Friday, January 13, 2006

Transnational Crimes Weekly Recap 1-13-06


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posted by McNabb Associates, P.C. @ 3:37 PM  

Sex Tourism—Joint Operation

A resident of New Jersey, Anthony Mark Bianchi, has been indicted on charges.[1] In addition, his alleged translator, Ion Gusin, has been arrested by Moldovan police.[2] There is no report whether Mr. Gusin’s will be requested. Mr. Bianchi is charged with one count of conspiracy to engage in illicit sexual conduct in foreign places, two counts of traveling with the intent to engage in illicit sexual conduct, two counts of engaging in illicit sexual conduct in foreign places, and one count of using a facility in foreign commerce (a telephone) to entice a minor to engage in sexual activity.[3]

According to ICE, Mr. Bianchi allegedly conspired to travel from Philadelphia International Airport to Cuba, the Republic of Moldova, and Romania to engage in illicit sexual conduct with males younger than 16 years of age.

As a testament to the reach of the United States, the transnational investigation involved agents from the Philadelphia ICE office, the ICE Attache in Austria, the ICE Cyber Crimes Center in Virginia, the US Diplomatic Security Service, the DOJ, the US Postal Inspection Service, the Romanian Organized Crime Police, the Romanian Prosecutor’s Office, Moldovan Police assigned to the Ministry of Internal Affairs, and Polish Border Police.[4]

One of the many interesting aspects of this case is that Mr. Bianchi, a New Jersey resident, was indicted out of Philadelphia.[5] Under of the Federal Rules of Criminal Procedure, “the government must prosecute an offense in a district where the offense was committed.” Therefore, since the overarching charge of the indictment is a conspiracy “to travel in foreign commerce … to engage in illicit sexual conduct, in violation of Title 18, United States Code, Section (c),”[6] part of the offense was conducted at the Philadelphia airport.

As we have mentioned , the United States is ramping up its prosecutions of sex tourism and human trafficking.


[1] ICE, , Jan. 12, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] See, United States v. Bianchi, , (E.D. Pa. 2005).
[6] Id. at 2.

posted by McNabb Associates, P.C. @ 2:01 PM  

Thursday, January 12, 2006

Transnational Money Laundering—New Methods

A new federal report suggests that are becoming much more creative in the ways they “conceal and move dirty cash.”[1] The report, known as the Money Laundering Threat Assessment [hereinafter MLTA], is “the first government-wide analysis of its kind, which investigates money laundering vulnerabilities across a spectrum of techniques used” by individuals.[2] 16 different government agencies, offices, and bureaus collaborated on the report, which outlined more than 10 different ways that people are known to have laundered money.[3]

Casinos remain a popular place to launder money because of the high volume of cash transactions, as well as the “broad array of financial services” available to patrons, such as deposit and credit accounts, funds transfers, check cashing and currency exchanges.[4] Typically, money is laundered through the casinos by exchanging illicit cash for casino chips and then either: holding the chips for a period of time and later cashing them in for a casino check or wire transfer; using the chips as currency to purchase narcotics with the drug dealer later cashing in the chips; or using the chips to gamble in hopes of generating certifiable winnings.[5]

Casinos, however, have long been suspected of being places where money gets laundered, and the MLTA highlights a few new methods which demonstrate some ingenuity. The most intriguing new method of laundering money is by using “stored value cards” which are sometimes called prepaid cards.[6] These cards can operate in either an “open” or “closed” system: open systems can connect to global debit and ATM networks, allowing the user to purchase goods or access cash at any merchant or ATM that connects to the global payment networks; closed system cards are limited in that they can only buy goods or services from the merchant issuing the card.[7]

According to the DEA, ICE, and the IRS, prepaid cards have been used with bulk-cash smuggling; “[d]rug dealers load cash onto prepaid cards and send the cards to their drug suppliers outside the country. The suppliers then use the cards to withdraw money from a local ATM.”[8]


[1] See Jeannine Aversa, , Associated Press (via Houston Chronicle), Jan. 12, 2006; Claire Hoffman, , LA Times, Jan. 12, 2006; US DOJ, , Dec. 2005 (PDF).
[2] US DEA, , Jan. 11, 2006.
[3] See US DOJ, supra note 1, Table of Contents.
[4] Id. at 51.
[5] Id. at 52.
[6] Id. at 20.
[7] Id.
[8] Aversa, supra note 1.

posted by McNabb Associates, P.C. @ 3:31 PM  

Wednesday, January 11, 2006

Software Piracy—Singapore

Ang Chiong Tek of Singapore has been sentenced to four months of prison in Singapore for of Microsoft software.[1] Mr. Ang was found guilty of importing counterfeit Microsoft software from Hong Kong for S$80 per disc and reselling them as genuine for prices ranging from $180 to S$320, which is a 30% discount on normal retail prices in Singapore.[2]

Mr. Ang was arrested in September, and police seized 100 copies of counterfeit software and fake certificates of authenticity worth over S$20,000.[3] While low-end pirated software can be purchased in Singapore for S$10, those copies are easily identifiable by their “cheap labels and flimsy plastic wrapping.”[4] Mr. Ang’s counterfeits, in contrast, were “virtually indistinguishable” from legitimate copies; his scam came to light only after his customers complained to Microsoft that they were unable to register their software.[5]

Microsoft in turn, notified Singapore authorities about Mr. Ang, who began an investigation of the student under tough new intellectual property laws that went into effect at the beginning of 2005 after signing a free-trade agreement with the United States.[6] He could have potentially received up to 5 years in prison under the new Copyright and Trademark Acts.[7]

Mr. Ang’s conviction comes at a time of blossoming public-private partnerships, as well as the recent of an US DOJ Intellectual Property Law Enforcement Coordinator for Asia. Back in , we mentioned that the individuals responsible for the “Mytob” and “Zotob” computer “worms” that disrupted major computer networks in the US last year had been arrested in Morocco and Turkey. At the time the arrests were made, the FBI announced that they had received “valuable assistance” from Microsoft, which operates an Internet Crime Investigations Team that provides “round-the-clock” technical and investigative support to the FBI and foreign authorities.[8]


[1] Ingrid Marson, ZDNet UK, Jan. 11, 2006.
[2] Id.
[3] , Malaysian Star, Jan. 1, 2006.
[4] Id.
[5] Id.
[6] Marson, supra note 1.
[7] Malaysian Stat, supra note 3. See also , Cap. 63 § 136.; , Cap. 332, § 46.
[8] See FBI, , Aug. 26, 2005.

posted by McNabb Associates, P.C. @ 10:36 AM  

Tuesday, January 10, 2006

Human Smuggling—El Paso

After a two-year investigation, ICE agents have arrested the leaders of two alleged networks.[1] According to ICE, three “masterminds” and nine associates were arrested last Friday after being indicted on charges that they smuggled and transported more than 600 aliens from the El Paso area to Dallas and beyond.[2] The operations allegedly generated more than US$1.6 million in smuggling fees by smuggling Brazilians, Colombians, Hondurans, Salvadorans, Guatemalans, Nicaraguans, Ecuadorians, and Mexicans into the country.[3] Depending on the nationality, it is claimed, those wishing to get into the US were charged between US$1,500 and US$6,000.[4]

The operation also allegedly made use of “drop houses,” which we recently , as well as tractor-trailers containing “35 to 79 people crammed in … for the non-stop nine-hour trip to Dallas from El Paso with no food and limited water”; sometimes the doors to the trailer were padlocked.[5]

Human smuggling is a that is covered by . 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.[6] Harboring illegal aliens is also a crime, which can be punished by a fine, the potential for life in prison, or both.[7] Conspiracy to do any of the previous is also a crime that carries the same punishment.[8]


[1] ICE, , Jan. 9, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] 8 U.S.C. § 1324(a)(2)(B).
[7] Id. § 1324(a)(1)(A)(iii).
[8] Id. § 1324(a)(1)(A)(v)(I).

posted by McNabb Associates, P.C. @ 5:19 PM  

Monday, January 09, 2006

Piracy at Sea—Asian Agreement

India has approved the ratification of a Regional Cooperation Agreement [hereinafter Agreement] in Asia to combat and armed robbery against ships in Asia.[1] The agreement, which has been signed by 16 nations including India, Bangladesh, China, Japan, Singapore, and Indonesia, is “the first of its kind” to combat this in Asia.[2] The pact paves the way for establishment of an information sharing center that would be located in Singapore, as well extending mutual legal assistance and extradition processes to member nations[3] Singapore, Japan, Laos, and Cambodia were the first countries to sign on to the agreement, which was spurred by Japan and concluded in Tokyo in November 2004.[4]

While much attention has been directed at the Somali coast this past for pirate activity in that region, most acts of piracy worldwide take place in the Oceana region.[5]

The Agreement differentiates acts of piracy from acts of armed robbery against ships. Piracy is “any illegal act of violence or detention, or any act of depredation, committed for private ends by the crew or the passengers of a private ship or a private aircraft” which is directed “on the high seas, against another ship, or against persons or property on board such ship” or “against a ship, persons or property in a place outside the jurisdiction of any State.”[6] By contrast, armed robbery is defined as “any illegal act of violence or detention, or any act of depredation, committed for private ends and directed against a ship, or against persons or property on board such ship,” when that act is committed within a contracting party’s jurisdiction.[7] Incitement and facilitation are both acts which are a part of both definitions, as is voluntary participation in the operation of a ship or a private aircraft with knowledge that that craft is either a pirate ship or a ship used for armed robbery.[8]

The agreement does not apply to warships, nor to “other government ships operated for non-commercial purposes,”[9] nor does it entitle a contracting party to exercise jurisdiction in the territory of another contracting party.[10] It also places obligations on the contracting parties to prevent and suppress piracy; to arrest pirates;[11] to seize the crafts and property used for committing piracy, as well as the ships taken by pirates; and to rescue the victims of pirates.[12]

The Agreement, as noted, contains a number of cooperative components. The first is , which is a blanket statement that the contracting parties will, subject to their national laws and regulations, “endeavor to extradite” pirates who are present in their territories.[13] Second, the parties will “endeavor to render mutual legal assistance in criminal matters,” which includes the submission of evidence related to piracy.[14] Third, the parties have agreed to enhance their capacity to prevent and suppress piracy through technical assistance such as education and training programs.[15] Fourth, the parties may, for time to time, engage in joint exercises or other forms of cooperation.[16] And finally, each party will “encourage ships, ship owners, or ship operators,” to take protective measures against piracy.[17]


[1] , Asia Pulse (via Yahoo!), Jan. 9, 2006.
[2] Id.
[3] Id.
[4] Ministry of Foreign Affairs—Singapore, , Apr. 28, 2005.
[5] See, e.g., International Chamber of Commerce [hereinafter ICC], , ICC Commercial Crime Services [hereinafter ICC CCS], last visited Jan. 09, 2005; ICC, , ICC CCS, Dec. 27, 2005- Jan. 2, 2006 (three incidents occurred during this period: two off Indonesia, and one off India).
[6] , Apr. 28, 2005, art. I, para.1(a), 44 I.L.M. 829. (PDF)
[7] Id. art. 1, para. 2(a).
[8] Id. art. 1.
[9] Id. art. 2, para. 3.
[10] Id. art. 2, para. 5.
[11] For simplicity, we will refer to piracy and armed robbery against ships as “piracy” and we will refer to pirates and persons committing armed robbery against ships as “pirates.”
[12] Agreement, supra note 6, art. 3, para. 1.
[13] Id. art. 12.
[14] Id. art. 13.
[15] Id. art. 14.
[16] Id. art. 15.
[17] Id. art. 16.

posted by McNabb Associates, P.C. @ 9:24 AM  

Sunday, January 08, 2006

McNabb in the News

Senior Principal Douglas McNabb is quoted in the Denver Post in an article about Joe Nacchio who has been indicted on charges.

Mr. Nacchio’s defense so far is that the Qwest board of directors ordered him to “unload millions’ worth of company shares,”[1] which could be a vital defense:
"He would argue that what he was doing was with full knowledge and authorization of the board," said Douglas McNabb, senior principal of McNabb Associates, a Washington, D.C.-based criminal defense law firm not involved in the Nacchio case. "That's huge."[2]

[1] Andy Vuong, , Denver Post, Jan. 8, 2006.
[2] Id.

posted by McNabb Associates, P.C. @ 7:51 AM