Top 3 High-Profile Cases of PEP Corruption Involving Aliases

Corruption involving the use of aliases is not a modern age phenomena. It has a long and diverse history, spanning cultures, periods, and evolving techniques.

In the ancient empires and in the earlier European courts, for instance, in the Roman Empire, military leaders and politicians often used false aliases to commit corruption and receive bribery.

Secret negotiations were carried out in the dark using false names or aliases by the diplomats and courtiers which maintained their anonymity and saved their reputation.

Dating back to the 20th century, the father of money laundering Al Capon is known to use 30 plus aliases, when he had to bribe the law enforcement officials, to hide his true identity.

He is famously known to use the alias “Al Brown”. For 17 years, he was able to avoid arrest and prosecution by the federal authorities.

In the contemporary world, many politicians, statesmen, and even members of the general public use false identities to conduct fraud and identity theft.

This article will talk about the top three well-known instances of PEP corruption with aliases and ways how their potential in money laundering can be controlled and mitigated.

French Prime Minister Nicolas Sarkozy As “Paul Bismuth”

Former French President Nicolas Sarkozy, who pulled the strings from the echelons of power from 2007 – 2012 was found guilty of using the alias  “Paul Bismuth ” and had a secret line registered using this fake name.

Mr. Sarkozy was found to employ this line of communication to speak with his lawyer, Thierry Herzog.

He was put on trial along with a senior judge, Gilbert Azibert, and his lawyer, Thierry Herzog.

In 2014, the french police taped a conversation between Mr. Sarkozy and his lawyer in which they were found to seek the idea of offering a prestigious job to judge Gilbert Azibert in Monaco as a reward for sharing confidential information.

Subsequently the court found the French president guilty of “influence-peddling and violating professional secrecy” for trying to buy off the judge by offering a bribe to provide sensitive information for a separate case after he had left his position of influence.

Both Azibert and Herzog were also suspended and sentenced to three years in jail.

This ruling turns out to be a significant historic event in the constitutional history of Post-war France.

Earlier it has witnessed the historic trial of Sarkozy’s predecessor Jacques Chirac who introduced bogus jobs at Paris City Hall during his tenure as the Paris city mayor.

In 2011, he received a two-year suspended sentence which was the first precedent in the history of France. Chirac later died in 2019.

The former French president Nicolas Sarkozy is also embroiled in another case, scheduled for trial in 2025, for receiving millions of euros from the late Libyan dictator Muammar Gaddafi to fund his 2007 presidential campaign.

From the anti-money laundering (AML) and anti-corruption perspective, My. Sarkozy’ case is an ideal example of why high ranking officials like political party leaders, executive cabinet members of state, members of government and parliament, and military leaders are placed in the high-risk category of politically exposed persons (PEPs) in the Anti-Money Laundering industry.

They are more prone to abuse power and commit white collar crimes like bribery, corruption, money laundering and embezzlement of state funds which makes it essential to put them in the category of ongoing-monitoring of PEPs.

How 1MDB Scandal Involved Aliases?

The 1MDB scandal is a groundbreaking tale of mass sackings due to the embezzlement of state funds, corruption, bribery and money laundering which sent shock waves throughout the world and turned the Malaysian political landscape upside down.

1 MDB or 1Malaysia Development Berhad is simply Malaysian state funds that were found to bring foreign investment and partnerships and it was chaired by Najib Razak, then Malaysian Prime Minister.

This scandal turned out to be the biggest case of embezzlement, and corruption of more than $4.5bn in the modern history of the world.

It resulted in the resignation of many high ranking government officials including Malaysian Prime Najib Razak, his first lady Rosmah Mansoor and some senior government officials.

It involved misappropriation of funds by creating highly intricate layers of offshore accounts and shell companies.

The chairman of 1MDB funds, Najib Razak, had a key role in funds misappropriation by transferring $700 millions into his personal bank accounts.

Another main character who masterminded this whole scheme was Jho Low also known as Low Taek Jho.

He set up a number of shell companies across Hong Kong, British Virgin Island, and Seychelles. These shell companies served as aliases for hiding the source of money and their ultimate beneficial owners which made it impossible to trace the final destinations and origin of the funds.

He often used fake documentation to process transactions and made bogus loan documents and investment agreements. Most of these funds were used to finance the Hollywood movie “The Wolf of Wall Street”, purchase of Van Gogh painting and  a $250 million yacht.

Global banking giants in Luxembourg, Switzerland, United States and Singapore made headlines for facilitating the transaction and embezzlement of the 1MDB scandal which complicated the money trail due to layering of shell companies.

David Matthew Read As Alias ‘Demi Moore’

In 2018 under the guise of Demi Moore’s personal assistants, 35-year-old David Matthew Read and 37-year-old Marc Higley committed corruption using alias and identity theft and reported to the authorities that the actress had misplaced her American Express no-limit card and asked for a replacement as per the court documents.

After somehow acquiring Demi Moore’s social security number and her other personal details using online sources, Mr. Read used this personal information which was publicly available on the internet and sent a request to American Express for a replacement card for disguising as her, who, according to him, had “lost” her card.

Not just that, he also pretended to be Demi Moore’s personal assistant, dispatched to a FedEx facility in Santa Monica to acquire the “Black” card.

To support his claim that he was employed by the Hollywood star, he went the extra mile, Mr. Read even created a fake ID badge; he actually appeared to be her personal assistant.

Now he took advantage of the stolen card and went on a wild $169,000 shopping spree over the course of five weeks.

The investigation later revealed that Mr. Read purchased at upscale stores in New York, with the intention of eventually reselling the items.

In the meantime, Higley joined Mr. Read and had a wild shopping spree around Los Angeles, visiting the posh locations of Bloomingdales, Saks Fifth Avenue, Apple, and Nordstrom.

You may be wondering how they got caught? Well, Mr. Read committed a fairly careless blunder that led to his arrest.

He paid off a balance on some of the purchases using both his personal as well as the stolen credit card.

More proof gathered when the investigative team spotted him surveillance cameras when they were using the pilfered card in Nordstrom store.

Ultimately they were caught by the police authorities and Highley was compelled to pay $52,670 in reparations with a 14 months sentence in halfway house.

Mr. read, on the other hand, received much lengthy sentence in federal prison as he was already embroiled in another case where he stole committed identity theft and bought a luxury items like Mercedes,

Are You Looking for Ways to Reduce the Risk of Aliases?

• Choose a compliance tool that provides data on any potential alternate names for a customer throughout Customer Due Diligence procedures.
• Choose a compliance tool with ongoing PEP screening features that keep monitoring out for any potential alternate names or hidden identities of politically exposed persons.
• Choose a solution with Adverse media screening that provides updates on alternate names used by general or layman clientele.
• Opt for a system that gives a free open search feature, such as AML Watcher.

Is there Any AML Software in Place to Deal with Aliases?

Dealing with aliases and complex name variations is a significant challenge in modern day compliance.

Several criminals have used this approach to get involved in the illicit process of money laundering without being caught.

AML watcher deals with this dilemma by offering a smooth process of checking for aliases and AKAs that help detect all possible name variations as well.

By searching “Ladin” alone you can get precise results matching with “Osama Bin Laden”

Moreover, the feature of biometric AML enables the users to get the most precise results. There can be many name alterations for two different people.

Biometric screening helps resolve the challenge with the most precise match for the intended person.

Lastly, there is no such definite guarantee that every alias must be a PEP or famous personality.

They could also be infamous. In such circumstances, our adverse media screening is intelligent enough to understand the sentiment of news, thus helping in more informed decision making.

Try searching for FREE with the real time Open Search feature available at AML Watcher.