Month: December 2022

UK Government Expands Enforcement Measures To Address Fraud and Money Laundering

Money Laundering
On 22 September 2022, the U.K. government introduced the Economic Crime and Corporate Transparency Act 2022. The new bill is currently navigating its way through the U.K. Parliament and is likely to receive royal assent in 2023. The bill seeks to build on the Economic Crime (Transparency and Enforcement) Act 2022 (ECA 2022), which took effect on 15 March 2022. (See our 26 April 2022 client alert “New UK Economic Crime and Transparency Laws Take Effect” to review the key provisions of the ECA 2022.) Since that update, the “Register of Overseas Entities” requirements came into force on 1 August…

UK crime agency arrests ‘wealthy Russian’ over money laundering

Money Laundering
Britain’s National Crime Agency (NCA) said on Saturday it had arrested a “wealthy Russian businessman” on suspicion of money laundering and other offences as part of a crackdown on corrupt oligarchs. The NCA said the 58-year-old was among three men arrested by officers from the Combatting Kleptocracy Cell (CKC) on Thursday at a “multi-million pound residence” in London. The Russian embassy in London has demanded information from Britain’s Foreign Office on the reasons and circumstances of the detention of the unidentified businessman and the conditions in which he was being held, Russian news agencies said. The man was detained on…

Fraud alert: Five bank scams to watch out for 2023

Fraud
As many of us wind down over the festive period into the New Year, fraudsters are busy at work luring in unsuspecting victims. The UK is currently in the grip of a fraud epidemic, from get-rich-quick schemes to unknown sellers tempting consumers with fake bargains. The rising cost of living is forcing many people to seek alternative ways to save and make money, and fraudsters are capitalising on it. They will often trick victims into making quick bank transfers rather than using other, more secure payment methods. UK consumer group Which? is warning against unwittingly handing over money and has…

Criminals are using the cost of living crisis to scam the public – don’t become a victim

Fraud
Law enforcement, government and private sectors partners are working together to encourage members of the public to be more vigilant against fraud, particularly about sharing their financial and personal information, as criminals seek to capitalise on the cost of living crisis. Criminals are experts at impersonating people, organisations and the police. Stop: Taking a moment to stop and think before parting with your money or information could keep you safe. Challenge: Could it be fake? It’s ok to reject, refuse or ignore any requests. Only criminals will try to rush or panic you. Protect: Contact your bank immediately if you…

Tax dodging and non-compliance during pandemic cost UK £9bn – NAO

Tax Evasion
Tax dodging and non-compliance during the pandemic cost the government £9bn, Whitehall’s spending watchdog has found. The loss to the public purse came as HM Revenue & Customs (HMRC) moved thousands of tax compliance staff to Covid support schemes, reducing its capacity to investigate people and businesses not paying the right amount, according to the National Audit Office. About 1,350 workers were redeployed to Covid schemes throughout 2020-2021, shrinking the number of those working on tax compliance by 12%, the NAO said. Before the pandemic, tax revenues from HMRC’s compliance work were on average 5.2% of its total revenues. This…

SEC Charges Danske Bank with Fraud for Misleading Investors about Its AML Compliance Failures in Estonia

Fraud, Money Laundering, Prosecutions, Regulatory Fines
The Securities and Exchange Commission today announced fraud charges against Danske Bank, a multinational financial services corporation headquartered in Denmark, for misleading investors about its anti-money laundering (AML) compliance program in its Estonian branch and failing to disclose the risks posed by the program’s significant deficiencies. Danske Bank agreed to pay $413 million to settle the SEC’s charges. According to the SEC’s complaint, when Danske Bank acquired its Estonian branch in 2007, it knew or should have known that a substantial portion of the branch’s customers were engaging in transactions that had a high risk of involving money laundering; that…

Santander Fined £108M for AML Failings

Money Laundering, Prosecutions, Regulatory Fines
BRITAIN’S Financial Conduct Authority (FCA) today announced it has fined Santander almost £108M for AML failures in its business banking division. The FCA ruled the UK division of the Spanish bank had failed to manage its anti-money laundering systems properly – affecting the way it dealt with 560,000 business customers. Between 2012 and 2017 the bank’s systems were not able to verify properly information provided by customers about their businesses. “Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime,” said Mark…

Elizabeth Warren’s Tough-On-Crypto Bill is Taking Shape

Digital Currencies, Regulation
Sen. Elizabeth Warren, D-Mass. is working on a sweeping cryptocurrency bill that would hand the Securities and Exchange Commission most regulatory authority over the market, according to two people familiar with her efforts. While discussions are still early and details could change, Warren’s office is looking at a range of crypto-related issues, including regulations, taxation, climate, and national security. The senator has recently stepped up her criticism for the industry and demanded “comprehensive” new rules to govern it following the massive collapse of the crypto exchange FTX. (FTX founder Sam-Bankman Fried is an investor in Semafor.) Ideas on the table…

Former director in the Office of the Director General of Audit Sentenced to 4 Years in Bribery Case

Bribery, Prosecutions
A Paramasivan, former director (AMF-II) in the Office of Director General of Audit, Central Expenditure, New Delhi has been sentenced to four years of rigorous imprisonment and a fine of Rs 10,000 by the principal special judge for CBI Cases, Chennai (Tamil Nadu) in a bribery case. The Indian Audit and Accounts Service was sentenced along with Sivaram Thilagar, then Assistant Surgeon, Government Primary Health Centre,Kanchipuram (Tamil Nadu) in a bribery case. Sivaram has been sentenced to undergo three years rigorous imprisonment with fine of Rs 5000 in a bribery case. The CBI had registered a case against the accused…

Sanctions Targets Allowed up to £1m of Frozen Funds to Pay Jersey Legal Bills

Sanctions
Russian oligarchs and others facing sanctions can now access up to £1 million of their Jersey-based funds to pay outstanding bills to local lawyers. The island’s External Relations Minister has issued a new ‘general licence’, which allows legal firms who have represented clients facing international sanctions to be paid more easily. While people linked to the regimes in Russia have had their financial assets in Jersey frozen since the country invaded Ukraine in February, they have still been able to get legal advice or representation – but have not been able to pay their bills without an individual licence from…

The European Union’s Qatar Bribery Scandal

Bribery, Corruption
The European Union is embroiled in a scandal involving alleged influence peddling through a European Parliament vice president, literal bags of cash, a nonprofit organization called Fight Impunity, and a “Gulf State” widely reported to be Qatar, host of the 2022 FIFA World Cup. Nothing less than “Europe’s credibility is at stake” in the EU’s response, German Foreign Minister Annalena Baerbock said. Here’s what you need to know: Who was allegedly bribed to do what?Belgian police raided at least 20 sites across Brussels between Dec. 9 and Dec. 13, including inside European Parliament offices, arresting six people and seizing more…

Federal Court Orders Man to Pay More than $2.8 Million in Restitution for Virtual Currency Fraud

Fraud, Prosecutions
The Commodity Futures Trading Commission today announced the U. S. District Court for the Southern District of New York entered a consent order on November 29 for a permanent injunction, restitution, and equitable relief against Jeremy Spence of Bristol, Rhode Island. Spence, at times, conducted business as Coin Signals. The consent order resolves a CFTC action filed against Spence on January 26, 2021 alleging that he operated a virtual currency Ponzi scheme in which he fraudulently solicited individuals to invest in digital assets such as bitcoin and ether. [See CFTC Press Release No. 8356-21] The order requires Spence to pay…

Rabobank Investigated for Suspected Dutch Money Laundering Violations

Money Laundering
Dutch co-operative bank Rabobank (RABO.UL) on Wednesday said it is under investigation by public prosecutors in the Netherlands for suspected violations of national money laundering laws. The bank in a statement said it was cooperating with the investigation. The disclosure follows a 2021 warning by the bank that it had been instructed by the Dutch central bank (DNB) to fix its customer due diligence practices and that it was facing a “punitive enforcement procedure.” Rabobank is one of the Netherlands’ three largest banks. Competitors ING Group and ABN Amro incurred massive fines in similar situations, with ING docked $900 million…

Argentina Vice President Cristina Fernández de Kirchner Sentenced to 6 Years in Prison for Corruption

Fraud, Prosecutions
A federal court in Argentina sentenced the current Vice President Cristina Fernández de Kirchner to six years in prison and a life ban from public office after finding her guilty of corruption. The court found her guilty of fraudulent administration during her time as president from 2007 to 2015 in awarding public works contracts to friend and businessman Lázaro Báez, who was also given a six-year sentence as part of the same case. Last year, Báez was sentenced to 12 years in a separate case for money laundering. The prosecutors said that they found irregularities in multiple public work tenders…

Son of Former Mozambique President Sentenced to 12 Years in Prison for Fraud

Fraud, Prosecutions
The son of Mozambique’s ex-president was sentenced Wednesday to 12 years in prison for embezzlement and money laundering. Judge Efigenio Baptista said Armando Ndambi Guebuza defrauded the government of more than $2.7 million, and is responsible for crimes of money laundering, embezzlement of State funds; use of false documents; four crimes of forgery of other writings; blackmail, influence peddling and association to commit crime. Guebuza, the oldest son of former Mozambique president Armando Guebuza, was sentenced along with 10 other defendants including the former head of security and intelligence Gregorio Leao. The corruption case came after three newly state-owned companies…

Sanctions Forcing Russia’s Sberbank to Close UAE Office

Sanctions
Russia’s dominant lender Sberbank will be forced to close its office in the United Arab Emirates (UAE) early next year, First Deputy Chairman Alexander Vedyakhin said on Monday, blaming sanctions pressure. Sweeping Western sanctions targeted Russia’s financial system after Moscow sent tens of thousands of troops into Ukraine on Feb. 24. Sberbank is one of several major Russian banks to have been blocked from the international SWIFT payments system and some senior executives have been personally hit by sanctions. “Unfortunately, in the context of sanctions restrictions, we are facing serious constraints on our SberInvest Middle East office in Abu Dhabi…

Angolan Court orders Seizure of Dos Santos Assets

Money Laundering, Proceeds of Crime
Angola’s Supreme Court has ordered the “preventive” seizure of assets worth around $1 billion held by Isabel dos Santos, the daughter of the southern African country’s former president, Portugal’s Lusa news agency said on Tuesday. The court document cited by Lusa, dated Dec. 19, said authorities had evidence of alleged embezzlement and money laundering and ordered the seizure of the money dos Santos holds in “all banking institutions”. The seizure also includes all of dos Santos’s shares in Angolan company Embalvidro, as well as 100% of shares in Cape Verde’s telecom company Unitel T+ and Unitel STP in Sao Tome…

Dutch Banks Bring in new fees for money laundering checks

Compliance
Companies, foundations and churches are being asked to pay additional banking fees to cover the cost of money laundering investigations, broadcaster NOS noted on Tuesday. ABN Amro, ING and SNS have already introduced the new fees and Rabobank will follow on next week, NOS said. Banks say the monthly charge is needed to pay for the extra checks they have to make for money laundering and funding terrorism. ‘The cost for banks have risen considerably in recent years,’ Helène Erftemeijer from the Dutch banking association said. ‘Some 13,000 people are involved in this sort of research and the increasing costs…

France’s Safran to pay $17.2 million to settle China Bribery in US probe

Bribery, Corruption
(Reuters) – French jet engine maker Safran SA will pay about $17.2 million as part of a settlement with the U.S. Justice Department over bribes its subsidiaries allegedly paid in China, the Department of Justice (DoJ) said in a statement made public on Friday. The Paris-based aerospace supplier will be required to turn over profits from “corruptly obtained” and retained contracts by its U.S.-based subsidiary, Monogram Systems, the DoJ said. Monogram and Safran’s German unit, Evac GmbH, allegedly paid bribes to obtain “lucrative” train lavatory contracts with the Chinese government. Safran did not immediately respond to Reuters request for a…

UK Anti Money Laundering and Countering the financing of Terrorism – Supervision Report 2020-22

Regulation
This report provides information about the performance of AML/CTF supervisors between 6 April 2020 – 5 April 2022 and fulfils the Treasury’s obligation, under Section 51 of the MLRs, to publish an annual report on supervisory activity. The report includes supervisory and enforcement data on both the Statutory and Professional Body Supervisors, highlighting any notable changes in supervisory activity and any fines that supervisors have issued. This report provides supervisory and enforcement data for both the 2020-2021 period (6th April 2020 – 5th April 2021) and the 2021-2022 period (6th April 2021 – 5th April 2022). The two years have…

FTX diverted $200 million of customer money for two venture deals that caught the SEC’s attention

Digital Currencies, Fraud
Of the billions of dollars in customer deposits that disappeared from FTX in a flash, $200 million was used to fund investments in two companies, according to the Securities and Exchange Commission, which charged founder Sam Bankman-Fried with “orchestrating a scheme to defraud equity investors.” Through its FTX Ventures unit, the crypto firm in March invested $100 million in Dave, a fintech company that had gone public two months earlier through a special purpose acquisition company. At the time, the companies said they would “work together to expand the digital assets ecosystem.” The other deal the SEC appears to have…