05TBILISI3205, GEORGIA/ANTI-MONEY LAUNDERING PROSECUTION

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Reference ID Created Released Classification Origin
05TBILISI3205 2005-12-09 03:48 2011-08-30 01:44 UNCLASSIFIED Embassy Tbilisi

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 TBILISI 003205 
 
SIPDIS 
 
STATE FOR INL, EUR/ACE, EUR/CACEN 
DOJ FOR OPDAT (LEHMANN/NEWCOMBE), AFMLS, OCRS (STONE) 
FBI FOR PHILLIP GADD 
 
E.O. 12958: N/A 
TAGS: SNAR PGOV OTRA KCRM KJUS GG
SUBJECT: GEORGIA/ANTI-MONEY LAUNDERING PROSECUTION 
UNIT TAKES BILLION-DOLLAR CASE TO TRIAL AND PASSES 
POLYGRAPH TEST 
 
1.  Summary.  The DOJ supported anti money-laundering 
(M/L) unit of the Georgian Prosecutor's Office scored 
a first ever in Georgian jurisprudence by having a 
witness testify at trial pursuant to a plea bargain 
agreement. The case charges that the president of a 
local bank (and vice premier of Georgia in 1992) 
directed the laundering of a billion dollars through 
his bank. Further, in an affirmation of the eliteness 
of this unit and the confidence placed onto its 
members, 14 out of the 15 members passed a second 
(follow-up) polygraph test administered two weeks ago 
by a team of visiting FBI agents.  End Summary. 
 
Background 
---------- 
 
2. The Georgian Prosecutor's Office created a vetted 
unit last year to tackle high-level money laundering 
cases.  At that time, all unit members had to pass a 
polygraph administered by the FBI to gain entry into 
the unit. With USD 30,000 in INL funds, Post DOJ 
Resident Legal Advisor renovated and equipped a stand- 
alone office owned by the Prosecutor's Office in the 
old section of Tbilisi and conducted a series of 
intensive trainings in the investigation and 
prosecution of these types of cases. 
 
Gamma Bank Trial 
---------------- 
 
3. This expenditure of money, training, and effort has 
paid off.  To date the unit has initiated several 
significant investigations, each involving the 
laundering of millions of dollars received from banks 
in Russia. One of these, dubbed the "Gamma Bank" case, 
is currently in trial. Amiran Kadagishivili, the 
president of Gamma Bank, is in pre-trial detention and 
charged with receiving up to a billion dollars from a 
bank in Moscow over the past few years, and in turn 
wiring the received amounts to different banks in the 
US and elsewhere. Also, Gamma Bank was an authorized 
government collection agent for utility bills, notary 
fees, etc.  The bank collected a million dollars, 
which instead of being turned over the government, was 
wired to an account in Montenegro.  From there the 
money was transferred back into Georgia to shell 
accounts controlled by relatives of Kadagishivili. 
 
4. Although trial commenced in June, hearings have been 
held only sporadically, with a total of five held to 
date. At a recent hearing, a bank cashier who flipped 
pursuant to a plea bargain and pled guilty to 
conspiracy to money laundering, testified that 
Kadagishivili had ordered her to create false loan 
accounts through which to pass funds.  She was cross- 
examined by the defense counsel on the validity of her 
plea.  Refusing to backtrack on her position, she stood 
firm (despite tears) in her assertion of her own guilt 
and that of the defendant's. 
 
5. This hearing was quite significant as it showcased 
for the first time in Georgia the implementation of 
the trial techniques advocated by Post RLA and 
recently implemented into Georgian law; namely, use of 
a witness testifying pursuant to a plea bargain. The 
plea bargain provision was recently put into Georgian 
law upon recommendation by the RLA. The prosecutor 
handling this witness learned the technique at both a 
study tour sponsored by DOJ and a trial advocacy 
course taught by the RLA and visiting DOJ experts. 
 
Polygraph 
--------- 
 
6.  Two weeks ago all eleven members of the unit were 
administered polygraph tests by a team of visiting FBI 
agents.  Also, four M/L investigators from the 
Ministry of Internal Affairs were polygraphed.  Only 
one person (a prosecutor three months new to the M/L 
unit) registered deceptive on the question as to 
whether he/she had accepted bribes in connection with 
their work. By order of the Prosecutor General, this 
prosecutor was immediately dismissed from the unit. 
 
7.  Post hereby makes special mention of and offers 
its thanks to the four FBI Special Agents - Phillip 
Gadd, Unit Chief; Joseph Edwards from New Orleans, LA; 
Jeffrey Newton from Columbia, SC; and Michael Shafer 
from Lexington, KY - for their dedication, hard work, 
and professionalism. 
 
8. Comment.  That only one out of fifteen failed the 
polygraph is quite a significant testament to the 
dedication and professionalism of this unit. 
Considering the high money environment and the culture 
of temptation, this unit is a model for the rest of 
Georgian law enforcement to emulate. 
 
TEFFT 
1

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