Year: 2020

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. …

Global Witness exposes international Syrian – Russian money laundering network financing brutal Al-Assad regime (Global Witness)

Money Laundering
New report shows how Syrian-Russian money laundering network uses anonymous companies in the EU and UK Overseas Territories Read the full report, Assad’s Money Men in Moscow, here. Global Witness reveals today the workings of a Syrian-Russian money laundering network that has helped prop up President Bashar al-Assad’s regime during the ongoing armed conflict. This assistance ranged from helping the regime purchase fuel and banknotes to providing front companies possibly used by its chemical weapons and ballistic missiles programme. Close associates of the network also appear to have helped embargoed North Korean firms evade UN sanctions.  The report, Assad’s Money Men…

How Germany’s SEC failed to act on warnings about Wirecard’s financial practices (Financial Crime Compliance Education)

Investigation
Germany’s top financial supervisor received detailed warnings about deceptive financial practices at Wirecard AG starting in 2008 but repeatedly declined to investigate the allegations, turning instead against the accusers. Over more than a decade, investors, U.S. authorities, journalists and people close to the company warned of possible fraudulent accounting or money laundering, practices that are now at the heart of a criminal investigation into the disgraced fintech giant. But as the red flags piled up, Germany’s equivalent of the U.S. Securities and Exchange Commission played down the allegations, kicked the ball to other agencies and delayed examining the company’s accounts, according to previously unpublished documents,…

NCA statement on modern slavery allegations in Leicester (National Economic Crime Agency)

Exploitation, Slavery
NCA statement on modern slavery allegations in Leicester  Modern slavery The National Crime Agency can confirm that it has received information regarding allegations of modern slavery and exploitation in the textile industry in Leicester. We are now in the process of assessing that information, alongside our partners, which include Leicestershire Police, HMRC, GLAA, the Health and Safety Executive, Leicester City Council, Leicestershire Fire and Rescue and Home Office Immigration Enforcement. Our primary focus is on the protection of vulnerable people and safeguarding them from harm. As part of that, in recent days NCA officers have joined partners in attending a…

NCA and police smash thousands of criminal conspiracies after infiltration of encrypted communication platform in UK’s biggest ever law enforcement operation (National Economic Crime Agency)

Investigation
NCA and police smash thousands of criminal conspiracies after infiltration of encrypted communication platform in UK’s biggest ever law enforcement operation  Operation Venetic Entire organised crime groups dismantled during Operation Venetic with 746 arrests, and £54m criminal cash, 77 firearms and over two tonnes of drugs seized so far. UK law enforcement has made a massive breakthrough in the fight against serious and organised crime after the takedown of a bespoke encrypted global communication service used exclusively by criminals. EncroChat was one of the largest providers of encrypted communications and offered a secure mobile phone instant messaging service, but an…

Economic Crime Levy consultation (UK Treasury)

Consultation
Consultation description At Budget 2020 the government announced its intention to introduce an economic crime levy. This consultation invites views on the design principles of the levy, and how this levy could operate in practice, to ensure that it is proportionate and effective. It has been developed to help realise the public and private sectors’ shared ambition to improve the UK’s response to economic crime. The consultation seeks views on what the levy will pay for, how it should be calculated and distributed across the anti-money laundering (AML) regulated sector, and how the levy should be collected. The consultation also…

Superintendent Lacewell announced DFS imposes $150 million penalty of Deutsche Bank

Investigation
In connection with Bank’s relationship with Jeffery Epstein and correspondent relationships with Danske Estonia and FBME Bank (Department of Financial Services) First Enforcement Action by a Regulator Against a Financial Institution for Dealings with Jeffrey Epstein  Superintendent of Financial Services Linda A. Lacewell announced today that Deutsche Bank AG, its New York branch, and Deutsche Bank Trust Company America (collectively “Deutsche Bank” or the “Bank”) have agreed to pay $150 million in penalties as part of a Consent Order entered into with the New York State Department of Financial Services (“DFS” or the “Department”) for significant compliance failures in connection…

Federal Reserve Board announces termination of enforcement action with State Street Corporation and State Street Bank and Trust Company

Uncategorized
The Federal Reserve Board on Thursday announced the termination of the enforcement action listed below: State Street Corporation and State Street Bank and Trust Company, both of Boston, MassachusettsWritten Agreement, dated May 28, 2015 (PDF) on https://www.federalreserve.gov/newsevents/pressreleases/enforcement20200604a.htm Terminated May 29, 2020 Additional enforcement actions can be searched for. For media inquiries, call 202-452-2955. Article Credit: https://www.federalreserve.gov/newsevents/pressreleases/enforcement20200604a.htm

KYC Reviews: The Dragon of AML Compliance Programmes

Compliance
Written by Samantha Sheen | Jun 30, 2020 9:38:09 AM “It does not do to leave a live dragon out of your calculations, if you live near him.”J.R.R. Tolkien, The Hobbit Introduction The most common area of AML/CFT compliance programmes that organisations struggle with are in relation to KYC reviews, refresh and subsequent remediation work needed to update or patch up existing customer KYC information. It’s a tough nut to crack. This month the Jersey Financial Service Commission (“JFSC”) published feedback from its examination of firms required to comply with local AML/CFT regulations. Findings in relation to KYC reviews included: In over half of the firms who used reviews…

Treasury Targets Major Iranian Metals Companies and Foreign Subsidiaries and Sales Agents

Investigation
WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against four steel, aluminum, and iron companies operating within Iran’s metals sector, including one subsidiary of Mobarakeh Steel Company — Iran’s largest steel manufacturer. Treasury is also designating one Germany-based and three United Arab Emirates (UAE)-based sales agents for being owned or controlled by Mobarakeh Steel Company. Mobarakeh Steel Company was designated in 2018 pursuant to counterterrorism authorities for providing support to Iran’s Mehr Eqtesad Iranian Investment Company, an entity designated for being owned or controlled by the IRGC-affiliated Bonyad Taavon Basij. Mobarakeh Steel Company was…

POLICE RECOVER ‘MILLIONS’ IN STOLEN TREASURES AFTER BUSTING ARCHAEOLOGICAL CRIME GANG IN BULGARIA

Investigation
An international crime gang that ransacked ancient sites in Bulgaria and trafficked stolen archaeological goods whose total worth exceeds several millions of euros has been broken up as a result of an international police operation coordinated by Europol. 8 individuals were arrested and some 4,600 archaeological items were recovered as a result of this sting.  Nicknamed Operation MEDICUS, this effort was led by the General Directorate for the Fight against Organised Crime of the Bulgarian Ministry of Internal Affairs (Главна дирекция “Борба с организираната престъпност” при Министерството на вътрешните работи на Република България) together with the British Metropolitan Police and…

Founder of Anti-Money Laundering Bitcoin Project indicted for money laundering

Investigation, Money Laundering
The U.S. Department of Justice (DOJ) indicted the founder of “AML Bitcoin” on money laundering and wire fraud charges. The U.S. Securities and Exchange Commission (SEC) also filed charges, alleging the AML Bitcoin team violated federal securities laws. According to a court filing dated June 22, Texas resident Rowland Marcus Andrade, the founder of the NAC Foundation, allegedly raised funds by conducting an initial coin offering for tokens representing AML Bitcoin, telling investors that the tokens would ultimately be converted into actual AML Bitcoin (which isn’t actual bitcoin). The SEC and DOJ also charged longtime DC lobbyist Jack Abramoff on conspiracy, lobbying disclosure and deceptive practices counts, alleging he…

Money Laundering and the Illegal Wildlife Trade

Organised Crime
25 June 2020 – The illegal wildlife trade is a major transnational organised crime, which generates billions of criminal proceeds each year. The Financial Action Task Force (FATF) has conducted a new study to provide guidance to countries on measures they can take to combat money laundering from the illegal wildlife trade. Wildlife traffickers exploit weaknesses in the financial and non-financial sectors, to move, hide and launder their proceeds, enabling further wildlife crimes and damaging financial integrity. One of the most effective ways to identify the broader criminal networks and take the profit out of this crime, is to follow the financial trails…

Six arrested and luxury cars seized as part of drugs and money laundering conspiracy

Investigation, Money Laundering
Suspected members of an organised crime group in Merseyside have been arrested as part of a drug trafficking conspiracy. Five men, aged between 35 and 48, and a woman aged 35, were arrested in raids on Thursday 18 June, in the Wirral and Wallasey, and Deeside, by officers from the National Crime Agency, with support from Merseyside Police. All five men were apprehended on suspicion of conspiracy to import controlled drugs, conspiracy to launder money, and participating in the activities of an organised crime group. The woman was arrested on suspicion of conspiracy to import controlled drugs and money laundering.…

The Murky History of Russia’s Largest Sports Betting Company

Organised Crime
One day in the summer of 2013, the central Moscow office of Fonbet, Russia’s largest sports betting company, looked like a besieged fortress. Sparks and the smell of burnt metal filled the air. Officers from the anti-corruption directorate of the Ministry of Internal Affairs had come to execute a search warrant. Finding a barred door, they sawed it open using a grinder. Before the search, investigators had used marked banknotes to place bets on tennis, soccer, and basketball matches on the company’s terminals. They found that Fonbet was providing online betting services using a website registered abroad. All forms of…

Scams Involving the Federal Reserve Name

Scams
The Federal Reserve Bank of New York has become aware of numerous COVID-19 themed phishing email scams in which fraudsters are fraudulently impersonating employees of the Federal Reserve System and purporting to offer financial relief programs. The fraudulent emails appear to come from the Federal Reserve System, and reference financial relief programs contained in the CAREs Act including the Paycheck Protection Program and Economic Impact Payments. If clicked, the malicious link in the emails leads to a convincing website containing the logos of the Federal Emergency Management Agency (FEMA) and the Centers for Disease Control and Prevention (CDC). The malicious…

Police bust alleged B1bn drug-money laundering operation

Money Laundering
Police arrested six people during raids in Samut Prakan and Nonthaburi and seized assets worth about 100 million baht on Wednesday, in an operation aimed at suspects in the laundering of a billion baht of drug traffickers’ money. Six premises were searched in Samut Prakan. The prime location was house 129/72 in the Chaiyapruek housing estate in tambon Bang Muang of Muang district. It belonged to Naruepol Phapphithee and his wife Patthama Buathong, who were named in arrest warrants. Police suspect them of laundering money for several drug gang leaders, including Pannawit Prathum, aka Kokae, and Theppabut Solo, who is…

The FCA’s response to COVID-19 and expectations for 2020

Speech
Speaker: Megan Butler, Executive Director of Supervision – Investment, Wholesale and SpecialistsEvent: PIMFA’s Virtual FestivalDelivered: 4 June 2020Note: this is the speech as drafted and may differ from the delivered version Highlights: In operational terms, advisors and wealth managers responded well to the onset of the coronavirus (Covid-19) crisis. Whilst acting with speed has been the absolute priority, as the industry adapts to the long-term impact of coronavirus, there is a need to transition from the immediate ‘incident response’ towards focusing on longer-term impacts. In her speech to PIMFA’s members, Megan Butler explores the FCA’s priorities and longer-term expectations for the wealth management and advice industry.…

Wirecard Files for Insolvency Following Criminal Investigation

Investigation
German payment and financial services provider, Wirecard, announced on Thursday that it would file for insolvency just days after its former CEO surrendered to authorities following an arrest warrant they issued against him over a missing 1.9 billion euros (US$ 2.13 billion) the firm claimed probably “do not exist.” According to German prosecutors in Munich, former CEO Dr. Markus Braun, possibly in collaboration with other individuals, managed to artificially inflate the company’s assets and sales in order to make it more appealing to both investors and customers. He was released from jail on Tuesday after posting five million euros ($5.6 million) in…