Western Express-full story

Power of words

Who can deny the power of words! Words can calm us down, make angry or just leave indifferent to what was said. Have you ever experienced this emotional rollercoaster when you read/hear one position and fully agree with it, then you read/hear the opposition and agree as well. Words skillfully put together can manipulate people's minds. Some words are so powerful that they change your life, some words go unnoticed, some words make you think, and some words make you wonder. Wondering is what made me look into the recent arrest of Vadim Vassilenko, formerly the chief officer of Western Express International of Manhattan.

The first charges came on 02/22/06 when in a news release Manhattan District Attorney, Robert Morgenthau announced the indictment of three people - Vadim Vassilenko, 39 and his wife, Yelena Barysheva, 40 and their son, Alexey Barishev, 21 on charges of operating an illegal check cashing and money transmittal business. Western Express International has also been indicted. Allegedly, the company and its employees violated New York State banking laws and falsified business records. Prosecutors claimed that Western Express acted as a one-stop shop for Eastern Europeans who wanted to conduct business in the United States, but not supply their true identities to their business partners or customers. Besides cashing checks and transferring money, prosecutors claim that Western Express supplied its clients with false, English-sounding identities, fake taxpayer identification numbers and U.S. addresses to use as mail drops. It was also claimed that most of the company's clients were involved in a variety of cyber crimes, including phishing, spoofing and re-shipping.

Vadim Vassilenko and Yelena Barysheva pleaded guilty to charges in that case and began serving their sentences in state prison. But more charges were brought on November 9, 2007 against Western Express International and its operators. This indictment resulted from a joint two-year investigation by the Manhattan District Attorney's Identity Theft Unit and the United States Secret Service. This time along with Western Express Intl. 17 people were charged with trafficking in stolen credit cards, cybercrime, and identity theft. According to the 11/9/07 Distict Atterney Office Press release: "The 173-count indictment charges that from 2001 through 2007, the defendants participated in a multi-national, internet-based criminal enterprise - the "Western Express Cybercrime Group" - dedicated to trafficking in stolen credit card numbers and other personal identifiers. The group realized millions in illicit profits from the sale and fraudulent use of this personal data, with some members of the enterprise laundering these profits in a variety of high-tech ways. As the indictment alleges, the defendants engaged in a variety of crimes intended to make money for the participants while avoiding detection by law enforcement, including Enterprise Corruption, Grand Larceny, Money Laundering, Criminal Possession of Stolen Property, Falsifying Business Records, Criminal Possession of a Forged Instrument, Scheme to Defraud, and Conspiracy to commit the crimes of Grand Larceny and Criminal Possession of Stolen Property... The investigation revealed that, in a four year period, over $35 million flowed through numerous bank accounts set up by WESTERN EXPRESS. About $4 million of these funds were generated by the company's illegal check cashing business, which was the subject of an earlier indictment. Approximately $20 million flowed through the company's Egold digital currency accounts. It is also estimated that WESTERN EXPRESS purchased approximately $15 million worth of Webmoney digital currency. WESTERN EXPRESS and its managerial agents are charged with numerous counts of money laundering, in connection with the laundering of over 1.5 million dollars in funds related to their customers' cybercrime activity... All defendants are charged with Enterprise Corruption, a class B felony punishable by up to twenty-five years in jail. Each defendant is also charged with at least three additional felony counts, depending upon his role within the criminal enterprise." (To read more, go to www.manhattanda.org/whatsnew/press/2007-11-07.shtml)

The other side of the moon

Don't you feel overwhelmed already by the charges? The way they are put is powerful, striking and absolute. It makes people go: "Oooof! Thanks God!" But there is always more to each story, there is always the defendant's position that is never published, there is always context and the intent.
According to Vadim Vassilenko's personal audio blog page on livejournal.com, he came to the USA in 1992 from Ukraine. He has a music teacher degree and being inspired by the jazz music he always wanted to come to the USA and experience the freedom and justice proclaimed worldwide. In 1997 he registered his company Western Express International that was located in the Empire State Building, Manhattan. Being very ambitious and financially savvy, he received permanent residency based upon exceptional abilities in business. Being interested in financial markets, he became a market maker and exchanger for fast growing digital currencies and gold currencies which were becoming more popular as an alternative to almost monopolistic and inefficient use of credit cards when conducting transactions on-line or wireless.

Currently being held in the Manhattan Detention Complex, he is trying to be heard by public through telephone statements and updates that are posted on Live Journal. He is completely denying the charges of being knowingly involved in any criminal activity and pleading to people to recognize the vindictive treatment of his case. Here are some of his claims:

- His offers to cooperate were denied

- When after a frantic search for an experienced in financial issues legal aid, potential lawyers were calling to inquire about his case, they were told that Vassilenko did not need an attorney and that the court will appoint one. Well, the appointed attorney did not open his case for 3 week forcing him to continue his frantic search for someone who could understand the world of digital money and had financial background.

- His and his wife's arrests were in violation of International laws as both consulates (Russian and Ukrainian) were not informed of the arrest of their citizens by the police;

- Some of the articles he posted on his popular blog "www.dengiforum.com" were partially translated from Russian and used against him in his indictment papers by prosecutors. According to Vassilenko, his 5,000+ most controversial topics were the expression of the right to free speech. He actually asked his supporters to mail him a magazine called "Hacker" (published in Russian) to present to the court. This publication comes in the form of print and on-line editions and is deemed invaluable to computer geeks and anyone else who is interested in computers and internet. The magazine allows people to express their thoughts and opinions without promoting criminal activity.

- Before his initial arrest he personally investigated several fraudulent transactions conducted through his company and maintained documentation of that which can not be located after the seizure of all of his records.

- Vassilenko is also very offended that his good deeds and claims against criminal activity were not translated and presented to the court.

The NYC Department of Correction record shows that Vadim Vassilenko was actually arrested on October 23 and indicted 17 days later. Serving his sentence at the Bare Hills Correctional Facility, he made his merit board for exception on a good behavior at Bare Hills Correctional Facility and was released on October 10, 2007 to Batavia Immigration Detention Center for scheduled deportation to Ukraine. In less than two weeks he was brought back to New York City to face new charges. The fact is that Mr.Vassilenko and his wife voluntary surrendered their US residency in the summer of 2007. Apparently the charges were rushed to ensure that Mr.Vassilenko does not leave the country prior to being charged again as it appeared that he did not serve enough time to pay for his crimes.
Vadim Vassilenko and his wife were charged with enterprise corruption. The USA Penal Law, article 460 explains the prosecution process and defines Enterprise Corruption:

A person is guilty of enterprise corruption when, having knowledge of the existence of a criminal enterprise and the nature of its activities, and being employed by or associated with such enterprise, he:

(a) intentionally conducts or participates in the affairs of an enterprise by participating in a pattern of criminal activity; or

(b) intentionally acquires or maintains any interest in or control of an enterprise by participating in a pattern of criminal activity; or

(c) participates in a pattern of criminal activity and knowingly invests any proceeds derived from that conduct, or any proceeds derived from the investment or use of those proceeds, in an enterprise.
Without underminding the lengthy investigation of Western Express' operations and its findings, some questions still stand. What happens when the knowledge is not there, or it is limited? Are there any regulations for the safeguards to be put in place? Vassilenko claims that he did not even personally know most of the people arrested in this case. They were his clients that the company dealt with via internet. The digital money market is growing extremely fast and attracting more and more people: good or bad, who can really tell? In creating on-line financial services it is very hard to guarantee everyone's good intent. There are no definite Federal and International laws concerning digital currencies. No definition of digital currencies is offered in law books as well. Very few lawyers specialize in this emerging business and therefore, there is little advancement in amending legislation through trials and court decisions as it is done in the US. It happened so that prosecution is more prepared than lawyers when it comes to cases involving new internet technologies and opportunities for new business methods. The majority of defense attorneys faces difficulties defending their clients and tends to loose their cases. And which lawyer would want to loose one case after another? It is apparent that there is a new demand for defense attorneys who are internet savvy, understand finance and the emerging world of digital money.

It seems to become an epidemic that companies conducting digital money transactions get charged with very serious crimes. Is it that criminals are attracted by internet possibilities or the laws can not catch up with the development of digital money world? Well, it looks like it is both. A natural desire of any human being to remain anonymous in financial matters drives the success of digital money world. A logical desire of a criminal to stay anonymous drives him to the same place. How do you filter legitimate and illegal intent in on-line transactions? How you regulate this business without taking away the right for privacy? These and many more questions have to be answered before governments' actions to regain control of digital money are going to turn into a ‘witch hunt'! Until then business will always continue to explore in the same direction: whatever is not prohibited - is allowed...

Marianna, reporter of Ecommerce Journal

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