Year: 2024

German regulator fines Commerzbank over anti-money laundering non-compliance

German financial watchdog BaFin has ordered Commerzbank (CBKG.DE) to pay a fine of 1.45 million euros ($1.55 million) for breaching its anti-money laundering duties, the regulator said on Monday. “Commerzbank AG and the former comdirect Bank AG, of which Commerzbank AG is the universal successor, had breached their supervisory duties,” said the regulator in a statement. According to BaFin, the bank did not update customer data on time and did not provide proper security measures, which resulted in inadequate due diligence in three cases, thus violating its anti-money laundering obligations. Commerzbank said on Monday it has reworked due diligence and…

Lloyds Bank issues urgent warning over Taylor Swift ticket scams

Fans of Taylor Swift are being targeted by a wave of concert ticket scams flooding social media, as the global music icon prepares to tour the UK for the first time in six years this summer.Analysis by Lloyds Bank of scam reports made by its own customers found a surge in fraud cases from those buying tickets for the star’s upcoming – and sold out – Eras Tour. Since tickets went on sale in July last year, more than 600 customers have come forward to report being scammed, significantly more than for any other music artist. The average amount lost…

US Department of Treasury Imposes Targeted Sanctions on Iran

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced targeted sanctions against multiple individuals and entities involved in Iran’s UAV (Unmanned Aerial Vehicle) program, steel industry, and automobile sector. The sanctions aim to disrupt Iran’s UAV production capabilities, particularly focusing on engine types powering Iran’s Shahed variant UAVs, which were utilized in the April 13 attack on Israel. These actions are directed towards individuals and entities facilitating Iran’s UAV production arm, including Kimia Part Sivan Company (KIPAS) and other Iranian UAV manufacturers. Additionally, OFAC is designating five companies across various jurisdictions involved in supplying component materials…

FINRA orders Barclays unit to pay $700K over conflicts of interest

A Barclays unit agreed to pay $700,000 to settle allegations levied by the Financial Industry Regulatory Authority (FINRA) that its research analysts violated conflict-of-interest rules and the firm failed to sufficiently supervise their trades. Barclays Capital agreed to be censured and pay the fine in reaching settlement, according to a FINRA order issued Friday. Barclays failed to identify and disclose 99 instances of its research analysts holding stock in a company in which they published a report and three instances of research analysts trading in their brokerage accounts in a manner inconsistent with published recommendations, FINRA alleged. The details: From…

Crypto.com Postpones South Korea Launch After Reports of Money Laundering Probe

Justice Department’s First Cryptocurrency Open-Market Manipulation CaseA federal jury in New York convicted a man residing in Puerto Rico today of commodities fraud, commodities market manipulation, and wire fraud in connection with the manipulation on the Mango Markets decentralized cryptocurrency exchange. According to court documents and evidence presented at trial, Avraham Eisenberg, 28, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts. “Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out…

Ukraine’s agriculture minister suspected of corrupt land grab

Ukraine’s agriculture minister has been made a suspect in a corruption probe. Agriculture Minister Mykola Solsky pledged on Tuesday his full cooperation with Kyiv’s anticorruption agency as it investigates the illegal acquisition of state-owned land. The case is the first against a minister under President Volodymyr Zelenskyy. The post of agriculture minister is particularly sensitive given Kyiv’s efforts to maintain its massive grain exports – a vital economic pillar – in the face of Russia’s invasion. The National Anti-Corruption Bureau of Ukraine (NABU) said it had uncovered a scheme led by a current minister to illegally acquire state-owned land worth…

SEC SEEKS $5.3 BILLION FINE FOR TERRAFORM AND CO-FOUNDER DO KWON

Federal regulators are pursuing a fine of $5.3 billion against Terraform Labs and its co-founder Do Kwon for defrauding investors, following a recent verdict that found them liable for a multi-billion-dollar fraud. Do-Kwan-Terraform-LabsIn a court filing, the U.S. Securities and Exchange Commission (SEC) requested that Kwon and Terraform pay $4.7 billion in disgorgement and interest for their involvement in the Terra-Luna collapse of 2022. Additionally, the SEC is seeking civil penalties of $420 million for Terraform and $100 million for Kwon. The SEC highlighted the need for a strong message to be sent, stating in the filing, “The Court should…

Man Convicted for $110M Cryptocurrency Scheme

Justice Department’s First Cryptocurrency Open-Market Manipulation CaseA federal jury in New York convicted a man residing in Puerto Rico today of commodities fraud, commodities market manipulation, and wire fraud in connection with the manipulation on the Mango Markets decentralized cryptocurrency exchange. According to court documents and evidence presented at trial, Avraham Eisenberg, 28, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from Mango Markets and its customers by artificially manipulating the price of certain perpetual futures contracts. “Avraham Eisenberg executed a manipulative trading scheme on a cryptocurrency exchange, defrauding the exchange and its investors out…

Still no fines as a result of 2022 Russian sanctions breaches

No fines for sanctions breaches have been levied as a result of the 2022 sanctions against Russia since its full-scale invasion of Ukraine, correspondence from the Foreign, Commonwealth and Development Office (FCDO) reveals. Letter from Minister Trevelyan relating to Russian sanctions, dated 28/03/2024Read the report [HTML]Download the report [PDF 525B]Evidence Session: The situation in Ukraine and the UK’s responseInquiry: Responding to illicit and emerging financeForeign Affairs CommitteeMinister of State at the FCDO, Anne-Marie Trevelyan, writes that she expects Government investigations into potential breaches of the UK’s financial sanctions, imposed on Russian individuals and organisations since the invasion, to come to…

FATF Ministers commit to stepping up efforts to fight money laundering, terrorist and proliferation financing

Washington, D.C., 18 April 2024 – The Ministers of the Financial Action Task Force (FATF) reaffirmed their unwavering commitment to combat financial crime, and fully support the FATF as the global standard-setter for preventing and combatting money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction (AML/CFT/CPF). During this biennial meeting in Washington DC, members recognised the achievements of the Singapore Presidency under FATF President T. Raja Kumar. These included major steps taken to enhance the FATF Standards on asset recovery – improving jurisdictions’ toolkits to recover the proceeds of crime, and also to reinforce…

UK Government to tackle global financial corruption 

UK Government to work with international community to tackle illicit flows of money through increased transparency of company ownership.  UK Deputy Foreign Secretary and Minister for Development and Africa Andrew Mitchell will announce a call to action on this issue during the World Bank Spring Meetings.  He will also announce a £2 million funding contribution to tackle corruption in support of the call to action.   Today (Tuesday 16 April), the UK Government will announce a global call to action for greater transparency on company ownership to tackle global illicit flows of money. Transparency about who owns, controls, or benefits from companies is…

‘You’re Never Too Busy For Your Banker’: How Italy’s ’Ndrangheta Mafia Allegedly Infiltrated Canadian Banks

Angelo Figliomeni wanted answers. The alleged mob boss had sent an associate to make a deposit into his account at the Royal Bank of Canada, but there was less cash than expected. He got on the line with his “client care manager” at the bank branch, Nicola “Nick” Martino — who police alleged also happened to be a member of his organized crime group. “Thirteen thousand, three hundred, tell me why?” Figliomeni asked Martino. “Three days short, ‘cause it was February checks,” the banker replied. “Always an excuse!” Figliomeni barked at Martino. Little did they know, police were listening in.…

New EU rules to combat money-laundering adopted

Authorities, journalists, civil society organisations, to gain access to new registers, information sourcesEU limit on large cash payments up to EUR 10 000Due diligence rules to apply to football clubs and agents from 2029New EU Agency to directly oversee riskiest entities The European Parliament has adopted a package of laws strengthening the EU’s toolkit to fight money-laundering and terrorist financing. The new laws ensure that people with a legitimate interest, including journalists, media professionals, civil society organisations, competent authorities, and supervisory bodies, will have immediate, unfiltered, direct and free access to beneficial ownership information held in national registries and interconnected…

Cash couriers who smuggled millions in suitcases are sentenced

Six more members of a money laundering network which smuggled more than £100 million out of the UK to the UAE have been sentenced following an investigation by the National Crime Agency. The network transported the cash to Dubai during 83 separate trips between November 2019 and October 2020, overseen by ringleader Abdullah Alfalasi, 48, who was jailed for more than nine years in July 2022. The couriers, who were paid between £3,000-5,000 for each trip and would be booked on business class flights due to the extra luggage allowance, communicated on WhatsApp groups including one titled ’Sunshine and lollipops’.…

Panama Papers money-laundering trial begins

The trial of 27 people charged in connection with the Panama Papers money laundering scandal has started in a Panamanian criminal court. The leak of secret financial documents in 2016 revealed how some of the world’s wealthiest people stashed their assets in offshore companies. The defendants include Jurgen Mossack and Ramon Fonseca Mora who founded the now defunct law firm, Mossack Fonseca. They face money-laundering charges but say neither they, the firm nor its employees were involved in unlawful acts. In 2017, the firm said it was the victim of a computer hack and that the information leaked was being…

Bribery, fraud and anti-money laundering | UK Regulatory Outlook April 2024

Financial Conduct Authority 2024/2025 Business Plan The Financial Conduct Authority (FCA) has published its 2024/25 Business Plan, as a useful reminder of its objectives and areas of regulatory focus for the financial sector. Over the next year, the FCA will focus on reducing and preventing financial crime, prioritising the needs of consumers and strengthening the UK’s position in global wholesale markets. This follows its work update published in February 2024 (as reported in our previous Regulatory Outlook), which highlighted the need for firms to tackle fraud and ensure their systems keep up with the increasing sophistication of criminal groups.   For further information see our Insight.…

China former football chief sentenced to life for bribery

A former president of the Chinese Football Association (CFA), Chen Xuyuan, has been sentenced to life in prison for bribery, according to the country’s state media. In January, he pleaded guilty to taking bribes worth a total of 81 million yuan ($11.2m; £8.9m). An anti-corruption crackdown led by President Xi Jinping has cut through sport, banking and the military. In football, more than a dozen coaches and players have been investigated. The trial at the Intermediate People’s Court of Huangshi in central China revealed Chen’s illicit activities from 2010 to 2023, which included his earlier role as the president and…

US Sanctions Zimbabwe President for Corruption and Torture Against His People

Zimbabwe President Emmerson Mnangagwa was sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) Monday for corruption and severe human rights abuses, which include members of his administration facilitating acts of kidnapping and torture. In addition to Mnangagwa, the U.S. blacklisted 10 members of his government and their spouses under the the Global Magnitsky Program for corrupt practices to the detriment of their citizen’s human rights and well-being. The new measures replace an older set of sanctions against the Southern African state, which the Biden administration felt were too harmful to the Zimbabwe economy. “The United States remains…

Gunvor S.A. to Pay Over $661M in Landmark Guilty Plea for Foreign Bribery Case

Gunvor S.A., an international commodities trading company based in Switzerland, has pleaded guilty and agreed to pay over $661 million to settle an investigation by the U.S. Justice Department, resolving allegations of violations of the Foreign Corrupt Practices Act (FCPA). The guilty plea follows an extensive probe into Gunvor’s corrupt practices, specifically its scheme to pay substantial bribes to Ecuadorean government officials with the aim of securing business deals with Petroecuador, the state-owned and state-controlled oil company of Ecuador. As part of the resolution, Gunvor entered into a plea agreement, admitting to conspiracy charges related to violating the anti-bribery provisions…

Two men acquitted of bribing Saudis in huge British defence deal

Two men have been acquitted of paying bribes totalling millions of pounds to high-ranking Saudis after they argued that they had been unfairly prosecuted. Jeffrey Cook and John Mason had been accused of bribing a Saudi prince and his associates to secure and maintain a huge defence deal for a British company. But on Wednesday, a jury in London acquitted them after lawyers argued the payments had been authorised by the British and Saudi governments. Tom Allen, the KC representing Cook, had told jurors at Southwark crown court that a wide array of British politicians, officials and military figures had…

Expensive Art at Stake as Venezuelan Banker Faces U.S. Bribery Charges

He’s already facing charges for allegedly bribing a former Puerto Rican governor, and his bank is in liquidation following money laundering fines. Now, Julio Herrera Velutini has another legal concern: the state of his confiscated US$23-million art collection. Administrators in charge of liquidating his bank’s assets have “stashed” the collection “under conditions that seem inadequate for its proper preservation,” according to a lawsuit recently filed by Herrera Velutini. Herrera Velutini made the claims against Driven Administrative Services LLC, which has been appointed to administer Bancrédito International Bank and Trust Corporation. Herrera Velutini is the sole shareholder of Bancrédito Holding, the…

Settlement Agreement between the U.S. Department of the Treasury’s Office of Foreign Assets Control and EFG International AG

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a settlement with EFG International AG, a Switzerland-based global private banking group. EFG has agreed to pay $3,740,442 to settle its potential civil liability for processing 873 securities transactions in apparent violation of the Cuban Asset Control Regulations, the Kingpin Act, and +Order 14024. The settlement amount reflects OFAC’s determination that EFG’s apparent violations were voluntarily self-disclosed and were non-egregious. Article Credit: https://ofac.treasury.gov/recent-actions/20240314_33

Specialist CPS team involved in UK’s largest Bitcoin seizure

An ex-takeaway worker has been convicted (Wednesday 20 March 2024) of laundering the proceeds which saw her rise from living above a Chinese restaurant to residing in a multi-million pound house in an affluent part of North London. Jian Wen, 42, was found guilty at Southwark Crown Court of an offence relating to money laundering. Picture of Jian WenJian WenA Metropolitan Police investigation resulted in the CPS seizure of Bitcoin wallets from Wen, with an initial estimated value in excess of £2 billion. Prosecutors told the court the sheer scale of the seized Bitcoin, the lack of any legitimate evidence…

FATF publishes guidance on Beneficial Ownership and Transparency of Legal Arrangements

Following the February 2023 revisions to FATF Recommendation 25 on Beneficial ownership and transparency of legal arrangements, the FATF has updated its risk-based guidance for this Recommendation. The guidance complements the existing guidance on Recommendation 24 on legal persons and aims to help stakeholders from the public and private sectors to implement the new requirements more effectively. The Guidance aims to assist countries and the private sector to better understand how transparency requirements apply to legal arrangements. It sets out practical guidance on how to understand and assess the money laundering and terrorist financing risks associated with trusts and similar…

Online Cryptocurrency Exchanger Pleads Guilty to Operating Unlicensed Money Transmitting Business

Defendant Agrees to Forfeit $1.3 Million in Cash, Crypto and Precious MetalsEarlier today, in federal court in Central Islip, David Scotese pleaded guilty to operating an unlicensed money transmitting business. As part of his plea agreement, Scotese agreed to forfeit cryptocurrency, cash, and precious metals worth in excess of $1.3 million at current valuation. The proceeding was held before United States District Judge Joan M. Azrack. When sentenced, Scotese faces up to five years in prison. Breon Peace, United States Attorney for the Eastern District of New York, Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation (IRS-CI), Erin Keegan, Acting…

Improving the effectiveness of the UK Money Laundering Regulations

HM Treasury has published a consultation on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the ‘MLRs’), which place requirements onto a range of businesses to identify and prevent money laundering and terrorist financing. HM Treasury committed to consulting on changes to the MLRs as part of a wider programme of work aimed at reducing money laundering, which was set out in the Economic Crime Plan 2023-26. This consultation principally covers issues with the MLRs already identified by HM Treasury, for example in the 2022 Review of the UK’s…

Dawn crackdown on suspected money launderers across Greater Manchester

Six people suspected of being part of an organised crime group involved in a large-scale drugs supply and money laundering conspiracy have been arrested. This morning (Thursday 29 February) specialist detectives from GMP Serious Organised Crime Group and Economic Crime Unit, supported by district resources and colleagues from neighbouring forces, executed thirteen simultaneous warrants at properties and residences across Bury, Bolton, Salford, and Rossendale.Three women aged between 35 to 40, and three men aged between 38 to 41, have been arrested on suspicion of money laundering. They remain in police custody for questioning.A 38-year-old man was also arrested on suspicion…

Bribery, fraud and anti-money laundering | UK Regulatory Outlook February 2024

The Environment Agency has established a new Economic Crime Unit to combat money laundering and conduct financial investigations in the waste sector, made up of accredited financial investigators and financial intelligence officers and financial crime analysts. The unit comprises two teams: the Asset Denial Team, focusing on account freezing orders, cash seizures, pre-charge restraints and confiscations; and the Money Laundering Investigations team, responsible for conducting money laundering investigations targeting environmental offences. Businesses within the waste sector should ensure they are adhering to proper financial practices and reporting any suspicious activities. It is crucial that should the Economic Crime Unit launch…

New report finds AML compliance failures are rife in the UK

AN ANALYSIS of more than 1,600 ‘anti-money laundering (AML) events’ recorded across the UK in the last decade shows money laundering is the most prevalent issue (27.5%), a new report has revealed. In its 2024 Money Laundering and Financial Crime Stats Report, SmartSearch inspected 1,664 AML events in the UK alone and found that while just over a quarter of the UK’s crimes and issues pertain to money laundering (27.5%), this was closely followed by AML compliance failures (23.9%) – which beat drug trafficking (19.8%) and financial fraud (13.4%) to the top spot. AML events include recorded crimes or issues…

Bank fined £1m by Isle of Man regulator

Royal Bank of Scotland International has been fined £1m by the Isle of Man’s financial regulator for breaching its anti-money laundering and countering the financing of terrorism code.The firm was fined by the island’s Financial Services Authority (FSA) for failing to adequately carry out customer risk assessments in line with the code between 2015 and 2018.It followed an inspection reviewing elements of the bank’s Isle of Man non-personal customer book between June and July 2021.A spokesman for the bank said it had “already updated and improved our controls and procedures to ensure this cannot happen again”.A total of 2,239 non-personal…

UK art market feeling the heat as anti-money laundering legislation ramped up

HMRC has been issuing more regular fines and putting into force intensive checks, making art-related businesses sweatRiah Pryor19 February 2024ShareUnder the AML broiler: HMRC fined at least 31 UK art market participants from January 2021 to March 2023 © M4OS Photos/Alamy Stock PhotoUnder the AML broiler: HMRC fined at least 31 UK art market participants from January 2021 to March 2023© M4OS Photos/Alamy Stock Photo The British art market is under mounting pressure from anti-money laundering (AML) legislation. HMRC, the UK’s tax authority, fined at least 31 art market participants from 10 January 2021, when it began supervising the art…

New York Attorney General Files Lawsuit Against Citibank Over Fraud Protection Failures

New York Attorney General Letitia James has initiated legal action against Citibank, N.A. (Citi), accusing the banking giant of neglecting to protect customers and refusing reimbursement to victims of fraud. The lawsuit alleges a range of misconduct, including the failure to implement robust online security measures, misleading account holders about their rights following unauthorized access, and illegal denial of reimbursement to victims of fraud. Alleged Misconduct by Citibank: Inadequate Security Measures: The lawsuit contends that Citibank’s lax approach to online security, insufficient monitoring systems, and failure to respond promptly and effectively to fraudulent activities have enabled scammers to steal millions…

Treasury Publishes 2024 National Risk Assessments for Money Laundering, Terrorist Financing, and Proliferation Financing

WASHINGTON – Today, the U.S. Department of the Treasury published the 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing. These reports highlight the most significant illicit finance threats, vulnerabilities, and risks facing the United States. The reports detail recent, significant updates to the U.S. anti-money laundering/counter-financing of terrorism framework and explain changes to the illicit finance risk environment. These include the ongoing fentanyl crisis, foreign and domestic terrorist attacks and related financing, increased potency of ransomware attacks, the growth of professional money laundering, and continued digitization of payments and financial services. These assessments also address how…

UN to investigate claims of corruption in Iraq aid project

The UN Development Programme (UNDP) is dispatching a team to Iraq to assess allegations of corruption in its $1.5bn (£1.2bn) construction programme following a Guardian investigation. According to an internal document obtained by the Guardian, the UNDP’s administrator, Achim Steiner, has “commissioned a management review and assessment of the allegations” after revelations its staff were allegedly taking kickbacks in return for helping business people obtain lucrative construction contracts. The six-page document, sent to donors on 25 January, aimed to reassure western capitals that the UNDP could hold itself to account through internal oversight mechanisms. At a subsequent meeting, several donors…

Frankfurt Chosen as Host for EU Anti-Money Laundering Authority

Frankfurt has been selected as the headquarters for the European Union’s Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA). The decision was made through a joint vote on Thursday by Members of the European Parliament (MEPs) and EU ambassadors. Out of nine candidate cities that applied to host AMLA and presented their cases in public hearings, Frankfurt emerged victorious in the first round of voting, securing a majority of validly cast votes. The co-rapporteurs for AMLA, Emil Radev of the European People’s Party (EPP) from Bulgaria and Eva Maria Poptcheva of Renew from Spain, expressed their confidence in…

EU told Slovakia that its reforms risked ‘irreparable damage’ to rule of law

Brussels told Slovakia it risked doing “irreparable damage” to the rule of law, it has emerged, before the country’s MPs approved legal reforms that critics say are aimed at protecting the prime minister’s political and business allies. The Slovakian news outlet SME reported on Wednesday that the European commissioner for justice, Didier Reynders, had written last week to Robert Fico’s government urging it not to fast-track the legislative package through parliament. The request was ignored and the changes – including scrapping a special prosecutor’s office dealing with high-level corruption, lowering penalties for financial crimes and cutting the statute of limitations…

UAE Removed from FATF ‘Grey List’ as Kenya and Namibia Face Increased Monitoring

The Financial Action Task Force (FATF), an international crime watchdog, announced the removal of the United Arab Emirates (UAE) from its ‘grey list.’ Simultaneously, Kenya and Namibia have been added to the list, subjecting them to heightened scrutiny due to concerns over inadequate measures against money laundering and terrorism financing. The decision came during the FATF Plenary, where the organization stated, “At this Plenary, the FATF added Kenya and Namibia to the list of jurisdictions subject to increased monitoring.” Kenya’s Treasury had already disclosed the news earlier in the day, emphasizing its full commitment to implementing the FATF’s action plan.…

Hezbollah-linked Picasso and Warhol stash raises red flag to art world

When police swooped on a high-security warehouse near London’s Heathrow airport, officers took away nearly two dozen works of art belonging to alleged Hezbollah financier Nazem Ahmad. At the same time, at an auction house in central London, they seized art that Mr Ahmad, a Beirut art gallery owner who the US wants to put on trial, had hoped to sell. The seized works included Picasso’s 1962 linocut Nature morte a la pasteque (Still Life with a Watermelon) and several by Andy Warhol, including Details of Renaissance Paintings (Leonardo da Vinci, The Annunciation, 1472). A Stanley Whitney painting, Sing All…

Germany’s BaFin warns Deutsche Bank of potential fines if it doesn’t improve money laundering controls

The Federal Financial Supervisory Authority of Germany, BaFin, has “threatened to impose penalty payments” on Deutsche Bank, the country’s largest lender, if it doesn’t fix what it refers to as “defects” concerning its money laundering controls. Deutsche Bank fintech newsBaFin extends monitoring of Deutsche BankThe regulator has extended the stay of its special representative at Deutsche Bank until 30 October 2024 to report on and assess the progress of the bank’s implementation of safeguards against money laundering and terrorist financing. The representative was first instated by BaFin in 2018. BaFin says: “On November 21, 2023, BaFin ordered Deutsche Bank AG…

EU proposes sanctions on Chinese firms aiding Russian war effort

The EU is proposing to sanction companies in mainland China for the first time as part of its latest measures aimed at shutting down loopholes that allow Russia to route military technology via third countries to its weapons factories. Three companies in mainland China, as well as four in Hong Kong and one in India, are on a 91-page document of companies and individuals who EU member states want to add to a growing sanctions list before the second anniversary of Russia’s invasion of Ukraine. As the EU, the UK and US representatives prepare to meet in Brussels on Wednesday,…