Zwartz Talk

Money Laundering and the Luxembourg Connection

Money Laundering #1

And You Thought it Was the French Connection

by Scott [The Shadow] Zwartz

April 2, 2016

    How to Spot Money Laundering

  in the Courts 

      It starts with the general observation — If something is too good to be true, then it isn’t true.

       What does this “Too Good To be True” tip off look like in the court system?  One common sign is an outlandish action by a judge.  A high jury verdict cannot start money laundering because it would require secrecy and 12 people are not going to be able to keep a secret.  Thus, the Too Good To Be True tip off starts with the judge.

      There are couple prime tips offs.  First, the judge issues a huge “remittitur.”  We see this when a jury awards a plaintiff $25 Million and the judge reduces it to $2 Million.  That is like giving the defendant $23 Million. A tip off that money laundering may be occurring does not mean that it is happening.  It only alerts one to pay attention.

    Second,  the judge makes an excessively high award of attorney fees.  There is the tale of a state court judge in Washington who wanted an appointment to a federal judgeship, but he did not know the US Attorney General.  Thus, he made an unusually high award of attorney fees to a friend of his who was presenting a child in a serious personal injury case.  The judge later explained that since he did not know the US Attorney General, he had to buy his judgeship.  Thus, he made the high award to his lawyer friend, who was representing the child, so that his friend, who knew the Attorney General, could give a few hundred thousand dollars to the Attorney General.  That way there was no direct transfer of money between the state judge and the US Attorney General.

     The scheme was uncovered when the child’s parents complained so much to so many authorities, that a brief investigation uncovered the theft of the child’s money. Nothing happened to the judge or his friend, but he did not get appointment to the federal judgeship.

    Why Judges Engage in Money Laundering

    Duh!  The answer is the same explanation why drug traffickers engage in money laundering. Greed and Corruption.

        Judges want the things that money can buy, like admission of their children to prestigious schools, expensive vacations, second homes, and just plain old money.

     Let’s say the judge wants his son admitted to an expensive private school.  In 2013, the elementary schools ranged from the high at The Buckley School which was $28,846.00 per year per students to a low at St. Paul The Apostle which was “only”  $11,000 per year.

    For private high schools, the range was from Brentwood’s high at $32,950 to “only”  $14,340.00 at  Pilgrim.

    Not only judges who are Mom’s and Dad’s want the best that money can buy, but the same holds for grandparents who are judges.

How Much Do Los Angeles

Superior Court Judges Make?

    In 2013, they had a median salary of $221,000.00, but in Orange County, they made only $155,000.00.  [This link explains the disparity —  http://cnn.it/1E0z45k May 24, 2010, CNN Special Investigations Unit]

       In 2012, average non-equity partner in a DTLA law firm made over $333,000.00 per year and equity partners made over $880,000.00 per year. Judges figure that if they were in private practice rather than sitting on the bench, they would be in that $350,000.00 to $880,000.00 bracket.  One also has to remember that many judges score high on hubris and it galls them that the “clowns” appearing before them may be making three to fours times as much money.  Many judges also run in the same social bracket and if your income is only 1/4 that of the “Jones,” it’s hard to keep up.

     You get the picture — there’s no need to elaborate on all the things that judges want but cannot afford.  Yet, so many of them have those things … and more.

    That’s right, we have come full circle to Money Laundering.

 Just Whom Are the Judges Ripping Off?

   Oh, excuse me.  Assuming arguendo that judges were hitting up people for cash under the table, just who would be the targets?  The simple answer.  Anyone with money to pay.

      As we alluded to previously, insurance companies are a easy mark, but then are they really been ripped off?  If a judge reduces a punitive damages award by 90% and the insurance company pays 20% of that saving to the judge, is the insurer being ripped off?    Money laundering can be convoluted.  The person who is  shafted is the plaintiff to whom the jury awarded $25 Million but which the judges lowers to only $2 Million.  The money to the judge will be coming from the insurance company, assuming hypothetically any judge would ever be the recipient of such funds.  [Oh, Shirley, there is never a dishonest judge.]

    Another easy mark for judges are cities and counties who have to pay attorney fees when they lose a case.  Senate Bill 1818, for example, requires the City to pay a developer’s attorney fees if he sues the city for not allowing him to build as he pleases under SB 1818 (Affordable Housing).  There have been some griping that when parties sue various cities and towns for violating California’s Environment Protection Act called CEQA, the judges make absurdly high attorney fee awards to the Plaintiff attorneys.   Lawyers who put in minimum time can rake in $250,000.00.  Some attorneys who have done virtually nothing can get an attorney fee award of $750,000.00.

    We could go through the hundreds of cases seeing how much the judges are awarding in these CEQA cases and find some interesting things.  Attorneys who are known not to be participating in any sort of kick-back will submit bills for 1/3 to 1/7 of other attorneys, who have done substantially less work.

     Catching these discrepancies is virtually impossible as it takes an insider on each case to know who spent how much time on one of these huge environmental cases. The public doesn’t have a clue how many millions of dollars in extra attorney fees are sucked out of California cities, towns counties and other public agencies in the form of excessively high awards of attorney fees to plaintiff counsel.  How much of those high lawyer fees end up being laundered and coming back to the judges is unknown.  It could none.  It could hundreds of millions.  Who knows?

What is the Key to Successful Money Laundering?

     The key for judges is the same as for any other crook — Don’t get caught.  Money laundering calls for professionals with over seas connections.  Luxembourg has traditionally been Europe’s #1 money launder ahead of both Switzerland and Germany.

http://bit.ly/1S1Flri November 3, 2015, Germany Second Only to Luxembourg in Money Laundering Risk, Says Report

http://bit.ly/1NEipvy August 25, 2015, Luxemburger Wort, “Luxembourg Performs Poorly in Anti-money Laundering Index”

     If a judge wants to launder money, it’s good to have a friend with connections in Luxembourg.  It is especially helpful to have a friend with connections high in the Luxembourg government.  As the articles make clear, money laundering in Luxembourg occurs because government officials are behind making Luxembourg the number one European county for money laundering.  They expressly make the laws favorable to money laundering so that Luxembourgians can make money as the middle men in the transactions.  Needless to say, money laundering is a game of whom you know.

     Some have quipped that the quickest way to find out if a judge is taking kick backs is to look not at his bank account but at the number of Luxembourgians he/she knows. LOL

How to Stop Judicial Corruption

       You can’t.  Even if you knew which judge was taking kick backs and laundering the money overseas, law enforcement would have to try him/her in a court.  The judge’s money launder knows the names of a plethora of other judges who are doing the same thing.  Law enforcement is unlikely to know which judges are on the take.  For the prosecutors, it becomes a crap shoot.

    Theoretically it is possible that the feds could tap into one money launder and follow him around for a year or two with wire taps and all the other techie things which they can now do under the Patriot Act, and then sweep up several judges and justices at one time.  Frankly, few judges are angels.

  “Who knows what evil lurks in the hearts of men? The Shadow knows.”

 

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