Year: 2021

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.…

FinCEN has turned its attention to crypto

Digital Currencies
The U.S. Financial Crimes Enforcement Network (FinCEN) has identified cryptocurrencies as one of the anti-money laundering and countering the financing of terrorism (AML/CFT) priorities. In the agency’s first list of government-wide priorities published Wednesday, FinCen has highlighted eight priorities; corruption, cybercrime and relevant virtual currency considerations, terrorist financing, fraud, transnational criminal organization activity, drug trafficking, human trafficking and proliferation financing. Currently, the list of priorities is not connected to any policies, however the agency will issue regulations at a later date specifying guidelines on how financial institutions should incorporate these Priorities into their risk-based AML programs. The priorities comes in…

Jet-setting DJ, and cousin of Azerbaijan’s president Aliyev, accused of receiving millions in suspicious funds

Money Laundering
“Mikaela Jav” made a name for herself as a DJ, spinning infectious electronic beats on the Spanish island of Ibiza, long famed for its fervent nightlife. The host of “Mikaela & Friends” parties, which kicked off on Saturday nights in the summer of 2015, also had an active presence on Facebook, where she posted sultry, jet-setting photos in Greece, Thailand, and Las Vegas. In Spanish press interviews, DJ Mikaela gushed about her love for Ibiza, her musical inspiration, and her life in Russia, which she described as her home. In fact, OCCRP can reveal in this joint investigation with Transparency…

U.K. financial watchdog bans cryptocurrency trader Bianance

Digital Currencies
The Financial Conduct Authority (FCA) has prohibited Binance Markets Limited (BML) from undertaking any regulated activity in Britain. The company is part of the Binance Group, which terms itself as operating the world’s leading cryptocurrency exchange. The FCA said: “No other entity in the Binance Group holds any form of UK authorisation, registration or licence to conduct regulated activity in the UK. The Binance Group appear to be offering UK customers a range of products and services via a website, Binance.com,” it added. In a series of tweets, the company responded by saying: “BML is a separate legal entity and…

Myanmar’s jade fuels the military

Corruption
Corruption in Myanmar’s jade industry extends all the way to the top of the country’s military, including the family of the country’s Commander-in-Chief Min Aung Hlaing, UK-based NGO Global Witness claimed in its latest report on Tuesday. In the years preceding the February 2021 coup, Myanmar’s military tightened its grip on the lucrative jade trade, even as the new civilian-led National League for Democracy (NLD) administration attempted to reform it. “The military coup has triggered a new wave of violence in the conflict-ridden sector, demonstrating the danger of armed actors controlling the multibillion-dollar mining industry,” according to Global Witness. It…

Anti-money laundering expert convicted of money laundering

Money Laundering, Prosecutions
The former chairman of a UK group that represents the payment services industry has been convicted of laundering the proceeds of an investment fraud worth £850,000 and involving more than 60 victims. Dominic Thorncroft, 56, was found guilty at Southwark Crown Court of one count of money laundering, one count of breaching money laundering regulations and four counts of retaining a wrongful credit. Thorncroft was the former chair of the Association of UK Payment Institutions who worked with lawmakers and financial regulators providing anti-money laundering advice and training. An investigation by the Metropolitan Police, which began in 2016, found evidence…

Wood Group settles Amec bribery case in $177 million agreement

Bribery, Prosecutions
John Wood Group Plc said it agreed to pay $177 million to settle a UK-led bribery and corruption probe into a British engineering firm it acquired in 2017. The settlement is part of a so-called deferred prosecution agreement with the Serious Fraud Office and the U.S. Department of Justice concerning Amec Foster Wheeler Plc, Wood Group said in a statement Friday. The UK agreement is still subject to court approval. As part of the deal, the company can avoid prosecution for three years if it cooperates in the continuing bribery probe. Wood Group’s payment is one of the largest ever…

Biden proposes more stringent regulations to catch crypto tax evaders

Digital Currencies, Tax Evasion
Biden’s Fiscal Year 2022 Revenue Proposal aims to catch crypto tax evaders by reinforcing existing information reporting rules and information sharing agreements between jurisdictions. What is Information Reporting? Information reporting is the primary way that regulators like the IRS knows about your crypto activity. Cryptocurrency exchanges are required by law to collect your personal identification information (name, address and social security number) and report your annual activity to the IRS by using forms such as 1099-K, 1099-B and 1099-MISC. If exchanges fail to report this information correctly, they get subject to hefty penalties. Expanded 1099-K Reporting Currently, crypto exchange users…

Environmental crime is money laundering threat says FATF

Money Laundering
Countries should view environmental crimes such as illegal forestry, mining, land clearances and waste trafficking – and the associated trading – as a money-laundering (ML) risk, according to the Financial Action Task Force (FATF). “Anti-money laundering is often not part of the public policy dialogue on environmental protection,” the Paris-based organisation says in a new report, Money Laundering from Environmental Crimes. “Despite the significant proceeds involved in many cases, jurisdictions are mostly addressing environmental crime as a conservation issue rather than a serious financial crime.” Yet the report cites UN studies showing that the proceeds from environmental crimes are of…

‘High level’ crime gang member admits money laundering

Money Laundering, Prosecutions
A high-level member of an “transnational crime organisation” will be sentenced next month after he was caught with more than €350,000 in criminal proceeds. Jason Reed (40) was also found to have five Rolex watches, an encrypted Aquarius phone and to have purchased a mobile home for cash, despite having no source of income. Reed, of Maelduin, Dunshaughlin, Co Meath, pleaded guilty to money laundering after €32,330 and £390 (€441) was found at his home on May 11th, 2020. Reed also pleaded guilty to money laundering and possessing the proceeds of crime at a car park on Donore Road, Drogheda,…

Former U.S President Trump’s company, longtime CFO Weisselberg charged with tax fraud

Fraud, Tax Evasion
Manhattan District Attorney Cyrus Vance has charged former President Donald Trump’s company, the Trump Organization, and his longtime CFO Allen Weisselberg with tax fraud, according to an indictment unsealed Thursday in New York. The charges are the first brought by New York prosecutors in the case since they launched their investigation nearly two years ago into the financial dealings of Trump, his company, his family, and associates. Weisselberg and the company pleaded not guilty to criminal charges including grand larceny in the second degree as outlined in a lengthy indictment unsealed in Manhattan State Supreme Court. Weisselberg was released on…

Tara Hanlon admits £5m money laundering offences

Money Laundering, Prosecutions
A woman has pleaded guilty to money laundering offences worth over £5m after being found at Heathrow Airport with suitcases stuffed with cash. Tara Hanlon, 30, of Pelham Court, Leeds, was arrested as she tried to board a flight to Dubai on 3 October 2020 with more than £1.9m in cash. Appearing at Isleworth Crown Court by video-link, Hanlon admitted four of the five offences she was charged with. She was warned to prepare for a jail term when she is sentenced on 26 July. Border officials said the find in October was the largest individual cash seizure at the…

FCA: Many Crypto businesses fail to meet regulations

Digital Currencies, Money Laundering
A ‘significantly high number’ of cryptocurrency firms have failed to comply with the U.K.’s trading standards and are struggling to meet anti-money laundering rules, Britain’s financial regulator said last week. Since January 2020, crypto firms operating in the U.K. are required to register with the Financial Conduct Authority (FCA) and comply with local money laundering, terrorist financing and transfer of funds regulations. Additionally, last December the agency granted a temporary registration for existing firms that will allow crypto businesses to continue operating while their applications are still under assessment. The FCA has said many businesses have failed to meet the…

Malta to be ‘grey listed’ by FATF, Pakistan to remain and Ghana removed

Financial Crime
It has been confirmed that the EU’s smallest Member State, Malta, has been added to the Financial Action Task Force’s ‘grey list’, something which may cause detrimental effects to the Maltese economy. Following the FATF’s five-day plenary session, it has been announced that Haiti, Malta, the Philippines, and South Sudan, have been grey listed by the global financial watchdog. They join countries such as Albania, Myanmar, Nicaragua, Uganda and Syria under increased monitoring by the body, which has called for these jurisdictions to “complete their action plans expeditiously and within the agreed timeframes”, after “strategic deficiencies” were identified in their…

‘Overwhelming majority’ of countries were against greylisting of Malta

Financial Crime
An “overwhelming majority” of countries expressed opposition to Malta being placed on a global watchdog’s financial crime greylist. Sources briefed on the confidential greylisting discussions in the past week said numerous FATF member countries were of the view that Malta had done enough to avoid being placed on the list of jurisdictions deemed untrustworthy in the fight against financial crime. Despite having majority support, Malta’s efforts to remain off the greylist were torpedoed by the US, UK and Germany. “The FATF does not take decisions by a vote. Decisions are taken by consensus which is neither based on unanimity nor…

U.K. Police seize $160 Million In cryptocurrency In Money Laundering investigation

Digital Currencies, Money Laundering
British detectives seized around £114 million (around $158 million) worth of cryptocurrency as part of an ongoing money laundering investigation, the U.K.’s Metropolitan Police force announced Thursday, marking the largest ever seizure of crypto assets in the U.K. and one of the largest in the world. Key facts The force, which did not reveal what cryptocurrencies had been confiscated, said the seizure was carried out by detectives in its Economic Crime Command “on the back of intelligence received about the transfer of criminal assets.” Criminals must hide the origin of ill-gotten money or else risk it being taken by law…

Casinos: Title 31 compliance is just the beginning of better due diligence

Money Laundering
Among non-bank financial institutions, casinos top the list of businesses that federal regulators are scrutinizing for evidence of money laundering — and it’s not hard to see why. Gaming is still largely a cash business, after all, and it’s not unusual for a customer to exchange thousands of dollars in a single visit. Furthermore, a casino’s customers are often one-time visitors and people who move from state to state. And unlike a bank, casinos are not legally required to collect a great deal of personal information from their customers before exchanging large sums of money. For these and many other…

Global spend on Financial Crime compliance at financial institutions reaches $213.9B USD

Financial Crime
Lexis Nexis Risk Solutions released its annual True Cost of Financial Crime Compliance Global Report. The results derived from the comprehensive survey of 1,015 financial crime compliance decision makers at financial institutions including banks as well as investment, asset management and insurance firms globally. The projected total cost of financial crime compliance across all financial institutions reached $213.9 billion in 2021, surpassing the $180.9 billion recorded in 2020. The majority of this sizeable year-over-year increase is represented by Western Europe and the United States. The decision makers who took part in the study oversee financial crime compliance processes such as…

Italian organised crime using pandemic to build parallel credit systems to launder money

Money Laundering
Italy’s Parliamentary Anti Mafia Commission has warned how organised crime has found parallel credit systems and money laundering operations to operate during the Covid pandemic. “In the emergency pandemic increased parallel credit systems, money laundering through small and medium-sized enterprises, forms of violence and aggression,” says the Commission. The Commission also reports that the various mafia groupings in the course of the Covid-19 emergency are launching “a real attack on the State”. Anti Mafia Commission spokesman Sergio Nazzaro said the warnings in the report of the predatory activities by organized crime during the health emergency were approved unanimously. The reports…

EU takes Luxembourg to court over AML non-compliance

Money Laundering, Prosecutions
European Commission started infringement procedure against Luxembourg in 2016 over late adoption of EU rules The European Commission on Wednesday took Luxembourg to court, asking the European Court of Justice (ECJ) to impose a daily penalty on the country for failing to put new EU rules to stop money laundering into law. Without the rules on the freezing and confiscation of proceeds of crime, EU and national law enforcement authorities are unable to stop the proceeds from crime from flowing into the legitimate economy, the Commission said. It is also harder for the EU to recover profits from organised crime.…

COVID-19: The evolution of scams in Asia-Pacific

Fraud
In 2020, one in three people in Southeast Asia experienced online fraud amid a boom in online shopping and activity due to the COVID-19 pandemic. Asia-Pacific already has the highest number of internet users in the world, so the opportunities for scammers were already aplenty before the crisis of 2020. The pandemic-influenced increase in online activities has served as the perfect backdrop for increasingly nuanced racketeering efforts by financial crime syndicates who targeted everything from the boom in deliveries, to interest in the stock market and even the vaccine program to fleece consumers. In Indonesia, online fraud made up the…

South Korean authorities seize $47 Million in cryptocurrency from tax evaders

Digital Currencies, Tax Evasion
Cryptocurrency worth millions of dollars has been seized by South Korean authorities More than 53 billion Korean won ($47 million) in cryptocurrency assets were seized from 12,000 people accused of attempting to hide money from the government In order to comply with upcoming industry regulations, a number of digital asset platforms have begun to delist high-risk coins Thousands of tax evaders have been identified by South Korean authorities as part of a growing crackdown on tax dodging among cryptocurrency investors. The government is said to have seized cryptocurrency worth millions of dollars after a lengthy investigation. It was the largest…

TRACE Foundation announces recipients of the 2021 TRACE prize for investigative reporting

Financial Crime
The TRACE Foundation, a non-profit organization established to support projects that encourage greater commercial transparency, today announced the winners of the 2021 TRACE Prize for Investigative Reporting. The annual award recognizes journalism that uncovers business bribery or related financial crime. Zorayda Gallegos Valle, a freelance journalist writing for El País in Mexico, won the TRACE Prize for her investigation that uncovered the Mexican Army’s scheme to divert at least $156 million of public resources through hundreds of shell companies contracted to complete infrastructure projects. “I am grateful to the TRACE Foundation for supporting investigative journalism because it plays an important…

Julius Baer admits in court to facilitating money laundering in FIFA case

Money Laundering
SWISS BANK JULIUS BAER has today admitted in court that it took part in a multi-million dollar laundering scheme connected to soccer’s governing body FIFA. The admission comes alongside the announcement of a final agreement between the medium-sized private bank based in Zurich, and the United States Department of Justice. It means the penalty payment of $79.7M originally announced in November of last year will go ahead as planned. “Julius Baer welcomes the final resolution of this legacy matter,” the bank said in a statement Thursday. “This marks another step in Julius Baer’s continued efforts to pursue the closure of…

Governance and ownership issues in football and its ties to economic crime

Money Laundering, Tax Evasion
Decades of self-regulation and rapid expansion has led the sport sector to lag behind other industries in corporate governance and policy implementation, as demonstrated by the consistent media exposure documenting scandals at football clubs, and at National and International Sport Federations. On Wednesday April 28th 2021, the Economic Crime Series: Governance and Ownership Issues in Football was held online. The event was organised and chaired by Prof. Lisa Jack who welcomed two speakers, Dr. Rob Wilson and Mrs. Christina Philippou. The Risk & Compliance Platform Europe also took part in this webinar and has subsequently covered it on its website.…

Trump Could Be Investigated In Scotland Next Year

Unexplained Wealth Orders
The Scottish government could investigate how Donald Trump acquired two golf courses in Scotland pending a legal challenge in the country’s highest civil court. Nicola Sturgeon’s government has previously said it does not have the power to use an unexplained wealth order to investigate Trump’s two golf courses in the country, Trump Turnberry and Trump International in Aberdeen. An unexplained wealth order would allow authorities to question the Trump Organization about where the money he used to buy the golf courses came from. On Thursday (20 May), however, Avaaz, a human rights group, filed a petition in Scotland’s Court of…

Police in London discovered more than £5m in cash in a flat

Money Laundering, Organised Crime
Police in London discovered more than £5m in cash (pictured) in a flat after a criminal gang reportedly “didn’t know what to do with it”. On Friday three men were sentenced following the London Metropolitan Police’s largest-ever single seizure of cash at the apartment in Fulham. Bundles of “dirty cash” were found hidden in plastic shopping bags under a bed and strewn on the floor, the force revealed. Police said the cash was stacked up at the flat because the gang “didn’t know what to do with it” and the Covid-19 pandemic had “really exacerbated their problem of how to…

UK Government proposes new powers to block London Stock Exchange listings backed by dirty money

Law, Regulation & Guidance
THE BRITISH GOVERNMENT is planning to start blocking companies backed by illicit funds that pose a national security threat from listing on the London Stock Exchange, according to new plans announced by Chancellor of the Exchequer Rishi Sunak. In an announcement Tuesday, the treasury department said it will launch a public consultation within the next two weeks with proposals for stricter rules on flotations. “The UK’s reputation for clean, transparent markets makes it an attractive global financial centre. We’re planning to bolster this by taking a targeted new power to block listings that pose a national security risk, and will…

Binance Holdings is under investigation by the Justice Department and Internal Revenue Services

Digital Currencies, Money Laundering, Tax Evasion
[NEW YORK] Binance Holdings is under investigation by the Justice Department and Internal Revenue Service, ensnaring the world’s biggest cryptocurrency exchange in US efforts to root out illicit activity that’s thrived in the red-hot but mostly unregulated market. As part of the inquiry, officials who probe money laundering and tax offenses have sought information from individuals with insight into Binance’s business, according to people with knowledge of the matter who asked not to be named because the probe is confidential. Led by Changpeng Zhao, a charismatic tech executive who relishes promoting tokens on Twitter and in media interviews, Binance has…

The UK is losing the fight on money laundering

Money Laundering
At the end of 2018, a softly spoken British executive matter-of-factly told the European Parliament how to clean tens of billions of dirty dollars. Howard Wilkinson’s voice shook slightly as he described to MEPs how money from the former Soviet Union was flushed through Danske Bank, where he once worked, into the international financial system. It had been Wilkinson who first blew the whistle on what was happening at the Danish institution, particularly its Estonian subsidiary. Investigators now believe some $200bn was funnelled through the accounts of Danske Bank’s customers. It may have been the biggest money-laundering machine ever uncovered.…

Russian oligarchs the ‘most sophisticated in the world’ at dodging KYC and evading sanctions

KYC, Sanctions
THE CAPACITY OF Russian oligarchs to work around rigorous KYC rules and international sanctions is the strongest in the world, a former FATF President has warned. Their methods were so capable that their identity may remain hidden even if a financial institution makes every effort to root out accurate beneficial ownership information, he suggested. In the same speech, he also hit out at the Russian FIU Rosfinmonitoring claiming that it was “firmly under the control” of the country’s Federal Security Service (FSB) and headed by a sixteen-year veteran of the Soviet KGB. Billingslea believes the FIU allows state-sponsored money-laundering schemes…

Germany orders Deutsche Bank to do more to prevent money laundering

Money Laundering
The German financial regulator BaFin has ordered Deutsche Bank to enact further safeguards to prevent money laundering, BaFin said on Friday, a blow to the nation’s largest lender as it tries to repair its reputation. In 2018, BaFin took the extraordinary step of installing the auditor KPMG as a special monitor at Deutsche to oversee progress on money-laundering controls. It was the first time that the German regulator had made such an appointment and followed a series of money laundering lapses. Now, BaFin is expanding KPMG’s mandate. BaFin said in a brief statement that it wanted improved controls particularly regarding…

A significant High Court judgment that brokers took bribes to push allegedly ruinous loans to farmers

Bribery, Fraud
A significant High Court judgment that brokers took bribes to push allegedly ruinous loans to farmers has fuelled campaigners’ demands for a change in approach to financial crime in our region. Spates of evictions and land-grabs scarred Britain as it exited the 2008 financial crash. A crisis of ‘bad’ debts, repossessions, cases of homelessness and even suicides engulfed farmers, builders, property developers and small-scale entrepreneurs of all types across the UK and Ireland. Some banks were later found to be asset-stripping borrowers, ostensibly to ensure their own survival. Not all the alleged debtors gave up though, with some turning detective…

Two Individuals Indicted for Money Laundering Related to Odebrecht Bribery and Fraud Scheme

Bribery, Fraud, Prosecutions
Bank Executives Charged with Conspiring to Launder Hundreds of Millions of Dollars Through U.S. Financial System Earlier today, in federal court in Brooklyn, an indictment was unsealed charging Peter Weinzierl and Alexander Waldstein, both citizens of Austria, for their roles in a scheme to launder hundreds of millions of dollars through the U.S. financial system on behalf of Odebrecht S.A. (Odebrecht), a Brazil-based global construction conglomerate, in order to pay bribes around the world and defraud the Brazilian government. Weinzierl was arrested earlier today in the United Kingdom pursuant to a provisional arrest request from the United States. Waldstein remains…