Author: gracechurchfcp

EU to hit Russian steel, IT industry with sanctions, but spare diamonds

Sanctions
The European Union is aiming to ban imports of several steel products from Russia and outlaw the export of certain semiconductors to Russia, according to the European Commission’s latest sanctions proposal, seen by POLITICO. One item left off the list, however, is Russian diamonds — an omission that will make Belgium and its robust diamond industry happy. Instead, the Commission wants to bar the import of “certain elements used in the jewellery industry such as stones and precious metals.” It also wants to sanction Alrosa, Russia’s largest diamond mining firm. The draft text, which the Commission presented to EU ambassadors…

Danske Bank fined €1.82m for AML failures by the Central Bank of Ireland

Money Laundering, Regulatory Fines
On 13 September 2022, the Central Bank of Ireland (the Central Bank) reprimanded and fined Danske Bank A/S, trading in Ireland as Danske Bank, €1,820,000 pursuant to its Administrative Sanctions Procedure for three breaches of the Criminal Justice (Money Laundering & Terrorist Financing) Act 2010, as amended (the CJA). The three CJA breaches stem from the failure by Danske Bank A/S (Danske) to ensure that its automated transaction monitoring system monitored the transactions of certain categories of customers of its Irish branch1, for a period of almost nine years, between 2010 and 2019. The root cause of this failure was…

France initiates new Crypto bill to allow the seizure of assets

Asset Seizure, Digital Currencies
Authorities in France have proposed a new crypto bill that will allow the seizure of digital assets belonging to criminals. With this bill, any investor involved in illicit activities through their accounts is at risk of forfeiting their assets to the authorities. The bill has now been presented for deliberation at the house level. France President Emmanuel Macron’s decision to introduce this new bill is similar to the effort unfolding in the United Kingdom. UK newly elected prime minister Liz Truss has vowed to carry on with his predecessor’s plans to expand authority to seize and recover crypto assets. Recall…

Wise hit with AML Fine in Dubai

Regulation, Regulatory Fines
London-listed fintech firm Wise has been slapped with $360,000 (£307,801) fine by Abu Dhabi regulators today after a series of failures in its anti-money laundering controls. The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) announced today it had fined the money-transfer firm after finding it did not “establish and maintain adequate AML systems and controls” to ensure full compliance with its AML obligations. In its charge sheet against Wise, the regulator said that it had failed to track and verify the source of funds on customers it had identified as high risk, as well as failing…

U.K. at Risk of Joining Global Anti Corruption Partnership ‘List of Shame’

Bribery, Corruption
The Government has been warned it is on the brink of joining three other countries on a “list of shame” for repeatedly failing to meet the requirements set out by a global anti-corruption body co-founded by the UK. The Government was informed it has for the third time in a row fallen short of minimum requirements in its action plan to boost transparency, as set out as a condition of membership by the Open Government Partnership (OPG). In a letter to the Cabinet Office dated August 2, seen by PA news agency, OPG chief executive Sanjay Pradhan said the Government…

CoinSwitch Cooperating with Financial Crime Agency Probe

Digital Currencies, Financial Crime
India’s top crypto app CoinSwitch is cooperating with the national financial-crime agency, whose agents searched its offices this week to find out about its business model and user-onboarding processes, its CEO told Reuters on Saturday. CoinSwitch, valued at $1.9 billion, says it is the largest crypto company in India, with more than 18 million registered users. The firm is backed by Andreessen Horowitz, Tiger Global and Coinbase Ventures. Ashish Singhal, speaking for the first time publicly about Thursday’s search, said his company was engaging with the Indian Enforcement Directorate’s unit in the tech hub Bengaluru on functioning of its crypto…

USA Financial Crime Dashboard 2022 by FCN

Threat Assessment
The USA is faced with threats the size and scale of which very few other countries face. Whether due to its economic size, population, wealth, levels and breadth of international trade and its importance as both a financial centre as well as the US dollar as a global currency, the US is a money laundering centre, with hundreds of billions of dollars in financial crimes generated domestically each year. Foreign illicit funds destined for the US to invest in its currency, its securities markets or real estate, or as a transit country, for example trade via correspondent banking, the US…

Former U.S. Congressman from California Arrested and Charged with Fraud

Fraud, Prosecutions
A former congressman from California was charged with multiple fraud schemes, the Justice Department announced Tuesday. Terrence John “TJ” Cox, 59, is charged with 15 counts of wire fraud, 11 counts of money laundering, one count of financial institution fraud and one count of campaign contribution fraud, according to the Justice Department.  He could face a maximum of 20 years in prison and a $250,000 fine for wire fraud and money laundering if he is convicted. In addition, he could face a maximum of 30 years in prison and a $1 million fine for wire fraud and five years and…

Germany Plans New Financial Crime Authority in Bid to Tackle Money Laundering

Money Laundering, Regulation
Germany wants to create a new financial crime authority that would bundle several fragmented competencies, including sanctions enforcement, said a finance ministry paper on Tuesday. There are currently more than 300 supervisory bodies across Germany, a figure the finance ministry would like to reduce. With the new authority, the finance ministry hopes to make it easier to tackle complex international money laundering cases, which have long been a weak spot for the country. “We need to do better in many areas,” said a government representative, referring to the fight against money laundering. The current FIU unit, which receives suspicious activity…

Dutch Authorities Arrest Man for Facilitating Money Laundering’ Through US-Sanctioned Tornado Cash

Digital Currencies, Money Laundering, Sanctions
Police in the Netherlands have arrested a 29-year-old man in Amsterdam as the “suspected developer” of US-sanctioned crypto mixing service, Tornado Cash. In a statement, the Fiscal Information and Investigation Service (FIOD) said the man arrested was suspected of involvement in “concealing criminal financial flows” and “facilitating money laundering” through the mixing of cryptocurrencies through Tornado Cash. The man is due to be brought before a judge later today, while the FIOD have warned that multiple arrests have not been ruled out. The FIOD has also said that advanced technologies such as Tornado Cash mixers that “may facilitate money laundering”…

Dutch City of The Hague Seeks Exemption from E.U. Sanctions Against Russia

Sanctions
The Dutch city of The Hague on Thursday said it would ask for a temporary exemption of EU sanctions against Russia, as it struggles to find a replacement for its contract with Russian gas supplier Gazprom in time. Sanctions imposed by the European Union against Russia following its invasion of Ukraine order governments and other public bodies to end existing contracts with Russian companies by October 10. For The Hague, this means it has to find a new supplier of gas to replace its existing agreement with Gazprom. The city said it held an EU-wide tender in June and July,…

Canberra Lawyer Ben Aulich was Hoping to Reap Millions from Money Laundering Plan

Money Laundering, Regulation
Canberra lawyer Ben Aulich and accountant Michael Papandrea will continue to resist being put on trial on conspiracy to launder money after losing a bid to have their case heard in the ACT Magistrates Court. Both have been charged with conspiracy to launder money. Mr Aulich faces an alternative charge of recruiting others to engage in criminal activity. Efforts to keep the case in the lower court failed after prosecutor Mark Tedeschi told the court it didn’t have jurisdiction to hear the case, and the charges should be sent to the ACT Supreme Court for trial. “It would be hard…

Former Detroit Cop Who Led Integrity Unit Pleads Guilty in Bribery Conspiracy

Bribery, Prosecutions
Former Detroit Police Lieutenant John F. Kennedy, who previously supervised the department’s integrity unit, pleaded guilty Wednesday to conspiring with another officer to commit bribery, according to the United States Attorney’s Office. Kennedy, 57, of Rochester Hills, was accused of bribery as part of a broader federal investigation into public corruption involving Detroit city government officials and the towing industry. Initially charged with three counts bribery and one count of conspiracy, Kennedy and former Detroit Police Officer Daniel Vickers were accused of teaming up in May 2017 and began accepting cash, cars, car parts, car repairs and other valuables from…

UAE: Priority Remains to Detect, Investigate and Understand Money Laundering and Terrorist Financing

Money Laundering
The Executive Office of Anti-Money Laundering and Counter Terrorism Financing met on Thursday to conclude a review on progress in the first half of 2022. The highlights of the review included the signing of five new international judicial cooperation agreements by the UAE with the United States, Russia, Netherlands, Denmark, and Italy. There have been significant AML/CFT enforcement actions Hamid Al Zaabi, Director General, said: “We have a clear agenda for combating illicit finance and preserving the integrity of the global financial system. It is anchored in embedding the institutional capabilities set out in the UAE’s National Risk Assessment, National…

Make your bed and lie in it: Man sentenced for money laundering after cash stash found under bed

Money Laundering
A man has been sentenced for money laundering after police found him in possession of £280,000, including a quarter of a million pounds stashed in a drawer under a bed.Lin Guo, 32, of Bywell Place, Canning Town, London, previously pleaded guilty to two counts of money laundering. He was sentenced to two years in prison, suspended for 18 months, at Inner London Crown Court on Thursday 11 August 2022. Guo was also ordered to complete 200 hours of unpaid work within 12 months. Detective Inspector Mark Forster, from the City of London Police, said:“Guo portrayed himself as an innocent person…

What the UK’s updated anti-money laundering rules mean for the art market

Art Dealers, Art Market, Money Laundering
For those in the art market currently spending August wondering how best to navigate the opaque waters of UK anti-money laundering (‘AML’) legislation, this year the beach reading is slightly cheerier. Arguably, the scope of those participants in the art market who are regulated for AML is not as wide as once thought, and the statutory obligations to conduct Customer Due Diligence (‘CDD’) are potentially not as onerous as anticipated. A year ago, my article on anti-money laundering measures in the art market focused on the recent risk assessment published by the government. It then seemed too soon to see…

New register to crack down on dirty money and corrupt elites in UK goes live

Money Laundering
A first of its kind register, designed to root out corrupt oligarchs and elites attempting to hide ill-gotten gains through UK property, has come into force. The Register of Overseas Entities will require anonymous foreign companies owning or seeking to buy UK land to reveal their true owners, ensuring criminals cannot hide behind secretive chains of shell companies. The reforms will support government efforts to root out Russian oligarchs and kleptocrats using UK land to hide illicit wealth. From today, any foreign company wishing to buy UK property will have to identify its beneficial owner and present verified information to…

Lee Jae-yong: Why South Korea just pardoned the Samsung ‘prince’

Corruption
Samsung heir Lee Jae-yong – convicted of bribery and embezzlement in 2017 – has been granted a special presidential pardon.One of South Korea’s most powerful white collar criminals, Lee was twice imprisoned for bribing a former president. South Korea’s government justified the move, saying the de-facto leader of the country’s biggest company was needed back at the helm to spearhead economic recovery post-pandemic. This marks another swing in a struggle over how the country is run that has raged since mass protests took over Seoul six years ago and ousted a president from office.Lee’s crimes were directly tied up in…

Companies House plans digital ID verification

Regulation
Companies House is developing a new digital identity verification process to prevent people registering companies for illegal purposes. Chief executive Louise Smyth referred to the plan in a blogpost, published to coincide with the release of the agency’s corporate plan for 2022-23, saying that anyone setting up, running, owning or controlling a company in the UK will need to provide assurance they are who they claim to be. A spokesperson for Companies House said an individual will have to verify their identity, either directly or through an agent, by linking themselves with an authorised photo ID. They will take photographs…

Insider dealing occurs in 10% to 25% of cryptocurrency listings

Digital Currencies, Market Abuse
According to a recent study conducted by the University of Technology Sydney, researchers estimated that insider trading occurs in 10% to 25% of cryptocurrency listings. In deriving the conclusion, researchers first sampled 146 token listing announcements on cryptocurrency exchange Coinbase between Sept. 25, 2018 and May 1, 2022. Afterward, researchers examined the price movements of the sampled tokens in the time interval of 300 hours before Coinbase listing announcements up until 100 hours after the announcement, on various exchanges. The hypothesis was that if insider trading was involved, tokens that were also available to trade on decentralized exchanges, or DEXs,…

Estate Agents failing foul of Money Laundering Regulations

HMRC, Money Laundering
HM Revenue & Customs (HMRC) recently published a list of firms that have received penalty notices for failure to meet their anti-money laundering (AML) obligations, and almost half were in the property sector. In a list of 79 firms that had breached AML regulations between April and December last year, more than 30 were estate agents, commercial property firms, valuers and auction houses, meaning property firms accounted for almost half (44%) of all AML breaches during that time period. Why are HMRC clamping down on estate agents? The property market is one of the most vulnerable sectors in the UK…

Latvian Prosecutors Charge Bankers with Laundering 2.1B Euro

Money Laundering
Latvian prosecutors have charged a shareholder and top managers of the country’s erstwhile third largest bank, ABLV, with laundering 2.1 billion euros through a network of shell companies. Also to go on trial is the manager of the notorious shell company provider investigated by OCCRP. The indictment accuses ABLV co-owner and CEO Ernests Bernis, former deputy CEO Vadims Reinfelds as well as Arvis Šteinbergs, co-manager of shell firm provider ‘International Overseas Services’ (IOS) group, and five others of laundering the proceedings from crime using shell firms incorporated and administered by IOS.money, according to a copy of the indictment obtained by…

UK Filed over 34,000 Crypto scam reports in the last 6 years

Digital Currencies, Fraud
Along with the rise in popularity of cryptocurrency trading worldwide, there has been a significant increase in the number of crypto scams or frauds. In the UK alone, there have been 34,305 allegations of criminal behavior involving cryptocurrencies since 2016. Cybercrime is now a widespread issue on a global scale. The amount of criminality involving cryptocurrencies peaked in 2021. According to a Chainalysis analysis, a blockchain data company, criminals laundered $8.6 billion in cryptocurrencies in 2021, an increase of 30% from the year before. Since 2017, hackers have laundered nearly $33 billion in cryptocurrencies, with the majority of that amount…

FCA fines The TJM Partnership Limited (in liquidation) £2 million for serious financial crime control failings in relation to cum-ex trading

Financial Crime, Regulation
The FCA has fined The TJM Partnership Limited (in liquidation) £2,038,700 for failing to ensure it had effective systems and controls to identify and reduce the risk of financial crime and money laundering in its business. This is the third case brought by the FCA in relation to cum-ex trading and the largest fine so far. This reflects the multiple examples of serious misconduct over a lengthy period. TJM did not have adequate procedures, systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to trading on behalf of…

How North Korean Cryptocurrency abuse is expanding

Sanctions
Countries must secure new and emerging gateways that are used to circumvent sanctions, as North Korea’s exploitation of cryptocurrency continues. Blockchain analytics companies are identifying potential links between North Korea and the Harmony Bridge Exploit that occurred in June 2022. In this cyber attack, hackers stole $100 million worth of cryptocurrency, and began transferring funds in a similar manner to North Korea’s approach following the Ronin Bridge hack in March 2022. This latest attack reinforces the need for countries to monitor the rise of new cryptocurrency gateways that allow North Korea to circumvent sanctions and finance its nuclear weapons programme.…

Five problems with Economic Crime Policing and how to solve them

Money Laundering, Policing
The policing response to economic crime is not fit for purpose, and money launderers and fraudsters operate with impunity – but evolution and not revolution is the answer. Despite the valiant efforts of an under-resourced law enforcement contingent and a commitment in the UK government’s Economic Crime Plan (2019–2022) to ‘strengthen the capabilities of law enforcement … to detect, deter and disrupt economic crime’, the policing response to economic crime is not fit for purpose: money launderers continue to launder with impunity, and fraudsters rarely face retribution. There are, however, some green shoots. The National Economic Crime Centre (NECC), established…

Lyne Barlow: Travel agent faces money laundering and fraud charges

Fraud, Money Laundering
A travel agent suspected of duping hundreds of customers has been charged with fraud and money laundering totalling more than £1.6m. Lyne Barlow was arrested in September 2020 after an investigation into claims surrounding discount holidays. Durham Police said her travel business was no longer operational and its social media page had been deleted. The 39-year-old, formally of Stanley, County Durham, is due before Newton Aycliffe magistrates on 5 September. Mrs Barlow, who has moved from the area, has been charged with 18 counts of fraud relating to loans, investments and holiday sales. Durham Police said she faced a further…

Head of ‘colossal’ UK-Dubai money-laundering gang jailed for nine years

Money Laundering
The ringleader of Britain’s biggest ever money-laundering gang has been jailed after a “colossal” criminal enterprise was broken up by police. Abdulla Alfalasi, 47, an Emirati national, enlisted dozens of couriers in his role at the helm of the gang. In total they smuggled more than £100m of dirty cash out of the UK to Dubai between April 2019 and November 2020. He was sentenced to nine years and seven months in prison, after the “considerable network” of criminals was exposed following an arrest at Heathrow airport in October 2020. Couriers received £3,000-£8,000 a time. A total of 83 trips…

The Nigerian gas deal, the Irish impresario and the £8bn ruling amid claims of bribery

Corruption
It has been described as one of the most extraordinary cases ever to come before the high court, involving an Irish impresario, an alleged $50,000 bribe stuffed into a bag and potentially one of the biggest payouts in legal history. The saga of two Irish businessmen, Michael Quinn and Brendan Cahill, who promised to revolutionise Nigeria’s energy sector, will be at the centre of a high court trial early next year. It is claimed the two men’s hopes of a 20-year project to provide plentiful supplies of electricity for the country were dashed when Nigeria failed to build the required…

Universal Credit: Fraudulent claims in NI almost double to £102m

Fraud
The cost of fraudulent Universal Credit (UC) claims in Northern Ireland almost doubled to £102m last year, a public spending watchdog has said. The figure has emerged in the auditor general’s annual audit of the Department for Communities accounts. The department said a significant number of the fraudulent claims date to the start of the pandemic. At that time certain conditions were eased to allow unprecedented numbers of people to get financial help. In the previous year the cost of fraudulent UC claims was £51.8m. The number of households on UC in Northern Ireland almost doubled between February and July…

Bernie Ecclestone charged with fraud following investigation, says CPS

Fraud
Ex-Formula One boss Bernie Ecclestone has been charged with fraud by false representation, the Crown Prosecution Service has said. The 91-year-old billionaire businessman failed to declare overseas assets believed to be worth in excess of £400m, according to investigators. The charge was authorised by the Crown Prosecution Service (CPS) on Monday, following an investigation by Revenue and Customs (HMRC). Andrew Penhale, chief Crown prosecutor, said: “The CPS has reviewed a file of evidence from HMRC and has authorised a charge against Bernard Ecclestone of fraud by false representation in respect of his failure to declare to HMRC the existence of…

Risk-based Approach Guidance for the Real Estate Sector

FATF, Money Laundering, Regulation
Real estate is a popular choice for investment, but it also attracts criminals who use real estate in their illicit activities or to launder their criminal profits. It allows criminals networks to thrive and grow using the profits of their illegal activities, which impacts society and undermines the rule of law. In some countries, these practices also contribute to driving up the prices of real estate, making housing inaccessible to many as well as further incentivizing the criminal activity. FATF assessments show that the real estate sector often has poor understanding of these risks and regularly fails to mitigate them.…

Sanctioned Russian Banker, Head of Putin’s Piggy Bank, Uses Proxy for Vast Holdings

Sanctions
The son of a globe-trotting Canadian communist, Eric Whyte moved to the Soviet Union as a boy in 1966, and was educated at a prestigious school outside Moscow. Those are nearly all of the scant details publicly available about his life –– even “Champagne and Meatballs,” a book-length memoir by Whyte’s late father, Bert, only mentions his birth. But while Whyte maintains a low profile, leaked corporate documents offer a clue about his activities over the past decade or so: He appears to be a frontman for sanctioned Russian banker Andrei Kostin. Whyte owns companies registered in secretive offshore financial…

ESG is Becoming a Magnet for Financial Crime

Financial Crime, Regulation
In the words of Atilla the Hun, “The spirit of the law is greater than the letter.” How organizations adhere to principals, puts the organization ahead of the compliance curve. Ahead of rules there are movements and ideas, written laws follow closely thereafter. The principals of ESG are still being widely debated across the globe, the underlying principles of ESG are to do the right thing and elevate a consciousness of stakeholdership by organizations in the world in which they interact, naturally, such a broad mandate is going to be subject to rigorous debate, as creating policy around “impact” is…

Guatemala’s Former Economics Minister Pleads Guilty to Paying Bribes

Bribery, Prosecutions
A former high-ranking government official in Guatemala has pleaded guilty in Miami federal court to conspiring to commit money laundering while paying hundreds of thousands of dollars in bribes to Guatemalan politicians through the U.S. banking system. Acisclo Valladares Urruela, the former economics minister in Guatemala, admitted that he transferred $350,000 in bribery payments to the unidentified Guatemalan politicians through two companies with bank accounts in Miami, according to a factual statement filed with his plea agreement. Valladares also acknowledged that he received $140,000 for moving the dirty money into those accounts, the statement says. Valladares paid the illegal bribes…

Exploring the New Dawn for Crypto and Regulation

Digital Currencies, Regulation
In recent times there has arguably been a global shift in the regulatory attitudes and action towards cryptocurrency. What once was considered a fringe currency is gradually being brought into the mainstream and legitimised by regulation. In the past six months, the UK government has created a Crypto and Digital Assets Group, announced that it is “open” for crypto business, and launched a consultation into an insolvency regime for cryptocurrency, specifically stablecoins. A recent report by CUBE has explored global regulatory data to understand the shifting regulatory attitudes for crypto. It has found that in four years alone, there has…

Deutsche Bank Settles Money-Laundering Case for $7.1m

Money Laundering, Prosecutions
Deutsche Bank AG settled a probe by Frankfurt prosecutors looking into whether the bank violated money-laundering prevention rules for 7.01 million euros ($7.1 million). The bank agreed to pay the amount and accepted an administrative penalty notice, the lender said in a statement. Frankfurt prosecutors confirmed the end of the investigation, which found the bank failed to file 701 reports of suspicious activities. Deutsche Bank acted “thoughtlessly,” they said. The settlement comes less than three months after law enforcement officials raided Deutsche Bank’s headquarters in Frankfurt as part of the investigation. The bank had processed payments related to the extended…

Why not a single banker was jailed over HSBC’s billion-dollar money laundering scandal

Money Laundering
Ten years after the bank admitted enabling El Chapo’s Mexican drug cartel, the drug lord is serving a life sentence but bankers only faced fines. Whose job is it to police global finance? No senior banker went to jail over 2008; no HSBC banker was charged, let alone went to jail, when the bank admitted in 2012 to enabling the laundering of billions of dollars of drugs money for El Chapo and his Mexican Sinaloa cartel. The reason, as I explain in my new book Too Big to Jail – Inside HSBC, the Mexican drug cartels and the greatest banking…

Londongrad: how the City became a money-laundering haven

Money Laundering
Which key factors have conspired to make the UK capital synonymous with financial crime? Insights outlines the root causes, and ICAEW’s Michelle Giddings highlights emerging vulnerabilities.Since the dawn of Russia’s war with Ukraine, scrutiny has intensified on illicit financial activity conducted in and around the City of London. Rooted primarily in money laundering, the cycle of criminality has earned the UK’s financial hub two damning sobriquets: ‘The Laundromat’ and ‘Londongrad’ – monikers steeped in such blithe resignation, they convey that London’s susceptibility to malign influences is essentially taken for granted. Faith in a medium- or long-term solution is conspicuous by…

Review of the UK’s AML/CFT regulatory and supervisory regime

Money Laundering
The government is publishing two post-implementation reviews and a forward-looking review of the UK’s anti-money laundering and countering the financing of terrorism regime. Review of the UK’s AML/CFT regulatory and supervisory regime Post Implementation Review of the Money Laundering Regulations Post Implementation Review of the OPBAS Regulations Details The government is publishing a forward-looking review of the UK’s AML/CFT regime, in response to the call for evidence launched last year. Alongside this, the government is also publishing two post-implementation reviews to fulfil its statutory obligations; one of the Money Laundering Regulations 2017 and one of the OPBAS Regulations 2017. Taken…