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From a global fentanyl ring to a grieving family in Garland, a reporter’s FinCEN Files diary

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“Hello Will, this is Brandon Hubbard, you sent me a letter.”

The last thing I expected when reporting on the FinCEN Files investigation was a nighttime reply from a convicted drug dealer.

“Texting because this jail provides iPods to do so but if you want to set up a phone call that is fine,” Hubbard wrote me at 9:10 p.m. on July 28 from his cell in Grand Forks, North Dakota.

I had contacted Hubbard a week earlier. He was easy to find; he’s locked up for life for his role in a scheme that imported fentanyl into the U.S. He’s also a convicted money launderer.

“I’m reporting on fentanyl and how people in the USA buy it and pay for it,” I told Hubbard in my letter. “I’d really like to talk to you about what you know about how fentanyl is ordered and paid for … No worries if you don’t feel like you know much about this – anything you can tell me would be really interesting.”

I knew it was a long shot, but Hubbard had already spoken to Keegan Hamilton, a VICE journalist who aired an excellent podcast on deadly opioids. Keegan had focused on fentanyl’s route from China to the United States, where it kills tens of thousands of Americans each year.

I was interested in something else. As a reporter with the International Consortium of Investigative Journalists, my bread and butter is complex financial documents, bank transfers, and secretive shell companies. I was in Jerry McGuire mode: “Show me the money.”

Hubbard told me all about how he paid for fentanyl from China and through a jailed middleman in Canada and his vast cryptocurrency operation.

“That’s the first thing they asked me when they came in the door, ‘Where’s the money?’” Hubbard told me in our first interview about his recollection of the night he was arrested by the FBI.

Texting and speaking to Hubbard in two interviews was one of the most unexpected episodes in my reporting on the FinCEN Files, a global exposé of how the world’s largest banks, politicians and shadowy characters move money around the world with few constraints. BuzzFeed News obtained thousands of secretive bank documents from the Financial Crimes Enforcement Network, the financial crimes watchdog agency known as FinCEN inside the U.S. Department of Treasury. BuzzFeed News shared the documents with ICIJ and we gathered a world-class team of more than 400 journalists. For over 16 months, reporters traced how dirty money flows freely through major banks, swamping a broken enforcement system. They are the kind of documents that no journalist is ever supposed to see.

But the FinCEN Files investigation was about so much more than leaked files.

Hubbard’s name doesn’t appear anywhere in the FinCEN documents. Yet he was one of dozens of people I spoke to – or tried to speak to – whose stories helped ICIJ connect one of the driest, most complicated set of documents ICIJ has ever tackled to one grieving family in Garland, North Carolina.

Welcome signs on the utility poles of Garland, North Carolina, read, “Greatness Grows in Garland”. Image: Photo by Travis Dove

It started with a few words in a Microsoft Excel spreadsheet that formed part of the thousands of records shared by BuzzFeed News. Four other people jailed in the same global fentanyl probe that sent Hubbard to prison were listed in a document, probably prepared by FinCEN, titled “VTB Bank Export.” VTB is a Russian state-owned bank. VTB denied wrongdoing and it’s unclear why this document was created.

The spreadsheet showed that, from 2012 to 2017 (the exact years that U.S. authorities alleged Hubbard and others imported fentanyl into the U.S.), the four people and others had moved more than $400,000 through MoneyGram, the world’s second largest money transmitter.

All we had to work with were the names of these four. Armed with that, I dived into court records where many of them had been charged. I read indictments, sentencing hearing transcripts, FBI affidavits and more. I learned when they were arrested and how fancy their homes were.

But, most importantly, the court records opened a window onto the victims of this drug trafficking ring and the money sent around the world that allowed it to happen.

On page seven of one of the longer court documents, a plea agreement by one of the alleged drug ring participants, I read that U.S. prosecutors believed that the first person to die from this scheme was “J.W. in Garland, North Carolina, on or about January 19, 2014.” Others had died in North Dakota and Oregon. More still were injured.

Garland is a small place. It didn’t take me long, using the online obituary legacy.com, to identify Joseph Williams as the likely “J.W.”

But I had my doubts. In a court document, one of hundreds that I read, U.S. prosecutors also mentioned “James Williams”. Was I barking up the wrong tree? After a quick email and phone call, the U.S. attorney’s office in North Dakota told me that they had made a filing error. It was Joseph, not James, after all. (They wouldn’t answer any of my other questions, by the way).

Joseph Williams' family in North Carolina
Fentanyl victim Joseph Williams’ mother, Susan, and sister, Emily Spell, in Garland, North Carolina. Image: Fentanyl victim Joseph Williams’ mother, Susan, and sister, Emily Spell. Photo: Travis Dove/ICIJ

Once I confirmed that Joseph Williams was the victim of a fentanyl trafficking ring whose key players were listed in our leaked documents, I tried to contact the family.

The Williams had moved since Joe’s death, so that didn’t help. I called the Garland post office, which confirmed that the Williams family still lived in town. I eventually contacted Joe’s sister, Emily Spell, through Facebook. Emily works mad hours as a nurse, so it wasn’t always easy to find time to speak, especially during the summer peak of COVID-19.

I eventually spoke to Emily on the phone. Emily told me everything she remembered about the day Joe died and what has happened since.

I promised to try to visit Emily, hoping that the COVID-19 lockdown would be lifted. I wanted to meet the family and I wanted to see Garland with my own eyes, a tiny town of fewer than 700 people, better known for its blueberries than for its connection to a vast money laundering ring.

I spoke to Garland’s mayor. Welcoming and friendly, she suggested that I postpone my visit. Garland was a COVID-19 hotspot, she said. The town is surrounded by hog farms, which have seen high infection rates among workers.

I waited. And waited. And waited. The FinCEN Files deadline was approaching.

After getting a COVID-19 test at my local fire station and assuring my editors that I would take all necessary precautions, I drove to Garland. I explored for a day, trying the local vinegar barbecue, strolling through the Piggly Wiggly supermarket, taking some photos in front of the shuttered Brooks Brothers store.

To be honest, it wasn’t where I thought my FinCEN Files reporting would take me. Before COVID-19, I had planned a trip to Turkmenistan and toyed with visiting a gold mine in Liberia to investigate other leads in the documents.

Instead, I met Emily, her mother and one of Joe’s kids at the family’s local Methodist church. We avoided sitting inside their home out of an abundance of caution due to the pandemic.

Joseph Williams, center, with his father and one of his children. Image: Supplied

Emily and her mom laid out Joe’s photos before me, describing a boy and a man who was good at heart but, like all of us, had his fair share of problems. We talked about the music that had played at Joe’s funeral.

I had spent months at my desk in Washington D.C. reading through suspicious activity reports, Excel spreadsheets that didn’t always make sense, and putting into order what happened, when.

Now, in Garland, I was speaking to the people for whom the FinCEN Files were not an abstraction. The free flow of dirty money had contributed to their family member’s death. What if banks, MoneyGram or U.S. officials had acted earlier? Could Joe’s death have been prevented?

I asked Brandon Hubbard, in jail, if he knew the Williams family. He swears he doesn’t and that he had nothing to do with Joe’s death. But, there they were, one family in North Carolina and one felon in North Dakota, bound together by an ICIJ investigation that exposed the broken global anti-money laundering system. One used the system to his advantage, the others were victims of it. 

It wasn’t easy for Joe’s family to share their story. But they were generous with their time and with their patience. “If it helps one person, I’m glad to have done it,” Joe Williams’ mother said.

The post From a global fentanyl ring to a grieving family in Garland, a reporter’s FinCEN Files diary appeared first on ICIJ.

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Election Integrity

Analyzing the Case for Election Fraud

Despite the overwhelming pressure, if you can’t help but feel that tingling sense of knowing that is telling you there’s more to the story, you are not alone. In fact, according to a new Rassmussen poll, nearly 50% of voters believe the election had issues. A quick look at the data blatantly shows that indeed, shenanigans abound (how can a state have 1+ million more mail-in ballots tallied than they sent out?). But was it fraud or masterful gamesmanship?

Adryenn Ashley

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The world, or at least the global media, has spoken: Biden won the 2020 Election.

UPDATED FREQUENTLY WITH NEW INFORMATION – Last update 12/21/2020

A quick Google search reveals pages upon pages of reports of why the Trump team’s assertions of vote fraud and election fraud and vote flipping are flat out fallacies. YouTube has announced a ban on any videos questioning the election results. And now on Monday all 538 electors have voted, formalizing Biden’s 306-232 win. And while there is still Congress to get through, and the inauguration, based on social media and television news and practically every other point of information bombarding society today, Biden is now the President-elect.

But why now, after Government officials confirmed during Senate testimony that a foreign adversary, Russia, attempted to interfere in the 2016 United States Presidential Election via “a multi-faceted approach intended to undermine confidence in our democratic process.” According to U.S. intelligence official reports, Russia targeted voter registration databases in at least 21 states and sought to infiltrate the networks of voting equipment vendors, political parties, and at least one local election board. And if their purpose was not so much to “hack” the election but create chaos and sow seeds of uncertainty around our election process, I would say they have won. But what if this cycle, it was Russia who somehow manipulated extra ballots and placed the blame on the Democrats? What if…?

Russian Experience With Voter Fraud

The 2004 presidential election in Ukraine saw suspiciously high turnout rates that “even Stalinist North Korea would envy,” the State Department declared!

Back then, the U.S. government decried as corrupt an earlier election where special voting boxes were created to help citizens vote from home, election observers were expelled from vote counts, pre-election polls were wildly off, and voter turnout in certain communities exceeded 90%.

But the story of that Ukrainian election as recounted by then-Ambassador John Tefft to a Senate committee in December 2004 raises a tantalizing question for voters distrustful of the Nov. 3 elections results in our own 2020 Presidential Election: If tactics and outcomes in the Ukrainian election back then were enough to cry foul, why can’t Americans debate similar concerns here?

Tefft’s testimony raises an important question: Should America, the greatest democracy in the world, share any of the fraudulent attributes of a Ukrainian election? The answer for most Americans is hopefully resounding “No.”

And despite continued and repeated headlines that there was no fraud, according to the Harvard Kenney School report on Election Integrity this cycle, expert assessments indicate that compared with 2016, the performance of this contest displays several warning flags, namely worsening confidence in the integrity of American elections and falling public trust, challenges to legitimacy arising from threats of campaign violence,legal disputes about the process and results, and public protests about the outcome, as well as growing attempts at voter suppression. 

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Investigations

Advocates celebrate major US anti-money laundering victory

Landmark laws to thwart the use of U.S. shell companies by terrorists, human traffickers, arms dealers and kleptocrats are set to be enacted after more than a decade of lobbying and politicking with rare bipartisan support.

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Advocates celebrate major US anti-money laundering victory

The sweeping anti-money laundering reforms hitched a lift in the annual defense spending bill that passed the Senate 84-13 today, and was approved by the House 355-78 earlier this week.

The Corporate Transparency Act requires U.S. companies to report their true owners to the Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN — largely ending anonymous shell companies in the country.

The International Consortium of Investigative Journalists has repeatedly documented how the rich, the powerful and the criminal have used anonymous entities to hide their wealth, including in the 2016 Panama Papers and the 2020 FinCEN Files investigations.

Welcoming the clampdown, Transparency International’s U.S. director Gary Kalman said, “It is rare for such a simple measure to promise such an enormous impact.” Kalman added that the long sought anti-corruption reforms would “move us into a new era of enforcement.”

The new legislation will allow law enforcement agencies and financial institutions to request company ownership information from FinCEN. The data will not be publicly available.

FinCEN Files was based on a trove of suspicious activity reports filed by banks and other financial institutions to FinCEN. BuzzFeed News obtained the secret documents and shared them with ICIJ and more than 100 other media organizations.

The global investigation exposed how a broken U.S.-led enforcement system allows banks to continue to profit from moving dirty money tied to drug cartels, trafficking rings fueling the opioid crisis, fraud, organized crime, sanctions evasion, ruinous real estate schemes, and terrorism.

“Too many times, people … think money laundering is a federal, victimless crime. It is certainly not that,” Sen. Sherrod Brown of Ohio, the top Democrat on the Senate banking committee, told reporters on a call organized by the advocacy group the FACT Coalition. “Sinaloa cartel actors, fentanyl traffickers have been destroying thousands of families in my state and across the country.”

Earlier this year, Brown credited FinCEN Files for revealing the lack of forceful enforcement against banks that repeatedly violate the law. Advocates said a number of proposed bipartisan bills, including one co-sponsored by Brown, were instrumental in generating the support needed to attach the reforms to the spending bill.

“This is a really big deal to get this passed,” Brown said Thursday. “No more hiding these abuses in anonymous shell companies. It also cracks down on bank officials who look the other way or actively aid money laundering.”

A long time coming

ICIJ has shown how offshore shell companies have been used for dubious financial dealings and tax avoidance through a series of global exposés, including the Secrecy for Sale investigation, Panama Papers and Paradise Papers. U.S. lawmakers have repeatedly cited the investigations in proposing reforms over the years.

Countries like the United Kingdom, Indonesia and members of the European Union also took steps toward ending anonymous shell companies in response to ICIJ reporting.

“When the Panama Papers leaked, there was a huge flurry of interest because there’s all of a sudden this recognition that it was kleptocrats, money launderers, corrupt officials the world over, as well as criminals, were all using a very common structure to help evade law enforcement, which was setting up an anonymous company,” Lakshmi Kumar, policy director of Global Financial Integrity, said.

The phenomenon is not limited to the exotic offshore tax havens of popular imagination. U.S. jurisdictions like Delaware, Wyoming and Nevada are among the world’s top locations to set up anonymous companies. Legislation to require corporations to disclose their true owners was first proposed in the U.S. over a decade ago, co-sponsored by then-senator Barack Obama, and similar bills have been introduced over the years.

Advocates credit years of lobbying a broad coalition of stakeholders, including the U.S. Chamber of Commerce which had previously been a leading opponent, in getting the reforms across the finish line this year.

“What’s changed now is a growing understanding among various constituencies about the harms that anonymous companies pose, and the threats that they pose for our financial system, to our businesses,” Clark Gascoigne, senior policy advisor at FACT Coalition, said.

But it’s not a done deal quite yet.

Although the anti-money laundering proposals have had the support of the administration, President Donald Trump has repeatedly threatened to veto the National Defense Authorization Act over provisions unrelated to financial secrecy.

Both the House and the Senate votes surpassed the two-thirds margin that would be needed to override a veto, although some Republicans have indicated that they would not support what would be the first veto override of the Trump presidency.

But the NDAA has been reliably passed by Congress every year for six decades and advocates are confident that the time has come for the landmark financial transparency measure that’s included in the omnibus bill.

“It’s one of the few areas where the outgoing Trump administration agrees with the incoming Biden administration,” Gascoigne said. “It may be the first bill in the history of Congress that has the support of both Dow Chemical and Friends of the Earth. Heck, the state of Delaware even supports reform.”

The post Advocates celebrate major US anti-money laundering victory appeared first on ICIJ.

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Muslim Brotherhood suspect and Saudi billionaire linked to same offshore companies, Austrian report says

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One of 30 people in Austria suspected to be members of the Islamic fundamentalist group Muslim Brotherhood was the director of offshore companies linked to a Saudi billionaire, according to an investigation by Austrian media outlets profil and Ö1.

The man, described as a 37-year-old Viennese entrepreneur with Iraqi roots, is suspected of “participating in a terrorist, subversive and criminal organization” and was a target of the police investigation into the group and the Palestinian extremist organization Hamas, the report said

The inquiry, which led 930 officers to raid 60 apartments, shops and clubs in four federal states last month, had no connection to the Vienna terror attack that killed four and injured 23 on November 2, according to officials cited by Deutsche Welle.

The Austrian report ー based on police records ー does not name the suspect, nor the Saudi businessman, for fear of hampering the ongoing probe into possible terror financing.

The pair’s link to shell companies in the British Virgin Islands and other offshore financial centers was revealed for the first time after the reporters’ examination of Paradise Papers, a trove of leaked documents obtained by Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists in 2017.

The 13.4 million files include incorporation documents, emails, contracts and other records from two offshore service providers and the company registries of some of the world’s most secretive countries.

The Austrian man was listed as the director of several companies in the BVI, Malta and the Bahamas, the media report said. His address on the documents referred to an apartment in Vienna that belongs to the wife of one of the main suspects in the police investigation, according to a review of Austria’s land registry records.

By cross-checking the confidential files with property records, the reporters also found that the shell companies owned properties in the U.K., including two office buildings, a commercial property and a retail park, worth about $73 million in total.

The documents show that a Liechtenstein trust owned by the Saudi businessman was behind those companies. The man is also known as a philanthropist who has financed Islamic studies at various European universities in recent years, including in Austria, the report added.

The complex offshore structure identified by the journalists is legal, the report said, but “can be used to disguise the flow of money and the identity of the true economic beneficiaries.”

Profil and Ö1, two ICIJ media partners in Austria, asked the Viennese suspect about the purpose of the offshore company network and his link with the Saudi billionaire. A lawyer representing him declined to comment.

The post Muslim Brotherhood suspect and Saudi billionaire linked to same offshore companies, Austrian report says appeared first on ICIJ.

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