemers of the profits they generate through their 
schemes and the computers, access devices, and other machinery and 
facilities they use to implement their schemes. 

Finally, in our own country prosecutors and bank regulators 
also need to share more information with each other. For example, 
when foreign banks apply to enter the U.S., particularly those from 
countries recognized as posing major organized crime threats, our 
current system does not require regulators to notify law 
enforcement either of a foreign bank's application to establish 
operations in the United States or of the ultimate approval or 
rejection of such an application. Thus, the law enforcement 



217 

community is seldom aware of the applicant bank's commercial 
intentions, and is unable to conduct research on or otherwise 
investigate the applicant bank prior to the bank's commencement of 
business in the United States. By the same token, regulators often 
are unaware of information the law enforcement community may have 
regarding the applicant bank, its customers, and any criminal ties 
it may have . The law enforcement community and regulators could 
both benefit from an enhanced dialogue that encourages more 
information flow between them, without encroaching on the other's 
authority. This is an avenue that the Department of Justice 
intends to pursue . 



Once again, I am grateful for the opportunity to appear before 
the House Corjmittee on Banking and Financial services today to give 
you the Department's views on international organized crime. I 
look forward to working with the distinguished Members of the 
Committee, and my colleagues here today, to combat international 
organized crime. 



218 



STATEMENT 



BORIS F. MELNIKOFF 



SENIOR VICE PRESIDENT 
WACHOVIA CORPORATION 



an behalf of 

THE AMERICAN BANKERS ASSOCIATION 

bdbtctfae 



COMMITTEE ON BANKING AND FINANCIAL SERVICES 
U.S. HOUSE OF REPRESENTATIVES 



FEBRUARY 28, 1996 



219 



OVERVIEW OF THE U.S. BANKING INDUSTRTS EFFORTS 
TO ELIMINATE FRAUD 

Good Morning Mr. Chairman and members of the Committee, I am Boris F. Melnikoff, 
Senior Vice President and Director of Corporate Security for Wachovia Corporation in 
Adanta, Georgia. I am here today representing the American Bankers Association (ABA) of 
which I serve as their Money Laundering Task Force Chairman. The American Bankers 
Association is the only national trade and professional association serving die entire 
banking community, from small community banks to large bank holding companies. ABA 
members represent approximately 90 percent of the commercial banking industry's total 
assets, and about 94 percent of ABA members arc community banks with assets less than 
$500 million. ABA has been asked to discuss money laundering trends and other types of 
financial fraud both domestically and internationally. We welcome this opportunity to 
oudine for the Committee, the banking industry's efforts in deterring all types of financial 
fraud. ABA believes that our response to this problem has been strong and our ongoing 
efforts successful. Clearly, all parties can do more and we appreciate the Committee's 
interest in this issue. 

The Committee has indicated its concern with the threat of organized criminal groups to 
the international financial system and while the ABA shares that concern, we must also 
emphasize that the U.S. flnancial industry addresses fraud, whether committed by groups 
or individuals, on an ongoing basis in a variety of ways. The industry b working diligently 
with our government counterparts to ensure that the fmancial community has all die 
appropriate tools to combat all types of bank fraud. The ABA is committed to that result 
and we have created educational mechanisms so that our members are prepared for financial 
crimes and know best how to respond to that problem.^ 



VARIOUS TYPES OF BANK FRAUD 

The Committee seeks ABA comments on the various types of financial crimes associated 
with organized groups. Many of the crimes can occur on a random basis so trends will be 
the same, regardless of who commits the crime. ABA, as well as many other groups, has 
tried to estimate the scope of the fraud problem. While there does not seem to be a 



^On April 1, 1996 all of the federal financial agencies will require banks and other 
financial institutions to file suspicious activity reports or SARs with the Financial Crimes 
Enforcement Network (FmCEN). This new streamlined reporting system, diat will grcady 
enhance the efficiency of reporting possible crimes against the financial community, is the 
subject of three seminars sponsored by the ABA in early April and produced with the help 
of FmCEN, the Federal Reserve Board, U.S. Secret Service and the FBI. This joint 
endeavor is just another example of the ongoing alliance between banking and the 
government that will better equip our industry to respond to fraudulent activity. 



( ASSOOATION 



220 



consensus on the size of money laundering both in the U.S. and abroad^, wc have several 
estimates on other types of firaud. 

For example, one of die major crimes committed against banks and other businesses is 
check fraud.' Our Association completed a survey of check fraud losses in 1994 and those 
results are attached to this statement. The estimate for industry losses from that survey was 
$815 million, up from $568 million in the last survey (1991) — a 43.5% increase. The 
survey respondents told us that check fraud can be perpetuated with forged signatures, 
forged endorsements, check kiting, or counterfeit checks. This may occur through 
organized efforts, but it is not limited to those activities. In order to address diis problem, 
banks have, among other things, indicated a need to educate dieir corporate customers 
about their responsibilities for preventing check fraud. In addition, the industry stresses 
that there must be employee training for firont-line personnel, managers, and/or backroom 
personnel. Odier popular initiatives to deter fraud include account screening, signature 
verification and deposit review. Many banks also verify questionable or irregular items such 
as signatures and check stock, or phone customers to verify large dollar amounts. To repeat 
Mr. Chairman, the problem of check fraud is harmful to banks and the economy whether 
initiated by organized groups or by individuals. ABA continually provides information to 
its members on how to protect against being a victim of firaud but vigilance is the key.* As 
we continue to discuss the industry response to fraud, it must be emphasized that there is 
one common thread to all deterrence — know your customer. We will amplify this concept 
later on in this statement. 

In addition to counterfeiting and other elements of check fraud, financial institutions also 
fieel the brunt of credit card fraud' and commercial loan fraud. In 1994, account takeover 
fraud -- one type of credit card abuse, resulted in a $37.3 million increase from 1993. 
While there is no one factor that led to this increase, security officials have stepped up their 



'Estimates on money laundering range from $300 billion annually to $85 billion. 
However, according to an Office of Technology Assessment (OTA) study, "this and other 
estimates of the scale of money laundering must be ^ewed skeptically...(n)o one can be sure 
how much money is laundered." 

^Check fraud is also exacerbated by the federal Expedited Funds Availability Act (12 
use 5001 et seq.). That law requires depository institutions to provide customers their 
funds before the depository institution knows that the check deposited is payable. 
Criminals use this law to their advantage. (The Federal Reserve Board pursuant to the 
1994 Community Development Banking Act, is currendy preparing to conduct a study on 
the advisability of revising that law to extend the time banks may hold some deposits.) 

'According to Bankers' Hodine, a monthly newsletter covering fraud and odier issues 
for front-line personnel, counterfeit check activity has forced the National Fraud 
Investigation Center, Inc (NFIC) to create a counterfeit check database with the FBI and 
the Secret Service. This is another example of banks working widi the government to solve 
the fraud problem. 

"Excerpts from ABA's Bank Card Survey for 1995 are also attached. 

AMEMCAN BAIKBO ASSOCUTION' 



221 



detection efforts. Commercial loan fraud losses average $175,000 per loss according to the 
FBI. A "Fraud Assessment and Impact Study" compiled by NFIC and Trans Union found 
that the top five firaud concerns for banks were check fraud, fraudulent accounts, new 
account fraud, counterfeiting and true name fraud. All of these problems can be and are 
being addressed by extensive training through ABA's conferences, videos and educational 
publications. For example, our Association publishes a mondily "Bank Security and Fraud 
Prevention" newsletter which we have attached to diis statement. We are also proud of our 
National School for Bank Security, a week-long training program held March 3-8, 1996 at 
Georgetown University.* 

Mr. Chairman, ABA does not believe that die enactment of any new or modified banking 
or criminal laws will be a better method to combat die firaud threat, but we would be 
happy to comment on any specific proposals that the Committee may be considering. 



MONEY LAUNDERING - THE U.S. RESPONSE 

The ABA has long supported the efforts of the Congress and the U.S. Government in its 
drive to address money laundering activity throughout die world.' ABA was pleased to 
support the Money Laundering Suppression Act of 1994 (P.L. 103-325) which was 
enacted to improve the regulatory process covering the Bank Secrecy Act. Due to that 
legislation, FinCEN has successfully reduced the size of die Currency Transaction Report 
(CTR) and are dose to further streamlining the entire cash reporting process. All of these 
initiatives will assist the industry and the government in their efforts to stop money 
laundering by refocusing our efforts from routine reporting to suspicious transaction 
reporting. FinCEN deserves much of the acclaim for spearheading the regulatory burden 
reduction process that benefits bodi bankers and law enforcement. 

To continue on die point of reducing the amount of cash reports, ABA would like to 
recmphasize the partnership developed in the past several years between die government 
and the banking industry. This alliance needs to be highlighted because the same 
relationship is not common in foreign countries. The lack of private-public sector 
teamwork internationally needs to change if the goal is improved (and more effective) 
vigilance on the part of bankers. Spedfically, the recent Undersecretary for Enforcement at 
the Department of Treasury initiated, and the Director of HnCEN carried out, the 
formation of a Bank Secrecy Act Advisory Board comprised of private and public sector 
representatives to meet on a regular basis and discuss trends in money laundering, the 



'in addition to ABA's efforts, other organizations recognize the scope of fraud. The 
International Banking Security Association (IBSA), a group in which ABA actively 
participates, has just released a booklet on International Fraud. That document is attached 
for your information. 

'ABA supported the original money laundering proposals that eventually became 18 
U.S.C. 1956. 1 was fortunate to have represented ABA in the first Congressional hearing 
on this subject in 1985. The Association has continued its efforts to support fair and 
necessary legislation as well as working to improve the current regulatory scheme. 

AMBOCAN BMKBK ASSOCUTKNT 



222 



current regulatory structure and what changes were necessary to streamline and improve the 
system. Over thirty individuals meet and engage in candid discussions which have resulted 
in an improved regulatory system. This "forum" was duplicated at a January, 1996 
meeting in Paris with international representatives prior to the Financial Action Task Force 
(FATF) meeting and should be the goal for all nations. 

In the international arena, the Financial Action Task Force serves as a forum for ideas and 
recommendations on how to eliminate money laundering activities not only in our own 
countries but widi our neighbors throughout tiie world. FATF is to be commended for its 
dedication to this worthy goal and it is imperative that die private sector lend its expertise 
and energy to increasing the obstacles for narcotics traflickcrs and other criminals who 
illegally use our fmancial institutions to move their ill-gotten gains. ABA has supported 
these efforts but, as we previously mentioned, the record of our international counterparts 
has been mixed, at best. 

The ABA stands ready to continue its decade-long involvement in educating bankers and 
other private sector representatives on the need for compliance and vigilance with money 
laundering laws and activities. We have worked with FATF and its members so that one 
day we can all trumpet the end of money laundering in financial institutions everywhere. 
We urge the Committee to go on record advocating the need for increased international 
cooperation. 



A. Trends in Money Laundering 

The first thing that one must understand about money laundering in the United States is 
that the financial industry is extremely varied, with institutions ranging from small 
community banks to large international financial service providers. Thus, the experiences 
will differ widely as to what is attempted by criminals. Much of what we have seen in the 
past several years, in the aggregate, has been continued attempts to evade the cash reporting 
requirements (i.e. through structured transactions), the creation of "front" companies 
designed solely to move the proceeds of illegal activities and complicated investment 
schemes. In addition to those well-known activities, domestic fmancial institutions are 
wary about transactions with certain countries that are considered drug havens by U.S. and 
international audiorities. We have also seen a rise in possible illegal transactions in certain 
financial institutions that are not regulated by federal banking agencies. As with any 
general statement, it must be emphasized diat many "non-bank" financial institutions are 
working toward developing improved compliance systems but the amount and frequency of 
federal examinations will often dictate the seriousness by which those institutions take anti- 
money laundering deterrence responsibilities. The ABA acknowledges our own industry's 
past shortcomings in this area but our progress is well documented and we are confident 
that other financial service providers share our support for improved compliance. 

The trends in money laundering must, by defmition, be discovered by law enforcement and 
state and federal bank regulators since those entities are better equipped than bank officials 
to discover new forms of criminal activities and to distribute this information to all 
concerned parties. The U.S. government has been working toward an improved "alliance" 



AMEHCAN MNKBS ASSOCUTKMI' 



223 



with the private sector to share information on new trends and schemes and we are 
optimistic that die sharing of critical information will continue. The ABA has offered its 
ser^aces in this regard and we urge our counterparts both in the U.S. and abroad to do the 
same.* 

Mr. Chairman, while diere are many examples of cooperation with die government, I 
would like to offer one strong example. The level of success in deterring money laundering 
achieved by the models of industry-government cooperation in such places as Oklahoma 
speak for itself. The following are money laundering schemes uncovered by the joint 
efforts of Oklahoma bankers and law enforcement agents: 

• A fmancial institution reported suspicious activities by a group of individuals 
who were oi>ening new accounts. As a result, a major cocaine distribution 
organization was uncovered. This organization had deposited in excess of ten 
million dollars in Swiss banks. The investigation resulted in the following seizures: 
a $375,000 home in Oklahoma City; $1,000,000 in cash in an Oklahoma City 
bank; an airplane located in Tucson, Arizona, valued at $5,000,000; and in Reno, 
Nevada, automobiles valued at $100,000, and gold and jewelry from a safe deposit 
box valued at approximately $3,000,000. 

• A financial institution employee contacted the Fmancial Task Force in 
Oklahoma concerning a ne^v account holder who was receiving wire transfers from 
California and then withdrawing the money in currency (approximately $50,000 
each wire). This information uncovered a dieft ring which had stolen almost four 
million dollars in microchips from a business in Oklahoma City. 

• Three financial institutions independendy reported suspicious transactions 
concerning the purchase of one or two cashier's checks in amounts of $3,000 to 
$4,000 with currency. This lead initiated an investigation which uncovered an 
international heroin organization which had laundered in excess of one million 
dollars dirough Oklahoma City banks in less than twenty-three days. The 
individuals who purchased the cashier's checks, known as smurft, went to as many as 
twenty banks in one day acquiring cashier's checks. Law enforcement seized over 26 
pounds of heroin valued at twenty million dollars in Oklahoma City. 

• An alert employee at a financial institution reported that a customer was 
conducting repeated cashier's checks transactions in increments less than $10,000, 
the threshold for bank reporting. As a result, the customer, who had embezzled his 
blind grandmother's life savings of $350,000, was arrested. This same bank 



*rhe ABA has been fortunate to have received the support of many government agencies 
in our seminars, conferences and schools diat cover money laundering. During the past 10 
years, our members have heard from the Federal Reserve Board, the Office of the 
Comptroller of the Currency, die Federal Deposit Insurance Corporation, die Treasury 
Department, the Department of State, the U.S. Customs Service, the Internal Revenue 
Service, the Justice Department, FinCEN and many others. This support is critical if 
bankers are to receive proper training. 

AMEMCAN BAMCB* ASSOCIAnON* 



224 



reported another suspicious transaction that resulted in die recovery of embezzled 
funds totaling $125,000 from an out-of-state company and of $66,000 from a local 
automobile dealer who was wanted in several states for similar embezzlement 
offenses. 

• A Bank's BSA Compliance Officer called the Fmancial Task Force when an 

elderly gendeman began taking large cash advances on a number of credit cards. 
Because of this call, an investigation ensued that uncovered fraudulent telemarketing 
schemes in Las Vegas, Nevada and prevented the gendeman from losing his entire 
life savings. 

The Oklahoma model of partnership (which has been duplicated in California, Arizona and 
Florida) strengthens both the banking industry and the government and is made possible 
only through the efforts of dedicated public servants that work closely and well with our 
industry. 

Fmally, we would be remiss if our association did not commend the various federal agencies 
for their efforts to train foreign law enforcement, regulators, and bank officials on current 
detection and prevention efforts. ABA has participated (as have several major U.S. 
institution bank officials) in a global attempt to share information and offer advice on how 
to craft effective fraud deterrence programs. The United States Customs Service, the 
Federal Reserve Board, FinCEN, various U.S. Attorney offices as well as many others have 
developed seminars, conferences and odicr forums to train our international counterparts in 
die critical area of fraud prevention and detection. The programs do not stress the U.S. 
regulatory and legal model as the answer to worldwide money laundering but create an 
opportunity for information exchanges that gready assist all participants. This area of 
support gets litde recognition and that needs to be remedied. 



B. Copntcmnfaitnres 

Anodier area that we have been asked to cover concerns what countermeasures have U.S. 
financial institutions developed in order to both comply with our regulatory responsibilities 
and to develop an appropriate proactive response to money laundering. While the U.S. 
does not now have a regulation in place (althou^ one is expected in 1996), the ABA has 
long supported the concept of formalizing a "know your customer" policy. In 1990, the 
ABA surveyed its membership to determine the extent to which institutions already had 
policies that could be construed as Know Your Customer procedures. At that time, over 
86% of the respondents had KYC procedures of some type.* The task force which I chair 



* In addition, then Chairman of ABA's Money Laundering Task Force, Earl Hadlow, 
told a U.S. Senate Committee in 1989 that "[t]he emphasis must shift, in a logical and 
reasonable manner, from currency transaction tracking to know your customer in all facets 
of transactions. A reasonable approach to the problem can only be accomplished by the 
concentrated cooperation of the government and die financial services industry." Mr. 
Hadlow went on to add that: 



AMEfOCAN BANKBK ASSOCUnON* 



225 



also developed recommendations in this area. Excerpts of what we concluded follows. 

First, it must be emphasized that the Treasury Department [now FmCEN] now has the 
authority to require financial institutions to issue "Know Your Customer" (KYC) 
procedures based on the passage of the 1992 Annunzio-Wylie Money Laundering Act (Pub. 
L. No. 102-550). While the concept of KYC has long been a cornerstone of prudent 
banking, this will be the first time that the government will mandate that all financial 
institutions create such procedures. 

Therefore at that time and once again, the Task Force states that die banking industry is 
poised to cooperate with the Treasury's efforts to formalize what, to a large degree, already 
exists in the commercial banking industry.^" 

Much of the banking industry's "countermeasures" will stem from a solid Know Your 
Customer procedure. The Task Force also concluded that, in a KYC policy, establishment 
of a tiered monitoring system of certain accounts and activities may be appropriate. ABA 
stresses that if there are no "red flags" or other indications of unusual beha\dor then 
monitoring need not take place. If, based on government and industry warning signs, 
there is an indication of illegal activity the bank would be required to conduct more 
research or analysis to determine if there is a problem." It must be emphasized that die 



ABA's Money Laundering Task Force, and the industry in general, recommend that 
financial institutions base their regulatory compliance on KYC. This means activities 
such as verifying the business of a new account holder and reporting activity in an 
accoimt that is disproportionate to that customer's known business. Immediate 
reaction to unusual transaction activity should be die goal for all banking 
institutions. Identification procedures beyond the regulatory minimum should be 
considered to include situations such as verifying whether a document for 
identification that is seemingly altered is genuine. With these several concepts in 
play, individuals will find it increasingly difficult to deliberately utilize a financial 
institution for illegal purposes. 

Financial institutions already have a well known KYC standard that does ensure 
compliance with both the Money Laundering Control Act and the Bank Secrecy Act. 
While we may not always agree as to what constitutes KYC, it is important that this 
concept be advanced widiin the industry. 

^ We have attached ABA's KYC Policy Statement, issued July 1994. 

" For example, one large financial institution, in its Code of Ethics states the following: 

Money Laundering Activities/Bank Secreqr Act 

Both fiederal and state law prohibit the laundering of money. 
Money is laundered to hide the criminal activity associated with 
it, including the crimes by which it is generated, e.g., drug 
trafficking, tax avoidance, counterfeiting, etc Employees need 

tASSOdATMN* 



226 



risk level associated with a well-known and respected corporation differs from that of some 
other entity. In addition, risks will vary along product lines. ABA has advocated that any 
final rules which are developed should specifically permit such differentiation. As long as 
FmCEN allows flexibility in handling customer monitoring, a KYC policy that includes this 
requirement could and will receive solid support firom our industry. 

C. Other Issues 

In November 1995, ABA's Executive Vice President, Don Ogilvie wrote to FATF 
President, Ronald K. Noble, in response to a request to review long standing FATF 
recommendations, on creating effective money laundering enforcement programs. I will 
summarize several key points that we made at that time. 

1. Review of FATF Recommendations; 

Much of the FATF recommendations (i.e. passage of laws criminalizing 
money laundering, reporting of suspicious transactions and due diligence) 
have been implemented in U.S. banks and in place for many years. The ABA 
remains committed to the need for policies requiring non-banks as well as 
banks to keep certain records and identify customer transactions. We believe 
that our industry has an excellent record of emphasizing account-opening 
procedures in employee training programs as oudined in several FATF 
recommendations. We have also pointed out die need to streamline, and in 
some instances, eliminate reports and records on routine transactions, and the 
federal agencies responding to the Congress have already begun riiat process. 
Therefore, while we support having several of the U.S. Bank Secrecy Act laws 
being placed on all fmancial institutions throughout the world, changes and 
modifications to those laws are also necessary. 

ABA also stressed that recommendations addressing the reporting of 
suspicious Q^ansactions and other "Know Your Customer" procedures are 
important requirements for all institutions to assist in money laundering 
deterrence, but that financial institutions nnist be protected firom civil and 
criminal liability for fulfilling their responsibility to detect and report 
unusual or potentially criminal violations as well as closing accounts on 
individuals who have acted contrary to law and regulation. 



to "know dieir customer," and be alert to the dangers to the 
bank should it, even unwittin^y, become involved in receiving 
or laundering proceeds of crimes. Regulators require banks to 
report any known or suspected criminal activity, such as the 
laundering of monetary instruments or structuring of 
transactions to evade ^mk Secrecy Act reporting requirements. 
Employees should contact their Regional Security Department 
immediately in the event any known or suspected criminal 
activity or transaction comes to their attention. 



tASSOOATION* 



227 



Finally, the FATF recommendations concerning cooperation and mutual 
assistance on an international basb are also critical to successfully create an 
atmosphere of vigilance on die part of the public and private sector. 

2. Implication of Emerging Tedinolbgies: 

With the advent of smart cards, banking on the internet and other 
"cyberspace" financial services, both the government and the industry must 
be prepared to address these tremendous new technologies as potential 
vehicles for money laundering. This must be done before, not after, diey 
become commonplace. In addition, ABA has created a Payment Systems Task 
Force that is considering policy issues relating to Ac security of these new 
technologies. 

Mr. Chairman, we would urge the Congress to aggressively support the action of the FATF 
so that all participating countries will take seriously the need for unity in combatting 
financial crimes. 



ABA KECOMMENDATIONS 

As this Committee continues its review of global financial crimes and how best to address 
fraud, our Association would ask that you consider the level of resources available to law 
enforcement in die United States. Due to die lack of funds in many agencies, firauds 
committed under certain thresholds (i.e. $100,000 in New York City) are simply not 
prosecuted by U.S. Attorneys or investigated by law enforcement. Therefore large scale 
frauds, committed over time, may go unreviewed because of the dearth of manpower hours 
that can be dedicated to such offenses. While this is not a slight at our friends in law 
enforcement, it is nonetheless frustrating and harms financial institutions in their goal of 
ensuring the safety and soundness of their industry. In fact, one of the major changes to 
the new suspicious activity report was to substantially raise thresholds for reporting 
fr^uds.^' This was done because many small dollar frauds simply cannot be handled by 
the government. ABA recognizes that the batde for appropriations encompasses nuny 
competing interests, but the ever-dwindling amounts given to combat fraud is 
disappointing. Simply stated ~ our partners in the government need more tools to solve 
financial crimes. 



'^In addition to increasing reporting thresholds, the new SAR (which replaces die 
criminal referral form) will have two additional benefits ~ only one (1) filing will be 
required by financial institutions (from the current 6) and banks will receive software so 
diat die forms can be completed electronically. The Bank Fraud Working Group deserves 
credit for agreeing to this new process ~ first proposed by and led by die leadership of die 
Federal Reserve Board. 

AMEnCAN BAMCBB ASSOOATION' 



228 



CONCLUSION 

The American Bankers Association has long advocated adherence to Know Your Customer 
principles as a means to deter fraud and protect die banking industry. Those concepts can 
work in the area of money laundering as well as for other fmancial crimes. We humbly 
recommend that our international counterparts consider the same principal because 
organized criminal groups can only succeed if vigilance is poor or non-existent. By 
working together, fmancial institutions and law enforcement can craft workable, flexible 
and reasonable regulations that will deter criminals from using our banking system to 
launder the process of illegal activities. This can, and does work in die United States and 
should be replicated abroad. 

Thank you for this opportunity and I would be happy to answer any questions. 



AMEMCAN BMKBK ASSOCUTKM' 



229 



Attachment 1 



1994 CHECK FRAUD SURVEY 
Management Summary of Survey Results 



I. Introduction 

n. Methodology 

III. Management Sununary 

IV. Recommendations 



Page 

1 

1 

2 

20 



Figure 1 
Figure 2 
Figure 3 
Figure 4 

Figure 5: 

Figure 6: 



Banks Reporting 1993 Check Fraud Losses . . 
Check Fraud Losses - Industry Estimate .... 
1993 Check Fraud Losses by Type of Account 
Expeacd Fraud Loss Exposure in 12 Months 

Community Banks 

Expeaed Fraud Loss Expos\ire in 12 Months 

Mid-Size Banks 

Expeaed Fraud Loss Exposure in 12 Months 
Large Banks 



8 
10 
11 

14 

IS 

16 



^^ 



AMl.HU.AN 

IVANKl-KS 

ASSOCIAIKIN 



230 



i. INTRODUCTION 

A representative group of banks were surveyed in April 1994 to coUea information on their check 
&aud experiences. Check fraud contributes substantially to bank losses. The check fraud problem has 
recently received increased attention. Regulation CC imposed tighter check deposit availability 
requirements than in the past New desktop capabilities of producing counterfeit checks has exposed 
the industry to greater risks of check fraud and losses. 

The primary objective of this study was to determine the extent of check fr^ud losses for 1993 and 
to assess the impact of regulations and other Actors on such losses. In addition, the survey identified 
actions taken or planned by banks to reduce check fraud losses, for example, employee training and 
conversion to electronic payments. The survey also identified member services that banks want from 
ABA to assist them in controlling check fraud. 

The opinions and evaluations contained in this repon rq>re$ent those of individual authors and are 
not necessarily the views of the American Bankers Association. Please contaa ABA, Surveys and 
Statistics Division (202) 663-5176 if you have any questions or comments. 



II. METHODOLOGY 

A mail sample survey designed by the ABA Check Fraud Task Force collected data on check fraud. 
The 8-page, 41-pan survey covered 5 major topics: 

— Funds availability policy 

— Safeguard exceptions 

— Rfitum items 

— Check fraud losses 

— Check fraud prevention 

General information about survey participants was also requested 

A stratified random sample of 2,925 banks was selected by asset size to obtain information 
representative of the industry. The survey was conducted during the second and third quarters of 
1994 with two mailings. FoUow-up interviews were conducted when necessary. By the cutoff date, 
a total of 309 returns had been received, for an overall response rate of 10.6 percent. 

All quantitative data were compiled by three categories of banks, based on asset size as of year-end 
1993: 

1. Banks with less than S500 million in assets, herein denoted as community b»nkr, 

2. Banks with $500 million to S4.9 billion in assets, herein denoted as mid-size banltr, and 

3. Banks with $5 billion or more in assets, herein denoted as lar^e banks. 

This division by size clarifies differences in the impact of fraud and in preventive methods used by 
banks. 



] 

i 



231 



NUMBER OF BANKS IN U.S. AND SURVEY PARTICIPANTS 





Ccmmuni:y 
Banks 


Mid-Size 
Banks 


Lar£e Banks 


Total 


Number of banks in 
U.S. (a»on2/31/93) * 


10,335 


497 


122 


10,954 


Number of survey 
parddpants 


199 


77 


33 


309 



• Source; FDIC. 

Unless otherwise indicated, median values of the number and dollar amounts were used to describe 
typical check fraud losses experienced by community, mid-size, and large banks. For certain 
questions, suivey dau were extrapobted to the industry level to fecilitate comparisons between 1992 
and 1994 results. When a[^ropriate, statistical tests were conducted to identify differences in the 
req>on$es of community banks versus mid-size and large banks. Selected qualitative (wriaen) 
comments were extraacd and analyzed sq>arately. A few of these comments are included in this 
repon for illustrative purposes. 



III. MANAGEMENT SUMMARY 

A, GENERAL INFORMATION 

Most (64.4 percent) of the 309 banks responding to this survey had assets of less than S500 million 
as of year-end 1993, while 24.9 percent had assets of $500 nodllion to $4.9 billion; the other 10.7 
percent had S5 billion or more in assets. Gsmmunity banks reponed deposits imder S500 million 
(97.5 percent had less than S300 million in deposits). Mid-size banks bad deposits of between S300 
million and S5 billion (93.5 percent had $500 million to $5 billion). Large banks reported dq>osits 
of $1 billion or more (typically S5 billion to S50 billion). 

1. 1993 Check Deposits On-Us and Non-On-Us: Number and Dollar Value 

At community banks, an annual median volume of 451,000 checks (S168 million) per bank were 
dq>osited non-on-us (transit), with another 100,000 checks ($36 million) deposited on-us. Among 
mid-size banks, an annual median volume of 8.3 million checks (S3.4 billion) were dq>osited non-on- 
us per bank, and 3.6 million checks (S1.7 billion) were deposited on-us. Large banks received 97.8 
million transit items (S39 billion) and 5.3 million on-us items ($6.3 billion). As expected, transit 
items outnumbered on-us items by a large margin. 

2. 1993 Checks Drawn Against Accounts On-Us: Number and Dollar Value 

As paying banks, 28 community banks reported a median volume of over 306,000 checks drawn 
against their accounts in 1993, with a mecUan value of S99.5 million per bank. In contrast, 23 mid- 
size banks reported a median volume of 7.4 million checks drawn against accounts, and a median 
value of S2.7 billion. Eleven large banks had a median volume of 58.9 million checks per bank drawn 
against their accounts in 1993, with a median value of S35.3 billion. 

The variation in check volume and dollar value for checks deposited into accounts or drawn against 
accounts was substantial within individual bank size groups. For conununity banks, for instance, 

Ammiean Banktra AMociation . 1994 Cttaek Fraud Survmy 



232 



checks deposited non-on-us ranged fiom 2,000 to 4.3 million. For mid-size banks, the range was 
from 33,000 to 184.7 million checks. For large banks, xhc range was from 165,000 to 553 million 
checks. The dollar value of these deposits for community banks ranged from $900,000 to $1.5 
billion; for mid-size banks, from $10 million to $173 billion. Deposits into accounts at large banks 
ranged from $17 million to $685 billion. As could be expected, banks' exposure to check fraud 
increased with check transaction volume and value. 

3. Deposit (Check) Processing Facility and Arrangements 

Most respondents reported that they processed checks at an on-premise facility. On-premi$e was the 
arrangement for 62.1 percent of community banks, with higher proportions found for the mid-size 
banks (74.0 percent) and large banks (81.8 percent). Most surveyed banks used their own operations 
to process checks. The proportion for community banks was 54.8 percent, compared to even higher 
proportions for mid-size banks (67.5 percent) and large banks (75.0 percent). A holding company 
performed check processing for a few banks in each asset size category, including 17.6 percent of 
community banks, 23.4 percent of mid-size banks, and 12.5 percent of large institutions. 

Community banks were more likely than larger banks to use two other check processing 
arrangements: a correspondent bank or a nonbank service company. More community banks used 
a correspondent bank to process checks (15.4 percent) than did mid-size banks (6.5 percent) or large 
banks (3.1 percent). Also, 20.2 percent of community banks used a nonbank service company to 
process checks, while only 6.5 percent of mid-size banks and 9.4 percent of large banks rq>oned such 
an arrangement. 

B. FUNDS AVAXLABIUTY POUCT 

Most surveyed banks reported funds availability to customers on the next business day or immediately 
for local checks, whether the customer accounts were individual consumers or commercial accounts. 
For nonlocal checks, funds were generally available the next day or immediately, for either individual 
or commercial accounts. 

1. Funds Availability Policy for Accounts That Do Not Qualify As Exceptions Under 
Regulation CC 

Funcb availability policies for local checks varied by bank asset size: more community banks provided 
next day/immediate availability than did mid-size banks or large institutions. On consumer demand 
accounts, 93.5 percent of community banks had a published policy of next day/immediate availability 
for local checks, compared to 75.0 percent of mid-size banks and 72.7 percent of large banks. For 
small business demand accounts, 93.4 percent of community banks had a policy of next 
day/immediate availability, while 77.5 percent of mid-size banks and 77.4 percent of large banks had 
this policy. On large corporate demand accounts, over 80 percent of all banks reported a policy of 
next day/immediate access, including 93.3 percent of community banks, 80.6 percent of mid-size 
banks, and 76.7 percent of large banks. 

A similar pattern was found for funds availability policies for nonlocal checks. More conmiunity 
banks provided next day/immediate availability than did mid-size banks or large banks. On 
consumer demand accounts, 68.1 percent of community banks had a published policy of next 
day/immediate availability for nonlocal checks, compared to 50.7 percent of mid-size banks and 39.4 
percent of large banks. For small business demand accounts, 67.0 percent of community banks had 
a policy of next day/immediate availability, as did 50.0 percent of mid-size banks and 51.6 percent 
of large banks. On large corporate demand accounts, 67.8 percent of community banks, 50.0 

AmericMn Banktra Ataodation _ 1994 Ch»ck Fnud Survay 



233 



percent of mid-size banks, and 51.7 percent of large banks reported next day/immediate access. 
From 1991 to 1993, next day /immediate availability of funds at banks industrywide increased 
significantly. In 1993, more banks made firnds available the next day/immediately for both local 
checks and nonlocal items on each type of account than did so in 1991. Prompt fimds availability 
have become increasingly important to relationship management as market competition has 
intensified. 

2. Collection Mechanisnis for Transit Items 

Banks collected their transit items primarily through the Federal Reserve bank or a correspondent 
bank. The proportion of deposits collected through the Federal Bxserve bank was 49.1 percent at 
community banks, 56.4 percent at mid-size banks, and 40.9 percent at large banks. The Federal 
Kcservre bank was the primary collection mechanism for banks of all sizes. 

More community banks collected through a correspondent bank (46.5 percent) than did mid-size 
banks (18.8 percent) or large banks (28.9 percent). Conversely, more large banks collected transit 
items through a clearinghouse (24.4 percent) than did mid-size banks (16.7 percent) or community 
banks (only 2.3 percent). 

3. Availability of Funds Through Banks' Check Qearing Network 

Over 80.0 percent of all banks reported that funds were available to them from local checks within 
I business day, and over 95.0 percent reported funds available in 1 or 2 business days. More than 
8 in 10 (83.7 percent) community banks reported that funds were available to them from local diecks 
within 1 business day on items deposited through their check clearing network, as did 85.9 percent 
of mid-size banks and 93.8 percent of large banks. Most of the remainder reported access in 2 
business days. 

Banks did not obtain such quick access to funds fit>m nonlocal checks. Only 42.2 percent of 
community banks repontd that funds became available to them from nonlocal checks within 1 
business day on items deposited through their check clearing network, compared to 53.2 percent of 
mid-size banks, and 65.7 percent of large banks. Many other banks, however, reported access in 2 
business days, including 40.8 percent of community banks, 31.1 percent of mid-size banks, and 24.3 
percent of large banks. Overall, almost 9 in 10 banks had access to fiinds from nonlocal checks in 1 
or 2 business days. A large minority of banks, however, reported that it took more than 2 business 
days to receive available funds on nonlocal checks. 

There was no significant difference between 1991 and 1993 in the speed of receiving available fimds 
on deposited items by banks. During that same period, however, earlier access to dq>o$ited fimds 
were widely offered to bank customers. 

C. SAFEGUARD EXCEPTIONS 

1. Individual Consuniers 

Most banks (63.2 percent of community banks, 662 percent of mid-size banks, and 57.6 percent of 
large banks) occasionally imposed a safeguard excepdon to hold fiinds dqx»ited into new accounts 
beyond 2 business days for local checks and 5 business days for nonlocal checks for individual 
consumen. In contrast, fewer institutions imposed these exceptions routinely, with large banks 
employing a less stringent policy. 

Amtriemt Banktn AMOdation ^ 1M4 Ctwek Fraud Survty 



234 



More than 6 in 10 banks also occasionall)' imposed a safeguard cxcqidon to bold fiinds for large 
deposits (aggregate over $5,000} made by individual consumers. However, only about 8 percent to 
27 percent, depending on bank size, of survey participants imposed these excepdoos routinely. 

Sixty-three percent of community backs, 43.7 percent of mid-size banks, and 53.1 percent of large 
banks occasionally imposed an exception for checks redepositcd by individual consumers. About 20 
percent of community banks and large banks imposed these exceptions routinely; a higher proportion 
of mid-size banks (about 42 percent) did so. 

2. Commercial Accounts 

Most banks occasionally imposed a safeguard excq>tion to hold funds deposited into new small 
business accounts (56.0 percent to 73.0 percent). Approximately another 18.0 percent of smaU and 
mid-size banks did so rounncty. However, about 31.0 percent of the large institutions imposed these 
exceptions routinely. 

More banks occasionally imposed a safeguard exception to hold Amds for large dq>osits made by 
small business customers, in<-l<iHing 69.0 pcrceiu of community and mid-size banks and 58.1 percent 
of large banks. However, fewer banks imposed these exceptions routinely. 

Similar results were found for redepositcd checks for small business accounts. Over half of the banks 
occasionally imposed an excq)tion, while 16.2 percent to 34.3 percent imposed these excq>tions 
routinely. 

Policies for exception holds on large corporate accounts differed only slightiy. Most banks 
occasionally imposed a safeguard exception to hold funds deposited into new accounts for large 
corporate customers. Less than 2 in 10 banks did so routinely, and many never imposed safeguards 
on corporate accounts. Large corporations received fewer safeguard exceptions at large banks than 
did consumers and snull businesses. 

More than 6 in 10 banks occasiooaily imposed a sa£^;uard excq>tion to hold funds for large deposits 
made by their large corporate customers. Less than 10.0 percent imposed these exceptions routinely, 
and 21.2 percent to 36.7 percent never did so. Only 3.3 percent of large banks routinely imposed 
exceptions for large deposits. 

About one in two survey participants occasionally imposed an excq>tion for redq>osited checks for 
large corporate accounts, and 10.7 percent to 28.0 percent, dq>cnding on bank size, imposed these 
exceptions routinely. A significant proportion, 18.2 percent to 42.9 percent, never imposed safeguards 
for redeposited checks. Mid-size banks were more likely than community banks to impose safeguards 
routinely, for example, on large dcpoats and redeposited checks. 

In summary, most banks occasionally imposed a safeguard excq>tion to hold funds deposited beyond 
2 business days for local checks and 5 business days for nonlocal checks. Few routinely and some 
never imposed cxcq>tion holds. Banks uniformly repotted such a hold policy for individual 
consumen, small busGiesses, or large corporate accounts, and for transactions involving new accounts, 
large deposits, or redepositcd diccks. Oveiall, large corporations received fewer safeguard exceptions 
than consumer or small business afroont hcdders. 



Am«ne»iBtnk«r>>U*odMon - 1994 Ch0ck Fraud Survey 



235 



3. Changes in Use of Safeguard Exceptions from 1991 to 1993 

From 1991 to 1993, the proportion of banks who routinely imposed safeguard exceptions on 
consumer, small business, and corporate accounts decreased significantly-. For example, only 19.3 
percent of banks applied safeguard exceptions on consumer accounts routinely in 1993, compared 
to 29.0 percent in 1991. Decreases ranged from 5.0 percent to 10.0 percent from 1991 to 1993. 

4. Frequency of Imposing Safeguard Exceptions for Instances with Cause 
to Doubt Collectibility 

Banks were much more likciy to impose safeguards routinely when tfaey had cause to doubt the 
collectibility of fiinds. In 1993, 41.9 percent of community banks, 56.3 percent of mid-size banks, 
and 48.5 percent of large banks routinely imposed a safeguard exception to hold funds deposited 
when collections were in doubt for individual consumers. Less than 9.0 percent never imposed such 
exceptions when collections were in doubt. A similar policy was reported for small business accounts. 

Mid-size banks were more likely than community banks to impose safeguards routinely on individual 
consumers and on small business accounts. About 4 in 10 banks (37.3 percent of community banks, 
46.9 percent of mid-size banks, and 37.9 percent of large banks) also routinely imposed a safeguard 
exception to hold funds deposited when collections were in doubt, even for large corporate 
customers. However, another 11.0 percent to 28.0 percent never imposed safeguard exceptions on 
large coiporate customers, even when collectibility is in doubt. 

Twenty-nine banks commented on their increased use of exceptions after the implementation of 
Regulation CC. Many indicated that such holds were applied on an excq>tional basis, when needed 
and permitted. These holds were applied to returned items, large ATM deposits, new accounts, and 
w^en collectibility was in doubL One banker stated that the holds were "virtually the only way of 
protecting the baiik. " 

Between 1991 and 1993, the percentage of banks industrywide that routinely imposed safeguard 
exceptions on consumer and small business accounts with cause to doubt collectibility did not change 
significantly, although decreases of 5.0 percent to 7.0 percent were found For large coiporate 
accounts, the percentage decrease was significant: torn 46.0 percent in 1991 to 38.0 percent in 
1993. 

5. Impact of Written Notification Requirements on Sa&gaard Exceptions 

Opinion was mixed about whether banks would impose safeguard exceptions more routinely if they 
were not required to provide written notification on holds that meet current notification 
requirements. About 3 in 10 banks said that they would impose exccpdons morc routinely. About 
4 in 10 would not impose exceptions more routinely. The rest indicated that they had no basis on 
which to judge. Competition greatly influenced bankers' reluctance to use safeguard exceptions. 

D. RETURN ITEMS 

1. Mechanisms to Process Return Items 

The Federal Reserve Banks processed morc than 60 percent of the return items. The use of other 
me chanis ms varied by bank asset size. At community banks, about one-third (30.3 percent) of return 
items were processed by correspondent banks. Mid-aze and large banks were more likely to route 
the return items through a clearinghouse. 

American Banken Aaaoeiation . 1994 Chaek fraua Survey 



236 



2. Average Length of Entire Cycle for Returned Deposited Checks 

The cadre cycle of returned deposited local checks was completed in 3 days or more, according to 
71.0 percent of conununity banks and 75.4 percent of mid-size and large banks. In contrast, the 
processing cycle for nonlocal checks takes longer to complete. Hvc or more days are required for 
processing nonlocal checks for most banks (69.0 percent of community banks, 56.6 percent of mid- 
size banks, and 60.5 percent of large banks). Indeed, 23.3 percent of community banks and 18.4 
percent of large banks sated that it took 7 or more business days to complete the cycle for nonlocal 
checks. Industrywide, between 1991 and 1993, the length of the cycle for either local or nonlocal 
returned deposited checks did not change significantly. 

3. Timely Notification on Large, Local Setnmed Checks 

As banks of fint deposit, about 9 in 10 banks reported receiving timely notification of large local 
checks exceeding S2,500 being returned, as required by Ri^iulation CO. However, banks were more 
likely to be notified promptly but with exceptions than they were to always receive prompt notice. 
Bank size was a factor. While 37.7 percent of community banks said that they always receive such 
notice, only 22.1 percent of mid-size banks reported service this efficient. Conversely, 54.3 percent 
of community banks said they were notified promptly but with exceptions, compared to 67.5 percent 
of mid-size banks. The eiq)erience of large banks was similar to mid-size banks. 

4. Holding Funds in Accounts Pending Rcceq>t of Ketnmed Items 

More than 8 in 10 banks indicated that tfaey would hold the funds on their depositors' accounts 
while waiting for the return of the pfaysicai item(s), after notification that large items (local and 
nonlocal) are being returned. Depending on the situation, mid-size banks (40.3 percent) were more 
likely to always bold fiinds than community banks (20.1 percent), and 30.3 percent of large banks 
always hold funds. 

Forty-two banks provided comments on retom item notification. About one in three were satisfied 
with the present system, but others proposed changes or made critical conmients. For example, survey 
participants dted the need to enforce penalties for &ilurc to notify or for delays in notification, the 
desirability of mandatory use of Fedbne for large checks, and the benefits of lowering the S2,500 
limit. One banker observed that 'fiaud often [occurs] with items just below the S2,500 limit." 

£. CHECK FRAUD LOSSES 

Most survey participants e:q>erienccd losses attributable to check fiaud in 1993. The extent of such 
losses increased with bank size. Data on the number and dollar amount of check fiaud losses showed 
considerable variation from bank to bank. Community banks and mid-size banks suffered more losses 
as paying banks, while large banks had more losses as banks of first depoat. 

1. 1993 Check Fraud Losses 

Check fiaud losses were rqxined by 54.0 percent of community banks, and even more frequently by 
mid-size banks (94.0 percent) and large banks (88.0 percent). By region, banks in the Northeast were 
hit most frequently (83.0 percent), followed by the West (76.0 percent) and the Southeast (69.0 
percent). 



Awricm B»nk»n A$»ocmtion „ 1994 Cti0ck Fraud Survty 



237 



FIGURE 1: BANKS REPORTING 1993 CHECK 
FRAUD LOSSES 

Percentage of Banks 




Less Than 500 500-4.999 5.000 or More 

Bank Assets in Millions of Dollars 



Percentage of Banks 



100 



80i 



60-1 



40- 



20- I 




Northeast Southeast Central Midwest Southwest West 

Region 



1994 Ctttek Fraud Surv0y 



238 



Id total, 162 of the 208 banks (77.9 percent) v.ith check fraud losses provided data on losses. Some 
130 gave data as bank of first deposit, and 120 gave dau on losses as the paying bank. The tosses 
in each category are discussed below. 

Ninety-five conununity banks reported a median of 4 cases per bank and lost a median of Sl,728 per 
bank in 1993, 50 mid-size banks reported a median of 28 cases and a median loss of S37,443 per 
banJc Large banks had the worst experience, with a median loss of S387,211 repotted by 17 banks 
for a median of 210 cases of fraud. 

Seventy- three community banks had a median number of 2 fraud cases as banks of first deposit, with 
a median loss of SI, 000 per bank; and 64 community banks reported 4 cases of fraud as paying 
banks, with a median loss of SI, 466 per bank. 

Forty-five of the mid-size banks rcponed a median of 13 fraud cases as banks of fim dq>osit, with 
a median loss of 519,500 per bank. In addidon, 40 mid-size banks reported 20 cases of fraud as 
paying banks, with a median loss of S14,500 per bank. 

Tweh^ large banks incurred a median of 162 fraud cases as banks of first deposit, with a median loss 
of S374,681 per bank. Also, 16 large banks reported 81 cases of fraud as paying banks, with a median 
loss of S256,381 per insdtution. 

The variation from bank to bank in check fraud losses was substantial. As banks of first deposit, 
community banks incurred losses ranging from S97 to S71,157, and from S90 to 5138,842 as paying 
banks. Mid-size banks reponed losses as banks of first deposit of between S208 and S400,000 per 
institution, and as paying banks of between S820 and S3 10,000. Large banks experienced check fraud 
losses in the millions of dollan in 1993. They indicated losses from S1,000 to S63.8 million per 
institudon as banks of first deposit, and from Sll,270 to S13.7 million as paying banks. 

2. Indnstry Losses from Check Fraud 

Industrywide, check fraud was estimated at 1,267,000 cases in 1993, a 135.9 percent increase wiien 
compared with 537,000 cases in 1991. Total losses from these fiaud cases was S815 million, up from 
$568 million in 1991 (a 43.5 percent increase), but losses per case declined from Sl,058 in 1991 
to S643 in 1993. These results show more frequent instances of check firaud, with each instance 
involving less money. 

3. Sources of Check Fraud Losses in 1993 

Most 1993 check fiaud losses came from retail accounts or coiporate accounts, as exposed to internal 
fraud or other sources. A total of 153 banks reported losses from retail accounts, and 76 banks 
r^orted losses from corporate accounts. In contrast, only 18 banks repotted losses involving their 
own employees or bank-related personnel, «^e another 18 banks attributed losses to "other" 
sources. 

The median dollar loss from retail accounts was $1,674 per bank for community banks, $30,612 for 
mid-size banks, and $310,369 for large banks. The typical amount lost from corporate accounts was 
$1,020 per bank for community banks, 59,081 for mid-size banks, and $218,800 for large banks. 
Aldiou^ check fiaud cases linked to retail accounts outnumbered those linked to corporate accounts, 
the dollar amount of each case was generally higher for corporate accounts ($1,000 or more each) 
than for retail accounts (about S500 each), as was expected. 

AmvieanBank»nA*toemlion o 1994 Om* Freud Surwy 



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Typical losses due to internal fraud were 52,994 per bank for mid-size banks and $60,513 for large 
banks. None of the community banks reported losses due to internal fraud in 1993. Losses stemming 
from "other" sources ranged from $3,506 per bank for community banks to $930,416 for large 
banks. Mid-size banks reported a typical loss of $31,750 per institution. 

4. Losses from Government Checks 

Most banks did not nqjort check fraud losses from government checks in 1993. Of the 208 banks 
with check fraud losses, only 54 banks reported any losses from U^. Treasury checks (26.0 percent), 
and even fewer rqxirted any losses from sute government checks (32 banks, or 15.4 percent) or local 
government checks (14 banks, or 6.7 percent). 

Losses due to government checks amounted to a median of 15 percent to 20 percent of fraud losses 
for community banks, and 2 percent to 6 percent for mid-size and large banks. 

5. Types of Check Fraud 

Check fraud can be perpetrated with forged signatures, forged endorsements, check kiting, or 
counterfeit checks. A paying bank and a bank of first deposit face dififcrcnt risk exposures. Few survey 
participants were able to provide detailed information about the source of their losses for 1993, such 
as losses on-us/non-on-us, kiting versus counterfeiting. These banks were asked about their ability 
to provide detailed check fraud information in the fiiturc. Most said they were not sure if they would 
be able to provide better information, or would not be able to do so. Less than 35 percent indicated 
that they would be able to provide detailed check fraud informadon in the future. More community 
banks are expected to be able to provide information (38.1 percent) ±an large banks (15.8 percent). 
Tracking check fraud by the perpetration medhod would help banks identify weaknesses in their check 
processing procedures and would thus assist in the development and implemenution of effective fraud 
control mechanisms. 

6. Organized and Professional Fraud 

Organized and professional fraud continued to be major concerns for mid-size and large insdtutions. 
Much more organized fiaud was cited by large banks (79.2 percent) and mid-size banks (48.4 
percent) than by community banks (7.6 percent). Large banks also attributed a much higher 
percentage (50.0 percent) of check fraud losses to organized or professional efforts than did 
community banks (25.0 percent) or mid-size banks (17.0 percent). 

7. Losses from Certified Checks, Cashier's Checks, and Teller Checks 

Few banks rqmrted losses from returned certified checks, cashier's checks, or teller checks for which 
fiinds must be made available the next day following dq)Osit under Official Check Availability 
Requirements. More than 95 percent reported no check fraud losses under these categories. The 
differences in the reported rates of loss for commtmity banks, mid-size banks, or large banks were not 
statistically significant. 

8. Fraudulent Checks in Various Account Age Categories 

On retail accounts, many banks rq>orted that fraudulent checks were dq>osited in relatively "new 
accounts." Indeed, 16.5 percent to 41.9 percent of fraudulent checks, depending on bank size, were 
deposited in accounts open less than 30 days. 



Ammriem BmAmn A—odmdon . - ^994 Chuck Fraud Survy 



242 



However, over one-third of fraudulent checks on retail accounts were deposited in accounts open for 
more than 1 year. Differences between community banks and mid-size or large banks were not 
statistically significant 

Similar results were found for corporate accounts. While 11.3 percent to 36.4 percent of fraudulent 
checks involved corporate accounts open less than 30 days, another 40.2 percent to 64.6 percent 
involved corporate accounts open more than 1 year. 

In 1993, higher prc^rtions of fraud were linked to banks' established accounts (retail accounts, 43.9 
percent; corporate accounts, 40^ percent) than in 1991. 

9. Did Rtgulation CC Increase Exposure to Check Fraud Loss? 

Opinions were mixed about wbe±er exposure to check fraud losses increased due to the 
implementation of Hegulation CC. More of the mid-size and large banks saw problems widi 
Regulation CC dian community banks. While 67.6 percent of mid-size banks and 54.5 percent of 
large banks said that they &ced significantly or somewhat more exposure to losses because of 
Regulation CC, only 28.1 percent of community banks rq>orted more exposure to losses. Instead, 
more community banks reported either no change (40.7 percent) or no basis on which to judge 
(31^ percent). One of the concerns voiced by survey participants related to notification of problems 
and returned items. The conflict was evident fivm written comments. Bankers said that they needed 
to be notified sooner and that there were problems with banks diat did not notify. Others 
commented that diey received an item before notification or on the same day. The need for ABA to 
communicate with regulators about these problems was apparent Some of the proposed 
improvements included better enforcement of notification standards and longer bold times. 

10. Bisected Fraud Loss Exposure in die Future 

Opinions were also mixed about whether fiiture check fraud losses would increase, decrease, or stay 
the same. This question was posed with respea to three categories: (1) counterfeits, (2) organized 
attempts, and (3) other conditions. 

Many banks think e3q>o$ure to counterfeits will increase in the next 12 months, and they expea an 
increase due to organized attempts. Fewer banks expea losses to increase because of "other" 
conditions. Large banks in particular foresee an increase in exposure to counterfeits and organized 
attenq>ts. For instance, 73.0 percent of large banks and only 25.0 percent of community banks expect 
an increase in exposure to counterfeits. Similar expectations were found for organized attempts. 

F. FRAUD INSURANCE AND OTHER PRECAUTIONS 

1. Insurance Coverage Against Fraudulent Checks Deposited 

Community banks (73.8 percent) were more likely to cany insurance coverage against losses from 
fraudulent checks deposited (74 percent) than mid-size banks (62.7 percent) or large banks (51.9 
percent). The difference between conununity banks and large banks was statistically significant. The 
risk potential for check fraud was heavily concentrated at mid-size and large banks, where insurance 
coverage and fraud prevention must be balanced to be cost effective. Most institudons included the 
coverage against firaudulent checks under a Financial Institution Bond (FIB), carried either by the 
bank or the holding company. 



4m*rfean SwiJr«rs Auodatlon . - »»•* Ch»ck Fnud Sunny 



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Survey results suggested that banks ultimately bore the losses from check fraud. In most cases, loss 
totals were less than insurance deductible amounts. 

2. Bank Functional Areas Ad d ressing Check Fraud 

Most banks have already allocated resources to internal funcdons in an attempt to reduce check fraud. 
R£sources were allocated primarily to operadons, followed by audit/invesdgadon funcdoiu, systems, 
and, to a lesser extent, produa management Large banks were much more likely to provide funding 
to internal functions for check fraud prevendon than community banks. For example, 75.8 percent 
of large banks allocated resources to operadons, compared with half the proportion (39.7 percent) 
of community banks. Audit/invesdgadon efforts to control check fraud were supported by 69.7 
percent of lai^ banks versus 23.6 percent of community banks. Many community banks indicated 
that the most effective method of fraud control was customer recognition. The relative few fraud 
cases reported by community banks suggest that adequate attention and resources had been devoted 
to the check fraud issue at these banks. 

3. Positive Pay Service 

Most mid-size and community banks had not adopted a positive pay service for their coipotate 
customers. Among mid-size banks, 83.1 percent were not actively marketing this service and had no 
plans to do so in the next 12 months. Among community banks, 96.0 percent did not market a 
positive pay service nor planned to do so. Large banks were the exception. More than half (54.5 
percent) of large banks already marketed a positive pay service. At these banks, an appreciable 
proportion (30.3 percent) of corporate customers migrated from standard disbursement- 
reconcilement service to a positive pay service in the past 12 months. 

4. Metiiods Used to Educate Bank Customers 

Banks employed various methods to educate their corporate customers about their responsibilities for 
preventing check fraud. Statement suffers were the primary medium of education, regardless of bank 
size. Community banks were most active; almost two in three (65.3 percent) used statement sniffers, 
as did one in two mid-size banks (53.6 percent) and large banks (54.2 percent). Mid-size (35.7 
percent) and large (41.7 percent) banks also used seminan or workshops. Fewer banks used bulletins, 
newsletters, or other media to communicate with their corporate customers on check fraud issues. 

5. Do Corporate Customers Understand Their Kesponsibilities for Preventing Check FraudJ 

The need for customer education became obvious because only about half of the banks believed that 
their corporate customers understood some or all of their responsibilities for the prevention of check 
fraud. Less than 1 in 5 banks believed that corporations had a thorough understanding of their 
responsibilities. Indeed, many banks asserted that cotporations were cither unaware of these 
responsibilities or in denial, i.e., they did not believe that they had any responsibilities to prevent 
check fraud. This pessimistic assessment was gjven by banks of all sizes. 

6. Amounts Devoted eo Check Fraud Prevention, Detection, Investigation, and Prosecution 
in 1993 

The amount of money that banks devoted to combat check fraud in 1993 varied as a direa function 
of bank asset size. Community banks typically spent less than S10,000 and mid-size banks between 
S10,000 and 8250,000 for check fraud prevention, detection, investigation, and prosecution. 

American B»rA»nA;oeiation ^j 1994 Clm* Fnud Survey 



247 



The majority of large banks surveyed (57 J percent) devoted under $250,000 to the check fraud 
issue. About 1 in 10 (14.3 percent) spent between 5250,000 and SI million, and a large proportion 
(28.6 percent) spent more than SI million in 1993 on check fraud and related expenses (not 
including actual losses). 

7. Tracking the Bcsults of Check Fraud Prevention 

Most banks did not measure their check fraud prevention results, although this difTers by bank size. 
Thus, 85.6 percent of community banks and 80.3 percent of mid-size banks do not track these 
results, nor did they plan to do so in the next 12 months. In contrast, over half of the large banks 
(54.6 percent) currently tracked or planned to track their check fraud prevention results. 

The benefits of tracking were amply demonstrated by the data furnished by a small group of survey 
participants. Nine large banks identified a median number, 155 cases, of check fr^ud attempts in 1993 
where no loss was sustained, but with a potential median loss of $1,162,461. The attempts reported 
by large banks had a range of potential losses from $68,000 to $6,340,000 per bank. Sbcteen 
conununity banks found a median of 8 cases of potential fr^ud, which could have cost $2,350 per 
bank. Eight mid-size banks tradxd their prevention results and identified a median of 34 cases of 
potential check fraud, with a potential cost to each bank of $56,500. 

8. ^preaches Taken to Prevent Check Fraud Losses 

Banks took many actions to prevent check fi^ud loss. Action cited most frequently was employee 
training for firont-line personnel, managers, and/or backroom personnel. Other popular initiatives 
included account screening, signature verification, and deposit review. Many banks verified 
questionable or irregular items such as signatures and check stock, or phoned customers to verify 
large dollar amounts. Fewer banks converted to electronic payments, such as debit cards, or used 
applications software to control check fraud Even fewer considered Electronic Check Presentment 
or image procesang as a means of preventing check fraud. 

Only a small proportion of survey participants required corporate customers to use positive pay service 
or non-laser-printed checks, or specified check stock security features for their corporate amomers. 
Large banks were more likely than smaller banks to take these steps. 

Indeed, large banks and mid-size banks inq>lemented several approaches to reduce their exposure to 
losses. For example, most banks conducted employee training, or used software ^plications, 
verification/callbacks, and Electronic Check Presentment to control fiaud. Their efforts paid off, 
according to the banks that monitored fraud prevention outcomes. 

9. What Actions Are Most Important in Addressing ifae Issue of Check Fraud? 

Bankers agreed that employee training was by bi the most important aspect in addressing the check 
fraud issue. Bankers dted next in importance customer education about bank fraud, and 
communicating with regulators about check firaud problems/availability schedules. They ranked next 
a check fiaud prevention procedure manual, followed by communication with peers regarding check 
fraud in seminars/workshops/conferences. Finally, bankers dted audits, standardized procedures to 
track and monitor check fraud losses, and the confidential exchange and compilation of loss daa. 
Survey particq>ants ranked conversion to Electronic Check Presentment low in priority. 



AfiMfican Bmnk^n Attedation . g »»W Ch«* Frmid Sumy 



248 



G. ABA ASSISTANCE 

Communication with regulators is the most valuable service ABA can provide to banks as they cope 
with check fraud problems and availability schedules. This assistance appealed to 54.0 percent of 
community banks, 64.9 percent of mid-size banks, and 85.0 percent of large banks. This difference 
was statistically significant because larger banks want this assistance more than community banks. A 
check fraud prevention procedure manual was requested by over half of all banks. 

Community banks (42.0 percent) needed seminars/workshops/conferences significantly less than did 
mid-size banks (64.9 percent) and large banks (60.0 percent). Community banks and mid-size/large 
banks differed significantly on two other services. Fewer community banks wanted ABA to provide 
confidential exchange and compilation of loss data (32.0 percent) than did mid-size banks (62.2 
percent) and large banks (60.0 percent). Also, only 32.0 percent of community banks wanted ABA 
to establish standardized procedures to tnck and monitor losses, compared to 56.8 percent of mid- 
size banks and 65.0 percent of large banks. 

Community banks wanted ABA to help with employee training (52.0 percent). However, this service 
appealed to only 37.8 percent of mid-size banks and 30.0 percent of large banks, where such training 
might already be in place. 

About 4 out of 10 banks of all sizes requested assistance in educating bank customers. More large 
banks (30.0 percent) wanted ABA to help with conversion to Electronic Check Presentment than did 
community banks (6.0 percent). 

Few banks requested help fi-om ABA with audits: only 6.0 percent of community banks, 16.2 percent 
of mid-size banks, and 15.0 percent of large banks. 

Survey participants were asked to describe the actions they have taken and the solutions they have 
found for check fraud prevention. Almost 90 comments discussed methods used to avoid or reduce 
loss: 

(1) Initial and periodic/continuous training to increase "teller awareness;" 

(2) A multi-tier system of check review processing, such as different processes for different amounts; 

(3) Signature verification by methods from signature files to fax/on-line verification; 

(4) Conservative procedures for opening new accounts, for example, requiring references and/or 
valid sute IDs, conducting credit bureau checks, sending letters to verify addresses, using the 
CH£X and NCPS systems; and 

(5) Plans to start/promote debit card programs, applications software, and kiting reports. 

Twenty-seven banks also made general comments on controlling check fraud. Suggestions included 
a method to control unauthorized paper drafc and ATM fraud, new regulations on check printing 
vendors and the hardware/software used to print laser checks, extending the bold time on local 
checks, and methods to control new account fraud. Two banks requested a uniform statistical 
reporting system. Othen commented that they do not keq> records on the items in the survey. 
Several banks stressed the importance of vigorous prosecution, but the problem of collecting 
restitution was also dted. One banker indicated the benefit of training front-Une people as the "best 
preventive measure.* 



Amtriean Bankmn A»9odation -o 1M4 Chtek Fnud Sunny 



249 



IV. RECOMMENDATIONS 

The following Fccommcodatioas arc provided for consideration: 

1. Distribute information to aU ABA members on the positive acdons taken by banks to reduce 
check fraud. 

2. Communicate with regulators about check fraud problems identified by surve>' pardcipants. 
Provide the member services most requested, for example, a check fraud prcvendon procedure 
manual. 

3. Target the services to banks by asset size where differences exist, for example, employee training 
for community banks, scminars/workshops/confcrences for mid-size and large banks. 

4. Promote standardized check fraud tracking procedures. Establish a cUubase to monitor losses 
from check fraud and compare these losses to insurance coverage and recoveries and to total 
check volume. This service appealed in pardcular to mid-size and large banks. 

5. For future surveys on check fraud, design a simpler form for communitv' banks to complete 
because many community banks do not keep the detailed dau sought, nor do ±cy cxpca to 
be able to provide detailed informadon in the future. 



250 



Attachment 2 



1995 BANK CARD INDUSTRY SURVEY REPORT 



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254 



ABA 


BAXK SECURITY 


F r a u d 


Prevention 



EXECUTIVE SUMMAKSr 



New SAR Released 

Federal regulators have 
finalized the new Suspicious 
Activity Report, which will 
replace the old Criminal Referral 
Form system. 

Banks only have to file the 
new form with one agency — 
Treasury's Financial Crimes 
Enforcement Network 
(FinCEN). Supporting 
documentation is retained by 
the bank and must be kept only 
five years instead of 10. 
Thresholds for mandatory 
reporting have been increased. 

The rule that implements 
the new form is effective April 1 . 
Regulators vAW send banks 
software to put the new system 
in place. 

Watch Out for These 
Scams 

 Federal regulators have 
learned of a scheme whereby 
banks are receiving fraudulent 
certified banker's checks and 
notes and controller's 
warrants of up to a million 
dollars. The checks are 
supposedly payable at United 
States Post Offices, the 



Treasury Department and the 
Office of the Comptroller of 
the Currency. A few banks 
have suffered substantial 
losses. 

^ The Securities and Exchange 
Commission has put out the 
word on an investment scam 
that has cost some insurance 
companies millions of dollars. 
The elaborate scheme was 
started by several fraudulent 
brokerage companies which 
claim to be able to buy and 
sell Treasury bilk to generate 
profits far in excess of interest 
rates. The companies then 
misappropriate the funds in 
several ways including check 
kiting. Regulators are 
concerned that the banking 
industry may be the next 
target. 

Travel Rule Update 

Comptroller of the Currency 
Eugene Ludnig has informed 
banks that they do not have to 
comply with the April 1 effective 
date for the new funds transfer 
travel rule until changes in the 
Fedwire are completed. 



Temporary Rule on CTR 
Exemptions 

FinCEN announced at a 
recent meeting that it will 
publish a temporary rule that 
will allow banks to exempt close 
to three million CTRs from 
being rep>orted to the IRS. The 
agency also said it will propose a 
rule to exempt another six 
million. 

Debit Card Study 

Events over the last several 
years have alerted banks to the 
threat of massive debit card 
counterfeit fi^ud. 

Recognizing the seriousness 
of this exposure, executives of 
leading regional networks asked 
the consulting firm Card Alert 
Services, Inc. (CAS) to perform 
a nationwide sDjdy of the 
problem. This study defines and 
quantifies the problem and 
recommends an appropriate 
course of action. CAS completed 
the study in early 1995 and 
published a report entided 
"Debit Card Fraud: A National 
Perspective." ABA has published 
a form of that report. 



Volume 3/Issue 1 



January 1996 



255 



ABA BANK SECURITY 

& ; 

Fraud Prevention 



?^ 



AMI KICW 
liAXKKKS 

ASSOIIAI ION 



January 1996 
Volume 3/lmtt 2 



NewsBrie& 

Streamlmed 

SARReport I 

TimdySAS. 

Scmbnr 1 

Aiert: Fraudulent 

Ctrtificd Cbecks . 5 

ABA Ta^ Force » 

Address Paynu3>t Risk ..7 
Qectroak Sttperfaii^nmy; 

Tnrffic Rides .... J' 

Melnikoff at Foreijg^ 

Conference 9 

Spcckl In-Depdi Feature 
Mana^ng "Debh Card 

RBk(partl) . .. . .. . .«2 

Debit Card ftaud 

Scenarios . .8 

Wa^ington Rcp<»t 
BSAAdviscHy GbRKip, 
newSAR & more .... .6 

Secnrity Frcriuct 
XxHtodup 10 



New Suspicious Activity Report 
Streamlines Reporting System 



Federal regulaton finalized 
and released the long-awaited 
new Suspicious Activit>' Report 
in February. 

The SAR replaces the filing 
of Criminal Referral Forms and 
streamlines the reporting 
system. The rule that 
implements the ne«' form is 
effective April I, and all banks 
uill receive software to prepare 
SARs on computer and file them 
by magnetic media. 



The new system combines 
FinCEN's suspicious activity 
reporting with other agencies' 
criminal referral processes. 
Previously banks could submit 
Currency Transaction Reports 
along with CRFs. 

Banks only have to file 
SARs with FinCEN instead of 
multiple agencies. All 
supporting documentation is 
retained by the institution 

CoHttHutd en page 5 



Timely Workdiop: 

How to Complete New 
Suspicious Activity Report 



In three different cities, ABA 
will conduct a four-hour 
workshop which will take you 
seep-by-step through the new 
Suspicious Acti\it>' Rc[x>rt, tell 
you what new crimes are now 
covered, as well as who must 
report them and when! 

Banks are still required to 
file reports of known or 
suspected criminal and 
suspicious activities to the 
government. 



The new reporting 
mechanism will be a Suspicious 
Activity Report (SAR) which 
replaces the filing of Criminal 
Referral Forms (CRFs). 

The rule goes into effect 
April 1, 1996 and all banks will 
receive software in order to 
prepare an SAR on a computer 
and file it by magnetic media. 

This new system simply 
requires one filing with 

Centinutd »n page 11 



American Bankers Association 



256 



ABA BANK SECURITY 8c FRAUD PREVENTION 

Building an Effective Debit Card Risk 
Mana£fefnent Program 

by Douglas D. Anderson, chairman, and Richard H. Urban, 
president of Card Alert Services 



Editor's Note: 

Over the past several years, events awakened the banking 
industry to the threat of massive debit card counterfeit fraud. 
Recognizing the seriousness of this exposure, executives of leading 
regional networks (Cash Station, CU CO-OP, HONOR, MAC, 
MOST, NYCE, PULSE, STAR, and TYME) asked Card Alcn 
Services, Inc. (CAS) in late 1994 to perform a nationwide study of 
the problem. This study would define and quantify the problem, 
gather the insights of banken around the country, and recommend 
an appropriate course of action. CAS completed this study in early 
1995 and published a report entided "Debit Card Fraud: A 
National Perspective." ABA has published a condensed form of 
that repon in its Retail Delivery Strategies publication. The 
following article contains some of the information and 
recommendations made in chapter four, which covers how to 
create an effective debit card risk management program. 



'ATMs are dead' 

This highly sensational but 
misguided statement was made 
in November 1993 by a 
disguised personal computer 
desperado before the cameras of 
an American Journal video 
report. 

The setting was an 
international hackers' 
symposium in Amsterdam where 
among the lessons PC 
aficionados were taught was how 
to defraud automated teller 
machines (ATMs) via electronic 
intrusion and intervention. 

The statement was made six 
months after the highly 
publicized Buckland Hills, 
Conn., caper in which two 
criminals defrauded hundreds of 
bank customers using a fake 
ATM. 

The symposium took place 
around the time that "shoulder- 
surfing," was beginning to take 
off (see the October and 



November 1994 issues of Bank 
Security and Fraud Prevention). 

Because of these and other 
events, bankers were becoming 
iiKreasingly aware of the risk the 
industry faces. 

They also showed the 
industry that while its personal 
identification number/data 
encryption standard (PIN/DES) 
has constituted a strong first line 
of defense, it has some limits. 

A recent scam against MCI 
proved further that more 
sophisticated fraudulent 
methods, including insider help, 
can be employed to commit 
major crimes against 
corporations. 

In that case, a PC hacker 
from Majorca, Spain, along with 
an MCI insider in North 
Carolina, obtained in a few 
weeks 160,000 calling card 
numbers and personal 
identification numbers (PINs). 

The cards were then 
"trafficked" on the street, 



resulting in estimated losses to 
MCI, AT&T, and Sprint of 
SI 50 million. It is possible that 
such a major scam can happen in 
the banking industry. 

To guard against this 
[wssibility, bankers and the 
banking industry in general need 
to take a cohesive approach that 
includes action by both 
individual banks and by the 
industry in general. 

The debit card problem 

Most U.S. banks define 
debit card fi-aud in terms of 
traditional fiaud — lost or stolen 
cards and fraud perpetrated by 
femilies, friends and neighbors. 

The evolution of debit card 
counterfeiting over the past two 
years, however, has transformed 
debit card fi-aud from a low- level 
"nuisance" cost of doing 
business to a jKitentially serious 
industry problem, with 
significant consequences in store 
for the coming years. 

The problem includes on- 
line fraud, the misuse of 
automated teller machine cards 
(ATMs) or Visa/MasterCard 
debit cards with PINs to obtain 
cash at ATM and point-of-sale 
(POS) cash-back locations and 
off-line fraud. 

The latter refers to 
fi-audulent purchases with 
Visa/MasterCard debit cards at 
locations not able to facilitate 
PIN identification. 

Cardholders now can use 
debit cards in millions of 
merchant locations worldwide 
where no capability exists to 



American Bankers Association 



January 1996 



257 



ABA BANK SECURITY & FRAUD PREVENTION 



identify die cardholder 
electronically and where, in 
many cases, transactions arc not 
authorized. 

While many of these point- 
of-sale terminals are technically 
"on-line" to an authorization 
system, no merchants except 
those offering cash back on a 
debit card, ask for and validate 
customers' PINs. 

So for, counterfeit debit card 
fraud activity has been isolated 
to certain geographic markets. 

However, these first stage 
counterfeit schemes will likely 
^read to other geographic 
markets. 

Almost all counterfeit 
activity encountered to date has 
been relatively "low tech" in 
nature, also. 

But as more and more fraud 
management defenses such as 
truncation (eliminating a 
portion of the card number on 
customer receipts) are 
constructed, the cnminals 
perpetrating counterfeit fraud 



will be forced tf) move up the 
technology curve to obtain the 
necessary information for 
counterfeiting cards. 

The result will be more 
sophisticated fraud Khemes and 
a much higher exposure for the 
financial services industry. 

Developing risk 
management programs 

To address this growing risk 
effectively, industry action in 
two areas is needed. 

First, individual banks need 
to take specific actions to shore 
up traditional defenses against 
fiaud. 

Second, the industry as a 
whole needs to take initial steps 
to build a common defense 
against counterfeit fraud. 

In the February issue of 
ABA Bank Security & Fraud 
Prevention the authors will 
dcschbe several ways in which 
debit card security is being 
compromised in banks and at 
POS locations. 



And, they will recommend a 
number of safeguards that 
banks can install to reduce their 
exposure to losses from debit 
card fraud and counterfeiting. 

Editor's Postscript 

The industry has taken a 
significant step forward tovard 
building a common defense 
against counterfeit fraud. 
Through Card Alert Servius, 
Inc., an early detection and 
control service has been developed 
and is scheduled to be 
implemented by early second 
quarter, 1996. 

At the time of this writing, 
more than 40 major banks 
throt^ghout the country, with 
approximately 60 million cards 
outstatulit\g (40% of the total 
U.S. debit card base) have 
committed to participate. To 
learn more about this project, 
contact Card Alert Servius at 
(709)486-1122.0 



Ones That Get Away 

You don't want these fish to 
bite. 






We want to bear from 
you. . . 


The Oregon Bankets 
Association observed recently 
that numerous financial 


Got an idea for 


institutioiu in the past year have 
found evidence of people using 
hooks and fishing line to 
attempt to lift hags placed in 
night-deposit boxes. 

Contact your bank's service ^^^' 


a news story or 

article? 
Call or e-mail 


rerpresentative to see if your 
night deposit can withstand 
fishing. 

If it can't, ask about devices 
that can be added, says Doug 
Kidder of the OBA. (reprinted 
with permission of ABA 
BankersNews) 


u 




your editor. 

Hunter Moss 
(202) 663-5071 
IN 1 bRNET: 
hmoss@aba.com 



January 1996 



American Bankers Association 



258 



ABA BANK SECURITY 6c FRAUD PREVENTION 



ATM Security 
Banker Resource Kit 



^^ 



AMI Kl( \\ 
HAXKKKS 

ASSOC I \l U)N 



Protect your ATM customers 
...as you protect your bank! 

The increase in ATM crime continues to threaten 
your customers' safety.. .and your bank's security. 

But you can fight bacl< with the useful set of tools 
included in this new Banl<er Resource Kit from ABA's 
Center for Banking Information (CBI). 

You'll get 

 Articles on ATM security from recent periodicals 
gathered from CBI's exhaustive database 

 A list of Customer Safety Tips to distribute to 
your customers or present to community groups 

 Suggested guidelines for ATM security 

 A review of existing case law and current 
legislation from ABA's legal staff 

 A sample public relations packet to help you 
respond to media inquiries about your ATM safety 
program 

 Information on ATM networks and on programs 
conducted by various state bankers associations 

 Information on related ABA products and 
programs You can get this versatile, cost effective, 
and immediately useful information only from ABA. 




Order your ATM 
Security Banker 
Resource Kit today! 

ATM Security: A 
Banker Resource Kit - 
$55 ABA member. 

$75 Non-member. 

For more information 
or to order: Call ABA 
toll free at 1-800-338- 
0626, ext. 5384 or 
(202) 663-5384. 

Internet address: 
hmoss@ABA.com 



American Bankers Association 



January 1996 



259 



ABA BANK SECURITY 8c FRAUD PREVENTION 



'SAR'from pagt 1 
instead of filing all 
documents with the entities 
that will receive the SAR. 
The final rule also reduces 
the time banks must keep 
SAR information to five years 
fi-om the previously required 
10 years. 

Increased threshold 

A major change in filing 
requirements is the increased 
threshold for mandatory 
reporting. They now are as 
follows: 

 S5,000 for violations where a 
suspect can be identified. 

 $25,000 for violations 
without a suspect. 

 55,000 for suspeaed money 
laundering and Bank Secrecy 
Act violations. 

Banks still must file SARs 
for any suspected insider abuse. 

Look for John Byrtie's column 
in the next issue for more 
information and analysis. O 



Fraudulent Certified Bankers 
Checks Have Caused Major Losses 



Federal banking regulators 
have been alerted that banks are 
receiving fi^udulent certified 
banker's checks and notes, and 
controller's warrants supposedK' 
payable at United States Post 
Offices, the Treasury 
Department and the Office of 
the Comptroller of the Currency 
(OCC). 

The checks are without 
financial value. In many cases 
the checks are written for 
hundreds of thousands of dollars 
and in several reported cases, 
millions of doUats. 

A few banks have suffered 
substantial losses by accepting 
the instruments. 

From the bankers 
perspective 

E>aniel P. Stipano, direaor of 
Enforcement & Compliance, 
OCC offers tfiis advice: 



Who within a bank should 
be looking for these checks? 

Anyone dealing with 
certified checks and notes or 
controller's warrants, including 
tellers and payments proccssmg 
personnel. 

What can bank employees do 
if they see such checks? 

^ Contaa local law enforcement 
such as local police or the 
regional FBI office. 

 Contact federal law 
enforcement officials. 

^ File a Criminal Referral Form 
or the new Suspicious Activity 
Report when it becomes 
available. 

 Send a fax to OCC office at 
(202)874-5301.0 



Banks Next Targets of Ijivcstmcnt Scam? 



The Securities and Exchange 
Commission recently alened the 
banking industry of a scam now 
afTecting the insurance industry 
that has the potential to spread to 
banking. 

Fake Treasury bill transactions 

In several cases now being 
pursued by law enforcement, 
brokerage companies bilked 
in\xstors out of tens of millions of 
dollars by claiming they could buy 
and sell Treasury bills in such a 



way as to generate profits hi in 
excess of interest rates. 

To lull investors into believing 
the investments were safe, the 
brokerage companies used false 
confirmations and communications 
ftom stock brokers. 

The money received for the 
fraudulent investments was then 
misappropriated in a number of 
ways including check kiting pay- 
off and real estate purchases. 

The scheme b fairly elaborate 
so tracking it down has taken 
several years. 



Money moved to foreign 
acfonntf 

In the mean time, even though 
the SEC has begun prosecution of 
suspects (SEC v. Robert C. Wilson, 
Gary F. Long, Samuel L. Boyd and 
Debenture Guaranty Corp., 
U.S.D.C., Colorado), some of the 
money has been moved to foreign 
accounts. 

For further information, 
contaa SEC's Office of Consumer 
Affairs (202) 942-7040. O 



January 1996 



American Bankers Association 



260 



ABA BANK SECURITY 8c FRAUD PREVENTION 



yyashin£fton 
report by 



John J. Byrne 



Snowbound — 
But We Can^ 
Sleep In 

Washington, D.C., has finally 
dug out of the worst snowstorm 
in years. And while we were 
getting all that snow, politicians, 
not to be outdone in the 
headline department, were 
engaged in the worst budget 
battle in years. 

The year has gotten off to an 
interesting start, and we must ask 
ourselves — what's in store in 
1996 for security officers.' As 
always, there is plenty going on 
to occupy our time. However, we 
should prepare ourselves for 
change. The following is a quick 
update on a few items on the 
front burner. 

BSA Advisory Group 

Treasury's Bank Secrecy Aa 
Advisory Group met Dec. 8, 
1995, for the sixth time. 
Comptroller of the Currency 
Eugene Ludwig welcomed 
committee members with 
remarks on the value of the 
regulatory reduction being 
finalized by FinCEN. 

Members then were briefed 
on a series of regulatory changes 
widely discussed by the industry 
in the past year. Several changes 



will directly result ui tremendous 
ccist savings and increased 
cfKciency for the banking 
industry. 

Delay of funds transfer 
travel rule: Many banks voiced 
concerns about the April 1, 
1996, effective date for the new 
fluids transfer travel rule. 

That rule would have 
required banks to incur new costs 
on April 1 AND additional new 
costs when the Fedwire changes 
its fonnat (expected in 1997). 

The New York Clearinghouse 
estimated that the costs for most 
banks would range from S2 
million to $3 million to comply. 
FinCEN agreed that these costs 
are prohibitive and announced to 
the BSA group that banks will 
not have to comply with all 
aspects of the travel rule until the 
changes to Fedwire were 
complete. As cf this writing, we 
are awaiting an official 
announcement from FinCEN on 
the maner. 

CTR exemption policy: 

In the ABA-supported 1994 
Money Laundering Suppression 
Act, Congress required FinCEN 
to create a new system for 
exempting currency transaction 
reports (CTRs). 

Simply put, the new system 
would allow an institution to 
cease filing CTRs on large dollar 
transaction filers such as major 
retailers. 

In addition, FinCEN was to 
create a system by which banks 
could permanently exempt 
entities that are of no interest to 
law enforcement. 

ABA put together a working 
group of bankers who met in 
Washington, D.C., in August to 
discuss various options with 
FinCEN. 



At tlic BSA Ad\nsory Group 
meeting, FinCEN announced it 
would pubUsh a temporary rule, 
effective immediately, that would 
allow banks to exempt close to 
three million CTRs from being 
reported to the IRS. 

FinCEN also said a notice of 
proposed rulemaking would be 
published that would eliminate 
another six million CTRs. Look 
for details soon on those events. 

The industry is cleaity getting 
a major reprieve from a rather 
burdensome reporting 
regulation. 

TheNewSAR 

Another change in BSA- 
relatcd re(>orting has just been 
released (see related story on 
p. 1 ): the new Suspicious Activity 
Report. 

This form, an improvement 
to the 10-ycar-old Criminal 
Referral Form, will allow banks 
to file reports on suspected 
violations of federal criminal law 
to one agency — FinCEN. 

The change will save the 
industry at least half a million 
dollars, as well as improve all 
aspects of the reporting system. 

ABA has long sought a 
method such as this one — as 
opposed to the current 
requirement that six different 
agencies receive forms. 

International efforts: 

In addition to our extensive 
domestic efforts to deter money 
laundering, ABA also is 
committed to helping the U.S. 
government work with foreign 
nations to craft anti-money 
laundering laws and regulations. 

I have been fortunate to have 
had the opptortunity to educate 
bankers in other countries on 
methods by which we train our 



American Bankers Association 



January 1996 



261 



ABA BANK SECURITY & FRAUD PREVENTION 



bankers to detect ami rci^on 
fraiul aiut other law violations. 

Most recently, ABA W3S 
asked to attend a Financial Acbon 
Task Force (FATF) forum on 
financial services in Pahs in late 
January. 

The forum was developed to 
give the international private 
sector a chance to share views on 
money laundering vulnerabilities 
and countermeasures. 

ABA was represented by 
Boris Mclnikoff, senior vice 
president. First Wachovia Corp., 
and chairman of ABA's Money 
Laundering Task Force. 

He presented ABA's views on 
the long-standing FATF proposals 
and other issues. A summary of 
those points is in the accompanying 
news story on p. 9. O 



ABA Task Force Will Address 
Payment Risk 



ABA has formed a Payments 
System Task Force to address all 
elements of payments systems 
and technologies, including 
security issues. 

The task force will consist 
of executives of banks of all 
sizes. 

The first meeting will be 
held on February 15 and 16 
in Washington, D.C. 

Threats from Cybercash 

As part of that meeting. 
Treasury's Financial Crimes 
Enforcement Netn'ork and the 
U.S. Secret Service will present 
concerns about the security and 



money laundering threats that 
cybercash may present to the 
lution. 

The task force is being 
chaired by Murray D. Lull, 
president and CEO of Smith 
County State Bank and Trust 
Co., Smith Center, Kan. 

Specific 
Recommendations 

The task force's mission is to 
come up with specific policy 
recommendations following a 
series of meetings. 

ABA will keep readers 
apprised of what occurs. O 



Superhighway Traffic Rules 



As banks scramble to deliver 
the electronic services demanded 
by millions more customers each 
year, risk and security managen 
must be involved in the 
development of those products. 

"It is an on-line world," said 
Jonathan Palmer, chief retail 
banking and technology 
executive, Bamett Banks Inc., 
Jacksonville, Fla. 

When his bank introduced 
electronic banking, it recorded 
200,000 transactions in 1993. 
Last year, the number rose to 
more than 50 million. 

New 'hacker' risk 

However, innovations such 
as personal-computer banking 
and smart cards open up whole 
new areas of risk fi'om hackers, 
computer viruses and insider 
theft. 



Too often. Palmer said, 
products arc developed and 
marketed before bank risk 
managers and security 
professionals can look at them to 
avoid pitfalls. 

Caterina Lauri, product line 
manager, Fidelit>' and Deposit 
Co. of Maryland, in Baltimore, 
said: "More than ever in product 
development, it's most 
important that the team comes 
along together, including those 
looking at securit>- risks." 

Factors to consider 

Consider these risk- related 
fectors in developing electronic 
banking products, advises 
Stephen Katz, chief information 
security officer, CitiBank, N.Y.: 

 How do you verify who can 
use the product.' 



 How do you control the level 
and types of services available 
to each individual customer 

^ How do you ensure the 
privacy of the information? 

^ How does the customer 
"sign," or electronically 
authorize, a given transactioa' 

^ If something unauthorized 
happens, how quickly can the 
bank become aware of that 
event and take steps to 
minimize loss? 
These risk experts spoke at 

ABA's National Security, Audit 

and Risk Management 

ConferetKC last month. 

(reprinted by permission of ABA 

BankersNews) 

Look for timely coverage in 

the February issue of key 

security and risk issues presented 

at the Security Conference. O 



January 1996 



American Bankers Association 



262 



ABA BANK SECURITY & FRAUD PREVENTION 

Debit Card Fraud Scenarios Hi£fhli£fht 
Where Banks Can Fortify Defenses 



The following scenarios arc 
composites of a number of cases 
that have already occurred. They 
are not intended to describe any 
specific case. They are presented 
to illustrate the levels of 
compromise, how criminals 
adapt their techniques, and how 
the risk escalates. 

In these scenarios, the fraud 
evolves in a market where about 
50 percent of the debit cards are 
vulnerable to shoulder-surfing 
(i.e. usable, but fraudulent cards 
can be produced from receipts). 
The terms used in describing 
this "evolution of a fraud" 
include: 

 Point of compromise — the 
ATM or POS terminal where 
the access information (card 
number and PIN) are 
compromised 

 Point of fraud — the ATM or 
POS terminal where the 
fraudulent card is used to 
withdraw cash or purchase 
merchandise 

Level 1 compromise 

An individual standing near 
the terminal observes the entry 
of a customer's PIN and 
recovers the discarded receipt. 

The criminal uses the receipt 
information to encode a card 
and then defrauds the 
customer's account. The typical 
point of compromise is an ATM 
or POS terminal. The typical 
point of fraud is an ATM 
without a camera. While 50 
percent of the cards are at risk, 
cardholders are wary of someone 
observing them entering their 
PINs and, therefore, are less 



likely to discard the receipts. A 
typical yield to a criminal using 
this level would be three to 
seven fraudulent cards per 100 
transactions; the potential — 
tens to hundreds of cards. 

Level 2 compromise 

A criminal, in a nearby 
parked van, uses a pair of field 
glasses or a video camera with a 
zoom lens to observe the entry 
of the PIN and recover a 
customer's discarded receipt. 

The criminal uses the receipt 
information to encode a card 
and then defraud customers' 
accounts. Again, the typical 
point of compromise is an ATM 
or POS terminal, and the typical 
point of fraud is an ATM 
without a camera. While the 
same 50 percent of cards are at 
risk, cardholders do not realize 
they are being observed entering 
their PINs and are more likely to 
discard receipts. "Dims, the yield 
goes up — to 8 to 15 fraudulent 
cards per 100 transactions; the 
potential — hundreds to 
thousands of cards. 

Level 3 compromise 

A criminal uses a video 
camera to observe the entry of 
customers' PINs and colludes 
with a store clerk to gain access 
to the store's copy of customer 
receipts. 

The criminal uses the receipt 
information to encode cards and 
defraud the customers' accounts. 
The typical point of compromise is 
a POS terminal. The typical 
point of fraud is an ATM 
without a camera. While half of 
the cards are at risk, the camera 



is likely in a fixed position and 
will not be able to "see" every 
PIN entry. The yield to the 
crook may be 16 to 35 
fraudulent cards per 100; the 
potential — thousands to tens of 
thousands of cards. 

Level 4 compromise 

A criminal uses a video 
camera to observe the entry of 
customers' PINs, and the 
magnetic stripe data is skimmed 
from a tapped phone line or a 
secondary collection device. The 
criminal uses the skimmed 
information to encode cards and 
defraud customers' accounts. 

The typical point of 
compromise is a POS terminal. 
The typical point of fraud is an 
ATM without a camera. While 
all of the cards are exposed to 
risk, the camera will not be able 
to record every PIN. The yield 
to the criminal may be 60 to 70 
fraudulent cards per 100 
transactions; the potential — 
tens to hundreds of thousands of 
cards. 

Level 5 compromise 

The criminal invades a 
terminal or system node with 
invasive program code (insider) 
or uses a fake terminal (outsider) 
to compromise both PIN and 
card information. Most likely the 
points of compromise are POS 
terminals, ATM or POS terminal 
processors, networks or switches. 

The cards are 100 percent at 
risk and the yield is 100 
percent; the potential — 
depending upon the point of 
compromise, millions of cards! 



American Bankers Association 



January 1996 



263 



A B ABA NK SECURITY & FRAUD PREVENTION 



ABA 


?^ 


NEWS 


AMI KK AN 

HA\KhKS 

\SS(»( lAi ION 



Melnikojf Represents ABA at Foreign Conference 



The chairman of ABA's 
Money Laundering Task Force 
responded to a request b/ 
foreign financial entities to 
comment on what the U.S. faces 
and what U.S. bankers are doing 
to combat money laundering. 

Boris Meinikoff, senior vice 
president. First Wachovia Ck>rp., 
represented ABA and the U.S. 
banking industry at a Fmandal 
Action Task Force forum in 
Paris in January. 

Among issues he discussed 
were: 

ABA'S views on FATF 
recommendations 

Many of FATF's 
recommendations, including 
passing a law to criminalize 
laundering, suspicious activity 
reporting and due diligence 
procedures, have been 
implemented in the U.S. for 
many yean. 

Meinikoff commented that 
ABA remains committed to a 
need for policies requiring non- 
banking entities, as well as 
banks, to keep records and 
identify certain transactions. 

Need to Streamline 
Routine Transactions 

He also pointed out that 
while the U.S. banking industry 
has an excellent record of solid 
account-opening procedures (as 
outlined in FATF 
recommendations 9 to 14), 



which are stressed in employee 
training programs, it also 
recognizes the need to 
streamline and, in some cases 
eliminate routine transactions. 

". . . But the U.S. 
government and the Congress 
have already begun that process. 

Therefore, while we support 
having several of the U.S. Bank 
Secrecy Act laws being placed 
on all financial institutions 
throughout the world, changes 
and modification to those laws 
are also necessary." 

FATF recommendations 15 
to 29, which address suspicious 
transaction reporting and Know 
Your Customer policies, are also 
important procedures, Meinikoff 
stressed. 

"But we would stress that 
financial institutions MUST be 
protected fi'om dvil AND 
criminal liability for fiilfilling 
their responsibilities to detect 
and report unusual or 
potentially criminal violations as 
well as closing accounts on 
individuab who have acted 
contrary to law and regulation." 

Money Laundering 
Trends Changes 

One of the unintended 
efifects of renewed banker 
\igilance in the U.S. is that the 
method of laundering has 
shifted from traditionai financial 
institubons to other entities. 

For example, attention in 
the past several years has turned 



to firaudulent postal money 
orders and letters of credit, 
phony import/export businesses 
and other methods of 
laundering through intemationa! 
trade. 

These new trends can be 
discovered and addressed by 
continued private/public sector 
cooperabon, which is occurring 
in the U.S., Meinikoff pointed 
out. 

"ABA recommends that 
various banker training forums 
include these new approaches to 
money laundering," he said. 

Emerging Technologies 

With the advent of smart 
cards and cyberspace financial 
services, both the government 
and the banking industry must 
be prepared to address new 
money laundering issues, 
Meinikoff suggested. 

He recommended an 
intemabonaJ FATF fonun 
dedicated solely to this issue. 

Continuing 
Communications 

Meinikoff also suggested 
that the working relabonship 
between government and the 
private industry in the U.S. has 
led to improved regulabons and 
better understanding. He 
suggested an ongoing 
communicabon link between 
FATF and the private sector. O 



January 1996 



American Bankers Association 



264 



ABA BANK SECURITY & FRAUD PREVENTION 



Nciv Products 



Safe personal 
checks 

Clarke American has 
unveiled a new line of 
sophisticated checks called 
ImagcSafe™ that offers 
consumers increased protection 
from check fraud. 

The ImagcSafe check 
enhances the security features of 
Clarke American's standard 
personal checks using an 
innovative design that combines 
protective enhancements in the 
paper, ink and design. 

These features interact to 
make the check nearly 
impossible to counterfeit and 
easy to authenticate. 

The ink fades or disappears 
when chemically washed. Colors 
are difficult to reproduce. 

A security screen pattern 
distorts or disappears when 
copied. For information, contact 
Clarke American at (210) 697- 
1233. 

Security door 
controls 

The new 932 and 933 Entry 
Check Digital Keypads from 
Security Door Controls arc 
designed to withstand extreme 
weather conditions and abuse. 
SDC 932 provides 50 user codes 
and 933 provides 100 user 
codes. 

Features include lock output 
auxiliary contact for second lock 
output, CCTV, tamper alarm, 
duress and lighting; a door 
[Msition with input for anti- 
tailgate or door hold open 



alarm; a request to exit input 
and more. 

For information, contact 
SDC at (818) 889-1622. 

Signature 
verification 

Spectrolinc® from 
Spectronic Corp., is a signature 
verification system designed to 
work even when a company's 
computer system is down. 

The invisible signature 
system feanires accurate, 
immediate and on-the-spot 
signature verification at any 
window of any branch. 

It adds a permanent invisible 
signature to a passbook page or 
identification card. A customer 
signs a specially coated transfer 
slip with an ordinary' ballpoint 
pen. 

The transferred signature 
becomes visible when viewed 
under an ultraWolet lamp. For 
information, contact Spectronics 
at (516) 333-4840. 

Fraud prevention 



software 



Task Force Software has 
released version 6.0 of its Social 
Security Number evaluation 
software for personal computers. 

The program can instantly 
alert investigators to fraudulent 
numbers. 

The new release also has 
Catudian Social Insurance 
Numbers. For information, 
contact Task Force Software at 
(800) 397-3085. 



Heads up on 
some resources 

ABA has learned of two 
resources of interest to security 
professionals. 

 The University of Windsor, 
Windsor, Canada, and the 
University of Detroit Mercy, 
Detroit, Mich, have put 
together an international 
money laundering conference 
to address cross-border 
laundering issues. 

The program is scheduled 
for May 1 to 3 and will include 
academics and U.S. and 
Canadian law enforcement 
officials, such as the Royal 
Canadian Mounted Police. 

For information, contaa 
Dolores Blonde (519) 253- 
4232, extension 2941. 

 Need an expert? Here's an 
unusual source. 

As part of a plea bargain in 
an ongoing investigation of bank 
employees, federal law 
enforcement agencies in the 
midwest have worked out a deal 
with a banker who embezzled 
half a million dollars. 

The man is to make himself 
available to speak on how he was 
able to compromise his financial 
institution. 

For information, contaa 
ABA'S John Byrne at (202) 663- 
5029. O 



10 



American Bankers Association 



January 1996 



265 



ABA B A NK SECURITY 6c FRAUD rREVHNTlON 



Continurd from pajic I 
UNCKN. Yoii no longer li.ivt lo 
\cnil \i\ copies to U\v 
cnl'orccnK'nt .inJ hanking 
agencies. 

Learn from experts 

At the seminar, you uill 
learn how to use this new form 
ftom banking industry experts 
and government agencies who 
have been directly involved in 
implementing these changes. 

You will learn how to fill out 
the form and who to go to 



when you need pronipi, reluhle 
.uiswers. 

You will get answers to all 
questions on how to use die 
new form, including: 

^ whether you are protected 
from civil liability for 
reporting possible violations 
of law. 

^ increased thresholds for SAR 
reporting 

 records retention 
requirements 



 how to use the nesv torni i>ii 
your PC. 

You \vt\\ he given copies of 
the new software which mtkes it 
a snap to till in the new SAR 
forms. 

Suspicious AcDviry Report 
Seminar presenters include:]ohn 
Byrne, Senior Counsel, 
American Bankers Association, 
Member of the Bank Secrecy Act 
Advisory Board; Richard Small, 
Setiior Counsel, Federal Reserve 
Board; law enforcement officials, 
industry bankers and other 
industry experts. O 



Suspicious Activity Report Seminars 



Seminar Registration Fee: 

S169 ABA member; S210 Non-member 

Special Team Fee: 

SI 50 each (discount available when 3 or more people 
from the same member insntution register at the 
same ome.) 

Hotel Information: 

A block of rooms have been reserved for seminar 
attendees. If you need hotel accommodabons, you 
can conun the following hotels, which are offering 
special room rates. To obtain a reduced room rate, 
identify yourself as an SAR Seminar participant when 
making the reservation. 



Chicago: 

Palmer House Hilton, 17 East Monroe St. 
Chicago, IL 60603 (312) 726-7500. 

Price: S 145 (Note: seminar will be held at Firrt 
Chicago Center, Firtt National Plaza — Plaza Level) 

Philadelphia: 

Doubletree Guest Suite, 4101 Island Avenue, 
Philadelphia, PA 19153 (215) 365-6600. 

Price: 5115 

Georgia (metre Atlanta): 

Sheraton Gatewav Hotel, 1900 Sullivan Road, 
CoUege Park, GA 30337 (770) 997-1 100. 
Price: $124 



Registration Form 



Yes, I want to register for the SAR Seminar in: 

D Chicago, April 2, 1996, 8:30 a.m.- 12:30 p.m. 
D Philadelphia. April 9, 1996, 8:30 a.m.- 12:30 p.m. 
□ Adanta, April 11, 1996, 9:00 a.m.- 12:30 p.m. 

Name: 

Tide: 

Bank: 

Address: 



Telephone: . 
Fa.v 



Payment: 

Total amount enclosed: S 

Check, payable to ABA D 

Charge: D VISA O MasterCard 

Card No 

Exp. Date: 



Register by: 

Phone: (202) 663-5274 Fax: (202) 828-4531 

Mail to: Registraoon Coordinator, 

American Bankers .^sociabon, P.O. Box 79129, 

Balamore. MD 21279-0129 



January 1996 American Bankers Association 



n 



266 



ABA BANK SECURITY & FRAUD PREVENTION 



Ounce of Prevention 

Say "No' to Auto Theft 

(reprinted with permission from State Farm Insurance Companies) 



While you can't fully 
safeguard a vehicle against 
theft, you can reduce the 
chances of becoming a victim 
by using these tips from the 
National Insurance Crime 
Bureau: 

 On an average, 13 percent 
of stolen vehicles have the 
keys in the car. Close car 
windows, lock doors and 
take your keys out of the 
ignition when you park 
your car. 

 Tows account for 10 
percent of stolen cars. Turn 
front wheels sharply to the 
right or left and apply the 
emergency brake when 
parking. This makes towing 
difficult. 



 When parking your car, 
activate any anti-theft 
devices you may have. 

 You invite theft when you 
leave items in view. Keep all 
packages and personal 
items out of sight. 

 To reduce your chances of 
being a car-jacking \ictim, 
drive in the center lane 
when on a muld-lane 
highway. 

^ Don't park in remote areas 
of shopping centers, motels 
or lots. 

 Etch your vehicle 
identification number in 
hard-to-find spots, using an 
engraver or dye marker. 



This makes your car easier 
to identify. 

<• Hide your business card or 
address labels on the 
bottom of floor mats and 
under the scat, or drop 
them down window 
channels into the door 
interior. 

 Use a business address on 
all luggage tags, rather than 
your home address, for 
additional privacy. O 



Please fetl free to use this 

c^ as a statement stuffrr, 

poOer arfiyer to^ve to yottr 

customers or employees. 



ABA Smtik Seatrityamd i-nimtt 


U^Uailve at Kc^iiatory Ecfitor 


Km Chicago Cotpotnioa 


Pirwtntiamap^MibedmOiiAl^by 


)<teJ.B7ciK 


Oiicago, iBBiaii 


the Pnxtoau D«j»iofl of «fae 


Aseagr Xcpatt SdKnr 


Ciiadeaf.Boclc,Ji;,CX£ 


Ameocm Butkos AModMioa, 


Director, l^aod ^Fcveittian & 


1 120 Conneakut Awenut, >W 


Fedent Bateau of bmxtigaooD 




Wuhiogtcn, DC 20036. 


Cmurflxitu^ Editor 


Qiaiiical Bank 


Sdncnptmn late; £210 per year; 


K>i«nG.Paakar 


Newyofit,JSewYojk 


$140 ftr ytat ASA membtt 


PiodaetiMi JUdttatit 


liAn B. Ha«4cca 


cfiscounted price To onler « 


Avclwa utxtiKt^ 


Director of $e«n(tt)r 


nabto^oa caB 1-800-338-0^6. 


Con^otitioB 


Boumea't Baociharo Inc. 


In dbe l^idiington maiope^itan 


Gc(ii:ge im& it Aaocjatta 


St.Lotdi.Mk<dui(i 


r«»kmc«a(202)«63-5087. 




SUbaW.Ploea 

Cutver, IndiMia 
T. B. Walfc«r 


Jamt»H.SiiBqr 




PttMither 


Viat JPtttidcBC «Dd Diiector, 


ChaiixDin of the Board and CEO 


LaurcDce Price 




Bank of Foteit 


Editor 


SeafiotBidc 


Foieg, Mtwimppt 


HnmtrV.MoM 


^_ ^ MmX 1 T^y* j^ ?^ ^^ ^^ 




(202)6<3.«>71 


TlKaM•«:•<».}^ 




Muu^aS Sditor 


^^ Tieidatt, Cotponte 




GenSee SwDpe-Pnente 


In»nti§»hw> 9c fiigd viVKtiuaa 


C7»»$ tf dK Amkaa >Mkn itaaonrioa 



12 



American Bankers Association 



January 1996 



267 



Attachment 4 




...CAN IT 
AFFECT YOU? 




riii: iMTKwrioNM. uankivi; m-ci kiit ass(m:i.\tio\ 



268 

TABLE OF CONTENTS 



INTRODUCTION p. I 

WHAT IS FKAUD? |vi 

•( hirvicw 
•Slalislics 

Wl lO Tl II: FRAl IDSIT.RS ARE p i 

•liucnul Jiul cxlcriul 
•RcnicmbtT u Misix-cis dcM.Tiptii»n 

WHAT YOU SHOULD KNOW ABOUT FRAUD p.(> 

• Ihc Dos 
•IIk- Dttn'is 

POPUIAR FRAIFD SCIIF^IES p.K 

•rhnic Ikink Noics uiiU Siundhy Uilcrs til (Tcilil 

•I he Nigerian omncciioi) 

•SIh-II hunks 

•Mtmcy laundering 

•(iounu-rfciling 

•Cindit canl Imud 

RFPORT SUSPICIONS pi I 

•Aniicipaic criminal activity 

STAYING ONE STEP AHEAD OF THE CRIMINAL p.2S 

•Training 

FRAUD PREVENTION PROGRAMS p. 26 

•Step one - Preparation 
•Step iw«) - Development 
•Step three - Implementation 

HOW CRIMINALS SOURCE THEIR INFORMATION p.2K 

C:ONCLUSION p. 29 



269 

INTRODUCTION 



i 



n KKlay's lii^hly competitive comnuTcialh -driven worlil, 
almost cvcTyonc is a potential \ ietim of Iraud: it seems to he a 
cost oldoin^ hu.siness these da>s. I ra iid has l>ec<»me the crime 
ol the nineties. It can allect anyone, anytime, anywhere and it 
respects no l>oundaries as it weaves its weh of deceit Irom one 
country into the next. 

lixpandin^ f^lohal financial markets oiler international 
criminals many opportunities to work their schemes, rcsuliin); 
in an increased numlxr of reported cases ol Iraud. To assist in 
the hattle a^iainst it, .security directors representing the major 
world hanks and hanking j^roups have joined forces under the 
ausjiices of the Inlvnialhnuil Hanking Sirniily . issodntnui 
(IHSA). IliSA's mission is to promote the exchange ol 
information Ixtween memhers and to assist one another in the 
prevention and detection of criminal activities a};ain.st ihe 
hanks. 

In order to share its knowledge and expertise w ith other 
potential victims of international fniud.lHSA has produced this 
puhlication. Hie objective of INTERNATIONAL FRAUD - 
CAN IT AFFECT YOU? is to help rvduce the incidence of 
fraud hy thoroughly describing it, listing the measures that can 
be implemented to prevent it, examining popular fraud 
schemes, and outlining the .steps that should Ik* taken when 
fraud is suspected. This b<M)klel is aimed at tho.se w ho are most 
often victimized by fraud: consumers, compan) olTicers. 
investors and entrepreneurs. 

The pnibability of eliminating all fraud is imrealistic - 
imposing the stringent rules required to do so would severely 
restrict customer service and impede the operational 
efficiency of most businesses. However, I bSA and international 
law enforcement agencies strongly believe that fraud can be 
managed. 'I1)e key to its reduction is stopping fraudulent 
activity before it gels started. 

As you read this b<H>klet. you will note two repetitive 
themes - education and prevention. Hy knowing how to 
detect fraud in its early stages, ii is ho|H'd that potential victims 
will Ix- able to curb this crime, protecting themselves from 
embarrassment and from those who would deceixe them. 



270 

WHAT IS FRAUD? 



i 



Ihc Oxford ilii lioiiary defines fraud as ciiniiiuil (U'wpliou 
ami ihc use of Jtilsc ivprvsentatUni. it docs not define fraud as 
a financial crime, lor the purposes of INTERNATIONAL 
FRAUD - CAN IT AFFECT YOU?, fraud will be described as 
(hell, facilitated by deceit, falsehood and/or other devious 
nuans. 

I ( )\ CTVkW ] 

Main companies have experienced an attempted fraud or 
lia\e actually been victimized by this crime in the last few 
years And, bctause new fraudulent schemes are continually 
surfacing, they are not always easy to identify. Iraud strikes in 
main differeni ways: just as quickly as one type of fraud is 
ileiected. another is introduced. 

I raud is not uni(|ue to cerlain countries: it attacks eivry 
nation in some fashion. although some frauds are more closely 
associated with specific countries. Physically or culturally 
remote locations, such as cnicifihifi or ttcix'lopin}^ countries 
and third \Norld nations, are especially appealing to criminals, 
(.ountries recopii/ed for their lack of conmiitment in fighting 
fraud, make good targets uny. 

.Many criminals infiltrate international companies and 
institutions with their schemes, crossing numerous national 
biirdcrs and international jurisdictions in the process. This 
makes it difficult for those in authority to investigate, arrest 
and |>rosecute fraudulent operators (or fraud.sters. as they will 
also be referred to in this publication). 

fraud is frustrating lor everyone involved, except the 
criminal. 



271 



f Statistics | 

tuich year more and more corporate pnifus arc* lost due to 
Iraiid. 

Individual financial frauds can range Ironi crimes 
involving; a few hundred dollars to several million dollars. In 
some countries, the incidence of business Iraud has Ixen 
re|>oned to have quadrupled in the last five )ears - S(» [kv cent 
of it resulting Inim |XM)r internal security controls. 

Although statistics vary from country to country, one 
recent study conducted by an international forensic 
accounting firm estimates that appn>ximately 27 |xr cent of 
all fraud was committed against banks and other financial 
services institutions, 29 |XT cent against investors, 2 1 per cent 
against commercial companies, 19 per cent against 
governments, and four |xt cent occurred in tilher areas. 

If a company is s<-en to Ix- vulnerable, criminals are more 
likely to attempt to exploit it. Therefore, it is imperative for 
management to .stay one step ahead of criminals, anticipating 
new types of fraud Ixfore Ixcoming \'ictimi/ed. 



i 



272 

WHO THE FRAUDSTERS ARE 



IhoNC wlui jtciuT.ilK i)biain material advantage by unfair aiul 
wronj;!!!! nicaiis or by falsely rcprcscniiii}! ihcniM-lvcs are 
ctinimonly knoun as fraiidscers lliere is no maj;ic fornuila thai 
can deieei people who exploit others: nor can they Ix- typicall) 
described rhe\ are just dishonest indixidiials who attempt to 
deceixe their victims  usually quite successfully. 

I rauilsters are often exjxised by chance, unless they leave a 
trail of e\idence behind them  which they rarely do. One of the 
reasons uh\ these criminals are difficult to apprehend is because 
they appear no different than honest folk The only distinction is 
that they are plausible liars who often seek to exploit elements of 
^reed found in many of their victims. 



! Inicrnal an<J A'xK'Lnal ) 

Iraud can strike a company internally or externalh. 
International studies show that in some countries, more than half 
of all fraud is engineered by employees with or without the aid of 
outside accomplices. Thinking internal fraud Is easy to conceal, 
employees olten Income involved in purchasing fraud, curancy 
and stock theft, cheque forgeries, and false- loan prmuremeni. 

Internal fraudsters are usually motivated by op|^>rtunit\. 
basic greed. re\enge. the need for quick cash to support an 
acquired lifestyle, or to repay gambling or drug-related debts. 
Once exposed, co-workers often admit that they had been 
suspicious of their dishonest colleague but fell unable to act for 
one reaMin or another 

it is generally believed that about half of all fraud-nrlated 
offences are external • committed by professional criminals 
having no prex ious relationship with their victims.'IlK' POPULAR 
FRAUD SCHEMES section of this publication elescrilx's the more 
popular coniem|>orary. external fraud seliemes. 

Whether \ou encounter internal or external fraud. ihea* are 
certain prot«>e<)ls that should be* obserxe'd to assist authorities in 
arasting and convicting the criminals involved nu-sc measure's 
will be outlined throughout this publiculion. 



273 



r • 

[KcmcmlxT a suspect's description 

11 you siispcci an iiulividiial is ahoiit (<>. or has alivaih 
ami mi I till a frauil-rilaud olTciuc. ihonxi^hh iloi iiiiKnt ilic 
ptrsons (UscTiptioii aiul thai ol any aicoiuplicts. Ik- smv lo 
inchuk- the lollowin}*: 

sex, naiionaliiy, a^c, height, hiiilil. conipkxion. hair, 
btaril/moustachf. cars, iccth. eyes, glasses, nose, mouth, 
hands, searsAlistinguishing marks/tattoos, aeeent. 
eloiiiing. jewellery. l«M)iwear, and the make anil model 
ol his/her vehicle. 

linsure youve listed all pertinent information as 
accurately as possible. I)»>n"t list leatures you can t recall in 
ikiail; inaccurate descriptions serve no jiurpo.se. 

Once you have compiled this, and other relevant data, 
contact the p»)lice for sound advice on how lo deal with the 
problems you are facing. 



274 



WHAT YOU SHOULD 
KNOW ABOUT FRAUD 



i 



llohali/.ation ot tlnanciul murkcls, coupled with increased 
inicniational trade, has };reatiy conthhiiied to the incidence ot 
Iraiid. liecause it is so prevalent, chances aa* you t»)o may Ix* 
presented with a suspicious business proposal at some point. 
W hat will you do? 

Ihe lifNl step in t«) remain alert and report any inusinesv 
related mis^ivin^s to the authorities. It yjui have sulTered 
monetary loss due to fraud, quickly react to resolve the 
situation in order to deter further criminal activity. If your local 
media should learn that you've been detrauded, don't be 
surprised ii you are asked to respond to some probinj; 
questicms. 

^bu may consider contacting* your fmancial institution il 
you are unsure about the legitimacy of proptised business 
deals; chances are employees can recogni/.e a potential framl 
If questioned about suspicious business transactions when 
doing your regular banking, don't react negatively. It's usually 
in your best interest if unusual proposals are thoroughly 
examined Your financial institution has been exposed to many 
fraudulent schemes, in-depth inquiries may prevent you from 
entering into damaging business arrangements. 

IJelow are some Dos and Don'ts to consider if >t>u 
encounter suspicious business propositions. 

(rhc"Dos^l 

• Become kn<m ledgeable about fraud. 

• nnforce practical security precautions. 

• Know your customers and their business practices. 

• Always be on guard. He somewhat su.spicious of all 
bu.siness transactions until you are satisfied that they are 
legitimate. 

• Ensure customers' identification dcKuments are valid. 

• Verily references and addre.s.ses when entering into new 
business relationships. 

• t^ueMion changes or irregularities in cu.snnners' normal 
business patterns. 

• he sure all verbal/telephone/telex/fax instructions 
received are legitimate prior to completing business 
transact it )ns, especially if funds are being transferred 
from one account to another. 



275 



liiiMirc lori-i};ii paynKni iliniN Mich .i> kiuis olcivilil iiiv 

lc>;iiiniaic iHiorc ;u-iiii^ upon iIkiii. 

lUkr Mispkioiis ir.in.vK'iions or otiuirciKo lo senior 

ni:ni;i>;nnrni. 

Kccorii ini|>ortinii iiiformalion on llic h.ick iil ilK-i|iK-s. 

I- j» p:i>s|>ori niinilxrs. 

I'np.in- .1 I r;iiKl AwartiUNs ;iiul t'rivriiiion l»r«»^r.nu 

(Mi I'KAIII) PKIiVUNTlON PK(H.KAIVIS) 

l( a M.rioii> cast* ol" Iraiitl has Ixcii ilciccuil anil ncgaii\c 

puhhcily is cxpicud, conlaci your Public Kclaiions 

IH-parlnu'ni lo assist with ilantagc control. 

• Don I lake anytliin^ lor granted. 

• Don't volunteer confidential inlorniation over the 
leleplione/lelex/lax unless )ou know and trust those \Nh«» 
are iiu|uiring. 

• Dont allow customers |«> pressure yiui into making 
impulsive decisions. 

J Don't give value against uncleared payment items. 

• Don't aicept thiril party cheques (rom new customers 
without a senior manager's authorization. 

• Don't cash cheques lor .strangers. 

• Don't transler luiuls without first obtaining pro|>er 
atithori/aiions. 

• Don't tliscuss internal operations or systems with 
outsiders. 

• Don't write to suspicious individuals on compan\ 
stationery. 

• D«)n t Ix- afraid to contact the police il urn ha\e 
suspicions about certain customers and their respective 
business ilealings. 



i 



276 

FOPLJIAR FRAUD SCHEMES 



loi Mirprisinnlx. Ir.uKlulciil hiisinos propositions rcllici 
pniniiiK-ni iconomic irciuls. For example, during llic I9"'(»s 
wIkii ilic oil iiuhisiry was hoominj; ami Inillion prices were 
viarinK. '"•">> investors were ilelramleil in oil lease and n«»ld 
hoaxes In ihe I«;H(»s. wiih the real estate market peaking, 
criminals tlesij>ned creative Irauds involving this thrixing 
hnsinesN sector \\ iih the ecommiic instability ol the l')*>Os. 
there isn t one particular recurring international Iraiid theme 
that is more popular than another. Anything goes these days. 

(^nile olten. international Irand sehemes inxolve one or 
more of the South l^acillc or Carihhean island nations that are 
lax haxens and/or have stringent secrecy laws I herelore. law 
eiilorccment agencies caution people to exercise extra care 
when entering into husiness arrangements in all uniamiliar 
territories. 

Alth«»ugh most husinesses operating within these 
c«>untries are upstanding and prolitahle. many are not. it is 
alwa\ s important to conduct thorough background checks on 
comiunies operating in miy countr> pritir to signing business 
lontracts. 

To further assist you in detecting international fraud, the 
lollowing more contmonly practiced frauds will be deseribeil: 

• prime bank notes and standby letters of credit 

• Nigerian Irauds 

• shell banks 

• money laundering 

• counierleit currency 

• che(|ue fraud 

• lorgerx 

• counterfeiting 

• cretlit caril fraud 



277 



I Prime Hank Notes and Standhv Leiters ol' (Tedii 

l-raiiilsicrs tilUn employ sclunics involving I'rinic Hank 
Noiis (soiiK'tinics rckrrcd lo as I'rimc hank Insirunjcnis 
aiul/or I'rimc- Hank (iiiarantccs) and Siandh) LcUcrs olCrcdii. 
Alihoiigh iIksc frauds vary in oimpkxiiy. the) arc olun ihc 
mosi suiccssliilly cxcculcd because ihcy appear l«) he 
legit imale. 

jiiir<)diiclMMU»] 

(isiially. victim inveslors are direcdy approached h\ 
Iraiidsiers - niitldlvim'ii - who claim lo represent wealiln. 
unnamed principals. The ntiddlemen. on hehall ol ihe 
principals, oiler lo sell and evenuiallx repurchase (he I'rime 
liank Noles and/or Standby Letters ol Credit Irom the 
prospective investors. Having; been promised large ilnancial 
returns, these investors are iisiialh asked to hold ihe 
instriiments in trust, or to iimd product purchases. 

Should the investors question how they have been 
selected as business partners, the middlemen tell them that 
they arc extremely respected investors, known to Ik capable 
negotiators of sophisticated transactions. Ksseniialty. the 
fraudsters arc hoping to appeal to the vanity and greeil ol' their 
victims. 

Is this really a crime? | 

So how is this frautl eventually ex|x»sed!' .Suspicions olien 
arise when the Iraudsters are asked tor baikground material on 
the principals, including sources ol their ca|)iial The middlemen 
cannot produce this information, yet try to rea.ssua- investors that 
deals aa* legitimate, and that all monies involved are so-tailed 
"good clean funds". 

Iraudsters Ixlieve suspicions will n<»t arise if investors are 
a.sked to act as nduciaries • those who hold items in trust prior to 
credit agreements Ixing signed. Since investors as.sume that liinils 
will Ik transferred without any problems, they ilo not feci 
financially threateiKd. Transactions seem normal. Victims iKlieve 
that they will not be involved in the purchan* and/or s;ile of these 
in.struments.onlv the middlemen will. 



278 



i IHiivlinji^rriiiitl^ 



\i (iii\ poHii. (Ik- IniucisUTN ixphiiii iliai ir.iiisk-r dclavN ami 
oiiu r coinplii .iii<in> have arisi-nA iciiniN arc lokl ihal llu* rniuK no 
lon^i r (.MM in (.iirrciKvialicmaic lornis ol Ncinrilv arc Mig^olcil 
- olicn siispccl paper MihMiUilcs. Investors arc ncM asked lo 
aihance cash afiainsi this non-cxisicni pa|H'r Hcurilx This is 
when viiiiins inadxertcnih enter into crcilit alatuinsliips with 
the hauiKlers. 

i raiKlMers hope these- e\cnis won I Ix- noiiecil and that an\ 
creilit nviewN and approval priKCsscs are eircunivented by the 
iiivtsiors aniit ipation «>l sipiifieani financial returns. Only when 
inMKinienis are due and pavahle are the Iraiids delected. 

Here is .m e\aniple ol this Iraiul it may help you to 
reil>^ni/c it if \ou are Approached h\ a Iraudsier: 

\ hiiMticos inrvMi is pr< MiiiM-tl :i si.iiull>\ Iciur ol ( nJil unrlh 
I NsliNi niiiliiiii iiiuri-M liv«-. .iiiil tlistiiiiiiii tl lo Hit |Hr (iiil ol ii> 
l.ui' t.iliK li IN |>.i\.thU- in I ^ iiioiulio li.iN iHrii inmuiI In .inAM.iii 
lunk .iiul iiitlorNiil h\ .1 I S luiik llowittr ilii' Iiiimiion imtvhi 
i> n(|U(M(il lo |>ro\i«U iIk- IiiiuK lor llu piirtlMM iiitnitiliaKh 
Wluii iIk ili.il IS .ignrd upon, .i I ram lull ill M.iiulln liiltT ol 
< niiii IN iNNtii tl on In h.ill ol iju- piiiu ip.it Alilioii^li ilu' ir.iiis.ii lion 
.ip|x .UN .iliiiM Ito.iiil tl IN not li is oiil\ wlii'ii llu hiisiiii'Ns |H'rson 
winIkn III i-ik.inIi iIu' I till I ol ( rctlil tl in iv.iIi/kI ili.il Ihis is a 
liaiiiliiUiii iiiNiiiinunl 

I lie cautious | 

Alwavs resist promises of iimrdinately hifjh returns anil 
liuaraniecs ol endless supplies ol tuiuling Nothing; ever comes 
lor tree Ihink twice when youre presented with I'onlusini* 
husiness proposals «>r when potintial husiness partners 
supplx vague answers And should y«iu ever he rei|uestetl l«» 
provide leiicrs printed on \our compam letterhead. outlining 
p«»tenlial new husiness relationships, alwavs decline. 

RemeinlH r. you aiv the oiih «hU' who can saw yotirscH" 
Ironi Ir.iud. 



279 



llic Nigerian conncciioii] 



S«»nK- lounirio ;iri- known lo haw nioiv ih;ni cluir l.iir 
>h;nv «»r risiiUni rniiulsUTs. Nij;iri;i is one ol iIkiii. Liu 
cnloriiincnt :l^cnck-^ worUlwkk- arc onl\ loo taniiliar wilh 
Nigerian IraiKl rhiri- is howivcr. wry link- thai ilu\ tan ilo 
alviiii ii.cxccpl lo laulion propk- ahoiil its prcvakiuc aiui its 
inirkacks. 

linancial losses cx|Hrkiuvd as a ivsuli ol Ni^irian Iraml 
M'iK-nu-.s arc (.'slimalccl to he in ihc millions or dollars - ihcsc 
losses eoniiniie lo inoinil. Mosi olien. people iniliaiiiif; 
Nigerian Irantls are eullured. ixilished. nuillilin^iial. and well 
edtieaied ll is noi niuisiial lor Ihesi- Iraiidsiers lo iinpirstinaie 
^oNemnieni ollkials or hiisiness persims. I 'nioruinaieh. sonu- 
iinseriipiiloiis >;o\ernineni ollkials ami hiisiness persons are 
oiien ihe aiiual Irandsiers. 

Many nnsuspeelin^ people respond lo Nigerian Mail 
Seams, seiuling hanking* and personal inlormaiion lo 
Irautlsiers Some have heen known to lly to Nijjeria.ai risk lo 
iheir own lives, lo cxeciiie husiness iransaeiions. Siill «>ihers. 
wiihoui ihinkinn. even supply additional gilts or hrihes that 
are ret|iiested h\ these Iraudsiersisueh as e\|Knsi\e watches, 
additional cash paxmcnis and holiday packages. Criminals are 
Ml persisieni that even when their viciinis ha\c discoxered 
the\ ve heen delraiided. the IraiKlstcrs will jiltcn maintain 
their innocence ami .seek lo continue the deal 

Although Nigerian Iraiids appear ohvious when hroughi 
to our attention, many astute husiness people and iiuliviiluals 
ha\e heen ileceived h\ Nigerian Ira misters Ihe hest way tt» 
protect vourseli against the nunurous Iramls associateil with 
Nigeria, is to lamiliari/e yoursellwilh them helore xou and/or 
\our compain are \klimi/ed. 



280 



Mail aiul ad\ai Kc Ic e fraiKis | 

llic iiMial lacik ol' nonJiscrinunatin^ Ni^cnan rraiulslcrs 
is Ui scihI ktUTN lo iiKlixiduaJs and busincNscs worldwide. 
• •Hcring ureal Minis ol money lor no particular reason - nuiil 
liaiuls Ihcse Idlers ask tor personal iniormation Invariably 
linancial iransaciions are also proposed, always involving 
clcnicnts ol illegal ac(i\ ity including corruption ol government 
ollkials and \iolation of national currency controls. 

Once the victims have been baited - providing 
inlorntaiion and money - they are inlormed that problems have 
arisen and that the Nigerian funds cannot be released unless 
the Iraudsier recei\es an adranu' fev, usualh a percentage i»l" 
the original pay-oil or a predetermined lump sum. 



281 



[a sample' hiisincss proposal 

llirr is a saiiipk* ol a I) pica! Nigerian Iratiil liiur. Sonu* 
(lay. yoii ma) receive similar eorrespoiuleiiee. \)on'i gel eaiighi 
ill (he (rap. 

Siricdy CoiilkleiKia l 

Dear Sir: 

Alter due ileliJH-r.UioiiN with nn eiillea}>iieN. I am lon\:iriling this 
Inisiiuss p^(>pl>^al to you. We neetl a reliable person lo iransler 
S.^K.S.M into tlu-ir hank aeei>unt. 

This tiiiul exislN as a riMill ol an t>\er invoiiv Iroin a ptxirnnienl 
eonirael Hie eonirael has lu-en exeeiiled anil the eontraetor has 
heen paid. \K'e an- now kit with the h;ilanei- «>r $5H S.M that was 
lUliberately oxer-estiniateil. As eivil servants. \m- are lorttidiieii l«» 
o|H-rale or own loreign aeeoiints. therelore we would reijiiest that 
you transact our business, keeping; .VI per eent ol the Itital lor >our 
ex|X-n.ses. 

I reeeiveil >our addrrss Irom our ChanilHT ol' Coinnieree aiul 
IndusiryAnd I am a t<ip onieial with the Nigerian National IVtrokiim 
(orpo rat ion Ibis iransailion is I'rir Irom all risk 

To gii ibis fund paiil inio your aeeount. wc- nivd to present an 
iiiUrnaiional business prollk to oflleials ri-(|U(.-siing this intornialion 
I'leasi- I'orwanl blank eopit-s uf y«nir eonipait\'s ktlerluud and 
inx'oiees. signeil and stamped on eaeh pagi-: \our banker's lull 
address, telephone, telex and fax numlx-rs; bank aecouni nunilvrs: 
and private telephone/lax numbers lor easx and eonrideiiliai 
eommunieations. 

\ini ma> Ik- re(|uireil to sign a liind relea.sc in our National liank: 
three ollk-ials will eome lo xoiir country lo arrange this. 

let honest) ami trust Ik* our watihword throughout this 
transaction. 

Uest ri-g.irds. 



282 



l'l.i\ it Miuri j 

A nuilHuI ol spoiling a Mail or AiKaiuc Ice I rami is lo 
su'uiini/i.- ai)\ inr«irn)ation siipplicil to \(>ii. Iciurs arc 
t;i lur.illx «>l poor <|ii.ilit\.alih()(iKli ihcy can M>niciinK> appear 
i|iiiu Ic.uiliniaic. liicx nv.iy even incliulc onicial-lookin^ 
uovcinnicni sianipN anil >cal>. ami arc oticn accoMipanicil h> 
aiiilu iiiic lookni^ ilociinicnis 

^^Hl sIhuiIiI In- aware thai Ni>;crian Iramlsicrs are lx)kl 
( noii^l) lu >eml sccniinxly Ic^itiniaie bank IcIcxcn lo iheir 
\KiiniN hanks, askinj; lor crcilil checks lo he ilone. ensuring; 
\ minis can ^^'••'■••'^•<-'^' rei|iiirecl pavnients. Somclimes 
iounicrteil hank ilralis. drawn on (he (.cnlral Hank ol Nigeria, 
are even circulaieil  pa\ahle in Ihe viclinis names There is 
III lie iluiihi ihai these I rami artists are inventi\c. 

Hanks spemi a great deal ol lime aleriing customers to 
ciMihrm the legitimacy ol Nigerian coniracls. However, 
imlixiiluals greeil imiiices their inv«)lvemeni in these Iramls - 
ixen when hanks aihise against it - oltcn resulting in large 
lin.iiu iai losses, not to mention emharrassment. 

slicjl hanks 1 

Many Irauiiulent schemes involve shvH hunks or 
ttmssfflah' fuink's \Uv\ are appropriately named Ixcausi- they 
are hanks that exist in name only - without as.sels or internal 
structure  emptx shells. Ihcse financial institutions are usually 
rcgistcrcil by a solicitor or accountant: olTice stall arc listed as 
shareholders Shell hanks have one or more mailing addresses 
- usually a post olllce hox «)r mail collection agency. 

i legitimate or ilieg itimale | 

Some shell hanks are legitimate, operating as ollshore lax 
shelters .Main. h«>wever. whose .services are rrei|uenily 
marketed, are IraiKluleni. 



283 



i.(.->'iiiiii;iu- sIh'II hanks an- IkciiMil, ikal in lorcign 
i'iiiT(.-nc\.(lo noi aivi'pi linal ik-posi(>.ani.l ilo n«M iraili- localh. 
It oiHTaiiiif* ilk'^alU. tiKt|iK>, tliaHs. iiriifKatiN o\ tkpo>ii.s. 
and kiliiN ol cridil arc issiicil. OlUn ikposilN ami loan 
hnsinivs arc NolkiUil Inini nn.Mispcclin^ indix kluaK l(M>kin>; 
lor a >;imkI ileal. 

(iriminah inviic invcMors lo open ilcposji accounts 
whkh pa> (inusually \u\i,\\ rales oi interest, \ictinis arc also 
aiiractcil by loans with low interest rates. Tliesc iinii|uc 
lcnilin>> opportunities often a|)pcal to inilividuals who cannot 
qualih lor loans Ironi legitimate institutions. 

Shell hanks sonKtimes claim lo he supported h\ one ol 
the WOKIi) or IM<IMi: HANKS: their names max he sinkin^h 
similar lo genuine, international hanks. This makes them 
dinUult to delect. Man) ol their names incluilc the lollowin^ 
words: internaiional. commercial, united, mercantile, trust, 
credit and merchant, ^tixin^ and matching these worils. along 
with the inclusion ol the word htiiik and the name ol a cit\ or 
country, can prtKluce a ver) formal sounding name.conhising 
even the most astute hankers. 

Ikcause licenses are relatively eas) to ac(|uire in the 
(^irihlxan or Asian l^icific island nations, customers shoukl 
seriously research hanks operating there. One should als»> he 
aware of the illegal shell hanks that advertise unkjue husiness 
pro|M>sitions in international new.spupers • they are not wiirth 
the paper on which they are printed. 



284 



|)<m I Ihcoiik- ;i \iclini | 

Mow .irc pf4)pk' iklraiicktl by (.riininals operating shtll 
Ivinks' \iilin)> who make ik-posits wiih nIkII l)anks simply 
loM- ilu'ir lapiial. (ho>c seeking loan> arc rcc|iiircJ lo pay 
ad\ai)«.(.- kcN (or loans whkh iu\cr matcriali/r 

MoiK) laundering ] 

MoiK-y lauiuk-riii>i is the practice ol coiuvaliti}; illicil 
Imuls gciiciaicci from ilkj;al acliviiics - coincriinj; criminal 
money into sccmingh legitimate income. Irauclstcrs cAv/// 
I heir money so it can Ix* used legalh, without leaving; paper 
ir.nls lhe\ do (his hy processing liinds ihroii};h international 
paxmeni s\ stems sexenii times, obscuring any audit trails. 

Iniernaiional driiK traUkkers and organi/.ed crime groups 
are noiorioiish associated with this activity. Although there 
are no reliable statistics on the si/e of the global money 
laundering i^roblem. policing agencies aroimd the world 
estimate it to be in the billions of dollars. 

lo c(»mbat money laundering, many countries have 
introduced legislation which criminali/.es this activity. Iliese 
lawN oHen include provisions lor Iree/.ing. seizing and 
lorleiiing the proceeds lr«)m criminal activity. Most large 
international llnancial institutions have also established anti- 
numey laundering procedures, co-operating with law 
enforcement agencies in an elTort to curb this criminal activity. 

Alwaxs ensure you are conducting legitimate business 
transactions so \our company does not uitwittingly involve 
itself in money laundering schemes. 



285 



[(".ounlcTfcitiiiij 

CodiKcrlrii insirumcnis aiv procliKvil Irom originals, 
using sophistic alril graphic aris caniiras. scanntT-t-(|iiipp<.-il 
personal conipiUcrs. plastic carcJ reproduction, laser printers, 
conunon colour photocopiers, and conventional printing 
lechniijues To assist you in detecting this illegal acti\it\. three 
types ol counterleiting will be described here: currenc>, 
chei|ues and credit cards. 

Technically, counterreiling relers to the illegal process o( 
reproducing currency. Iloxvevcr. because it is so tilten 
associated with the illicit duplication or forgery ol chet|ues. 
credit cards, .securities and other |>ayntent instruments, lor the 
purpiise ol this publication the word counterleiting will refer 
to tite process o( iorging any «)! these items. 

I ( '.(Hinierrcil currenc)'] 

(.ounterleiting currency or banknotes is one ol" the oldest 
forms of fraud. 

With the statcMif-the-art technology axailable today, the 
incidence of counterfeiting has increased dramaticalh. 
Although the size, .shape and denomination of currency varies 
fnmi country t«) country, ualays reprographic equipment 
seems lo Ix- able to duplicate all kinds of currency. 

Millions of dollars an* lost annually to currency fraud. 
Therefore, international task lorces ha\e been struck • 
comprised of representatives from gt>vernment treasury 
bureaus and technological firms - to develtip systems to detect 
this crime. Tor example, with the assistance «>f experts, 
manufacturers of cohuir pluitocopiers have inin)duced 
security features which prevent currenc\ from being 
reprtKluced. .Sensors in these copiers priKluce blank ct)p\ 
when duplication of banknotes is attempted. 



286 



! Ik- on I Ik- lnukoiii] 

NnimiinKN il i> cxiriiucly clillkiiil l«» kknlilx coiinicrUii 
ciirrciux IlKrcrorc. al\v;ivs pay dost- atuiuion wluu 
;u\T|Min^ hanknou-N - cspiiially bilK <>( lar^c tUnoniinaii»>ns. 
I nltiriunau-ix. iliost- accipiinn iraiKliiknl lurrtno arc the 
i»ni> who iiKur ni«>iuiaiy lovsc>. Ik- aware ol ilic laicM 
lounnrkiiinn siiKincs <.«mMill your local police ikparinuni 
>hoiikl \o(i lia\c ain (|iicstions. 

lo he sale, il \oii are uiiMire ol ihe aiilheiuicitx ol a 
haiikmne.ah\a\> a>k ihe preseiiler lor iikiUirication.incliKliii^ 
a paNspori ituinlHr. Me pariictilarh vigilant when neK<>ii'*liiiK 
larjic .niioiinis ol loreigii or tloiueslic curreiu \. II you ve heeii 
iinloriiinaie enoii};h lo have previ«)iisl\ receixed coumerleil 
hanknoicN. keep a rectiril lor hiliire relereiue ikiaiMiiK li><- 
pariicuJars. iiKliiilin^; iheir origin, currency iianie. 
iknoniiiiaiion anil M-rial iiumhers. 

I(.lie(|iie Iraiid | 

lechnologx ha> ilrainaiically changeil ihe cheque clearing 
proie» the sx.Meni which Ncmls chet|ue.s through the hank ol 
a recipient - reluming it to the original t»r ilrawee hank lor 
paxnieni 

^ear^ ago. chei|ueN were pnicessed hy hand. Although 
sorting these instruments manually was lah«)rious. it gaxe 
those reailing them more t>ran opportunity n> detect lorgeries 
Noxx. automation all«»xvs signillcanily niore chei|ues to be 
cleared. Iloxvexer. hank processing machines olien cannot 
detet t Irauiluieni chei|iies. resulting in hundreds ol millions ol 
dollars Ixing lost annually to chei|ue Iraud. 

[stolen aiul lo rged ^ 

Often Iraudsiers steal perstmal or company chec|ues 
pax able to legitimate indixiduals. Hndorsement signatures are 
lorged and cash is deposited into the Iraudsiers" accounts. 
( heque Iraud is also committed when authentic blank 
chei|ues are stolen and ctuiipleted. naming legitimate or 
labricaled paxees ( riminals lorge the endorsements and cash 
these chei|ues. 



287 



I AlllT.llMHIN 

In aiUliiioii lt> ihaiiKin^ iIk- serial nuinhiiN thai apiuar 
on iIk-i|iu's, Iraiuhiirs aho clian}>(.- llu- iiaiius oi pa\ci> 
aiul/or llu' ainoiinis apprariiiK on Ic^ilinuiu- cIk-i|ik->. iiumkx 
orikiA nr ollirr insirununis of paynK-ni. AI\va)N pay cl«>sc 
ait<.-nii«>n lo llu* iiulin^s of dollar anuuinis appearing on 
ilK-i|iK-s  IxMh iIk' niMmrah anil ihc \vor«.K nIioiiUI Ih- iilcnii- 
cal KrnK-nilHT thai ncgoiiahic insirununis arc olun alUTiil 
In skilkil lorKcrs usin>> sophisiicaud nutlxKls. Hu-\ can hi- 
ilillKiili ioik-k-il. 

Ilopdulh.ilu-si- points will lulp you lo (.UUil i ounurli ii 
ilu-i|urs: 

• no iwo i-|K-(|Ui-s ilrawn on ihr same account shouki hear 
the same serial numlnr; 

• che(|ue pa|)er is generally ilull Shiny paper max indicate 
a lolour phoiiHop) ; 

• I hei|ues shouki have at least one pcrroralcil ed>;e; 

• the (|ualily of the priming thai appears on chei|ues 
should Ik* crisp and clear; 

• MICK (Magnetic Ink Character Kei (ignition) characters 
appear at the IxMtom oi all theques: 

• MICK ink should Ih- ilull. not shiny: 

• MICK characters and any wonling appearing on che(|ues 
should not he raised ahove the regular surlace ol the 
paper: 

• look Ibr securit\ leaiures such as ultraxiolet markings 
and watermarks if the) are known to Ih* present on the 
genuine payment instrument. 

f 



Che(|ue kiting 

Kiting, or cross -firing, is one ol the oklesi kiiuts ol hank 
Iraiid It involves the manipulation ol two or more che(|uing 
aceounis hy exploiting the normal delay in the clearing ol 
cliei|ues Irom one hank lo another (^uite .simph. it is ihe 
huilding ol ficiitious halances or credits, hased on uncleared 
clie(|ues Ihe iiuiileiKc oi' kiting has Ixen signiliianth 
reduced hy modern-day processing, limiting the dclaxs 
inxohed when clearing che(|ues. 



288 



lliiN IS hiiw kilin}> \\«»rk>: 

\ kili-r will wrili- a (.lu-(|u<.- nn an aivoiinl al Itank A whca- 
ilK-rr aiv iiiMilliiknl IiiiuIn lo idmt its ckariii);. IIoxm-vit. 
hilnrr il iliar> llic kiicr tli-|xtNils into his accmiiil al Itank 
A. a I li(.-i|iK- ilraw n on an account al liank It. mi ji covitn iIk* 
lUahni; ul ihr lirsi tluiiiic- lliis pnnrss can conliniic 
iliniii^h an\ niiinlHT ul hank aiconnls When kiiin);. a 
haiulsUT (an hiiiUi iar>ic haianics. wiihilrawin}* lunds 
hclorc i.lui|iicN arc rclnrncd and Irauils arc iklcclcil. 



I'rc\ciul«»n J 

(luquc Iniiul is ;in inlcmational prohkii) and (iccurs in 
main ililkTciu \Na\> Il is iniportani Ut rcincmlKr llial you arc 
loponsihic. as ilic pcrstm acccphng clict|iKs. lo verify ihcir 
aiiilicniicilx. as well as ihc k'ttiliniacy ol llic people preseniinj; 
I hose ehe(|iies. (aretullx examine all ehetpies prior lo 
at ceptinf; ihem. 

Hie k>llo\\ in^ list should assist you in preventing eheipie 
liaud: 

(. he(|ues shouki always Ih* examineil to establish their 
au(heniieit>: 

• \alue shcHikl noi be given a}>ainst uncleared foreign or 
ilomcstic items unless you know your custonKr: 

• request t\\«) identification documents when encashing 
che(|ues; 

• chei|ues should Ik* endorsed in your presence: il 
signatures are irregular, notify your supervisor; 

• Ik- sure that w riilen and numeral amounts appearing on 
ihci|ues correspond; 

• check lor spelling errors on cheques. 



289 



I Crctlil card l/aiKl 

Over a billion U.S. dollars is loM aniuiailx lo inii-rnaiional 
crcilil card Iraml. Tlu- IramlsUrN who s|Htiali/v in i rrtlii lanl 
crinu- an- criatiw in ihcir nKMhoils and o|Hrau- in t\cr\ 
coiinir) in which pla.Mic cards arc w idcl> uscil as insiriinicnis 
ol paxiucni. 

There are many ways thai criminals obtain Hie i reilii cards 
thai ihcy use rraiidiilcntly. Some cards are siolen Umw wallcis. 
residences and automobiles, others are iniercepleil wliile 
iravellin>; through the p«»sial system - pre and post deli\ery. 
(iriminals use stolen cards mainb lo aci|iiire goods and 
scrv ii es and lo make cash withdrawals at banks, or banking 
machines il the) also ha\e ihe correspouiling personal 
ideniilication number or security cikIc. 

St»meiin)es. Iraudsiers can obtain credit cards by opening 
bank accounts using fictitious names and/or legitimate data 
ixrtaining lo genuine indi\iduals. Next. lhe\ complete credit 
card application forms. II siicccsslul in obtaining creilit cards, 
fraudsters disassiK iaie themselves w ilh addresses listed on the 
applications and use the cards until the Irauds are eventually 
delecled. 

be aware <»l the extent «»! Irauduleni credit card acii\il\. 
lUcause of its prexalence.il will someilay probabb allecl you. 

Stolen credit carils are generally used by Iraudsiers lor 
lwi> or three days • usualb Ihe length «>! lime il takes to list a 
stolen card on a (ivdil (.aril Wiiniin}* list. 

(Tedil card Iraudsiers can Ix* delecled il signatures iouiul 
on Ihe backs ol credit cards do not match ih«)se on the 
transaction vouchers. Ii they dilTer, iinlicalc this when calling 
(Iredil (i;ird Authori/aiion ( enires b) signalling with the 
appropriate emcrgenc) aleri. The centre will activate a 
distreel security response. Try lo delay the customer until Ihe 
authorities arrive • but never ai risk lo vour own s;ireiv. 



290 



.\l\\.i\> npori li»M. Molcn or n<»n ililiMitil caiiK 
ininKilMuK to niininii/.c IniiKl. 11 yoii noikc ili.il a nuntlH-r ol 
iinaiiiliiiri/cii iransaciions have biin iviorikil on ytmr 
MaicnKiu. ripori this lo your I'lnaiKial iiistiiuiion. 

Imlax. Iraiiil can aKo Ix* tlckrlril h\ in hoiisc siaii-ol-ilK- 
aii mural niixvorks or knowkilKi-basiil Iraml nionilorin^ 
NNsUins rcciiuly inMalkil ai many international financial 
MiMiiiitionNriKNC nc'iworks arc compiiicri/cil s\stcniN which 
profile unusual or Irauilulcnt transactions I hey can also assess 
ntenhants sales patlcrns. or customers' buxinn habits. II 
purchases lit Iraml proliles. the caril-issuinn llnancial 
institutions in\esii)taie by calling canlhoklers to iletermine il 
purchases are legitimate. 

; Ketail Iraml J 

Retail Iraml «KCurs when dishonest merchants and/or 
their em|>lo\ees sell customer credit card inlormalion to 
liaudsters.Counterleit credit cards are then manulaclured and 
Nt>kl to other criminals. Issuing institutions are generally 
unaware ol these Iraucis until cardhoklers advise them ol" the 
unauthorised transactions appearing on their statements. 
Sometimes, howewr. the\ may be detected b\ in-house 
monitoring s\ stems. 

Retailers haw also been kmiwn to make two or ni«»ie 
credit card transactit»n slip imprints when customers are 
making purchases Once customers leave the premises, illegal 
sales are transacted. 

: Warning signsj 

Although it can Ite diificult lo uncover criminal credit 
card acii\ it\. Ik aware ol the ktllowing warning .signs: 

• nerxous »>r suspic ituis In-haxiour b\ those- presenting 
c redit cards; 

• signatures on credit cards that do not correspond to those 
on transiciion vouchers: and 

• credit cards v\ iili commencemeiil dales ol the current 
monih. iiulk aiing cards nuiy have Ixen stolen prior lo 
deli\er\. 



291 



Inicmational crtdii card counicrlciiinj' u»sis ihc worltl 
banking c«)mnuiniiy appn)ximaul) USSA'iO million anmially It 
accoiinis lor aU)iil one third of all inicrnalional crcdii card 
Iraiid aclivily. The production ol coiinurlcii.s is oUcn 
c<M)rdinaicd by inicrnalional orKimizcd crime groups, typically 
ori^inaiinK in the Asia l^icific region It is truly a global crime, 
wiih plastic cards Ixing cut in one coiiniry. holograms 
priKluced and applied lo cards in an«)ther. magnetic stripes 
encmled and alfixed in a third liKaiion. and final pnidncts 
iH-ing sold in yet another c«)uniry where they are Iraudulently 
used. 

[white plastic IraiidJ 

Credit cards can also be counterfeited by altering and re- 
eml>ossing genuine charge, credit or debit cards, and re- 
encoding details t>f authentic account numbers t>nto the 
magnetic .stripes of other slolcn cards. In some cases, 
legitimate credit card data are eml>t)ssed on blank or while 
plastic cards. Properly encoded magnetic stripes are also 
alfixed to the cards, which are then used to defraud card 
issuers. Known as while plastic fraud, this criminal activity 
rei|uires the assistance of dishonest merchants. 



292 

REPORT SUSPICIONS 

lu- a^cnij'c- person is loially iinawaiv oflhc' nia^nitiKlc of 
Ii.iikIuIcik ac(i\ii\ that (Kcurs on an on^oin^ basis. Having 
rt kI l\ri:K.\ATI().\AI. FRAUD • CAN H AFttlCI YOU'/ to 
iliis pt>ini. \oii should uiKlersiancI its far reaching cllccls and 
l^f ahic lo hiiur idciuily examples ol this erinie. 

It cannot he entphasi/ed strongh enough that unlaniiliar 
ionipanies need to be in\estigated thoroiighh il yon are 
(.onteniplating a business association with them Walk away 
Ironi cpiestionabie actixities: ne\er be alraid or too 
embarrassetl to imntediately report them to your local police 
departments, these authorities are there Ut help you to deter 
luw anil repeat oKentlers. The) receixe regular updates tin 
Nuccessiul and unsuccessl'ul frauds, and will often recogni/e a 
p.irtiiular fraudster's method of operation. 

AiHicipau* criminal acliviiy] 

II \ou become suspicious of u recently established busi- 
ness relationship, terminate il. Companies can appear straight- 
fi»r\\ard at the outset. Once they've earned your trust, they 
ma\ subse(|uently initiate criminal activity. Similarly, terminate 
liingterm business dealings with associate companies if man- 
agement, for some reason, Ixgins lo act peculiarlj.Take noth- 
ing for granted. 

.Mso. be cautious of those approaching you professing lo 
represent legitimate banks. If they offer lo deal wilh your com- 
pan\ and \ou are unfamiliar wilh their financial institutions, 
refer to such publications as the Jiankvis' Alnmiuii: l\tlk's 
InWnitilhnitil litiiih DiivcUny or TImhiisihi lUmk Diivcltny, 
which can Ik- found at your l(K'al library They list all the major 
international banks, ihcir histories, ownership .siaius. and 
assi'ts and liabilities. 

.\l>4ive all. rememlHT if a deal hM)ks 1<h) good lo be true, il 
\er\ likeh is - and usuailv involves fraud. 



293 



STAYINCl ONE STEP 
AHEAD OF THE CRIMINAL 

U 

HI veil it your business has not been victinii/ecl hy inuKl. 
consider eoniaclinj^ seciiriiy specialists and/or ItK'al police 
«)rncers (o discuss ihe lalesi preveniive measures iliai can Ix- 
ini|)lemenicd lo prolecl your company. Ihey will aiklress 
popular Iraudulenl aciixiiy and recommend local seminars 
thai ma) Ix- ol inieresi. lAeryone. Irom Ihe presitleni o\ a 
nuiiti national company to the sole proprietor, should know 
how to fight fraud - only the well informed can deter it 

^ou may c|ueslion the need for obtaining training in mat- 
ters pertaining to security. Dont. It will protect vour company 
by: 

• creating an awareness alxiut fniutl; 

• familiari/.ing you with actual fraud cases; 

• outlining how monetary losses have resulted 
from previous fraudulent activity; 

• underlining the importance of preventative 
measures; 

• reilucing the incidence «)f fraud; 

• helping lo ileal with actual frauds in 
pn)gre.ss; 

• explaining how to rect)ver part, or all of the 
monies lost, due to a fraud; and 

• preventing similar frauds from re-occurring. 

If )()U feel it is warranted, you may Ix'neHl from preparing 
a program outlining how your company should deal with 
fraudulent activity. This, coupled with professional security 
instruction, will help you to ftxiis on implementing sound, 
protective measua's. 

Kememlx-r. education is an e.ssi'niial component of fraud 
pre vent ion. To further pnHecl your company, perhaps you may 
wish lo go one step further.. 



294 



FRAUD PREVENTION 
PROGRAMS 



i 



\rainl Pivivniiou l*r<n^mms can Ix- tailored K) mcci 
ixcnoiK- s mcilN riuy art useful lo dcvel«»p ami iniplcntcni 
iHiause iliiy force companies lo thoroughly assess their 
>ecuriiy operations. Strengths and weaknesses are quickly 
le.irned You will also identify- areas where fraud has been 
ili>co\ered in the past and \Nhere it can resurface. 

Si how do you start developing this pnigram? 

I Step one - Preparation J 

• Identify employee knowledge and awareness levels regarding 
lompany fraud prevention pn)cedua*s. Refer to the specific 
l>oinis in the IK)s and l)()NTs listed in the section entitled, WHAT 
YOU SIKHJIJ) KNOW ABOUT F^UD Review any existing 
seiurity pnKcduas. {insure that information at)out fraud is circu- 
lated regularly including fraud notices, publications, bulletins, new 
initial i\es and preventative measua's. 

• IKiermine if your company has ever been victimized by 
the following: 

- stolen cash - counterfeit currency 

- Molen cliet|ues • fraudulently altered chet|ues 

- iorged doeumentation - falsified invoices 

- illegal letters of credit • erroneous instructions 

Having regard for the above, and by assevsing the eight points 
found in the IRAININCi segment of the previous chapter, STAY- 
1N(> ONE STEP Aill-AD OF THE CRIMINAL, you have complet 
ed the initial research phase of your Fraud Ftvivntioii Pnt^mm. 



295 



[ 

I Step two - Development | 

• rapaa- the wriiicn porilon o( the IniiKl Prevention 
Pn»Kr.im. The PUm, et>nlerring with local polking agencies 
if necessary, list the procetliias and iniplenieniaiion steps 
needed to seciia- your company. 

• bnsna- that senior management (if applicable) 
endorses //»<• PUiu. 

. ( lonllrm that asoiirees are available lor necessarj emplo> ee 

training programs. 

[Slep Three - Implementation | 

• Distribute The Plan, aviewing and u|xJating it 
when necevs;iry. 

• i:xecuie //»<• PUin. 

With your I'raiul hvivnliou rm^iinni in plaee. yt»u 
should Ik Ixtter able to detect, and prevent fraudulent activi- 
ty which may target you or y«)ur company. 



296 



HOW CRIMINALS SOURCE 
THEIR INFORMATION 



i 



A\ ami irK'Ucciiw hiisincss oix-nuions arc open iiivitaiions 
l«>r IraiKlMcrs U) Mhkc. rhcrclorf. companies nuiM rely on iheir 
cniploxccs U) ciiMire thai sccurih measures in place are folh)\ve«.l. 
()nl\ (hen will companies he safc^uardeil a^^ainst Iraiid. 

lUisincss p«>licics. especialh those that can inHiiencc fraud 
and Iraud prevention, must he maintained as classified. Client 
I (inridcntiali(\ must also he guaranteed unless customers agree to 
allow the release ol their personal information, or should a court 
order demand it. It is a serious criminal ollence to divulge 
inlormalion to outsiders for fraudulent purposes. 

Ihere are man) ways, other than from employees, for 
fraudsters to ohtain information to execute their crimes I hey can 
intercept mail and confidential correspondence, search waste 
i>askets and garhage hins for sensitixe documents, convince 
indepenilent consultants and temporary staff to leak clas.silied 
material, eaxesilrop on employee conversations, make unusual 
telephone information inquiries, and even sometimes Ik- hired as 
emplou'es. 

I rauilsiers also study institutions ami businesses, oh.serving 
ami learning operational prtH.edures. Acctirdingly. employees 
should not respond to c|uestions asked by third parties, no matter 
how innocent the inquiry. Criminals who know too much ai>out 
\our customers affairs ami are overly familiar with company 
pr«)cedures are alwaxs a threat. 

Ikr aware Never become a communicaii(»ns vehicle for a 
Iraiklster Know your customers and reveal only relevant and 
appropriate information to them. Always comply with company 
procedures And alert those in authority when colleagues or 
I ustomers act suspici«»usly or if you have lioubts alxmt s(xcific 
business transactions. 



297 

CONCLUSION 



i 



iNvc lived in u pcrkcl \vi)rkl.cvcryt»iK' \v«)iikl Ik irii>iuorihv 
aiui h;ir«.l\v«>rkinjt. companies would never be deiraiuleil. 
eiiMoniers would be honeM and honourable, and police Ibrees 
and seeuriix speeialiMs would not be needed. We d«» nt»l. however, 
live in a perleet \\t»rkl 

lUisinesses ilo not comnui fraud. m>r do svMenis - diMmneM 
people do When eriniinalN reeoj-ni/e a llaweil or earelesN 
operali<»n. ihe\ are quick lo capiiali/e on the resuliing 
ueaknesses. linlortunaiely.securiiy measures ha\e limited sia\inn 
power Criminals study and rapidly evaluate them, establish their 
laults. and quickly iniplement nuthods ol delrautlin}' honest 
companies. 

(;ontn)llinK Iraud should Ix- imp<»rtant t«» all A proactive 
approach can c«)n.siderabl\ reiluce vulnerabilitx. 11 criminals 
perceive that prevention and iletecii<»n .strategies are in place, 
they w ill Ik less likely t«» attempt to defraud 

!i> reading IhTtRNATIONAL FRAUD  CAS IT AFttd 
YOll'f, you tiM> should In- able H) detect fraud RenK-mlKr that 
awareness, prevention and education are the solutions to this 
major concern of jjlobal commerce. 

^'ou are the eyes and ears of your company With 
determination, and a little eflon. fraud can be managed - t«» limit 
fmaniial losses - and to frustrate and expose the crintinals that 
viciimi/e us all. 



298 



II5SA 

Iht' lnU'rnaii<m»l Hanking Security Ass(K'i;iti<m (IBSA). 
iluricri-J in I9HI. is a noi-for-proni profcssiional association 
I onipris(.*il of security pn>ressionak representing tiKr international 
linjiKiji Ncrxices community, including many of the world's largest 
hanks. Mcmlx-rship activities focus on international fraud sihemes, 
UTrorisni and otiKT crimes perpetrated against world hanks. IlkSA 
cnjovs oilicial ohser\-er status in Interpol. 



fllNl^lMtl tt» 

lirM citiitiiti lirM |HiniMi|( 
ijiMun I 'I'M! 

M^\ liMiirpiirjud 
111^ \ Imiwpiir4lt-tl 

* IMiiJtUjt S<Nl« |IM>^. 
N<M ^tti, N«'W \iMi 



299 

Attachment 5 

KNOW TOUB. CUSTOMER POLICT STATEMENT 

Money launderers need to enter the banking system in order to conceal the true source and 
use of funds derived from their criminal activity. To do this, most money laundering 
schemes utilize one or more of the many fmancial services offered by banks. Adopting a 
prudent and reasonable KYC policy and promoting employee awareness is the most effective 
way for a bank to avoid being unwittingly involved in money laundering. Since many 
banks already observe formal KYC policies, ABA believes that a KYC regulation must 
recognize this practice. 

Accordingly, ABA believes that a "Know Your Customer" regulation must be consistent 
with the following principles: 

1. Due to die varying sizes and types of financial institutions in the United States, any 
appropriate KYC requirement must consider a direct relationship between the size of the 
bank and the cost of compliance. The banker/customer relationship continues to evolve so 
that "knowing customers" in the traditional sense is not always easily achievable. 
Customers are generally very mobile, and large banks offer multiple banking locations 
throu^out cities and states. Therefore, it is unrealbtic to believe that banking center 
employees will recognize or know all customers who conduct transactions at their location. 
Transaction or account monitoring should be limited to high risk products. Fmally, the 
Treasury must acknowledge tfiat modem banking services now result in less face-to-face 
interaction between bankers and customers. A I^C regulation must be flcadblc! 

2. As we have stated many times, a bank must review customer information regarding the 
nature of the customer's business or account activity (i.e. household or personal account). 
A bank should obtain and retain information appropriate to its business needs. Therefore, 
heavy emphasis should be placed on identifying, verifying and retaining information on 
new account relationships. 

3. While this element must be flexible, bankers support a policy of taking reasonable steps 
to verify the information provided by die customer in #2 above. 

4. A bank will not knowingly accept deposits from or provide services to customers whose 
funds are derived from illegal acti\dty. 

5. A bank will not ignore indications that a customer's monies originated from illegal 
activities. Banks will NOT make a conscious decision to avoid learning the truth. 

6. The institution will quickly respond to known warning signals in a legal and 
appropriate fashion. These signals need to be developed by the government as well as by 
the bank. 

7. Bankers realize the necessity of establishing an alliance with law enforcement and will 
cooperate with law enforcement efforts to the extent that it is possible and legally 



AMERICAN BAMOatS ASSOOATION' 



300 



permissible. 

8. No KYC policy can be effective without extensive training throughout an entire 
institution so that there is employee awareness and strong procedures. The training must 
be ongoing and include new and transferred employees, and covers both changes to 
regulatory and statutory requirements. 

9. There mtist be a system in place to test or audit the KYC policy. The type and size of 
testing should be left to the discretion of the individual institution. 

10. In order for U.S. banks to remain competitive in the global marketplace, banks should 
not be required to build new systems other than as needed in the normal course of business 
operation. 



I ASSOCIATION' 



301 



House of Representatives, Committee on Banking and Financial Services 

Testimony from 

Amaud de Borchgrave 

Director, Global Organized Crime Project 

Center for Strategic & International Studies (CSIS) 

February 28, 1996 



Four years ago, a wealthy American friend with excellent contacts at the top in Moscow 
received a phone call from a prominent Russian asking him to take care of five Russians 
coming to New York. When they got to his office, it soon became clear that all they wanted 
was a banking introduction in Nassau where my friend also has a house. A week later, he 
received a phone call from his Swiss banker in Nassau who asked him whether he knew 
what his Russian friends wanted. "I assume they wanted to open a bank account," he replied. 
"Yes," said the banker, "but do you know for how much?" "I assume a few miUion," my friend 
replied. "No," said the Swiss banker, "it was for $2.5 biUion." Zurich headquarters was 
informed and the Russians were turned down. 

Four weeks later, I found myself in the south of France sitting next to a Swiss banker based 
in Monte Carlo. After I told him what had happened to my friend in New York, he 
volunteered that he had received a Russian the day before who walked in without any 
introduction and wanted to deposit $400 miUion. He also wanted to make sure that it would 
be concealed through a variety of other offshore banking centers and would be totally 
untraceable. This, too, was turned down by Zurich headquarters. 

But these two incidents led me to the conclusion that something very big was taking place. 
It was also the genesis of the Global Organized Crime project I launched and now direct 
at CSIS. The project is designed to assess the dimensions of transnational crime, the nature 
of the threat, and to make reconmiendations on measures for a muscular response. 

The Project's Steering Group is chaired by Judge WilUam H. Webster, the former DCI and 
FBI Director, and is composed of some 30 prominent experts from the intelligence, law 
enforcement and corporate security communities. It has spawned seven task forces 
(composed of 150 members, each one highly rated in his or her field) that deal with money 
laundering; counterfeiting; the smuggling of radioactive materials; the smuggling of millions 
of illegal immigrants from east to west and from south to north since the end of the cold 
war; narcotics trafficking; Russian Organized Crime; Asian Organized Crime; cybercrime 
and information technology security; cyberterrorism; cyberwarfare, or infowar. 



302 



After 18 months on the job, there is little doubt in our collective minds that the dimensions 
of transnational crime present a far greater international security challenge than anything 
western democracies had to deal with during the cold war. Jim Woolsey, the former DCI, 
who is a member of our Steering Group, could not have put it more succinctly when he said, 
"We have slain the dragon of the Soviet empire, but we now find ourselves in a jungle filled 
with a bewildering variety of poisonous snakes." 

President Yeltsin, as we know, has called his own country, which still spans eleven time 
zones, the biggest mafia state in the world, the superpower of crime. He has accused 
officials of turning a blind eye to the criminal penetration of the MVD, the very 
organization that is in charge of fighting organized crime. The collapse of the Soviet Union 
also brought about a lethal mix of intelligence services, banks and organized crime. 

I personally investigated -- and in many cases witnessed -- what Russian thieves-in-law or 
mafia dons were doing all over western Europe, North America and Latin America. 
Carrying $5 million to $10 million around in $100 bills in suitcases, they have been buying 
choice properties for the past four years, all the way from Buenos Aires to Berlin, from 
Marbella, Spain, to Monte Carlo, Monaco. 

Mr. Jurgen Storbeck, the German Director of Europol, the nascent EU police investigative 
unit (which does not have law enforcement powers), said recently, "there is a tidal wave of 
cash of dubious origin being invested by Russians. Russians are now the most active in 
buying up any assets on the European markets, including companies, office buildings, stores, 
restaurants, clubs and so forth. Billions of dollars are being channelled each month through 
such money laundering centers as Cyprus. No one is quite sure about how the money is 
being made and where it's coming from. But we do know that much of it is obtained through 
extorsion and other criminal activities." Tiny Cyprus, incidentally, receives 100,000 Russian 
visitors a year -- compared to 200,000 in the U.S. 

Dr. Zbigniew Brzezinski, the former National Security Adviser, who also headquarters at 
CSIS, estimates that Russia has taken in approximately $110 million from all western 
countries, principally Germany, and international institutions during the past seven years. 
Of that amount, he reckons that between 60% and 70% has found its way back to secret 
bank accounts abroad. 

There is a growing crisis of law and order over an increasingly large part of the globe. The 
collapse of the Soviet empire led to a breakdown of the discipline generated by a fear we 
no longer fear -- to be replaced by a new, largely unspoken, fear that the human being is 
becoming redundant. 

There are already 820 million unemployed in a world of 5.7 billion people. And with almost 
100 million new babies a year -- 40 per cent of then born into the megaslums of the 
developing world -- and with an average age of 21 or less, we have entered an era of rising 



303 



inequities between nations and within nations. 

There are also the haves and have-nots of the information age. In our banking sector alone, 
some 450,000 employees will be laid off by the end of the century, displaced by 
megamergers and by on-line banking which is exp>ected to shut down half the branches in 
the country. A new cashless society will have created a ready-made army of disgruntled 
people, potential recruits as purveyors of inside information. 

This is the global environment in which transnational crime, which knows no borders, has 
carved up the planet into privileged sanctuaries of all manner of crime. The social and 
demographic pressures driving transnational crime are little understood. Narco-democracy 
is now part of our geopoUtical jargon. The Hong Kong-based Chinese Triads, now spreading 
all over China, and, through the Overseas Chinese, to the rest of the world, have forged 
alliances with the Japanese Yakuzas, Russian syndicates, Colombian cartels and so forth, 
and left national law enforcement agencies trailing from five to ten years behind. 

Our GOC study has also established a direct correlation between the exponential growth 
of transnational crime and the computer revolution. Traditional prerogatives of national 
sovereignty have not only been challenged in cyberspace; they have ceased to exist. 

But we still seem oblivious to how vulnerable information technology has made us. A former 
computer topsider in the intelligence community told one of our task forces, "Give me $1 
billion and 20 super-hackers, and I can shut down America." A DoD colleague, upon hearing 
the statement, said he could do it for $100 million. 

In order to test the security and vulnerability of DoD's communication systems, the ASSIST 
Center of DISA (Defense Information Systems Agency) was tasked to penetrate the 
Pentagon's worldwide operations. For these mock attacks they did not use sophisticated tools 
and techniques, but rather software available to anyone on INTERNET, such as SATAN, 
R-BONE and ROOTKTT. 

First, they were able to gain full user privileges of three per cent of computers through the 
frontdoor. Then, by e}q)loiting the relationship of trust of the three per cent, they were able 
to penetrate 88 per cent of all targeted systems. 96 per cent of those attacks went 
undetected. And of the four per cent who did realize they had been successfully attacked, 
only five per cent reported the incident to their superiors. 

Sub-state or non-state criminal actors are using the same methods. Although not verifiable, 
briefers in off-the-record meetings, representing industry and government, have told us that 
at least 400 of the Fortune 500 corporations have been penetrated ~ and again only five per 
cent were aware of the intrusion. In many instances, the objective was passive economic 
intelligence collection, setting off fewer, if any, alarms. 



304 



We have no early warning capability in cyberspace. In mock information warfare scenarios, 
we have seen that telephone signaling systems and switches can suddenly curdle, jamming 
communications; that trading on the New York Stock Exchange can be paralyzed; that 
automated teller machines can go haywire, crediting and debiting erroneous amounts at 
random; that the Social Security System and its 1,325 field offices could no longer function; 
that air traffic control centers, and railroad and shipping computers can be disabled. 

The order of magnitude of transnational crime is staggering. Britain's National Criminal 
Intelligence Service has a rough guesstimate of $1.3 trillion for annual global money 
laundering ~ an increase of $300 billion on their previous annual estimate. NCIS receives 
some 12,000 confidential money laundering tips per year from public-spirited citizens. But 
not one of these tips led to a conviction. Evidence simply vanishes in cyberspace in 
nanoseconds. 

PDD-42, issued by President Clinton last October, was designed to come to grips with 
transnational crime and money laundering. It is at least a begiiming. But it is woefully 
inadequate in that it assumes that we can negotiate the closing of some 50 major money 
laundering centers that span the globe ~ many of them tiny island nations -- and, if 
unsuccessful, punish them by taking them out of the U.S. financial loop. There is no such 
loop. It is now a global one, but law enforcement still has to stop at meaningless borders. 
The Seychelles will give anyone depositing $10 million a diplomatic passport - i.e., immunity 
from prosecution. A St. Kitts passport can be had in return for the purchase of a $150,000 
condo. 

The world's leading financial policemen are only now getting around to "considering" 
targeting money laundering from arms trafficking, extortion and bribery, as well as the drug 
trade. Members of the Financial Action Task Force, which groups officials from the 
European Commission in Brussels, the six member countries of the Gulf Cooperation 
Council, and 26 other countries ~ for a total of 47 nations - have launched a review of 
"guiding principles." This review will be completed in June. Hopefully, it will result in the 
criminalization of money laundering linked to any serious crime. 

The Task Force's current reconmiendations, based on the lowest common denominators 
among the member states, only require the criminalization of drug money laundering. The 
inclusion of all serious crimes could make it simpler for law enforcement officials to launch 
investigations that look suspicious, but have no obvious drug links. The review is not 
expected to result in big changes to the 40 principles currently recommended by the Task 
Force. Yet, in our opinion, these changes are long overdue. 

The review will also have to consider whether to address new issues raised by the 
development of "cybercash," new payments systems such as stored value cards or electronic 
wallets. Ronald Noble, the outgoing Undersecretary for Enforcement at Treasury and 



305 



chairman of the 47-nation Task Force, said, "We have to be concerned as an organization 
to come up with principles which recognize that technologies could pose a threat but do not 
define them in such a way that you are dated as soon as you publish them." 
Law enforcement officials feel strongly that the developers of new financial technologies 
should think about their criminal potential before they launch them, so that governments 
do not have to clamp down on them afterwards with draconian rules. Safeguards now being 
discussed against the misuse of electronic stored value cash cards could include limiting their 
maximum value or restricting their use to certain closed systems. 

The professionals on our own CSIS task forces believe that electronic financial crimes are 
now the principal threat to the world's financial infrastructure. We are facing a new breed 
of transnational criminals with hightech methodologies. 

Individuals and corporations are only dimly aware of the risks. Vint Cerf, the father of 
Internet, predicts that before the end of the century, some 200 million computers (vs. 40 
million today), and some five million global networks (vs. 85,000 networks today), will all 
be linked to the 'Net. Internet's World Wide. Web sites are now doubling every 53 days. 
Electronic commerce is expected to reach $3 trillion a year in four years time when on-line 
banking will become the norm, and checkbooks the exception. 

America's real assets are in electronic storage, not in Fort Knox, including most ot its 
proprietary and intellectual property. And in this global electronic environment, there are 
no cops to protect you, your assets or your secrets, or your reputation in personnel or court 
records that can be doctored by remote control. As "60 Minutes" demonstrated last Sunday, 
transnational criminal gangs are now routinely stealing the identities and retirement 
accounts of American citizens. 

We all know that successful counterfeiting is also a global plague. If 14 out of 15 French 
banks -- forewarned that it might be a forgery - guaranteed the authenticity of a $100 bill, 
we know that the superbill is not a journalistic fantasy. Russians now hold tens of billions 
of dollars in $100 bills. About $100 million in $100 bills is shipped daily to Russia where 
they are bought for rubles. Topic A among Russians these days is what the new $100 bill 
will do to their hoard of old bills. The U.S. Embassy hot line tells them they have nothing 
to worry about, that the old bills will be valid tender for the indefinite future. But there is 
no question that regimes such as Iran, Libya and Iraq have a vested interest in destabilizing 
confidence in the dollar. They have also been using counterfeit dollars for subversive 
purposes. The global reach of the superbill is yet another example of how law enforcement 
and intelligence have no alternative but to pool - not share -- their resources. 

What does CSIS hope to do about Global Organized Crime? First of all, there is no central 
clearing house for information about activities in all fields of transnational crime. CSIS has 



306 



collected and continues to collect this information from a wide variety of sources all over 
the world. 

Our mandate is that of a catalyst to raise the level of awareness that hopefully will provide 
the building blocks for the kind of hightech transnational cooperation and legal structures 
that are essential in order to level the playing field between law enforcement and 
transnational crime syndicates. 

Countries under attack, including all the democratic nations of the world, have no choice 
but to pool their resources to create the kind of countervailing force that transnational crime 
syndicates will have to take seriously. 

Until that happens, Global Organized Crime will continue to supplant national entities and 
undermine the world's financial infrastructure. 



###### 



¥ 



307 

Qiffbrd L Brody Associates, Inc 



Written Testimony 

of aiflbrd L. Brody, President of Clifford L. Brody Associates, Inc., 

Washington, D.C., 

before the Committee on Banking and Financial Services 

of the House of RepresenUtives, on the Threat Presented by the Activities of 

Organized Russian Groups, Banks, and the Russian Government 

to the International Financial System. 

February 28, 1996 



Mr. Cbaimian, Representative Gonzalez, Members of the Committee, my name is Clifford L Brody I am 
President of Clififord L. Brody Associates, Inc. a bank marketing and electronic banking consultancy based in 
Washington DC. I am pleased to appear before you today to testify on the threat of organized crime to the 
international financial system and, if I may add, to the domestic banking system of the United States. 

I bdieve that Russian banks and the Russian government play a major role, often an active role, and thus bear 
major responsibility, in contributing to the growing problem of laundering of U.S. currency. 

I also believe diat the U.S. Government should take specific steps to counter these activities, and that it can - 
without comprwnising its goal of diminishing the threat of Russia's returning to its role as super-power adversary, 
or rebuilding its cold war nuclear arsenals. 

I therefore make the following recommendations. 

• First, that Congress attach a carefully worded, concise requirement to targeted appropriations legislation, 
requiring the U.S. Government to negotiate and then confum specific and effective Russian Government 
acticn to improve its bank supervisory fimctions in order to thwart illicit Russian bank activities, and that 
securing a dmetable for specific improvements by Russia be a prerequisite for continued funding of U.S. 
technical assistance to Russia's fmancial sector, or any technical assistance, targeted to investment in 
individual Russian banks and their back room processing, from multi-lateral institutions like the World 
Bank or European Bank for Reconstruction and Development, 



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• Second, that Congress urge the Executive Branch to secure agreement from the Russian Government to 
make available to legitimate U.S. banks the approved list of Russian companies authorized to maintain 
deposit accounts outside Russia, 

• Third, that Congress secure, ideally through informal discussions with the Executive Branch but with 
legislation if necessary, a firm commitment from the Executive Branch to act in concert with other 
governments, and a similar commitment from the Federal Reserve to act in concert with other central 
banks and the Bank for International Settlements, to negotiate agreement among OECD governments 
and central banks that so called stored value cards generally be limited in their function so as to pre-empt 
any opportunity for Russian (or any other) banks systematically to use electronic cards to bypass any 
OECD country's effective control over its currency and money supply, and 

• Fourth and most importantly, that this Committee work closely with the domestic U.S. banking mdustry 
to decide on the necessity for legislation defining whether "bearer" stored value cash cards should be able 
to contain unlimited amounts of cash without some form of electronic stamp indicating where large 
money balances on such cards came from, and who they belong to. 

My perspective in these matters is shaped by my professional experience and, of course, my personal bias. 
I have been a United States diplomat specializing in East-West matters, serving m Washington and in Europe 
for 14 years from 1966 to 1979. Since leaving government, 1 have served as a consultant to most of the larger 
money center and regional U.S. banks, and as advisor to several large banks, high technology firms, and 
multinational consumer goods companies expanding into Central Europe, Eastern Europe, and countries of the 
former Soviet Union, notably Russia itself 

In the period from 1990 to 1994, my firm either advised or represented Citibank, Avon Cosmetics, Hearst 
Publications, AT&T, Hewlett-Packard, HJ Heinz, Cabletron, and several smaller firms in specific business 
matters in Russia. In each instance, our client's goal was to achieve a satisfactory return on the heavy investment 
required for opening business operations there. Our scope of work in each case was to negotiate with Russia's 
Central Bank, commercial banks, or state-owned banks as circumstances warranted to assure that our client's 
business interests, contract relationships, account balances, or operating licenses would be properly respected and 
treated fairly 

My firm also entered into agreements with First Data Corporation, US West, and several other major firms 
to work with emerging Russian commercial interbank clearing systems to improve electronic frinds transfer 
operations among Russia's private sector and state owned banks. In addition, my firm located and helped 
negotiate multi-year project financing from non-Russian and Russian commercial banks for housing construction 
desperately needed by the US Embassy in Moscow to house U.S. diplomats. 

My fum also had became known to the largest Russian banks and the Russian equivalent of the American 
Bankers Association ~ namely, the Russian Bankers Association ~ as a potential supplier of technology for 
making needed repairs to Russia's interbank clearing system. The Russian Bankers Association in particular 
urged my company to approach the Central Bank of Russia on this subject, which it did in 1992 

Subsequently, with the sponsorship of several major US technology firms, my firm sought out the National 
Automated Clearing House Association, NACHA, the US. self-regulatory organization (SRO) umbrella group 
whose membership includes over 400 of this country's most active electronic payments systems operators and 



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participants - including all major banks and several agencies of the US Government like the Social Security 
Agency and the Department of the Treasury. As you may know, NACHA sets the standards for encoding, 
security, and transmission of all electronic fiinds transfers (EFT) in the United Sutes, including those involvmg 
SSI, VA, and other direct deposiU, virtually all pnvate sector direct deposit programs, and most company to 
company EFT as well. 

The avowed purpose of my firm's seeking the guidance of NACHA was to respond to a specific request fi-om 
die Central Bank of Russia to my firm, in the Fall of 1992, to provide expert technical assistance to the Central 
Bank for modernizing the hopelessly antiquated interbank payment system inside Russia 

By 1992, for reasons too complicated to summarize here, Russia's interbank payments system had become 
so inefficient and leaky that on a daily basis, interbank transfers by the thousands simply were getting lost, while 
millions of other paper transfer slips confirming interbank transactions were being stored in several rooms in 
a building in Moscow, left there to rot. At the same time, anyone with even a fu^t generation IBM PC could tap 
into the rudimentary electronic interbank clearing system then in place and literally create money transfers out 
of nothing -- effectively printing money widiout a printing press. 

The Central Bank of Russia said it knew this was happening, and that it wanted to put a stop to it. 

For ethical as well as practical reasons, we pointed out, the adoption inside Russia of modem interbank 
clearing and settlement procedures and technology made sense only if the Central Bank of Russia itself were 
detennined that the system operate according to the same high standards that today in every OECD country 
already govern interbank payments, clearing and same-day settlement of accounts at the central bank. Otherwise, 
technology could and likely would be used by at least some interbank payment system participants ~ including 
banks ~ for illicit as well as legal activities. 

Only when the Central Bank of Russia confirmed in writing to us later in 1992 that it wanted its interbank 
system to comport with BIS standards did we agree to move forward. The Central Bank then formally requested 
that my company, others, and NACHA bid on its interbank payments system modernization project, which we 
did. 

The government agencies that have testified earlier today have spoken of the general threat of organized crime 
to the international banking system. Several have spoken about the threat to our domestic banking system as 
well. They have spoken of the dangers inherent in the orgamzed groups that are becoming more and more 
technologically efficient, able to move huge sums of clean as well as dirty money in nanoseconds, without law 
enforcement agencies or honest bankers having much chance of knowing for sure who they are dealing with. 

These agencies represent a government - the U.S. Government - trying its best to keep the dirty players out, 
something my fum heard the Russian Central Bank say it wanted to do, too. 

Alas, the words did not fit with the deeds. For, in the process of organizing the bidding consortium with 
sevei^ U.S. companies and NACHA, pnqiaring volumes of bi-lingual terms of reference and bidding documents, 
competing intensely for the contract, winning it, and receiving a Letter of Intent fi'om the Central Bank to 
consummate the contract, the real deal was put to me m no uncertain terms by a senior Central Bank official in 
May, 1993, when I came to Moscow to sign the actual contract. 



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Look, Mr. Brody, he explained. All these standards and rules that you use in the United States are very nice. 
But what we really like is this little slice of software - he pointed to a single box in the complicated diagrams 
and technical narratives that our consortium had provided -- effectively singling out new technology that had 
resulted from more than five years of R&D by one of our consortium of bidders. This technology, he said dryly, 
may seem to you to be a very small item To us, it is big. We have everything else your consortium is offering, 
and we really do not want to buy any of it. But, tapping his finger on that little diagram, he went on: we don't 
have this, so name your price, Mr. Brody. We'll pay you anything for it! 

I've seen a lot of dirty dealing in my life. It's quite something else, though, when someone senior at the 
Central Bank of one of the most powerful countries in the world asks you to help it with software piracy. I 
walked out. 

Alas, inside Russia today, within the country's central bank, within its huge state owned banks, and among 
almost all of its large and not-so-large private sector banks, you can literally buy your way into the interbank 
payments system and use it for just about any purpose you want. 

If you are a clean player, you can transfer your money domestically inside Russia to one of the banks 
connected directly to SWIFT, and then have your money efficiently wired anywhere in the world. If you are a 
dirty player, you can do the same. No one checks where the money has come fi'om, what balances have been 
hidden from the government, or what the fiinds are meant to do. 

It is not a system in which there just happens to be a larger-than-usual bunch of bandit banks. Rather, there 
is simply no effective enforcement of banking supervisory rules over and above a rather elemental reserve set- 
aside program, based on a simple accountant's audit, that the Central Bank notches up or down as macro- 
economic circumstances seem to warrant. There is no effective reporting system for money laundering, nor even 
a modem set of rules in place requiring one. There is no modem examination system, few real examiners, and 
no document filing systems to signal to central authorities when inordinate amounts of hard currency is deposited 
or withdrawn, or even if hard currency balances actually exist. 

Banks comply with some existing Central Bank reporting requirements by declaring only some of their own 
balances, keeping the rest off the books by shifting them among their clients. The banks then become active 
partners helping corporate and high net worth individual customers sidestep their own nominally required 
reporting to various ministries. Often this happens because the banks themselves are substantial equity holders 
in the very companies whose accounts are maintained at the banks, and whose own interests are therefore better 
served by hiding the tmth of their customers' wealth. 

Russian companies, in turn, simply keep funds on deposit outside the country, either illegally (under Russian 
law) in their own accounts or in legally-held off-shore accounts of other companies that lend out the account 
faciUty to others — for a steep price These companies then send middlemen to the United States, shopping for 
domestic U.S. companies willing to receive wire transfer payments from these accounts for bogus services, draw 
out cash, and give it to other Russians when they travel here. 

My firm was approached more than once and asked to participate in precisely this kind of scam — in one case 
by a Russian who had been traveling to the United States repeatedly on grants from the U.S. Agency for 
International Development. We were even asked in New York City, by representatives of a huge Russian state 
owned enterpnse, to be the systems integrator for hardware, software, and transaction processing that would have 



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allowed the company in question to pay its employers and suppliers through accounts accessed by debit cards 
issued to them. At first, it sounded like a great idea. Then I asked how the company planned to gain what I knew 
to be required pre-approval fitxn the Russian Central Bank to operate a local card system and tap the interbank 
system for ongoing fiinds to redistribute to cardholder accounts. I was told flatly that the factory had no intention 
to do so. Instead, it wanted a system that it could use to create its own rubles. Not scrip. Rubles. 

Were it 1992 right now, Mr. Chairman, and were we talking today about a Russia just begiiming to emerge 
from the shackles of single-party communist rule, we could perhaps take comfort that in its first steps towards 
a true fi^e market economy, we were likely to see these kinds of improprieties. 

However, we are now four years into a massive program of bilateral and multilateral loans and grants from 
the United States, other OECD countries, the World Bank, the EBRD, and the IMF, amounting to more than S 1 00 
billion, where the government of Russia has had opportunity after opportunity to take control of its own destiny 
and impart to its economy and commerce a baseline of acceptable banking and business practices. 

Russia simply doesn't want to. 

In a country supposedly in desperate need of a $ 1 billion IMF loan over three years, there is anywhere fi-om 
S70 to $100 billion on deposit outside Russia belonging to Russian owners. With notable individual exceptions, 
neither at the Central Bank nor anywhere else in the Government of Russia is there an official thirst for instituting 
a system of legal, business, or banking practices that could comport with those in place here or elsewhere among 
highly developed economies. In its place, there is only bribery. Lots of it 

One hears splendid talk, to be sure, about how the system in Russia could be fixed. In the land that gave us 
Dostoyevsky, how could there not be hundreds, indeed thousands of pages of intellectually fascinating draft rules 
about banking r^^lations, coupled with the most elegant discussions among Russian central bankers, commercial 
bankers. World Bank advisofs, the IMF, and consultants from the European Bank for Reconstruction and 
Development about ways the system should be repaired. 

There are also a few senior people inside the Central Bank of Russia who yearn for propriety and honesty 
in tiK system. I have met them. Their motivation is first and foremost the pride they have — and want to have - 
in dieir own country, and the desire to see themselves and be seen as members of an international community of 
regulators working in concert to improve the international banking system and keep dishonest players in check. 

Unfortunately, what prevails in Russia today is an attitude of official laissezfaire coupled with an "I want 
my share too" mcntahty from the top to bottom of government. It is a system without effective laws, no less law 
enforcement, and a population of officials inside the Central Bank and the Finance Ministry who think the rules 
offairplayandhonesty in banking diat you and I might talk about are sheer lunacy. Not luxuries. Lunacy, with 
no place in the real world that Russia has been for a very long time. 

The result is a banking free-for-all, where the banks inside the country do what they want - including bribing 
their way in the door at the Finance Ministry itself to get in line for new state credits to bail out borrowers that 
cannot pay old loans coming due. Some of the insider dealing would make even Charles Keating blush. 

When western investors, bankers, visiting Members of Congress, or expert teams from the World Bank or 
EBRD or US AID meet with them, most of these bankers will mouth the rig^t words. And the banks' premises 



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sure do look spifiEy. But behind these splendid facades, the will is simply not anywhere to be found among 
commercial banks or the Russian government to play by internationally accepted banking rules. Instead, the 
passion is there only to find the best technology anywhere to move money to where it will make the most raw 
profit. 

Indeed, the business plan of most Russian banks can be summed up this way: use the best technology there 
is to accumulate dollar balances from home and abroad, lend as much as you can locally inside Russia for three 
to six months at rates of 40-80%, move any remaining balances outside the country on the bank's own account 
or wherever depositors vrant, leave them on deposit at banks large and small in European and Asian capitals, earn 
nominal interest, wait for customer instructions on where to move balances next, don't ask questions, and charge 
hefty fees every step of the way. To the recipient banks in Europe and Asia, these deposits are quite the gift - 
low cost deposits that can then be lent out at very attractive spreads. 

The reason more balances don't show up in the United States in quantity is not because our laws are that 
much better than, say, in Europe, and instead because most U.S. banks do a very fme job of watching where 
deposits comes from. This imperfect line of defense, this complex balance of laws, regulations, banking practice, 
and things we believe in, are ultimately reflected in that banking rule of rules - "Know Thy Customer." 

All Russian banks - all of them - live free from any equivalent form of self policmg. They don't care who 
their hard currency customers are. Instead, Russian banks realized in the early I990's that it would not take much 
to comer the market for laundering money, and that it would be very lucrative if they did. They also realized that 
with the right technology, they could do it eiSciently and make a lot of profit doing so. They have become simply 
the most systematic, efficient, and intense in attracting illicit dollar and other hard currency balances ~ no 
questions asked. They are also the most efficient in redistributing these balances all around the globe. 

There are two ways this Committee can deal with this serious problem. One is to address existing patterns 
of money laundering. The other is overcoming the ominous new threat of money laundering when electronic 
commerce and the use of electronic money - cybercash ~ becomes the norm. 

I do not believe it necessary that new laws be passed, or even that new regulations be written, to deal with 
the current threat fi-om Russia. The United States does not have the extratemtorial reach into Russia to make 
U.S. laws stick, nor is there very much interest among banks or the official community mside Russia to enforce 
equivalent rules of their own. 

Instead, the United States Government needs to be creative, asseriive, and above all practical. Right now, 
the Central Bank of Russia issues licenses authorizing companies inside Russia to maintain deposit accounts in 
foreign countries. It keeps a current list of who has those licenses. Through the Bank for International 
Settlements, by direct bilateral discussion between OECD countries and the Government of Russia, or by some 
other ofTicial means, an agreement can be reached ~ if the United States assets leadership " by which banks 
outside Russia could confirm with the Central Bank of Russia that funds being wired from a Russian owner to 
a bank anywhere outside that country were in fact legally being put on deposit outside Russia. 

It is not farfetched even to think that the Central Bank of Russia could put its list of approved account holders 
on the World Wide Web - allowing access only to authorized commercial banks. 



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The real challenge is pressing the Russian Government and Central Bank until it agrees to make this possible. 
It may not be as hard as it seems. At least one senior official from the Central Bank told me two years ago that 
the Central Bank would be amenable to coordinating this way, but that there were no takers from among the 
dozens of U.S. government officials with whom he had met about this - high-level officials from many of the 
agencies that testified hwe earlier today. If our government wasn't prepared to take up the offer then, it should 
now. 

Governments in Western Europe also have known of this option for a long time. A few correctly argue that 
they do not want to appear to be in bed with Russian law enforcement authorities, especially if those authorities 
can and often do act with capriciousness in defining who a bad guy might be. I agree completely. But it is a far 
cry from collaborating with Russian law enforcement merely to empower legitimate commercial banks, before 
accepting deposits that appear to have Russian ownership, to check a list of those Russian companies that can 
legally hold hard cuaency outside Russia. 

The acid test, of course, is whether in these times of nsmg political sentiment inside Russia against reforms 
of many kinds, the Central Bank will make that list available - and whether it will do so without requiring that 
the bank checking the list say why it is doing so. It is not worth the investment either of time or political capital 
for Congress to pass a law about this. But there should be a paragraph making financial assistance to Russia 
condibonal on our government getting the Russian Central Bank, and Finance Ministry if necessary, to go along. 

The real problem, Mr. Chairman, is getting US diplomats to press for a solution whose details they 
apparently do not understand, and therefore cannot defend when facing reluctant Russian counterparts who also 
may not understand the technical issues. The Federal Reserve does not suffer from this lack of understanding: 
fee Committee ought to explore whether the Federal Reserve can and should generate interest among other OECD 
central banks to use their powers of persuasion collectively to get the Russian Central Bank to go along. 

I want to tum now to legislation that this Congress may well have to pass, Mr. Chairman. Given how long 
it takes for legislative language to become law, and the sustained investment in tune and political capital needed 
to build an effective consensus with the bantong industry and regulators for statutory language that achieves what 
is intended, the Committee should begin work now, without delay. 

I am speaking here of legislation that preserves for governments the exclusive franchise of creating and 
printing money, and assures that as technology advances to allow citizens to use portable electronic forms of 
money, government does not cede its actual power to create money to organized crime, money launderers, 
counterfeiters, tax evaders, or even by accident to honest people. 

Right now, legitimate commereial companies and banks are investing extraordinary sums and working seven 
days a week to carve out an extraordinary franchise ~ literally the placement of multiple accounts on so called 
stored value cards. These stored value cards ~ people often call them smart cards — will eventually be as 
commonplace as regular plastic debit and credit cards are nowadays. 

These cards wilt work in one of two ways. One card might carry information and spending power from 
multiple accounts clearly identifred as belonging to the specific card holder. Or, it would cany real money 
downloaded onto the card in electronic form that can be spent electronically by whomever has the card in hand. 
It will be technologically possible for one card actually to do both, and the best ones will. 



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With the first kind of card, consumers will be able to access what is theirs in the way of their own money or 
other vital or valuable personal data stored in a money, credit, or information account somewhere. The one card 
vtrill let them tap these multiple accounts at home, on the job, in stores, and just about anywhere else for 
transactional, medical, educational or other purposes - all with extraordinary convenience and safety. 

Much of the private-sector planning for consumer and business use of these smart cards centers on marketing 
this multi-account functionality, and limiting the holder's spending to what the person has in his or her various 
bank or consumer loan (e.g. credit card) accounts. Save for the fact that multiple accounts will be included on 
the same card, these cards would work the same way ATM or credit cards do now: swiped at the point of sale with 
confirmation received fi'om the account issuer via an on-line dial-up connection before the transaction is 
permitted. 

A pure bearer stored-value card ~ a so-called cash card — will be different, in effect substituting literally for 
actual coin and banknotes. Much Uke a dollar bill, he who held it could spend it. It would be honored no matter 
who held the card or where it was presented. There would be no point-of-sale confirmation. Once the money 
inside the card were spent, the same card could be refilled with more. 

Much of the convenience these bearer cash cards will offer to merchants will be in eliminating the expensive 
per-transaction dial-up verification process so commonplace in stores today. Instead, the card bearer or store 
cleik will plug the card in to the cash register, and if there's cash value in it, the customer will be able to buy the 
newspaper, with the purchase price and tax deducted fi'om the value on the card, just as happens today when you 
use fare cards on the Metro. 

This type of card is ideally suited for the huge volumes of low-denomination transactions that would 
otherwise be prohibitively expensive to process electronically if the merchant had to perform verification through 
on-line systems ~ as happens today. 

Bearer cards issued by Mondex, a company in Europe, are already being used on a trial basis in a town in 
England in just this way There is anecdotal evidence that consumers, though understanding the logic of these 
cards and the convenience they are supposed to offer, question whether they want bearer cards that can be lost 
or stolen, and then spent by someone else. While it is too early to say how readily the marketplace will accept 
these cards, Mondex believes that it is a marketing problem to get consumers to go along, not a technological one. 

I believe that the Mondex model will not succeed commercially. Instead, banks and card issuers will succeed 
in fmding the right mix of specified card-holder accounts plus the bearer - refillable money capacity to include 
on one card. Marketed correctly with built in security features, this combination card will meet with consumer 
acceptance in sufficient numbers to make it commercially lucrative. 

The question is, what must be done to make sure these cards cannot be systematically exploited by highly- 
organized teams of financial institutions already intent on laundering money using high technology? 

It is inevitable that bearer stored value cards or combined personal account / bearer stored value cards will 
be lost or stolen. Some will only be drained of the money stored on the card and then thrown away. But without 
some form of protection, others will be used specifically as transfer vehicles to store extraordinary amounts of 
money that then can be carried inside a wallet from country to country and used to launder funds. Or, bearer cards 
will be cloned outright. 

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If cloning were to happen, counterfeiting would be only one of the real problems on our hands. Real if ill- 
gotten fiinds on deposit in Country A could be put on a single card which then would be carried to the United 
States, where the cmd could be drawn down or offloaded onto cards carrying denominations of, say, $500. That 
second tier of cards could then be smurfed through home banking systems into a master account, with no one the 
wiser A bearer cash card wiA a million dollars stored on it could be flushed electronically in $500 increments 
to disbursed accounts, at ten transactions a second (very slow by today's standards), in less than 5 minutes. It 
would make no difference if laws said that a single card could have no more than $ 10,000 on it; the value on the 
"illegal" $1,000,000 card could simply be dumped into 100 "legal" cards of $10,000 each, or 1000 cards of 
$1,000 each. 

It could be that simple, with the whole process automated on one PC. Therein lies an interesting future for 
organized Russian money launderers - and any other money launderer for that matter. CTRs and "Know Thy 
Customer" would no longer make any difference. 

Contrast this with matlas as they are today Regardless of what form they have, aggregated sums of money 
today, other than actual piles of banlowtes, always cany the name tag of an owner. Launderers have to take pains 
to falsify the names of those owners, by puttuig many layers between the true owners and the nominal owners 
of ill-gotten money. This is essentially the laundering process. The very fact of its built in inefficiencies - the 
necessity to have these layen - is also the sole reason why law enforcement agencies have at least half a chance 
to discover what is going on. 

If bearer fomis of rcfillablc money cards are allowed to circulate without any real limit on *ow much spending 
power can be put inside any one card, this one last defense against wholesale electronic movement of ill-gained 
money will fall away. In its place will come a tailor-made opportunity for organized crime, and banks organized 
to support it, to use the hig^Kst fbnns of available technology to marshal I these cards in ways that will avoid any 
detection at all. 

Arguably, Congress coukl simply stay on the sideUnes,1et consumers make the choice, and hope for the best. 
Will consumers accept single-purpose bearer money cards and their attendant risk? Will they opt solely for smart 
cards with their own accounts diat take the identity features and protections already built into present credit cards 
to new levels of electronic security? 

I believe that they will opt for a combination card. If I am right, the better course for this Committee is to 
begin discussions now with the domestic banking industry to define whether there should be statutory language 
defining where the balance should he between real convenience to the customer ~ something I want as a consumer 
— and a situation in which stored value cards can be used to contain and transfer unlimited amounts of money. 



It is too easy simply to say that any statute on this subject should require that all forms of stored value cards 
be allowed so long as they attadi specific identity to the values stored on the cards that can be confirmed at the 
time transactions are made. It does not make sense to give up the real cost savings to consumers, merchants, and 
banks alike firm my being able to store $50 on my card, and fi-om the merchant's ability then to accept it for my 
son's 50 cent purchase of a candy bar. Why should the merchant have to keep an expensive on-line terminal 
always at the ready for something like that? 



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Put differently, do I care if a card with a stored value of one dollar points to the owner? Probably not. Do 
I care if a card with one million dollars does. I probably do. Does Congress need to sit down with industry and 
work out where the threshold lies and how to incorporate it into these cards? Yes it does. 

If the consensus then points to the necessity of a statute, its drafting will clearly require the cooperation of 
the Treasury Department, the Federal Reserve, and the knowledge of the very companies, banks and industry 
groups that are developing the technology. If written badly, it is a statute that would dangerously interfere, as 
it must not be allowed to do, with the extraordinary and beneficial development of stored value cards meant to 
be tied to bank accounts, credit accounts, medical records, government benefits, library accounts, medical or 
dental records, frequent flier miles, allergy data - information that when stored on a single card for immediate 
access could provide wonderful and even life-saving benefits to real people, and create substantial job growth 
at the same time. 

We will see the first of these cards introduced by banks for use in Atlanta, during the Olympics later this year. 
We should watch carefully how they work, and what customers think of them. It then will become easier for 
banks, the bank regulatory agencies, and Congress working together to gear their thinking to what most customers 
seem to want - security and safety for their money ~ and then perhaps to set a threshold below which amounts 
of pure cash stored on a card is acceptable. 

I ask the Committee to keep in mind that the business goals of these banks are nght on the mark: to deliver 
real benefit, better customer service, all at a lower cost, by tying one single card rather than a whole wallet-fiill 
to a person's bank accounts, credit accounts, medical records, government benefits, library accounts, dental 
records, SSI benefits, frequent flier miles, allergy data, and the like. 

Congress ought to want these banks to succeed at achieving each one of these goals, which I believe it does. 
By the same token. Congress ought to accompany the development of bearer cards with discussion with the 
industry on how to build in common sense, technologically-driven features limiting the amount of cash on the 
card, or identifying the origins of large denomination stored card balances. 

Otherwise, the United States risks losing effective confrol over dollars in circulation, and even the creation 
of money itself, to money launderers around the world. At least some of them will be Russian. 

I am prepared to answer any questions you may have. 



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aparUnent in Queens in Septem- 
ber, they found thousands of bogus 
credit cards along with the equip- 
ment to manufacture them, Mans- 
field said. 

Zupanc told CBS that thieves 
tried to drain her retirement ac- 
count at the Majro Clinic and her 
daughter's college fund. But Zu- 
panc managed to bait the outflow 
of money before any was lost 

"I've been told by postal inspec- 
tors over and over again that this 
will go on for years," Zupanc said 
on 60 Minutes, "They have my 
identity, yes, and it is scary. It is 
very scary. And they have my 
daughters' names." 

Postal officials said fraud based 
on stolen financial Information is 
a growing problem. But officials 
Insisted It is not strictly a postal 
problem. 

About 1,000 fraudulent cbange- 
«f>address forms are submitted to 
the Postal Service each year, said 
Paul Griffo, spokesman for the 
U.S. Postal Inspection Service. 
'About 3,000 bogus change-of-ad- 
drcss forms are submitted directly 
to financial Institutions each year, 
Griffo added. 

An even larger number of credit 
cards and bank statement are sim- 
ply stolen from peoples' mailbox- 
es. In Minnesota, there are about 
5,000 mailbox thefts each year, 
said Wanda Krueger, a postal in* 
spector In St Paul. 

Zupanc and "60 Minutes" sug- 
gested a relatively simple solution 
— require anyone suomltting a 
change-of-address form to show up 
in person and present a picture 
identification card. 

Sandra Harding, spokeswoman 
for the Postal Service, said, "We 
arc looking at several alternative 
'solutions" to address the problem. 
But she would not reveal what 
alternatives are under consider- 
ation. 

The Postal Service already 
sends verification letters to a mail 
customer's old address each time 
a change of address Is ordered. 
But Harding admitted that the ex- 
isting verification system can be 
defeated by thieves. 

Griffo said the most sophisticat- 
ed thieves can forge identity 
cards. 

Zupanc also told "60 Minutes" 
that postal inspectors told her they 
knew the Brooklyn mailbox was a 
fraudulent operation. 



319 



SUPREME COURT OF THE STATE OF NEW YORK 
COUNTY OF QUEENS : CRIMINAL TERM 

THE PEOPLE OF THE STATE OF NEW YORK 

-against- 

OLUSHINA GODWIN ADEKANBI 

a/k/a "SHINA", a/k/a "GODY" 

PRINCE DELE OSIBOTE 

ROTIMI OGUNNUSI 
a/k/a "ROY" 

MICHAEL ATAMOLOGUN 
a/k/a MIKE ODEKU 



EKTERFKZSB COBSOPTZON 
SPECIAL ZairORIIATZON 
C.P.I.. 200.65 

ZHDZCDIEIIT MO.: 4355/95 



Defendant (s) 



The District Attorney of the County of Queens by this Special 
Information attests that he has reviewed the substance of the 
evidence presented to the Grand Jury in the above-entitled matter 
and concurs in the judgment that the charge of Enterprise 
Corruption in violation of Penal Law Article 460 is consistent with 
the Legislative findings contained in said Article. 



Dated: Kew Gardens, New York 
January 31, 1996 




[CBMtD A. BRomr 
IDZSTRZCT ATTOKHCT 



320 



EIGHTH ADDITIONAL GRAND JURY 

SUPREME COURT OF THE STATE OF NEW YORK 
COUNTY OF QUEENS CRIMINAL TERM 

THE PEOPLE OF THE STATE OF NEW YORK 



-against- 

OLUSHINA GODWIN ADEKANBI 

a/k/a -SHINA". a/k/a "GODY- 
PRINCE DELE OSIBOTE 
ROTIMI OGUNNUSI 

a/k/a -ROY" 
MICHAEL ATAMOLOGUN 

a/k/a MIKE ODEKU 
SAMUEL ADEWALE 
MARY OYETUGA 
OLANREWAJU ADEYEMI 

a/k/a FLORENCE JAMERSON 
AKINDELE OSHODI 

a/k/a "NIYI- 



FILED: 

INDICTMENT NO.:4355/95 

SUPERCEDES NO.:4203/95 



Detendant(s) 



PL 460.20(1)(a) 



ENTERPRISE CORRUPTION (1) 



ADEKANBI, OLUSHINA GODWIN 
OSIBOTE, PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN, MICHAEL 



PL 105.05 



CONSPIRACY FIFTH DEGREE (2) 



ADEKANBI. OLUSHINA GODWIN 
OSIBOTE, PRINCE DELE 
OGUNNUSI, ROTIMI 
ATAMOLOGUN, MICHAEL 
ADEWALE, SAMUEL 
OYETUGA, MARY 
ADEYEMI, OLANREWAJU 
OSHODI. AKINDELE 



PL 190.65(1) (a) 



SCHEME TO DEFRAUD IN THE 
FIRST DEGREE (3) 



ADEKANBI, OLUSHINA GODWIN 
OSIBOTE, PRINCE DELE 
OGUNNUSI, ROTIMI 
ATAMOLOGUN, MICHAEL 
ADEWALE, SAMUEL 
OYETUGA, MARY 
ADEYEMI, OLANREWAJU 
OSHODI, AKINDELE 



321 



PL 155.40(1) 



GRAND LARCENY IN THE 
SECOND DEGREE (4-a) 



ADEKANBI, OLUSHINA GODWIN 
OSIBOTE. PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN. MICHAEL 
ADEWALE. SAMUEL 
OYETUQA, MARY 
ADEYEMI. OLANREWAJU 



PL 155.35 



GRAND LARCENY IN THE 
THIRD DEGREE (9-34) 



ADEKANBI. OLUSHINA GODWIN 
OSIBOTE, PRINCE DELE 
OGUNNUSI, ROTIMI 
ATAMOLOGUN. MICHAEL 
ADEWALE, SAMUEL 
OYETUGA. MARY 
ADEYEMI. OLANREWAJU 



PL 155.30(1) GRAND LARCENY IN THE 

FOURTH DEGREE (35-45) 



ADEKANBI. OLUSHINA GODWIN 
OSIBOTE. PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN. MICHAEL 
ADEWALE. SAMUEL 
OYETUGA. MARY 
ADEYEMI. OLANREWAJU 



PL 155,25 



PETIT LARCENY 
(46-49) 



ADEKANBI. OLUSHINA GODWIN 
OSIBOTE, PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN, MICHAEL 
ADEWALE. SAMUEL 
OYETUGA. MARY 
ADEYEMI, OUANREWAJU 



PL 170.40 



CRIMINAL POSSESSION OF 
FORGERY DEVICES (50-52) 



ADEKANBI, OLUSHINA GODWIN 
OSIBOTE, PRINCE DELE 
OGUNNUSI, ROTIMI 
ATAMOLOGUN, MICHAEL 
ADEWALE. SAMUEL 
OYETUGA. MARY 
ADEYEMI. OLANREWAJU 



PL 170,25 



CRIMINAL POSSESSION OF 
FORGED INSTRUMENT IN THE 
SECOND DEGREE (53-117) 



ADEKANBI. OLUSHINA GODWIN 
OSIBOTE. PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN. MICAEL 
ADEWALE. SAMUEL 
OYETUGA, MARY 
ADEYEMI, OLANREWAJU 



322 



PL 165.52 



PL 165.45(2) 



PL 165.40 



PL 165 40 



PL 156.35 



CRIMINAL POSSESSION OF 

STOLEN PROPERTY IN THE 
SECOND DEGREE (118) 



CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE 
FOURTH DEGREE (119-191) 



CRIMINAL POSSESSION OF 

STOLEN PROPERTY IN THE 
FIFTH DEGREE (192) 



CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE 
FIFTH DEGREE (193-196) 



CRIMINAL POSSESSION OF 
COMPLTTER RELATED MATERIAL 
(197-200) 



ADEKANBI. OLUSHINA GODWIN 
OSIBOTE, PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN, MICHAEL 
ADEWALE. SAMUEL 
OYETUGA. MARY 
ADEYEMI. OLANREWAJU 

ADEKANBI. OLUSHINA GODWIN 
OSIBOTE. PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN, MICHAEL 
ADEWALE. SAMUEL 
OYETUGA. MARY 
ADEYEMI, OLANREWAJU 

ADEKANBI, OLUSHINA GODWIN 
OSIBOTE. PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN. MICHAEL 
ADEWALE. SAMUEL 
OYETUGA. MARY 
OSHODI. AWNDELE 
ADEYEMI. OLANREWAJU 

ADEKANBI. OLUSHINA GODWIN 
OSIBOTE. PRINCE DELE 
OGUNNUSI, ROTIMI 
ATAMOLOGUN, MICHAEL 
ADEWALE, SAMUEL 
OYETUGA. MARY 
ADEYEMI. OLANREWAJU 

ADEKANBI. OLUSHINA GODWIN 
OSIBOTE. PRINCE DELE 
OGUNNUSI. ROTIMI 
ATAMOLOGUN. MICHAEL 
ADEWALE. SAMUEL 
OYETUGA. MARY 
ADEYEMI, OLANREWAJU 



A TRUE BILL 



FOREMAN 



DISTRICT ATTORNEY 



323 



SUPREME COURT OF THE STATE OF NEW YORK 
COUNTY OF QUEENS CRIMINAL TERM 

THE PEOPLE OF THE STATE OF NEW YORK 

-against- 

OLUSHINA GODWIN ADEKANBI 

a/k/a -SHINA', a/k/a "GODY" 
PRINCE DELE OSIBOTE 
ROTIMI OGUNNUSI 

a/k/a "ROY" 
MICHAEL ATAMOLOGUN 

a/k/a MIKE ODEKU 
SAMUEL ADEWALE 
MARY OYETUGA 
OLANREWAJU ADEYEMI 

a/k/a FLORENCE JAMERSON 
AKINDELE OSHODI 

a/k/a "NIYI" 



FILED: 

rNDICTMENT NO.:4355/95 

SUPERSEDES NO.:4203/95 



Defenclant(s) 



FIRST COUNT 
ENTERPRISE CORRUPTION 

THE GRAND JURY OF THE COUNTY OF QUEENS, by this Indictment, accuses the defendants 
OLUSHINA GODWIN ADEKANBI. a/k/a "SHINA-. a/k/a "GODY". PRINCE DELE OSIBOTE, ROTIMI 
OGUNNUSI, a/k/a "ROY". MICHAEL ATAMOLOGUN. a/k/a MIKE ODEKU, of the crime of ENTERPRISE 
CORRUPTION, in violation of Penal Law Section 460.20(1)(a), committed in the County of Queens and 
elsewhere, as follows 

The defendants. OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
and MICHAEL ATAMOLOGUN. from on or about October 1, 1994 to on or about September 10. 1995, 
having knowledge of the existence of a criminal enterprise, and the nature of its activities, and being 
employed by or associated with that criminal enterprise. Intentionally conducted and p)artlcipated in the 
affairs of the enterprise by participating in a pattern of criminal activity, as foltows: 



324 



THE CRIMINAL ErfTERPRISE 

At all times relevant to Count One: 

(1) The defendants. OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. 
ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. along with other persons known and unknown, were 
members of or associated with an enterprise in which they shared a common purpose of engaging in 
criminal conduct, and were associated in a structure that was distinct from the pattern of criminal activity 
and that had a continuity of existence, structure and criminal purpose beyond the scope of individual 

criminal incidents. 

(2) The atKDve-named defendants were members of a group of persons which 
operated an unlawful credit card operation in Queens and Kings Counties. This group of persons, 
hereinafter referred to as the "Shina Credit Card Fraud Group", constituted a "criminal enterprise" as that 
term is defined In Penal Law Section 460.10(3). 

(3) The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIN4I 
OGUNNUSI. f^lCHAEL ATAMOLOGUN. were members of the Shina Credit Card Fraud Group. 

(4) There were other members of the Shina Credit Card Fraud Group not named 
herein as defendants, who were emptoyed by and associated with tt. Some of these included 
OLANREWAJU ADEYEMI. a/k/a FLORENCE JAMERSON. SAMUEL ADEWALE, AKINDELE OSHODI. a/k/a 
•NIYI"and MARY OYETUGA. defendant ADEKANBIs wife, ADEBAYO ODESANYA, OYEWALE ADEMOLA 
OLATUNJI, and OLALANRE ANIMASHAUN. a/k/a "LARRr. 

PURPOSE AND STRUCTURE OF THE CRIMINAL ENTERPRISE 

(5) It was the common purpose of the members and associates of the Shina Credit 
Card Fraud Group to engage in criminal conduct and to acquire money, goods, and sen/ices illegally 
through the acquisiton. possession, nwnufacture. distributksn and use of stolen and counterfeit credit 
cards. 



325 



(6) The Criminal Enterprise, l<nown as the Shina Credit Card Fraud Group, consisted 
of at least twenty (20) individuals operating at three or more levels, hereinafter referred to as "principals", 
"managers" and "soldiers". The pnncipals were OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. 
ROTIMI OGUNNUSI. and others. The pnncipals controlled the Shina Credit Card Fraud Group, received 
the cash proceeds and goods and services of the enterprise from the managers and soldiers, and gave 
instructions to said managers and soldiers The principals also manufactured, distributed, sold or used 
counterfeit credit cards and distributed, sold or used stolen credit cards. Managers obtained cash 
advances or goods for the principals and for themselves using stolen or counterfeit credit cards provided 
to them by the principals Managers also recruited and compensated soldiers to assist them in obtaining 
said cash advances or goods. Managers acted as middlemen for soldiers wishing to purchase stolen or 
counterfeit credit cards from the principals. Managers also located individuals known as "customers" 
wishing to purchase stolen or counterfeit credit cards and steered said sales to the principals or acted as 
middlemen for the principals Soldiers assisted managers in obtaining the aforementioned cash advances 
and goods by use of stolen or counterfeit credit cards by serving as drivers or lookouts or conducting the 
cash advance or goods transactions at the directions of the managers. Soldiers also provided raw 
materials to the managers and principals such as stolen invoices, bearing credit card access numbers, or 
false identification, such as drivers' licenses, to enable other members of the enterprise to use the stolen 
or counterfeit credit cards successfully and without detection. 

(7) The credit card operation was conducted by the Shina Credit Card Fraud Group 
as follows: 

j). The principals would buy stolen invoices, stolen computer data, 

stolen bank documents or other credit information obtained by use of illegal or unauthorized means from 
sokliers. The principals would use said documents to obtain credit card information of legitimate 
cardholders without their knowledge or permission and manufacture counterfeit credit cards using ssad 
information. The principals woukj also change PIN numbers on existing accounts of said cardhokjers in 
order to manufacture counterfeit credit cards and obtain cash advances at ATMs. The principals wouki 



326 



also divert the mail of said cardholders to commercial mail boxes rented by said principals by filing forged 
U.S. Post Office change of address cards In the name of said cardholders or sending forged change of 
address requests to the credit card companies of said cardholders, thereby obtaining additional credit and 
pedigree information relevant to said cardholders, and credit cards, convenience checks, checks and other 
financial matter sent to said cardholders. 

II). The principals woukt buy credit cards stolen by soldiers from the 
U.S. mail. Typically, credit card institutk>ns woukl mail out batches of credit cards destined for cardholders 
living in a particular region of the United States. Said batch or a substantial portion thereof would be 
stolen from the US mail at airports or other points of shipment. The stolen credit cards, still in the original 
envelopes and mailing sleeves, wouU then t>e soM to a principal. The principal would then sell or 
distribute said cards to members of the Shina Credit Card Fraud Group. 

lii). The principals possessed machinery which produced counterfeit 
credit cards or which altered stolen credit cards thereby making them counterfeit by re-emtK)Ssing or re- 
encoding them. The principals possessed information necessary to encode and re-encode the magnetic 
stripes on said credit cards. 

iv). The principals used stolen credit cards to obtain cash advances, 
goods and services, which wouU be billed to the legitimate cardholder and ultimately resulted in economic 
loss to the credit card company or institution. The principals also used stolen credit cards as klentification 
to obtain services for themselves using the nante of the legitimate cardhokjer such as cellular telephone 
service. 

v). The principals used counterfeit credit cards to obtain cash 

advances, goods and services, which woukj be billed to the legitimate cardhokjers whose credit card 
access numbers were encoded or emtxsssed on sakj counterfeit credit cards and ultimately resulted in 
economic k>ss to the credit card company or institutkMi. 

vi). The principals sokj stolen credit cards to managers and soldiers 
and customers of the enterprise for their own personal use, the prk:e t)eing a percentage of the credit 



327 



card's credit limit. The principals also distributed stolen credit cards to managers and soldiers in order 
for said members to "shop* the cards, obtaining cash advances and goods for said principeds in exchange 
for a percentage of the economic gain. In all instances, the charges made with said stolen cards would 
be billed to the legitimate cardholders and ultimately resulted in economic loss to the credit card company 
or Institution. 

vi) The principals manufactured counterfeit credit cards and sold said 

cards to managers and soldiers for their own personal use. the price being a flat rate which varied If the 
purchaser supplied a credit card access number or if said number had to be provided by a principal or 
manager. The principals also manufactured and sold said counterfeit cards to customers by taking the 
order and payment from managers and giving the completed counterfeit credit card to the manager for 
distribution to the customer. The principals also distributed counterfeit credit cards to managers and 
soldiers in order for said members to "shop" the cards, obtaining cash advances and goods for said 
principals in exchange for a percentage of the economic gain. In all instances, the charges made with said 
counterfeit cards would be billed to the legitimate cardholders whose credit card access numbers were 
embossed or encoded on said counterfeit credit cards and ultimately resulted in economic loss to the 
credit card company or institution. 

(8) Defendant OLUSHINA GODWIN ADEKANBI. a/k/a "SHINA". a/k/a "GODY" was the 
lead principal in charge of the Shina Credit Card Fraud Group, and as such, controlled all of the functions 
of the Shina Credit Card Fraud Group Together with defendant PRINCE DELE OSIBOTE. he conducted 
the day-to-day business of the Shina Credit Card Fraud Group's credit card operatnn, keeping books and 
records reflecting such business, controlling the flow and distributbn of stolen and counterfeit credit cards 
and reviewing transactions done by managers and soldiers, and receiving the proceeds therefrom. 

(9) Defendant PRINCE DELE OSIBOTE was the next lead principal, second in 
command, controlling all of the functions of said Shina Credit Card Fraud Group with OLUSHINA GODWIN 
ADEKANBI. He also directed all managers and sokjiers when defendant OLUSHINA GODWIN ADEKANBI 
was out of town furthering the business of the enterprise or was otherwise unavailable. 



328 



(10) Defendant ROTIMI OGUNNUSI. a/K/a "ROV. was a principal of the Shina Credit 
Card Fraud Group who directed nrtanagers and soldiers to obtain cash transactions or goods for the 
enterprise His functions also related to the technical area of the enterprise such as printing and encoding 
counterfeit cards, as well as reviewing and working up stolen invoices in order to use the credit card 
access numbers contained on said invoices. 

(11) Defendant MICHAEL ATAMOLOGUN. a/k/a MIKE ODEKU, was a manager of the 
Shina Credit Card Fraud Group engaged in cash transactions eind purchases using stolen and counterfeit 
credit cards and who recruited, directed and compensated soldiers to engage in cash transactions or 
purchases using stolen or counterfeit credit cards. He also sokj credit card access numbers to soldiers 
and customers and obtained counterfeit credit cards from the principals for those soldiers and customers 
bearing those access numbers 

PATTERN OF CRIMINAL ACTIVITY 

During the period of this offense, each of the defendants, with intent to participate in and advance 
the affairs of the criminal enterprise and pursuant to a common scheme and plan, engaged in conduct 
constituting or was criminally liable for the folkswing criminal acts Included within an established pattern 
of criminal activity 

PATTERN ACT ONE 

The defendants, and SAMUEL ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMi, AKINDELE 
OSHODI and others known and unknown to the Grand Jury, committed the crime of CONSPIRACY IN THE 
FIFTH DEGREE in violation of Penal Law §105.05(1). in that from on or about October 1, 1994 to on or 
about September 10 1995. in the (k>unty of Queens and elsewhere, with intent that conduct constituting 
a felony, to wit Schenrw to Defraud in the First Degree, be performed, agreed with one or more persons 
to engage in or cause the performance of such conduct. 

It was a purpose of this conspiracy to acquire money, goods and services through the operation 
of an unlawful enterprise which acquired, possessed, manufactured, distributed and used stolen and 
counterfeit credit cards At all times relevant to this indictment, defendant OLUSHINA GODWIN ADEKANBI, 



329 



supervised this credit card enterprise, which consisted of a location in Queens and other locations. 

As part of this conspiracy, defendant PRINCE DELE OSIBOTE worked as the second in comnnand 
in the credit card enterprise, thereby supen/ising the operation of the enterprise and nrfeeting with or 
speaking regularly with defendant OLUSHINA GODWIN ADEKANBI. 

As part of this conspiracy, defendant ROTIMI OGUNNUSI acted as a principal in the credit card 
enterprise, nneeting regularly with defendants OLUSHINA GODWIN ADEKANBI and PRINCE DELE 
OSIBOTE. 

As part of this conspiracy, defendant MICHAEL ATAMOLOGUN acted as a nnanager of the credit 
card enterprise obtaining cash advances and goods for defendants OLUSHINA GODWIN ADEKANBI and 
PRINCE DELE OSIBOTE and recruiting others to obtain cash advances and goods for hinisetf and for said 
defendants using stolen and counterfeit credit cards. Defendant MICHAEL ATAMOLOGUN also brokered 
sales of counterfeit credrt cards manufactured by defendants OLUSHINA GODWIN ADEKANBI, PRINCE 
DELE OSIBOTE or ROTIMI OGUNNUSI to other members and customers of the enterprise. 

As pan of this conspiracy. OLANREWAJU ADEYEMI, SAMUEL ADEWALE and MARY OYETUGA 
and others used stolen or counterfeit credit cards and false identification to obtain cash advances and 
goods for the credit card enterprise and thenuelves. 

As part of this conspiracy. AKINDELE OSHODI provided store invoices belonging to Fretter. an 
appliance store chain bcated in Massachusetts, and which invoices contained credit card access numbers 
of customers of Fretter. to OLUSHINA GODWIN ADEKANBI and others working in the above mentioned 
credit card enterprise 

OVERT ACTS 

In furtherance of the conspiracy and to effect the objects thereof, and during the course thereof, 
the following overt acts, among others, were committed: 

(1) On or about August 1 . 1995. Apartment 9M at 164-20 Highland Avenue, Jamaica, 
Queens, New York was rented in the name of 'Rhonda Freeman*. 

(2) On or about September 10, 1995. in the County of Queens, the defendants, acting 



330 



in concert with each other and others, possessed in excess of five hundred credit card access numbers 
assigned to individuals other than the defendants and others acting in concert with them. 

(3) On or about September 10. 1 995 in the County of Queens, the defendants, acting 
in concert with each other and others, possessed in excess of fifty stolen credit cards. 

(4) On or about September 10. 1995 in the County of Queens, the defendants, acting 
in concert writh each other and others, possessed in excess of fifty counterfeit credit cards. 

(5) On or about Septemt>er 10, 1995. in Jamaica. Queens, the defendants, acting in 
concert with each other and others, possessed in excess of 500 store invoices of Fretter. an appliance 
store chain located In Massachusetts. 

(6) On or about and between July 21 . 1994 and July 1 , 1995. in the County of Kings 
and the State of MassachuseHs and elsewhere. AKINOELE OSHODI possessed store invoices of Fretter. 

(7) On or about September 10. 1995, in Jamaica. Queens, the defendants, acting in 
concert with each other and others, possessed in excess of fifty store invoices of Budget Car and Truck 
Rental from Wanwick. Rhode Island. 

(8) On or about September 10. 1995. in Jamaica, Queens, the defendants, acting in 
concert with each other and others, possessed twenty invoices of WLF Automotive, a gasoline station in 
Evanston, Illinois 

(9) On or about September 10. 1995. in Jamaica. Queens, the defendants, acting in 
concert with each other and others, possessed a portable embossing machine. 

(10) On or about September 10. 1995. in Jamaica. Queens, the defendants, acting in 
concert with each other and others, possessed a portable tipping machine. 

(11) On or about September 10. 1995. in Jamaica, Queens, the defendants, acting in 
concert with each other and others, possessed a portable encoding machine. 

(12) On or about September 10, 1995 in Jamaica Queens, the defendants, acting in 
concert with each other and others, possessed Universal Bank convenience checks in the name of "Jay 
Weaver". 



331 

(13) On or about September 10, 1995 in Jamaica, Queens, SAMUEL AOEWALE. acting 
in concert with others, possessed Budget Car and Truck Rental invoice #GONAA2414130. 

(14) On or about and between September 8, 1995 and September 10, 1995. in 
Jamaica, Queens. ROTIMI OGUNNUSI, acting in concert with others, possessed Budget Car and Truck 
Rental invoice #PVDAA5702964. 

(15) On or about September 10, 1995, in Jamaica, Queens. ROTIMI OGUNNUSI, acting 
in concert with others, possessed a Bank One VISA credit card in the name of "John Paul Barr". 

(16) On or about September 10. 1995. in Jamaica. Queens, OLUSHINA GODWIN 
ADEKANBI. acting in concert with others, possessed an Arizona driver's license in the name of JOHN P. 

BARR". 

(17) On or aljout September 10, 1995, in the County of Queens, the defendants, acting 
in concert with each other and others, possessed a computer printout with the names, addresses, phone 
numbers and social security numbers of nine individuals. 

(IB) On or about September 10. 1995. in Jamaica. Queens, MARY OYETUGA, acting 
in concert with others, possessed a 'State of Massachusettes* [sic] identification card in the name *Mary 
Olesanya". 

(19) On or about September 10, 1995. in Jamaica. Queens. MARY OYETUGA. acting 
in concert with others, possessed a J.C. Penny credit card in the name of 'Linda Moore*. 

(20) On or about September 10. 1995. in Jamaica, Queens, ROTIMI OGUNNUSI, acting 
in concert with others. pK>ssessed a list of equipment which can be used to manufacture credit cards. 

(21) On or about July 30. 1995 and September 10. 1995. in the County of Queens and 
elsewhere, the defendants, acting in concert with each other and others, possessed a cellular telephone 
encoded with AT&T Wireless nmblle identification number 917-853-3645. 

(22) On or about August 27. 1995. in Jamaica. Queens, merchandise was purchased 
from Incredible f toots Corp. using a VISA credit card in the name of 'Mark Dunlop'. 



332 



(23) On or about September 10, 1995 in Jamaica, Queens. OLUSHINA GODWIN 
AOEKANBI, acting in concert with others, possessed a New Jersey driver's license in the name of 'Daniel 
Yemkin". 

(24) On or about June 13. 1995. OLUSHINA GODWIN ADEKANBI purchased a Sharp 
pocket organizer from Staples in New York, New York, using a VISA credit card in the name of "Daniel 
Yemkin". 

(25) On or about September 9, 1995, OLANREWAJU ADEYEMI. 

a/k/a FLORENCE JAMERSON, acting in concert with others, purchased merchandise from Staples in 
Jamaica, Queens using a Diamond Prestige VISA credit card in the name of 'Laura Winslow". 

(26) On or about September 9. 1995. in the County of Queens and elsewhere. 
OLANREWAJU ADEYEMI. acting in concert with others, possessed a New York driver's license in the name 
of "Laura WinsloW. 

(27) On or about and between June 21. 1995 and September 10, 1995. in Jamaica. 
Queens and elsewhere. PRINCE DELE OSIBOTE possessed a Virginia driver's license in the name of 
"RICHARD RAMSEY*. 

(28) On or about June 21 . 1995. commercial mail box #184 was rented at 207 E. Ohio, 
Chicago, Illinois in the name of "Richard Ramsey". 

(29) On or about August 1 , 1995, commercial mail box #128 was rented at 207 Church 
Avenue, Brooklyn, New York. 

(30) On or about September 1. 1995. commercial mail box #148 was rented at 207 
Church Avenue, Brooklyn. New York. 

(31) On or about August 28. 1995, a change of address letter for the Integra Bank VISA 
credit card account of Terry Lee Hritz was faxed from Forest Hills. Queens to sakj credit card institution. 

(32) On or about August 28. 1995. a U.S. Post Office change of address card for Daniel 
Hunnel was mailed from Queens. New York. 

(33) On or about August 1 . 1 995, a U.S. Post Ofiic^ change of address card for Bettye 



333 



Walden was mailed from Brooklyn. New York. 

(34) On or about August 1 , 1 995. a U.S. Post Office cfiange of address card for William 
Whrtwortfi was mailed from Brooklyn. New York. 

(35) On or about September 10. 1995, in Jamaica. Queens, the defendants, acting in 
concert with each other and others, possessed Chemical Bank convenience checks in the name of "William 
J. Whitworth". 

(36) On or about September 10. 1995. in Jamaica, Queens, the defendants, acting in 
concert with each other and others, possessed a Chemical Bank Mastercard credit card in the name of 

"Bettye W. Walden" 

(37) On or about October 25. 1994. in the CountyofNassau and elsewhere, OLUSHINA 

GODWIN ADEKANBI possessed store invoices of Fretter. 

(38) On or about October 25. 1994. in the County of Nassau and elsewhere, OLUSHINA 
GODWIN ADEKANBI possessed what purported to be a VISA credit card of NBD Bancorp. 

(39) On or about October 25. 1 994. in the County of Nassau and elsewhere, OLUSHINA 
ADEKANBI possessed a cloned cellular telephone. 

(40) On or about October 25. 1 994, in the County of Nassau and elsewhere, OLUSHINA 
GODWIN ADEKANBI possessed a Wachovia VISA credit card in the name of "Luther Howard". 

(41) On or atxxit October 25, 1994. in the County of Nassau and elsewhere, OLUSHINA 
GODWIN ADEKANBI possessed a Natlonsbank VISA credit card in the name of "Luther Howard". 

(42) On or about October 25. 1 994 in the County of Nassau and elsewhere, OLUSHINA 
GODWIN ADEKANBI possessed a New Jersey driver's license in the name of "Luther Howard". 

(43) On or at>out May 11. 1995. in the County of Kings and elsewhere, OLUSHINA 
GODWIN ADEKANBI possessed a counterfeit VISA credit card in the name of "Emanuel Jones". 

(44) On or about May 11, 1995. in Fort Lee, New Jersey. OLUSHINA GODWIN 
ADEKANBI, acting in concert vwth another, attempted to obtain a cash advance in the amount of $2000.00 
from Natwest Bank using a counterfeit VISA credit card in the name of "Emanuel Jones". 

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(45) On or about and between June 30. 1995. in the County of Kings and elsewhere, 
MICHAEL ATAMOLOGUN. acting in concert with others, possessed a New Jersey driver's license in the 
name of *Mark D Morris*. 

(46) On or about June 30, 1995. in the County of Kings and elsewhere, MICHAEL 
ATAMOLOGUN. acting in concert with others, possessed a VISA credit card in the name of *Mark 0. 
Morris". 

(47) On or about and between July 15. 1995 and August 11. 1995. In the County of 
Kings and elsewhere. MICHAEL ATAMOLOGUN. acting in concert with others, possessed a New York 
driver's license in the name of "David Sherman*. 

(48) On or atXHit and between July 15. 1995 and July 19. 1995. in the County of Kings 
and elsewhere. MICHAEL ATAMOLOGUN. acting in concert with others, possessed a VISA credit card in 
the name of "David Shernun* 

(49) On or about and between July 15. 1995 and July 19, 1995. in the County of Kings 
and elsewhere. MICHAEL ATAMOLOGUN. acting in concert with others, possessed a VISA credit card in 
the name of "Joseph Ward". 

(50) On or at>out and between July 15. 1995 and July 19. 1995. in the County of Kings 
and elsewhere. MICHAEL ATAMOLOGUN. acting in concert with others, possessed a VISA credit card in 
the name of "Stanley Johnson*. 

(51) On or about June 30. 1995. in Branford. Connecticut. MICHAEL ATAMOLOGUN. 
obtained a cash advance in the amount of $2525.00 from Branford Savings Bank, using a VISA credit card 
in the name of "Stanley Johnson* 

(52) On or about July 11. 1995. in Guilford. Connecticut. MICHAEL ATAMOLOGUN 
obtained a cash advance in the amount of S2800.00 from the New Haven Savings Bank using a VISA card 
in the name of 'Mark D Morris". 

(53) On or about July 15. 1995 In NIantic. Connecticut. MICHAEL ATAMOLOGUN 
obtained a cash advance in the arrxiunt of $3000.00 from Chelsea Groton Savings Bank using a VISA 

12 



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credit card in the name of "David Sherman" 

(54) On or about July 18. 1995. in Old Lyme. Connecticut, MICHAEL ATAMOLOGUN 
obtained a cash advance in the amount of $3000.00 from the Maritime Bank and Trust in Niantic. 
Connecticut, using a VISA credit card in the name of "Stanley Johnson". 

(55) On or about July 19. 1995. in Watertord. Connecticut. MICHAEL ATAMOLOGUN 
obtained a cash advance in the amount of $2900.00 from Citizens Bank using a VISA Credit Card in the 
name of "Joseph Ward". 

PATTERN ACT TWO 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
MICHAEL ATAMOLOGUN. acting in concert with each other and others, committed the crime of SCHEME 
TO DEFRAUD IN THE FIRST DEGREE in violation of Penal Law Section 190.65 (1)(a) in that on or about 
and between October 1. 1994 and September 10, 1995, in the County of Queens and elsewhere, they 
engaged in a scheme constituting a systematic ongoing course of conduct with intent to defraud ten or 
more persons or to obtain property from ten or more persons by false or fraudulent pretenses, 
representations or promises, and so obtained property, to wit: United States Currency, from at least one 
such person whose identity is known to the Grand Jury. 

PATTERN ACT THREE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF 
FORGERY DEVICES in violation of Penal Law Section 170.40 in that on or about and between August 1, 
1995 and September 10. 1995 in the County of Queens, they possessed with knowledge of its character 
any plate, die or other device, apparatus, equipment, or article specifically designed for use in to wit: 
counterfeiting credit cards. 

<»ATTERN ACT FOUR 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF 

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FORGERY DEVICES in violation of Penal Law Section 170.40 in that on or about and between August 1. 
1995 and Septennber 10. 1995 in the County of Queens, they possessed with knowledge of Its character 
any plate, die or other device, apparatus, equipment, or article specifically designed for use in to wit: 
counterfeiting credit cards. 

PATTERN ACT FIVE 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF 
FORGERY DEVICES in violation of Penal Law Section 170.40 in that on or about and between August 1 . 
1995 and September 10. 1995 in the County of Queens, they possessed with knowledge of its character 
any plate, die or other device, apparatus, equipment, or article specifically designed for use in to wit: 
counterfeiting credit cdrds. 

PATTERN ACT SIX 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI 
OGUNNUSI. acting In concert with each other and others, comitted the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170J25. in that 
on or about and between June 13. 1995 and September 10, 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with Intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a written instrument officially issued or created by a public office, 
public servant or governmental instrumentality. 

PATTERN ACT SEVEN 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI 
OGUNNUSI, acting in concert with each other and others, comitted the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in vkslatkin of Penal Law Sectk>n 170.25, In that 
on or about and between June 21 . 1995 and September 10. 1995, In the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a written instrument officially issued or created by a public office, 

14 



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public servant or governmental instrumentalrty. 

PATTERN ACT EIGHT 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI 
OGUNNUSI, acting in concert with each other and others, comitted the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMEfsTT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that 
on or about September 10, 1995, in the County of Queens and elsewhere, they, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a written instrument officially issued or created by a public office, public servant or governmental 
instrumentality. 

PATTERN ACT NINE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI 
OGUNNUSI, acting in concert with each other and others, comitted the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that 
on or about September 10. 1995. in the County of Queens and elsewhere, they, with knowledge that it was 
forged and with intent to defraud, decerve or injure another, uttered or possessed a forged instrument, to 
wit: a written instrument officially issued or created by a public office, public servant or governmental 
instrumentality. 

PATTERN ACT TEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI 
OGUNNUSI, acting in concert with each other and others, comitted the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that 
on or about September 10, 1995. in the County of Queens and elsewhere, they, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit a written instrument officially issued or created by a public office, public servant or governmental 
instrumentality. 

PATTERN ACT ELEVEN 



IS 



338 



The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI 
OGUNNUSI, acting in concert with each other and others, comltted the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMEMT IN THE SECOND DEGREE In violation of Penal Law Section 170.25. in that 
on or about September 10. 1995, in the County of Queens and elsewhere, they, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a written instrument officially issued or created by a public office, public servant or governmental 
instrumentality. 

PATTERN ACT TWELVE 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI 
OGUNNUSI. acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMEhfT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that 
on or about September 10. 1995. in the County of Queens and elsewhere, they, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a written instrument officially Issued or created by a public office, public servant or governmental 
instrumentality. 

PATTERN ACT THIRTEEN 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI 
OGUNNUSI, acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in vk}lation of Penal Law Section 170.25. in that 
on or about September 10,1 995. in the County of Queens and elsewhere, they, with knowledge that It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a written instrument officially issued or created by a public office, public servant or governmental 
Instrumentality. 

PATTERN ACT FOURTEEN 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI 
OGUNNUSI. acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION 

16 



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OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Uw Section 170.25. in that 
on or about September 10. 1995, In the County of Queens and elsewhere, they, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a written instrument officially issued or created by a public office, public servant or governmental 
instrumentality. 

PATTERN ACT FIFTEEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10. 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT SIXTEEN 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10. 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
p-ossessed a forged instrument, to wit: a commercial instrument or other Instrument vt/hich does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT SEVENTEEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 

17 



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FORGED INSTRUMENfT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT EIGHTEEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert wrtth each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to «vit a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT NINETEEN 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1.1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge tttat it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged irtstrument, to wA a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT TWENTY 

The defendantt OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 

18 



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acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that on or 
about and between August 1. 1995 and September 10. 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligation or status, to wrt 
a credit card. 

PATTERN ACT TWENTY-ONE 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10. 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and writh intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT TWENTY-TWO 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that on or 
about and between August 1. 1995 and September 10. 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wrt: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT TWENTY-THREE 



19 



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The defendants OLUSHINA GODWIN AOEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEf^ IN THE SECOND DEGREE in violation of Penal Law Section 170^5, in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT TWENTY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170,25. in that on or 
about and between August 1, 1995 and September 10, 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligatkin or status, to wit: 
a credit card. 

PATTERN ACT TWENTY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEfJT IN THE SECOND DEGREE in violation of Penal Law Section 170,25, in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obllgatkin or status, to wit: 
a credit card 



20 



343 



PATTERN ACT TWENTY-SIX 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that It was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation and status, to wit: 

a credit card. 

PATTERN ACT TWENTY-SEVEN 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert wrth each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between March 23. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT TWENTY-EIGHT 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert wrth each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE In violation of Penal Law Section 170.25. in that on or 
about and between June 1 . 1995 and September 10. 1995. in the County of Queens and elsewhere, they, 
with knowledge that rt was forged and wrth intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wrt: a commercial instrument or other instrument which does or may 

21 



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evidence, create, transfer, terminate or otherwise affect a legal rigfit, interest, obligation or status, to wit: 

a credit card. 

PATTERN ACT TWENTY-NINE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 

acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 

FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that on or 

about and between June 19. 1995 and September 10. 1995, in the County of Queens and elsewhere, they. 

with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 

possessed a forged instrument, to wit; a commercial instrument or other instrument which does or may 

evidence, create, transfer, terminate or othen*«se affect a legal right, interest, obligation or status, to wit: 

a credit card. 

PATTERN ACT THIRTY 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEfJT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that on or 
about and between March 29. 1995 and September 10. 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evkJence, create, transfer, terminate or otherwise affect a legal right, interest. obligat»n or status, to wit: 

a credit card. 

PATTERN ACT THIRTY-ONE 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in volatbn of Penal Law Sectkjn 170.25, in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, vnth knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 

22 



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possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT THIRTY-TWO 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between March 25. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT THIRTY-THREE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between July 13. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, 
with knowledge that It was forged and with Intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other Instrument vsrhich does or nnay 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT THIRTY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between June 22, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, 

23 



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with knowledge that it was forged and with intent to defraud, deceive or injure anottier, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT THIRTY-FIVE 
The defendants OLUSHINA GODWIN AOEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170^5. In that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge tttat it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligatk>n or status, to wit: 
a credit card. 

PATTERN ACT THIRTY-SIX 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Sectnn 170.25, in that on or 
about and between August 1, 1995 and September 10, 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligatksn or status, to wit: 
a credit card. 

PATTERN ACT THIRTY-SEVEN 
The defendanU OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMIfvlAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Sectnn 170.25. in that on or 

2$ 



347 



about and between August 1. 1995 and September 10. 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenvise affect a legal right, interest, obligation or status, to wit; 
a credit card. 

PATTERN ACT THIRTY-EIGHT 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with Intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial Instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenmse affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT THIRTY-NINE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violatbn of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FORTY 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 



25 



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FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between November 24. 1994 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that It was forged and with intent to defraud, deceive or Injure another, uttered or 
possessed a forged instrument, to wit: a commercial Instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FORTY-ONE 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between June 22, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, 
with knowledge that it was forged and with intent to defraud, deceive or Injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card 

PATTERN ACT FORTY-TWO 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENTT IN THE SECOND DEGREE in vblatlon of Penal Law Section 170.25. in that on or 
about and between March 1 , 1995 and September 10, 1995, in the County of Queens and elsewhere, they, 
with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligatbn or status, to wit: 
a credit card. 

PATTERN ACT FORTY-THREE 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 



26 



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acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that It was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged Instrument, to virit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othen«ise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FOBTY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert vnth each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995, In the County of Queens and elsewhere, 
they, virith knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or nnay 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FORTY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Sectran 170.25, in that on or 
about and between August 1. 1995 and September 10. 1995, in the County of Queens and elsewtiere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FORTY-SIX 



27 



350 



The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Uw Section 170.25, in that on or 
aboiit and between August 1. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FORTY-SEVEN 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1, 1995 and September 10, 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FORTY-EIGHT 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEf^n" IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995, in the County of Queens and elsev^ere, 
they, with knowledge that it was forged and with Intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercieU instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 



351 



PATTERN ACT FORTY-NINE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between July 3, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, 
with knowledge that It was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit; a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FIFTY 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FIFTY-ONE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 

29 



352 



evidence, create, transfer, terminate or otherwise affect a legal rigfit, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FIFTY-TWO 

Tfie defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert witfi eacfi other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT FIFTY-THREE 

The defendants OLUSHIt^ GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMIfMAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10. 1995, in the County of Queens and elsewhere, 
they, with knowledge ttiat it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligatbn or status, to wit: 
a credit card. 

PATTERN ACT FIFTY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in vkilation of Penal Law Sectkjn 170.25, in that on or 
about and between August 1. 1995 and September 10. 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 

30 



353 



possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 

a credit card. 

PATTERN ACT FIFTY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right. Interest, obligation or status, to wit: 

a credit card. 

PATTERN ACT FIFTY-SIX 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170,25, in that on or 
about and between August 1. 1995 and September 10. 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit; a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligatk>n or status, to wit: 
a credit card. 

PATTERN ACT FIFTY-SEVEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in vralation of Penal Law Sectkin 170,25, in that on or 
about and between September 5, 1995 and September 10, 1995, in the County of Queens and elsewhere, 



31 



354 



they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 

a credit card. 

PATTERN ACT FIFTY-EIGHT 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between July 1 . 1995 and September 10, 1995, in the County of Queens and elsewhere, they, 
with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligatkjn or status, to wit: 

a credit card. 

PATTERN ACT FIFTY-NINE 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that on or 
about and between December 19, 1994 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligatbn or status, to wit: 

a credit card. 

PATTERN ACT SIXTY 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in vkjlatran of Penal Law Secton 170.25. in that on or 



32 



355 



about and between August 1. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or Injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT SI)CTY-ONE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or Injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT SI)CTY-TWO 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1. 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT SIXTY-THREE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 

33 



356 



FORGED INSTRUMENT IN THE SECOND DEGREE In violation of Penal Law Section 170.25, In that on or 
about and between July 15, 1995 and September 10, 1995, In the County of Queens and elsewhere, they, 
with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit; 
a credit card. 

PATTERN ACT SIXTY-FOUR 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligation or status, to wit: 

a credit card. 

PATTERN ACT SIXTY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the chme of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violatbn of Penal Law Section 170.25. in that on or 
about and between November 3, 1994 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligation or status, to wit: 

a credit card. 

PATTERN ACT SIXTY-SIX 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 

34 



357 



acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that on or 
about and between August 1, 1995 and September 10. 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument vi/hich does or may 
evidence, create, transfer, terminate or othenwise affect a legal right, interest, obligation or status, to v/it: 
a credit card. 

PATTERN ACT SIXTY-SEVEN 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that on or 
about and between August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or niay 
evidence, create, transfer, terminate or othenmse affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT SIXTY-EIGHT 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Sectran 170.25. in that on or 
about and between August 1. 1995 and September 10. 1995. in the County of Queens and elsewhere, 
they, with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right. Interest. obligatk>n or status, to wit: 
a credit card. 

PATTERN ACT SIXTY-NINE 



35 



358 



The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting In concert with each other and others, comnnttted the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 7. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVErfTY 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between August 3, 1995 and September 10, 1995, in the County of Queens and elsev^ere. they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingry possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVENTY-ONE 
The defendanu OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) In that on or about and 
between August 3. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit catd. 

PATTERN ACT SEVENTY-TWO 
The defendanu OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) In that on or about and 
between July 7. 1995 and September 10. 1995. in the County of Queens and elsewhere, th-sy, with Intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 

36 



359 



thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVENTY-THREE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIfVll OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIf^^lNAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 29, 1995 and September 10, 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVENTY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vralation of Penal Law Section 165.45(2) in that on or about and 
between July 5, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVENTY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Sectron 165.45(2) in that on or about and 
between June 29. 1995 and September 10. 1995. In the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVENTY-SIX 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Sectkin 165.45(2) in that on or about and 



37 



360 



between June 29. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVENTY-SEVEN 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 26. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVEMTY-EIGHT 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 29. 1995 and September 10. 1995. intheCountyof Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT SEVENTY-NINE 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vkilatran of Penal Law Sectran 165.45(2) in that on or about and 
between June 29. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 



38 



361 



acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 14, 1995 and September 10, 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY-ONE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE QSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 27, 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY-TWO 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Sectkin 165.45(2) in that on or about and 
between June 29. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY-THREE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 13. 1995 and September 10. 1995, In the County of Queens and elsewhere, they, with 
Intent to benefit themselves or a person other than an owner thereof or to Impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 



362 



PATTERN ACT EIGHTY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165 45(2) in that on or about and 
between February 14, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE In violation of Penal Law Section 165.45(2) in that on or about and 
between February 14. 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY-SIX 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violatron of Penal Law Section 165.45(2) in that on or about and 
between March 23, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY-SEVEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 14. 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with 

40 



363 



intent to benefit theniselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY-EIGHT 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between March 23, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
ovwier thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT EIGHTY-NINE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between March 22. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to Impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit; a credit card or debit card. 

PATTERN ACT NINETY 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 14. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to Impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT NINETY-ONE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 



41 



364 



acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 13. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT NINETY-TWO 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crinrie of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between March 23. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, l<nowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT NINETY-THREE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violaton of Penal Law Section 165.45(2) in that on or about and 
between March 13. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT NINETY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert wrth each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 28. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit thenrwelves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

42 



365 



PATTERN ACT NINETY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert wrth each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE In violation of Penal Law Section 165.45(2) in that on or about and 
between February 27, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit; a credit card or debit card 

PATTERN ACT NINETY-SIX 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 27, 1995 and September 10. 1995, in the County of Queens and elsewrhere. they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT NINETY-SEVEN 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between April 4, 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT NINETY-EIGHT 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert vwth each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between May 17, 1995 and September 10, 1995. in the County of Queens and elsewhere, they, with intent 

43 



366 



to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, Itnowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT NINETY-NINE 
The defendants OLUSHINA GODWIN AOEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 28, 1995 and September 10, 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 24. 1995 and September 10, 1995, In the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-ONE 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 25. 1995 and September 10, 1995, In the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit cand or debit card. 

PATTERN ACT ONE HUNDRED-TWO 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 



367 



PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 2, 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-THREE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 13, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wtt: a credit card or debit card, 

PATTERN ACT ONE HUNDRED-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIH^I OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vkilatKjn of Penal Law Section 165.45(2) in that on or about and 
between March 22. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 27. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 



45 



368 



PATTERN ACT ONE HUNDRED-SIX 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 6, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-SEVEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert vtrith each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 28, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-EIGHT 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Sectbn 165.45(2) in that on or about and 
between July 28. 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-NINE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Sectbn 165.45(2) in that on or about and 
between June 27. 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 

46 



369 



to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-TEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between August 1, 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with 
intent to benefit thenrwelves or a person other than an owner thereof or to impede the recovery by an 
owner thereof. l<nowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-ELEVEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 13, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-TWELVE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vralatkjn of Penal Law Section 165.45(2) in that on or about and 
between June 27. 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-THIRTEEN 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 

47 



370 



PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 27, 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDBED-FOURTEEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert vtrith each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 27, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to vA: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-FIFTEEN 

The defendanu OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting In concert with each other ar>d others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violatkin of Penal Law Section 165.45(2) in that on or about and 
between July 24, 1995 arKl September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-SIXTEEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vK>lation of Penal Law Sectnn 165.45(2) in that on or about end 
between July 31 . 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to Impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 



48 



371 



PATTERN ACT ONE HUNDRED-SEVENTEEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 5, 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-EIGHTEEN 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 27. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED-NINETEEN 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 24, 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED TXtfENTY 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vrolatkin of Penal Law Section 165.45(2) in that on or about and 
between July 4. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 



372 



to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED TWEMTY-ONE 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 29, 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED TWENTY-TWO 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Sectkin 165.45(2) in that on or about and 
between June 29, 1995 and September 10, 1995. in the County of Queens and elsewhere, they, with Intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED TWENTY-THREE 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 29, 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to vint: a credit card or debit card. 
PATTERN ACT ONE HUNDRED TWENTY-FOUR 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 

SO 



373 



PROPERPK IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 28. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an ovmer thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED TWENTY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between September 5. 1995 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED TWENTY-SIX 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in volation of Penal Law Section 165.45(2) in that on or about and 
between .'uly 25, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED TWENTY-SEVEN 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert wrth each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vkjiation of Penal Law Section 165.45(2) in that on or about and 
between June 29. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by £m owner 
thereof, knowingly possessed stolen property, to wit: a credit csad or debit card. 
PATTERN ACT ONE HUNDRED TWENTY-EIGHT 



51 



374 



The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between June 12. 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED TWENTY-NINE 
Thidefendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 17. 1994 and September 10. 1995. in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED THIRTY 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERT^IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between February 17. 1994 and September 10, 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED THIRTY-ONE 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others , committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between November 1 . 1994 and September 10, 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 



375 



owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED THIRTY-TWO 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 1 . 1994 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recover/ by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED THIRTY-THREE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vnlabon of Penal Law Sectbn 165.45(2) in that on or about and 
between July 25, 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED THIRTY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vralation of Penal Law Section 165.45(2) in that on or about and 
between May 23, 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED THIRTY-FIVE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting In concert vinth each other and others, committed the crime of CRIMIf»JAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in volatton of Penal Law Sectbn 165.45(2) in that on or about and 



376 



between November 1 . 1994 and September 10, 1995, in the County of Queens and elsewtiere, they, with 
intent to benefit themselves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED THIRTY-SIX 
The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting In concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between July 1 . 1995 and September 10, 1995, in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED THIRTY-SEVEN 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vnlation of Penal Law Secton 165.45(2) in that on or about and 
between August 5. 1995 and September 10, 1995. In the County of Queens and elsewhere, they, with 
intent to benefit thenvelves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 
PATTERN ACT ONE HUNDRED THIRTY-EIGHT 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in vnlaton of Penal Law Sectkin 165.45(2) in that on or about and 
between July 15. 1995 and September 10. 1995. In the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE THIRTY-NINE 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 

54 



377 



acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Perwl Law Section 165.45(2) in that on or about and 
between April 1 , 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED FORTY 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Section 165.45(2) in that on or about and 
between November 1 . 1994 and September 10. 1995, in the County of Queens and elsewhere, they, with 
intent to benefit themselves or a person other ttwn an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED FORTY-ONE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FOURTH DEGREE in VKMaton of Penal Law Sectk>n 165.45(2) in that on or about and 
between June 1 , 1995 and September 10. 1995. in the County of Queens and elsewhere, they, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: a credit card or debit card. 

PATTERN ACT ONE HUNDRED FORTY-TWO 

The defendante OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FIFTH DEGREE in violation of Penal Law Section 165.40, in that on or about 
September 10, 1995. In the County of Queens, they, with intent to benefit themselves or a person other 
than an owner thereof or to impede the recovery by an owner thereof, knowingly possessed stolen 
property, to wit: Fretter invoices. 



378 



PATTERN ACT ONE HUNDRED FORTY-THREE 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIft^lhJAL POSSESSION OF STOLEN 
PROPERTY IN THE FIFTH DEGREE in violation of Penal Law Section 165.40, in that on or atxiut 
September 10, 1995, in the County of Queens, they, with intent to benefit themselves or a person other 
than an owner thereof or to impede the recovery by an owner thereof, knowingly possessed stolen 
property, to wit: Budget Car and Truck Rental invoices. 

PATTERN ACT ONE HUNDRED FORTY-FOUR 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting In concert vinth each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE RFTH DEGREE in vkslation of Penal Law Sectk>n 165.40, in that on or about 
September 10, 1995, in the County of Queens, they, with Intent to benefit themselves or a person other 
than an owner thereof or to Impede the recovery by an owner thereof, knowingly possessed stolen 
property, to wit: WLF Automotive invoices. 

PATTERN ACT ONE HUNDRED FORTY-RVE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FIFTH DEGREE in violaton of Penal Law Secton 165.40. in that on or about 
September 10, 1995, in the County of Queens, they, with intent to benefit themselves or a person other 
than an owner thereof or to impede the recovery by an owner thereof, knowingly possessed stolen 
property, to wit: Chemical convenience checks. 

PATTERN ACT ONE HUNDRED FORTY-SIX 

The defendants OLUSHIt^ GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF STOLEN 
PROPERTY IN THE FIFTH DEGREE in violaton of Penal Law Secton 165.40. in that on or about 
September 10. 1995. in the County of Queens, they, with intent to benefit themselves or a person other 

56 



379 



than an owner thereof or to impede the recovery by an owner thereof, knowingly possessed stolen 
property, to wit: Universal Bank convenience checks. 

PATTERN ACT ONE HUNDRED FORTY-SEVEN 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSl, 
acting in concert writh each other and others, committed the crime of CRIMIf^lAL POSSESSION OF 
COMPUTER RELATED MATERIAL in vwlatkjn of Penal Law Sectkjn 156.35, in that on or about September 
10, 1 995, in the County of Queens, they, wrtien having no right to do so. knowingly possessed, in any form, 
any copy, reproduction, or duplicate of any computer data or computer program, which was copied, 
reproduced, or duplicated in violation of Sectnn 156.30 of this article, with an intent to commit, or attempt 
to commit, or further the commission of any fekxiy, with intent to benefit himself, or a person other than 

an owner thereof. 

PATTERN ACT ONE HUNDRED FORTY-EIGHT 

The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSl. 
acting in concert w«h each ottier and others, committed the crime of CRIMINAL POSSESSION OF 
COMPUTER RELATED HAATERIAL « violation of Penal Law Sectkin 156.35, in that on or about September 
10, 1995, in the County of Queens, they, wtien having no right to do so, knowingly possessed, in any form, 
any copy, reproduction, or duplicate of any oofnputer data or computer program, which was copied, 
reproduced, or duplicated in volation of Section 156.30 of this artide, with an intent to commit, or attempt 
to commit, or further the commission of any felony, with intent to benefit himself, or a person other than 
an owner thereof 

PATTERN ACT ONE HUNDRED FORTY-NINE 

The defendants OLUSHIf^A GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSl, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF 
COMPUTER RELATED MATERIAL m violation Of Penal Law Section 156.35. in that on or about September 
10. 1995, in the County of Queens, they, wtien having no right to do so. knowingly possessed, in any form, 
any copy, reproductnn. or duplicate of any computer data or computer program, which was copied, 



380 



reproduced, or duplicated in violation of Section 156.30 of this article, with an intent to commit, or attempt 
to commit, or further the commission of any felony, with Intent to benefit himself, or a person other than 
an owner thereof. 

PATTERN ACT ONE HUNDRED FIFTY 
The defendants OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMIIMAL POSSESSION OF 
COMPUTER RELATED MATERIAL in violation of Penal Law Section 156.35. in that on or about September 
10, 1995, in the County of Queens, they, when having no right to do so, knowingly possessed. In any form, 
any copy, reproduction, or duplicate of any computer data or computer program, which was copied, 
reproduced, or duplicated in violation of Section 156.30 of this article, with an intent to commit, or attempt 
to commit, or further the commission of any felony, with intent to benefit himself, or a person other than 
an owner thereof. 

PATTERN ACT ONE HUNDRED FIFTy-ONE 
The defendant OLUSHINA GODWIN ADEKANBI, committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that 
on or about October 25, 1994. in the County of Nassau and elsewhere, he, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial Instrument or other instrument which does or may evkJence, create, transfer, terminate 
or otherwise affect a legal right, interest, obllgatkin or status, to wit: a NBD VISA Bancard. 

PATTERN ACT ONE HUNDRED FIFTY-TWO 
The defendant OLUSHINA GODWIN ADEKANBI. committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violatnn of Penal Law Section 170.25. in that 
on or about October 25. 1994. in the County of Nassau and elsewhere, he, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged Instrument, to 
wit: a commercial instrument or other instrument which does or may evkJence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a NBD VISA Bancard. 

58 



381 



PATTERN ACT ONE HUNDRED FIFTY-THREE 

The defendant OLUSHINA GODWIN ADEKANBI, committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE In violation of Penal Law Section 170^5, in that 
on or about October 25, 1994, in the County of Nassau and elsewhere, he, with knowledge that It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a NBD VISA Bancard. 

PATTERN ACT ONE HUNDRED FIFTY-FOUR 

The defendant OLUSHINA GODWIN ADEKANBI. committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25. in that 
on or about October 25, 1994. in the County of Nassau and elsewhere, he, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evkJence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligatnn or status, to wit: a NBD VISA Bancard. 

PATTERN ACT ONE HUNDRED RFTY-FIVE 

The defendant OLUSHINA GODWIN ADEKANBI. committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMEf^ IN THE SECOND DEGREE in violation of Penal Law Sectkm 170.25. in that 
on or atxiut October 25. 1994. in the County of Nassau and elsewhere, he. with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a NBD VISA Bancard. 

PATTERN ACT ONE HUNDRED FIFTY-SIX 

The defendant OLUSHIf^A GODWIN ADEKANBI, committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in volation of Penal Law Sectton 170.25. in that 
on or about October 25. 1994. in the County of Nassau and elsewhere, he, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 



382 



wit: a cnmmercJal instrument or other instrument which does or may evidence, create, transfer, terminate 
or othenvise affect a legal right, interest, obligation or status, to wit: a NBD VISA Bancard. 

PATTERN ACT ONE HUNDRED FIFTY-SEVEN 
The defendant OLUSHINA GODWIN ADEKANBI. committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25, in that 
on or about October 25. 1994. in the County of Nassau and elsewhere, he. with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
writ: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or othenMise affect a legal right, interest, obligation or status, to wit: a NationsBank VISA. 

PATTERN ACT ONE HUNDRED FIFTY-EIGHT 
The defendant OLUSHINA GODWIN ADEKANBI, committed the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMEfsH' IN THE SECOND DEGREE in violation of Penal Law Section 170,25, in that 
on or about October 25, 1994, in the County of Nassau and elsewhere, he, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a Tuscon Federal Credit Union VISA. 

PATTERN ACT ONE HUNDRED RFTY-NINE 
The defendant OLUSHINA GODWIN ADEKANBI, committed the crime of CRIMINAL POSSESSION 
OF STOLEN PROPERTY IN THE FOURTH DEGREE in vkilation of Penal Law Section 165.45(2) in that on 
or about October 25. 1994. in the County of Nassau and elsewhere, he, with intent to benefit himself or 
a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly possessed 
stolen property, to wit: Wachovia VISA Bank Card. 

PATTERN ACT ONE HUNDRED SIXTY 
The defendant OLUSHINA GODWIN ADEKANBI. committed the crime of CRIMINAL POSSESSION 
OF STOLEN PROPERTY IN THE FOURTH DEGREE in violation of Penal Law Secton 165.45(2) in that on 
or about October 25. 1994. in the County of Nassau and elsewhere, he, vwth intent to benefit himself or 

60 



383 



a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly possessed 
stolen property, to wit: AT&T Mastercard. 

PATTERN ACT ONE HUNDRED SIXTY-ONE 

The defendant OLUSHINA GODWIN ADEKANBI. committed the crime of CRIMINAL POSSESSION 
OF STOLEN PROPERTY IN THE FOURTH DEGREE In violation of Penal Law Section 165.45(2) In that on 
or about October 25, 1994, in the County of Nassau and elsewhere, he, with Intent to benefit himself or 
a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly possessed 
stolen property, to wit: American Express Optima Card. 

PATTERN ACT ONE HUNDRED SIXTY-TWO 

The defendant OLUSHINA GODWIN ADEKANBI, acting in concert with others, committed the crime 
of CRIMINAL POSSESSION OF STOLEN PROPERTY IN THE FIFTH DEGREE in violalton of Penal Law 
Sectnn 165.40 In that on or about October 25, 1994, in the County of Nassau and elsewhere, he, with 
Intent to benefit himself or a person other than an owner thereof or to Impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: Fretter invoices. 

PATTERN ACT ONE HUNDRED SIXTY-THREE 

The defendant OLUSHINA GODWIN ADEKANBI, comitted the crime of CRIMIf>4AL POSSESSION 
OF A FORGED INSTRUMEI^ IN THE SECOND DEGREE In violatron of Penal Law Sectnn 170.25, In that 
on or about October 25, 1995. In the County of Nassau and elsewhere, he, with knowledge that It was 
forged and with intent to defraud, deceive or injure arusther, uttered or possessed a forged instrument, to 
wit: a written instrument officialty Issued or created by a public office, public servant or govemmental 
instrumentality. 

PATTERN ACT ONE HUNDRED SIXTY-FOUR 

The defendant OLUSHINA GODWIN ADEKANBI. comitted the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE in volatlon of Penal Law Section 170.25. In that 
on or about October 25. 1995. in the County of Nassau and elsewhere, he, with knowledge that It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged Instrument, to 



•1 



384 



wit; a written Instrument officially issued or created by a public office, public servant or governmental 
instrumentality. 

PATTERN ACT ONE HUNDRED SIXTY-FIVE 

The defendant OLUSHINA GODWIN ADEKANBI. acting in concert witti others, committed the crime 
of CRIMINAL POSSESSION OF COMPUTER RELATED MATERIAL in violation of Penal Law Section 1 56.35, 
in that on or about October 25, 1994, in the County of Nassau and elsewhere, he, when having no right 
to do so. knowingly possessed. In any form, any copy, reproduction, or duplicate of any computer data 
or computer program, which was copied, reproduced, or duplicated in violation of Section 156.30 of this 
article, with an intent to commit, or attempt to commit, or further the commissron of any felony, with intent 
to benefit himself, or a person other than an owner thereof. 

PATTERN ACT ONE HUNDRED SIXTY-SIX 

The defendant OLUSHINA GODWIN ADEKANBI. acting in concert with each other and others, 
committed the crime of CRIMINAL POSSESSION OF COMPUTER RELATED MATERIAL in violation of Penal 
Law Section 156.35 In that on or about October 25, 1994, In the County of Nassau and elsewhere, he, 
when having no right to do so, knowingly possessed, In any form, any copy, reproductbn, or duplicate 
of any computer data or computer program, which was copied, reproduced, or duplicated In vkilation of 
Section 156.30 of this article, with an intent to commit, or attempt to commit, or further the commissnn 
of any felony, with intent to benefit himself, or a person other than an owner thereof. 

PATTERN ACT ONE HUNDRED SIXTY-SEVEN 

The defendant OLUSHINA GODWIN ADEKANBI. committed the crime of PETIT LARCENY in 
violation of Penal Law Sectbn 15525. in that on or about June 13, 1995, in the County of New York and 
elsewhere, he stole property. 

PATTERN ACT ONE HUNDRED SIXTY-EIGHT 

The defendant OLUSHINA GODWIN ADEKANBI, and PRINCE DELE OSIBOTE, acting In concert 
with each other and others, committed the crime of ATTEMPTED PETIT LARCENY In vblatksn of Penal Law 



62 



385 



Sections 110.00/155^5. in that on or about and between September 1, 1995 and September 9, 1995, in 
the County of Queens and elsewhere, they attempted to steal property. 

PATTERN ACT ONE HUNDRED SIXTY-NiWE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170.25 in that on or 
about and between September B. 1994 and September 10, 1995, in the County of Queens and elsewhere, 
they, with knowledge that It was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument. 

PATTERN ACT ONE HUNDRED SEVEMTY 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, 
acting in concert with each other and others, committed the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal Law Section 170,25 in that on or 
at>out and between August 28. 1995 and September 10. 1995. in the County of Queens and elsewhere, 
they, with l(nowledge tttat It was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged nstrument 

PATTERN ACT ONE HUNDRED SEVENTY-ONE 

The defendants OLUSHINA GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. 
acting in concert with each other and others, committed the crime of GRAND LARCENY IN THE FOURTH 
DEGREE in violation of Penal Law Section 155.30(1) in that on or about and between July 25, 1995 and 
Septemtwr 10. 1995. In the County of Queens and elsewhere, they, stole property whose value exceeded 
one thousand dollars 

PATTERN ACT ONE HUNDRED SEVENTY-TWO 

The defendant MICHAEL ATAMOLOGUN, acting in concert with others, committed the crime of 
CRIMINAL POSSESSION OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal 



63 



386 



Law Section 170^5 in that on or about July 11, 1995, in the County of Kings and elsewhere, he, with 
knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or possessed 
a forged instrument, to wit: a written instrument officially issued or created by a public office, public servant 
or governmental instrumentality. 

PATTERN ACT ONE HUNDRED SEVEMTY-THREE 
The defendant MICHAEL ATAMOLOGUN, acting in concert with others, committed the crime of 
CRIMINAL POSSESSION OF A FORGED INSTRUMENT IN THE SECOND DEGREE in violation of Penal 
Law Section 170.25 in that on or about and between July 15, 1995 and July 19, 1995, in the County of 
Kings and elsewhere, he, with knowledge that it was forged and with intent to defraud, deceive or injure 
another, uttered or possessed a forged instrument, to wit: a written instrument officially issued or created 
by a public office, public servant or governmental instrumentality. 

PATTERN ACT ONE HUNDRED SEVENTY-FOUR 
The defendant MICHAEL ATAMOLOGUN, acting in concert with others, committed the crime of 
CRIMINAL POSSESSION OF A FORGED INSTRUMENT IN THE SECOND DEGREE in vkilatkjn of Penal 
Law 170.25 in that on or about June 30, 1995, in the County of Kings and elsewhere, he, 
with knowledge that it was forged and with intent to defraud, deceive or injure another, uttered or 
possessed a forged instrument, to wit: a commercial instrument or other instrument which does or may 
evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, to wit: 
a credit card. 

PATTERN ACT ONE HUNDRED SEVENTY-RVE 
The defendant MICHAEL ATAMOLOGUN, acting in concert with others, committed the crime of 
CRIMINAL POSSESSION OF A FORGED INSTRUMENT IN THE SECOND DEGREE in vralation of Pelan 
Law 170.25 in that on or about and between July 15, 1995 and July 19, 1995, in the County of Kings and 
elsewhere, he, with knowledge that it was forged and with intent to defraud, deceive or injure another, 
uttered or possessed a forged instrument, to wit: a commercial instrument or other instrument which does 
or may evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligatkin or status, 

64 



387 



to wit: a credit card. 



PATTERN ACT ONE HUNDRED SEVENTY-SIX 

Tiie defendant MICiHAEL ATAMOLOGUN, acting in concert with others, committed the crime of 
CRIIMir^AL POSSESSION OF A FORGED INSTRUMENT IN THE SECOND DEGREE In violation of Pelan 
Law 17025 in that on or atx>ut and between June 30, 1995 and July 19, 1995, in the County of Kings and 
elsewhere, he. with knowledge tfiat it was forged and with intent to defraud, deceive or injure another, 
uttered or possessed a forged Instrument, to wit: a commercial instrument or other instrument which does 
or may evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, 
to wit: a credit card. 

PATTERN ACT ONE HUNDRED SEVENTY-SEVEN 
The defendant MICHAEL ATAMOLOGUN, acting in concert with others, committed the crime of 
CRIMINAL POSSESSION OF A FORGED INSTRUMEf^ IN THE SECOND DEGREE in violation of Pelan 
Law 170.25 in that on or at>out and between July 15, 1995 and July 19, 1995, in the County of Kings and 
elsewhere, he, with krK>wledge that it was forged and with Intent to defraud, deceive or injure another, 
uttered or possessed a forged Instrument, to wit: a commercial instrument or other instrument which does 
or may evidence, create, transfer, terminate or otherwise affect a legal right, interest, obligation or status, 
to wit: a credit card. 

PATTERN ACT ONE HUNDRED SEVENTY-EIGHT 
The defendant MICHAEL ATAMOLOGUN. acting in concert with others, committed the crime of 
GRAND LARCENY IN THE FOURTH DEGREE, in violation of Penal Law Section 155.30(1), in that on or 
about June 30, 1995, in the County of the Kings and In Branford, Connecticut, he stole property whose 
value exceeded one thousand dollars. 

PATTERN ACT ONE HUNDRED SEVENTY-NINE 
The defendant MICHAEL ATAMOLOGUN. acting in concert with others, committed the crime of 
GRAND LARCENY IN THE FOURTH DEGREE, in violation of Penal Law Section 155.30(1). in that on or 



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about July 1 1 , 1995, in the County of the Kings and in Guilford. Connecticut, he stole property whose value 
exceeded one thousand dollars. 

PATTERN ACT ONE HUNDRED EIGHTY 
The defendant MICHAEL ATAMOLOGUN. acting in concert with others, committed the crime of 
GRAND LARCENY IN THE FOURTH DEGREE, in violation of Penal Law Section 155.30(1), in that on or 
about July 15, 1995, in the County of the Kings and in Niantic. Connecticut, he stole property whose value 
exceeded one thousand dollars. 

PATTERN ACT ONE HUNDRED EIGHTY-ONE 
The defendant MICHAEL ATAMOLOGUN, acting in concert with others, committed the crime of 
GRAND LARCENY IN THE FOURTH DEGREE, in violation of Penal Law Section 155.30(1), in that on or 
about July 18, 1995. in the County of the Kings and in Old Lyme, Connecticut, he stole property whose 
value exceeded one thousand dollars. 

PATTERN ACT ONE HUNDRED EIGHTY-TWO 
The defendant MICHAEL ATAMOLOGUN, acting in concert with others, committed the crime of 
GRAND LARCENY IN THE FOURTH DEGREE, in violation of Penal Law Section 155.30(1), in that on or 
about July 19. 1995. in the County of the Kings and in Waterford, Connecticut, he stole property whose 
value exceeded one thousand dollars 

PATTERN ACT ONE HUNDRED EIGHTY-THREE 
The defendant MICHAEL ATAMOLOGUN. acting in concert with others, committed the crime of 
GRAND LARCENY IN THE FOURTH DEGREE, in violation of Penal Law Section 155.30(1), in that on or 
about July 19, 1995. in the County of the Kings and in Waterford, Connecticut, he stole property whose 
value exceeded one thousand dollars. 

PATTERN ACT ONE HUNDRED EIGHTY-FOUR 

The defendant MICHAEL ATAMOLOGUN. acting in concert with others, committed the crime of 
GRAND LARCENY IN THE FOURTH DEGREE, in violation of Penal Law Section 155.30(1). in that on or 



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about July 19, 1995, in the County of ttie Kings and in Groton, Connecticut, he stole property whose value 
exceeded one thousand dollars. 

PATTERN ACT ONE HUNDRED EIGHTY-FIVE 

The defendant MICHAEL ATAMOLOGUN. acting in concert with others, committed the crime of 
GRAND LARCEhJY IN THE FOURTH DEGREE, in violation of Penal Law Section 155.30(1), in that on or 
about July 25, 1995. in the County of the Kings and in Mystic, Connecticut, he stole property whose value 
exceeded one thousand dollars. 

SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI, ADINDELE OSHODI of the crime of CONSPIRACY 
IN THE RFTH DEGREE committed as follows: 

The defendants, and others known and unknown to the Grand Jury, from on or about October 1 , 
1994 to on or about September 10. 1995. in the County of Queens and elsewhere, with intent that conduct 
constituting a feksny, to wit: Scheme to Defraud in the First Degree, be performed, agreed with one or 
nrxsre persons to engage in or cause the performance of such conduct. 

It was a purpose of this conspiracy to acquire money, goods and services through the operatnn 
of an unlawful enterprise which acquired, possessed, manufactured, distributed and used stolen and 
counterfeit credit cards. At all times relevant to this indictment, defendant OLUSHINA GODWIN ADEKANBI, 
supervised this credit card enterprise, which consisted of a kicatnn in Queens and other k>catk>ns. 

As part of this conspiracy, defendant PRINCE DELE OSIBOTE worthed as the second in command 
in the credit card enterprise, thereby supervising the operation of the enterprise and meeting with or 
speaking regularly vinth defendant OLUSHINA GODWIN ADEKANBI. 

As part of this conspiracy, defendant ROTIMI OGUNNUSI acted as a principal in the credit card 

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enterprise, meeting regularly with defendants OLUSHINA GODWIN ADEKANBI and PRINCE DELE 
OSIBOTE. 

As part of this conspiracy, defendant MICHAEL ATAMOLOGUN acted as a manager of the credit 
card enterprise obtaining cash advances and goods for defendants OLUSHINA GODWIN ADEKANBI and 
PRINCE DELE OSIBOTE and recruiting others to obtain cash advances and goods for himself and for said 
defendants using stolen and counterfeit credit cards. Defendant MICHAEL ATAMOLOGUN also brokered 
sales of counterfeit credit cards manufactured by defendants OLUSHINA GODWIN ADEKANBI, PRINCE 
DELE OSIBOTE or ROTIMI OGUNNUSI to other members and customers of the enterprise. 

As part of this conspiracy, OLANREWAJU ADEYEMI. SAMUEL ADEWALE and MARY OYETUGA 
and others used stolen or counterfeit credit cards and false identification to obtain cash advances and 
goods for the credit card enterprise and themselves. 

As part of this conspiracy, AWNDELE OSHODI provided store invoices betonging to Fretter, an 
appliance store chain located in Massachusetts, and which invoices contained credit card access numbers 
of customers of Fretter. to OLUSHIf^ GODWIN ADEKANBI and others vrarking in the above mentioned 
credit card enterprise. 

OVERT ACTS 
In furtherance of the conspiracy and to effect the objects thereof, and during the course thereof, 
the folkjwing overt acts, among others, were committed: 

(1) On or atKJut August 1, 1995. Apartment 9M at 164-20 Highland Avenue, Jamaica, 
Queens, New York was rented in the name of "Rhonda Freeman". 

(2) On or about September 1 0, 1 995. In the County of Queens, the defendants, acting 
in concert with each other and others, possessed in excess of five hundred credit card access numbers 
assigned to individuals other than the defendants and others acting in concert with them. 

(3) On or about September 10. 1995 in the County of Queens, the defendants, acting 
in concert with each other and others, possessed in excess of fifty stolen credit cards. 

(4) On or at>out September 10, 1995 in the County of Queens, the defendants, acting 

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in concert with each other and others, possessed in excess of fifty counterfeit credit cards. 

(5) On or about September 10, 1995, in Jamaica, Queens, the defendants, acting in 
concert with each other and others, possessed in excess of 500 store invoices of Fretter, an appliance 
store chain located in Massachusetts. 

(6) On or about and between July 21 , 1994 and July 1 . 1995, in the County of Kings 
and the State of Massachusetts and elsewhere. AKINDELE OSHOOI possessed store invoices of Fretter. 

(7) On or aboitl September 10, 1995, in Jamaica, Queens, the defendants, acting in 
concert with each other and others, possessed in excess of fifty store invoices of Budget Car and Truck 
Rental from Warwick, Rhode Islartd. 

(8) On or atxxjt September 10, 1995, in Jamaica, Queens, the defendants, acting in 
concert with each other and others, possessed twenty invoices of WLF Automotive, a gasoline station in 
Evanston, Illinois. 

(9) On or about September 10, 1995, in Jamaica, Queens, the defendants, acting in 
concert with each other and ottiers, possessed a portable embossing machine. 

(10) On or about September 10, 1995, in Jamaica, Queens, the defendants, acting in 
concert with each ottwr and others, posse s sed a portable tipping machine. 

(11) On or atxMit Septemt>er 10, 1995, in Jamaica, Queens, the defendants, acting in 
concert with each other and others, possessed a portable encoding machine. 

(12) On or atxMJt Septemt>er 10, 1995 in Jamaica Queens, the defendants, acting in 
concert with each other and others, possessed Universal Bank convenience checks in the name of 'Jay 
Weaver". 

(13) On or atxMJt September 10, 1995 in Jamaica, Queens, SAMUEL ADEWALE, acting 
in concert with others, possessed Budget Car and Truck Rental invoice #GOtslAA2414130. 

(14) On or about and between September B, 1995 and September 10. 1995. In 
Jamaica, Queens. ROTIMI OGUNNUSI, acting in concert with others, possessed Budget Car and Truck 
Rental invoice #PVDAA5702964. 



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(15) un oraDouT beptemoer 10. 1995, in Jamaica, Queens, ROTIMI OGUNNUSI, acting 
in concert with others, possessed a Bank One VISA credit card in ttie name of 'John Paul Barr*. 

(16) On or about September 10, 1995, in Jamaica, Queens, OLUSHINA GODWIN 
ADEKANBI, acting in concert with others, possessed an Arizona driver's license in the name of JOHN P. 
BARR". 

(17) On or about September 10, 1995, in the County of Queens, the defendants, acting 
in concert with each other and others, possessed a computer printout with the names, addresses, phone 
numbers and social security numbers of nine individuals. 

(18) On or about September 10, 1995, in Jamaica. Queens. MARY OYETUGA, acting 
in concert with others, possessed a "State of Massachusettes" [sic] identification card in the name "Mary 
Olesanya*. 

(19) On or about September 10, 1995. in Jamaica, Queens, MARY OYETUGA, acting 
in concert with others, possessed a J.C. Penny credit canj in the name of "Linda Moore". 

(20) On or about September 10. 1995. in Jamaica, Queens. ROTIMI OGUNNUSI, acting 
concert with others, possessed a list of equipment which can be used to manufacture credit cards. 

(21) On or about July 30, 1995 and Septemtwr 10, 1995, in the County of Queens and 
elsewhere, the defendants, acting in concert with each other and others, possessed a cellular telephone 
encoded with AT&T Wireless mobile identification number 917-853-3645. 

(22) On or at>out August 27. 1995. in Jamaica. Queens, merchandise was purchased 
from Incredible Floors Corp using a VISA credit card in the name of "Mark Dunlop". 

(23) On or about September 10. 1995 in Jamaica. Queens. OLUSHINA GODWIN 
ADEKANBI. acting in concert vwth others, possessed a New Jersey driver's license in the name of "Daniel 
Yemkin". 

(24) On or about June 13. 1995. OLUSHINA GODWIN ADEKANBI purchased a Sharp 
pocket organizer from Staples in New York. New York, using a VISA credit card in the name of "Daniel 

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393 



Yemkin'. 

(25) On or about September 9, 1995. OLANREWAJU ADEYEMI, 

a/k/a FLORENCE JAMERSON, acting in concert with others, purchased merchandise from Staples in 
Jamaica. Queens using a Diamond Prestige VISA credit card in the name of "l-aura WinsloW. 

(26) On or about September 9. 1995. in the County of Queens and elsewhere. 
OLANREWAJU ADEYEMI. acting in concert with others, possessed a New York driver's license in the name 
of "Laura Winslow". 

(27) On or about and between June 21. 1995 and September 10, 1995, in Jamaica. 
Queens and elsewhere, PRINCE DELE OSIBOTE possessed a Virginia driver's license in the name of 
■RICHARD RAMSEY". 

(28) On or about June 21 . 1995, commercial mail box #184 was rented at 207 E. Ohk), 
Chicago, Illinois in the name of "Richard Ramsey". 

(29) On or about August 1 . 1995. commercial mail box #128 was rented at 207 Church 
Avenue, Brooklyn, New York. 

(30) On or about September 1, 1995. commercial mail box #148 was rented at 207 
Church Avenue, BrooWyn. New York. 

(31) On or about August 28. 1995. a change of address letter for the Integra Bank VISA 
credit card account of Terry Lee Hritz was faxed from Forest Hills. Queens to said credit card institutbn. 

(32) On or about August 28. 1 995. a U.S. Post Office change of address card for Daniel 
Hunnel was mailed from Queens. New York. 

(33) On or about August 1 , 1 995. a U.S. Post Office change of address card for Bettye 
WakJen was mailed from Brooklyn. New York. 

(34) On or about August 1 . 1995. a U.S. Post Office change of address card for William 
Whitworth was mailed from Brooklyn. New York. 

(35) On or about September 10. 1995. in Jamaica, Queens, the defendants, acting in 
concert with each other and others, possessed Chemical Bank convenience checks in the name of "William 



394 



J. Whitworth". 

(36) On or about September 10, 1995, in Jamaica, Queens, the defendants, acting In 
concert with each other and others, possessed a Chemical Banl( Mastercard credit card in the name of 

"Bettye W. Walden'. 

(37) On or about October 25, l994.intheCountyof Nassauandelsewhere.OLUSHINA 

GODWIN ADEKANBI possessed store Invoices of Fretter. 

(38) On or about October 25, 1 994, in the County of Nassau and elsewhere, OLUSHINA 
GODWIN ADEKANBI possessed what purported to be a VISA credit card of NBD Bancorp. 

(39) On or about October 25. 1994, in thoCountyofNassfiu and elsewhere, OLUSHINA 

ADEKANBI possessed a cloned cellular telephone. 

(40) On or about October 25, 1994, in the County of Nassauandelsewhere.OLUSHINA 
GODWIN ADEKANBI possessed a Wachovia VISA credit card in the name of "Luther Howard'. 

(41) On or about October 25, 1 994, in the County of Nassau and elsewrtiere, OLUSHINA 
GODWIN ADEKANBI possessed a Nationsbank VISA credit card In the name of "Luther Howard". 

(42) On or attout October 25, 1994 in the County of Nassau and elsewhere, OLUSHINA 
GODWIN ADEKANBI possessed a New Jersey driver's license in the name of "Luther Howard". 

(43) On or about May 11. 1995, in the County of Kings and elsewhere, OLUSHINA 
GODWIN ADEKANBI possessed a counterfeit VISA credit card in the name of "Emanuel Jones". 

(44) On or atx)ut May 11. 1995. in Fort Lee, New Jersey, OLUSHINA GODWIN 
ADEKANBI, acting in concert -MUh another, attempted to obtain a cash advance in the amount of $2000.00 
from Natwest Bank using a counterfeit VISA credit card in the name of "Emanuel Jones". 

(45) On or at>out and between June 30. 1995, in the County of Kings and elsewhere, 
MICHAEL ATAMOLOGUN. acting in concert with others, possessed a Now Jersey driver's license in the 
name of "Mark D Morns*. 

(46) On or about June 30. 1995, in the County of Kings and elsewhere. MICHAEL 
ATAMOLOGUN, acting in concert with others, possessed a VISA credit card in the name of "Mark D. 

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Morns'. 

(47) On or about and between July 15, 1995 and August 11, 1995. in the County of 
Kings and elsewhere, IWIICHAEL ATAMOLOGUN, acting in concert with others, possessed a New Yoric 
driver's license In the name of "David Sherman*. 

(48) On or about and between July 15. 1995 and July 19. 1995, in the County of Kings 
and elsewhere, MICHAEL ATAMOLOGUN, acting in concert with others, possessed a VISA credit card in 
the name of "David Sherman*. 

(49) On or atx>ut and between July 15. 1995 and July 19. 1995. in the County of Kings 
and elsewhere. MICHAEL ATAMOLOGUN. acting in concert with others, possessed a VISA credit card in 
the name of "Joseph Ward". 

(50) On or atx>ut and between July 15. 1995 and July 19. 1995, in the County of Kings 
and elsewhere. MICHAEL ATAMOLOGUN. acting in concert with others, possessed a VISA credit card in 
the name of "Stanley Johnson*. 

(51) On or about June 30. 1995, in Branford. Connecticut. MICHAEL ATAMOLOGUN, 
obtained a cash advance in the amount of $2525.00 from Branford Savings Bank, using a VISA credit card 
in the name of *Stanley Johnson*. 

(52) On or about July 11. 1995. in Guilford. Connecticut. MICHAEL ATAMOLOGUN 
obtained a cash advance in the amount of $280000 from the New Haven Savings Bank using a VISA card 
in the name of *Mark D. Morris*. 

(53) On or about July 15. 1995 in Niantic. Connecticut. MIChlAEL ATAMOLOGUN 
obtained a cash advance in the amount of $3000.00 from Chelsea Groton Savings Bank using a VISA 
credit card in the name of *David Sherman*. 

(54) On or about July 18. 1995, in Okj Lyme, Connecticut. MICHAEL ATAMOLOGUN 
obtained a cash advance in the amount of $3000.00 from the Maritime Bank and Trust in Niantic, 
Connecticut, using a VISA credit card in the name of "Stanley Johnson*. 

(55) On or about July 19, 1995, in Waterford, Connecticut, MICHAEL ATAMOLOGUN 



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obtained a cash advance in the amount of $2900.00 from Citizens Bank using a VISA Credit Card in the 
name of "Joseph Ward". 

THIRD COUMT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSIHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI. AWNDELE OSHODI of the crime of SCHEME TO 
DEFRAUD IN THE FIRST DEGREE committed as follows; 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995, in the County of Queens and elsewhere, engaged in a scheme 
constituting a systematic ongoing course of conduct with intent to defraud ten or more persons or to 
obtain property from ten or more persons by false or fraudulent pretenses, representatbns or promises, 
and so obtained property, to wit: United States Currency, from at least one such person whose Identity 
is known to the Grand Jury. 

FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE SECOND 
DEGREE, committad as folk>ws: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded fifty thousand dollars. 

FIFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 



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ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCEf»JY IN THE SECOND 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1 , 1 994 and September 1 0, 1 995, in the County of Queens and elsewhere, stole property whose value fifty 
exceeded fifty thousand dollars. 

SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI ofthe crime of GRAND LARCENY IN THE SECOND 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1 , 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded fifty thousand dollars 

SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI ofthe crime of GRAND LARCENY IN THE SECOND 
DEGREE, committed as follows: 

The defendants, acting in concert with each ottter and others, on or about and between October 
1, 1994 and September 10, 1995. v\ the County of Queens and elsewhere, stole property whose value 
exceeded fifty thousand dollars 

EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE SECOND 
DEGREE, committed as follows: 



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The defendants, acting in concert with each other and others, on or about and between October 
I, 1994 and September 10. 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded fifty tfKHJsand dollars. 

NINTH COUNT 

The Grand Jury of the County of Queens, by this Indlctnwnt, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCEf^Y IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and otfrars, on or atwut and between October 
1, 1994 and September 10, 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

TENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as folbws: 

The defendants, acting In concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

ELEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants 0LUSHIf>4A 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between Octot>er 
1. 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 

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exceeded three thousand dollars. 

TWELFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANHEWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

THIRTEENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1. 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

FOURTEENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCEIMY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

FIFTEENTH COUNT 



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The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCEfNfY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

SIXTEENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and Septemtwr 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars 

SEVENTEENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and Septemt>er 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

EIGHTEENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 



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ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1. 1994 and September 10, 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

NINETEENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. I^ICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

TWENTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

TWENTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DEL£ OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 



79 



402 



The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

TWENTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and t>etween October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

TWENTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MIChHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995, In the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars 

TWENTY-FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 

80 



403 



exceeded three thousand dollars 

TWENTY-FIFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAf^UEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

TWENTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed ss follows: 

The defendants acting m concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. «i the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars 

TWENTY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1. 1994 and September 10, 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars 

TWENTY-EIGHTH COUNT 



81 



404 



The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAIWIOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

TWENTY-NINTH COUMT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1. 1994 and September 10, 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

THIRTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1. 1994 and September 10, 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

THIRTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 



405 



ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1. 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

THIRTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

THIRTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

THIRTY-FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE THIRD 
DEGREE, committed as follows: 



83 



406 



The defendants, acting in concert with each other and others, on or about and t>etween October 
1, 994 and Septemtrar 10, 1995, In the County of Queens and elsewhere, stole property whose value 
exceeded three thousand dollars. 

THIRTY-RFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIh4A 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as follows: > 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 

THIRTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as follows: 

The defendants, acting in Qoncert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 

THIRTY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCEhJY IN THE FOURTH 
DEGREE, committed as follows 

The defendants, acting In concert with each other and others, on or about and between October 
1. 1994 and Septemtwr 10, I995.ejn the County of Queens and elsewhere, stole property whose value 



407 



exceeded one thousand doHars. 

THIRTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAI^OLOGUN, SAIwlUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 

THIRTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed ■§ foUows: 

The defendants, acting m concert with each other and others, on or about and between October 
1. 1994 and September 10. 1995. u\ the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars 

FORTIETH COUNT 

The Grand Jury o( the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as toOows: 

The defendants, acting in ooncert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. tn the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 



408 



FORTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY INTHE FOURTH 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995, In the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 

FORTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atiout and between October 
1. 1994 and September 10, 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 

FORTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995, in the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 



409 



FORTY-FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAtWiUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. In the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 

FORTY-FIFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property whose value 
exceeded one thousand dollars. 

FORTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of PETIT LARCENY, committed as 
follows: 

The defendants, acting in concert with others, on or about and between October 1, 1994 and 
September 10, 1995, In the County of Queens and elsewhere, stole property. 



410 



FORTY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAf^UEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of PETIT LARCENY, committed as 
follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10, 1995, in the County of Queens and elsewhere, stole property. 

FORTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of PETIT LARCENY, committed as 

follows: 

The defendants, acting in concert with each other and others on or about and between October 
1, 1994 and September 10. 1994. in the County of Queens and elsewhere, stole property. 

FORTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIf^lA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of PETIT LARCENY, committed as 

follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1, 1994 and September 10. 1995. in the County of Queens and elsewhere, stole property. 

RFTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIf^lA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 

88 



411 



FORGERY DEVICES, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between August 
1 , 1995 and September 10, 1995 in the County of Queens, possessed with knowledge of its character any 
plate, die or other device, apparatus, equipment, or article specifically designed for use in to wtt; 
counterfeiting credit cards. 

FIFTY-RRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAIWIOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
FORGERY DEVICES, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1 , 1995 and September 10, 1995 in the County of Queens, possessed with knowledge of its character any 
plate, die or other device, apparatus, equipment, or article specifically designed for use in to wit: 
counterfeiting credit cards. 

FIFTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
FORGERY DEVICES, committed as folkiws: 

The defendants, acting in concert with each other and others, on or about and between August 
1 , 1995 and September 10. 1995 in the County of Queens, possessed with knowledge of its character any 
plate, die or other device, apparatus, equipment, or article specifically designed for use in to wit: 
counterteiting credit cards. 

nFTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 



412 



ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between 
June 13, 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it 
was forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, 
to wit: a written instrument officially issued or created by a public office, public servant or governmental 
instrumentality. 

FIFTY-FOURTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBl, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of ttie crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 21 . 
1995 and September 10. 1995, In the County of Queens and elsewhere, with knowledge ttiat it was forged 
and with Intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a 
written Instrument officially issued or created by a public office, public servant or governmental 
instrumentality. 

FIFTY-FIFTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIhJA 
GODWIN ADEKANBl. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of ttie crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about September 10, 
1995, in the County of Queens and elsewhere, with knowledge that it was forged and with intent to 
defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a written instrument 
officially issued or created by a public office, public servant or governmental instrumentality. 

90 



413 



F1FTY-SI)CTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about September 10, 
1995, in the County of Queens and elsewhere, with knowledge that it was forged and with intent to 
defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a written instrument 
officially issued or created by a public office, public servant or governmental instrumentality. 

FIFTY-SEVENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIfMA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foHows: 

The defendants, acivtg in concert with each other and others, on or about September 10, 
1995, in the County of Queens and elsewtiere. with knowledge that It was forged and with intent to 
defraud, deceive or injure anottier. uttered or possessed a forged instrument, to wit: a written instrument 
officiaHy issued or created by a public office, public servant or governmental instrumentality. 

. RFTY-EIGHTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foOows: 

The defendants, acting in concert with each other and others, on or about September 10. 
1995. in the County of Queens mH elsewhere, with knowledge that it was forged and with intent to 

•1 



414 



defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a written instrument 
officiaily issued or created by a public office, public servant or governmental instrumentality. 

FIFTY-NINTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about September 10, 
1995, in the County of Queens and elsewhere, with knowledge that It was forged and with intent to 
defraud, deceive or injure another, uttered or possessed a forged Instrument, to wit: a written instrument 
officially issued or created by a public office, public servant or governmental instrumentality. 

SIXTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants 
OLUSHINA GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. 
SAMUEL ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about Septemt>er 10, 
1995. In the County of Queens and elsewhere, with knowledge that it was forged and with intent to 
defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a written instrument 
officially issued or created by a public office, public servant or govemmental instrumentality. 

SIXTY.RRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants 
OLUSHINA GODWIN ADEKANBI . PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. 
SAMUEL ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION 
OF A FORGED INSTURMEf^T IN THE SECOND DEGREE, committed as folkiws: 

The defendants, acting in concert with each otfier and others, on or at)out September 10, 



415 



1995, In the County of Queens and elsewhere, with knowledge that It was forged and with Intent to 
defraud, deceive or Injure another, uttered or possessed a forged instruntent. to wit: a written Instrument 
officially issued or created by a public office, public servant or governmental instrumentality. 

SIXTY-SECOND COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants 
OLUSHINA GODWIN ADEKANBI. PRINCE OEl^ OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, 
SAMUEL ADEWALE. MARY OYETUGA, OLANREWAJU AOEYEMI of the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMEt^ IN THE SECOND DEGREE, committed as foHows: 

The defendants, acting in concert with each ottier and others, on or atxxjt and between 
August 1, 1995 and September 10, 1995, in the County of Queens and elsewhere, with Imowledge that 
it was forged and with intent to defraud, deceive or injure another, uttered or possessed a forged 
instrument, to wit: a commercial instrument or other instrument which does or may evidence, create, 
transfer, terminate or otherwise affect a legal right. Interest, obligation or status, to wit: a credit card. 

SIXTY-THIRD COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants 
OLUSHir^ GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, 
SAMUEL ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION 
OF A FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foHows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10. 1995, in the County of Queens and elsewhere, with knowledge ttwt It was 
forged and with intent to defraud, deceive or Injure another, uttered or possessed a forged instrument, to 
wit: a commercial Instrument or other instrument which does or may evkjence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SIXTY-FOURTH COUNT 
The Grand Jury of the County of Queens, by this Indknment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 



93 



416 



ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and t>etween August 
1, 1995 and September 10, 1995, In the County of Queens and elsewhere, with knowledge that It was 
forged and with intent to defraud, deceive or Injure another, uttered or possessed a forged instrument, to 
wit: a commercial Instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SIXTY-FIFTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of ttie crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other Instrument which does or may evkjence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligatnn or status, to wit: a credit card. 

SIXTY-SIXTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of ttie crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as folk>ws: 

The defendants, acting in concert with each other and others, on or atxMJt and between August 
1,1995 and September 10. 1995. in the County of Queens and elsewhere, wtth knowledge ttiat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 

94 



417 



or otherwise affect a legal rigfit, Interest, obligation or status, to wit: a credit card. 

SIXTY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1. 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge ttiat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SIXTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1. 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evkjenca, create, transfer, terminate 
or otherwise affect a legal nght, interest, obligatkin or status, to wit: a credit card. 

SIXTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as folkiws: 



418 



The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SEVENTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAtWiUEL 
AOEWALE. MARY OYETUGA. OLANREWAJU AOEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, oimmitted as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrunrtent or other instrument which does or may evkJence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SEVENTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHII^ 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FRGED INSTRUMENT IN THE SECOND DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and Septemt>er 10. 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligatkin or status, to wit: a credit card. 



419 



SEVENTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crinie of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10. 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial Instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SEVENTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE OEL£ OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMIf^AL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting m concert with each other and others, on or atxHit and between August 
1, 1995 and Septemt>er 10, 1995. w\ the County of Queens and elsewhere, with knowledge ttiat It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation and status, to wit: a credit card. 

SEVENTY-FGURTH COUNT 

The Grand Jury of ttte County of Queens, by this Indictment, accuses the defendants OLUSHII^ 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foltows: 



SZ 



420 



The defendants, acting in concert with each ott>er and others, on or atxxjt and between March 23. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with krK>wledge ttiat it was forged 
and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a 
commercial instrument or other instrument which does or may evidence, create, transfer, terminate or 
otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SEVENTY-FIFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 19, 
1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was forged 
and with intent to defraud, deceive or injure another, uttered or possessed a forged Instrument, to wit: a 
commercial instrument or other Instrument which does or may evidence, create, transfer, terminate or 
otherwise affect a legal right, interest, obllgatkin or status, to wit: a credit card. 

SEVENTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foikiws: 

The defendants, acting In concert with each other and others, on or about and t>etween June 19. 
1995 and September 10. 1995, In the County of Queens and elsewhere, with knowledge tfiat it was forged 
and with intent to defraud, deceive or injure another, uttered or possessed a forged Instrument, to wit: a 
commercial instrument or other Instrument whk:h does or may evidence, create, transfer, terminate or 
otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 



421 



SEVENTY-SEVEKTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMIf^AL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and t>etween March 29. 
1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was forged 
and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a 
commerciaJ instrument or other instrument which does or may evidence, create, transfer, terminate or 
otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SEVENTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foUows: 

The defendants, acting In concert with each other and others, on or about and between August 
1. 1995 and Septemt>er 10. 1995. in the County of Queens arxl elsewhere, with knowledge tfiat K was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instmment or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

SEVENTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants 0LUSHII4A 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMih4AL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foHows: 



422 



The defendants, acting in concert witti each ottier and others, on or about and t>etween March 25. 
1995 and Septemtwr 10, 1995, in the County of Queens and elsewhere, with Icnowledge ttiat It was forged 
and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a 
commercial instrument or other instrument which does or may evidence, create, transfer, terminate or 
otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

EIGHTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIfOA 
GODWIN AOEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWAL£. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 13. 
1995 and September 10. 1995. In the County of Queens and elsewhere, with knowledge that it was forged 
and with intent to defraud, decerve or injure another, uttered or possessed a forged instrument, to wit: a 
commercial instrunwnt or other instrument which does or may evidence, create, transfer, terminate or 
otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

EIGHTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 22, 
1995 and Septemt>er 10. 1995. in the County of Queens and elsewhere, with knowledge ttiat it was forged 
and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a 
commercial instrument or other instrument which does or may evidence, create, transfer, terminate or 
otherwise affect a legal nght. interest, obligation or status, to wit: a credit card. 



100 



423 



EIGHTY-SECOND COUNT 

The Grand Jury of the County cH Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with etKh other and others, on or about and between August 
1. 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercia: instrument or other instrument which does or may evidence, create, transfer, terminate 
or othenwise affect a legal right, interest, obligation or status, to wit: a credit card. 

EIGHTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEhfT IN THE SECOND DEGREE, committed as foliows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument whk^h does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligaton or status, to wit: a aedit card. 

EIGHTY-FOURTH COUhTT 

The Grand Jury of the County of Queens, by this Indictment, accuses ttte defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crinr«e of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as folk>ws: 



101 



424 



The defendants, acting in concert with each other and others, on or about and between August 

1, 1995 and September 10, 1995. in the County of Queens and elsewhere, with Icnowledge that it was 

forged and with intent to defraud, deceive or Injure another, uttered or possessed a forged Instrument, to 

 wit: a commercial instrument or other Instrument which does or may evidence, create, transfer, terminate 

or othenvlse affect a legal right, interest, obligation or status, to wit: a credit card. 

EIGHTY-nFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMII^AL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged Instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

EIGHTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and between August 
1. 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge ttiat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evkjence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligatnn or status, to wit: a credit card. 

EIGHTY-SEVENTH COUNT 



102 



425 



The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DE1£ OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUQA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between November 
24, 1994 and Septemtwr 10. 1995. in the County of Queens and elsewhere, with knowledge that It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, irrterest, obligation or status, to wit: a credit card. 

EIGHTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendwtts. acting n concert with each other and others, on or about and t>etween June 22, 
1995 and September 10. 1995. tn the County of Queens and elsewhere, with knowledge that It was forged 
and with intent to defraud, deceive or njure another, uttered or possessed a forged instrument, to wit: a 
commercial instrument or other instrument which does or may evkJence, create, transfer, terminate or 
othenvise affect a legal right, interest, obligation or status, to wit: a credit card. 

EIGHTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as folkwvs: 

The defendants, acting m concert with each other and others, on or about and between March 1 , 
1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that it was forged 

103 



426 



and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a 
oommercial instrument or ottier instrument wfiich does or may evidence, create, transfer, terminate or 
othenwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI. PRINCE DELE OSIBOTE, ROTIMI CX3UNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1. 1995 and September 10, 1995. in the County of Queens and elsewhere, with Imowtedge ttiat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atxxjt and t>etween August 
1. 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial Instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wK: a credit card. 

NINETY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 



104 



427 



ADEWALE, MARY OYETUGA. OUVNREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10, 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOQUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEI^ IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and t>etween August 
1, 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETY-FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as folk>ws: 

The defendants, acting in concert with each other and others, on or about arKt between August 
1. 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other irutrument which does or may evidence, create, transfer, terminate 



105 



428 



or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETY-nFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DEl^ OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
AOEWALE. MARY OYETUGA. OLANREWAJU AOEYEMI of the crinw of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foUows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and Septemlwr 10. 1995, in the County of Queens and elsewhere, with Icnowledge that It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
AOEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and t>etween July 3. 
1995 and Septemt>er 10. 1995. in the County of Queens and elsewhere, with knowledge ttiat it was forged 
and with intent to defraud, deceive or Injure another, uttered or possessed a forged Instrument, to wit: a 
commercial Instrument or other instrument which does or may evidence, create, trartsfer. termirtate or 
otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMIf^AL POSSESSION OF A 
FORGED INSTRUMEfJT IN THE SECOND DEGREE, committed as foHows: 



ifiS 



429 



The defendants, acting in concert with each other and others, on or about and t>etween August 
1, 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETY-EIGHTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEffT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or othenwise affect a legal right, interest, obligation or status, to wit: a credit card. 

NINETY-NINTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as folkiws: 

The defendants, acting in concert with each other and others, on or atiout and between August 
1. 1995 and Septemt>er 10. 1995. in the County of Queens and elsewhere, with knowledge ttiat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDREDTH COUNT 



1fi7 



430 



The Grand Jury of Ihe County of Queens, by ttiis Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crinie of CRIMIf^AL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atxMJt arKi between August 
1, 1995 and September 10. 1995, in the County of Queens and elsewhere, with knowledge tfiat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wtt: a credit card. 

ONE HUNDRED-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMIf^AL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and between August 
1, 1995 and September 10, 1995. in the County of Queens and elsewhere, with knowledge tfiat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrunnent, to 
wit: a commercial instrument or other instrument which does or may evkience, create, trartsfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI Of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEf^ IN THE SECOND DEGREE, committed as foltows: 

The defendants, acting in concert with each other and ottiers, on or about and between August 
1, 1995 and Septemtwr 10, 1995. in the County of Queens and elsewhere, with krwwiedge that It was 



431 



forged and with intent to defraud, deceive or Injure anotfier, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other Instrument wtiich does or may evidence, create, transfer, terminate 
or otherwise affect a legal right. Interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OP A 
FORGED INSTRUMEI^ IN THE SECOND DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or atwut and between August 
1, 1995 and September 10. 1995. in the County of Queens and elsewhere, with loiowledge that it was 
forged and with Intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between September 
5. 1995 and Septemt>er 10. 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with Intent to defraud, deceive or injure another, uttered or possessed a forged Instrument, to 
wit: a commercial irwtrufrtent or other irtstrunrwnt which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-RFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 



IB 



432 



ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI at the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atxxrt and between July 1 , 
1995 and September 10. 1995. in the County of Queens an6 elsewhere, with knowledge tftat it was forged 
and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a 
commercial instrument or other instrument which does or may evidence, create, transfer, terminate or 
otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-SIXTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIf^A 
GODWIN ADEKANBi. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEf^T IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other arxj others, on or about and between December 
19. 1994 and September 10. 1995. in the County of Queens arxf elsewhere, with krKMwtedge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instruntent which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-SEVENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foHows: 

The defendants, acting in concert with each other and ottiers, on or about and between August 
1, 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge ttiat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument whnh does or may evWence, create, transfer, temiinate 



110 



433 



or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-BGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIf<JA 
GODWIN AOEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMElsJT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atiout and between August 
1. 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with Intent to defraud, deceive or Injure another, uttered or possessed a forged instrument, to 
wit: a commercial Instrument or other instrument which does or may evidence, create, transfer, terminate 
or othenvise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEfn* IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1. 1995 and September 10. 1995. in the County of Queens and elsewhere, with knowledge that It was 
forged and with Intent to defraud, deceive or Injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right. Interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-TENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as foltows: 



lU 



434 



The defendants, acting In concert with each other and others, on or about and between July 15, 
1995 and September 10, 1995, in the County of Queens arKi elsewhere, with knowledge that II was forged 
and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to wit: a 
oommerciat instrument or other instrument which does or may evidence, create, transfer, terminate or 
otherwise affect a legal nght, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-ELEVENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMIhML POSSESSION OF A 
FORGED INSTRUMEtOT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10, 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evklence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-TWELFTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIf^ 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMIfMAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between November 
3, 1994 arKi September 10. 1995. in the County of Queens and elsewhere, with knowledge tftat it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evkJence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-THIRTEENTH COUNT 



132 



I 



435 



The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN AOEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and between August 
1, 1995 and September 10, 1995. in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or ottwr instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-FOURTEENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMIfNJAL POSSESSION OF A 
FORGED INSTRUMEf^ IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or at>out and between August 
1. 1995 and Septemtwr 10, 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, (^ceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evkjence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligatkin or status, to wit: a credit card. 

ONE HUNDRED-FIFTEENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as folkwvs: 

The defendants, acting in conceit with each other and others, on or about and between August 
1. 1995 and September 10. 1995.ttn the County of Queens and elsewhere, with knowledge that It was 

112 



436 



forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right, interest, obligation or status, to wit: a credit card. 

ONE HUNDRED-SIXTEENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAIMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMEhJT IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1, 1995 and September 10. 1995. In the County of Queens and elsewhere, with knowledge that It was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged Instrument, to 
wit: a commercial Instrument or other instrument which does or may evidence, create, transfer, terminate 
or otherwise affect a legal right. Interest, obligation or status. 

ONE HUNDRED-SEVENTEENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIf^ 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF A 
FORGED INSTRUMENT IN THE SECOND DEGREE, committed as follows: 

The defendants acting in concert with each other and others, on or about and between August 
1 , 1995 and September 10, 1995, in the County of Queens and elsewhere, with knowledge that it was 
forged and with intent to defraud, deceive or injure another, uttered or possessed a forged instrument, to 
wit: a commercial Instrument or other instrument which does or may evklence, create, transfer, terminate 
or otherwise affect a legal right, interest. obligat»n or status, to wit: a credit card. 

ONE HUNDRED-EIGHTEENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 



114 



437 



ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE SECOND DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between October 
1 , 1994 and September 1 0. 1 995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property whose value exceeded fifty thousand dollars. 

ONE HUNDRED-NINETEENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert vinth each other and others, on or about and between July 7, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED-TWENTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between August 
3. 1995 and September 10, 1995 in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other tfian an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED TWENTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 

115 



438 



GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROT1MI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
3, 1995 and September 10, 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED TWENTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 7, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other ttwn an owner thereof or to iftipede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED TWENTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of ttie crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atxsut and between June 29, 
1995 and September 10, 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED TWENTY-FOURTH COUNT 



116 



439 



The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 5, 
1995 and September 10, 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED TWENTY-FIFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 29, 
1995 and September 10. 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED TWENTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as folkwre: 

The defendants, acting in concert with each other and others, on or about and between June 29. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

117 



440 



ONE HUNDRED TWENTY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 26, 
1995 and September 10. 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED TWENTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendanu. acting m concert with each other and others, on or about and between June 29. 
1995 and September 10 1995. m the County of Queens and elsewhere, wnth intent to benefit themselves 
or a person other ttwn an owner ttiereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED TWENTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follovre: 

The defendantt. acting m concert with each other and others, on or about and between June 29, 
1995 and September 10. 1995. m the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 

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possessed stolen property, to wtt: a credit card or debit card. 

ONE HUNDRED THIRTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, H/IICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 14, 
1995 and September 10. 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 27. 
1995 and September 10. 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between June 29. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with Intent to benefit themselves 

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or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between February 

13, 1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit 
themselves or a person other than an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as folk>ws: 

The defendants, acting in concert with each other and others, on or about and between February 

14, 1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit 
themselves or a person other than an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-RFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between February 

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14, 1995 and September 10. 1995. In the County of Queens and elsewhere, with intent to benefit 
themselves or a person other than an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-SIXTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIt^il OGUNNUSI. MICHAEL ATAH^OLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and between March 23, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-SEVENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltovrc: 

The defendfuits. acting in concert with each other and others, on or about £uid between February 
14, 1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit 
themselves or a person other than an owner thereof or to Impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-EIGHTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltovre: 



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The defendants, acting in concert with each other and others, on or about and between March 23, 
1995 and September 10, 1995, in the County of Queens and elsewhere, with Intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED THIRTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between March 22, 
1995 and September 10, 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FORTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between February 
14, 1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit 
themselves or a person other than an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FORTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the chme of CRIMINAL POSSESSION OF 



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STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between February 
13, 1995 and September 10. 1995, in the County of Queens and elsewhere, with intent to benefit 
themselves or a person other than an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FORTY-SECOND COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between March 23, 
1995 and September 10, 1995, In the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FORTY-THIRD COUNT 
The Grand Jury of the County of Queens, by this Indkrtment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMIfviAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between March 13, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED FORTY-FOURTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 



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AOEWALE, MARY OYETUGA. OLANREWAJU AOEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between February 
28, 1995 and September 10, 1995. in the County of Queens and elsewhere, with intent to benefit 
themselves or a person other than an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FORTY-FIFTH COUNT 
The Grand Jury of the County of Queens, by this Indictnnent, accuses the defendants OLUSHINA 
GODWIN AOEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting m concert with each other and others, on or atx>ut and between February 
27, 1995 and September 10. 1995. m the County of Queens and elsewhere, with intent to tranefit 
themselves or a person other ttwn an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FORTY-SIXTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MIChlAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMIf^AL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants acting m concert with each other and others, on or about and tratween February 
27, 1995 and September 10. 1995. m the County of Queens and elsewhere, with intent to benefit 
themselves or a person other tttan an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED FORTY-SEVENTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 

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GODWIN AOEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERPiT IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and between April 4. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with Intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FORTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between May 17. 
1995 and September 10. 1995. In the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FORTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between July 28, 
1995 and September 10. 1995, In the County of Queens and elsewhere, with Intent to benefit themselves 
or a person other ttian an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

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ONE HUNDRED RFTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 24, 
1995 and September 10, 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowing 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED RFTY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants acting in concert with each other and others, on or about and between June 25, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FIFTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between February 
2. 1 995 and September 1 . 1 995 . in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 

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possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FIFTY-THIRD COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or atxiut and between June 13. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FIFTY-FOURTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between March 22. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other tfwn an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED FIFTY-FIFTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
STOLEN PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between February 
27, 1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit 

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themselves or a person other than an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FIFTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARYOYETUGA, OLANREWAJU ADEYEMI ofthe crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 6. 
1995 and September 10. 1995. in the County of Queens and elsewhere, vinth intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED RFTY-SEVEMTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI ofthe crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 28. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FIFTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DEL£ OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI ofthe crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between July 28, 



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1995 and September 10. 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED FIFTY-NINTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atiout and between June 27, 
1995 and September 10. 1995, in the County of Queens and elsewhere, with Intent to benefit themselves 
or a person other than an owner thereof or to Impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SIXTIETH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or at>out and between August 
1 . 1 995 and September 10. 1 995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SIXTY-FIRST COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 



1M 



452 



The defendants, acting in concert with each other and others, on or atiout and between July 13. 
1995 and Septennber 10, 1995, in the County of Queens and elsewhere, with intent to benefit thennselves 
or a person other than an owner thereof or to impede the recovery by £m owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SIXTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMIfML POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 27. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with Intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED SIXTY-THIRD COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, commrtted as folkjws: 

The defendants, acting in concert with each other and others, on or about and between June 27, 
1995 and September 10 1995. in the County of Queens and elsewhere, vinth intent to benefit themselves 
or a person other ttwn an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED SIXTY-FOURTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 

130 



453 



ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI Of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and ottiers. on or about and between June 27, 
1995 and Septemt>er 10. 1995, in the County of Queens and elsewhere, with intent to benefil themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SIXTY-RFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBJ. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crioie of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 24. 
1995 and Septemtier 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other tfian an owner thereof or to Impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SIXTY-SIXTH COUNT 

The Graixl Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBJ. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between July 31 , 
1995 and Septemt>er 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SIXTY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 

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GODWIN AOEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between February 
5. 1995 and September 10. 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SIXTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 27. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SIXTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 24. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

_ ONE HUNDRED SEVENTIETH COUNT 



132 



455 



The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 29, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit cfird. 

ONE HUNDRED SEVENTY-RRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follovre: 

The defendants, acting in concert with each other and others, on or about and between June 29. 
1995 and Septemt>er 10. 1995. in the County of Queens and elsewhere, with Intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SEVENTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between June 29. 
1995 and September 10. 1995. m the County of Queens and elsewhere, with intent to benefit themselves 
or a person other ttwn an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

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456 



ONE HUNDRED SEVENTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictnient, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atxjut and between July 29, 
1995 and September 10, 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SEVENTY-FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or atxDut and between July 28, 
1995 and September 10. 1995, in the County of Queens and elsewhere, with intent to t>enefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SEVENTY-FIFTH COUNT 

The Grand Jury of the County ol Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between September 
5, 1995andSeptemt>er 10, 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 

134 



457 



possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SEVENTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 25. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to Impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SEVENTY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 29, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SEVENTY-EIGHTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between June 12, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 

135 



458 



or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED SEVENTY-NINTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between February 
17, 1994 and September 10, 1995. in the County of Queens and elsewhere, with intent to benefit 
themselves or a person other tfun an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED EIGHTIETH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE commrtted as follows: 

The defendants, acting in concert with each other and others, on or about and between February 
17, 1994 and September 10. 1995. m the County of Queens and elsewhere, with Intent to benefit 
themselves or a person other tftan an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED EIGHTY-FIRST COUNT 

The Grand Jury of the County ol Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as foltows: 



136 



459 



The defendants, acbng in concert with each other and others, on or about and between November 
V1994 and September 10, 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED EIGHTY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMI^lAI, POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 1. 

1994 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit carel. 

ONE HUNDRED EIGHTY-THIRD COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as folkws: 

The defendants, acting m concert with each other and others, on or about and between July 25, 

1995 and September 10, 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
Of a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED EIGHTY-FOURTH COUNT 
The Grand Jury ol the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 

137 



460 



PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between May 23. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED EIGHTY-FIFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting In concert with each other and others, on or about and between November 
1 . 1 994 and September 10.1 995 . in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED EIGHTY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between July 1 , 
1995 and September 10. 1995, in the County of Queers and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED EIGHTY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN, SAMUEL 



138 



461 



ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
5, 1995 and September 10, 1995, in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED EIGHTY-EIGHTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between July 15. 
1995 and September 10. 1995. in the County of Queens and elsewhere, with Intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit. a credit card or debit card. 

ONE HUNDRED EIGHTY-NINTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between April 1, 
1995 and September 10. 1995. in the County of Queens and elsewhere, with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit a credit card or debit card. 

ONE HUNDRED NINETIETH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 

139 



462 



GODWIN ADEKANBI. PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA, OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between November 
1 , 1 994 and September 10,1 995, in the County of Queens and elsewhere , with intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED NINETY-FIRST COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FOURTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between June 1 , 
1995 and September 10, 1995. in the County of Queens and elsewhere, with Intent to benefit themselves 
or a person other than an owner thereof or to impede the recovery by an owner thereof, knowingly 
possessed stolen property, to wit: a credit card or debit card. 

ONE HUNDRED NINETY-SECOND COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA, OLANREWAJU ADEYEMI, AKINDELE OSHODI. of the crime of CRIMINAL 
POSSESSION STOLEN PROPERTY IN THE FIFTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about 
and between October 1. 1994 and September 10. 1995. in the County of Queens and elsewhere, with 
intent to benefit thenrwelves or a person other than an owner thereof or to impede the recovery by an 
owner thereof, knowingly possessed stolen property, to wit: Fretter invoices. 

ONE HUNDRED NINETY-THIRD COUNT 



140 



463 



The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI. of the chme of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FIFTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1. 1995 and September 10. 1995. in the County of Queens, and elsewhere, with intent to benefit 
themselves or a person other than an owner thereof or to impede the recovery by an owner thereof, 
knowingly possessed stolen property, to wit: Budget Car and Truck Rental invoices. 

ONE HUNDRED NINETY-FOURTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE, ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE RFTH DEGREE, committed as follovre: 

The defendants, acting in concert with each other £uid others, on or about 
and between August 1 , 1995 and September 10, 1995, In the County of Queens and elsewhere, with Intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: WLF AutonrK>tive invoices. 

ONE HUNDRED NINETY-FIFTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of GRAND LARCENY IN THE FOURTH 
DEGREE, committed as folknvs: 

The defendants, acting in concert with each other and others, on or about 
and between August 1 , 1995 and September 10, 1995, in the County of Queens and elsewhere, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: Chemical convenience checks. 

141 



464 



ONE HUNDRED NINETY-SIXTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI, PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE, MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION STOLEN 
PROPERTY IN THE FIFTH DEGREE, committed as follows: 

The defendants, acting in concert with each other and others, on or about 
and between August 1 . 1995 and September 10. 1995. in the County of Queens and elsewhere, with intent 
to benefit themselves or a person other than an owner thereof or to impede the recovery by an owner 
thereof, knowingly possessed stolen property, to wit: Universal Bank convenience checks. 

ONE HUNDRED NINETY-SEVENTH COUNT 

The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
COMPITTER RELATED MATERIAL committed as foltows: 

The defendams acting m concert with each other and others, on or about and between August 
1, 1995 and September 10. 1995 n ttte County of Queens, and elsewhere, when having no right to do 
so, knowingly possessed, in any form, any copy. reproductk>n, or duplicate of any computer data or 
computer program, which was copied, reproduced, or duplicated in vkilatkin of Section 156.30 of this 
article, with an Intent to commit, or attempt to commit, or further the commission of any fek>ny, with intent 
to benefit themselves or a person other Xt\an an owner thereof. 

ONE HUNDRED NINETY-EIGHTH COUNT 

The Grand Jury ol the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
COMPUTER RELATED MATERIAL committed as foltows: 

The defendants, acting in concert with each other and others, on or about and between August 

142 



465 



1, 1995 and September 10, 1995. in the County of Queens and elsewtiere, wtien having no right to do so, 
knowingly possessed, in any form, any copy, reproduction, or duplicate of any computer data or computer 
program, which was copied, reproduced, or duplicated in violation of Section 156.30 of this article, with 
an intent to commit, or attempt to commit, or further the commission of any felony, with intent to benefit 
themselves, or a person other than an owner thereof. 

ONE HUNDRED NINETY-NINTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHINA 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI, MICHAEL ATAMOLOGUN, SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
COMPLTTER RELATED MATERIAL, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1 . 1995 and September 10, 1995, in the County of Queens and elsewhere, when having no right to do so, 
knowingly possessed, in any form, any copy, reproduction, or duplicate of any computer data or computer 
program, which was copied, reproduced, or duplicated in violation of Section 156.30 of this article, with 
an intent to commit, or attempt to commit, or further the commission of any felony, with intent to benefit 
themselves, or a person other than an owner thereof. 

TWO HUNDREDTH COUNT 
The Grand Jury of the County of Queens, by this Indictment, accuses the defendants OLUSHIN.^ 
GODWIN ADEKANBI. PRINCE DELE OSIBOTE. ROTIMI OGUNNUSI. MICHAEL ATAMOLOGUN. SAMUEL 
ADEWALE. MARY OYETUGA. OLANREWAJU ADEYEMI of the crime of CRIMINAL POSSESSION OF 
COMPUTER RELATED MATERIAL, committed as follows: 

The defendants, acting in concert with each other and others, on or about and between August 
1 , 1995 and September 10. 1995. in the County of Queens and elsewhere, when having no right to do so, 
knowingly possessed, in any form, any copy, reproduction, or duplicate of any computer data or computer 
program, which was copied, reproduced, or duplicated in violation of Section 156.30 of this article, with 
an intent to commit, or attempt to commit, or further the commissk>n of any felony, with intent to benefit 



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