The complex nature of money laundering through foreign bribery
Money laundering is the process of turning “dirty” money into “clean” money; giving profits derived from illegitimate means the appearance of coming from a legitimate source.
An example most people will instantly think of comes from the television series Breaking Bad, where Walter White launders the profits of his drug empire through his car wash business without detection.
Although Walter’s scheme may appear brilliant and complex on first blush, it is actually a fairly simplistic method of laundering ill-gotten gains when one compares it to elaborate schemes involving bribery of foreign officials.
What money launderers aim for
Money launderers have two principal concerns:
- Reducing the risk of detection by investigative organisations such as the Australian Federal Police (“AFP”), the Australian Transaction Reports and Analysis Centre (“AUSTRAC”), the Australian Securities and Investment Commission (“ASIC”) and the Australian Crime Commission (“ACC”) and New South Wales Crime Commission (“NSWCC”); and
- Enhancing the legitimacy of transactions and dealings.
Why are money launderers drawn to bribery?
Patently, foreign officials present a golden opportunity for money launderers. Not only does their prominent public position deflect suspicion about their financial dealings, but one also assumes that their dealings are legitimate. Their unique position of influence, trust and responsibility also places them in a position of singular corruptibility.
Australian law criminalises bribing foreign officials. Foreign bribery includes providing or offering a benefit to a foreign public official, or causing a benefit to be provided to a foreign public official, where the benefit is not legitimately due. The benefit must be intended to influence a foreign public official in the exercise of their official duties for the purpose of obtaining or retaining business or a business advantage which is not legitimately due. The crime attracts severe penalties for both individuals and corporations.
How is money laundered through foreign officials?
There are five main methods of laundering through foreign officials:
- By funnelling funds through a shell company or trust;
- By funnelling funds through third parties;
- By funnelling funds through professional facilitators such as lawyers, accountants, real estate agents and financial advisors;
- By funnelling funds through international fund transfers;
- By funnelling funds through companies linked to the foreign official.
Indicators of money laundering involving foreign officials
Investigative authorities use some of the following indicators to identify potential money laundering activities involving foreign officials:
- Dealing with money or participating in transactions involving large, unexplained amounts.
- Holding multiple bank accounts.
- Using a trust as a vehicle to move money.
- Using third parties to deal with large amounts of money.
- Receiving multiple international money transfers within a short period of time.
- Using corporate structures to obscure ownership of assets and equity.
What are some recent examples of foreign bribery and money laundering concerning Australians?
A number of media outlets have reported on recent instances of alleged foreign bribery, some involving Australian companies.
Tabcorp and the Cambodian government
It is reported that in 2010, Australian wagering and gaming operator Tabcorp wired $200,000 to a bank account in the United States linked to a Cambodian consultant, which was later wired to a Cambodian company linked to the sister of Prime Minister Hun Sen.
The payment was made around the time Tabcorp was examining the potential to get Cambodian government backing to launch an online sports betting business through Luxbet, a newly-acquired subsidiary. It is reported that Tabcorp wanted to access the lucrative Asian gambling market in the lead up to the 2010 FIFA World Cup, and that the gaming licence would have only been issued with the permission of Hun Sen or his regime’s senior official.
Unaoil and large scale examples of foreign bribery
Another recent report involves Unaoil, which, through operatives, bribed officials in oil-producing nations to help win government funded projects for clients (often large, multinational firms).
It is reported that one such company was the offshore arm of Australia’s Leighton Holdings, which was involved in a payment of $15 million dollars to a United Arab Emirates firm, Asian Global Projects and Trading, to guarantee the supply of steel to the Australian construction giant at “preferred and commercially beneficial” prices. It is reported that no steel was ever supplied and that the media outlet investigating the matter discovered that Asian Global Projects and Trading had been previously engaged in bribery and money laundering.
The need for expert legal advice in bribery cases
So, why do those exposed to money laundering via foreign bribery investigations require litigators with experience in defending and protecting individuals rights?
The governance model concerning the sharing of information exposes those under investigation for money laundering through bribery offences to double jeopardy as well as the risks of jurisdiction shopping, whereby law enforcement agencies determine which jurisdiction bests suits their objectives to try a particular case.
Presently, individuals who are the subject of multiple exposures to parallel criminal bribery charges are vulnerable to being extradited and sentenced in countries which have significantly higher maximum penalties than Australia.
The transnational framework has been designed to assist law enforcement co- operation, often at the expense of the human rights of those under investigation. This enhances the need for an experienced advisor and litigator who can assist you in every phase of a bribery matter.
How can Nyman Gibson Miralis help?
Nyman Gibson Miralis has acquired expertise in bribery investigations that are being conducted in multiple jurisdictions. As experts in transnational criminal law we can provide our clients with the full benefits of our deep relationships with local lawyers in foreign jurisdictions who are also experts, including in the USA, Europe and Asia.
Our unique criminal litigation experience derived from advising and acting in bribery matters ensures that we are able to provide unique insights and strategic advice on critical issues, such as the obtaining of information through the mutual assistance requests, through under multilateral and bilateral treaties Australia may have with other nations, the admissibility of foreign evidence into proceedings in Australia, and the restraining of the use of evidence obtained in Australia, into foreign investigations.
For further information, go to our foreign bribery and corruption page.