Month: July 2021

United Kingdom Threat Assessment 2021 by Financial Crime News

Financial Crime
This United Kingdom Threat Assessment by Financial Crime News for 2021 is now published. To download the UK Threat Assessment click here: UK Final July PBd 2021 The main Financial Crime threats are from fraud, drug trafficking, cybercrime, human smuggling, human trafficking, acquisitive crime, wildlife trafficking, tax offences and corruption (mostly from overseas). Based on an evaluation of all 43 FATF Member/Observer Countries by FCN (representing 87% of Global GDP), the UK faces significant threats ranked as equal 7th/43 (with Italy) behind Russia, India, Mexico, Brazil, Turkey & China. On Responses the UK is ranked 3rd best out of 43…

The Bribery Act – 10 years on

Bribery, Legislation
When the Bribery Act 2010 was introduced it was feted and condemned in equal measure. While supporters claimed it would be the international gold standard for bribery legislation, critics called it draconian. A decade later it seems that, at least in terms of prosecutions, the act falls far short of Draco’s standards. The Crown Prosecution Service and Serious Fraud Office have prosecuted a handful of individuals, and use of the corporate offence under section 7 (failure to prevent bribery) has almost exclusively been confined to deferred prosecution agreements (DPAs), rather than convictions. However, before declaring the act a failure, one…

Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds

Money Laundering
SummarySeeking views on amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. This consultation closes at 11:45pm on 14 October 2021 Consultation descriptionThis consultation invites views and evidence on the steps that the government proposes to take to amend the Money Laundering Regulations (MLRs). These amendments will allow the government to make some time-sensitive updates to the MLRs, which are required to ensure that the UK continues to meet international standards set by the Financial Action Task Force, whilst also strengthening and ensuring clarity on how the anti-money laundering regime operates, following…

Transforming to a Forward Looking Regulator – Nikhil Rathi, FCA CEO

Regulation
Highlights Being more innovative – data is the lifeblood of a modern regulator. Being more assertive – acting decisively and being clear about what we’re doing, why we’re doing it and where the limitations lie. Being more adaptive – working flexibly to respond to ever-changing challenges. Measuring our success – we will be clearer on what outcomes matter and what metrics we use to measure them. When I became CEO last October, I joined a purposeful organisation. Our people working round the clock with great energy and to great effect to stand up for consumers and businesses affected by the…

UK Government to Scrap National Fraud Reporting Centre

Fraud
UK national fraud and cybercrime reporting centre Action Fraud is being scrapped, the government said in its Beating Crime Plan. This comes after an undercover investigation by The Times in 2019 revealed that the centre’s telephone handlers were being trained to mislead victims into thinking their cases would be investigated, while they were almost never looked at. According to the newspaper, as few as one-in-50 reports actually led to a fraudster being caught and that only one-in-200 police officers were assigned to fraud investigations. This prompted the Home Office to commission a review of fraud policing in the UK, led…

Companies House: ‘Enabler of Illegal Activity’

Financial Crime
Many of us routinely use Companies House to check the legitimacy of a business, yet an investigation by The Sunday Times has shown it may not be a reliable source of information. Every UK business has to be registered with Companies House, but the investigation has revealed that the organisation carries out only basic checks on the information it is given and has no statutory power to verify the accuracy of the information it receives. As a result of the limited checks, UK companies registered with Companies House are involved in money laundering on an industrial scale. One example found…

The U.K.’s Reputation Management Industry is Destroying Journalism

Financial Crime
Protecting media freedom and tackling corruption are intrinsically linked. The UK needs to address both to achieve either effectively This month, British newspapers reported that an Azerbaijani millionaire DJ, Mikaela Jav, and her husband, Suleyman Javadov, had been forced to forfeit £4 million to the National Crime Agency, after admitting the funds had entered the UK illegally through a complex money laundering system known as the ‘Azerbaijan Laundromat’. Pictures of the Javadovs’ lavish lifestyle, including four multi-million pound properties in London, ran alongside commentary pointing out that the NCA actually reclaimed £10 million less than was originally under question. The…

Covid-19 Support Could Cost U.K. Taxpayers Billions in Fraud and Error

Fraud
The UK’s House of Commons Public Accounts Committee has estimated that fraud and error related to Covid-19 support schemes could cost UK taxpayers billions of pounds. In a new report focusing on fraud and error relating to government support schemes, the committee said undetected fraud and error resulted in losses to the public purse of around £25 billion a year. This amount could be doubled through fraud relating to Covid support, with evidence from the Cabinet Office suggesting that fraudulent claims for Universal Credit, furlough and the Bounce Back Loan Scheme could add up to losses of more than £30bn.…

European Commission Overhauls Anti-Money Laundering and Countering the Financing of Terrorism Rules

Money Laundering, Regulation
The European Commission has today presented an ambitious package of legislative proposals to strengthen the EU’s anti-money laundering and countering terrorism financing (AML/CFT) rules. The package also includes the proposal for the creation of a new EU authority to fight money laundering. This package is part of the Commission’s commitment to protect EU citizens and the EU’s financial system from money laundering and terrorist financing. The aim of this package is to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system. As…

Ex-bank Director and Minister Jailed in Portuguese Money Laundering Case

Money Laundering, Prosecutions
Armando Vara, a former director of Portugal’s state-owned Caixa Geral de Depositos bank and ex-government minister, has been imprisoned for two years for money laundering. He is already behind bars for a separate offence. The public prosecutor told Lisbon criminal court of a complex financial circuit of accounts in Switzerland and offshore companies, with Vara as the true beneficiary, and mentioned around €2m ($2.37m) being transferred to a Swiss account in the name of Vama, an offshore company of which Vara was ultimate beneficiary. When questioned by the criminal investigation judge in 2009, Vara admitted ownership of all the accounts…

Corruption and Cybercrime Top List of U.S. Anti-Money-Laundering Concerns

Money Laundering
The U.S. Treasury Department on Wednesday issued a wide-ranging set of national anti-money-laundering priorities, naming corruption and cybercrime among the areas where financial institutions should focus their compliance resources. The list is the first created by the Treasury’s Financial Crimes Enforcement Network, or FinCEN, following a major overhaul of U.S. anti-money-laundering laws in January. Legislation passed by Congress required FinCEN to develop a national strategy for countering money laundering and terrorism financing and to issue a list of priorities every four years. Financial industry groups had advocated to make the prioritization effort a part of the anti-money-laundering act, hoping it…

HSBC faces questions over disclosure of alleged money laundering to monitors

Money Laundering, Prosecutions
Bank was under supervision by US Department of Justice-appointed team because of previous violations HSBC discovered a suspected money laundering network that received $4.2bn (£3bn) worth of payments, it has emerged, raising questions over whether it disclosed the information to US monitors who at the time were ensuring the bank cleaned up its act. Insiders who spoke to journalists as part of a joint investigation by the Guardian and the Bureau of Investigative Journalism, have suggested that HSBC may not have appropriately shared the information with the monitoring team installed by US regulators in 2012 after HSBC allowed drug cartels…

Binance Crackdown: Regulators Tussle with the “Wild West” World of Crypto

Digital Currencies, Regulation
Changpeng Zhao’s company Binance is everywhere and yet based nowhere. The cryptocurrency exchange has processed trillions of dollars in trades this year as it transfers digital and conventional money around the world through a constellation of affiliates. And yet it has no headquarters. Incorporated in the Cayman Islands, the company has grown at extraordinary speed into a leading player in the fledgling industry. But the 44-year-old Canadian-Chinese mogul’s business empire is now attracting intense scrutiny from global watchdogs as they grapple with new financial entities that act in many jurisdictions but are rooted in none. Binance has led a peripatetic…

Binance CEO ‘Responds to Global Regulatory Pressure Calling Compliance a Journey’

Digital Currencies, Regulation
“We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” said CZ. Binance CEO Changpeng “CZ” Zhao has likened the recent pressures by regulators against his exchange business to that of the initial development of the car. In an open letter on Wednesday, CZ said the adoption and development of crypto contained many parallels to regulations around automobiles in that “laws and guidelines were developed along the way.” “We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” said CZ. “More regulations are, in…

Deutsche Bank Enabled Massive US Ponzi Scheme

Fraud, Prosecutions
Deutsche Bank AG is accused of turning a blind eye to a years-long Ponzi scheme that involved fraudulent investments in Florida, expanding the growing list of legal and compliance headaches for Chief Executive Officer Christian Sewing. Liquidators of two now-bankrupt Cayman Islands investment funds sued the bank in New York and Florida, claiming it “enabled theft on a massive scale” that led to hundreds of millions of dollars in losses, court records show. Deutsche Bank maintained accounts for entities involved in the scheme despite repeated red flags and SEC sanctions against them, and it failed to enforce its own rules…

Unseen and Unsanctioned, Belarusian Tycoon Slipped into the EU via Lithuanian Investments

Sanctions
Alexei Aleksin and Alexander Zaytsev have emerged as two of the wealthiest businessmen in Belarus. What are they doing in Lithuania? Key Findings Aleksin and Zaytsev began to receive generous economic preferences from dictator Alexander Lukashenko in the aftermath of 2012 sanctions against his regime. Around the same time, they managed to obtain Lithuanian residency permits and opened companies there. The nature of their activities in Lithuania raise serious questions about what they are doing in the EU member state. Aleksin registered a company in an abandoned building, then used it to buy an apartment where two more firms are…

5 Recommendations for Improving National Security & Fighting Financial Crime

Financial Crime
How can financial institutions and law enforcement better fight criminals in an increasing complex and borderless society? Modernizing FinCEN may be a way. The Financial Crimes Enforcement Network (FinCEN) is one of U.S. Treasury’s primary agencies that oversees and implements policies to prevent and detect money laundering. FinCEN’s role in stopping terrorist financing, drug traffickers, and international criminal organizations cannot be overstated, working on a global scale in anti-money laundering (AML) efforts. But how can financial institutions and law enforcement better work together to fight criminals in an increasing complex, technologically sophisticated, and borderless society? Some would argue modernizing FinCEN…

Nigerian influencer pleads guilty to money laundering

Money Laundering, Prosecutions
Nigerian influencer Ramon Abbas – also known as Hushpuppi – has pleaded guilty to money laundering in a US court. Hushpuppi, 37, is known for posting photos of his lavish lifestyle on Instagram, where he has 2.5m followers. Court documents filed in California said Hushpuppi’s crimes cost victims almost $24m (£17m) in total. In one scheme, Hushpuppi attempted to steal more than $1.1m from someone who wanted to fund a new children’s school in Qatar, the documents said. Court records unsealed this week show he pleaded guilty to this charge on 20 April. The documents state that between 18 January…

Money Laundering Case Against Lionel Messi Dismissed

Fraud, Money Laundering, Prosecutions
Fresh allegations accusing top footballer Lionel Messi of fraud, embezzlement and money laundering have been dismissed by a Spanish court. The national court ruled that after two years of investigation “no criminal act on the part of the people targeted by the complaint could be proven,” Agence France-Presse news agency reported. Federico Rettori, an Argentine national living in Spain, claimed he formerly worked for Messi’s charity and alleged funds received by the foundation which should have been directed to social causes went instead “towards various private activities or bank accounts that differed from those that were declared by the foundation”.…

New U.K. Sanctions Against Individuals Involved in Corruption Around the World

Corruption, Sanctions
Foreign Secretary Dominic Raab has announced further sanctions on individuals under the UK’s Global Anti-Corruption sanctions regime. Foreign Secretary Dominic Raab today announces new UK sanctions against 5 individuals involved in serious corruption in Equatorial Guinea, Zimbabwe, Venezuela and Iraq sanctions target cases of serious corruption which have deprived developing countries of vital resources one of those designated spent millions of misappropriated funds on mansions, private jets and a $275,000 glove that Michael Jackson wore on his ‘Bad’ tour, another ruthlessly exploited public food programmes in Venezuela. Foreign Secretary Dominic Raab has today announced further sanctions on individuals under the…

AML Compliance Mandatory for Foreign Crypto Exchanges, says Korean Regulator

Digital Currencies, Regulation
South Korea’s strict crypto regulatory oversight is now extending to overseas exchanges that offer cryptocurrency trading services denominated in the country’s currency. Eun Sung-soo, chairman of South Korea’s Financial Services Commission (FSC), said that foreign crypto exchanges that deal in the Korean won must comply with the country’s Anti-Money Laundering (AML) standards. According to The Korea Herald on Tuesday, Eun made these comments while fielding questions from lawmakers about the FSC’s plans to regulate crypto exchange giant Binance. Eun reiterated the need for overseas exchanges offering won-denominated crypto trading pairs to comply with the same Anti-Money Laundering standards as platforms…

Tara Hanlon jailed for over £5m money laundering offences

Money Laundering, Prosecutions
A woman has been jailed for 34 months after being found at Heathrow Airport with five suitcases stuffed with nearly £2m in cash. Tara Hanlon, 30, of Pelham Court, Leeds, pleaded guilty at Isleworth Crown Court in June to money laundering offences worth more than £5m. She was arrested as she tried to board a flight to Dubai on 3 October 2020 with more than £1.9m in cash. Hanlon previously claimed to have “the perfect life” due to her job. Border officials said the find was the largest individual cash seizure at the UK border in 2020. Hanlon previously admitted…

Vatican Puts Cardinal in Financial Crime Trial

Corruption, Prosecutions
The Vatican City has taken an unprecedented step to bring a sitting Cardinal to trial to face the charges of financial corruption associated with investing in London’s luxury real estate using Catholic charity. The indictment of Giovanni Angelo Bechiu, who oversaw the agency responsible for the selection of Catholic saints until last year, shows a dramatic acceleration of Pope Francis. Willingness to reform the finances of the Holy Throne after decades of controversy. The Vatican City said a trial would begin this month to mark the Cardinal’s face with financial crime charges for the first time in modern Catholic history.…