Transnational Crimes Weekly Recap 12-30-05

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Human Smuggling—“Drop House” Enforcers

Immigration and Customs Enforcement [hereinafter ICE] officials have announced that two Guatemalan men are facing human smuggling and hostage-taking charges.^[1] Responding to a possible hostage situation at a residence near downtown Riverside, California, ICE agents allegedly found 25 Central American migrants crowded into two upstairs bedrooms.^[2] According to ICE, the aliens from Ecuador, Guatemala, and El Salvador said that they had been held for more than a month with only one meal a day, and threatened by the two Guatemalans who were acting as “enforcers.”^[3] The bedroom doors were deadbolted and bars were placed on the windows to prevent escape.^[4]

ICE agents were tipped off by a friend of one of the migrants who allegedly “told authorities he had sent $5,000 via wire transfer, but that the smugglers demanded an additional $5,000” for the operation.^[5] The two men who were arrested are not viewed as the heads of the organization, and ICE has said that they will “do everything [they] can to identify people further up in the organization.”^[6]

Human smuggling is distinguished from human trafficking primarily in the manner in which people are brought into the country. Human trafficking usually involves some sort of trickery or coercion, while smuggling involves the clandestine cross-border transportation of people, typically in exchange for money.^[7]

Human smuggling is a transnational crime that is covered by 8 U.S.C. § 1324. Under this statute, it is a crime for a person, knowing that an alien has not received prior official authorization to enter the United States, to bring that person into the US for the purpose of financial gain. The punishment for violating this section is a fine, imprisonment for up to 10 years, or both.^[8] Harboring illegal aliens is also a crime, which can be punished by a fine, the potential for life in prison, or both.^[9]

Hostage taking is covered by 18 U.S.C. § 1203. It is a crime under this section for a person to seize or detain and threaten to kill, injure, or to continue another person in order to compel a third person to do any act as a condition for the release of the detainee.^[10] The punishment for hostage taking is a fine, imprisonment for any term of years or life, or both.^[11]

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[1] ICE, Two Men Face Charges After ICE Agents Uncover Human Smuggling “Drop House” in Riverside, Dec. 29, 2005.
[2] Id.
[3] Id.
[4] Id.
[5] Anna Gorman, “Drop House” Spurs Arrests, LA Times, Dec. 30, 2005
[6] Id.
[7] See our post on human smuggling and trafficking here.
[8] 8 U.S.C. § 1324(a)(2)(B).
[9] Id. § 1324(a)(1)(A)(iii).
[10] 18 U.S.C. § 1203(a).
[11] Id.

Trafficking in Antiquities—Re-Exportation in Malaysia

In September, the Malaysian Customs Department seized a large number of “historical items worth several million ringgit” from Port Klang, which were about to be re-exported.^[1] Now Malaysian officials are searching for Philip Greco, and his wife—Jane Anne Fisher. They are Americans who are believed to have brought the items from the United States between June and August of last year, declaring them as “used household personal effects” and “used household goods” with a value of only RM7,600 (roughly US$2,011). Mr. Greco was a permanent resident under the Malaysia My Second Home program, and “had offered to sell some of the artefacts from his huge collection to the Malaysian Government for US$31 [million] earlier this year.”^[2]

The seized goods, which included ceramic bowls and plates, vases, chairs and tables, wooden shields, bells, gongs, spears, keris, swords, various types of cannon and large drums, were about to be shipped to Dubai,^[3] where Mr. Greco is believed to be located.^[4] Experts have been called in to identify the origins of the items, which are believed to have come from the Philippines and China.^[5] Additionally, nine serviceable antique weapons—five revolvers, two semi-automatic pistols, a sawn-off shotgun and an assault rifle, as well as ammunition—were found in one of the containers.^[6] Culture, Arts and Heritage Minister Datuk Seri Dr Rais Yatim has said that Malaysian “police were trying to locate [Mr.] Greco through Interpol to learn more about the items.”^[7]

Interpol takes the trafficking of antiquities very seriously, going so far as providing a CD-ROM of stolen artworks, and maintaining a regularly updated webpage of stolen works of art.

The intrigue surrounding Mr. Greco is one of the larger stories about antiquities trafficking this year. Other large stories include the theft of Iraqi artifacts and the on-going trial of former J. Paul Getty Museum curator Marion True in Italy, which we most recently discussed about a month ago.

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[1] Husna Yusop, Foiled Attempt to Re-Export Artefact, Malaysian Sun Daily, Dec. 30, 2005.
[2] Wani Muthiah, Cops Seek “Indiana Jones,”, Asia News Network, Dec. 29, 2005.
[3] V. Shankar Ganesh, Experts to Verify Artifacts, New Straits Times, Dec. 28, 2005.
[4] Muthiah, supra note 2.
[5] Ganesh, supra note 3.
[6] Muthiah, supra note 2.
[7] Ganesh, supra note 3.

Trafficking in Narcotics—Caribbean Indictment

Immigration and Customs Enforcement [hereinafter ICE] has announced that nine alleged members of a drug trafficking organization that covered Venezuela, the Dominican Republic and the United States have been indicted and arrested.^[1] According to a 15-count indictment, the drug organization was headed by Ricardo Gonzalez-Zapata and Lucas Omar Osorio-Osorio, and it involved a conspiracy to import cocaine from the Dominican Republic and Venezuela into the United States “for distribution to obtain a significant financial gain and profit.”^[2]

The cocaine was allegedly loaded onto cargo containers destined for San Juan, Puerto Rico.^[3] As the shipping schedules and destinations of the containers were determined, the information was forwarded to members of the conspiracy “who acted as brokers, shipping supervisors, recipients and transporters working in the Port of Puerto Rico.”^[4]

We have previously discussed attempts and conspiracies to import narcotics into Puerto Rico here.

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[1] ICE, ICE-Led Investigation Dismantles Drug Trafficking Organization Operating in the Caribbean, Dec. 29, 2005.
[2] Id.
[3] Id.
[4] Id.

Year-End Transnational Crimes Statistics

Although the end of the year is still three days away, a number of law enforcement agencies across the world have released some end of the year transnational crime statistics.

The FBI, for example, has announced that its biometric database, which was recently implemented at the nation’s borders by US Customs and Border Protection, is responsible for returning “hits” on 118,557 criminal subjects trying to enter the US illegally.^[1] The Integrated Automated Fingerprint Identification System is now in operation at all 136 border patrol stations, and it has led to the arrests of:

• 460 individuals for homicide;
• 155 for kidnapping;
• 599 for sexual assault;
• 870 for robbery;
• 5,919 for assault; and
• 12,077 for drug-related charges.^[2]

The DEA has also announced some year-end statistics. According to that agency, its operations have resulted in US$1.9 billion worth of seizures, including US$1.4 billion in asset seizures and US$477 million in drug seizures.^[3] Additionally, financial investigations have led to the seizure of more than 2.5 tons of cocaine, 10 tons of marijuana, 15 pounds of heroin, $36.2 million worth of laundered funds, 181 vehicles, 72 firearms, and the arrest of more than 230 people.^[4] The DEA has also aggressively investigated internet drug trafficking through its Virtual Enforcement Initiative. Through this program, the DEA has identified more than 200 web sites that illegally sold pharmaceutical drugs, leading to the arrest of more than 20 people in eight US cities and four foreign countries.^[5]

Last week, the Department of Homeland Security [hereinafter DHS] noted that more than 1 million illegal immigrants were caught attempting to enter the United States.^[6] In addition, more than US$100 million in counterfeit goods were seized, as well as more than 2 million pounds of illegal drugs.^[7] 1,300 human traffickers were convicted, along with 5,700 drug smugglers.^[8] The DHS also mentioned that it is working to “build partnerships overseas.”^[9] With Canada and Mexico, the Security and Prosperity Partnership was launched to develop joint trusted traveler programs, and in Europe and Asia, screening, data-sharing, and cargo inspection programs have been developed to “dismantle threats before they reach our shores.”^[10]

Interpol has recently announced that 20 months after Austria became the first country to sign the charter governing the use of Interpol’s DNA Gateway program, at least 50 matches have been made from information submitted by Austria alone.^[11] 41 of Interpol’s member countries operate national criminal DNA profile databases, and 33 have submitted more than 55,000 records to Interpol.^[12] The UK has the world’s largest database of DNA profiles, and, in November of this year, it became the second country to adopt the charter.^[13] It is expected to start submitting records to the DNA Gateway in early 2006.^[14]

Europol is expected to release its year-end statistics soon.

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[1] FBI, Using Technology to Catch Criminals, Dec. 27, 2005.
[2] Id.
[3] DEA, Drug Enforcement Administration Highlights Year’s Accomplishments, Dec. 28, 2005.
[4] Id.
[5] Id.
[6] Michael Chertoff, Remarks by Homeland Security Secretary Michael Chertoff on Homeland Security Accomplishments and Priorities, DHS, Dec. 20, 2005.
[7] Id.
[8] Id.
[9] Id.
[10] Id.
[11] Interpol, 50 Cases Advanced by Austrian Hits in Interpol DNA Database Matches Involve Ongoing International Police Investigations, Dec. 15, 2005.
[12] Id.
[13] Id.
[14] Id.

Transnational Antitrust—EU Cartel Raids

The European Union has stepped up efforts to “stamp out” transnational cartels operating within that supranational organization’s boundaries.^[1] “[F]ormerly docile cartel authorities are cracking down on collusion in economically weighty sectors like telecommunications, construction and banking.”^[2] Price-fixers are being startled with early-morning raids, flashy publicity against prominent executives, and the imposition of large fines.^[3] The next step in the campaign, conducted both by the EU as a whole and within the individual nations, could be jail time for executives, something “officials say would be the most successful deterrent to price-fixing.”^[4]

Some of the more spectacular fines are those assessed against France Télécom, Vivendi Universal, and Bouygues in the telecommunications sector (€534 million); Hôtel de Crillon and Hôtel Ritz for room-rate fixing (€700,000); German cement makers, including HeidelbergCement, in the construction sector (€702 million); and pharmaceutical companies, including Hoffmann-La Roche of Switzerland, for fixing the prices of vitamin additives (€855 million).^[5] In addition, some other notable actions against European cartels include the Italian tobacco cartel, which involved 8 firms and was fined €56 million, while the five firms that comprised the monochloroacetic cartel were fined nearly €217 million.^[6]

Much of the pressure seems to be coming from the United States, and it seems that “[m]ost European policy makers agree that curbing cartels improves economic performance.”^[7] New policies have created incentives for European regulators to see “who can swing the biggest club,” and new rules that allow “companies to inform on co-conspirators in exchange for exemptions from fines mean that whistle-blowers have been lining up to confess.”^[8]

According to the European Commission, 493 investigations were conducted between May 1, 2004 and November 30, 2005; 20 new investigations were opened in November of 2005 alone.^[9] In June of this year, an entire directorate, dubbed Directorate F, having a staff of around 60, “has been involved exclusively in detecting and combating cartels.”^[10]

In Europe, “it is [generally] illegal for businesses … to collude with each other to fix prices or carve up markets between them.”^[11] However, some exceptions are allowed if cooperation in developing technical standards results in “an agreed single standard for the market as a whole” or if allowing smaller companies to cooperate “strengthens their ability to compete with larger ones.”^[12]

The rules governing collusion in the EU are contained in articles 81 through 85 of the Treaty Establishing the European Community. Under article 81, all agreements or decisions “which have as their object or effect the prevention, restriction or distortion of competition within the common market” are prohibited.^[13] These agreements can include: directly or indirectly fixing prices; limiting or controlling production; and applying dissimilar conditions to equivalent transactions with other trading parties.^[14] The potential fines that can be imposed on colluders fall into three categories: minor, serious, and very serious.^[15] Minor infringements typically include trade restrictions, “usually of a vertical nature,” that have a limited market impact; likely fines for this category range from €1,000 to €1 million.^[16] Serious infringements are often horizontal agreements, or vertical agreements with a large market impact; fines in this category can range from €1 million to €20 million.^[17] Finally, very serious infringements generally involve horizontal restrictions such as price cartels and market-sharing quotas; the likely fines for this category range above €20 million.^[18]

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[1] James Kanter, A Crackdown on Cartels By European Regulators, NY Times, Dec. 27, 2005.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] European Commission [EC], Competition: Commission Action Against Cartels – Questions and Answers, Europa, Nov. 30, 2005.
[7] Kanter, supra note 1.
[8] Id.
[9] EC, Figures on Antitrust Cases Dealt With by ECN Authorities, Europa, Dec. 5, 2005. (PDF)
[10] EC, supra note 6.
[11] EC, Overviews of the European Activities – Competition, Europa, Jun. 2005.
[12] Id.
[13] Treaty Establishing The European Community, Mar. 25, 1957, art. 81, para. 1, 298 UNTS 11, as amended by Treaty Of Amsterdam, Oct. 2, 1997, 1997 O.J. (C 340) 1, as amended by Treaty Of Nice, Feb. 26, 2001, 2001 O.J. (C 80) 1, consolidated version reprinted in 2002 O.J. (C 325) 33.
[14] Id.
[15] EC, Calculation of Fines, Europa, Mar. 7, 2002.
[16] Id.
[17] Id.
[18] Id.