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TRANSMITTER
LIABILITY FOR
CUSTOMER
INJURIES
West Coast AML FORUM
May 7-9, 2008 1
REMEDIES
CIVIL ACTION
Individual
Class action
RACKETEERING (CIVIL OR
CRIMINAL)
Allows state to sue for victim
Provides additional remedies
FACILITATION/ ACCOMPLICE
(CRIMINAL)
2
Restatement of Torts § 876
Persons Acting In Concert
For harm resulting to a third person from the
tortious conduct of another, one is subject
to liability if he
(b) knows that the other’s conduct
constitutes a breach of duty and gives
substantial assistance or encouragement
to the other so to conduct himself
CIVIL RICO ANALYSIS
EXISTENCE OF CRIMINAL
ENTERPRISE
KNOWLEDGE OF THE
CRIMINAL ACTIVITY
PARTICIPATION IN THE
AFFAIRS OF THE
ENTERPRISE 4
FACILITATION
acting with knowledge that
another person is committing
or intends to commit an
offense,
the person knowingly provides
the other person with means
or opportunity for the
commission of the offense.
ELEMENTS
EXISTENCE OF CRIMINAL/
TORTIOUS CONDUCT
KNOWLEDGE OF THAT CONDUCT
PROVISION OF ASSISTANCE/
MEANS/ OPPORTUNITY/
PARTICIPATION
INJURY CAUSED BY THE
CONDUCT (only for civil)
6
EXISTENCE OF
CRIMINAL OR
TORTIOUS
CONDUCT
7
SOURCE AREA FOR ILLEGAL
8
GOODS AND SERVICES
$
COLLECTION POINT
FOR PAYMENTS 9
THE KLONDIKE EFFECT
Arizona portion of the annual flow of UDAs is
estimated at 3,000 to 4,000 per day.
ICE says:
95% of Arizona UDAs use a coyote
each UDA pays his or her coyote an
average of $1,600 to $1,800
3,000 X 95% X $1,600 = $1.7
Billion/yr
4,000 X 95% X $1,800 = $2.5
Billion/yr
Five Year Trends
$2 Billion Illegal immigration market draws “gold
rush” of hard core coyotes and facilitators to
Phoenix, the US hub
Coyotes have criminal backgrounds in other
crimes, such as drug smuggling, so they form
multi-crime enterprises
Money draws businesses into facilitation
Money transmitters
Used car dealers
Travel agents
Residential rental agents
Weapons dealers
Coyote activity is increasingly hard core organized
crime.
Exportation of activity to Sonora—triangulation.11
KNOWLEDGE
OF
EXISTENCE OF
CRIMINAL
CONDUCT 12
NECESSITY OF
MONEY
TRANSMISSION
$ S
C
AZ
SON C
SMUGGLING CONSPIRACY
PAYMENT IN ARIZONA
13
$
“PICKUP” SPECIALISTS
14
FACILITATION SYMBIOSIS
SPECIAL SERVICES
STRUCTURING
NAME EVASION
MULTIPLE NAMES/ IDENTITIES
NON-FILING OR SARS, CTRS
EMPLOYEE SIGNATURES ON TRANSMITTER’S
DRAFTS
EVASION OF STATE REPORTING REQUIREMENTS
INDIVIDUAL BRIBES
“LAUNDERING PREMIUM” CHARGES
UP TO $35,000 PER MONTH IN COMMISSION
INCOME
COMMISSION PAYMENT METHOD 15
DATA PATTERNS
Customers’ receipts of person-to-person
transactions of > $500 show:
• seasonal “coyote curve” pattern
• structuring
• evasive tactics on names, other
identification
• disproportionately corridor states
RED FLAGS
1) A total of over $500,000 in 12 months
in person-to-person receive
transactions >$500
2) A send to receive ratio over 1:20.
3) Customers received > $500 cash
a) in >40 person-to-person
transactions in two consecutive months
OR
b) in person-to-person transactions
totaling > $60,000 in two consecutive
HUMAN TRAFFICKING GROUP
18
CUSTOMER CONDUCT
Avoiding use of a single name
to pick up large amounts or
large totals
Using multiple alias names,
false identification, and pollo
names
Using associates to receive
money
19
People Receiving over $100,000 & $50,000
1200
1128
Number of Receivers over
1000 $100,000
Number of Receivers over
Number of Receivers
800
$50,000
600 607
468
400
258
200
28
51
0 16 1
2001 2002 2003 2004
20
Year
0
40
20
Ja
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$0
n-
Fe 04
b-
M 04
ar
-0
Ap 4
r-
M 04
ay
-
Ju 0 4
n-
0
Ju 4
l-
Au 04
g-
2004
Se 04
p-
O 04
ct
-
N 04
ov
-
D 04
ec
-
Ja 04
n-
Fe 05
b-
M 05
ar
-0
Ap 5
r-
M 05
Receives In Arizona
ay
-
Ju 0 5
n-
0
Ju 5
l-
WU Receives 2004-2006
Au 05
g-
Se 05
2005
p-
O 05
ct
-
N 05
ov
-
D 05
ec
-
Ja 05
n-
Fe 06
b-
M 06
ar
-0
Ap 6
r-
M 06
ay
-
Ju 0 6
n-
0
Ju 6
l-
Au 06
g-
2006
06
WESTERN UNION RECEIVES >$500 AZ
Western Union Top 10 Agents to send
Western Union Average Receive to Send Ratio
for the receive ratio
120.00
Top 10 AZ agents
100 100.00
80 80.00
60
Ratio
60.00
40 40.00
20 20.00
0 0.00
Mar-05
Mar-06
May-05
May-06
Jul-05
Sep-05
Apr-05
Jun-05
Oct-05
Dec-05
Apr-06
Jan-06
Feb-06
Aug-05
Nov-05
3/05 Date 3/06 22
PROVISION OF
ASSISTANCE
MEANS
OPPORTUNITY
PARTICIPATION 23
COYOTE MONEY
TRANSMISSION
$ S
C
AZ
SON C
SMUGGLING CONSPIRACY
PAYMENT IN ARIZONA
24
TRIANGULATION
S
AZ $
SON C1 SMUGGLING CONSPIRACY
PAYMENT IN SONORA
25
TRIANGULATION
S
C2
AZ $
SON C1
TRIANGULATED
SMUGGLING CONSPIRACY
PAYMENT IN SONORA 26
Receiver Wires Spelling Total $$
Agent # rank Received Variations Received
AMX005375 1 176 36 $269,439
AMX005375 2 87 17 $126,700
AMX005375 3 78 25 $112,620
AMX005375 4 79 17 $109,657
AMX005375 5 53 19 $96,700
AMX005375 6 55 25 $87,414
AMX005375 7 42 20 $49,500
AMX005375 8 36 9 $49,400
AMX005375 9 48 20 $43,200
AMX005375 10 24 14 $32,100
27
JAVIER’S MURDERERS
(CABORCA, SONORA)
WESTERN UNION
55 TRANSACTIONS
3/3/05-4/16/05 (43 DAYS)
•$1,590/ TRANS
•$2,030/ DAY
•$14,570/ WEEK
• $58,270/ MONTH
28
COYOTE
ORGANIZATION
PICKUP C
C
C C C
P P P P P P P P P P P P
29
FACILITATION OF
COYOTE ORGANIZATION
C
M/T C
C C C
P
PPPPPPPPPPPP
MONEY TRANSMITTER WITH KNOWLEDGE OF CRIMINAL
ACTIVITY FACILITATES BY PROVIDING MEANS OR
OPPORTUNITY FOR COMMISSION OF OFFENSES 30
RICO ENTERPRISE
C
M/T C
C C C
PP
PP P PP PP PPP P
ALL PARTICIPANTS ARE MEMBERS OF RICO ENTERPRISE,
INCLUDING MONEY TRANSMITTER 31
RACKETEERING
REMEDIES
(FEDERAL OR STATE)
TREBLE DAMAGES
ATTORNEY FEES AND COST OF
INVESTIGATION
INJUNCTION
FORFEITURE
JUDGMENT IN AMOUNT OF MONEY
INVOLVED IN MONEY LAUNDERING
32
INJURIES
RECKLESS/ NEGLIGENT
DESERT CROSSING
TRAFFIC ACCIDENTS
STRUCTURAL
INTRA-COYOTE VIOLENCE
ENFORCEMENT OF SLAVE CONDITIONS
INTENTIONAL
EXTORTION/ KIDNAPPING VIOLENCE
SEXUAL ASSAULTS
33
34
Yuma, Arizona August, 2006
SUV rollover at 80 mph
9
killed
12
injured
35
ANTI-MONEY
LAUNDERING
CHALLENGES
NEW
EVERY
DAY 36
37
CAMERON HOLMES
(602) 542-8482
Cameron.holmes@azag.gov
38
