Month: August 2024

DOJ’s New Whistleblower Program Faces Scrutiny from Legal Experts

Whistleblowing
The U.S. Department of Justice’s recently launched whistleblower reward program is drawing both praise and criticism from legal experts in the field. While many welcome the initiative, concerns have emerged about key aspects of the three-year pilot program. Introduced last week, the program offers financial incentives to individuals who provide original information or analysis related to financial crimes, bribery, or healthcare fraud. Deputy Attorney General Lisa Monaco announced the program in March, aiming to bridge gaps between existing whistleblower programs at other agencies. Legal professionals specializing in whistleblower cases have identified several potential shortcomings in the program’s structure: Funding Uncertainty:…

PwC Fined £15m for Fraud Alert Failures

Fraud, Prosecutions
PwC has been fined £15m for failing to alert the Financial Conduct Authority (FCA) to suspected fraudulent activity at London Capital & Finance (LCF). The FCA, which is fining an audit firm for the first time, said PwC encountered “significant issues” throughout its 2016 audit of LCF, with the company having and provided the Big Four outfit with “inaccurate and misleading information”. A senior individual at LCF also acted aggressively towards auditors. Considerably longer to complete According to the FCA, PwC found the audit very complex and it took “considerably longer to complete” than anticipated with the firm ultimately coming…

SEC Charges NovaTech and its Principals and Promoters with $650m Crypto Fraud

Digital Currencies, Fraud, Prosecutions
The Securities and Exchange Commission today announced charges against Cynthia and Eddy Petion, along with their company, NovaTech Ltd., for operating a fraudulent scheme that raised more than $650 million in crypto assets from more than 200,000 investors worldwide, including many in the Haitian-American community. The SEC also charged Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley for their roles in promoting NovaTech to investors. According to the SEC’s complaint, the Petions operated NovaTech as a multi-level marketing (MLM) and crypto asset investment program from 2019 through 2023. They lured investors by claiming NovaTech would…

Whistleblowers Cash In: SEC Awards $98 Million for Crucial Tips

Whistleblowing
The Securities and Exchange Commission (SEC) has awarded a staggering $98 million to two whistleblowers. The announcement, made on August 23, 2024, underscores the critical role that individuals play in uncovering financial misconduct. The lion’s share of the award—$82 million—went to a whistleblower whose initial tip sparked the investigations and who provided ongoing assistance. A second whistleblower, contributing later but significantly to one aspect of the case, received $16 million. “Without these whistleblowers’ information, the violations would have been difficult to detect,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower, emphasizing the importance of such cooperation in…

Singapore Charges Ex-Bankers with Abetting $2.2 Bn Money Laundering Ring

Money Laundering, Prosecutions
Singapore charged two bankers Thursday for their alleged role in abetting clients responsible for a US$2.2 billion money laundering ring, marking the first time that criminal charges have been laid against finance professionals since the scandal came to light. The Central American Bank for Economic Integration (CABEI) has been trying to clean up its image after allegations of major mismanagement. But those efforts are now overshadowed by dueling lawsuits between the bank and its former president –– with each accusing the other of tarnishing their reputations. A former Georgian defense minister is under investigation for his alleged role in a…

Hong Kong Customs detects money laundering case involving about $1.5 billion

Money Laundering
Hong Kong Customs mounted an operation codenamed “Fencing” yesterday (August 7) and dismantled a money laundering syndicate receiving suspicious funds from the Asia-Pacific region. It was suspected that the syndicate masterminds and members made use of shell companies and cryptocurrency to launder crime proceeds amounting to about $1.5 billion. During the operation, Customs arrested four persons suspected to be connected with the case and has already arranged to freeze a total of about $2.2 million in assets held by the arrestees.      Earlier this year, Customs officers identified a money laundering syndicate for a financial investigation. It was revealed that the…

Investigation Goliath: Suspected ringleaders of international crime group charged with €93 million VAT fraud

Fraud, Prosecutions
Three suspected ringleaders of an international criminal group were indicted yesterday at the Regional Court of Dusseldorf (Germany) for a €93 million VAT fraud, following an investigation by the European Public Prosecutor’s Office (EPPO) in Hamburg, code-named Goliath. The three were charged with criminal association and VAT fraud on a large scale. Two of the defendants remain in pre-trial detention. One of the suspects was arrested during an action carried out by the EPPO on 22 November 2023, targeting the international criminal ring. Another suspect – a Danish citizen who had fled to Africa to escape detention – was arrested…

Gang jailed for operating £55m Chinese-money-laundering ring in UK

Money Laundering
Seven people have been jailed for operating an undercover £55m money-laundering ring aimed at international university students seeking to bypass limits on the amount of cash that can be taken out of China. Four people – three men and one woman – were sentenced at Snaresbrook crown court on Monday for a range of money-laundering offences. In June, three others were sentenced for similar offences. They were handed sentences ranging from 11 months to 12 years. Chinese citizens cannot transfer more than $50,000 (£38,000) for personal purposes out of the country a year. To regulate this, citizens are required to…

Property firm fined £22k for money laundering failures

Money Laundering
A property law firm in Manchester has been handed a fine of nearly £22,000 for failures in anti-money laundering (AML) procedures, towards the top end of the Solicitors Regulation Authority’s (SRA) powers. The fine represented 2.4% of the firm’s turnover, with the SRA acknowledging that “there was no evidence that actual harm had materialised”. According to an SRA notice, an inspection in early 2023 identified various areas of concern surrounding the firm’s compliance with the 2017 Money Laundering Regulations. This led to an investigation that found that GD Legal, which handles both residential and commercial property work, did not have…

Uptick in money laundering cases reaching UK courts, KPMG data shows

Money Laundering
There has been an increase in the number of alleged fraud cases heard in Crown Courts across the country, with money laundering being the most common fraud type by value in the last six months.According to new data by KPMG’s Fraud Barometer, 122 fraud cases in total were heard in the first six months of the year at the Crown Courts. This figure is up from 105 cases during the same period in 2023.Nine cases of money laundering, worth a collective £128.2m, have been heard so far this year.This increase comes on the back of a well-documented court system is…

US sanctions over 400 firms accused of aiding Russian war effort

Sanctions
The United States imposed new sanctions Friday on more than 400 entities accused of supporting Russia during its war with Ukraine. Announced the day before Ukraine’s Independence Day holiday, the sanctions focus on firms in Russia, Europe, Asia and the Middle East accused of helping Russia avoid U.S. sanctions and enabling its war in Ukraine, according to a Treasury Department press release. The Biden administration also added 123 firms to the U.S. export control list, which requires suppliers to obtain licenses prior to shipping items to the companies listed. Those added Friday included 42 Chinese firms and 63 Russian firms,…

Left steaming at the ears: father and son duo jailed after City of London Police uncover £136,000 iron fraud

Fraud
A father and son have been jailed for a total of five years after pocketing £136,000 in an elaborate scheme of purchasing reconditioned steam irons and returning them with forged receipts to Argos.Paul Mathews, 62, and Dean Mathews, 40, both of Queens Road, Wisbech, purchased heavily discounted Tefal steam irons, worth £400, and then returned them to Argos.Paul Mathews and Dean Mathews both pled guilty to conspiracy to commit fraud and money laundering and were sentenced to three years and two years, respectively, at Norwich Crown Court on 13 August 2024.The steam irons that were purchased by Paul and Dean…

Half of crypto ads on Facebook are scams or violate Meta’s policies, consumer regulator alleges

Fraud
More than half of cryptocurrency-related ads on Facebook analysed by Australia’s consumer regulator were scams or violated Meta’s policies, a court has heard. The Australian Competition and Consumer Commission (ACCC) took Meta to court over celebrity scam ads in 2022, alleging the company had engaged in false, misleading or deceptive conduct in publishing the ads, and aiding and abetting the false conduct by the advertisers. In a ruling issued last week, it was revealed the ACCC has alleged that, since at least January 2018, “Meta has been aware that a significant proportion of cryptocurrency advertisements on the Facebook platform have…

Eurojust supports large-scale anti-mafia operation leading to arrest and freezing of EUR 50 million

Money Laundering
An investigation lasting over two years has uncovered an intricate money laundering scheme run by a mafia family from Palermo. The total value of their profits is estimated at over EUR 500 million. They reinvested the profits of their crimes in multiple companies in Brazil. Cooperation between Italian, Brazilian and Swiss authorities led to the arrest of a member of the organised crime group (OCG) during an action day on 13 August, as well as the freezing of financial assets worth EUR 50 million during several searches in Italy, Brazil and Switzerland.To support other major mafia families, the OCG was…

Unraveling the Web: Money Laundering through E-Payments from Russia to the UK

Money Laundering
Experts from Transparency International Russia (in exile) have conducted an in-depth analysis of illegal money transfers from Russia to the UK through e-payments over the past decade.This research examines the sophisticated trade of verified business bank accounts, often exploited by criminals to obscure large-scale financial transfers. The investigation highlights significant regulatory gaps and the use of dark web marketplaces where these accounts are sold, often registered under false identities with genuine documents. The study reveals that high-risk profiles, including politically exposed persons (PEPs and complex corporate structures exacerbate these risks.The report identifies several e-payment platforms, which have been exploited for…

Man charged over €6.5m cryptocurrency seizure in Dublin

Digital Currencies, Money Laundering
A man has appeared in court following the seizure of €6.5m (£5.6m) worth of cryptocurrency in County Dublin.The seizure was part of an investigation into the sale of illegal material on darknet markets and money laundering.The 23-year-old man is facing three counts of money laundering.Two other people arrested as part of the police investigation, a 49-year-old man and a 32-year-old woman, have been released from custody. As part of the investigation, the Garda National Cyber Crime Bureau (GNCCB) said they seized “substantial assets” including Bitcoin and Monero, along with watches worth €120,000 (£100,000) and two vehicles valued at €220,000 (£190,000).Kevin…