Introduction of Financial Crimes Speaker Alexander Vasilescu (September 16, 2008)
2008 Speeches
Ambassador Robert J. Dieter’s Introduces Financial Crimes Speaker Alexander Vasilescu (September 16, 2008)
Central Bank
Belize City, Belize
Good morning.
It is my pleasure to welcome members of the Central Bank, Financial Intelligence Unit, and commercial banks to today’s presentation on the topic of financial crimes. I also want to thank Governor Campbell for making the Central Bank facilities available for the forum today.
We all are familiar with the saying “Follow the Money.” The truth is that if we want to strike at the heart of organized criminal activity - if we really want to hurt ‘em where it hurts the most, then hit ‘em in the pocketbook.
Illegal financial transactions, including money laundering, embezzlement, and illicit financing, share common threads: dishonesty, deception, and fraud.
But, these crimes are most often not independent unto themselves. They are directly linked to other, more heinous criminal activity - like drug trafficking that undermines the social fabric of our societies and victimizes our youth; sex trafficking that victimizes vulnerable women and young girls; and terrorist activity and murder.
The worldwide scale of financial crimes is huge. The International Monetary Fund, estimated years ago that the aggregate size of money laundering throughout the world was between two and five percent of the world’s gross domestic product and these figures likely underestimate the far-reaching scope of these crimes.
Financial centers and economies that lack adequate controls are particularly vulnerable to financial crimes because money launderers and other criminal elements go for the weak spots. They tend to exploit countries and financial systems with weak or ineffective countermeasures. Financial criminals continuously look for new routes to launder their funds. As we know, postponing or neglecting the implementation of rigorous anti-fraud detection measures and prosecution of these crimes is dangerous. As action is deferred and this activity is overlooked, organized criminals become entrenched and more pervasive.
Corruption is both a cause and result of financial crimes and financial crimes have far-reaching negative impacts that elude quantification.
We most often focus on the micro level - individuals become corrupted; banking and governmental institutions gain dubious reputations. But often overlooked is that on a macro level, the economic potential of an entire nation is undermined, and in extreme cases even halted.
Financial crimes not only damage the integrity of individuals and individual financial institutions, they also lead to an associated dampening effect on foreign direct investment. Legitimate investors - the kind who grow a vibrant economy and provide productive jobs - seek to avoid countries whose commercial and financial sectors are perceived to be subject to the control and manipulation of money launderers and financial criminals. For this reason, detecting and combating money laundering and other illicit financial activity is a significant precondition for wide-spread, lasting economic development.
You in particular - as employees of entrusted financial institutions - have a critical role in limiting the frequency and scope of financial crimes and in preserving the integrity and reputations of your organizations. Financial institutions must constantly strive to promote transparency in corporate and government budgeting by encouraging training for proper accounting and reconciliation and ensuring that money is accurately routed and traced.
A significant deterrent to illegal financial activity is effective prosecution -- this not only deters financial crimes like money laundering, but also prevents drug and arms traffickers and other deadly criminals from reaping benefits from their heinous practice.
Our speaker today is here to share his experiences and insights in investigating and prosecuting financial crimes, to exchange ideas and suggestions for effective control mechanisms, and to support you in your role in identifying and prosecuting financial malfeasance as you work to improve the stability of your banking system.
If we come away today with a greater appreciation of the importance of preventing financial crimes and leave with a renewed commitment to eliminating corruption in the financial system by dedication to transparency and accountability, this session will have been a success. Let’s work together to put a stake in the heart of criminal organizations and strive to secure a more prosperous world, free of the evil that financial criminals and cartels promote.
And now, it is my pleasure to introduce to you Mr. Alexander Vasilescu.
Mr. Vasilescu is the Regional Supervisory Trial Counsel for the Securities and Exchange Commission’s (SEC) Division of Enforcement. As trial counsel, he not only supervises the SEC’s New York Regional Trial Unit but also advises senior management on enforcement and charging recommendations for investigations in our federal court system.
As many of you know, the SEC is a United States government agency having primary responsibility for enforcing the federal securities laws and regulating the securities industry and stock market. It was established in 1934 as an independent, non-partisan, quasi-judicial regulatory agency. Congress empowered the SEC with authority to bring civil enforcement actions against individuals or companies found to violations of the securities law, such as accounting fraud, providing false information and insider trading. The SEC cannot itself bring a criminal case, but in those cases which include a criminal violation, the SEC can refer the matter to the U.S. Department of Justice for prosecution. In addition, the SEC can initiate a parallel civil case.
Mr. Vasilescu is a graduate of Tufts University, Medford, Massachusetts, and received his law degree in 1987 from Cornell Law School in Ithaca, New York. He has worked for the SEC since 1995 and has conducted a variety of investigations and enforcement actions. One that we all are probably familiar with is his obtaining an insider trading settlement from Martha Stewart.
Others include:
- Obtaining emergency relief to halt a $500 million Ponzi scheme conducted by the Foundation for New Era Philanthropy.
- A trial victory over broker-dealer Castle Securities and its principal who engaged in securities manipulation.
- Obtaining emergency relief against Dana Giacchetto and The Cassandra Group, Inc., an investment advisor who defrauded clients, including prominent actors and artists.
I am pleased that the U.S. Embassy is able to sponsor Mr. Vasilescu’s visit to Belize. Sessions such as this one are intended to encourage a free exchange of ideas and to strengthen our partnership in combating the pervasiveness of financial crimes.
I trust that you will come away with new ideas and strategies for fraud detection and prosecution, and develop a long-lasting relationship with your new contact in the United States.
Thank you and I hope you enjoy the presentation.