Month: August 2022

For nearly 90 years, nations around the world have sought, with varying degrees of success, to combat illegal wildlife trade.  Yet even after the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) entered into force in 1975, wildlife crime remains a blight for many countries. The U.S. Department of Justice even declared that illegal trafficking in wildlife, plants and timber, and marine creatures “has reached epidemic proportions.”

Several species that have been especially heavily targeted by poachers, because of the heavy demand for their use in traditional Chinese medicine, are African and Asian rhino.  From the start of the 20^th century to 1970, the African and Asian rhino population plummeted from 500,000 to 70,000, and in just the last decade, nearly 9,900 African rhinos have been lost to poaching.

An August 22 report by the International Union for Conservation of Nature (IUCN) and the NGO Traffic seeks to strike a cautiously positive note.  The report, which covers the period 2018 through 2021, states that “[o]verall rhino poaching rates have declined since 2018, and trade data suggests the lowest annual estimate of rhino horns entering illegal trade markets since 2013.”  One significant variable that evidently affected rhino poaching rates was the COVID pandemic.  According to the report, “global lockdowns and restrictions due to the COVID-19 pandemic saw several African countries experience dramatically reduced poaching rates in 2020 compared to previous years.” But “as COVID-19 travel restrictions lifted, some range states reported new increases in poaching activities – for example, South Africa reported 451 and Kenya six poached rhinos in 2021. However, these numbers are still significantly lower than during the [poaching] peak in 2015.”

At the same time, the report cautioned that threats to rhinos “are at a global – transnational scale, and include environmental change and social drivers”, and that “[t]he risks of these additional threats to global rhino conservation outcomes is unclear.”  It also noted that “illegal trade in rhino horn is still considered the primary threat to the persistence of rhinos.”

Government officials and corporate compliance teams whose mandates include wildlife crime and corruption should read the report closely, while recognizing that several variables may well contribute to an increased incidence of rhino poaching later in 2022 and beyond.  For example, the reportedly lower incidence of COVID in Africa and Asia may contribute to increased travel and tourism to those regions, including an upsurge in poaching.  In addition, South Africa, which can boast the world’s largest rhino population, is set to see an increase in rhinos killed for the second straight year, as poachers have shifted their focus to the country’s KwaZulu-Natal province.  Faced with these disturbing trends, all of the 184 CITES signatory nations will need to redouble their efforts to sustain the decline in rhino poaching.

It is sometimes said, in the money-laundering field, that “cash is king.”  It may be more appropriate to say that cash is a Sisyphean burden that many professional criminals must bear (or find professional money launderers to bear for them) in order to realize long-term benefits of their criminality.  Street-level transactions in crimes such as drug trafficking, arms sales, and human trafficking, generate tremendous volumes of smaller-denomination bills that must be exchanged for higher-denomination bills.  Even after exchange, large masses of those higher-denomination bills cannot easily be deposited in banks attentive to money laundering risks. As a result, major criminal operations remain dependent on bulk cash smuggling networks to begin the laundering process in less attentive jurisdictions.

A recent criminal prosecution shows the extent to which bulk cash transportation remains an essential service in money laundering operations.  On July 28, the Isleworth Crown Court in London sentenced Abdulla Mohammed Ali Bin Beyat Alfalasi, an Emirati national, to nine years’ and seven months’ imprisonment, after he pleaded guilty to removing criminal property from England and Wales in violation of section 327(1) of the Proceeds of Crime Act.  The Crown Prosecution Service (CPS) stated that Alfalasi arranged a service designed to transport cash that constituted criminal proceeds of crime out of England and Wales.  According to the National Crime Agency, which investigated the operation, first Alfalasi, and then a number of “couriers” whom he recruited, transported a total of £104 million in cash on at least 83 occasions between November 2019 and October 2020.

The NCA stated that Alfalasi’s operation collected cash from criminal groups around the United Kingdom and took it to counting houses, usually rented apartments in Central London.  Alfalasi’s money laundering method consisted of four steps: (1) filling suitcases each with around £500,000 in cash; (2) spraying each suitcase “with coffee or air fresheners in an effort to prevent them being found by Border Force detection dogs”; (3) Alfalasi or a courier flying business class to Dubai, which allowed increased baggage allowance, and checking in as late as possible to avoid detection of the cash; and (4) declaring the cash on arrival, supported by a letter from a company that Alfalasi owned, saying that the couriers were authorized to carry that amount of cash.  Alfalasi set up the company, Omnivest Gold Trading LLC, specifically to legitimize the funds.

At the time of Alfalasi’s arrest, officers of the National Crime Agency recovered three phones that contained numerous messages between him and others that discussed the collection, consolidation, and movement of the cash.  According to the CPS, the phones “also contained pictures of suitcases filled with cash, a read-out from a money counting machine and an itinerary for one courier’s journey, with Alfalasi checking in at every stage of the process to ensure the money was delivered safely to Dubai.  Credit cards were also recovered from Alfalasi’s home which had been used to buy the flight tickets.”

The Times reported that one of Alfalasi’s couriers “travelled from Heathrow to Dubai three times in August and September 2020, checking in 19 suitcases with a combined weight of almost half a tonne. She returned a few days after each trip with the same baggage weighing significantly less each time.”  To date, four of Alfalasi’s couriers reportedly have been convicted as part of Alfalasi’s operation and others remain under investigation.  The CPS deemed the case one of the largest money laundering cases that it has ever prosecuted.

This set of prosecutions shows why both customs authorities and airlines need to maintain vigilance in watching for bulk cash-smuggling operations.  As the Alfalasi case shows, experienced money launderers can be counted on to try to exploit situations in which that vigilance can weaken – such as the temptation to clear passengers and luggage quickly when departures are imminent.  Moreover, that temptation is likely to increase in the near term, as international air travel continues to grow apace despite rising ticket prices.  Bulk cash-smuggling launderers will readily bear those costs so long as they can successfully run the gauntlet and deposit their customers’ cash in jurisdictions that fail to implement effective anti-money laundering measures.