Money Laundering: The Kazakhgate Case

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Table of Contents

The Issues in the Litigation
Laws Under the UNCAC Were Broken
Key Issues Now in Terms of the Way the Illicit Money is Spent
References

The Kazakhgate case is a proceeding carried out as a result of a scandal or incident involving James Giffen. He was an American businessman and former advisor to the president of Kazakhstan, Nursultan Nazarbayev. U.S. authorities charged Giffen with paying bribes to Nazarbayev and Nurlan Bagumbayan. Nurlan was former prime minister of Kazakhstan, in the 1990s to gain contracts for Western firms over the Tengiz oil reserves. James was detained in 2003 while attempting to board a flight to Paris at John F. Kennedy International Airport in New York (United States V. James et al., 2015). However, it was later discovered that he was not attempting to leave the country. This is because he had a return ticket, and the trip had been routinely scheduled for business. He was accused of breaking the Foreign Corrupt Practices Act of 1974 and money laundering by the U.S. attorney’s office for the Southern District of New York. I agree with the court’s decisions since James took all measures for personal gain, and the laws broken under UNCAC are bribery, conspiracy, and money laundering.

James had accepted payments from the Swiss bank account to transfer funds to other persons in this case. The court’s decision was released on April 18, 2008, and it was discovered that the defendant had bribed officials. However, the court permitted the U.S. government to seize his possessions and attorney fees already incurred. I agree with this decision because the defendant broke the law. This is because he was a businessman who used his position for personal gain at the expense of others. The main issues, in this case, were to determine whether the defendant gave money to Nazarbayev and Bagumbayan for personal reasons or to supply U.S. companies.

The Issues in the Litigation

The litigation issues were determining whether James’ bribery violated the Foreign Corrupt Practices Act and whether his conduct constituted money laundering. The issues other issues were money laundering, violation of Swiss banking secrecy laws, conspiracy to commit these crimes, and violations of the United Nations Convention against Corruption. The judge’s decision was complex because there were issues in the case. The main one was to determine if the defendant was bribing Nazarbayev and paid him millions of dollars (United States V. James et al., 2015). However, the amount was traceable to a Swiss bank account, constituting a violation of the Foreign Corrupt Practices Act. He also had to determine if the defendant broke currency laws by making over $1 million transfers from the accounts in question (Del Sordi, 2018). The issues with these transactions were that they involved cash deposits from foreign sources, unrecorded wire transfers, and third parties involved in transferring funds.

Laws Under the UNCAC Were Broken

Bribery is the law under the UNCAC that was broken in the Kazakhgate case. In this case, the defendant was willing to pay bribes to win contracts for a mining company. The companies that he was bribing were companies that worked with the government of Kazakhstan. Giffen was guilty of violating the United States Foreign Corrupt Practices Act. This act is committed when a person is bribing officials for an act of corruption (Del Sordi, 2018). The material in the case is that he worked as an advisor to Nursultan Nazarbayev, and in return for his efforts, he received money from Kazakhstan. This proves that he used his position for personal gain at the expense of others by giving bribes to Nursultan Nazarbayev and Nurlan Bagumbayan and then transferring funds from Switzerland.

The other law that was broken in Giffen’s case was money laundering. In this case, he moved funds that he received from Kazakhstan to the United States with the help of a Swiss Bank. The material in the issue is that the accused could move his money from Kazakhstan to Switzerland and then from Switzerland to the United States because he had help from a Swiss banker. He was moving his money without explaining where it came from or why he wanted to move it (Del Sordi, 2018). Hence, it had no connection to where it originated and did not have any legitimate purpose, thus, constituting the crime of money laundering.

The broken rule during this scandal is conspiracy and violation of UNCAC (United Nations Convention against Corruption). A scheme is when a group of two or more persons violate the law or commit a crime. It was proven in this case because the accused gave money to Nazarbayev for his gain (Ziouvas, 2018). This confirms that Giffen broke the conspiracy laws when he aided Nazarbayev and Bagumbayan in their acts of corruption. In addition to violating the offenses, one more crime occurred during the scandal. The judge’s decision involved violations of the United Nations Convention against Corruption (UNCAC) because it stated that he had been using his position to influence decision-makers within Kazakhstan.

Key Issues Now in Terms of the Way the Illicit Money is Spent

The key issues now, in terms of the way illicit money is spent, include laundering and for what purposes. In this case, Giffen was buying homes, and cars through his company. The defendants’ company was taking money illegally or laundering them from Kazakhstan. The accused was charged with federal bribery for allegedly opening Swiss bank accounts and transferring $20 million (Ziouvas, 2018). Additionally, he was paying for the tuition of prestigious boarding schools for the relatives of Kazakh leaders and purchasing millions of dollars’ worth of jewelry. According to his legal representatives, the U.S. government had full knowledge of and consent for his actions. At his trial, he asked for access to classified documents to support his assertions. The government objected to the disclosure of sensitive information. There is a concern that the accused had been using his position to have business dealings with governments to receive money from them. The problem was that he would be permanently able to use this money for personal needs rather than for the company.

Other issues include how officials acquire wealth in most countries and the question of how to prevent corruption. During the hearing, it was stated that Giffen was unaware that he was engaging in corruption. However, he knew he was violating the Foreign Corrupt Practices Act, an offense under U.S. law. Nonetheless, the defendant knew Kazakhstan has been trying to develop its economy and reduce poverty (Ziouvas, 2018). He knew that they had been trying to privatize other companies in the country, and because of these reasons, he feels this makes him innocent of any wrongdoing in the case.

In conclusion, in this case, the main issues involved breaking the Foreign Corrupt Practices Act, money laundering, and bribery of Kazakh leaders. There is a concern that there are concerns about Giffen’s use of the funds and would these funds be used for personal needs or company. His use of foreign funds and his position with his company were significant issues throughout the case. These issues were also important because they exposed his lack of knowledge regarding the Foreign Corrupt Practices Act. People should learn that it is important to understand the laws in a country and not be bribed, accept a bribe, launder money or take any other action that the UNCAC is against.

References

Del Sordi, A. (2018). Sponsoring student mobility for development and authoritarian stability: Kazakhstan’s Bolashak programme. Globalizations, 15(2), 215-231.

Ziouvas, D. (2018). International asset recovery and the United Nations convention against corruption. In The Palgrave Handbook of Criminal and Terrorism Financing Law (pp. 591-620). Palgrave Macmillan, Cham.

“United States V. James H. Giffen, Et Al. | CRIMINAL-FRAUD | Department of Justice.” United States V. James H. Giffen, Et Al. | CRIMINAL-FRAUD | Department of Justice, Web.

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Money Laundering: The Kazakhgate Case

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