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United States Gets $4.3 Million From Narcotics Money Laundering – UAE & Europe Narcotic Sales

LawFuel.com – Legal Newswire –
LEV L. DASSIN the Acting United States Attorney for the
Southern District of New York, announced today the entry of
judgment granting the United States forfeiture of over $4.3
million seized from bank accounts in New York that had been used
to launder the proceeds of narcotics sales in Europe through the
United Arab Emirates (“UAE”) and into the United States.
According to the Verified Complaint previously filed in
this action:

Law enforcement authorities in Italy learned through an
investigation that began in 2004 that a network of Albanian
narcotics traffickers operating in Italy distributed heroin and
cocaine throughout Italy and then used a network of money
remitters in Italy and other European countries, as well as in
the UAE and Pakistan, to launder their drug proceeds. Several of
the Albanians coordinated the transportation of heroin and
cocaine from the Balkans to Italy, where the drugs were then
distributed in various Italian cities. The Albanian narcotics
trafficking organization also utilized “hawalas” — informal
networks of money remitting businesses commonly used in the
Middle East to transfer money — to move their narcotics proceeds
out of Italy and into a financial network based in the UAE, among
other places. NARESH JAIN KUMAR PATEL, who operated out of
Dubai, UAE, controlled some or all of these hawalas.

On February 20, 2007, Dubai law enforcement authorities
arrested PATEL and 39 other individuals associated with this
extensive money laundering operation. PATEL and others have been
charged with offenses contrary to the UAE’s Anti-Money Laundering
Legislation of 2002. In conjunction with the arrest of PATEL,
Dubai law enforcement authorities executed numerous search
warrants and recovered banking and wire transfer records
demonstrating that PATEL directed transfers from entities under
his control in Dubai, through various banks and exchange houses
in Dubai, into various bank accounts at Man Financial in
Manhattan. Activity in the Man Financial accounts demonstrated
that PATEL engaged in “layering,” a money laundering technique
that seeks to disguise the origin of funds by engaging in
transactions that are designed merely to make tracing more
difficult, and sham commodities trades in which he and his
nominees would always suffer losses and other entities would
enjoy profits — all with no real change in trading position for
either party. Such “wash” commodities trades have no commercial
justification and resulted in the filing of a civil lawsuit by
the U.S. Commodities and Futures Trading Commission (“CFTC”) on
April 5, 2007.

On May 18, 2007, the Government obtained a seizure
warrant for the funds in the Man Financial accounts, as property
involved in money laundering. On June 16, 2009, United States
District Judge SIDNEY H. STEIN issued an Opinion and Order
dismissing claims to the forfeited funds that had been filed by
PATEL, KANTA NATH JAIN, and PANKAJ JAIN, HAINKE & ANDERSON
TRADING LLC and TRADING CO. (“Claimants”), and ordered that
judgment be entered in favor of the United States. As set forth
in the Opinion and Order, the claims asserted by the Claimants
were dismissed as a sanction for the Claimants’ “willful and
longstanding” violation of the Court’s discovery orders. Today,
Judge STEIN entered judgment in favor of the United States and
ordered the forfeiture to the United States of over $4.3 million
in seized funds.

Mr. DASSIN praised the investigative work of the New
York Organized Crime Drug Enforcement Strike Force, comprised of
law enforcement agencies including the Drug Enforcement Agency,
New York City Police Department, Immigration and Customs
Enforcement, Internal Revenue Service, Federal Bureau of
Investigations and the New York State Police. Mr. DASSIN also
thanked the CFTC and the New York Mercantile Exchange for their
role in discovering the suspicious commodities trading in several
of the forfeited accounts.
This civil forfeiture action is being handled by the
Asset Forfeiture Unit. Assistant United States Attorney JEFF
ALBERTS is in charge of the case.
09-189 ###

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