Transnational Crimes Weekly Update

Trafficking in Narcotics—Operation Sweet Tooth

DEA agents, along with partners in Canada and Vietnam, have broken up a huge Ecstasy and marijuana trafficking ring.^[1] 291 individuals were arrested in the execution of 98 search warrants in both the United States and Canada, and 931,300 ecstasy tablets, 1,777 pounds of marijuana, and US$7.75 million in assets were seized.^[2]

The investigation occurred over the course of 24 months, and it shut down two major drug transportation rings with ties to 61 separate domestic investigations.^[3] The investigation, known as “Operation Sweet Tooth,” comes on the heels of “Operation Candy Box” which dismantled another major international Ecstasy ring.^[4]

In this case, Ecstasy powder was smuggled into Canada where it was then turned into pills and smuggled into the United States.^[5] Millions of dollars were laundered through Vietnam’s underground banking system.^[6]

The ringleaders of the trafficking operation will be charged with conspiracy to traffic in narcotics and money laundering.

Conspiracy to Traffic in Narcotics
Under 21 U.S.C. § 846, anyone who conspires to traffic in narcotics will be punished as if he had actually trafficked in narcotics. There is no overt act requirement. Trafficking in narcotics is covered by 21 U.S.C. § 841(a), which states it is a crime for a person to knowingly possess or distribute a controlled substance. Ecstasy, or MDMA, is a schedule I drug,^[7] and the punishment for violating section 841 with a schedule I drug is a fine of up to US$1 million, imprisonment for up to 20 years, or both.^[8]

Money Laundering
Under 18 U.S.C. § 1956(a)(2)(A), it is a crime for a person to transfer monetary instruments or funds from the United States to a place outside the United States with the intent to promote the “carrying on” of a specified unlawful activity. The unlawful activity in this case is drug trafficking.^[9] The punishment for violating section 1956 is a fine, imprisonment for up to 20 years, or both.

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[1] DEA, Press Release: DEA Dismantles International Ecstasy Trafficking Groups, Nov. 17, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] DEA, Drug Scheduling, last visited Nov. 18, 2005, available here.
[8] 21 U.S.C. § 841(b)(1)(C).
[9] 18 U.S.C. § 1956(c)(7)(A) (incorporating an offense in 18 U.S.C. § 1961(1)).

Fraud--Conrad Black

Almost three months to the day that two of his business associates were indicted on mail and wire fraud charges, Lord Conrad Black has himself been indicted on mail and wire fraud charges.^[1] Three other individuals—Hollinger Inc. CFO John Boultbee, Hollinger general counsel Peter Atkinson, and Hollinger corporate counsel Mark Kipnis—were also indicted, along with Ravelston, Lord Black’s former company.^[2] Mr. Boultbee and Lord Black were charged with 8 counts of mail and wire fraud, Mr. Atkinson with 6 charges of mail and wire fraud, Mr. Kipnis with 9 charges of mail and wire fraud, and Ravelston with the same 7 counts of mail and wire fraud it faces when charges were brought against it in August.^[3]

The Schemes
According to Bloomberg News, there were two schemes involved in the charges. The first involved the diversion of $51.8 million from Hollinger International’s sale of assets to CanWest Global Communications Corp. in 2000.^[4] The second scheme involves the abuse of company perks such as the corporate jet, two luxury apartments in New York, and a lavish birthday party for Lord Black’s wife.^[5]

Mail Fraud
We have previously discussed mail fraud here.

Wire Fraud
Under 18 U.S.C. § 1343, it is a crime for a person to devise an artifice or scheme to defraud, and then use the telecommunications technology of the United States to carry out that fraud.

The punishment for a violation of section 1343 is a fine, imprisonment for up to 20 years or both.
As Lord Black is currently located in the United Kingdom, US Attorney Patrick Fitzgerald is giving Lord Black the opportunity to turn himself in.^[6] If Lord Black chooses not to, his extradition will be requested, the details of which we discuss here.

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[1] Conrad Black, Ex-Hollinger Chief, Indicted for Fraud, Bloomberg, Nov. 17, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.

Transnational Espionage—Australian Defense Officer

An apparent associate of Noshir Gowadia, who we mentioned a couple of weeks ago, is being questioned about his alleged role in the sale of B-2 Stealth bomber technology to foreign powers.^[1] What makes this case especially interesting is that the associate in question is a Defence Materiel Organisation [hereinafter DMO] officer in Australia’s Department of Defence.^[2] Arthur Lazarou “is the subject of an internal Defence investigation over his links” to Mr. Gowadia.^[3] Mr. Lazarou, who is a retired Australian Navy lieutenant-commander, became employed by the DMO only two weeks ago, just after Mr. Gowadia’s arrest, and was a joint director and shareholder with Mr. Gowadia in the Canberra-based company NTech Australia Pty Ltd.^[4]

According to US prosecutors, NTech is one of two companies that allegedly were used “to launder the proceeds of the sale of the military secrets that funded Mr. Gowadia’s lavish lifestyle.”^[5]

Mr. Gowadia has apparently admitted that he “provided classified information to approximately eight named countries,” and that, while he knew it was wrong, he “did it for the money,” and to “establish technological credibility with potential customers for future business.”^[6] The technology that he disclosed concerned the B-2’s ability to reduce its infrared signature in order to foil heat-seeking missiles.^[7]

Mr. Lazarou acknowledged his links to Mr. Gowadia before being hired by DMO, and “denies having any knowledge of his former business partner’s activities.”^[8]

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[1] Michael McKenna et al., Aussie in Spy Scandal, The Australian, Nov. 17, 2005, available here. See also Aussie Implicated in U.S. B-2 Spy Scandal, Free Internet Press, Nov. 16, 2005, available here.
[2] McKenna, supra note 1.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.

Trafficking in Persons—Victim Protection

When Congress passed the Trafficking Victims Protection Act [hereinafter TVPA],^[1] they created a special “T” visa that allowed the victims who were trafficked to stay in the United States and receive services such as courses in English.^[2] However, only about 800 victims, out of an estimated 14,000 to 17,000 who have been brought into the country to work as prostitutes or slave, have come forward to take advantage of the program.^[3]

Because so few people have signed up for the special visas, Steve Wagner, the head of the human trafficking program with the Department of Health and Human Services, is going to Houston today “to launch a public awareness campaign about the problems with human trafficking and the need to help victims come forward.”^[4] It is believed that the hesitance to come forward is the fear of deportation and the fact that often the trafficker and the traffickee come from the same cultural background.^[5]

One of the hallmarks of trafficking as opposed to smuggling is that trafficking victims are typically lured into the country under false promises of employment.^[6]

The assistance available to victims of human trafficking is based on the individual being a victim of human trafficking as defined by the TVPA, being willing to assist with the investigation and prosecution of traffickers, and either having completed a bona fide application for a T visa or having received Continued Presence status from the Department of Homeland Security.^[7]

A victim of human trafficking as defined by the TVPA is a person who is subjected to trafficking for sex or labor.^[8]

We have previously discussed human trafficking for prostitution here.

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[1] Pub. L. No. 106-386, 114 Stat. 1464 (2000) (codified at 22 USCS §§ 7101-7110).
[2] See Edward Hegstrom, Federal Help for Trafficking Victims Unused, Houston Chronicle, Nov. 16, 2005, available here. See also 22 U.S.C. § 7105; 8 U.S.C. § 1101(a)(15)(T).
[3] Hegstrom, supra note 2.
[4] Id. See also, Dept. of Health & Human Services [hereinafter HHS], The Campaign to Rescue & Restore Victims of Human Trafficking, Nov. 15, 2005, available here.
[5] Hegstrom, supra note 2.
[6] Id.
[7] HHS, Fact Sheet: Victim Assistance, Nov. 15, 2005, available here.
[8] 22 U.S.C. § 7102(14) (incorporating definitions found in sections 7102(8) or 7102(9)).

Trafficking in Persons—Prostitution

Six men and two women have been charged in federal court in Houston for allegedly running a sex-trafficking ring.^[1] The individuals were arrested Sunday on the trafficking charges, and 100 women from Central and South America were arrested on immigration charges related to the activity.^[2]

According to the US Attorney’s Office in Houston, the eight defendants are all of Salvadoran extraction, and the women who were trafficked—which includes minors—are hail from El Salvador, Guatemala, and Honduras.^[3] The women were lured to the US on promises of monthly waitress wages of $500,^[4] but when they arrived in the United States, they were forced into prostitution to pay off smuggling debts totaling $8,000 to $13,000, which included things such as “coyote” fees, food, housing, clothing, and other miscellaneous items.^[5] One woman told investigators that she earned $500 to $600 a week as a “bargirl” sitting and dancing with restaurant patrons, but when all was said and done, she only netted $50 each week.^[6]

On top of this debt, the women were required to submit to the sexual demands of the defendants, bar patrons, or close associates;^[7] those who refused or tried to leave were coerced with threats to their homes or families.^[8]

The eight individuals have been charged with conspiracy to recruit, transport and force girls and women into commercial sex acts.

Conspiracy
Under 18 U.S.C. § 371, it is a crime for a person to conspire with one other person to commit an offense against the United States and then make an overt act in furtherance of the commission of that offense.

The punishment for a violation of section 371 is a fine, imprisonment for up to 5 years, or both.

Trafficking in Persons for Sexual Activity
Under 18 U.S.C. § 1591(a)(1), it is a crime for a person to recruit, entice, harbor, transport, or obtain by any means a person, knowing that force, fraud, or coercion will be used to cause that person to engage in a commercial sex act. A commercial sex act means “any sex act, on account of which anything of value is given to or received by any person.”^[9]

The punishment for an offense involving fraud, force, or coercion is a fine, imprisonment for any term of years or for life, or both.^[10]

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[1] Harvey Rice, 8 People Accused of Smuggling Girls for Prostitution, Houston Chronicle, Nov. 15, 2005, available here.
[2] Id.
[3] US Attorney’s Office, Press Release: Salvadorans Arrested and Charges with Conspiracy to Commit Sex Trafficking, Nov. 14, 2005, available here [hereinafter USAO].
[4] Rice, supra note 1.
[5] USAO, supra note 3.
[6] Id.
[7] Id.
[8] Rice, supra note 1.
[9] 18 U.S.C. §1591(c)(1).
[10] Id. § 1591(b)(1).

McNabb in the News

Senior Principal Douglas McNabb is featured in a Voice of America report on Yevgeny Adamov.

Douglas McNabb is a defense attorney with McNabb Associates, an international criminal defense firm with offices in the U.S. and Europe.

"The U.S. wants him because of the outstanding charges. Russia wants him apparently because this gentlemen may have information about the nuclear program that they want to make sure that the U.S. doesn't get hold of. "

…

Mr. McNabb offers a possible explanation. "I don't think that the U.S. government at this point wants it disclosed that there is a possibility that one of the options available to Mr. Adamov is that he may cooperate with the government."

…

Mr. McNabb disagrees. “My view of Mr. Adamov's case is that this isn't a political case; this is a law enforcement case. That he has been charged with criminal activity. Now, as a result of his being charged with criminal activity, he may very well disclose to the U.S. government information that the U.S. government could use politically."^[1]

This story is also accompanied by a video.

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[1] Anya Ardayava and Kathie Scarrah, Former Russian Nuclear Official Fighting Extradition to the United States, Voice of America, Nov. 14, 2005.

Piracy at Sea and Non-Lethal Weapons—Somali “Mother Ships”

Last week, we discussed a pirate attack on a luxury cruise ship off the coast of Somalia. Since that time, at least five more attacks have taken place, most of them occurring in the waters northeast of the war-torn country.^[1] Andrew Mwangura, the program director at the Kenyan Seafarer’s Association, says that, in total, seven ships and crews have been taken into captivity in that part of the Indian Ocean.^[2]

Authorities are now investigating reports of a “pirate mother ship” spotted by fishermen in the area.^[3] The ship was spotted in July, on November 5, and late last week, and there may be more than one; it apparently has a well-organized crew of about ten men, including a captain and engineer.^[4]

In related news, the cruise ship that evaded capture last week apparently used a sonic weapon to fend off the pirates.^[5] The weapon, known as a Long Range Acoustic Device—or LRAD—was developed by the US military after the 2000 attack on the USS Cole in Yemen.^[6] The device directs an ear-splitting noise at its target, and the makers of the LRAD liken its noise to a smoke detector, only much louder.^[7]

The LRAD is one of a number of so-called “non-lethal” weapons that have been or are being developed for use against civilian populations. The New York City Police Department deployed at least one during the 2004 Republican National Convention in New York City,^[8] and it has also been used in New Orleans in the wake of Hurricane Katrina,^[9] and in Iraq during the elections.^[10]

Another type of non-lethal weapon is called a Directed Energy Weapon—or DEW—which focuses a beam of energy that flash-heats its target.^[11] The DEW’s “beam of concentrated electromagnetic energy or atomic or subatomic particles [can be used] primarily as a direct means to damage or destroy enemy equipment, facilities, and personnel.”^[12] While the weapon, as envisioned for use on civilian populations, does not burn flesh, it does “create an unbearably painful burning sensation.”^[13] A DEW system can also be more powerful: “[t]hese weapons range in power from non-lethal to highly lethal and destructive and range in size from man-portable to platform based.”^[14] The DEW is sometimes called the Active Denial System, and it has recently been announced that the system will be deployed in Iraq next year.^[15] Recent tests of the system proved to be quite troublesome as test subjects were encouraged to remove glasses and contact lenses to prevent damage to their eyes, and were also told to remove coins and other metal objects from their pockets to avoid burning their skin.^[16]

The most controversial use of a non-lethal weapon occurred in 2002 when Russian commandos stormed the Theater Center on Dubrovka where Chechen rebels were holding more than 800 Russians hostage.^[17] The commandos piped a gas derived from fentanyl, which is supposedly non-lethal, into the theater.^[18] 117 people died as a result of the gas.

The Russian incident shed light on a problem plaguing the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction,^[19] which created an exception for non-lethal weapons for domestic riot-control purposes.^[20] That carve-out raised questions about the propriety of developing other, non-chemical-based, non-lethal weapons, a controversy which clearly has not slowed the development of things like the LRAD and the DEW.

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[1] Pirate “Mother Ship” Spotted, CNN.com, Nov. 12, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Cruise Ship “Used Sonic Weapon,” CNN.com, Nov. 8, 2005, available here.
[6] Id.
[7] Id.
[8] Amanda Onion, Listen Up: Unusual Forms of Sound to Emanate from RNC, ABCNews.com, Aug. 25, 2004, available here (noting that New York’s police department claims that they would use it only as a very loud loud-speaker). Note: the original story has been removed from ABC’s website.
[9] Adam Blenford, Cruise Lines Turn to Sonic Weapon, BBC News, Nov. 8, 2005, available here.
[10] Matt Wickenheiser, Super-Loud Device Helps Cruise Ship Evade Pirates, MaineToday.com, Nov. 9, 2005, available here.
[11] See Lev Grossman, Beyond the Rubber Bullet, Time.com, Jul. 21, 2002, available here.
[12] Weapons, Space, and Nuclear Safety Division, Directed Energy Weapons Safety, Department of Defense, available here [hereinafter WSNSD]; see also Air Force Research Laboratory, Directed Energy Directorate, Department of Defense, available here.
[13] Grossman, supra note 11..
[14] WSNSD, supra note 12.
[15] Microwave Weapon Use in Iraq Worries Scientists, ABC News (Australia), Jul. 21, 2005, available here.
[16] Id.
[17] See Romesh Ratnesar et al., Russian to the Core, Time Reports, Nov. 11, 2002, available here.
[18] Id.
[19] Jan. 13, 1993, S. Treaty Doc. No. 103-21 (1997), 32 I.L.M. 800, available here. (PDF)
[20] Id. art. II, para. 9, sec. d (“Purposes Not Prohibited Under this Convention” includes “Law enforcement including domestic riot control purposes.”)