Interludes - Crime Reporting

Trio of individuals in the Southern District of Texas get prison terms for mortgage fraud.

http://www.justice.gov/usao/txs/1News/Releases/2011%20December/111222%20Frazier%20et%20al.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

More Con Games 6

As promised - here is a link to wikipedia to explain the origin of the "badger baiting" con.  Supposedly it came from the state of Wisconsin (state symbol - the badger), but given the fact that this con has been around since the dawn of time, this explanation seems unlikely.

We will move on to another topic tommorrow.

http://en.wikipedia.org/wiki/Badger_game

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

More Con Games 5

So - back on track.

     We are talking about the fraud of blackmail - the use of a threat to avoid being exposed to some sort of scandal or worse.  This is the stereotypical blackmail scheme.

      As stated in an earlier post, this is a crime, pure and simple.  When threatened with blackmail, it is necessary to find an attorney immediately to work out a way to disclose this to the proper authorities (whether local, state or federal).  If a person goes along with a blackmail scheme, then not only is the person literally "digging" himself into a worse situation, by going along with the scheme, the person is also in danger of being a co-conspirator in a blackmail scheme as well.  Further, once the initial demands of blackmailers are met, then the situation arises that violence may be used in the future to force compliance.

     It is critical, therefore, to seek legal counsel immediately if such a situation occurs.  It is the best way to ensure that the person will work with legal authorities to not only cut off the blackmail, but avoid criminal charges.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Interludes - Southern District of Texas News

Please find the enclosed link to the website for the Department of Justice - Southern District of Texas.  Note the wire fraud.

http://www.justice.gov/usao/txs/1News/Releases/2012%20January/120127%20Alaniz.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Interludes - Allan Stanford

I'll be taking another interlude here to post about the opening of the Allan Stanford trial.  Houston is no stranger to white collar crime and fraud (in fact, our city practically put it on the map beginning in the 21st century).  However, even by "off the charts" standards, this case is "off the charts."

There will be a lot more to post on this as the trial continues and eventually ends.

http://www.dailymail.co.uk/news/article-2091332/Allen-Stanford-Fraudster-trial-using-Ponzi-scheme-turning-clients-money-personal-piggy-bank.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Interludes - James Randi

I've posted before about the James Randi Educational Foundation and their fight against crooks and con artists who claim "psychic" powers and then bilk innocent people out of money.  Fraud, pure and simple.

The link below follows a victim of such a scam.  Hat tip to the James Randi Educational Foundation (a great organization if there ever was one) for posting this new story.

http://www.orlandosentinel.com/news/local/breakingnews/os-psychic-fraud-meditation-healing-20120124,0,5834797.story

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

More Con Games 4

So - if a person has been caught in the stereotypical "compromising position" having sex with his secretary, etc.  He receives the further stereotypical letter (or email or text or vidlink or whatever) telling him to pay up or the press will get the pictures, or the internet, or YouTube or what have you.  The possibilities are endless.

     As mentioned in an earlier post, this is a crime - blackmail, pure and simple.  It is a fraud scheme because, once again, the perpetrator of the scheme is using deceit to try and get the mar's money.  It is a crude form of fraud, and definitely not as sophisticated as other schemes, but it is still fraud.

     It is important to get help immediately when faced with this situation for a number of reasons.  The obvious one is that blackmail schemes such as this can continue (theoretically) indefinitely.  The second reason is that by paying the blackmail, the mark is furthering a criminal enterprise or scheme which, strangely, can lead to criminal charges against the mark (as Charles Dickens once remarked - "the law is a ass").  The third reason is also obvious - by paying the blackmailers, the hole is only going to get deeper and more monies can be demanded.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

More Con Games 3

My apologies for not posting yesterday, but once again ran into internet connection problems.  One of these days I really need to look into my ISP.

     So - we are talking about the Badger Game (or badger fraud), one of the oldest (if not the oldest) type of fraud in existence.  A person is placed in a compromising position (usually, but not always, sexual), has pictures taken (surreptitiously) in this compromising position and is threatened with having these pictures published if money is not paid.

    How does one avoid this fraud?  Well, the easiest answer (and the most glib) is simply not to have an affair or do something that can end up in a compromising position in the first place.  However, it is important to remember that if this does happen, it is a crime, pure and simple.  If someone is threatening blackmail, then this person is committing a crime and a crime which, in many districts and jurisdictions is an aggravated felony and a crime involving moral turpitude.

More on this later.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

More Con Games 2

Hollywood exaggerates of course, but this movie is an excellent example of the badger game.  Well worth seeing:

http://themoviespoiler.com/Spoilers/derailed.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

More Con Games

Let's talk about what is ostensibly a crime a violence, but is also a fraud - the badger trap (more on this name in a future post).

     This is the most basic type of fraud - a person is placed in a compromising position, pictures (or some other type of recording) is made, and the victim is blackmailed.  The victim is threatened that unless money is paid, the compromising pictures or recordings will be published.

     The fact that it may be a crime of violence is obvious - many times these types of extortion schemes involve criminal elements and organized crime that will use violence to make certain the "mark" pays.  But, let's look at this scheme from the beginning.  Just like any good fraud, it requires a planning scheme and the use of psychology and human nature to succeed.

     As we begin this conversation, I advise watching the movie "X-Men II - X Men United."  In the movie, the shapeshifting mutant Mystique (played by the ever-watchable Rebecca Romijn) disguises herself as a beautiful woman to seduce the guard that is watching Magneto, the primary nemesis of the films.  When Magneto is able to escape because the guard was seduced, Magneto points out to the guard: "when a beautiful woman is interested in someone like YOU - you should definitely be skeptical."

     Words to live by.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Con Games V

So, the "Embarrassing Check" con is in and of itself a con.  There is no record that the con ever took place, so it belongs in the "Urban Legend" file, safe and sound.

     But, as has been commented in this post, this is not the issue.  The issue is that the entire "Embarrassing Check" ploy, from start to finish, is fraud and a con.  Just because someone has never used it does not mean that it is not a fraud - just a fraud that has never been done.

     Tomorrow we will move on to another con, this time a real one.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Con Games IV

What if the Embarrassing Check routine actually happened?   What if it occurred at least once?

    Well - why is it a con?  We already know the answer to this - because it is a game using deceit with the intent to take money from a victim.  The idea is to get the mark to pay for something from a porno shop.  Through this purchase, the mark is fooled into thinking that something will be send to him, something that he does not want other people to know he is receiving.

     However, the intent of the seller is never to send the item to him.  The intent is to take the money, whether cash, check or credit card or wire transfer, make certain that the money is in his account, and then tell the mark that the product is not available.  The money will be sent in the form of a check back to the mark BUT the mark is told ahead of time.  Further, the check that arrives will clearly have the imprint and name of the business on it.

    The entire con, therefore, is motivated by deceit from start to finish.  The intent is to deceive the mark, with no other purpose.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Con Games III

Sorry for not posting last night.  I normally take one day a week off, not two, but I was having problems with my internet connection so was unable to post.

     Back to the "embarrasing check" routine.  To answer my question - there is no known instance (at least of which I am aware) of this con actually proceeding.  As stated in an earlier post, it has been mentioned in at least one movie and certainly has been thought of more than once.  But - as stated, there is no instance yet of it being used, at least not an instance where it can be verified.

     But, this gets to the heart of this con, whether real or imagined - cons like this involve the mark BEING TOO EMBARRASSED TO DO ANYTHING ABOUT IT.  This is the heart of all con games - the mark is too shy or too embarrassed or too ashamed of his actions to report on it.  This is why con games succeed and continue from generation to generation - they count on human nature.

     Remember the very basic discussion of con games vs. a more "straightforward" crime such as armed robbery.  With armed robbery, all it takes is a gun and the will to use it to force someone to turn over their money.  This is a crime which only relies on force.  Very few people would be willing to trade their money for their life, so they part with their money under the threat of violence.  This is a normal, human reaction.

     But - a con artist is not using force.  He is using his understanding of human psychology to get money from his victim.  In a sense, this is a risk to the con artist as well.  He has no threat of violence to back him up - he has only his wits and what he perceives to be his response to human nature.  And, many times, the con artist is correct in his assumptions.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Con Games II

The "Embarrassing Check" is both a fraud and an urban legend (described in the movie "Lock, Stock and Two Smoking Barrels."

    The con goes as follows: customers are encouraged to purchase pornography items from an explicitly named porn store (whether a traditional brick-and-mortar store or internet store).  The customers are told that they will receive a bill in the form of a nondescript store or service (e.g. "Jack's Lumber") so the person who purchases the pornography will not have to worry about it being traced back to them.

     When the purchase is made, the mark is then told there has been a mistake and a refund will be issued back to the purchaser.  The check that is issued to the purchaser, however, has the name of the porn store on it (usually something explicit or obscene) that any person would immediately recognize as coming from a porn store.

     The idea, of course, is that the person receiving the check will be too embarrassed or terrified to cash the check.  Therefore, the person is ripped-off because he will never cash the check and the monies remain with the perpetrators of the fraud.

    Is this real?

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Con Games I

I mentioned before on this blog that I happen to be a big fan of con games and con men.  I understand, of course, that con men are criminals and con games are crime schemes (hence the purpose of this blog in the first place), but I still can't help but admire people that have the ability to gain the confidence of a person and, by using this misplaced confidence, take advantage of their victim.  I guess it comes down to the fact that it seems obvious to me that anyone can take a gun and rob someone,  but to gain someone's confidence takes work and ingenuity.

     We will therefore spend a few days exploring some of the better known con games that have been played throughout the years.  They all are "games" in the sense that they are not complex schemes, but rather rely on the self-confidence of the perpetrator and the ability to fool the "mark."  Most of these con games have been around for centuries, if not longer.  Human nature does not change.

     We will start off tomorrow with the "embarassing check" con game which indeed goes back centuries, in one way or another.

Hope you like it.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War XV

We have come to the end of our story regarding Viktor But.  He will be forever immortalized as the Enron of arms dealers - a Russian who was able to take advantage of the downfall of the Soviet Union and sell weapons to everyone who was willing to purchase them.  In a real way, he was a true Lord of War - his sales of AK-47's (the most popular automatic weapon ever produced) to as many countries as possible helped not only to start conflicts, but to keep conflicts going long after they should have stopped.

     But, Viktor But could not live the life he wanted to lead (and did live) without money laundering and fraud.  He could not simply sell his arms and take the money - he had to launder it first.  This was an Achilles heel that led law enforcement to him time and again and provided the U.S. Government with the ammunition needed to bring him down.  Illegal activities such as arms dealings cannot live without money laundering.

     This makes Viktor But a case study for laundering and for white collar crime.  Not to be too melodramatic, it is also a case study in how money laundering affects everyone.

    Tomorrow - new topic.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War XIV

Well, let's get back to our real Lord of War- Viktor But.  But was charged, in addition to his various arms dealings, with wire fraud and money laundering.  We have already discussed this in depth.  Once again - whenever illegal arms dealings are occurring, it is obvious that money laundering (and, wire fraud - the fraudulent transfer of funds [which will be discussed in a later column] is also occurring).  You cannot have one without the other (at least, not if you want to actually make money at it).

     But is probably the most well-known arms dealer, but he is not the only one.  He is sort of the Enron of arms dealers - the most famous (thanks to movies like Lord of War and him having been in the right place at the right time) but not the most original.  His arms dealings were so famous, however, and so far off the charts in terms of whom he supplied and the sheer volume of arms that But became the poster boy for arms dealers.

     However, he could not ignore even the most basic rule of arms dealers - he had to make money and the only way to make money from illegal sources was to launder the money so he could eventually use it at some point.  Viktor But may have been the most talented arms dealer in history (unlikely), but even he was at the mercy of accountants and international finance.

Something to think about.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War XIII

We were discussing last time regarding the strange notion that many arms dealers are caught and prosecuted not because of their arms dealing which, although illegal under many U.S. laws and international laws, can be difficult to prosecute because of political machinations and the intricacies of international law.  However, money laundering, because it is a direct violation of U.S. criminal law, tax law and immigration law (to name a few) is often much easier to prosecute and convict.

     As a result, therefore, arms dealers are placed in the ultimate "Catch 22" situation (look it up).  Illegal arms dealers cannot make their money legally and, therefore, cannot have their monies be traced.  Illegal arms dealers, like Viktor But and the fictional Yuri Orlov, must resort to money laundering which places them in a dangerous position.  It is one of the ironies of their profession that the arms in which they traffic are less dangerous to the arms dealers than the monies they earn from such arms dealing.

   Strange world, indeed.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War XII

As we already know, the final stage of money laundering is the integration phase, when the monies are introduced into the financial system having been "cleaned" and therefore above scrutiny (or allegedly above such scrutiny).

     For arms dealers, like any money launderers, this is the most important phase.  Let's look again at the movie "Lord of War" where the fictionalize character of Viktor But (Yuri Orlov) enjoys a high lifestyle of deluxe penthouses, private jets and limosines.   The only way he can maintain this lifestyle is through the constant sales of arms and flow of money.  Unlike regular businessmen, however, Orlov has to go through the additional stages of money laundering to get the funds he needs.  Ultimately, this is how he is caught.

     This is one of the strange episodes when working with arms dealers.  Often, the dealers are caught not because of their arms dealings, but because of sloppy money laundering which leads to federal and international prosecution.  Yet another reason that money laundering can be as great as a threat as the arms dealing itself.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War XI

We were talking about arms dealers being paid in diamonds and other precious stones to avoid the problem of having to deal with getting "paid" and having to report the income (which, of course, would immediately reveal the issue of arms dealing in the first place).  This leads, of course, to the obvious issue of just how problematic money laundering operations can be on a larger scale, namely that the illegal trafficking of arms (or other illicit materials) can lead to the sale of illegal diamonds.

      Not to cite another film here, since we are already referencing "Lord of War," but the film "Blood Diamond" comes to mind as we discuss this issue.  In "Blood Diamond," the illegal trafficking of diamonds from Sierra Leone during that country's horrific civil war helped to keep the rival militias and armies well armed so they could continue their conflict well after most other conflicts would have died out from lack of money.  But, because of arms dealers who were more than happy to be paid in diamonds and could not care less from where the diamonds came from, a mutually assisted continual circle of death came about as the arms dealers and illegal diamonds merchants fed off each other.

     Money laundering, therefore, and illegal arms dealing go hand-in-hand, like most criminal enterprises.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War X

So, we have been learning about why it is necessary for arms dealers to launder money.  We know that many arms dealers (although But may not have been one among them) who would do the first step of laundering (placement) by purchasing diamonds or other minerals/gems to avoid placing his monies in the world's banking system (which would have been a dead giveaway that something was up).

     The second stage that would have been used by But or another arms dealer is the layering process. Since the arms dealer is getting paid in gems, he would have to sell the gems to get the actual money to integrate it (third step) into the world's financial system.  This is not very difficult.  Arms dealers would have a veritable army (no pun intended) of dealers that would be able to sell the gems for them, record the transactions, and begin the process of taking the proceeds from the sales and "layering" the proceeds into bank accounts, stocks, bonds, safe deposit boxes, CD's, and other financial tools and packages.

     What is important for the arms dealers is that the sale of the gems must be recorded and legitimized because this is the crucial step of getting their monies (earnings from the sales of arms) into the world's financial system so that they can have access to the money later.  Of course, this would involve the payment of taxes and other royalties, but it is a small price to pay to legitimize their illegal activities.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War IX

One of my alert readers pointed out that I am not keeping track of the Roman numerals I use to subdivide my chapters in this blog.  Looking back, I see he is right.  So, in the future, I will use the good old-fashioned Arabic numerals in the future.  Serves me right for trying to use a numeric system that has been out of date for hundreds of years.

     We talked about Viktor But getting paid in diamonds or some other form of gem or precious stone as payment for his arms shipments.  This enables him to get paid in a form of "currency" that is untraceable.

     This next example does not involve But since there is no evidence that he did this.  However, the idea of trading arms for oil has been done in the past and will likely be done int he future.  Like getting paid in diamonds, it has the advantage of not being traced and being something which can be easily dumped on the world market in return for currency.  Unfortunately, the diversion of oil also has the side effect of driving up prices of oil as insurance companies and governments are forced to pay for waste.

    Once again, this is another example of how money laundering affects the world at large.  The side effects of money laundering are felt far beyond local markets.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War VIII

OK - let's get back to Viktor and his ill-gotten arms deals.

     By the way, before we move ahead, I have received some email from readers who ask about my spelling of Viktor But's surname.  As I mentioned in a previous post, it is pronounced "boot" as in the shoe.  The standard English transliteration of his surname from the Cyrillic is usually "Bout."  However, for the sake of convenience, I prefer "But" although the 'u' is to be pronounced as a long 'u' and not a short one.  There is seldom any agreement (except among academics) for transliteration from Cyrillic characters to Latin characters, and this is just another example.  So, for the purposes of this blog, we will continue to call him Viktor But.

     Viktor, in his arms dealing, has to be careful about how and where he places his money.  There is no possibility that governments will overlook millions of dollars (if not billions) being placed directly in bank accounts.  This will attract too much attention.  And so, Viktor But, like so many before him, has to launder his money.

     The first step to laundering is to PLACE the money.  Although it is not known for certain (at least, not by me), the explanations given in the movie "Lord of War" where the fictitious character of Yuri Orlov is paid in "blood diamonds" probably has some accuracy to it.  Remember, one of the easiest ways to place money when laundering it is to buy high value goods such as artwork, planes, real property, gold or diamonds.  These instruments can be exchanged for cash and resold and the proceeds placed in the world's banking system.  If Viktor is being paid in diamonds to begin with (at least for some of his transactions), this removes one of the steps to placement.

More tomorrow.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

The Real Lord of War VIII

Welcome to 2012!  I hope everyone had a great New Year and all my readers (and everyone for that matter) have my wishes for a great and prosperous New Year!

     Well, let's get back to Viktor Bug - arms dealer extraordinaire.

     But is suspected of selling arms to Liberia during the civil war in that country.  The Liberian civil war, fought in the 1980's and 90's was a particularly nasty war in which hundreds of thousands of civilians were killed or wounded (ironic since the country was founded as a haven for freed American slaves and the capital, Monrovia, is named after former President James Monroe).

     But was allegedly getting paid by multiple factions for his supply of weapons.  He would get paid in American dollars or, sometimes, diamonds or other gems.  When But would get paid in American dollars, it would make sense that But would have to go through the normal processes of money laundering.  Remember from our previous discussions on money laundering, there are three stages to a successful laundering operation: (1) placement; (2) layering; (3) integration. The money has to be placed (such as in financial institutions or to buy high value goods with the cash.  Then, the money has to be layered (financial operations to separate the money from the source) and finally, integration (where the money is fully integrated with the economic system.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk