The Foreign Service Journal, November 2004

field audit, normally they will simply send out a circular to the suppliers asking them to “confirm” the num- bers. The suppliers happily provide written documentation of their phan- tom work and everyone is a winner — except the agency and the taxpayers, of course. If you are a bit more daring, you may do the transaction in cash, but that’s liable to raise suspicions in case of an audit. Cash transactions are best done when some work is performed but the cost for that work is doubled or tripled and the supplier’s boss and the project manager share the illegal proceeds above the actual cost. In this scam, the check for payment is run through the supplier’s bank. The supplier receives 20 percent of the money. For instance, a job that cost $50,000 is billed out at $100,000 or $150,000, with the supplier receiving $20,000 to $30,000 for his effort and the difference paid to the project manager in cash. To deposit large amounts of illegal cash presents its own challenges in the post-9/11 crackdown on money laun- dering. But where there’s a will, there’s a way — or several, actually. Wire transfers under $10,000 each to stateside accounts, are one method. Deposits into offshore accounts are another, and using shell companies is a third. Reversing the scam and having friends who have companies pay you for work you never did is yet another. Naturally, they receive a commission for their service. And physically carry- ing money from one country to anoth- er across borders is yet another. There are also plenty of financial institutions in foreign countries that will launder money for a small fee. But suppose you are caught? You simply correct the “oversight” and promptly return the cash. This is what Halliburton has had to do. The multimillion dollar overcharges for gasoline, for example, were re- turned. They were just a mistake, an N O V E M B E R 2 0 0 4 / F O R E I G N S E R V I C E J O U R N A L 57 korman communities arlington CORPORATE SUITES arlington, va 880 north pollard street 866.korman.4 : kormancommunities.com live better. brand new luxury high rise : fully appointed one, one bed- room dens and two bedroom corporate suites : state of the art fitness and business centers : heated outdoor lap pool : custom made mahogany furniture : fully equipped kitchens : luxury towels and linens : soft, firm or hypoallergenic pil- low selection : weekday club breakfast serving Starbucks ® Coffee : afternoon Tazo ® Tea : digital premium cable and high speed internet : 27” and 20” sony wega tv and dvd : sony cd stereo : free local phone : on-site management, maintenance, housekeeping : concierge services : walking distance to ballston common mall, ballston and virginia square metro stops