Word: rjr
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Dates: during 2000-2009
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...lawsuit, filed recently in federal court in New York City, the E.U. charges that Italian mafiosi, Colombian cocaine dealers and Saddam Hussein's eldest son have all profited from illegal sales of RJR cigarettes--with the willing participation of the company, which reaped millions of dollars in illicit sales. The 149-page complaint names RJR executives who allegedly met with money launderers, and it lists the Swiss bank accounts used for payment...
Stephen Heard, an attorney for RJR, calls the lawsuit "a mixture of fabrication and fantasy" and says he expects it to be dismissed. An earlier version of the lawsuit, which accused RJR of tax evasion, was dismissed in February. But experts say the money-laundering allegations are more likely to stick. "This is a new dimension, and a clearly criminal dimension," says Richard Daynard, 59, a tobacco-litigation expert and professor of law at Northeastern University in Boston...
...value and have a pretty universal market base," says John Auerbach, 33, a money-laundering expert with the risk-consulting firm Kroll, based in New York City. "They're almost like currency in some places." What's new in the E.U. suit is its allegation that not only did RJR executives know about their cigarettes' being used this way but also that it was "part of their operating business plan to sell cigarettes to and through criminal organizations." The E.U. says RJR gave its "criminal customers" special treatment: removing the tracking codes from their shipments, sending invoices separately from...
...alleged Iraq connection makes the case especially troublesome on RJR's home turf. To circumvent economic sanctions against Iraq, the lawsuit alleges, RJR used a former employee, who had become a cigarette distributor in Cyprus, to guide its Winstons and Aspens (the top-selling brand in Iraq) to Baghdad. There, Saddam's son Uday, 38, collected "taxes" on them. The trade is so lucrative, the E.U. alleges, that the Iraqi government allows the Kurdish Workers' Party--considered by the U.S. to be a terrorist organization and by Iraq to be a threat to the regime--to deal in cigarettes...
...thing on which both RJR and the E.U. agree is that cigarettes aren't the only vehicle for money laundering--stereos and CDs work almost as well. The E.U. lawsuit, along with new laws in the U.S. and Europe targeting the financing of terrorism, is meant to put other companies on notice. "The defense of 'We don't know about this,'" Auerbach says, "is becoming less and less credible." --With reporting by Helena Bachmann/Geneva and Leo Cendrowicz/Brussels