Month: August 2020

Eight-year NCA investigation denies organised crime group £17 million property portfolio

Drug Trafficking, Fraud, Money Laundering
Fifty nine properties worth an estimated £17 million have been recovered following National Crime Agency investigations into a prolific organised crime group carried out over almost a decade. In addition to a successful criminal investigation, the NCA conducted four linked civil recovery investigations over an eight-and-a-half year period into dozens of individuals who were suspected of financial links to drug dealers in East Birmingham. NCA officers established that the properties were acquired using the proceeds of crime including heroin importation and distribution, fraud and money laundering. Alam and Ameran Zeb Khan have both been convicted of drug trafficking offences, the…

A U.S. judge on Monday dismissed a lawsuit accusing Denmark’s Danske Bank A/S and four former top executives of defrauding shareholders by hiding and failing to stop widespread money laundering at its former Estonian branch.

Money Laundering
U.S. District Judge Valerie Caproni in Manhattan said shareholders in the proposed class action failed to sufficiently plead that the bank improperly reported revenue derived from money laundering or downplayed its supervision failures. She also said the plaintiffs, led by four pension funds in New York and Massachusetts, failed to show that Danske acted recklessly or with conscious disregard that its statements were false and misleading. “They allege in a conclusory way that defendants and employees of (Danske) received reports contradicting public statements, and fail to connect any of those reports to specific representations by specific persons,” Caproni wrote. The…

The Quiet Man in Stockholm Who Laundered China’s Oil Money for Iran

Corruption
This article from the Organized Crime and Corruption Reporting Project (OCCRP) and Sweden’s Sveriges Television (SVT) is part of an investigation in which Courthouse News Service and NBC News are partners. By all outward appearances, Hatam Khatoun Nema was a small-time money changer working from a nondescript office in Järfälla, a workaday Stockholm suburb. In reality, the Swedish-Iranian businessman ran an obscure Hong Kong company, H M E A CO., LIMITED, that laundered hundreds of millions of dollars through a web of shell companies and businesses stretching from Singapore to Panama.  A major customer of Nema’s operation was the Islamic Republic of Iran. Between…

CP20/17: Extension of Annual Financial Crime Reporting Obligation

FCA
Why we are consulting Our annual financial crime reporting obligation shows us the potential money laundering risk faced by a firm, based on its regulated activities and the nature of its customers. The obligation is set out in our Handbook SUP 16.23 Annual Financial Crime Report (REP-CRIM). When we introduced it, we committed to consulting on any future policy change and providing a cost benefit analysis. We currently assess whether REP-CRIM applies by looking at firm type, eg banks, building societies and mortgage lenders and activity type, eg intermediaries, e-money institutions and consumer credit firms. Approximately 2,500 of the 23,000…

Banks and financial institutions need to assess money-laundering risks and conduct appropriate due diligence when dealing with foreign public officials and their families or associates, five regulatory agencies said.

Money Laundering
People who are considered politically exposed may pose higher risks because their funds may be the proceeds of corruption or other illicit activities, the banking regulators said in a joint statement. The agencies added, however, that risks associated with politically exposed individuals vary and not all of them are automatically higher risk. The agencies don’t include U.S. public officials in the politically exposed persons category. “The risk depends on facts and circumstances specific to the customer relationship,” said the statement issued Friday by the Federal Reserve Board, the Federal Deposit Insurance Corp., the U.S. Treasury Department’s Financial Crimes Enforcement Network, the National…

Lori Loughlin jailed over college admissions scandal

Corruption
Lori Loughlin, star of beloved US sitcom Full House, has been given a two-month prison sentence for paying $500,000 in bribes to get her daughters into the University of Southern California. Her husband, fashion designer Mossimo Giannulli, will spend five months in prison for the same “breathtaking fraud”, a judge ruled.  Giannulli was ordered to pay a $250,000 fine and do 250 hours of community service, while Loughlin will pay $150,000 and do 150 hours.  Prosecutors said Giannulli deserves a tougher sentence because he was “the more active participant in the scheme,” while Loughlin “took a less active role, but was nonetheless…

2,600 Belgian clients involved in Credit Suisse investigation

Investigation
Image Credit: Credit Suisse in Zurich. © Plaza Financiera, Flickr Commons The federal prosecutor’s office in Brussels has opened a criminal investigation into the Swiss bank Credit Suisse, in particular the dealings of 2,600 Belgian clients suspected of using Swiss bank accounts to evade taxes.  “A criminal investigation has been opened against Credit Suisse for money laundering and unlawfully acting as a financial intermediary, as well as against Belgian customers who have not yet undergone tax regularisation.” On several occasions, the tax authorities in Belgium have offered a partial amnesty to anyone wishing to repatriate money hidden in accounts abroad,…

Extending criminal liability for money laundering: update on Germany’s new draft law implementing the latest EU AML directive

Money Laundering
August 21 2020 In January, a draft bill reforming the crime of money laundering in Germany (section 261 of the German Criminal Code (StGB)) was leaked. In a February blog post, we criticised how broad the suggested definition was. Last week, the official draft bill was published by the Federal Ministry of Justice. Much to the surprise of German anti-money laundering (AML) circles, it goes even further. The most important change compared to the unofficial draft and the law in place today is the complete elimination of a catalogue of suitable predicate offences. A ‘predicate offence’ is the underlying crime that…

A Hidden Tycoon, African Explosives, and a Loan from a Notorious Bank: Questionable Connections Surround Beirut Explosion Shipment

Investigation
Since the devastating explosion of a store of ammonium nitrate in Beirut’s port on August 4, Lebanese citizens have taken to the streets in shock, outrage, and grief. Beirut’s Grain Silo Was One Man’s Refuge Through Years of War. On August 4, It Was Where He Died Read the story of one family’s loss from our partner Daraj.com. Above all, they have demanded answers: Where did the nearly 3,000 tons of explosive chemicals come from, and who owned it? Why did the rickety ship that brought the hazardous material to Lebanon end up stranded in the city’s port in late 2013?…

Insurance billionaire Greg Lindberg sentenced to 7 years in bribery case

Corruption
Greg Lindberg, the billionaire businessman at the heart of one of North Carolina’s worst government corruption scandals, will spend more than seven years in prison, a federal judge ruled Wednesday in Charlotte. U.S. District Judge Max Cogburn also ordered Lindberg to pay a $35,000 fine and placed him on three years’ probation for his scheme to bribe Insurance Commissioner Mike Causey with up to $2 million in campaign contributions. Eventually, Lindberg, one of the state’s largest political donors who wrote checks to both parties, funneled $250,000 earmarked for Causey through the state Republican Party, an illicit transaction handled by the party’s…

Regional Report: In face of massive EU AML scandals, prosecutors, regulators, banks looking to bolster information sharing, accountability, liability

Compliance
The Skinny:  In this regional report focusing on Europe, the ACFCS Netherlands Chapter looks at some of the EU AML scandals and issues in and out of banks that can make compliance difficult.  The takeaways come from the “Fintech and FinCrime in Europe” session, a panel from ACFCS Fincrime Virtual Week, the association’s first-ever fully online fincrime compliance conference.   More than 5,600 attendees, speakers and thought leaders registered for the event, which addressed the overarching themes of Disruption, Innovation and Resiliency. In the panel focused on compliance and regulatory trends in the EU, speakers highlighted several key trends, including: …
Download
Publication of Source of Wealth and Source of Funds (Private Banking/Wealth Management) FAQs  The Wolfsberg Group is pleased to publish Frequently Asked Questions (FAQs) on how Financial Institutions can identify, mitigate and manage money laundering risks by undertaking Source of Wealth (SoW) and Source of Funds (SoF) checks on relevant customers, when appropriate and/or required by applicable regulation. Such checks are to be considered among the key elements of customer risk assessment and risk management for certain customers, as defined by each Financial Institution. This document is primarily aimed at Financial Institutions’ Private Banking/Wealth Management customer segments and the Group…

Sanctions and Transport

Sanctions
What are Transport Sanctions? From almost the first moment someone fashioned wood into a canoe to transport people and goods across a river there has been some form of maritime regulation. As with any regulations however, there will always be someone who seeks to circumvent them. Issues such as falsifying documents, obscuring ownership and hiding a ship’s registry have been endemic in the shipping industry for centuries. Unfortunately, there is no exception when it comes to enforcing sanctions. Such a multifaceted problem can never be tackled by one Government department alone. While OFSI plays its part in the implementation of…

US calls for ‘significant’ jail time for Panama Papers tax crooks

Investigation
“Meaningful sentences must be given… to forewarn others of the consequences for engaging in multi-year tax fraud,” prosecutors argue. By Will Fitzgibbon July 31, 2020 The first people to plead guilty following the United States government’s response to the Panama Papers investigation should spend “significant” time in jail, prosecutors say. U.S. officials last week recommended prison for Harald von der Goltz and his accountant Richard Gaffey. Both men pleaded guilty to financial crimes earlier this year and are at home on bail. “For decades, von der Goltz orchestrated a complex fraudulent scheme for the purpose of evading tax payments that he owed to the United…

Will the e-money boom make the UK a hub of money laundering?

Money Laundering
openDemocracy investigation finds that international money launderers are moving into Britain’s e-money business – with the Financial Conduct Authority’s official seal of approval. Article By David Leask Richard Smith COVID is killing cash. Even as lockdowns loosen, consumers are turning away from notes and coins like never before. A survey in April found four out of five Britons – many forced to do all their shopping online – were considering new digital ways to pay. Some are turning to ‘e-money’, with a raft of new money-handling products aiming to challenge industry leader PayPal. From a health point of view, this…

FURLOUGH FRAUD AND THE FINANCE ACT 2020

Fraud
The Coronavirus Job Retention Scheme (the “Furlough Scheme”) The coronavirus pandemic (COVID-19) detrimentally impacted not just public health, the NHS and other vital public services, but the economy as a whole.  The impact of the “lockdown” was that overnight a lot of businesses closed or experienced unparalleled revenue shrinkages. This placed jobs at risk. If employers could no longer generate revenue then they could no longer keep on employees.  The spectre of redundancy loomed.  In response, the government introduced The Coronavirus Job Retention Scheme (the ‘Furlough Scheme’). Instead of mass redundancy, businesses could retain staff, as an alternative to redundancy. …