Local banks and dirty $$ dealings

Those currency trades involving alleged dirty money were done through several local banks which have come under scrutiny of US prosecutors investigating a US$150 million world football bribery scheme.

That Warner used several local banks to conduct his business, had a plethora of bank accounts, conducted cash raids on football accounts under his control or sloshed funds through a maze of parallel football and personal bank accounts is not new.

Those details were revealed in a special investigative series published in this newspaper two years ago.

New and significant, however, is the possible money laundering local banks allowed to take place, according to a US law enforcement source with knowledge of the situation.

New questions are being asked about the banks compliance measures; customer due diligence and record keeping in connection with the well-known international football figure and former acting prime minister whose high public-profile automatically placed him on a financial institutions PEP (politically exposed person) watch-list for a higher degree of financial scrutiny.

US investigators are looking into how tens of millions of US dollars were banked, shifted around and then disappeared altogether and why the local financial system, including the banks, Board of Inland Revenue (BIR) and Central Bank regulators failed so dramatically to flag possible decades-old money laundering, tax evasion and other financial crimes allegedly committed by Warner.

Maze of bank accounts

In laying out a sweeping corruption case against 14 defendants, including Warner, US prosecutors have detailed allegations of corrupt transactions and kickbacks going through a maze of bank accounts in dozens of different jurisdictions over two decades involving top officials in football’s governing body, FIFA.

From Switzerland and Qatar to Trinidad and Tobago and the Cayman Islands, a substantial number of those corrupt transactions passed through the local banking system, according to the US Department of Justice (DOJ), despite tightened and stringent anti-money laundering (AML) and terrorist financing rules issued by the global intergovernmental body, Financial Action Task Force (FATF) which came into force in 2010.

What is emerging from the US DOJ investigation into the FIFA corruption scandal is a portrait of failed regulation which Warner used to enrich his family business empire. US sources, speaking on condition of strict anonymity, revealed that ongoing criminal investigations have turned up a series of suspicious banking activity at three local banks, specifically State-owned First Citizens (FCB), Intercommercial Bank Ltd (IBL) and Republic Bank Ltd (RBL).

Investigators are said to have flagged the routing of millions of dollars from football accounts held at RBL to private-Warner controlled accounts at FCB.

Warner is said to have emptied out millions from Concacaf, Caribbean Football Union (CFU) and the Trinidad and Tobago Football Federation (TTFF) bank accounts via USD bank drafts made payable to FCB.

US$2 million in USD bank drafts

Banking sources say this sort of circuitous cash transfers via a payee account in the name of a bank is highly “unusual”.

Ved Seereeram, a former Citi-banker and financial analyst said: “At best, it is a suspicious transaction. The bank should not allow it.” Close to US$2 million of these transactions are said to have passed through FCB’s accounts, according to sources.

On June 12, Sharon Christopher, deputy CEO in charge of corporate administration at FCB, declined to comment on the specific question relating to RBL-issued USD bank drafts made payable to the state-owned bank.

Her stock response to questions relating to FCB’s role in the unfolding Warner corruption story was: “First Citizens is a financial institution that conducts its affairs in strict accordance with the laws of the jurisdiction in which we operate, including anti-money laundering laws. Accordingly, First Citizens will not knowingly facilitate any criminal activity whatsoever, including money laundering.”

Larry Howai, who traded in his CEO job at the national bank in 2012 for a government post in Finance as Minister of the Economy and on whose watch a lot of these US-flagged transactions took place, responded this way to whether FCB was perhaps overly accommodating to the former government minister: “Transactions are handled by branch or unit that is dealing with any account not by executive so I would not be familiar with any transaction. I am sure that the bank would have at all times observed procedures.”

On the question of whether FCB followed regulatory practices as required by the FATF-issued AML-regime, Howai, who left FCB with a golden handshake, said: “I know that the bank established an Operational Risk Unit to ensure compliance with regulators so it would be unlikely that it did not comply.”

Theft of Haiti money

US sources say Warner used an array of tactics to camouflage his alleged theft of football funds including US$750,000 in emergency aid intended for earthquake-devastated Haiti in 2010.

FIFA’s donation of US$250,000 was wire transferred into a TTFF account at RBL on January 18, 2010. A second donation of US$500,000 from the Korean Football Association was paid into a Concacaf account at RBL on February 4, 2010.

Approximately US$700,000 of that emergency relief money ended up in Warner’s pocket, according to sources. About US$155,000 was sold in currency trades to the JTA Group and International Shipping Ltd (ISL). Another $100,000 was routed through a Daryan Warner company called, We Buy Houses.

Warner’s two sons, Daryan and Daryll, have also been indicted by US prosecutors on corruption charges related to the FIFA bribery case. Both have pleaded guilty to a variety of fraud and money-laundering charges. Only US$50,000 of the emergency aid money destined for the poorest country in the Western Hemisphere reached the Haitian football federation.

During his heyday when he ruled the football world – he had effective control of Concacaf, CFU, TTFF and Loc Germany— ­­ Warner is reported to have controlled 79 USD and TT accounts held in local banks.

The accounts were held in the names of miscellaneous and parallel privately-owned companies, football bodies and personal accounts held in his name.

FCB has refused to comment on reports that it has stonewalled a court order for the production of bank records or that it provided deficient information relating to Warner-conducted transactions, including a lack of supporting documents on wire transfers and source of funds declarations.

The bank’s deputy CEO, Christopher, maintained: “We are bound by the laws of client confidentiality from discussing any matter related to any person/entity who may conduct business with us.”

The bin Hammam bribe

Still, the growing stockpile of evidence shows that Warner moved tens of millions of US dollars around the local banks with apparent ease.

In the case of the US$1.2 million kickback from football pal and Qatari billionaire Mohamed bin Hammam, it took two failed wire transfer attempts through international correspondent banks before the money was paid directly to a Warner Intercommercial bank account.

US banks twice red-flagged the transaction and demanded a more detailed explanation for the US$1.2 million wire transfer payment to the two Warner boys and personal Warner assistant from bin Hammam’s private company, Khalid Electrical and Mechanical Est (kemco) in July 2011.

As reported previously, bin Hammam also failed in a second attempt to send the money to Warner’s Cayman account in the name of J&D International.

He succeeded on the third try to Intercommercial Bank Chaguanas branch. Former CEO of IBL, Krishna Boodhai, the last director standing in Clico, refused comment when contacted by the Sunday Express. “I have absolutely no comment to make on this matter,” he said.

US authorities have reportedly flagged a number of transactions at the Indian-owned bank, including the bin Hammam US$1.2 million kickback paid to Warner for arranging the 2011 cash-for-votes CFU meeting at the Hyatt hotel in Port of Spain.

Warner has repeatedly denied any wrongdoing and has just as often refused to provide any explanation about any of the allegations made against him. He has also proclaimed his innocence on US charges of wire fraud, racketeering and money laundering.

Millions in $100 bills

Huge cash deposits in TT$100 bills made to a personal bank account at Intercommercial are said to be engaging the attention of investigators following Warner’s money trail.

In the six month period between September 2012 and February 2013, Warner, then the minister of national security, is reported to have deposited TT$2.5 million in cash. The source of funds is listed as commercial rental income from the disputed Dr Joao Havelange Centre of Excellence (CoE) and other unnamed businesses.

The Sunday Express was told Warner banked more than TT$9 million in cash 100 bills to one of six Intercommercial bank accounts between August 2011 (following his resignation from all football bodies in the wake of the bin Hammam bribery scandal) and January last year.

Source of funds filings list the cash deposits as “rental income from property”.

Banking sources say the cash deposits raise an obvious red flag. They say the large cash deposits usually come from supermarkets and casinos. The CoE derives its income from trade shows, concerts, conferences and weddings, among other things.

New CEO at IBL, Nigel Romano, insists that Intercommercial has complied with all of the requirements of the AML regime but was unable to comment on specific transactions because of client confidentiality. “Under the law we cannot tell you we flagged specific transactions,” he said, saying, “We feel very comfortable that we have complied and did what we were supposed to do.”

Asked if IBL was comfortable accepting bin Hammam’s money after US banks twice refused it in 2011, he said Intercommercial was not informed of those prior attempts to wire funds from Doha, Qatar.

He said Intercommercial was not informed by the international correspondent banks of the failed attempts and noted that: “It is something we will have to take up.”

Suspicious bank activity

He said Intercommercial was scrupulous in its record keeping and “sometimes go further” and ask customers for documentation to support the source of funds declarations.

Without giving any details, Romano said there have been instances when the bank rejected transactions and made the requisite suspicious activity report to the Financial Intelligence Unit (FIU) which last year reported 617 suspicious transactions, up from the previous year’s figure of 554.

Romano declined to talk about the large cash deposits made by Warner, saying only that Intercommercial always try to up its game in relation to PEP or high risk customers.

Intercommercial account number 373 498 0401 in the name of Jack Warner also received cheque payments from the Chaguanas West Constituency Office. Warner is the Member of Parliament for Chaguanas West and is said to be the sole signatory of the RBL held bank account, said sources.

Another transaction under scrutiny of US prosecutors is the US$10 million bribe payment made to a Warner-created dummy programme called the African diaspora legacy in exchange for votes in favour of South Africa hosting the 2010 World Cup.

Bribe from South Africa

Three wire transfers from FIFA’s UBS account in Zurich, Switzerland, were paid into two Warner-controlled football accounts at Republic Bank Ltd (RBL), namely CFU and Concacaf. And as reported previously by this newspaper, a significant portion of the 2008 kickback went towards settling credit card debt and a personal loan, among other things. More than half of the SA bribe was disposed of in currency trade sales with JTA and ISL.

Chairman of RBL Ronald Harford said Republic was “reviewing transactions one by one to see if there was any laxity in any way”.

Michelle Palmer-Keizer, another RBL official said a lot of the transactions under review by US authorities, including the FIFA US$10 million deposit predated the AML rules. She said, however, the bank has red- flagged transactions and have had follow-up enquiries from the FIU and the police Financial Investigations Bureau (FIB).

A legal source, who preferred not to be quoted, said the FIU should be given investigatory and prosecutorial powers to go after white collar criminals. The agency operates as a repository for suspicious activity reports. Investigations are conducted by the FIB whose head, Superintendent Wendy Wilkinson said the agency’s secrecy rules prohibits her from saying anything.

There have been little or no convictions for white collar crime in Trinidad and Tobago.