Without any evidence to initiate prosecutions here, the seizure and forfeiture of the local assets of the two Guyanese drug smugglers as well as others who have pleaded guilty to drug trafficking and money laundering in the US is not possible. However, these pleas should prompt local law enforcement to start investigations a member of parliament says.
Last year a US-based Guyanese couple, Arnold and Sabrina Budhram, pleaded guilty to money-laundering charges, admitting that they used a company they had set up and their connections to launder money for drug-traffickers operating in Guyana. Among those traffickers is Roger Khan, who himself pleaded guilty in March to importing cocaine into the US, as well as Peter Morgan, a well-known local businessman and former race car driver, who also pleaded guilty to conspiring to import cocaine into the US. Morgan is also Sabrina Budhram’s brother and records show that on at least one occasion the couple transferred funds in his name. While the couple were each sentenced to prison terms last year, Khan and Morgan are currently awaiting sentencing. However, the guilty pleas have raised questions about their local assets and property here, which are believed to have been proceeds from drug trafficking operations.
The Anti-Money Laundering and Countering the Financing of Terrorism Bill 2007 which was passed by the National Assembly in May after a two-year parliamentary review has expanded the scope for the identification, tracking, freezing and forfeiture of the proceeds of money-laundering, among other offences. Indeed, the new law is believed to be a significant improvement on previous anti-money laundering legislation, although according to Raphael Trotman, who sat on the parliamentary special select committee that reviewed the legislation, any move on the properties or assets of any of the persons convicted overseas is still dependent on willingness by local authorities to investigate and the provision of crucial evidence.
In an interview, he told Stabroek News that action, such as the freezing of assets and the seizing of property, can be taken, but only pending investigations or in anticipation of the filing of legal charges here. The law, however, does not apply retroactively although it does empower the Financial Intelligence Unit (FIU) to enter into formal and informal information exchange agreements with local and international institutions with similar responsibilities. Meanwhile, the Director of Public Prosecutions (DPP) could apply to the court for a restraining order against property held by an accused or person other than an accused in cases where legal action is pending. Under the law, the DPP can apply for a forfeiture order on conviction, which is to be granted once the court is satisfied that property is tainted in respect of the offence for which the person has been convicted.
But Trotman emphasised that while the fact that persons had pleaded guilty in other jurisdictions should prompt local action, any move must be supported by a local investigation based on documented evidence. “You can’t ipso facto say I have the right to take away your property in Guyana if you plead guilty [and] if you have not even gone as far as charging that person with a crime,” he explained, “A person may plead guilty in a foreign court knowingly to trafficking in narcotics but that in and of itself should not be able to trigger the DPP seizing [assets] unless you can show that the assets here are a direct result of the crime to which that person has admitted.” He noted that this demonstrated the need for documentation which indicated the proceeds of the crimes as well as identification of all persons who may have benefited. “Just to say you pleaded guilty is not going to be enough and I can see great resistance,” he said.
However, Trotman also argued that the guilty pleas by Guyanese to importing cocaine into the US should be enough to trigger a local investigation, since it followed that Guyana was the likely source of the exportation. “I am surprised that our authorities have not gone the route of instituting charges,” he said in this vein, noting that there had been a failure to pursue what were clear admissions. Nevertheless, he said, with the implementation of the new law, all the “powers and tools” had been handed to the government and the FIU. “We will wait see if they are genuinely interested in confronting a major problem not only for Guyana but for the region,” he said.
Additionally, he emphasised that the seizure and disposal of assets in one jurisdiction arising out of matters in another jurisdiction depended on reciprocity between law enforcement authorities in the two jurisdictions. “A lot depends on what is handed over to the authorities,” he said, noting the Khan, Morgan and Budhram cases. He further added that the US authorities had indicated that this would be done at the appropriate time. “The power is there to proceed but it also depends on trust, credibility and reciprocity and I don’t believe that those three ingredients exist right now between our North American partners and Guyana,” Trotman said, while expressing the hope that reciprocity in the relationship between the two countries could evolve.
The law provides for oversight of the export and insurance industries, real estate, and alternative remittance systems, and sets forth the penalties for non-compliance. It also establishes the FIU as an independent body responsible for requesting, receiving and analysing, and the dissemination of suspicious transaction reports and other information relating to money laundering, terrorist financing or proceeds of crime. Also, the FIU is also mandated to issue guidelines to reporting entities and advise the Finance Minister accordingly and conduct research into trends and developments in the area of money laundering and improved ways of prevention.
Among the obligations of reporting entities enshrined in the law, is reporting suspicious business transactions. Additionally, an institution or person licensed to do business in Guyana as a financial institution under the Financial Institutions Act 1995 or a money transfer agency is now required to include accurate originator information and other related messages on electronic funds transfers.
Activities over a certain sum have to be reported, Trotman said, noting that they triggered a response system that obligated banks to file reports with the Bank of Guyana. Reports include the frequency of transactions as well as the persons involved and the data is analysed to determine if the case demands investigation and if need be prosecutions.
Sabrina Budhram had admitted to collecting large sums of money from drug traffickers, which her husband Arnold deposited into bank accounts in small sums to avoid filing currency transaction reports (CTR) that help detect money laundering.
Court documents stated that a handwritten “money and drug ledger,” found in the Budhrams’ home at the time of their arrest, referred to individuals who were believed to be Khan’s co-conspirators and it was expected that this would have been used as evidence against Khan. The prosecution had told the court that bank records indicated that in 2001, a company associated with the Budhrams transferred money to a bank account in the name of Khan’s wife and child and it appeared that Khan was in direct contact with the Budhrams in early 2003. The couple were arrested and charged with money laundering on April 6, 2004 and investigators searched their home and work offices and gathered a large amount of evidential material.
Trotman said the legal architecture created by the by the law and a new dispensation were now crucial, noting that the FIU was now empowered to pursue known narcotics and money-laundering activities, which would be effectively deterred by investigations that yielded successful prosecutions. The unit has been gathering information from several reports, this newspaper has been told.
Meanwhile, Trotman explained that while money laundering was always going to occur, prevention would come by way of a deterrent in the form of the identification and successful prosecution of persons trying to hide ill-gotten gains. “We now have the tools to root out and confront this scourge,” he said, while cautioning that the law was not intended to be anti-business. “You have to remember the purpose is not to stymie or shut down legitimate transactions or commerce, but you have to monitor that commerce or movement of money in and around Guyana to see if it warrants further investigation,” he said.
