Mr Simon and the Queen Bee: Traffickers Above Suspicion at HSBC
Translations:
From 2002 until 2007 at least, HSBC Private Bank was the scene of an alliance between Atlanta-based ecstasy dealers and an Israeli arms trafficker, former Al-Qaeda supplier and money launderer for Mexican cartels.
By François Pilet, Marie Maurisse and Aliaume Leroy
Night was falling over an Atlanta suburb on Monday 22 March 2004 when Sergeant Sean Mahar’s patrol car stopped at a red light behind the blue Mercedes. He could see the long black hair of the two women sitting in the front. The passenger was wearing her seatbelt, but the driver’s one was clearly hanging down beside the door.
Sergeant Mahar tailed the car as it drove along Buford Highway. After 200 yards, the officer turned on his blue light. The car immediately swung left into the parking lot of an Asian supermarket, on the corner of McClave Drive, and stopped in the first free space.
The driver showed a licence in the name of Jenny Nguyen. The passenger was speaking nervously into her cellphone in a language the sergeant could not understand. She appeared to be looking out for someone. The police officer decided to search the car. In the trunk, a large amount of cash was carefully arranged in bundles of $10, $20, $50 and $100 bills tied with elastic bands in two white cardboard boxes and a plastic bag. That day, Jenny Nguyen’s car contained $414,870 from the sale of ecstasy on the streets of Atlanta by a Vietnamese gang.
When Sergeant Mahar stopped them on the corner of Buford and McClave, the bills had been on their way to accounts 31241 and 14025 at HSBC Private Bank in Geneva. The plan – done many times before – had been to transfer the cash in small amounts through independent money transfer offices such as An Chau Services and HO Express.
The data stolen from the Swiss bank by the computer analyst Hervé Falciani, and obtained by Le Monde and the International Consortium of Investigative Journalists (ICIJ), shows that the accounts belonged to two diamond traders: Toronto-based Anh Ngoc Nguyen, alias “Lenny”, and Alain Lesser from Antwerp in Belgium.
“Lenny” collected the money sent from Atlanta and used it to buy diamonds through Lesser. The precious stones were then forwarded to Vietnam for delivery to a man called “Uncle Five”.
A few days after Jenny Nguyen’s arrest, documents referring to the two HSBC Private Bank accounts were found during a raid on a house in Atlanta. DEA and police agents also discovered diamonds, bundles of dollar bills and a Beretta 9mm pistol.
The investigation into the Vietnamese ecstasy dealer (see original court cases at the end of the article), codenamed “Operation Candy Box”, had been going on for over a year. The U.S. Drug Enforcement Administration (DEA) did everything to achieve its ends. Jenny Nguyen’s arrest on the corner of Buford and McClave, for instance, owed nothing to luck.
An hour before he drew up behind the Mercedes, Sergeant Mahar had met with DEA Special Agent Kenneth McLeod at a gas station to receive his instructions. McLeod had asked him to find an excuse to stop Jenny Nguyen’s car. He knew from wiretaps that the car was loaded with cash. A seemingly unexpected check was meant to allow the investigators to gather evidence. They did not want to spoil the plan before the net closed on the dealers. Jenny Nguyen had made Sergeant Mahar’s job a whole lot easier by forgetting to put on her seatbelt.
Ten days later, “Operation Candy Box” led to the arrests of 130 people and the seizure of 400,000 ecstasy tablets, a stash of weapons and $6 million in cash. The gang had been supplying drugs to 18 U.S. cities from Canada since at least 2002.
Organigramme of the Vietnamese dealers gang: structure, members and associates
The customer is king
Thi Phuong Mai Le, the gang’s chief money launderer, was dubbed “Queen Bee” or “Big Boobs” by her associates. According to the FBI, the 38-year-old Vietnamese was capable of laundering $5 million of drug proceeds each month. The U.S. authorities estimate that at least $8 million passed through HSBC in Geneva. Thi Phuong Mai Le was sentenced to 15 years in jail in 2008.
HSBC’s two diamond-trading clients, on the other side, were able to continue their business without any fuss. In January 2005, nine months after the Americans made a request for mutual assistance regarding Alain Lesser’s role in “Operation Candy Box”, HSBC bankers proposed to set up an offshore company in order to enable him to evade Belgian tax.
The bankers were even more indulgent towards Anh Ngoc Nguyen, the Toronto-based diamond trader who received the drug proceeds directly on his Swiss account. When the United States asked Switzerland to block the $300,000 he held with HSBC, the bank advised him to hire the law firm Baker & McKenzie to oppose the order.
28-year-old Rodolphe Gautier, who came third in the Geneva young lawyers’ public-speaking contest in 2001, a sailing enthusiast and specialist in white-collar crime, managed to get the sequestration lifted on a technicality.
At this stage, HSBC could have quietly shown its diamond-dealing client the door and told him to launder his money elsewhere. They did not.
As soon as the freeze order was lifted, the bank allowed Ang Ngoc Nguyen to open a second account to transfer the funds targeted by the U.S. The diamond trader made the most of this opportunity, siphoning off $200,000 in the process. It took months of proceedings between the United States and Switzerland to have the second account seized. In 2007, the year Hervé Falciani’s stolen files stop, Anh Ngoc Nguyen was still a client of the Geneva bank.
The diamond dealer from Toronto may have duped the Swiss authorities, but the game was much less easier when he sat down for questioning with Special Agent McLeod. Arrested during a trip to the United States with his family, he quickly agreed to cooperate. The facts he revealed are damning for HSBC.
Anh Ngoc Nguyen’s testimony revealed that the Swiss bank had not just held the funds of a gang of Vietnamese drug dealers. Its coffers had for years played hosted a vast crime cooperative, where drug proceeds were used to finance diamond-trading and gunrunning activities. The diamond trader’s confession also put the DEA investigators back on the trail of an Israeli arms trafficker they had been following since 2001.
Anh Ngoc Nguyen explained that one of his main partners in the money-laundering diamond scheme was a man he had met soon after opening his Swiss account, in 2002. He only knew him as “Moshe”. The DEA had their suspicions about who this man might be. They showed Anh Ngoc Nguyen eight photos to verify their belief. He pointed the one of “Moshe”, whose real name is Shimon Yelinek.
Having identified their man, the Americans ramped up their investigation, and two new investigators were brought in to assist Special Agent McLeod. In return for Anh Ngoc Nguyen’s cooperation, the U.S. authorities dropped the charges of money laundering against him in 2010.
Gunrunning
The files Hervé Falciani spirited out of HSBC show that Shimon Yelinek, who was born in Israel on 23 January 1961, had been a loyal client of Edmond Safra’s Republic National Bank since 1995. Despite being implicated in major arms trafficking since 2001, he was allowed to keep his HSBC Private Bank accounts until at least 2007, at which point they contained a little over $850,000.
Shimon Yelinek performed his first deal at the age of 40. He and his wife Limor moved into an apartment on the 23rd floor of Edificio Mirage, one of the highest tower blocks in Panama City with a view across the bay to the old colonial city. His associates knew him as “Mr Simon”, and he used the codename “Sierra” when answering the phone.
A name and phone number for “Mr Simon” first appeared on a handwritten note found during a Belgian police raid, in 2001, as part of an investigation into a network trafficking arms and diamonds between Liberia and Sierra Leone.
This network allowed Al-Qaeda to purchase tens of millions of dollars’ worth of precious stones to escape the freezing of its bank accounts by the U.S. authorities in the months before the 9/11 attacks. The FBI gave Shimon Yelinek’s name to the Belgians after they had traced the number on the note.
The organization’s brain was a Lebanese Shiite diamond trader and gunrunner named Aziz Nassour. His trail leads to Geneva, too. Hervé Falciani’s stolen files reveal that Aziz Nassour had also held an account at the Republic National Bank since 1991. He closed it in 1997, just after Shimon Yelinek opened his.
Yelinek has never been prosecuted for his links with Al-Qaeda’s diamond suppliers. Oddly enough, it was a different affair that brought him down.
On 7 November 2001 the cargo ship Otterloo, a Panamanian-flagged vessel, unloaded 14 containers filled with 3,117 Kalashnikovs and 5 million cartridges at the Colombian port of Turbo. The weapons came from the Nicaraguan army supplies. On paper the cargo was meant to reach the Panamanian police, but Shimon Yelinek had made arrangements for it to be delivered to its true consignee: the AUC, a Colombian paramilitary group specialising in cocaine production and seaborne drug shipments.
Sadly for Yelinek, news of the delivery got out and the affair became known to the world as the “Otterloo incident”. A year later, Shimon Yelinek was arrested at Tocumen airport in Panama City.
HSBC could not have remained unaware of its client’s illegal activities. The Washington Post revealed the links between Shimon Yelinek and the Aziz Nassour/Al-Qaeda nexus at the end of 2002, and the international press had given wide coverage to his arrest in connection with the “Otterloo incident”. Yet the data we have obtained shows that Shimon Yelinek was able to hold onto his Swiss accounts throughout this period and for many years thereafter.
Even more startling information has also come to light. The DEA’s investigations into the Vietnamese dealers in Atlanta revealed that Shimon Yelinek was able to use his HSBC Private Bank account to buy his way out of a Panamanian jail in 2004. Details of money transfers from Ang Ngoc Nguyen’s account show that $465,000, paid to Shimon Yelinek by the dealers, was sent on to Panama in 2003 via another Swiss bank. One of the recipients of these funds was Shimon Yelinek’s lawyer in the “Otterloo Incident”. The half a million dollars from Switzerland presumably paid for more than just his lawyer.
In April 2004, as if by magic, Panama’s Supreme Court dropped the charges against Shimon Yelinek. In a diplomatic cable published by WikiLeaks in 2010, the chargé d’affaires at the U.S. Embassy in Panama described the abandoning of proceedings against the Israeli as “yet another example of Panama’s Supreme Court deep-sixing a high profile corruption case on trumped-up technicalities”. He stated that such “egregious corruption (…) poses a threat to U.S. economic and security interests in Panama”. The cable also indicated that the DEA would still keep a close eye on the gunrunner’s next moves.
Their investigations bore fruit seven years later. On 23 February 2011 the U.S. Department of the Treasury put Shimon Yelinek’s name at the top of an international sanctions list against a network laundering money for the Mexico’s Sinaloa drugs cartel, one of the world’s most powerful crime syndicates. Yelinek was under the direct authority of the Cifuentes drug trafficking network, a Colombian organization affiliated to the Sinaloa cartel.
Although he has still not been charged with any crime, this measure compels all banks to freeze Shimon Yelinek’s assets and disclose them with the U.S. authorities. The Department of the Treasury has extended these sanctions to his wife’s children’s clothing company.
HSBC has refused to say whether the accounts that belonged to its embarrassing client between 1995 and 2007 were still active when the U.S. authorities announced their sanctions in 2011.
The United States have not provided any precise details about Shimon Yelinek’s involvement with the Sinaloa cartel. Their links were well established, according to the U.S. Bureau for International Narcotics and Law Enforcement Affairs (INL). The Mexican organization had, for instance, approved the 2001 “Otterloo incident”. The arms deal had been planned by the Colombian cartel.
Should these suspicions be confirmed, HSBC might one day have to explain why its Geneva subsidiary silently sheltered a man it had known for years was involved in narcotics and arms trafficking, linked to Al-Qaeda and who turned out to be a private money launderer for Colombian and Mexican drug barons. On February 18, Geneva prosecutors searched the offices of HSBC Private Bank in Geneva as part of a probe into suspected ‘aggravated money laundering’.
Ongoing investigations
The heads of several cartels have been arrested in the United States and Mexico in recent months, and they are due to stand trial soon. The DEA and the Department of the Treasury refused to comment about “ongoing investigations”.
The HSBC manager responsible for Shimon Yelinek’s account, M. B., was a member of the MEDIS (Mediterranean, Diamonds and Israel) department. He left the bank in 2012 following the forced disbanding of his “desk” and his entire clientele. M. B. quickly found a job with another private bank in Geneva. He did not respond to the messages we left at his home. Shimon Yelinek reportedly now lives with his wife and children in Israel.
Thi Phuong Mai Le, the Vietnamese gang’s “Queen Bee”, was extradited from the United States and tried in Canada in August 2013. She broke down in tears at the witness stand and apologized to her daughter, whom she had not seen since her own arrest ten years earlier. Her daughter was six years old at the time.
This article was originally published in French in the Swiss newspaper l’Hebdo.
Original Documents of “Operation Candy Box” Court Cases:
– Testimony of Sergeant Sean Mahar
– USA vs Jenny Nguyen and Nhung Nguyen