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Archive for the ‘MONEY LAUNDERING’ Category

Walking through the streets of Neutral Bay on Sydney’s north shore, a humble and unassuming woman on the way to the convenience store she ran gave no hint of a darker side.

But inside her Yeo Street apartment, and in the presence of organised crime figures she did business for, Ping He assumed the role of the “godmother”.

This petite 52-year-old mother was at the helm of a lucrative money laundering ring, washing hundreds of thousands of dollars of drug proceeds offshore.

Her arrest was a major scalp in a lengthy NSW Organised Crime Squad investigation that shone a light on the scale of the illicit money laundering industry in Australia.

The intricacies of this investigation can now be detailed after He pleaded guilty last month to one outstanding charge.

Detectives put He – also known as “Angel” – – under surveillance in 2014 after learning of her extensive links to Asian organised crime figures.

He, who owned Danny’s Convenience Store in Neutral Bay, was part of a syndicate that laundered money from Australia to China and back again. Some of it would end up in the hands of Sydney-based Chinese nationals with gambling habits, court documents show.

The end game was to launder the proceeds of drug sales through numerous transactions with remitting agencies to mask the true source so it eventually appeared the money was from a legitimate source.

James Zhu, 48, who has been sentenced to five years jail from drug and money laundering offencesPhoto: NSW Police

Sometimes He, who charged maybe 1-2 per cent commission, would organise someone to travel to Melbourne with loads of cash to flush money through remitting agencies over the border.

The players in her syndicate referred to each other by titles like “Big head”, “team leader” and “godmother”.

In August, 2014, a surveillance device in He’s unit recorded convicted drug supplier James Zhu, 48, and another man counting $300,000 on a cash counting machine.

“I’m going to take my commission first, f**k how much should it be?” asked Zhu, who referred to himself as “the master”.

“$300,00, 2 per cent, $6000…do I take $6000?”

He replied: “Right, fine you take $6000, mine is $9000.”

A few days later, He was heard telling a courier how to split $250,000 into $50,000 lots and deposit it into one bank account via multiple remitters.

In May 2014, He used a remitter to move client He Ren’s drug sale proceeds from China to Australia. That money was directed to Chinese nationals in Australia who had deposited funds in He’s Chinese bank account.

“This transaction … showed the accused was using Ren’s drug-related funds to facilitate money transfers to other people who required funds moved from China to Australia for their own purpose,” a fact sheet tendered in court states.

He was also heard discussing drug prices with 52-year-old Ren, using terms like apples and oranges as code for ounces of methamphetamine.

Fearing Ren was on the police radar, Zhu urged He to stay away from him.

“Did you know how Ren made so much money,” Zhu told He in 2014.

“In the past it was me giving Ren f**king opportunities all the way along.”

Sweeping police raids resulted in the trio’s arrest and a swathe of charges.

He – the leader of the syndicate – was sentenced last month to five years’ jail, with a non-parole period of three years, for dealing with proceeds of crime.

She is due to be sentenced for participating in a criminal group charge in November.

Colombian gold CEO involved in $970m laundering case arrested

A manhunt for the Chief Executive Officer of CI Goldex, once the Colombia’s second-largest gold exporter, ended this week after police caught John Hernandez on a public bus Tuesday night.

According to Colombia’s Attorney General’s office, the company and its top executives are at the centre of a $970 million money-laundering scheme involving cocaine traffickers, Bloomberg reported.

For years, prosecutors followed the traces left by Hernandez, in an attempt to determine his involvement in the money laundering case. They finally gathered enough evidence to charge him last week, and authorities ordered his arrest along with two dozen other people.

Colombian gold CEO involved in $970m laundering case arrested

In the past, Goldex had acknowledged that most its gold was mined in the northeast of the Antioquia department, where illegal armed groups like the Revolutionary Armed Forces of Colombia (FARC) and the Urabeños are active in mining activities.

Mixing it up

Prosecutors believe the company used to add illegally mined gold to legally extracted minerals and thus helped finance the illegal businesses of rebels and neo-paramilitaries.

An anonymous source within the Colombian police told local paper El Tiempo (in Spanish) last year that Goldex was not the only gold exporter investigated for illegal activities.

“We are investigating six companies that are suspicious and could be linked to crimes like money laundering and illicit enrichment,” the source told the newspaper.

Two years ago local authorities said than profits from illegal gold mining were already five times greater than returns from cocaine for rebels groups operating in the country.

Colombia, Latin America’s third-largest economy, has over the past decade been working hard to leave behind the years of trafficking-fuelled violence, which tainted its name abroad.



Uploaded on May 30, 2010

This is a video of the record cash seizure during March 2007 at a mansion in Mexico’s capital city and photos of subjects that were arrested as a result of the investigation.


In 2006 Mexican authorities seized 19.5 tons of the chemical pseudoephedrine at a port in the city of Lazaro Cardenas in the state of Michoacan. This is one of the most important ingredients to make methamphetamine. This shipment had arrived from China and the company that sent it is headed by Zhenli Ye Gon who was originally from Shanghai, China but became a Mexican citizen in 2002.

On March 25, 2007 Mexican police raided a mansion in the very wealthy neighborhood of Lomas de Chapultepec in Mexico City.

Approximately 205 Million in US Dollars, 18 million Mexican Pesos, 200 thousand Euros, 113 thousand Hong Kong Dollars, gold and jewels were seized in the raid. Numerous firearms were also seized. Several Asians and Mexicans were arrested at the mansion. The photos of some of them are in this video as well.

Zhenli Ye Gon was not at the mansion at the time of raid. He was later arrested in the state of Maryland in the USA. His photos are last two pictures in this video. He would later contend that the money in the mansion was money that he was forced to store for Mexican President Felipe Calderon’s political party.

The United States Government charged Zhenli Ye Gon with a meth drug conspiracy charge, but later dropped this charge for lack of evidence. The suspect was reported to have gambled away over 100 million US Dollars in Las Vegas.

The main suspect is awaiting deportation to Mexico where he face charges.


US prosecutors have announced what they say is the biggest international money laundering prosecution in history – a $US6 billion ($A6.2 billion) trail that allegedly includes $US36.9 million ($A38.4 million) deposited in Westpac Bank accounts.


The trail was allegedly left by Costa Rica-based Liberty Reserve, a currency-transfer and payment-processing company that allowed customers to move money anonymously from one account to another via the internet with almost no questions asked, and has travelled through 17 countries, including the Westpac accounts in Australia.

cloud 9 for the money image

One person was registered under the name of “Joe Bogus” and the address “123 Fake Main Street” in “Completely Made Up City, New York.” 

Prosecutors described Liberty Reserve as a “financial hub of the cyber crime world … one of the principal means by which cyber criminals around the world distribute, store and launder proceeds of their illegal activity … including credit card fraud, identity theft, investment fraud, computer hacking, child pornography and narcotics trafficking.”

“The scope of the defendants’ unlawful conduct is staggering,” officials said. Over roughly seven years, Liberty Reserve processed 55 million illicit transactions worldwide for 1 million users.


Prosecutors said 45 bank accounts have been restrained or seized.

According to the indictment, three Westpac accounts held in the name of Technocash Ltd contained $US36.9 million ($A38.4 million).
“The bank of choice for the criminal underworld”: US Attorney Preet Bharara.

“The bank of choice for the criminal underworld”: US Attorney Preet Bharara. Photo: AP

“We have rigorous processes in place to combat money laundering and have been working closely with regulators and law enforcement agencies,” said a Westpac spokeswoman.

In Australia, the agency responsible for detecting money laundering is AUSTRAC, which passes on intelligence to the Australian Federal Police and Australian Crime Commission.

‘Bank of choice’

The Liberty Reserve network “became the bank of choice for the criminal underworld,” US Attorney Preet Bharara said in announcing the unsealing of an indictment against the defendants, including founder Arthur Budovsky, an American who renounced his US citizenship after deciding to set up in Costa Rica.

Unlike traditional banks or legitimate online processors, Liberty Reserve did not require users to validate their identities, it is alleged.

It allowed users to open accounts using fictitious names, including “Russian Hacker” and “Hacker Account.” One person was registered under the name of “Joe Bogus” and the address “123 Fake Main Street” in “Completely Made Up City, New York.”

“The only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes – the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers and traffickers,” said Bharara. “It was the opposite of a know-your-customer policy.”

Cyber-age laundering

“We’re now entering the cyber age of money-laundering,” said Richard Weber, chief of the Internal Revenue Service’s Criminal Investigation division, who also alluded to Chicago Crime boss Al Capone. “If Al Capone were alive today, this is how he would be hiding his money.”

The company operated one of the world’s most widely used digital currencies, allowing users to send and receive “instant, real-time currency,” according to the indictment in US federal court in Manhattan.

Digital currency, such as Bitcoin, was developed as a way to make anonymous transfers over the internet without paying fees to a bank. The US Justice Department warned as early as 2008 that criminals would increasingly rely on the digital currency industry to launder and move funds because it facilitates financial transactions outside the rules of the traditional banking system.

The alleged crimes involved only Liberty Reserve and its operators, and not any other digital currency, Bharara said.

“The actions brought today relate only to Liberty Reserve and no other system,” Bharara said. “We’re not taking any position on virtual currency generally and we’re not taking any position with respect to any particular other company that engages in something that may look on the surface that something that Liberty Reserve was doing.”


Five of the seven defendants were arrested last week in a global swoop.

Budovsky, 39, was arrested in Spain, co-founder Vladimir Kats, 41, was arrested in Brooklyn, New York, while two other defendants, Ahmed Abdelghani, 42, and Allan Jimenez, 28, remain at large in Costa Rica, prosecutors said.

The names of the defendants’ attorneys were not immediately available.

“The global enforcement action we announce today is an important step towards reining in the Wild West of illicit internet banking,” said Bharara. “As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth.”

A notice pasted across Liberty Reserve’s website on Tuesday morning said the domain “has been seized by the United States Global Illicit Financial Team.” As of Wednesday morning, the website is no longer accessible. Attempts to reach Liberty Reserve by phone and email were not immediately successful.

Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the internet’s largest payment processor and money transfer system serving millions of people around the world.

Prosecutors alleged Liberty Reserve was used extensively for illegal purposes, providing an infrastructure that enabled cyber criminals around the globe to conduct untraceable financial transactions.

The network charged a 1 per cent fee on transactions through “exchangers” – middlemen who converted actual currency into virtual funds and then back into cash.

It is alleged when US authorities began to investigate the company, the defendants pretended to shut it down.

But it is alleged that they continued operating “and moved tens of millions of dollars through shell company accounts maintained in Cyprus, Russia, China, Hong Kong, Morocco, Spain, Australia and elsewhere”.

Budovsky and Kats have previous convictions on charges related to an unlicensed money-transmitting business, according to court papers. After that case, the pair decided to move their operation to Costa Rica, the papers said.

In an online chat captured by law enforcement, Kats admitted Liberty Reserve was illegal and noted that authorities in the US knew it was “a money-laundering operation that hackers use”.

Legitimate users

While authorities described Liberty Reserve as being rife with criminals, the site’s ease of use, low fees and irreversible transactions that deterred fraud also attracted legitimate users.

Mitchell Rossetti, whose Houston-based was one of several mainstream merchants that accepted Liberty Reserve’s online-only currency, said his business still had about $US28,000 tied up in Liberty Reserve accounts.

“The irony of this is I went to them because of the security,” Rossetti said. “All sales were final.”

He acknowledged that the currency was being used by scammers but said Liberty Reserve funds were just like any other currency: “The US dollar can be donated to a church or it can pay a prostitute.”

Liberty Reserve appears to have played an important role in laundering proceeds from the recent theft of some $US45 million from two Middle Eastern banks, according to documents made public by authorities earlier this month. In that scheme, thieves stole debit card information and then used it to drain cash from thousands of ATMs around the world in a matter of hours.

As part of the Liberty Reserve investigation, authorities raided 14 places in Panama, Switzerland, the US, Sweden and Costa Rica. In Costa Rica, investigators recovered five luxury cars, including three Rolls-Royces. Bharara said authorities also seized Liberty’s computer servers in Costa Rica and Switzerland.

The seven defendants are each charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years jail.

They’re also charged with one count of conspiracy to operate an unlicensed money transmitting business and of operation of an unlicensed money transmitting business. Both of those charges carry a maximum jail term of five years.


THE Australian government authorised more than $10 million in suspected drug funds to be sent offshore in an extraordinary operation that revealed top Asian political and policing officials are involved in a criminal syndicate, according to an intelligence briefing.

The Australian Crime Commission briefing describes a multibillion-dollar international drug and money laundering network that poses ”a significant threat” to  Australia.

Read an edited extract from The Sting: Australia’s plot to crack a global drug empire

The briefing, seen by The Saturday Age, outlines the findings of Operation Dayu, a four-year intelligence investigation into large-scale money laundering and drug trafficking in the Asia-Pacific region. Operation Dayu included the running of an undercover money-laundering operation, a controversial but legal methodology that involved the ACC sending $10.6 million of suspected drug funds offshore to identify overseas crime bosses and their activities.

Operation Dayu, run in partnership with the Australian Federal Police, state agencies and anti-money-laundering agency Austrac, seized drugs worth an estimated $780 million and exposed a triad-led global criminal entity known as the “grandfather syndicate”.

The briefing says the syndicate is responsible for drug imports worth at least $1.2 billion into Australia annually, with some distributed by outlaw bikie gangs.


According to the briefing, Operation Dayu has uncovered intelligence that the grandfather syndicate has achieved “high-level infiltration of government in both law enforcement agencies and political circles” across much of Asia, including China, Vietnam, Thailand, Burma, Laos and Cambodia.

“There are a number of other countries where this is suspected but not apparent to date,” it says.

One example cited in the briefing involves a “high-placed triad associate” of the grandfather syndicate “attending an Interpol conference in New York”.

The findings highlight the extraordinary challenge facing the Australian government and law enforcement agencies as they seek to combat drug importation via the nation’s porous and, according to some police sources, vulnerable or corrupted border security regime.

The grandfather syndicate has its origins in a “triad conglomerate” formed by formerly warring triad groups in Asia a decade ago.

It works much like a multinational company, with operating hubs around the globe that shift with demand and supply. Australia is a significant market for the syndicate because of the huge demand for drugs and the comparatively high prices Australians pay for them. The briefing says: “The pooling of resources of the main triad groups has allowed them to merge their contacts, assets and holdings, creating a well-established network of contacts across many governments as well as legitimate business and company structures, that enable them to mask and support their criminal activities.”

It consists of “three main heads based in south-east Asia and at least 22 other primary seats [bosses]” based around the globe, and it pours billions of dollars into “high-profile internet gambling facilities, Asian hotel chains and resorts, commercial construction companies, property companies in Hong Kong and Vietnam, casinos and casino ships”.

To move money, the syndicate uses “highly placed government officials, banking staff … and many other means to provide a service that will undercut any other overt or covert money transfer facility”.

Members or associates of the grandfather syndicate are believed by law enforcement officials to be responsible for importations into Australia dating back more than a decade.

These include shipments linked to jailed Sydney crime boss Duncan Lam Sak Cheung and a 105-kilogram heroin shipment in 2005 which led to the jailing of another Asian crime boss, Ly Vi Hung.

Other major seizures linked to Operation Dayu include a $500 million ecstasy bust in 2007, several seizures from Canada in 2008 totalling half a tonne of illicit drugs, and large drug busts in 2009 and 2010 linked to Asian crime figures or bikie gangs supplied by triad-linked importers.

The behind-the-scenes battle in Australian policing agencies and the federal government to confront organised crime – including the work of Operation Dayu – is detailed The Sting, written by Nick McKenzie (Melbourne University Press).



Eight former Siemens senior executives and agents have been charged with plotting to pay $US100 million ($99.55 million) in bribes to secure a $US1 billion contract to produce national identity cards for Argentine citizens, in a scam involving a ”shocking level of deception and corruption”, an assistant US attorney general says.

An indictment returned late on Monday in US federal court in New York charged the defendants with conspiring together from 1996 to early 2007 when they worked for the German engineering company.

A former member of the central executive committee of Siemens AG, Uriel Sharef, and two former chief executive officers of Siemens Argentina were among those charged with conspiracy to violate the Foreign Corrupt Practices Act and the wire fraud statute, the Justice Department said. They were also charged with money laundering, conspiracy and wire fraud.

”Today’s indictment alleges a shocking level of deception and corruption,” Assistant Attorney General Lanny Breuer said. ”Business should be won or lost on the merits of a company’s products and services, not the amount of bribes paid to government officials.”

The charges against Sharef marked the first time a board member of a Fortune Global 50 company had been charged in a Foreign Corrupt Practices Act case, Breuer said. He was not in custody on Tuesday and it was not immediately clear who might represent him in legal proceedings. None of the bribe recipients were named in the indictment and none of the defendants is in the United States.

Breuer said it was Justice Department policy not to name people who are not indicted and that the US would work with other countries to bring the defendants to justice.

Seven of the defendants were also charged in a civil case in New York in which the Securities and Exchange Commission accused them of violating the Foreign Corrupt Practices Act. It’s the largest action the SEC has ever brought against people accused of bribing foreign officials, said Robert Khuzami, SEC director of enforcement.

Ronald Hosko, the FBI’s agent in charge of the bureau’s Washington field office criminal division, and Khuzami emphasised the complexity of the investigation, which authorities unravelled with what Breuer called ”extraordinary” cooperation from Siemens, the German engineering company.

”The company is not indicted,” said Alexander Becker, a Siemens spokesman. ”We can’t comment on proceedings against individuals.”

The conspirators committed to pay $US100 million in bribes to Argentine officials and actually paid more than $US60 million, including more than $US25 million laundered through the US banking system, Breuer said.

After the identity card project was terminated, the defendants tried to recover profits they would have gotten from the contract that was awarded to them illegitimately, US Attorney Preet Bharara said.

The SEC said bribes were initially paid to secure the contract to produce national identity cards known as Documentos Nacionales de Identidad for Argentine citizens. According to the indictment, the government of Argentina invited bids in 1994 to create state-of-the-art national identity cards to replace manually created national identity booklets that citizens previously received.

The contract issued to a special-purpose subsidiary of Siemens was suspended and then cancelled after a change in Argentine political administrations, the indictment said.


Police have charged a man over a suitcase allegedly stuffed with $1 million in cash after it being left in a Sydney cafe this week.

The man, a 49-year-old Chinese national from Hong Kong, was in Concord Hospital suffering from an undisclosed illness after he was detained by police on Tuesday afternoon.

He allegedly carried the black, unlocked suitcase, filled with Australian banknotes reportedly amounting to about $1 million, into Caffe Marco in Burwood at 8am on Tuesday.

He allegedly walked out of the outlet only a few minutes later.

Ashfield police saw him in Summer Hill some hours later and took him to Burwood police station, where he allegedly assaulted three officers.

The officers suffered minor injuries, police said.

The man was released by the hospital yesterday and charged with goods in custody, dealing with the proceeds of crime over $100,000, dealing with property suspected to be the proceeds of crime and assaulting police.

He was refused bail and will appear at Burwood Local Court today.

Earlier, police alleged the money was linked to  criminal activities, although they could not say which one, Inspector David Cottee of the Burwood Local Area Command said.

The cash was banked in a police bank account at one of the big four banks immediately after it was found.

“There’s no piles of cash sitting around in the police station,” Inspector Cottee said.

“It went straight to the bank and the bank provided us with a money-counting machine and a teller and kept it open until they were able to count and verify it.”

Two men, arrested by police at Central Station in April with $2 million in cash in two suitcases, pleaded guilty to dealing with property suspected to be the proceeds of crime.

Li Wang, 26, and Yu Xiang, 25, will be sentenced next month.

FBI charges

11 internet poker kingpins

April 16, 2011
Daniel Tzvetkoff has become a prized FBI informant in a bid to avoid a 75 year jail sentence.
Daniel Tzvetkoff has become a prized FBI informant in a bid to avoid a 75 year jail sentence. Photo: Glen Hunt

Australian internet whiz Daniel Tzvetkoff, who has become a prized FBI informant in a bid to avoid a 75 year jail sentence in the US, may have brought down the multi-billion dollar American online poker industry.

The FBI announced on Friday it had charged 11 people, including the founders of three of the largest internet poker companies in the US, with bank fraud, money laundering and illegal gambling offences.

The three poker sites – PokerStars, Full Tilt Poker and Absolute Poker – have been shut down. 

It is believed Gold Coast entrepreneur Tzvetkoff’s decision to turn super-grass and reveal to authorities the secret schemes used by poker companies to illegally launder billions of dollars via phony bank accounts and shell companies helped the FBI and New York prosecutors build their case.

“These defendants, knowing full well that their business with US customers and US banks was illegal, tried to stack the deck,” FBI assistant director Janice Fedarcyk, in announcing Friday’s charges, said.

“They lied to banks about the true nature of their business.”

The internet gambling kingpins, including Isai Scheinberg and Paul Tate of PokerStars, Raymond Bitar and Nelson Burtnick of Full Tilt Poker and Scott Tom and Brent Beckley of Absolute Poker, face 30-year sentences in US jails.

A year ago it was 28-year-old one-time Queensland high-flyer Tzvetkoff who faced the long stint in the US federal prison system for money laundering, bank fraud and other charges.

US authorities arrested Tzvetkoff exactly a year ago (April 16) when he visited one of the top casinos on the Las Vegas strip, the Wynn, for a gambling conference.

Tzvetkoff was painted by prosecutors as the brains behind the creation of an illegal system for processing $US500 million in transactions between US gamblers and internet gaming websites. Tzvetkoff allegedly created phony shell companies with names unrelated to gambling to process the transactions.

US federal prosecutors vigorously fought to keep Tzvetkoff in jail, battling and eventually overturning a Las Vegas judge’s decision to grant the Australian bail.

Tzvetkoff was transferred to a New York jail and sat there until June when in a surprise about-face, he was quietly released with his whereabouts unknown.

“He’s turned the corner, seen the light and is co-operating,” former FBI agent Harold Copus, after reviewing the details of the case, told AAP.

It is believed Tzvetkoff and his fiancee, Nicole Crisp, are being held in a safe house.

Mr Copus, head of Atlanta-based private investigative company Copus Security Consultants, said that was normal procedure for a high-value informant.

Prosecutors and Tzvetkoff’s Boston-based lawyer Robert Goldstein have refused to comment on the Tzvetkoff case.

Tzvetkoff’s life in exclusion and period in Las Vegas and New York jails was polar opposite to his flamboyant former life as an internet high-flyer.

Just a few years ago Tzvetkoff, who created Brisbane-based internet payment processing company Intabill, had an estimated personal worth of $A82 million, bought a $A27 million home on the Gold Coast, drove Lamborghinis and Ferraris and sponsored a professional motor racing team.

Prosecutors during last year’s bail hearing in Las Vegas suggested Tzvetkoff may have a secret stash of $US100 million in money netted from illegal dealings.


Perth accountant Trevor Thomson

jailed for $27m fraud in an

Australian  scheme to defraud

the Commonwealth

A PERTH accountant has been sentenced to 13 months jail for his part in a $27 million tax fraud.

Trevor Neil Thomson, 57, of South Perth, was sentenced by the WA Supreme Court  after admitting to conspiring to defraud the Commonwealth.

Australian Crime Commission executive director of serious organised crime Michael Outram said Thomson illegally conspired with others to evade paying between $25.78 million and $27.68 million in tax, involving family trusts, between 1999 and 2001.

“Through the use of false documents, Mr Thomson deliberately attempted to hide profits generated by his clients’ businesses and knowingly misled the Australian Government to ensure his clients did not pay their required tax,” Mr Outram said in a statement.

“Accountants and lawyers who help clients evade their tax responsibility by using complicated, deceptive schemes such as this one, will be investigated and prosecuted.”

Thomson was arrested as part of Project Wickenby, conducted jointly by the Australian Tax Office, Australian Federal Police, Australian Crime Commission, Australian Securities and Investments Commission, and the Commonwealth Director of Public Prosecutions.

Tax Commissioner Michael D’Ascenzo said the Commission would continue to crack down on undeclared offshore accounts.

“Our ability to trace fund flows around the world is constantly expanding and we are identifying transactions and participants in abusive secrecy haven schemes,” Mr D’Ascenzo said in a statement.

“This sentencing sends a clear message to participants and promoters of complex offshore schemes that they will face serious consequences.”

Thomson was given a “significant reduction” in his sentence, for entering an early guilty plea and co-operating with authorities.

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