Month: July 2022

Latvian Prosecutors Charge Bankers with Laundering 2.1B Euro

Money Laundering
Latvian prosecutors have charged a shareholder and top managers of the country’s erstwhile third largest bank, ABLV, with laundering 2.1 billion euros through a network of shell companies. Also to go on trial is the manager of the notorious shell company provider investigated by OCCRP. The indictment accuses ABLV co-owner and CEO Ernests Bernis, former deputy CEO Vadims Reinfelds as well as Arvis Šteinbergs, co-manager of shell firm provider ‘International Overseas Services’ (IOS) group, and five others of laundering the proceedings from crime using shell firms incorporated and administered by IOS.money, according to a copy of the indictment obtained by…

UK Filed over 34,000 Crypto scam reports in the last 6 years

Digital Currencies, Fraud
Along with the rise in popularity of cryptocurrency trading worldwide, there has been a significant increase in the number of crypto scams or frauds. In the UK alone, there have been 34,305 allegations of criminal behavior involving cryptocurrencies since 2016. Cybercrime is now a widespread issue on a global scale. The amount of criminality involving cryptocurrencies peaked in 2021. According to a Chainalysis analysis, a blockchain data company, criminals laundered $8.6 billion in cryptocurrencies in 2021, an increase of 30% from the year before. Since 2017, hackers have laundered nearly $33 billion in cryptocurrencies, with the majority of that amount…

FCA fines The TJM Partnership Limited (in liquidation) £2 million for serious financial crime control failings in relation to cum-ex trading

Financial Crime, Regulation
The FCA has fined The TJM Partnership Limited (in liquidation) £2,038,700 for failing to ensure it had effective systems and controls to identify and reduce the risk of financial crime and money laundering in its business. This is the third case brought by the FCA in relation to cum-ex trading and the largest fine so far. This reflects the multiple examples of serious misconduct over a lengthy period. TJM did not have adequate procedures, systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to trading on behalf of…

How North Korean Cryptocurrency abuse is expanding

Sanctions
Countries must secure new and emerging gateways that are used to circumvent sanctions, as North Korea’s exploitation of cryptocurrency continues. Blockchain analytics companies are identifying potential links between North Korea and the Harmony Bridge Exploit that occurred in June 2022. In this cyber attack, hackers stole $100 million worth of cryptocurrency, and began transferring funds in a similar manner to North Korea’s approach following the Ronin Bridge hack in March 2022. This latest attack reinforces the need for countries to monitor the rise of new cryptocurrency gateways that allow North Korea to circumvent sanctions and finance its nuclear weapons programme.…

Five problems with Economic Crime Policing and how to solve them

Money Laundering, Policing
The policing response to economic crime is not fit for purpose, and money launderers and fraudsters operate with impunity – but evolution and not revolution is the answer. Despite the valiant efforts of an under-resourced law enforcement contingent and a commitment in the UK government’s Economic Crime Plan (2019–2022) to ‘strengthen the capabilities of law enforcement … to detect, deter and disrupt economic crime’, the policing response to economic crime is not fit for purpose: money launderers continue to launder with impunity, and fraudsters rarely face retribution. There are, however, some green shoots. The National Economic Crime Centre (NECC), established…

Lyne Barlow: Travel agent faces money laundering and fraud charges

Fraud, Money Laundering
A travel agent suspected of duping hundreds of customers has been charged with fraud and money laundering totalling more than £1.6m. Lyne Barlow was arrested in September 2020 after an investigation into claims surrounding discount holidays. Durham Police said her travel business was no longer operational and its social media page had been deleted. The 39-year-old, formally of Stanley, County Durham, is due before Newton Aycliffe magistrates on 5 September. Mrs Barlow, who has moved from the area, has been charged with 18 counts of fraud relating to loans, investments and holiday sales. Durham Police said she faced a further…

Head of ‘colossal’ UK-Dubai money-laundering gang jailed for nine years

Money Laundering
The ringleader of Britain’s biggest ever money-laundering gang has been jailed after a “colossal” criminal enterprise was broken up by police. Abdulla Alfalasi, 47, an Emirati national, enlisted dozens of couriers in his role at the helm of the gang. In total they smuggled more than £100m of dirty cash out of the UK to Dubai between April 2019 and November 2020. He was sentenced to nine years and seven months in prison, after the “considerable network” of criminals was exposed following an arrest at Heathrow airport in October 2020. Couriers received £3,000-£8,000 a time. A total of 83 trips…

The Nigerian gas deal, the Irish impresario and the £8bn ruling amid claims of bribery

Corruption
It has been described as one of the most extraordinary cases ever to come before the high court, involving an Irish impresario, an alleged $50,000 bribe stuffed into a bag and potentially one of the biggest payouts in legal history. The saga of two Irish businessmen, Michael Quinn and Brendan Cahill, who promised to revolutionise Nigeria’s energy sector, will be at the centre of a high court trial early next year. It is claimed the two men’s hopes of a 20-year project to provide plentiful supplies of electricity for the country were dashed when Nigeria failed to build the required…

Universal Credit: Fraudulent claims in NI almost double to £102m

Fraud
The cost of fraudulent Universal Credit (UC) claims in Northern Ireland almost doubled to £102m last year, a public spending watchdog has said. The figure has emerged in the auditor general’s annual audit of the Department for Communities accounts. The department said a significant number of the fraudulent claims date to the start of the pandemic. At that time certain conditions were eased to allow unprecedented numbers of people to get financial help. In the previous year the cost of fraudulent UC claims was £51.8m. The number of households on UC in Northern Ireland almost doubled between February and July…

Bernie Ecclestone charged with fraud following investigation, says CPS

Fraud
Ex-Formula One boss Bernie Ecclestone has been charged with fraud by false representation, the Crown Prosecution Service has said. The 91-year-old billionaire businessman failed to declare overseas assets believed to be worth in excess of £400m, according to investigators. The charge was authorised by the Crown Prosecution Service (CPS) on Monday, following an investigation by Revenue and Customs (HMRC). Andrew Penhale, chief Crown prosecutor, said: “The CPS has reviewed a file of evidence from HMRC and has authorised a charge against Bernard Ecclestone of fraud by false representation in respect of his failure to declare to HMRC the existence of…

Risk-based Approach Guidance for the Real Estate Sector

FATF, Money Laundering, Regulation
Real estate is a popular choice for investment, but it also attracts criminals who use real estate in their illicit activities or to launder their criminal profits. It allows criminals networks to thrive and grow using the profits of their illegal activities, which impacts society and undermines the rule of law. In some countries, these practices also contribute to driving up the prices of real estate, making housing inaccessible to many as well as further incentivizing the criminal activity. FATF assessments show that the real estate sector often has poor understanding of these risks and regularly fails to mitigate them.…

Sanctioned Russian Banker, Head of Putin’s Piggy Bank, Uses Proxy for Vast Holdings

Sanctions
The son of a globe-trotting Canadian communist, Eric Whyte moved to the Soviet Union as a boy in 1966, and was educated at a prestigious school outside Moscow. Those are nearly all of the scant details publicly available about his life –– even “Champagne and Meatballs,” a book-length memoir by Whyte’s late father, Bert, only mentions his birth. But while Whyte maintains a low profile, leaked corporate documents offer a clue about his activities over the past decade or so: He appears to be a frontman for sanctioned Russian banker Andrei Kostin. Whyte owns companies registered in secretive offshore financial…

ESG is Becoming a Magnet for Financial Crime

Financial Crime, Regulation
In the words of Atilla the Hun, “The spirit of the law is greater than the letter.” How organizations adhere to principals, puts the organization ahead of the compliance curve. Ahead of rules there are movements and ideas, written laws follow closely thereafter. The principals of ESG are still being widely debated across the globe, the underlying principles of ESG are to do the right thing and elevate a consciousness of stakeholdership by organizations in the world in which they interact, naturally, such a broad mandate is going to be subject to rigorous debate, as creating policy around “impact” is…

Guatemala’s Former Economics Minister Pleads Guilty to Paying Bribes

Bribery, Prosecutions
A former high-ranking government official in Guatemala has pleaded guilty in Miami federal court to conspiring to commit money laundering while paying hundreds of thousands of dollars in bribes to Guatemalan politicians through the U.S. banking system. Acisclo Valladares Urruela, the former economics minister in Guatemala, admitted that he transferred $350,000 in bribery payments to the unidentified Guatemalan politicians through two companies with bank accounts in Miami, according to a factual statement filed with his plea agreement. Valladares also acknowledged that he received $140,000 for moving the dirty money into those accounts, the statement says. Valladares paid the illegal bribes…

Exploring the New Dawn for Crypto and Regulation

Digital Currencies, Regulation
In recent times there has arguably been a global shift in the regulatory attitudes and action towards cryptocurrency. What once was considered a fringe currency is gradually being brought into the mainstream and legitimised by regulation. In the past six months, the UK government has created a Crypto and Digital Assets Group, announced that it is “open” for crypto business, and launched a consultation into an insolvency regime for cryptocurrency, specifically stablecoins. A recent report by CUBE has explored global regulatory data to understand the shifting regulatory attitudes for crypto. It has found that in four years alone, there has…

Deutsche Bank Settles Money-Laundering Case for $7.1m

Money Laundering, Prosecutions
Deutsche Bank AG settled a probe by Frankfurt prosecutors looking into whether the bank violated money-laundering prevention rules for 7.01 million euros ($7.1 million). The bank agreed to pay the amount and accepted an administrative penalty notice, the lender said in a statement. Frankfurt prosecutors confirmed the end of the investigation, which found the bank failed to file 701 reports of suspicious activities. Deutsche Bank acted “thoughtlessly,” they said. The settlement comes less than three months after law enforcement officials raided Deutsche Bank’s headquarters in Frankfurt as part of the investigation. The bank had processed payments related to the extended…