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Herstelling money laundering matter should also rope in the other participants

Feb 11, 2023 Letters

Dear Editor,

I’d like to commend the Special Organised Crime Unit’s (SOCU) recent success on the arrest of the alleged Herstelling money laundering family syndicate published by various media entities on February 9 2023. This success was most likely achieved with the help of the Financial Intelligence Unit (FIU) which is responsible for processing Suspicious Transaction Reports (STRs), although they did not much get much credit from the press. The staggering GY$4.1B in laundered funds does cause me to ask two simple questions.

Firstly, what plans for criminal asset recovery does SOCU have in place? Criminal prosecution goes as far as to punish culprits and uphold the law so that an example is made out of the Herstelling family for other Guyanese. Asset recovery would be a welcome gift to the public coffers and show that SOCU is a net gain for the taxpayer dime. The UK’s Serious Fraud Office essentially pays for its own operations through recovered assets and court fines. In future, it is important for journalists and the public to ask questions about asset recovery to encourage this element of financial crime prevention. A money laundering report is incomplete without this crucial factor. For illustrative purposes, GYD$4.1B is nearly as much as the entire budget allocation for Sport ($4.3B) in 2023. In other words, a full asset recovery or court fine, could just about triple current pensions (i.e. appx. GYD $2.1B of current government expenditure on pensions (budget speech data) + GYD $4.1B in asset recovery of laundered funds = GYD$6.2B or triple the expenditure for pensions) for one year. Not to mention that the court fines could well exceed the GYD$4.1B in laundered funds if we prosecute the companies behind these crimes.

This brings me to my second question. What are the arrangements being made to prosecute these businesses? It takes two to tango and the other half of the coin is the Chinese businesses that were using this family to launder their money. Given the significance of the amount, I dare posit that it is perhaps more in the public interest to prosecute the foreign businesses responsible and not just the private citizens. If you have seen ‘The Ozarks’ (a popular Netflix show about money laundering) then you would know that American law enforcement habitually cuts deals to obtain useful information to bring down the bigger fish. I wonder what this case could have achieved if SOCU had offered the family a reduced sentence in return for their cooperation to incriminate the businesses they were working for.

This case provides a golden opportunity for Guyana to showcase the excellence of its AML (anti-money laundering) regime to avoid any future blacklisting from CFATF (Caribbean Financial Action Task Force). I do hope that the authorities have recognised the opportunity to make a request for mutual legal assistance to the Chinese embassy in accordance with FATF (Financial Action Task Force) Recommendation 37 so that we can recover the proceeds of crime and bring the 22 culpable companies in China to account. Unfortunately, I’m sure that even the layman might describe this international standard for fighting financial crime to be wishful thinking given political interests and the likelihood that nation state’s would rather protect their domestic companies. Nonetheless, we should be seen to be working toward a golden standard in Anti-Money Laundering.

SOCU at the very least appears to be turning the gears in the right direction. I wish our investigators every success.

Yours Faithfully,

Othniel Lewis

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