Month: August 2023

Pakistan: Imran Khan barred from politics for five years

Bribery, Corruption
The former prime minister of Pakistan, Imran Khan, has been barred from holding public office for five years by the country’s electoral authorities. The decision was announced by the Election Commission of Pakistan three days after Mr Khan was sentenced to three years in prison for corruption. Tuesday’s announcement also means Mr Khan will be dismissed as an MP. He maintains the charges are politically motivated, but the Pakistani government denies this. Marriyum Aurangzeb, Pakistan’s minister of information and broadcasting, told the BBC before the announcement: “You have to be accountable for your deeds in law. This has nothing to…

Dubai’s Financial Services Authority (DFSA) signs MoU with the UAE’s FIU.

Regulation
DUBAI’s Financial Services Authority (DFSA) has signed a Memorandum of Understanding (MoU) with the UAE’s Financial Intelligence Unit (FIU) to advance AML/CFT coordination and cooperation. The MoU was signed by the DFSA’s ceo Ian Johnston and the FIU’s chief Ali Faisal Ba’Alawi last week (August 3). The agreement aims to enhance co-operation, co-ordination, and information sharing between the DFSA and FIU to fulfill their respective obligations related to AML/CFT compliance. This includes ensuring that applicable laws are followed by relevant entities. “It is crucial to work closely with authorities at a local, regional and global level in our interconnected environment,…

FinCEN, IRS warn US banks of $100Ms in tax evasion by construction firms using shell companies, undocumented workers

Fraud, Tax Evasion
FinCEN and the IRS Criminal Investigation unit (CI) today (Tuesday) issued a notice to banks around tax evasion and workers’ compensation insurance fraud in the US residential and commercial real estate construction. Both agencies said hundreds of millions of dollars are lost to these schemes, which are perpetrated by illicit actors primarily through banks and check cashers. The Notice describes how payroll tax evasion and workers’ compensation fraud schemes may involve networks of individuals and the use of shell companies and fraudulent documents. These schemes affect the local and national construction job markets and put legitimate construction contractors and their…

Leading Spanish Banks Launch Fraud Prevention Platform

Fraud
Three of Spain’s top banks have joined forces to develop a platform for exchanging information and data to assist in the fight against and prevention of financial crime. BBVA, Banco Santander, and CaixaBank have launched FrauDfense, a joint business that will unify the three banks’ anti-fraud operations to address “one of the biggest challenges facing the banking sector: financial fraud.” They have presented the project to various Spanish supervisors and regulators. “The project covers the fight against a variety of fraudulent practices, which can be very diverse and sophisticated, such as admission fraud, where customer information is compromised by impersonating…

Banks Slapped with Hefty Fines for Utilizing Messaging Platforms to Evade Regulators

Prosecutions
U.S. regulators have unleashed a barrage of penalties, amassing a total of $549 million against Wells Fargo and a cohort of smaller or non-U.S. firms for their failure to uphold electronic records of employee communications. The Securities and Exchange Commission (SEC) spearheaded this crackdown, unveiling charges and levying $289 million in fines against 11 companies over “widespread and longstanding failures” in record-keeping. In tandem, the Commodity Futures Trading Commission (CFTC) announced fines totaling $260 million against four banks for their noncompliance in maintaining records stipulated by the agency. This move is the latest endeavor by regulators to curb the pervasive…

Why Switzerland is a Haven for the World’s Biggest Money Launderers

Money Laundering
Over the past fifteen years, notable investigations and exposés, such as the Magnitsky Investigation, Laundromats, Offshoreleaks, Panama Papers, and Pandora Papers, have shed light on the staggering scale of global money laundering with trillions of dollars, predominantly originating from kleptocracies like Russia and other former USSR countries. These illicit funds are cleverly disguised and anonymized through laundering mechanisms, infiltrating the Western financial systems via a vast network of banks, lawyers, real estate agents, and have been utilized to purchase influence, garner political support, and secure positions within local establishments. Recently there have been efforts to combat money laundering such as…

Bankman-Fried Used Customer Funds for $100 in U.S. Political Donations

Digital Currencies, Fraud, Prosecutions
Sam Bankman-Fried used stolen customer funds to make more than $100 million in political campaign contributions ahead of the 2022 U.S. midterm elections, federal prosecutors said on Monday in a new indictment filed against the FTX cryptocurrency exchange’s founder. The new indictment charges the 31-year-old former billionaire with seven counts of conspiracy and fraud over the collapse of the exchange. He has previously pleaded not guilty to charges of stealing billions in FTX customer funds to plug losses at Alameda Research, his crypto-focused hedge fund. Mark Botnick, a spokesman for Bankman-Fried, declined to comment. Sam Bankman-Fried criminal charges unsealed: Conspiracy…

UBS to Pay $1.4 Billion in Civil Penalties for Mortgage-Backed Securities Fraud

Fraud, Prosecutions
Swiss banking giant UBS has reached a landmark settlement, agreeing to pay a combined $1.4 billion in civil penalties to address allegations of fraud and misconduct related to its offering of mortgage-backed securities during the lead-up to the global financial crisis. The announcement was made by federal prosecutors on Monday, marking a significant development in the aftermath of the financial turmoil. The settlement effectively concludes the last remaining case brought by the United States Department of Justice against major financial institutions regarding deceptive statements made to investors who purchased mortgage-backed securities. The cumulative recoveries resulting from these cases now stand…

Goldman Sachs Could be in Trouble Again Over Its Malaysian Money Laundering Settlement

Money Laundering, Prosecutions
Goldman Sachs agreed to pay Malaysia $3.9 billion in July 2020 to settle a money laundering scheme involving its bankers, Malaysia’s new Prime Minister Anwar Ibrahim says it wasn’t enough. In 2018, Malaysian prosecutors sued the investment bank, accusing bankers of helping to raise billions of dollars for 1Malaysia Development Berhad, known as 1MDB. The funds were part of an international money laundering scheme involving major financial institutions in the United States, Switzerland, Singapore, Luxembourg and others. “We’ll have to reopen this negotiations with Goldman Sachs, because they were complicit to the crime,” Anwar, who was took office in November,…

Coinbase Cleared to Offer Regulated Crypto Futures to Eligible U.S. Customers

Digital Currencies
Despite its ongoing legal battles with the SEC, Coinbase has gained approval from another regulator to offer eligible US customers access to crypto futures directly from its platforms. The clearance to operate as a futures commission merchant (FCM) came from the National Futures Association, a self-regulatory organization designated by the Commodity and Futures Trading Commission (CFTC), Coinbase revealed Wednesday. “Offering US investors access to secure and regulated crypto futures is key to unlocking growth and enabling broader participation in the crypto economy,” Coinbase Financial Markets CEO Andrew Sears told Blockworks in an email. Coinbase filed an application to the NFA…

3M Agrees to Pay Over $6.5 Million to Settle Foreign Corrupt Practices Act Charges

Bribery, Corruption, Prosecutions
n a move to resolve allegations of violating the Foreign Corrupt Practices Act (FCPA), the Securities and Exchange Commission (SEC) has announced that 3M will pay more than $6.5 million. The charges stem from violations of the books and records as well as internal controls provisions of the FCPA. The SEC’s order outlines that employees of a 3M wholly owned subsidiary located in China were involved in orchestrating arrangements for Chinese government officials, who were employed by state-owned health care facilities, to attend conferences, educational events, and health care facility visits overseas. These arrangements were purportedly a part of the…

E.U.’s Regulators Warn of Money Laundering Threat in Deal for Closer Economic Ties with Monaco, San Marino and Andorra

Money Laundering
THE CHAIR of the European Banking Authority (EBA) has warned of the money laundering risks of closer financial relatonships with Monaco, San Marino and Andorra. In a letter to the European Commission, the EBA chair warned that the trio of tiny states “historically maintained less rigorous financial regulations” and “may be prone to money laundering and other illicit activities.” The letter says that companies might be tempted to set up in the so-called microstates in a deliberate attempt to benefit from lighter financial standards, which would create “significant risks to consumers” if they sold their wares across the bloc. Monaco…

U.S. Department of the Treasury, IRS Release Proposed Regulations on Sales and Exchanges of Digital Assets by Brokers

Digital Currencies, Regulation
WASHINGTON – As part of the Biden-Harris Administration’s implementation of the bipartisan Infrastructure Investment and Jobs Act (IIJA), the U.S. Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) today released proposed regulations on the sale and exchange of digital assets by brokers, in an effort to crack down on tax cheats while helping law-abiding taxpayers know how much they owe on the sale or exchange of digital assets. This is part of a broader effort at Treasury to close the tax gap, address the tax evasion risks posed by digital assets, and help ensure that everyone plays…

Cash, cars and homes seized in $735m Singapore anti-money laundering raids

Money Laundering
Singapore police have seized about S$1bn ($735m; £578m) – including luxury homes, cars and watches – in one of its biggest anti-money laundering probes.Gold bars, designer handbags, wine and S$23m in cash were among the items seized in the raids.Police arrested ten people in the operation, all of whom held foreign passports.Raids of this size are rare in Singapore, which has one of the lowest crime rates in the world.The Singapore Police Force said in a statement that simultaneous raids were held across the city-state on Tuesday.It added that 94 properties, including houses in some of the country’s most sought…

Estonia’s FSA fines LHV bank €900K for AML/CFT failings

Money Laundering, Regulatory Fines
ESTONIA’s Financial Supervision Authority (FSA) has fined LHV Pank €900,000 for AML/CFT shortcomings, the watchdog announced today (Tuesday). The FSA said that LHV fell short in the fields of establishing business relations and their monitoring, as well as its obligation to store data. The watchdog has also issued an order, obligating the Estonian bank to improve its AML/CFT risk control systems. Kilvar Kessler, head of the authority, suggested that it was LHV’s rapid growth coupled with a high-risk environment that led to deficiencies and violations at the bank. “Rapidly developing payments intermediaries could experience a situation where their risk management…

Nigeria’s ex-oil minister Diezani Alison-Madueke charged with bribery in the U

Bribery
Nigeria’s former oil minister Diezani Alison-Madueke has been charged with bribery offences in the UK.She is suspected of accepting financial rewards for awarding multi-million dollar oil and gas contracts.A key figure in ex-President Goodluck Jonathan’s administration, she also served as the first female president of the oil exporters group Opec.The 63-year-old, who has been on bail since her arrest in London in 2015, has denied corruption allegations.BBC Africa Live: Updates from the continentAssets worth millions of pounds relating to the alleged offences have been frozen as part of an ongoing probe by the UK’s National Crime Agency (NCA).“These charges are…

FINMA publishes guidance on money laundering risk analysis

Money Laundering, Regulation
The Swiss Financial Market Supervisory Authority today published guidance on the money laundering risk analysis. It repeatedly identified shortcomings in this area during on-site supervisory reviews. It sets out its observations in the guidance.FINMA is publishing guidance on the money laundering risk analysis. By doing so, it is creating transparency about its observations and experiences gained from supervisory practice in this area. FINMA has repeatedly identified shortcomings in the area of the money laundering risk analysis during on-site supervisory reviews. This prompted it to conduct an in-depth review of the money laundering risk analyses of more than thirty banks in…

Former J.P. Morgan Precious Metals Traders Sentenced to Prison

Fraud
Defendants Were J.P. Morgan’s Former Head of Global Precious Metals Business and J.P. Morgan’s Former Head Gold Trader in New YorkTwo former precious metals traders at JPMorgan Chase & Co. (JPMorgan) were sentenced today for engaging in fraud, attempted price manipulation, and spoofing as part of a market manipulation scheme that spanned over eight years, involved tens of thousands of unlawful trading sequences, and resulted in over $10 million in losses to market participants. Gregg Smith, 59, of Scarsdale, New York, was sentenced to two years in prison and a $50,000 fine. Michael Nowak, 49, of Montclair, New Jersey, was…

MAS Will Not Tolerate the Abuse of Our Financial System for Illicit Activities

Money Laundering, Prosecutions
Singapore, 16 August 2023… The Monetary Authority of Singapore (MAS) said today that it had worked closely with the Commercial Affairs Department (CAD) to facilitate the development of the case that led to the Police’s arrest, on 15 August, of 10 individuals for suspected involvement in offences including forgery and/or money laundering and resistance to lawful apprehension [1] . MAS has also been collaborating closely with CAD to identify potentially tainted funds and assets in our financial system and prevent their dissipation. 2 Intelligence and information from suspicious transaction reports (STRs) filed by financial institutions (FIs) in Singapore had earlier…

Abramovich ally Eugene Shvidler fails in attempt to overturn UK sanctions

Sanctions
A billionaire and close ally of Roman Abramovich has failed in his attempt to overturn UK sanctions, ending a challenge that had been seen as a crucial test of the government’s response to Russia’s invasion of Ukraine. The high court in London on Friday rejected the effort by Eugene Shvidler to have the sanctions on him declared unlawful. Shvidler’s lawyers immediately said he would appeal. The UK government imposed sanctions on Shvidler in March 2022, a month after Vladimir Putin ordered the full-scale invasion of Ukraine. The UK government targeted Russia-linked oligarchs and officials as part of its effort to…

The Caspian Sea is a Sanctions busting paradise

Sanctions
While everyone is watching the latest drama unfold in the Black Sea, mysterious shipping journeys are taking place in the Caspian Sea. The massive lake—the world’s largest—is bordered by Kazakhstan, Turkmenistan, Azerbaijan, Russia, and Iran. And these days, the ocean-like sea is the scene of enormous volumes of hush-hush shipping involving primarily Russian and Iranian vessels. The past three months have each seen more than 600 AIS gaps by Russian-flagged vessels alone, up from just over 100 per month during the same period last year. (AIS is the automatic identification system, which virtually all commercial vessels are obliged to use;…

Ladbrokes owner sets aside £585m to settle HMRC bribery inquiry

Bribery, Corruption
The owner of Ladbrokes and Coral bookmakers has said it is close to “drawing a line” under a scandal at one of its former Turkish business, as it sets aside £585m to settle an investigation over alleged bribery. Entain has put aside the cash in anticipation of a settlement with UK authorities, who entered negotiations over a deferred prosecution agreement with the international betting and gaming group this year. Entain said on Thursday that negotiations with the UK’s Crown Prosecution Service (CPS) had “progressed to a point where the company believes it is likely to be able to agree a…