No whitewash on money-laundering

Yehuda Twersky uses statutes and snitches to track trails of ill-gotten gains.

By YAAKOV KATZ
Ch.-Supt. Yehuda Twersky spends a lot of his time looking at numbers and dollar signs. As head of the Israel Police Intelligence Department's Money Laundering Unit, it is his job to track the flow of funds in and out of Israel, and to ensure that the country's banks are not used as Laundromats for foreign and local criminals. Quite a tall order in a country which, up until recently, was blacklisted by major international financial institutions for not having legislated money-laundering laws. Yet, according to his commander, Asst.-Cmdr. Irit Bouton, Twersky has been instrumental in preventing Israel from being embroiled in a diplomatic crisis and in restoring the world's faith in its financial markets. With such high-profile cases as that of Bank Hapoalim and billionaire Arkady Gaydamak under investigation, this is no small accomplishment. Particularly when one considers that the 46-year-old father of three is a native New Yorker who made aliya in 1983. In a recent interview with The Jerusalem Post, Twersky discussed how money-laundering statutes have assisted the police in its new approach to fighting organized crime. The key to cracking crime rings, he said, is in tracking the money trail. "Since the statutes came into effect in 2000, the amount of money the police have succeeded in confiscating has skyrocketed," he said. "Whereas in 1999, we intercepted approximately NIS10 million, since then we have averaged more than NIS100 million annually; and in 2005, just under NIS400 million, due to the Bank Hapoalim investigation." However, Twersky added, pursuing suspects on the basis of money-laundering statutes is not so simple. "Detecting suspicious money transfers is one thing," he said. "Proving that certain money was obtained illegally, through crime, is quite another." As a result, he said, much of the work in this field relies on intelligence - which isn't always easy to collect. What is money laundering? It is essentially any action that is meant to distort the source of money that was obtained through a crime. Crimes of origin include drugs, kidnapping, murder, gambling, prostitution and extortion. Basically, any crime you can think of. The idea behind money laundering is to hide where the money actually came from. How do the police know whom to investigate? No one is considered a target simply because he's a millionaire. A person will only be investigated if he is engaged in criminal activity. Does the person who laundered the money also need to be the person who committed the original crime? The advantage of the money-laundering law, which was passed in 2000, is that it allows us to go after people who are not responsible for the original crime. Take, for example, a lawyer who received money after a crime was committed and laundered it knowing it was drug money, but he did not commit the drug crime itself. How do police find criminals who launder money? The problem with uncovering criminals who launder money is that they do not just put the money in their personal bank accounts. The laundering is done through straw companies, as well as by smuggling funds across borders. To track the funds, we need to have up-to-date intelligence, to know about the straw companies and who the front men are. The idea that you can go from the person and his assets directly to the crime itself is wrong, since the process does not work that way. You have to work on two different levels - the crime of origin and the money laundering - and you need to prove both and connect them to each other. We don't target 100 percent of potential cases, since it is not efficient. Numerically speaking, the police is tiny compared to the general population. What we try to do is be effective and target what we can. The scope of money laundering in Israel is the same scope as predicate offenses and crimes for profit. It is impossible and ineffective to try and deal with every case through money-laundering statutes. The law is built to deal with heavier cases. The major area we are focusing on now is organized crime, since that has the most effect on society as a whole. How is intelligence collected? Most of the intelligence comes from tip-offs. We get reports from various sources, but human sources are the best. We have others, such as wiretapping, and they are good. But they can't be questioned and they lack interaction. Why don't you simply follow suspicious bank transfers and examine accounts? The fact that someone makes an unusual bank transfer does not automatically cause us to launch an investigation. Not only would this be endless, but there's also the issue of people's privacy. People make unusual, yet legitimate, transfers all the time - for tax purposes, for example. There are also other crimes that are not connected to money laundering, such as tax evasion. What is the advantage to using money-laundering statutes when investigating criminal organizations? The money-laundering technique sometimes allows us to prove the connection between all the different levels within a criminal organization. With this law, we can see who is connected to whom and who commits which crime. This is our new system for combating organized crime. We have established task-forces in all the different districts which focus specifically on money laundering. At first, we used to investigate individuals, but we recently understood that it was most effective to go after organizations. Instead of pursuing 1000 different people who have no effect on the crime industry in the country, we prefer to focus on the characters who influence the crime rate and who are the main money launderers. What is the Bank Hapoalim investigation about? Most of the suspicions focus on bank employees who did not report money transfers and did not keep proper bank statements about possible money-laundering activity inside the bank. There are also suspicions about the source of the money. With some people we are having difficulty discovering the source; with others, some success. Deals have already been made with some of the suspects who live abroad, and we have already confiscated more than NIS 35 million. The fact that someone is willing to pay NIS35 to avoid going to court shows that we must be doing something right.