Page 5 - White Collar

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White-Collar Crime | MONDAY, FEBRUARY 10, 2014 | S5

two Lebanese money exchange houses, and laundering), because it applies to transfers the SDNY USAO brought civil money laun- to dramatically increase the use of the civil
also resolved related asset forfeiture claims. of SUA proceeds that are not for the purpose dering claims against 11 companies alleged money laundering statute even beyond the
The civil money laundering claims were based of concealment or crime promotion.
to have laundered proceeds of a Russian heightened level that we have seen in the
on allegations that Lebanese Canadian Bank United States v. S.A.C. Capital Advisors, tax refund fraud scheme that was alleged past few years.
and the other inancial institution defendants No. 13 Civ. 5182 (RJS), is the most prominent to involve corrupt Russian officials. That The trend of bringing civil money launder-
used the U.S. inancial system to launder nar- example of a recent civil money laundering action, United States v. Prevezon Holdings, ing claims against individuals began in 2011,
cotics traficking proceeds and other crimi- action brought against non-banking enti- 13 Civ. 6326 (TPG), includes civil money laun- when the SDNY USAO asserted civil money
nal proceeds. The government based its civil ties. In July 2013, the SDNY USAO iled civil
dering claims based on promotional money
laundering claims related to online gambling

money laundering claim on allegations of in United States v. Pokerstars, 11 Civ. 2564
promotional money laundering, concealment (LBS). In that case, the government initially
money laundering, international money laun- brought civil money laundering claims against Federal prosecutors clearly have recognized the power of the civil
dering, and bulk money laundering. Lebanese several poker companies, including Poker-
Canadian Bank ultimately agreed to forfeit stars, Full Tilt Poker, Absolute Poker, Ultimate money laundering statute as an enforcement tool, and there is
$102 million to settle the action.
Bet, and various entities that operated those good reason to think that their use of this statute will increase in
companies. The complaint also included civil
Non-Banking Entities
forfeiture claims seeking various assets of the future.
the companies. The government previously
The majority of the defendants in recent had indicted owners of the poker companies,
civil money laundering cases are not banks. including Raymond Bitar, but did not name
The expansion in focus from banks to entities these individuals as defendants in the civil money laundering claims based on the SUAs laundering, concealment money laundering,
outside the banking industry is signiicant action. The government then amended the of wire fraud and securities fraud against international money laundering, and bulk
in part because banks tend to have sophis- civil complaint to add civil money laundering four afiliated S.A.C. entities. The complaint money laundering. In this ongoing litigation,

ticated anti-money laundering procedures claims against Bitar and three other individu- also included civil forfeiture claims against the SDNY USAO is seeking at least $230 mil-
in place in order to comply with the Bank als alleged to be founders of Full Tilt Poker. “any and all assets” of those entities and the lion in civil money laundering penalties in
Secrecy Act, the Money Laundering Control The amended complaint included claims of assets of various investment funds that held addition to the forfeiture of various assets
Act, the USA PATRIOT Act, and other laws promotional money laundering, concealment assets of the four S.A.C. entities. The govern- of the companies.
and regulatory requirements that apply to money laundering, international money laun- ment asserted claims of promotional money
banks. By contrast, entities outside the bank- dering, and bulk money laundering. Bitar laundering and bulk money laundering, but Individual Defendants
ing industry often have limited familiarity with ultimately pled guilty to criminal charges no allegation of the core money laundering
money laundering laws. They therefore are in April 2013 and, as part of his plea agree- offense of concealment money laundering. In While the increasing use of civil money
often less prepared to respond to allega- ment, agreed to forfeit $40 million in assets, November 2013, the S.A.C. entities agreed to laundering claims against non-banking entities
tions of money laundering and more likely which was approximately the amount that the forfeit $900 million to resolve the civil forfei- is signiicant, probably the most important
to violate a money laundering statute without government had sought from Bitar as a civil ture and civil money laundering claims and expansion in the scope of civil money laun-
knowing that they are engaging in criminal money laundering penalty. The government’s also agreed to pay a ine of $900 million in a dering prosecutions is the application of the
conduct. The risk of unintentionally violat- civil money laundering claims against Full Tilt related criminal action.
civil money laundering statute to individuals.
ing a money laundering statute is greatest Poker and Pokerstars were resolved when Less than two months after iling civil mon- The decision to use civil money laundering
»
in the case of 18 U.S.C. §1957 (bulk money
Pokerstars agreed to forfeit $547 Page S11
ey laundering claims against S.A.C. Capital,
claims against individuals has the potential

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