Author: gracechurchfcp

OFAC Sanctions Dubai-based Financial Services Firm and CEO for Role in Russian Sanctions Evasion

Digital Currencies, Sanctions
On May 19, 2023, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 22 individuals and 104 entities operating in 20 countries for their role in facilitating Russian sanctions evasion. Concurrently, OFAC has expanded its Russian sanctions program for future targeting of individuals and entities involved in key sectors of the Russian economy. One of the individuals sanctioned today, an Irish national named John Desmond Hanafin, has an active Ethereum address included as an identifier on his SDN List entry. Hanafin is the founder and CEO of Huriya Private FZE LLE, a Dubai-based financial services company also sanctioned today…

iSpoof Scam Website Mastermind Sentenced to 13 Years in Prison

Fraud, Prosecutions
A U.K. court has sentenced the main administrator of a scam website known as iSpoof to 13 years and four months in prison. The administrator enabled criminals to make calls impersonating banks, retail companies, or government institutions, tricking people into disclosing their security data so that their accounts could be emptied. In the U.K. alone, victims lost the equivalent of more than $52 million, with projected global losses exceeding $124 million. According to Eurojust, iSpoof itself generated over four million dollars in just 16 months.Most of the four million dollars went to Tejay Fletcher, the website administrator and mastermind of…

DR Congo Exposes Tens of Thousands of Ghost Workers Across Government Ministries

Fraud
Auditors in the Democratic Republic of the Congo have uncovered a massive public payroll fraud, involving tens of thousands of ghost workers across government ministries, costing the public purse over US$800 million annually, according to a statement from the General Inspectorate of Finance. The audit found that 145,604 civil servants are paid based on fabricated payroll identification numbers, while 53,328 have more than one identification number and therefore receive multiple salaries. In addition, 43,725 officials are paid without being on the staff list of ministries that are supposed to employ them.The fraud was orchestrated by 961 payroll officers, who themselves…

Watchdog Proposes First Set of Global Rules for Crypto Sector

Digital Currencies, Regulation
INTERNATIONAL securities watchdog IOSCO unveiled on Tuesday the first global approach to regulating cryptoasset and digital markets, drawing on lessons from last year’s collapse of the FTX exchange that fuelled concerns over consumer protection. The industry, which typically only has to comply with anti-money laundering checks, has been calling for a global approach to regulation as different jurisdictions follow their own rules. The moves come after crypto exchange FTX began U.S. bankruptcy proceedings last November following a liquidity crisis that prompted intervention from regulators worldwide. Tuesday’s recommendations are a “turning point in addressing the very clear and proximate risks to…

Japan’s Crypto Anti-Money Laundering Measures to Start in June

Digital Currencies, Money Laundering
Lawmakers in Japan have decided to enforce stricter Anti-Money Laundering (AML) measures to trace cryptocurrency transactions from June 1. On May 23, the Japanese parliament made the decision to roll out tougher AML procedures from next month, according to a report the same day from local media outlet Kyodo News. The move aims to bring Japan’s legal framework in line with global crypto regulations. Lawmakers revised the AML legislation in December after it was deemed insufficient by the international financial watchdog, the Financial Action Task Force (FATF). According to reports, a vital feature of the new measures is the enforcement…

Skillonnet Agrees Settlement for U.K. AML Failures

Money Laundering, Prosecutions
Britain’s Gambling Commission has agreed a six-figure settlement with online gaming operator SkillOnNet for social responsibility and anti-money laundering failures. The operator will pay £305,150 in lieu of a financial penalty as a part of its settlement, with the proceeds to be directed to socially responsible causes. The penalty relates to breaches of the Licence Conditions and Codes of Practice (LCCP) and follows a regulatory review which found that the operator had insufficient policies, procedures and controls to comply with its Anti-Money Laundering (AML) responsibilities. The review also found deficiencies in SkillOnNet’s responsible gambling policies, procedures, controls and practices, including…

Australian casino group to pay US$290 mn over money laundering failings

Money Laundering
Australia’s Crown Resorts is set to pay a civil penalty of Aus$450 million (US$290 million) for lax money laundering controls that saw cash being carried into a casino in paper bags, shoe boxes and suitcases. Crown admitted failing to take appropriate measures to spot and prevent money laundering and terrorism financing at its Melbourne and Perth casinos, in an agreement announced Tuesday by the casino group and the government’s financial crime body. In a sign of the gravity of its behaviour, Crown agreed to pay Aus$450 million — a penalty subject to approval by the Federal Court at a hearing…

European Commission Details Further Plans for the EU’s New Anti-Money Laundering Authority

Money Laundering
The European Commission has written a memo detailing further aspects of the European Union’s new Anti-Money Laundering Authority (AMLA), which is expected to be fully resourced by the end of 2025, with direct supervision established by 2026. While the memo has not been made publicly available, media outlet euObserver has reported on its contents, highlighting the Authority’s intended scale, logistics, and facilities. According to the euObserver, the memo outlines the following plans: Staffing levels: The AMLA will begin with 150 staff members in its first year of operation, growing to 300-350 across the next two years, with an expected total…

Drug trafficking and money laundering kingpin told to hand over £630k

Money Laundering, Prosecutions
A former haulage firm owner jailed for moving drugs and dirty cash across Europe has been ordered to pay back £630,000. Thomas Maher, aged 42, of Wiltshire Close, Warrington, was sentenced to 14 years and eight months in prison in December 2020.Thomas MaherEvidence obtained by the National Crime Agency as part of Operation Venetic – the UK law enforcement response to the takedown of encrypted global communications service EncroChat – showed that he operated a transportation network spanning Europe, moving drugs into the UK and Ireland and the profits in the other direction. In one exchange of messages with a…

Ladbrokes owner ‘could face big penalty’ as it reveals talks with prosecutors

Bribery
A nearly four-year bribery investigation into the owner of Ladbrokes could end in a “substantial financial penalty”. Entain said it is in talks with the Crown Prosecution Service (CPS) and admitted misconduct “may have occurred”. The two sides are trying to reach a so-called deferred prosecution agreement, which removes the threat of prosecution for a company if it lives up to certain conditions. The case is a bribery investigation into Entain’s former subsidiary in Turkey. Authorities opened a probe into its suppliers in 2019, expanding it less than a year later to look at wrongdoing within the Entain group itself.…

What are the sanctions on Russia and are they hurting its economy?

Sanctions
What are sanctions?Sanctions are penalties imposed by one country on another, to stop them acting aggressively or breaking international law.They are among the toughest actions nations can take, short of going to war, and can be imposed at very short notice. What are the diamond sanctions?The UK is banning the import of diamonds from Russia. The US set out similar plans to ban Russian diamonds last year and the EU has announced plans to do so.Russia earned more than £4bn in 2021 from diamond exports, the US says. However, most Russian diamonds are sent to countries like India to be…

MAS – Strengthening Financial Institutions Countering the Financing of Terrorism Controls

Counter Terrorist Financing, Law, Regulation & Guidance, Terrorism
MAS conducted an industry-wide survey of CFT-related controls, and followed up with a series of thematic reviews to assess FIs’ TF risk understanding and examine the effectiveness of their CFT-related controls. This paper sets out MAS’ key observations, and highlights our supervisory expectations that FIs should review against their own controls. FIs should benchmark themselves against the practices and supervisory expectations set out in this paper in a risk-based and proportionate manner, and conduct a gap analysis. In doing so, FIs should give due regard to the risk profile of their business activities and customers. Where FIs observe any gaps…

Factors influencing the choice of technique to launder funds: The APPT framework

Money Laundering
This paper proposes a new framework to provide insights into the techniques launderers adopt to clean illicit funds, drawing on existing literature and theories including rational choice, public value, structural coupling, and stakeholder. The proposed APPT framework is named after four factors that explain the choice of techniques: the Actors involved, Predicate crime, the Purpose of laundering, and Technological innovations. While the current literature on money laundering primarily directs attention toward aspects such as regulatory frameworks, the stages of money laundering, and ways of detecting it, there is a lack of understanding about the reasons underlying a launderer’s choice of…

Artcurial auction house embroiled in provenance row with London Dealer

Art Market, Money Laundering
A London dealer is at odds with Artcurial over a painting he purchased last year, for which he claims that the Paris auction house was unwilling to provide the requisite provenance information to comply with anti-money laundering (AML) rules. Artcurial insists that it adhered to all its obligations at all times, and cancelled the sale last month. Patrick Matthiesen bought Narcissus (around 1640), a work recently reattributed to the French Baroque painter Laurent de la Hyre, for €918,400 (est €200,000-€300,000) on 9 November 2022. The large canvas had no provenance other than a 1929 “anonymous sale” at Christie’s in London.…

Investigating the illicit trade in stolen art and antiquities

Art Market, Financial Crime
At a landmark conference in Siem Reap, Cambodia, in September 2022, that country’s Minister of Culture and Fine Arts issued a poignant statement encapsulating exactly what it means for a nation to be repatriated of its ancient, looted treasures. “As each statue arrives back in Cambodia,” Phoeurng Sackona told government officials, historians and art experts, “We become more united with our history, our national identity, and our ancestors” The repatriation of stolen antiquities and other artworks – increasingly issues of diplomatic relations and concern – is just the final stage of a painstaking process spanning many years. Cross-border investigators have…

UK crime agency to pursue up to 100 lawyers accused of helping traffickers

Law Enforcement
The National Crime Agency is preparing to pursue up to 100 lawyers it believes are helping traffickers abuse modern slavery laws to secure asylum for people entering the UK. A potentially controversial sweep is being undertaken by the NCA, the British equivalent of the FBI, to identify solicitors who may be breaching their professional code or committing crimes by providing services to organised crime. Ministers have claimed that Albanian criminal gangs are misusing the modern slavery and asylum system at a time when record numbers of people are referred to the Home Office as potential victims of exploitation. The NCA…

Deutsche Bank to pay $75 million settlement to Epstein Victims

Civil Action
Deutsche Bank will pay $75 million to settle litigation alleging the German lender financially benefited from supporting Jeffrey Epstein’s sex trafficking scheme, according to a report Wednesday. The settlement concerns an unnamed defendant who launched a proposed class-action suit in November 2022, alleging Deutsche Bank did business with Epstein while knowing he used funds in the account to support sex-trafficking activity, the Wall Street Journal said Wednesday. The Journal, citing people familiar with the matter, said Deutsche Bank did not admit wrongdoing. A Deutsche Bank spokesperson declined comment. Deutsche Bank benefited financially by supporting Epstein’s “sex trafficking organization to successfully…

Property register fines worth £1bn not yet imposed

Law, Regulation & Guidance, Regulation
The UK has so far failed to impose fines worth as much as £1bn on foreign companies breaking a landmark transparency law, BBC analysis reveals.Since January, overseas firms that own UK property can be fined up to £2,500 a day unless they declare their owners.Thousands are still to do so, including firms which have been linked to oligarchs such as Roman Abramovich, but no fines have yet been issued.The government said it was “building cases” against unregistered companies.The register was introduced as part of the Economic Crime Act in February 2022, following Russia’s invasion of Ukraine. Ministers said it would…

‘Disgraceful breach of trust’: how PwC, one of the world’s biggest accountancy firms, became mired in a tax scandal

Corruption
PricewaterhouseCoopers used government secrets to help clients in Australia and the US avoid tax – a scandal that has forced resignations and threatens contracts worth hundreds of millions In the depths of winter 2015, an Australian tax specialist adopted the language of a spy. “For your eyes only,” he wrote, while emailing government secrets to colleagues who would later use them to help clients and make millions of dollars. Nearly eight years later, that email and dozens more like it have engulfed PwC in a scandal that has forced resignations, possible criminal and corruption investigations, invited furious rebuke and accusations…

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

Money Laundering, Sanctions
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…

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…