US Money Laundering Team Is at Crossroads as New Leaders Named

The Justice Department has picked two new leaders for a white-collar office focused on global money laundering that former staff members say needs to reenergize its uneven attempt at transforming from policy hub to litigation dynamo.

The Money Laundering and Asset Recovery Section would benefit from more forward-leaning leadership, faster prosecution decisions, and greater trial experience throughout the section, according to interviews with 32 former DOJ employees, most of whom are still financial crime attorneys.

The interviews preceded Tuesday’s announcement that Brent Wible, a manager in the Criminal Division’s Fraud Section, was selected as MLARS chief while Molly Moeser was elevated to second-in-command from her role as chief of the MLARS bank integrity unit.

A more aggressive posture could give the roughly 100-attorney MLARS unit added leverage in a range of cases, including those targeting illicit cryptocurrency transfers and Russian oligarchs luxury items, while wielding expanded subpoena power under a new anti-money laundering law, attorneys say.

The next leaders, “will likely want to send the message that the section intends to be a serious, heavy-hitting litigating unit,” said Alessio Evangelista, a former MLARS bank integrity supervisor who more recently worked with the section as a senior official at the Treasury Department’s financial crimes enforcement group.

“This is an opportunity to select a leadership team that really cements, defines, and carries forward what has been the goal for a number of years,” said Evangelista, who was speaking before Wible and Moeser were announced.

The Justice Department didn’t respond on the record to questions posed by Bloomberg Law about the MLARS office before announcing the selection of Wible and Moeser. Both appointments are pending approval from the Office of Personnel Management.

Growing Pains

This is the first time in 12 years—when MLARS started shifting its focus from coordinating nationwide prosecutor training and policy expertise to bringing its own cases against banks and alleged launderers—that the chief position opened simultaneously as the No. 2 slot. It presented a greater chance to consider candidates from outside the section, which many former employees said would help change its culture.

Wible would bring deep trial experience as a Southern District of New York prosecutor and has held senior roles at the Fraud Section, which frequently partners with MLARS on international cases. A bio provided by DOJ didn’t mention direct legal work on money laundering and assets forfeiture.

Former money-laundering prosecutors, many of whom cited frustrations with MLARS litigation progress as a reason for leaving, pointed to numerous instances where the section has undergone growing pains in the past decade, even when showing signs of promise.

For example, the MLARS Kleptocracy Asset Recovery Initiative aimed at confiscating proceeds of foreign officials in corruption investigations spawned an investigation that eventually became the section’s most signature achievement to date.

It recovered more than $1 billion in funds the international fugitive Jho Low had looted from the Malaysian government’s 1MDB fund. The section has since repatriated the money to Malaysia and prosecuted two Goldman Sachs bankers who are now awaiting sentencing.

Yet a preceding case later folded into the kleptocracy team’s docket, a 2004 civil suit to recover more than $230 million in offshore accounts from convicted former Ukrainian Prime Minister Pavlo Lazarenko, is still dragging on 18 years later.

“A case like Lazarenko in the private sector would’ve ended a long time ago, if you consider the amount of money and resources that have gone into having that case still remain open,” said Aixa Maldonado-Quinones, a former senior trial attorney at MLARS who left in 2019. “Leadership at some point has to say, ‘enough.’”

Other investigations have stalled due in part to leaders unwilling to take chances or allowing charging memo approvals to languish for months, said multiple former section attorneys.

A number of others who’ve left the office in recent years said a new leadership vision is necessary to enable trial attorneys to close more money-laundering investigations, while pursuing civil asset forfeiture claims that are rarely brought by US attorney offices, especially in smaller cities.

The next chief, Maldonado-Quinones said, must have the “backbone” to approach local office leaders to say, “‘We’re working this together. And if it cannot happen, we are more than happy to come in and litigate on our own because we have the authority.’ That’s the kind of leader that MLARS needs.”

When asked about the office’s reputation for leisurely decision-making, Evangelista pointed out that the type of work MLARS deals with isn’t an area “you sort of dabble in.”

He said the Bank Secrecy Act, which requires financial institutions to detect and prevent money laundering, is “challenging and will require an energetic leadership team that wants to leverage all of the relationships with the regulators, or create them if they don’t exist.”

Other former employees noted that MLARS deals with sensitive matters implicating diplomatic relations, which require deliberation.

Structural Hurdles

While people interviewed saw significant room for improvement and a few said it should restore its pre-2010 emphasis on training, a handful of others said the section is on the right course. They pointed to structural hurdles that often exclude MLARS from participation in cases brought by US attorney’s offices.

AnnaLou Tirol, an O’Melveny partner who routinely collaborated with MLARS while a top official at both FinCEN and DOJ‘s Public Integrity section, said that transformation takes time and questioned whether a shakeup is needed.

“On the litigation front, I have seen MLARS handle more and more significant money-laundering cases” and “when you look at the breadth of MLARS responsibilities, it is so much—it’s across the nation and across the world,” Tirol said.

Previous MLARS leaders contacted by Bloomberg Law declined to comment for this story. Assistant Attorney General Kenneth Polite last month credited the Fraud Section and MLARS corporate prosecutors and staff for their “tremendous work,” including returning $3.7 billion to 40,000 victims of the Bernie Madoff Ponzi scheme.

A DOJ official, on condition of anonymity, highlighted a series of enforcement accomplishments for the office, including its banking unit indicting 58 defendants since 2018—43 of whom have pleaded guilty and one was convicted at trial. The office also reached 12 corporate resolutions since 2017, including with Western Union and Credit Suisse.

The international unit, which oversees the kleptocracy initiative, has recovered more than $1.7 billion in assets since 2010, covering more than 14 countries, the official said.

‘Less Hostile’

Leslie Lehnert, who retired last year as an MLARS trial attorney, said the next section chief should prioritize hiring lawyers with more previous trial experience and to improve the level of trial training opportunities they’re provided once they arrive.

She sees irony in a separate MLARS unit’s longstanding excellence at training assistant US attorneys across the country on how to pursue a money-laundering and assets forfeiture cases.

“It’s funny to me that they are so effective at external training and yet internally they don’t seem to apply the same approach to making sure attorneys have adequate trial training,” Lehnert said.

Twelve years into the prosecution makeover, a significant share of MLARS attorneys still work in non-litigating units, focusing on policy, training, and sending forfeited funds to victims.

John Kucera, a former federal prosecutor in Los Angeles who was one of the original investigators on the 1MDB matter, said the next chief should stress the importance of working more cooperatively with field offices to make their relationships with Justice Department headquarters “less hostile.”

While 1MDB is hailed as a testament to MLARS’ value, the success came at a cost for the section’s relationship with the Los Angeles-based US attorney’s office.

Turf battles between DOJ headquarters and US attorney’s offices are common, as are US attorney office accusations that Justice Department headquarters litigating divisions operate too slowly. Like other sections in Washington, MLARS requires extra layers of approval before attorneys can seek an indictment, which means US attorney’s offices can often prosecute more nimbly.

The MLARS sprawling portfolio, which requires bringing cases under civil and criminal laws—domestic and abroad—while interacting with multiple regulatory agencies, requires a unique set of skills for the next section chief.

Bill McMurry, the former head of the FBI’s International Corruption Unit who regularly worked with MLARS, including on the 1MDB investigation, stressed that good collaboration with other offices and the ability to stand up for the section are necessary.

“The high profile and complex nature of the MLARS case load means there is often a lot at stake,” McMurry said, “which brings with it stress and strong opinions.”