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Program for Friday February 14, 2003

Valentines Day

TBA

Door Duty: Herb Cole and Jim Young

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Program for Friday February 21, 2003

Scott Donahue - Composite Sculpture

Door Duty: Hank Covell and Loren Straughn

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Program of February 7, 2003

Paul Camacho, "IRS Criminal Investigations"

Apologizing to the members for not bring the Groucho Nose & Glasses disguises, Prez Dave introduced Internal Revenue Service Special Agent Paul Camacho. Agent Camacho thanked David noting he wasn't at Rotary to find any more investigation opportunities as he is already too busy. Besides he gets all his new clients "from the Lions Clubs". Paul said he once tried to join the Rotary, but his application was disallowed by the District Governor because the Rotary doesn't have a vocational classification for, "The devil incarnate".

Besides being a sworn officer of the law, Agent Camacho is also a Certified Public Accountant. He said he is armed with a gun, a badge and a calculator, the latter being his most lethal weapon. The kind of work he does is called forensic accounting, (book and TV mini-series expected in the near future, "CSI-IRS"). The Walnut Creek office he supervises has 10 special agents who investigate money laundering, and tax evasion schemes with a special emphasis on Silicon Valley Hi-Tech crimes.

Agent Camacho asked if anyone in the club had gotten that Nigerian e-mail. It's an example of a get rich quick, bunko, "advance refund" scheme that have been going on for years, but that have really blossomed on the internet. People are losing money left and right because of it, including former congressmen (party affiliation unknown). For more information about this and other crooked schemes, check out the web site, <quatloos.com>.

Agent Camacho and his fellow agents, about 3,000 strong, investigate criminal tax evasion and money laundering. It is the art of following money, "on the books and off the books", with the emphasis "off the books". It has been getting a lot of attention because of major national disasters like the Enron and World.com scandals and the 9/11 terrorist attack on the World Trade Center. The most incriminating evidence uncovered about the 9/11 attack was from money movement---credit card receipts, electronic airplane ticket and rental car payments, etc. Six percent of national IRS investigative resources are dedicated to tracking international terrorists.

Because it is so important to criminal enterprise, Agent Camacho defined and described "money laundering". It is the process of taking illegally earned money and concealing it, or using it to finance more illegal activities. Examples include:
1.Buying real estate and placing it in someone else's name.
2.Depositing money in a bank account for a phony business.
3."Investing" money in additional illegal activity like buying drugs for illicit resale.
Money laundering is totally dependent on using currency (cash, green backs) in order to avoid creating a "paper trail". Using cash to launder money works very well until an individual with large amounts of it bumps up against IRS cash transaction reporting forms, like the Currency Transaction Report, or Form 8300 Large Transaction Report, or the IRS/Customs Form & Currency Declaration. The use of these different forms are all triggered when an individual completes a transaction with more than $10,000 cash. Banks, all money services (check cashers, pawn brokers, foreign exchange traders) and custom officials all report cash transaction (in the case of customs officials at entry or exit to the USA) over $10,000 to the IRS. For those criminals that try to avoid large transaction reporting with multiple deposits, the IRS requires banks to file a Suspicious Transaction Report any time they believe a depositor's cash transaction might indicate criminal activity. All these transactions are tracked by the IRS and contribute to most criminal activity identification and eventually prosecution. In the Bay Area the IRS tracks $80B in currency transactions a year, which is high for the US. He also said that since 9/11 there has been a 40% increase in voluntary compliance as people switched their point of view of the practice from "an intrusive hassle" to "a necessary fact of national security".

Agent Camacho acknowledged that the most successful money laundering happens in conjunction with felonious employees inside financial institutions. Most often these individuals simple destroy the IRS reporting documents, otherwise hiding the illicit transactions. Camacho noted however, that these individuals are "conspirators" and are subject to "enhanced penalties" when caught and prosecuted. He said there is no loyalty among criminals and this is a major source of his convictions as "caught" criminals rat right and left on their associates to plea bargain themselves into reduced sentences. Camacho said he has "seen and heard it all" as criminals rat on sons and daughter, mothers and fathers, etc., in and orgy of betrayal.

Agent Camacho then describe his investigation of hi-tech crime in Silicon Valley. Essentially, un-rehabilitated former drug dealers turned "dumpster diving" into high volume theft. Dumpster diving is a form of recycling in which valuable trash, motherboards, etc. is fished out of the trash of Silicon Valley manufacturers and resold. It was unclear from Camacho's presentation whether dumpster diving is illegal itself, but it definitely becomes illegal when the "divers' hook up with the janitors throwing out the trash , especially when the janitors start including large quantities of newly manufactured product. During the hay day of Silicon Valley, illegal sellers were making so much money selling stolen product into networks of used computer stores that they had to set up networks of money laundering operations through "friendly" check cashing operations, which did not process the IRS currency tracking forms. Camacho estimated that at its zenith, the illegal electronics theft operations were processing $17MM/year through one notorious check cashing operation in the valley.
The theft operation was uncovered when police and IRS agents picked up and interrogated a known drug dealer who broke his parole conditions. As an informant, he led the IRS into the entire operation. Camacho suggested that silicon theft has been largely disrupted because of this operation and the subsequent slow-down in the economy that has allowed hi tech manufactures to reform their manufacturing and inventory accounting practices.

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Last Week
President David Brown rang the bell and reminded the members that this year's Rotary theme is, "Sow the seeds of love." (http://www.bhichairattakul.org/). He then asked Werner Schwarz to lead the members in the Pledge of Allegiance.

Prez Dave asked for a moment of silence in memory of the astronauts who died in the destruction of the space shuttle Columbia, their sacrifice and the sacrifice of their families.
Dave's quote for the day - - - John Greenleaf Whittier, "For all sad words of tongue or pen, The saddest are these: 'It might have been'".

Visiting Rotarians:

Guests:
Jim Young introduced David Bautista, Senior Vice President of SGI Consultants. David and SGI are coordinating the expenditure of $500MM +/- in West County school district renovation and reconstruction bonds.

Announcements
District 5160 will have its Conference, "Festival in Fairfield", in Fairfield April 24th-27th complete conference details can be found @ http://www.rotary5160.org./conference.htm.

The Rotary License Plate program has until March 15th to get 2,500 new sign-ups. You have more time if you thought about getting a Rotary License Plate but did not act. Prez. Dave reminded the members that a good reason to participate in the program is because our club gets 50% +/- of the fee collected by the State. More information is available @ http://www.ca-rotarylicenseplates.org.

Prez Dave encouraged the members to nominate qualified young people for a Rotary Ambassadorial Scholarship. The application deadline is March 31st. For more information contact Richard Flanders @ srednalf@pacbell.net or 925-469-9155.

Prez Dave extolled the generosity of the members for their material, if somewhat belated support of the Canned Food Drive for the Richmond Food Pantry. Dave hopes to deliver a barrel of Canned Foods to the Richmond Food Pantry by the end of the drive.

The RI Convention for 2003 will be held in Brisbane Australia
Registrants from our District are eligible for the Visa known as Electronic Travel Authority (ETA) provided they hold a US Passport. They can apply online or through a travel agent. To apply online have them visit: http://www.eta.immi.gov.au/index.html.
Both a Passport and Visa are required, and you don't want to be "stopped at the gate" because a Visa has not been ordered early enough for travel to Australia.

Nominations for district governor are being accepted for the period 12/1/02 through 2/15/03. Please contact Bill Spaulding with any nominees at 925-938-0700.
The district conference will be held in Fairfield on 4/24-27/02. A Golf tournament will held concurrently

Coming Speakers
02/28/03 Dr. Gloria Johnston

Recognitions
David K. had no sunshine report so Prez Dave quizzed him about the Super Bowl Sturgeon Derby, the specifics of which are too complicated for these notes, except that Dave caught a nice ten pound Stripper and two "red" channel catfish. Dave said he'd never seen a red catfish before.

Joey Baggs launched into recognitions, starting with Jim Beaver's recent birthday. After a lot of badgering from Joey, Jim acknowledged he had a quite celebration featuring his favorite birthday food, Beef Stroganoff, which he makes himself. Joey then recognized Hanns Shaper's recent birthday. Joey put so much energy into recognizing Beaver's birthday, he was easily diverted by Hanns' reading of a philosophical birthday card he received,
"One day you're a Hot Dog…then you become a tired Winnie." (The writer could not see the card presented by Hanns, but notes that its message is replent with visual potential.) Joey then asked Richie B. if he celebrated his anniversary with Lisa. Rich said, "none other", but it was anniversary "light" as Lisa was on a business trip to LA and happened to be with her sister when he called. Under the circumstances, they had to forgo "the heavy breathing". All those recognized made contributions to the Carl Rafis Fund with Joey Baggs noting that "it's a good thing with a about $16M that deserves more support." Interest from the Fund supports club projects.

Happy/Sad $$
·Hank Covell had Happy Dollars for his "retired" wife Darlene whose many recent activities were so numerous they were missed by the writer except for the very impressive chaperoning of Pinole HS students to New York City to see five Broadway plays.
Gloria Johnson had Happy Dollars for Darlene Covell too and her continuing good works for the school district. Also for the successful opening of Lovonea DeJean Middle School in Richmond. Gloria invited the members to visit the district's newest school and to give the district a little more time to bring the rest of the schools up to new condition.
Jan Brown had Happy Dollars for Joe Green's membership in Rotary (we'll miss him) and for Peace Scholar Allison Bond's excellent recommendation of the book, Is There No Other Way? by Michael N. Nagler, which she has been reading.

Raffle
There was $501 at risk. Agent Camacho picked John Nicol as the rafflee. John picked the orange ball (again). John's take will go to his daughter's Paul Harris.

Prez. Dave adjourned the meeting.

Flywheel Editor
Jim Young