A dozen private foreign funds that included investors of dirty crime money were victims of Bernard Madoff’s multi-billion dollar Ponzi scheme, a private fraud investigator told a US Congressional committee last week.
Harry Markopolos, a private fraud investigator who’d tried for nine years to warn regulators that Madoff’s investment business was a fraud, told a House subcommittee that he would soon reveal to regulators the names of the dozen funds “hiding in the weeds” in Europe.
Discussing the Russian mobsters and Latin American drug cartels that he says were likely to have lost money by investing in those funds, Markopolos made it a point to tell the criminals that it was not his fault. “I’m the good guy,” he said in an exchange with Representative Gary Ackerman (D-NY). (A short clip can be found here.)
ACKERMAN: I'm talking about, when you talk about the Russian mob and organized crime, these are people who invested through European investors or European feeder funds?
MARKOPOLOS: Correct. And I didn't fear of them, and I didn't think they were going to come after me, I want to make this perfectly clear to all those Russian mobsters and Latin American drug cartels out there...
ACKERMAN: You're talking directly to them.
MARKOPOLOS: I was acting on your behalf trying to stop him from zeroing out your accounts. I'm the good guy here. Just like to make that clear.
ACKERMAN: Uh, yeah I think we registered that.
Bulgaria Organized Crime News
Witness: Mobs Victims of Madoff Fraud
Published: 10 February 2009
By Beth
Bulgarian police arrested a former elite policeman last week, charging him with forming and managing a criminal group. Zlatomir Ivanov, who once served in a Bulgarian anti-terrorist police unit, is suspected of involvement in drug trafficking and contract killing. He could face 10 years in prison if convicted.
Though Ivanov’s nom de guerre is Zlatko Baretata, a Bulgarian nickname translated by one news outlet as “the barrette,” and by another as “the beret,” Ivanov’s nickname certainly did not keep him from inspiring fear on the streets of Sofia. Dimitar Vuchev, suspected as a drug dealer, told Bulgarian radio last week that Baretata was the country’s most important drug lord and masterminded several of Bulgaria’s gangland killings that have outraged the European Union.
In other tough-on-crime news, a Sofia court last week rejected alleged mafia boss Krasimir Marinov’s request to go to Spain for a back treatment. Marinov, his younger brother, and four accomplices are in custody awaiting trial in three assassinations of high-profile Bulgarians.
Bulgaria’s government leaders are most likely hoping the European Union (EU) is watching all of this, as a new report on Bulgaria is due Thursday. The EU has already suspended €220 million in aid to the country over its inability to deal with organized crime and corruption, and its lax judiciary, but the word is that the new report is not going to be positive. Bulgaria Radio News had the story:
The major criticisms for the justice system and internal affairs in Bulgaria again will be due to the lack of sufficient results against organized crime and corruption, BNR announced.
There are still not enough charges and convictions on key cases for high-level corruption and participation in organized criminal groups, the EC stated in the already prepared project of the report.
More on Balkan Organized Crime
In other Balkans news, Serbia’s Interior Minister Ivica Dacic has proclaimed again that the much-vaunted “white book” on organized crime is nearly finished. He also said his ministry was collaborating with the OSCE on an anti-organized crime strategy.
Spain: Organized Crime, Terrorism
Spanish police arrested 13 people last week on suspicion that they were linked to organized crime and terrorist groups.
A police statement said the detainees — 11 Pakistanis, a Nigerian and an Indian — are suspected of belonging to an international crime gang involved in passport forgery, drug trafficking and people-smuggling.
Police said they were investigating whether the group may also have supplied forged documents to international terror groups. Spanish police often use that term to refer to Islamic extremist organizations, but a police official refused to say if that applied this time.
The group supposedly had contacts throughout Europe – in Belgium, Britain, France, Germany and Switzerland – and Thailand, and are suspected of stealing passports in Spain and sending them to Thailand, where they were altered before being sent back to criminal gangs in Europe.
Britain’s SFO drops Kenya case
Britain’s Serious Fraud Office (SFO) dropped a case involving major Kenyan corruption last week because Kenyan authorities have not supplied the SFO with evidence, reports Reuters. The case involved Kenyan state contracts worth hundreds of millions of dollars awarded to phantom firms.
The Reuters story called this “a damaging reflection on Kenya’s failure to combat graft.” But couldn’t it also be a damaging reflection on the SFO? I don’t mean in this particular case – there’s nothing they can do if Kenya won’t do its job – but in general the office has come under criticism, for dropping a politically charged probe into Britain’s largest defense firm, and most recently for not going after financial crime. The SFO’s new director recently responded to the criticism, saying that the SFO’s conviction rate is now 80 percent.
Italy: News of the Underworld
An Italian court has sentenced four alleged members of the Calabrian mafia to life in prison over the 2005 murder of a local politician.
Francesco Fortugno, vice-president of Calabria's regional assembly, was shot dead at a polling station in Locri.
His murder caused outrage in Italy and was seen as a challenge to the state by the Calabrian mafia, the 'Ndrangheta… Mr Fortugno, a former doctor, was investigating the awarding of hospital contracts in the Calabrian healthcare system at the time of his murder, which happened on 16 October 2005.
In other Italian underworld news, the Sicilian mafia understands that in tough economic times, it can be hard for businesses to cough up pizzo, or protection money. So La Cosa Nostra is now accepting in-kind contributions rather than just cash. A butcher can offer meat, a fishmonger fish, and farmers can hand over chickens, eggs and milk.
Maurizio de Lucia, the anti-mafia prosecutor in Palermo, Sicily, said: "Cosa Nostra bosses don't mind the economic crisis, shopkeepers have to pay. In some cases it's possible to pay by installments of fish or whatever, but they have to pay."
UNODC: African Conflict Feeds Crime Groups
Here’s something true of several regions, not just East Africa, which a UN agency’s director of operations singled out last week: Conflict, weak governments and a lack of the rule of law make the countries of East Africa easy prey for organized crime groups, said Francis Maertens of the UN Office on Drugs and Crime. Speaking at a regional conference last week, Maertens mentioned illegal trafficking of drugs, people, money, arms, wildlife and timber products as East Africa’s main crimes – as well as maritime piracy off Somalia.
In another Africa-related story, former Halliburton offshoot KBR was charged last week with bribing Nigerian officials tens of millions of dollars in return for billions of dollars in contracts.
And here’s a story about the opposite: The Yakuza are having to make adjustments after being hit hard by the Japanese recession. One former Yakuza footsoldier, kicked out for not paying his dues, laments:
"Without the organization behind me, what am I supposed to do? Who's going to hire an old man covered in tattoos with a missing digit?” he says of his vanished pinkie, hacked off in a ritual act of penitence for a past misdeed he’d rather not discuss.
“I’m too old for construction work and I can't see how I can learn to type with only nine fingers, so that pretty much rules out a white-collar job.”
