Year: 2023

SEC’s Gensler seeks $2.4B in funding to chase down crypto ‘misconduct’

Digital Currencies, Regulation
United States Securities and Exchange Commission Chair Gary Gensler says the regulator is spread thin and needs additional funding to keep up with the “increased complexity in the capital markets.” United States Securities and Exchange Commission Chair Gary Gensler has thrown his support behind U.S. President Joe Biden’s request to allocate a record $2.4 billion in funding for the regulator, highlighting the ongoing need to crack down on “misconduct” in the cryptocurrency industry. In prepared testimony for the March 29 budget hearing with the House Appropriations Committee, Gensler said the additional funding was needed to keep up the pace of…

Suspected Hizballah financier sanctioned under counter-terrorism regulations

Sanctions
Suspected Hizballah financier Nazem Ahmad has been sanctioned using domestic counter-terrorism powers.Powers used for the first time in order to curtail a suspected international terrorism financing network.The UK Government has announced a full asset freeze against an individual suspected of financing the terrorist group Hizballah. Nazem Ahmad has been sanctioned as part of continued efforts to prevent terrorism in the interests of national security. The move will also protect the integrity of the UK economy from terrorist financing threats. All assets and economic resources belonging to Ahmad in the UK have been frozen and no UK person may do business…

U.S. Charges North Korean Banker With Crypto Laundering

Digital Currencies, Money Laundering, Prosecutions
A U.S. court charged a China-based representative of North Korea’s Foreign Trade Bank with two counts related to laundering illicit crypto proceeds for the benefit of the North Korean nuclear weapons and ballistic missile program, according to a statement by the U.S. Attorney’s Office. Sim Hyon Sop, a 39-year-old North Korean national, is accused of conspiring with traders in China to launder cryptocurrency stolen by North Korea’s hackers by purchasing goods through Hong Kong-based front companies. The second indictment alleges that Sim managed a scheme laundering proceeds from the work of various North Korean IT specialists, who under fake identities…

SFO secures sentences totalling over 13 years for executives behind $500m bank fraud

Fraud, Prosecutions, Serious Fraud Office
Today at Southwark Crown Court, Nasser Alaghband, the CEO of British steel trading company Balli Steel Plc, was sentenced to six and a half years in prison, while two senior executives received sentences of over three years each. A Serious Fraud Office (SFO) investigation uncovered how Alaghband orchestrated a $500m fraud in a desperate attempt to keep his failing company afloat. He directed Melis Erda and Louise Worsell to secure bank loans, which they did by creating false contracts for non-existent steel shipments. These shipping documents were certified by an in-house shipping company, registered in the Cayman Islands, and operated…

Europe passes landmark crypto regulation

Digital Currencies, Regulation
The European Parliament passed landmark crypto regulation, the Markets in Crypto-Assets (MiCA), on 20th April, 2023 becoming one of the world’s leading jurisdictions for crypto asset regulation. MiCA is a regulatory framework for crypto assets not already covered under existing financial services legislation. The regulation includes provision for consumer and investor protection, addresses financial stability and monetary policy risks as well as measures against market manipulation, money laundering, terrorist financing and criminal activity. The European Commission first proposed MiCA in 2020, ahead of many other global economies including the US and the UK. The global crypto asset market has existed…

EU Sanctions Companies Named in OCCRP Syrian Phosphate Investigation

Sanctions
The European Union imposed this week sanctions on 25 individuals and eight companies for supporting the regime of Syria’s Bashar al-Assad. Among those designated were Gennady Timchenko’s Stroytransgaz, the Syrian state-owned company Gecopham, as well as STG-Logistics and STG-Engineering, two Russian entities operating in Syria that had signed contracts with Assad’s government to manage the port of Tartus and invest in phosphate mines in the Palmyra desert. All four of these companies were the subject of an OCCRP investigation published last year, which uncovered how sanctioned Syrian phosphate was ending up in the EU despite sanctions. The trade was enriching…

Money laundering cash couriers smuggled £100 million in suitcases

Money Laundering, Prosecutions
The National Crime Agency has dismantled a network of criminal cash couriers that laundered more than £100m by smuggling it out of the UK to Dubai in the UAE. Custody images of Beatrice Auty, Jonathan Johnson and Jo Emma LarvinFrom left to right: Beatrice Auty, Jonathan Johnson and Jo Emma Larvin Eleven of the couriers have now been convicted, following yesterday’s guilty verdicts returned in the trial of Beatrice Auty, 26, from London; Jonathan Johnson, 55, and Jo Emma Larvin, 44, both from Ripon in North Yorkshire, and Amy Harrison, 27, from Worcester Park in Surrey, at Isleworth Crown Court.…

Verdict of French court on fine on Rietumu Banka for money laundering takes force

Money Laundering
The Supreme Court in France this January rejected Rietumu Banka’s complaint, and the decision on EUR 20 million fine for money laundering has come into force, said Latvian public television’s analytical news program De Facto, citing data from the bank’s annual report. French businessman Nadav Benoussan and his company France Offshore helped clients to hide some of their income to avoid taxes. Benoussan established offshore companies and opened accounts for them in Rietumu Banka – about 300 accounts a year. Clients were issued bank cards, allowing them to withdraw money in France. Some of these accounts were used in VAT…

Financial watchdog puts banks on alert in fight against money laundering via the Post Office

Money Laundering, Regulation
A series of measures designed to reduce the risk of money laundering via the Post Office have today been set out by the FCA. The regulator brought together partners including the National Economic Crime Centre (NECC), industry and government to strengthen controls while seeking to ensure that legitimate customers can continue to use the Post Office for Everyday Banking. The measures set out for banks today include: Post Offices are an important part of protecting access to cash for people and small businesses. FCA research found 6% of adults in the UK used cash to pay for everything over the…

Six charged with money laundering activity at former Danske Bank Estonia

Money Laundering, Prosecutions
The Prosecutor’s Office charged six people with money laundering crimes Monday, in relation to the now-defunct Tallinn branch of Danske Bank. According to the charge sheet, the former employees of the foreign banking unit of the Danske Bank Estonia branch – five men and one woman – together orchestrated large-scale money laundering at the Estonian branch of Danske in the years 2007 to 2015, in so doing intentionally concealing the real origins of the funds suspected criminal origin which were transferred to accounts at Danske. Evidence gathered in pre-trial proceedings found defendants provided money laundering services to the tune of…

Publication of the ABC Guidance

Bribery, Corruption, Law, Regulation & Guidance, Wolfsberg
Today the Wolfsberg Group is publishing its updated Anti-Bribery and Corruption Compliance Programme Guidance. This document updates the 2017 version and it is designed to promote a culture of ethical business practices and compliance with ABC legal and regulatory requirements. The Guidance is a risk-based approach for the adequate development and implementation of compliance programmes to prevent, detect, and report acts of Bribery and Corruption and identifies areas of elevated risk. While no ABC compliance programme can prevent or protect against Bribery and Corruption risks completely, and there is no one-size-fits-all solution, this guidance can help the industry mitigate Bribery…

Venezuela Cracks Down on Corruption at State-Owned Petroleum Company

Corruption
Venezuela’s chief prosecutor has said that his office has requested the police to search 142 locations nationwide and arrest 67 people in an anti-corruption operation that is targeting businessmen and officials at the state-owned petroleum company, PDVSA. The suspects are believed to have run parallel oil operations. Attorney General Tarek William Saab tweeted these numbers on Sunday, making it clear that more arrests should be expected after authorities apprehended 51 individuals last week. According to investigators, the suspects used their positions to carry out illegal parallel oil operations where crude oil was sold to individuals and companies, but the payments…

Preston mastermind of one of UK’s largest tax frauds convicted

Fraud, Prosecutions
The mastermind of a fake designer clothing scam has been convicted of one of the UK’s biggest carousel tax frauds after an investigation spanning more than a decade. Arif Patel and his gang tried to steal £97m through VAT repayment claims on false exports of textiles and phones. The 55-year-old also sold counterfeit clothes that would have been worth £50m if genuine. He was convicted by jury in his absence with a warrant out for his arrest. Her Majesty’s Revenue and Customs (HMRC) said Patel, of Preston in Lancashire, is believed to be at large in Dubai – where the…

Factsheet: failure to prevent fraud offence

Fraud, Regulation
What is the government doing and why?The government is creating a new failure to prevent fraud offence to hold organisations to account if they profit from fraud committed by their employees. This will improve fraud prevention and protect victims. Whilst there are some existing powers to fine and prosecute organisations and their employees for fraud, the new offence will strengthen these, closing loopholes that have allowed organisations to avoid prosecution in the past. Under the new offence, an organisation will be liable where a specified fraud offence is committed by an employee or agent, for the organisation’s benefit, and the…

UK cracks down on cold calls and text scams offering financial products

Fraud
Cold calls offering financial products will be banned as part of a government crackdown on fraud following evidence that millions of people are being targeted each week. Once the ban is in force, anyone being offered phoney cryptocurrency schemes or fraudulent insurance can assume they are a scam. More than 40 million adults in the UK were the target of a scam text or call in just three months, according to research by regulator Ofcom. Cold calls offering pension products are already illegal, and the latest announcement effectively extends these powers. The move follows warnings that people living with conditions…

Three charged over online banking scam

Fraud
Three men have been charged with fraud offences as part of a National Crime Agency investigation into a website which enabled criminals to subvert banking anti-fraud measures. NCA cyber crime investigators began probing the paid for subscription website www.OTP.Agency in June 2020. The site provided a service to criminals by helping them socially engineer bank account holders into disclosing genuine one-time-passcodes, or give other personally identifiable information, allowing multi-factor authentication to be bypassed. This granted access to a victim’s online banking or other accounts, enabling criminals to complete fraudulent online transactions. Investigators believe over 12,500 members of the public were…

UK ‘should impose sanctions on human rights abusers in Sudan’

Sanctions
The UK should impose sanctions on human rights abusers in senior Sudanese military positions as well as designate the Wagner group operating in Sudan as a terrorist group, a report from the all-party group on Sudan has urged. The group, including the Conservative former Africa minister Vicky Ford, said on Wednesday the west has allowed impunity to become the norm, and the failure to bring to justice many of those responsible for the genocide in Darfur 20 years ago has allowed the same militia to regroup and form part of the forces now blocking democracy in the country. The report…

Britain Reviews Plans for ‘Edinburgh’ Light Touch Regulation Following SVB Collapse

Regulation
BRITAIN’S plans to re-introduce light touch regulation was being reviewed this week in light of the SVB collapse. UK prime minister Rishi Sunak and chancellor Jeremy Hunt have seeking regulation of the country’s financial services to make it more attractive post-Brexit. Known as the Edinburgh Reforms, these are now being re-considered. Vicky Saporta, executive director for prudential regulation at the BoE, said last month that the legislation was “a big deal” and would “make a big difference” to the way it regulated banks. However, the government was now being urged to be far more cautious. “The Treasury must be careful…

IWD2023: Women in Financial Crime; and why we must now operate in the age of continuous approach to KYC enabled by widely available tools

KYC
So it was such an honour and privilege for me to recently chair the incredible ‘Women in Financial Crime’ Summit. Indeed some key takeaways and reflections on that day, attended by hundreds of like-minded AFC professionals globally, that stand out for me. Financial crime mutates, evolves, adapts and, because of that, the response we provide to it – as individuals, institutions, governments, and societies – must constantly evolve, too. Debate and education are what fuels this evolution and makes us stronger. In a way, change was one of the unspoken themes of our conversation at the Summit. ‘Part of the…

SEC Charges Crypto Entrepreneur Justin Sun and his Companies for Fraud and Other Securities Law Violations

Fraud, Prosecutions
Eight celebrities also charged for illegal touting of Sun’s crypto asset securities FOR IMMEDIATE RELEASE2023-59Washington D.C., March 22, 2023 —The Securities and Exchange Commission today announced charges against crypto asset entrepreneur Justin Sun and three of his wholly-owned companies, Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent), for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT). The SEC also charged Sun and his companies with fraudulently manipulating the secondary market for TRX through extensive wash trading, which involves the simultaneous or near-simultaneous purchase and sale of a security to make it…

Crypto laundromat which washed €44M in dirty money is taken down in operation by German, US police

Digital Currencies, Money Laundering
POLICE on both sides of the Atlantic today reported bringing down a massive money laundering operation using a cryptocurrency mixer at its heart. Criminals are suspected laundering of 152 000 Bitcoins (worth roughly BILLION) through the ‘ChipMixer’ platform. Much of the dirty money was connected to darkweb markets, ransomware groups, illicit goods trafficking, procurement of child sexual exploitation material, and stolen crypto assets. Officers in Germany and the US said they took down the infrastructure of the “laundromat” platform, seizing about 1909.4 Bitcoins in 55 transactions (approx. €44.2 million) and 7 TB of data. Ransomware actors such as Zeppelin, SunCrypt,…

Financial Crime Watchdog FATF Suspends Russia over Ukraine War

Counter Terrorist Financing, FATF, Money Laundering
PARIS, Feb 24 (Reuters) – Global financial crime watchdog Financial Action Task Force (FATF) suspended Russia’s membership on Friday, saying Moscow’s war in Ukraine violated the organisation’s principles. FATF is an inter-governmental organisation set up to combat money laundering and terrorism financing by setting global standards and checking if countries respect them. “This is the first time a member of FATF is suspended,” FATF President Raja Kumar told a news conference. “Russia is effectively sidelined from the organisation.” Article Credit: https://www.reuters.com/world/europe/financial-crime-watchdog-fatf-suspends-russias-membership-over-ukraine-war-2023-02-24/

FATF Publishes its ‘Tougher’ New Beneficial Ownership Standards

KYC, Regulation
FATF today published its “tougher” global beneficial ownership standards to assist countries and financial institutions to prevent shell companies being safe havens for illicit proceeds. The task force’s Recommendation 24 requires countries to ensure that competent authorities have access to adequate, accurate and up-to-date information on the true owners of companies. The Paris-based body has also updated the guidance that will help countries implement the revised Recommendation 24. The guidance explains types and sources of relevant information, and mechanism and sources to obtain such information. This includes the multi-pronged approach, which consists of combining information from, among others, companies themselves,…

UK Gambling Commission Fines 32Red and Platinum Gaming £7M for AML, Social Responsibility Failures

Money Laundering, Prosecutions
BRITAIN’S Gambling Commission today fined 32Red and Platinum Gaming with a €7.1M fine for AML and other failings. The Commission said the penalty on the online operator owned by Kindred Group Plc was also to includes social responsibility failures. “These failures highlight clearly that both operators failed to interact with customers in a way which minimises the risk of them experiencing harms associated with gambling,” said Kay Roberts, executive director of the Gambling Commission. The regulator said financial triggers for anti-money laundering reviews at 32Red were too high and not appropriate to effectively manage money laundering and terrorist financing risks,…

Ericsson agrees to $206m plea bargain with US in bribery case

Bribery, Prosecutions
Swedish telecom giant Ericsson has agreed to plead guilty and pay a $206 million fine for breaching its deferred prosecution deal with U.S. authorities by withholding information about its alleged misconduct in Iraq and other countries. In 2019, Ericsson admitted to accusations of bribery and other wrongdoing in multiple countries and paid a record $1 billion fine under a deferred prosecution agreement struck with the U.S. Department of Justice. The deal allowed the company to avoid a criminal conviction but required it to report any potential wrongdoing and submit to the scrutiny of an outside monitor over a three-year period.…

FROM RUSSIA WITH CRYPTO: MOSCOW-BASED EXCHANGES OFFERING TO ANONYMOUSLY CONVERT STABLECOINS FOR CASH IN THE UK

Digital Currencies
Moving money around the world has never been easier. At the click of a button, it’s possible to ping funds from one continent to another in a matter of minutes. While much of this still flows through established payment providers and financial institutions, like major multinational correspondent banks, there are a growing range of alternatives on the market. One is the proliferation of cryptocurrencies, which use blockchain technology to move digital assets from one place to another. Some cryptocurrencies, called stablecoins, peg their value to ‘real world’ assets, such as the US dollar, to help reduce fluctuations in their value.…

What does new anti-fraud regulation mean for UK plc?

Fraud, Regulation
Legal experts are expecting the enactment of a series of new anti-fraud measures this year, particularly via the economic crime and corporate transparency bill. What effect will this have on British businesses?Jonathan Weinberg14 Mar 2023Gettyimages 1366039494This year is set to be a significant one for the legislative side of the fight against financial crime in the UK. That means there’s plenty of debate about it – in the Houses of Parliament, around boardroom tables and within legal chambers. Matt Horne worked for the National Crime Agency for nearly a decade, latterly as deputy director of investigations, before becoming head of…

What more can Westminster do to fight financial crime?

Money Laundering
Having reclassified fraud as a national security threat, the government’s resolve against financial crime – particularly money-laundering – is hardening. But will the new legislative measures it’s considering go far enough? The City of London Corporation’s website boasts of the UK’s status as “the world’s most global financial centre”, but what it doesn’t mention is that this country is also a magnet for international financial crime. The problem has grown to such a scale that the government announced last month that it was classifying fraud as a national security threat – a move that UK Finance, the trade body representing…

Oligarch’s lawyers say UK caused serious hardship by freezing assets

Sanctions
Eugene Shvidler wants expedited court hearing to hear his claim that impounding his jets was wrong. A Russian-born billionaire who is a close associate of the former owner of Chelsea FC, Roman Abramovich, has launched a legal challenge against UK government sanctions imposed on him in response to Vladimir Putin’s invasion of Ukraine. The case is the first to be launched in the British courts by an individual with sanctions following the invasion of Ukraine, and could serve as a test case for other oligarchs seeking to overturn restrictions such as travel bans or asset freezes. Eugene Shvidler has accused…

More than 1000 artifacts in Metropolitan Museum of Art catalog linked to alleged looting and trafficking figures

Corruption
In the village of Bungmati, Nepal, above an ancient spring, stand two stone shrines and a temple. One of those shrines has a large hole where a statue of Shreedhar Vishnu, the Hindu protector god, used to be. Carved by master artisans nearly a thousand years ago, the sandstone god was flanked by the Hindu goddess Laxmi and the winged demigod Garuda and is considered a protective figure. For many years members of the local community carefully tended and worshipped the idol. “When women started their labor pain, our elders used to come to put mustard oil on the statue…

New EU Measures against Money Laundering and Terrorist Financing

Regulation
MEPs approved stricter rules to close existing gaps in combating money laundering, terrorist financing and evasion of sanctions in the EU.On Tuesday, MEPs from the Economic and Monetary Affairs and Civil Liberties, Justice and Home Affairs committees adopted their position on three pieces of draft legislation on the financing provisions of EU Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) policy. The package consists of: the EU “single rulebook” – regulation – with provisions on conducting due diligence on customers, transparency of beneficial owners and the use of anonymous instruments, such as crypto-assets, and new entities, such as crowdfunding…

U.S. Anti-Money Laundering Vulnerabilities Counter its Efforts to Aid Ukraine, Experts Say

Money Laundering
The U.S. is a magnet for the world’s dirty money, financial crime experts say, as they weigh in on how vulnerabilities in America’s anti-money laundering laws counter the country’s efforts to aid Ukraine in its defense against the Russian invasion. Illicit proceeds equal an estimated two percent of U.S. gross domestic product, according to findings in the Treasury’s 2022 Strategic Action Plan. Russian oligarchs, experts note, contribute to this problem by funneling their ill-gotten gains through industries that are exempt from rigorous anti-money laundering checks. And that’s a lot of money. The combined illicit wealth of just three Russian oligarchs…

SFO recovers criminal assets from £740m property fraud concealed through school donation

Asset Seizure
Today, the SFO confiscated an additional £92,500 from Achilleas Kallakis, one of the fraudsters behind the UK’s largest ever mortgage fraud case – ten years after his conviction. A recent SFO investigation exposed how criminal proceeds from this fraud were donated towards a theatre at Mr Kallakis’ child’s London private school in 2005. When the school later removed the Kallakis name from the theatre, the family took legal action against it, revealing the additional funds to the SFO. Following a three day hearing at Southwark Crown Court, this donation, paid through a complex family trust fund, was confirmed as the…

Understanding the Art Market and Anti-Money Laundering Regulations

Money Laundering
The world’s largest art markets lack robust anti-money laundering supervision. This exacerbates their appeal as a destination for illicit finance. In late February, the Financial Action Task Force (FATF) published a report on Money Laundering and Terrorist Financing in the Art and Antiquities Market. The report highlights a series of risk factors that make it appealing to criminals, including widespread secrecy surrounding beneficial owners and transactions, the subjectivity and wide-ranging values of artwork, and the size and global nature of the art market. There is often a legitimate reason for many of these oddities: anonymity prevents bias in the bidding…

The Financial Conduct Authority Is Investigating Suspected Money Laundering Failings At Barclays

Money Laundering, Regulation
Barclays Bank is being investigated by the Financial Conduct Authority (FCA) for suspected failings in its compliance and anti-money laundering (AML) systems. The UK regulator requested an independent review of Barclays’ internal systems under Section 166 of the Financial Services and Market Act 2000. This involves asking an independent firm of experts to review and report on Barclays’ systems and provide recommendations to improve practices in line with AML regulations. The Financial Times reported that there had been a number of incidents where the bank had failed to conduct thorough know your customer (KYC) and AML checks. Although the incidents…

North West group arrested in suspected property fraud where victims lost life savings

Fraud
Five men have been arrested across the North West and London in an NCA investigation linked to property investment fraud and money laundering. Man in his dressing gown being arrested by the NCANCA officers arrested a 68 year-old man at an apartment in Central London on Thursday [23 Feb] morning. He is suspected of being involved in the fraud that targeted victims with promises of investment returns on North West property developments. Would-be investors were approached to purchase apartments advertised as off plan with offers of high rates of guaranteed rental income when completed. The projects were never completed resulting…

Three Russians under sanctions own UK property via overseas entities

Sanctions
Three Russian oligarchs under sanctions are among those to declare they own more than £35m of UK property through the British Virgin Islands, Cyprus and Russia, the Guardian has found. Alexander Frolov, a billionaire and associate of Roman Abramovich, is revealed as the owner of a mansion in Weybridge in Surrey bought for £9.8m in 2008 and a flat in Knightsbridge bought for £15.4m via the BVI. Frolov, who owns an estimated 10% stake in Evraz, a UK-incorporated mining company, was placed under sanctions last year along with co-owners Abramovich and Alexander Abramov. The UK government said he was involved…

Swiss regulator investigates 12 banks in Lebanese central banker corruption case

Bribery, Corruption, Regulation
ZURICH (Reuters) -Switzerland’s financial regulator has investigated 12 banks and launched enforcement proceedings against two of them in relation to corruption charges against longtime central banker Riad Salameh, it said on Monday. Lebanese authorities charged Salameh, his brother Raja and one of his assistants on Thursday with money laundering, embezzlement and illicit enrichment after months of delay in the high-profile case. The Salameh brothers have denied wrongdoing throughout the process. The governor insisted on his innocence to Reuters last Thursday, saying the charges were “not an indictment” and pledged to abide by judicial procedures. The charges are the product of…

Report: $3.8 Billion in Crypto Stolen Last Year, Mostly by North Korea

Digital Currencies
Hackers stole US$3.8 billion worth of cryptocurrency last year, surpassing the $3.3 billion record registered in 2021 despite a dramatic fall in the crypto market’s value, according to a new report by blockchain analysis firm Chainanalysis. North Korean hackers stole most of it. Crypto theft peaked in March and October, which alone saw equivalents of $732 and $776 million stolen. Elaborate encryption mechanisms underlying blockchains — public ledgers recording transactions in blockchain networks — make them nearly invincible to hacker attacks. There are still weak spots that can be exploited, however. The report said that over 82% of all cryptocurrency…

Treasury Targets Global Sanctions Evasion Network Supporting Russia’s Military-Industrial Complex

Sanctions
WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed full blocking sanctions against 22 individuals and entities across multiple countries related to a sanctions evasion network supporting Russia’s military-industrial complex. Today’s action, taken pursuant to Executive Order (E.O.) 14024, are part of the U.S. strategy to methodically and intensively target sanctions evasion efforts around the globe, close down key backfilling channels, expose facilitators and enablers, and limit Russia’s access to revenue needed to wage its brutal war in Ukraine. Over the last year, Treasury has sanctioned over 100 individuals and entities engaging in…