1. Cooperation with the Private Sector
The need for greater transparency
Stefan D. Cassella
Asset Forfeiture Law, LLC

2. The Russian Laundromat
Contract fraud
Tax evasion and tax fraud
Embezzlement
Flight Capital
Organized Crime

3. The Russian Laundromat
Shell
Company A
Shell
Company B
Documents say A owes B money, Russian company guarantees the debt
Company A defaults on the debt
Moldovan judge orders the Russian company to pay Company B
Company B’s
Account in
Moldova

4. Mirror Trading Shell Company B Broker says to Deutsche Bank:
Company A wants to buy stock worth $10M in XYZ in Moscow
and Company B wants to sell the same stock in London

5. A B Mirror Trading A buys stock for $10 million in Moscow
B sells the same stock (at market rate) in London B

6. Common Elements Use of shell companies
Lax AML compliance / failure to detect suspicious transactions
Willingness of vendors / banks to accept payments from third parties

7. Risks to National Security
Surrendering the high ground
Facilitating future criminal activity / terrorist financing
Integrity of institutions / skewing the marketplace

8. Recommendations
Increase awareness of the risks of accepting third-party payments
Prohibit transactions that are not transparent (ownership and source of funds)
Require financial institutions to know the customer’s customer

9. Cooperation with the Private Sector
The need for greater transparency
Stefan D. Cassella
Asset Forfeiture Law, LLC