U.S. Seizes Over $5.6 Million From Dubai-Based Money Launderer
MAY 4 -- (Manhattan, NY) MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, and JOHN P. GILBRIDE, the Special Agent in Charge of the New York Division of the United States Drug Enforcement Administration (the "DEA") have announced the seizure of 16 bank accounts containing in excess of $5.6 million that were utilized by a Dubai-based narcotics money launderer. The New York investigation was conducted as part of the New York Organized Crime Drug Enforcement Strike Force, comprised of law enforcement agencies including the DEA, New York City Police Department, Immigration and Customs Enforcement, Internal Revenue Service, Federal Bureau of Investigations and the New York State Police. The seizure was effected pursuant to a civil seizure warrant that was obtained and executed late yesterday. According to the Affidavit submitted to the Court in support of the seizure warrant:
Law enforcement authorities in Italy, the United Kingdom, and the United Arab Emirates learned that an Albanian narcotics trafficking organization operating in Italy was laundering its illicit proceeds through NARESH JAIN KUMAR PATEL ("PATEL"), a money launderer based in Dubai, United Arab Emirates ("UAE"). PATEL and 39 others were arrested in the UAE on money laundering charges on February 20, 2007. PATEL gave a post-arrest statement in which he admitted that he operated a money laundering business on behalf of several criminal organizations, and that he would launder these organizations’ illicit funds through various individuals and companies under his control; he further admitted that he was aware that the money he was transferring constituted the proceeds of criminal activity and that he believed a majority constituted the proceeds of illegal narcotics sales.
Police in Dubai executed a search warrant of PATEL’s office; during the search authorities found business records and banking documents demonstrating that PATEL controlled various entities, either directly or through nominees, including Hainke & Anderson Trading and Jayna Trading, the holders of several of the accounts seized today, the Affidavit stated. In addition, authorities reportedly recovered banking and wire transfer records demonstrating that PATEL directed that transfers be made from entities under his control in Dubai, through various banks and exchange houses in Dubai, into various bank accounts at Man Financial Inc ("Man Financial") in Manhattan. Further investigation disclosed that PATEL controlled at least fifteen separate accounts at Man Financial through entities or individuals under his control, the Affidavit stated. It was asserted in the Affidavit that the activity in these accounts is not consistent with legitimate commercial activity, but rather with "layering," a money laundering technique that seeks to disguise the origin of funds by engaging in transactions that are designed merely to make tracing by law enforcement more difficult.
Some of the activity in the Man Financial accounts demonstrated that PATEL engaged in sham commodities trades in which PATEL and his nominees would always suffer losses and other entities, including Aaristo Commodities and Futures DMCC, the holder of the 16th account seized today, would enjoy profits -- all with no real change in trading position for either party. These "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.
Mr. GILBRIDE stated: "Millions of dollars that was earned from illegal drug trafficking has been seized. It is a law enforcement success both nationally and internationally. This seizure was a direct result of combining the three C’s; global law enforcement Cooperation, Collaboration between law enforcement and several financial institutions and the Commitment to deny drug traffickers their revenue." Mr. Gilbride commends the New York Mercantile Exchange and the CFTC for its efforts in protecting the integrity of their commodity and futures trading exchange.”
Mr. GARCIA praised the investigative efforts of the DEA and the Internal Revenue Service’s Criminal Investigation Division, and thanked the Serious Organized Crime Agency of the United Kingdom; the Guardia di Finanza of Italy; the Dubai, UAE, Police Department, Criminal Investigations Division; and the Nassau County Police Department Asset Forfeiture Unit, for their assistance in this matter. Mr. GARCIA also commended the investigative efforts of the CFTC and the New York Mercantile Exchange for their role in discovering the suspicious commodities trading in several of the seized accounts.
"New York City is the undisputed financial capital of the world. That fact makes New York the target of sophisticated international narcotics money laundering organizations who view our banking system and markets as vehicles to wash their illicit money," said Mr. GARCIA. "This important seizure demonstrates that we and our law enforcement partners both at home and abroad will vigilantly defend our financial institutions from these attacks. However broad the geographic scope of the activity and however sophisticated the money laundering method, we will locate and forfeit these illicit funds."
The investigation is being handled by the Office’s International Narcotics Trafficking and Asset Forfeiture Units. Assistant United States Attorneys KEVIN R. PUVALOWSKI and CHRISTINE MEDING are in charge of the matter.