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U.S. Becoming a Popular Destination for Rich Foreigners Avoiding Corruption
Charges
http://www.truthdig.com/report/item/us_increasingly_popular_destination_rich
_foreigners_corruption_20161211/
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Posted on Dec 11, 2016
By Kyra Gurney, Anjali Tsui, David Iaconangelo, Selina Cheng / ProPublica
(https://www.propublica.org/article/corrupt-foreign-officials-find-refuge-in
-united-states)
Philip Brewer (https://www.flickr.com/photos/bradipo/) / CC BY 2.0
(https://creativecommons.org/licenses/by/2.0/)
Wealthy politicians and businessmen suspected of corruption in their native
lands are fleeing to a safe haven where their wealth and influence shields
them from arrest.
They have entered this country on a variety of visas, including one designed
to encourage investment. Some have applied for asylum, which is intended to
protect people fleeing oppression and political persecution.
The increasingly popular destination for people avoiding criminal charges is
no pariah nation.
It's the United States.
An investigation by ProPublica, in conjunction with the Stabile Center for
Investigative Journalism at Columbia University, has found that officials
fleeing prosecution in Colombia, China, South Korea, Bolivia and Panama have
found refuge for themselves and their wealth in this country, taking
advantage of lax enforcement of U.S. laws and gaps in immigration and
financial regulations. Many have concealed their assets and real-estate
purchases by creating trusts and limited liability companies in the names of
lawyers and relatives.
American authorities are supposed to vet visa applicants to make sure they
are not under active investigation on criminal charges. But the ProPublica
examination shows that this requirement has been routinely ignored.
One of the most prominent cases involves a former president of Panama, who
was allowed to enter the United States just days after his country's Supreme
Court opened an investigation into charges that he had helped embezzle $45
million from a government school lunch program.
Ricardo Martinelli, a billionaire supermarket magnate, had been on the State
Department's radar since he was elected in 2009. That year, the U.S.
ambassador to Panama began sending diplomatic cables warning about the
president's "dark side,"
(http://www.mcclatchydc.com/news/special-reports/article24626320.html)
including his links to corruption and his request for U.S. support for
wiretapping his opponents.
Soon after Martinelli left office in 2014, Panamanian prosecutors conducted
a widely publicized investigation of corruption in the school lunch program,
and in mid-January 2015, forwarded their findings to the country's Supreme
Court.
On Jan. 28, 2015, just hours before the Supreme Court announced a formal
probe
(http://www.tvn-2.com/nacionales/Martinelli-llega-sede-Parlacen-Guatemala_0_
4129087174.html) into the charges, Martinelli boarded a private plane, flew
to Guatemala City for a meeting and then entered the United States on a
visitor visa. Within weeks, he was living comfortably in the Atlantis, a
luxury condominium on Miami's swanky Brickell Avenue. He is still here.
The State Department declined to comment on Martinelli's case, saying visa
records are confidential and it is the U.S. Customs and Border Protection
that decides who is allowed to enter the country. CBP said privacy
regulations prevent the agency from commenting on Martinelli.
Efforts to reach Martinelli, including a registered letter sent to his Miami
address, were unsuccessful.
In September this year, Panama asked to extradite Martinelli, but the former
president is fighting that request, arguing there are no legal grounds to
bring him back to his home country where the investigation has broadened to
include insider trading, corruption and abuse of authority. Last December,
Panama's high court issued a warrant for his arrest on charges that he used
public funds to spy on over 150 political opponents. If found guilty, he
could face up to 21 years in jail.
Rogelio Cruz, who is defending Martinelli in Panama's Supreme Court, said
that the former president "will return to Panama once adequate conditions
exist with respect to due process, where there are independent judges -
which there aren't."
The United States has explicit policies that bar issuing visas to foreign
officials facing criminal charges in their homelands. In 2004, President
George W. Bush issued a proclamation
(http://www.presidency.ucsb.edu/ws/?pid=62035) designed to keep the United
States from becoming a haven for corrupt officials. Proclamation 7750, which
has the force and effect of law, directed the State Department to ban
officials who have accepted bribes or misappropriated public funds when
their actions have "serious adverse effects on the national interests of the
United States."
Under the rules implementing Bush's order, consular officers do not need a
conviction or even formal charges to justify denying a visa. They can stamp
"denied" based on information from unofficial, or informal sources,
including newspaper articles, according to diplomats and State Department
officials interviewed for this report.
The State Department declined to provide the number of times Proclamation
7750 has been invoked, but insisted that it has been used "robustly."
Over the years, some allegedly corrupt officials have been banned from
entering the United States, including former Panamanian President Ernesto
Perez Balladares
(http://www.washingtonpost.com/wp-srv/WPcap/1999-11/27/050r-112799-idx.html)
, former Nicaraguan President Arnoldo Aleman,
(https://wikileaks.org/plusd/cables/06MANAGUA833_a.html) former Cameroonian
Defense Minister Remy Ze Meka,
(https://wikileaks.org/plusd/cables/09YAOUNDE245_a.html) and retired
Philippine Gen. Carlos Garcia
(https://ph.usembassy.gov/u-s-helps-philippines-recover-ill-gotten-gains/) ,
according to cables published by WikiLeaks. In 2014, the U.S. banned visas
for 10 members of Hungarian Prime Minister Viktor Orban's inner circle
(http://www.humanrightsfirst.org/press-release/us-sanctions-target-corrupt-h
ungarian-officials) because of corruption allegations.
But numerous other foreign government officials, including former presidents
and cabinet ministers, have slipped through the cracks, according to court
documents, diplomatic cables and interviews with prosecutors and defense
attorneys in the United States and abroad. The charges involved a wide range
of misconduct, from stealing public funds to accepting bribes.
Six months before Martinelli entered the United States, a former Colombian
agriculture minister and onetime presidential candidate, Andres Felipe
Arias, fled to Miami three weeks before he was convicted of funneling $12.5
million to wealthy political supporters from a subsidy program that was
intended to reduce inequality in rural areas and protect farmers from the
effects of globalization.
The U.S. embassy in Bogota had been following Arias' trial closely and
reporting on the scandal
(https://wikileaks.org/plusd/cables/09BOGOTA3269_a.html) in cables to
Washington. The trial featured documents and witnesses
(https://www.ambitojuridico.com/BancoMedios/Documentos%20PDF/37462%20(16-07-
14)%20sentencia%20contra%20exministro%20andr%C3%A9s%20felipe%20arias.pdf)
saying that under Arias' watch, the agriculture ministry had doled out
millions in subsidies to affluent families, some of whom, according to media
reports, had donated to Arias' political allies or his presidential
campaign.
Subsidies went to relatives of congressmen, companies owned by the richest
man in Colombia, and a former beauty queen. One powerful family and its
associates received over $2.5 million, according to records released by
prosecutors. Another family, which included relatives of a former senator,
received $1.3 million. Both families had supported Arias' chief political
ally, former Colombian President Alvaro Uribe, with campaign contributions.
The law that established the program
(http://www.ica.gov.co/getattachment/235a5c55-4109-4612-9145-ff54fa9bfe5d/20
07L1133.aspx) did not ban wealthy landowners from getting grants, but some
elite families had received multiple subsidies for the same farm. They gamed
the system by submitting multiple proposals in the names of different family
members and by subdividing their land so they could apply for grants for
each parcel, court records indicate.
Yet, in November 2013, while the trial was going on, the U.S. embassy in
Bogota renewed Arias' visitor visa. The State Department refused to discuss
the case, saying that visa records are confidential. But a recent filing
(https://www.documentcloud.org/documents/3167525-Arias-Govern-Motion.html)
in federal court showed that the U.S. embassy had flagged Arias'
application, and asked him to provide documents to support his request to
leave the country while charges were pending. Arias submitted documents from
the Colombian court, including a judicial order that allowed him to travel.
In the end, the embassy issued a visa because he had not yet been convicted.
On the night of June 13, 2014, three weeks before the judges convicted him
of embezzlement by appropriation, a Colombian law that penalizes the
unauthorized use of public funds to benefit private entities, Arias packed
his bags and boarded a plane. The following month, the U.S. embassy in
Bogota revoked the visa. But Arias hired an immigration attorney and applied
for asylum.
"If you looked up 'politically motivated charges' in the dictionary, there
would be a picture of Andres Arias next to it," said David Oscar Markus,
Arias' lead attorney. "The case [against him] is absurd and not even one
that is recognized in the United States."
Over the next two years, Arias built a new life in South Florida with his
wife and two children, opening a small consulting company and renting a
house in Weston.
On August 24, he was arrested by U.S. authorities
(http://www.miamiherald.com/news/nation-world/world/americas/cuba/article976
95987.html) in response to an extradition request from Colombia. He spent
several months in a detention facility until his release on bail in
mid-November. Arias argues that the United States cannot extradite him
because it has no active extradition treaty with Colombia, but the U.S.
Attorney's Office disagrees. A plea for asylum does not shield defendants
from extradition if they are charged in Colombia with a crime covered by the
treaty between the two countries.
Congress established the EB-5 immigrant investor program in 1990
(https://www.justice.gov/sites/default/files/eoir/legacy/2009/03/04/IMMACT19
90.pdf) as a way of creating jobs for Americans and encouraging investment
by foreigners.
The agency that administers the program, the U.S. Citizenship and
Immigration Services, has adopted regulations designed to prevent fraud,
including requiring foreign investors to submit evidence, such as tax
returns and bank statements, to prove they obtained their money legally.
But these safeguards did not stop the daughter-in-law and grandsons of
former South Korean dictator Chun Doo-hwan from using Chun's ill-gotten
gains to get U.S. permanent residency.
In 1996, a Korean court convicted Chun of receiving more than $200 million
in bribes while in office in the 1980s, from companies such as Samsung and
Hyundai. He was ordered to return the bribes, but refused.
Part of Chun's fortune was funneled into the United States through his son,
who purchased a $2.2 million house in Newport Beach, California, according
to South Korean prosecutors and real-estate records.
Millions of dollars from Chun's bribery proceeds were hidden in bearer
bonds, which are notoriously difficult to trace. Unlike regular bonds, which
belong to registered owners, there is no record kept about the ownership or
transfer of bearer bonds. The bonds can be cashed out by whoever has them.
In 2008, Chun's daughter-in-law, a South Korean actress named Park Sang-ah,
applied for an immigrant investor visa. Park listed her husband's bearer
bonds as the source of her funds without mentioning that the money had been
initially provided to him by Chun. Eight months later, Park and her children
received their conditional U.S. permanent residency cards in the mail.
In 2013, at the request of South Korean prosecutors, the U.S. Justice
Department launched an investigation into the Chun family's wealth in the
United States and subsequently seized $1.2 million of the family's U.S.
assets
(https://www.justice.gov/opa/pr/united-states-assists-korean-authorities-rec
overing-over-287-million-corruption-proceeds) in the United States. The
money was returned to South Korea. Despite that, Chun's family members have
retained their residency status.
Chun's relatives obtained their permanent residency by investing in an EB-5
project managed by the Philadelphia Industrial Development Corporation, a
nonprofit company. The PIDC pooled Chun's $500,000 with money from 200 other
foreign investors to finance an expansion of the Pennsylvania Convention
Center in downtown Philadelphia.
The same project in Philadelphia also helped to secure permanent residency
for Qiao Jianjun, a Chinese government official accused of embezzling more
than $40 million from a state-owned grain storehouse, according to reports
in the People's Daily, the Chinese Communist Party's newspaper. Qiao had
divorced his wife, Shilan Zhao, in China in 2001, a fact he did not disclose
to U.S. immigration authorities. When Zhao applied for an EB-5 visa, Qiao
qualified for U.S. permanent residency as an applicant's spouse.
The Justice Department launched an investigation only when it was tipped off
by Chinese authorities. In January 2014, a federal grand jury indicted Zhao
(https://www.justice.gov/usao-cdca/pr/fugitive-chinese-official-and-former-w
ife-named-grand-jury-indictment-charging) and her ex-husband, Qiao, for
immigration fraud, money laundering and internationally transporting stolen
funds. Zhao was arrested and released on bail. Federal authorities are
pursuing Qiao, whose whereabouts remain unknown.
A trial has been set for February 2017. U.S. government attorneys have filed
asset forfeiture cases to recover real estate linked to Qiao and Zhao in
Flushing, New York, and Monterey Park, California.
In April 2015, Qiao appeared on the Chinese government's list of 100 "most
wanted" officials (http://www.ccdi.gov.cn/xwtt/201504/t20150422_55183.html)
who fled abroad after being accused of crimes such as bribery and
corruption. He and 39 other government officials and state-owned enterprise
leaders on the list allegedly fled to the United States.
The list, called "Operation Skynet," is part of Chinese President Xi
Jinping's anti-corruption campaign, which has vowed to take down what
Chinese officials describe as corrupt "tigers" and "flies" within the
country's ruling Communist Party.
Fengxian Hu was another fugitive on China's list. A former army singer and
radio broadcaster, Hu headed the state-owned broadcasting company that had a
joint venture with Pepsi to distribute soft drinks in Sichuan province. In
2002, The Washington Post and The Wall Street Journal reported
(https://www.washingtonpost.com/archive/business/2002/09/28/pepsi-seeks-divo
rce-in-china/fd287562-8348-41f8-b18b-9b86722664d7/) that Pepsi had accused
Hu of looting the joint venture and using company funds to buy fancy cars
and go on European tours.
The same year, in a widely publicized move, Pepsi filed a case with
international arbitrators in Stockholm, asking that the joint venture be
dissolved. Despite this, Hu was given a visa that allowed him to fly
regularly to Las Vegas, where he was a VIP client at the MGM casino.
In January 2010, Chinese authorities investigated Hu for corruption. But the
month before, Hu had entered the United States on a B1 visitor visa, joining
his wife, a U.S. citizen living in New York.
Hu tried to obtain a green card through his wife, but the petition was
rejected by U.S. immigration authorities. He applied for asylum instead.
Meanwhile, he had gotten into trouble in the United States for losing
millions in a Las Vegas casino and failing to pay a $12 million gambling
debt. In 2012, he was indicted in a Nevada court on two counts of theft and
one count of intentionally passing a check without sufficient funds.
Hu pled not guilty to the charges; his lawyers claimed that his checks
bounced because his bank account had been closed by Chinese authorities. The
charges against him in the U.S. were considered an aggravated felony, which
is a common basis for deportation. Hu, however, had a pending asylum case
and so could not be deported.
In August 2015, a New York immigration judge denied the asylum claim. But
Hu's lawyers argued that he would be tortured if he returned to China and
invoked the United Nations Convention Against Torture
(https://www.fas.org/sgp/crs/intel/RL32276.pdf) , which says that an alien
may not be sent to a country where he is likely to be tortured. In the end,
the immigration court suspended Hu's removal order, allowing him to remain
in the United States and work here indefinitely. He will not, however, be
given permanent residency or be allowed to travel outside the country.
The absence of an extradition treaty - coupled with a high standard of
living - makes the United States a favored destination for Chinese officials
and businessmen fleeing corruption charges.
In April 2015, Jeh Johnson, the Secretary for the Department of Homeland
Security
(https://www.dhs.gov/news/2015/04/12/fact-sheet-meeting-between-us-secretary
-homeland-security-jeh-johnson-and-chinas) , made a 48-hour trip to Beijing.
The visit was intended to pave the way for Chinese President Xi Jinping's
U.S. visit in September 2015, according to a memorandum Johnson wrote, which
was obtained through a request under the Freedom of Information Act.
In the memo, Johnson said the Chinese government is seeking 132 people it
said have fled to the United States to avoid prosecution. This represents a
greater number of fugitives than Chinese authorities have publicly
acknowledged.
"I'm told that in prior discussions, the Chinese have been frustrated by the
lack of any information from us about the 132 fugitives," Johnson wrote.
The Chinese request for assistance posed a dilemma for the United States.
American officials are concerned about a lack of fairness in China's
criminal justice system. Human rights groups say that China continues to use
torture to extract false confessions from suspected criminals. Torture has
also been documented to be part of shuanggui - a secretive discipline
process reserved for members of the Chinese Communist Party.
Some analysts see the crackdown on corrupt officials as part of a purge
aimed at the current regime's political rivals and ideological enemies. U.S.
officials say this makes returning corrupt officials to China a delicate
issue for the United States.
In 2003, headlines around the world reported widespread street protests
(http://www.nytimes.com/2003/10/18/world/bolivian-leader-resigns-and-his-vic
e-president-steps-in.html?) in Bolivia that led to security forces killing
58 people, most of them members of indigenous groups. Not long afterward, as
protesters massed up on the streets of La Paz demanding his resignation,
Bolivian President Gonzalo Sanchez de Lozada resigned and fled his country
along with his defense minister, Jose Carlos Sanchez Berzain.
The two men flew to the United States, where they continue to reside. In
2006, Berzain applied for political asylum, which he was granted in 2007. On
his application,
(https://www.documentcloud.org/documents/3167528-Berzain-Asylum-Application.
html) when the form asked, "Have you or your family members ever been
accused, charged, arrested, detained, interrogated, convicted and sentenced,
or imprisoned in any country other than the United States?" Berzain checked
the box "no," even though by then he and de Lozada had been formally accused
of genocide
(http://www.elmundo.es/elmundo/2005/02/21/internacional/1109004296.html) by
Bolivia's attorney general. The indictment was approved by Bolivia's Supreme
Court (http://content.time.com/time/world/article/0,8599,1586707,00.html)
in 2007. Berzain also stated on his application that the State Department
had arranged for his travel to the United States.
The de Lozada administration was vocally pro-American. Before it was ousted,
officials had announced they would facilitate gas exports to the United
States.
After their departure, Bolivia's attorney general publicly stated
(http://www.nacion.com/economia/Sanchez-Lozada-insinua-sometera-Bolivia_0_71
5128533.html) that the administration had embezzled millions from
government coffers, but did not formally file charges. He said de Lozada had
taken some $22 million from the country's reserve funds before fleeing.
De Lozada and members of his administration have dismissed the allegations
as part of a politically motivated smear campaign, but there is evidence to
suggest irregularities may have occurred in the handling of the reserve
funds. The former president signed a decree shortly before leaving office
authorizing the interior and finance ministers to withdraw money from
Bolivia's reserve funds without going through the normal approval process.
De Lozada's former interior minister pleaded guilty
(http://noticias.terra.com/noticias/acusan_de_corrupcion_a_ex_presidente_paz
_zamora_de_bolivia/act178525) in 2004 to embezzlement after $270,000 in
cash was found in an associate's home.
De Lozada, a mining mogul before he became president, moved to Chevy Chase,
Maryland, an upscale suburb of Washington, D.C. He now lives in a two-story
brick house bought for $1.4 million by Macalester Limited, a limited
liability company that was formed in the British Virgin Islands and lists a
post office box in the Bahamas as its principal address.
De Lozada's immigration status is unclear. He said in a sworn deposition in
2015 that he was not a U.S. citizen. His son-in-law, who spoke to ProPublica
on his behalf, would not say whether de Lozada had applied for asylum.
Berzain, meanwhile, settled in South Florida. Records show that he and his
brother-in-law personally own or are listed as officers or members of
business entities that together control around $9 million worth of Miami
real estate.
Some of the purchases were made in the names of entities that appear to list
different variations of Berzain's name in business records.
In addition, in the purchase of two properties, Berzain's name was added to
business records only after the deal had gone through. Berzain's
brother-in-law incorporated a company called Warren USA Corp in October
2010, for example, and the company purchased a $1.4 million residential
property the following month. Three weeks after Warren USA Corp became the
owner of an elegant Spanish-style villa in Key Biscayne, Berzain was added
as the company's secretary.
The following year, in May 2011, Berzain's brother-in-law created Galen KB
Corp and registered as the company's president. A month later, Galen KB Corp
purchased a $250,000 condo. In August, Berzain replaced his brother-in-law
as the company's president, according to business records. Berzain is no
longer listed as a company officer in either company.
During an interview in January, Berzain told ProPublica "I don't have any
companies." When asked about several of the companies associated with his
name or address in public records, the former defense minister said he had a
consulting firm that helped clients set up companies and that he was
sometimes added to the board of directors. Efforts to reach Berzain's
brother-in-law, a wealthy businessman and the owner of a bus company in
Bolivia, were unsuccessful. Berzain's brother-in-law has not been accused of
any wrongdoing.
The practice of purchasing real estate in the name of a business entity like
a limited liability company, or LLC, is a common and legal practice in
high-end real-estate markets, and one that enables celebrities and other
wealthy individuals to protect their privacy.
But the practice also allows foreign officials to hide ill-gotten gains.
U.S. regulations allow individuals to form business entities like LLCs
without disclosing the beneficial owner. The LLCs can be registered in the
names of lawyers, accountants or other associates - or even anonymously in
some states - and used to purchase real estate, making it nearly impossible
to determine the actual owner of a property.
Government investigators and lawmakers have pointed out persistent gaps in
U.S. policy that have enabled corrupt officials to evade justice and hide
their assets in this country. But little has changed.
Last year, a U.S. Government Accountability Office investigation
(http://www.gao.gov/assets/680/671940.pdf) said it can be "difficult" for
immigration officials to identify the true source of an immigrant investor's
funds. Immigration officials told the government auditors that EB-5
applicants with ties to corruption, the drug trade, human trafficking and
other criminal activities have a strong incentive to omit key details about
their financial histories or lie on their applications.
"It's very easy to get lost in the noise if you're a bad person," said Seto
Bagdoyan, the accountability office's director of forensic audits, who
co-authored the GAO report.
Immigration officials, he added, have an "almost nonexistent" ability to
thoroughly evaluate investors' backgrounds and trace their assets.
Despite such weaknesses, Congress has continually extended
(https://www.uscis.gov/news/alerts/expiring-eb-4-eb-5-programs-extended-thro
ugh-dec-9) the EB-5 program with minor changes. The program is backed by
real-estate lobbyists who argue that it
(http://abcnews.go.com/Business/lobbyists-declare-victory-visa-reform-measur
e-dies-quietly/story?id=35818901) is a crucial source of financing for
luxury condos and hotels. The program is expected to thrive
(http://therealdeal.com/2016/11/18/eb-5-will-thrive-under-trump-experts-say/
) in a Trump presidency because the president-elect is a developer and his
son-in-law Jared Kushner received $50 million in EB-5 funds to build a
Trump-branded tower in New Jersey.
In 2010, a Senate report
(https://www.hsgac.senate.gov/download/report-psi-staff-report-keeping-forei
gn-corruption-out-of-the-united-states-four-case-histories) described how
powerful foreign officials and their relatives moved millions of dollars in
suspect funds into the United States. The report said investors bypassed
anti-money laundering regulations with help from U.S. lawyers, real-estate
agents, and banking institutions. Last year, ABC News reported
(http://abcnews.go.com/Business/lobbyists-declare-victory-visa-reform-measur
e-dies-quietly/story?id=35818901) that lobbyists for real estate and other
business groups spent $30 million in 2015 in an effort to protect the EB-5
program.
Senate investigators proposed legislation that would require companies to
disclose their beneficial owners and make it easier for authorities to
restrict entry, deny visas and deport corrupt foreign officials.
A few of the proposals have been adopted, but they have not made much
difference. Banks have stepped up their efforts to identify corrupt
officials and monitor their accounts. Professional groups such as the
American Bar Association have issued non-binding guidelines for their
members on compliance with anti-money-laundering controls. The U.S.
government has also worked with the Financial Action Task Force
(http://www.fatf-gafi.org/about/whoweare/) , an international body set up to
fight money laundering, to bring its anti-corruption controls in accordance
with the body's guidelines.
In May, the Treasury Department enacted a new rule that will take full
effect in 2018 and will require financial institutions to identify the
beneficial owners of shell companies. Some advocates see the rule as a step
backward. The new rule allows shell companies to designate the manager of
the account as the beneficial owner, concealing the identity of the person
ultimately exercising control.
The State Department declined to say what progress, if any, it has made on
the Senate subcommittee's recommendation to more aggressively deny visas
through Proclamation 7750. "The Department takes seriously congressional
recommendations and devotes resources to addressing corruption worldwide," a
State Department official wrote in response to questions.
In 2010, then-Attorney General Eric Holder launched the Kleptocracy Asset
Recovery Initiative. The small unit, which has grown to include 16
attorneys, aims to recover assets in the United States that are tied to
foreign corruption and return the money to the looted countries.
Over the past six years, the unit has filed around two dozen civil asset
forfeiture cases in an attempt to seize money, real estate and other assets
tied to government officials from 16 countries. Assets have ranged from a
lone diamond-encrusted glove worn by Michael Jackson that was purchased by
Equatorial Guinea's Vice President, Teodoro Obiang, to a $1 billion fund
tied to Malaysian Prime Minister Najib Razak.
Yet most of the money the Department of Justice has pursued remains in
limbo. The case involving Chun, the former president of South Korea, is one
of only two instances in which corrupt gains have been returned to the home
country through the Justice Department's efforts. The other arose when
Justice Department officials returned $1.5 million to Taiwan
(https://www.justice.gov/opa/pr/united-states-returns-15-million-forfeited-p
roceeds-sale-property-purchased-alleged-bribes) from property bought with
bribes paid to the family of Chun Shui Bian, the former president of Taiwan.
The agency faces myriad challenges when attempting to seize and return
assets acquired by corrupt foreign officials, including a lack of witnesses,
said Kendall Day, head of the Department of Justice's Asset Forfeiture and
Money Laundering Section. These officials often shield their transactions
through shell companies, offshore companies or a network of associates.
"The mission of the Kleptocracy Initiative is really to target what we call
grand foreign corruption that impacts the U.S. financial system," Day said,
citing the Chun case as an example.
The 2012 Magnitsky Act gives the government power to deny visas and freeze
the assets of Russian nationals accused of corruption or human rights
violations. The Global Magnitsky Act would extend the same sanctions to the
rest of the world, but it has yet to be passed by Congress. Unlike
Proclamation 7750, the Magnitsky laws require the government to publish a
list of foreign government officials who are barred from the United States.
In addition, the Treasury Department imposed regulations this year that aim
to crack down on the use of shell companies to purchase real estate in
places like Miami and Manhattan. Title insurance companies are now required
to identify the real owners of companies purchasing high-end real estate
without a mortgage. These regulations, however, are temporary.
ProPublica is a Pulitzer Prize-winning investigative newsroom.
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