Author: gracechurchfcp

German Prosecutors search Deutsche Bank HQ in tax probe

Tax Evasion
German prosecutors have searched the headquarters of Deutsche Bank in connection with an ongoing investigation of the multibillion-euro tax fraud scheme known as “cum-ex”, Deutsche Bank said on Tuesday. Germany’s largest lender is one of many banks that prosecutors have raided in connection with the tax scheme that thrived more than a decade ago. The public prosecutor’s office in Cologne, without naming Deutsche Bank, confirmed it had conducted a raid on a bank and an auditing company in Frankfurt that involved more than 100 investigators, and extended to the homes of 10 suspects. Deutsche Bank, under Chief Executive Christian Sewing,…

Wined and Fined: OFSI Imposes Financial Penalty on UK Company for Publicising Sanctioned Crimean Winery

Regulatory Fines, Sanctions
The UK Office of Financial Sanctions Implementation (OFSI) announced on 27 September that it imposed a £30,000 penalty on UK company Hong Kong International Wine and Spirits Competition Ltd (HK Wine & Spirits) for breaching UK financial sanctions regulations.[1] This is the second monetary penalty OFSI imposed this year, following a £15,000 fine against Tracerco Limited in June. HK Wine & Spirits received three payments and 78 wine bottles from Massandra, a Crimean winery, for entry into its 2017, 2018, 2019 and 2020 competitions. Massandra is a designated entity subject to EU Regulation 269/2014 (the “Regulation”), which was introduced in…

AML efforts of European banks hampered by deficient on-boarding

KYC, Money Laundering
The anti-money laundering efforts of European banks is being hamstrung by failures to manage key customer data and perform proper due diligence, regulators say Banks’ failure to collect know-your-customer (KYC) data and their tendency to manage high-risk customer due diligence manually are hampering their anti-money laundering (AML) efforts, according to regulators in the United Kingdom. Further, many banks’ assessment of financial crime risk has also been found to be inadequate. Some UK banks, are failing to collect customer information such as income and occupation details. In some cases, customer risk assessment frameworks are underdeveloped or non-existent, which translates into poor…

Deutsche Bank in $26.3 million shareholder settlement over Epstein, Russian oligarch ties

Money Laundering, PEPs
Deutsche Bank AG agreed to pay $26.25 million to settle a U.S. shareholder lawsuit accusing the German bank of lax oversight while doing business with risky, ultra-rich clients like Jeffrey Epstein and Russian oligarchs. The preliminary all-cash settlement filed on Friday in federal court in Manhattan requires approval by U.S. District Judge Jed Rakoff, who in June allowed the proposed class action to proceed. Shareholders led by Yun Wang, who traded Deutsche Bank stock in 2018 and 2020, claimed that the bank had known its know-your-customer and anti-money laundering controls were ineffective, and that its share price fell as problems…

More questions than answers? The EU’s new anti-money laundering authority

Money Laundering, Regulation
The EU is set to establish a new Anti-Money Laundering Authority next year. Sebastian Diessner writes that while the new authority is a step in the right direction, there remain more questions than answers over how it will function and where it will be based. Until recently, the question of who is in charge of cracking down on money laundering in Europe should arguably have been answered with: ‘the US’. After all, it has been the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that has acted as the sheriff in terms of discovering and penalising major scandals among European…

London council could seize oligarchs’ homes for affordable housing

Asset Seizure, Sanctions
Homes acquired with “dirty money” in the richest parts of London could be seized and turned into affordable housing under plans to crack down on oligarchs using Belgravia, Knightsbridge and Mayfair “to rinse their money”. Labour-controlled Westminster city council is examining the use of compulsory purchase orders in extreme cases where it finds properties are not being used for their stated purpose, as part of a push to “combat the capital’s reputation as the European centre for money laundering”. The plan faces obstacles including a lack of transparency over property ownership and a shortage of checks on the registration of…

Russia to Legalise use of Cryptocurrency in International Trade

Digital Currencies, Regulation
The Bank of Russia and the country’s Ministry of Finance have reconsidered their positions toward cryptocurrency, acknowledging it to be necessary to legalize the use of cryptocurrencies in cross-border settlements, per a report by local news outlet TASS. According to TASS, the two government bodies have agreed that “it is impossible” to continue without enabling cryptocurrency as a legal payment method for international trade. The move comes as Russia dabbles on how to best regulate the Bitcoin and cryptocurrency markets. Swamped in Western sanctions, the world’s largest country has sought alternatives to the U.S. dollar so as to guarantee the…

Auditors Expose 9,800 Ghost Workers in Zambian Government Ministries

Corruption, Fraud
The audit of government payroll by Zambia’s Office of the Auditor General published this week reveals a series of grave misuse of public money including that in 2017-2021, ministries paid more than US$45 million in regular salaries to 9,800 apparently non-existent individuals. “As of July 31, the institutions had not accounted for the officers in that they were not known,” said the audit. “They are names included on a payroll who for one reason or another do not exist,” Laura Miti, Executive Director of Alliance for Community Action, Zambia’s public accountability NGO, told OCCRP. “It could be that they have…

Australia Police Form Digital Asset Unit Amid Rising Crypto Money Laundering Cases

Digital Currencies, Money Laundering
The Australian Federal Police (AFP) has set up a new unit dedicated to cracking down on digital asset-related crime. The AFP has been cracking down on digital asset money laundering and other related crimes for years now. However, these activities have not been coordinated by one unit, which would make them more efficient, AFP’s criminal asset confiscation command Stefan Jerga told the Australian Financial Review. “The environment was such that we felt a standalone team [was required], rather than a lot of officers picking up some of this skill set as part of their overall role. So we’ve now got…

Biden White House Just Put Out a Framework on Regulating Crypto

Digital Currencies, Regulation
The Biden White House has just released its first-ever framework on what crypto regulation in the U.S. should look like — including ways in which the financial services industry should evolve to make borderless transactions easier, and how to crack down on fraud in the digital asset space. The new directives tap the muscle of existing regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, but nobody’s mandating anything yet. The long-awaited direction from Washington has, however, captured the attention of both the crypto industry as a whole — and of investors in this nascent…

New crackdown on fraud and money laundering to protect UK economy

Fraud, Money Laundering
The Economic Crime and Corporate Transparency Bill will strengthen the UK’s reputation as a place where legitimate businesses can thrive while driving dirty money out of the UK. Through the reforms, anyone who registers a company in the UK will need to verify their identity, tackling the use of companies as a front for crime or foreign kleptocrats. The reforms to Companies House – its biggest upgrade in 170 years – will also see the organisation armed with new powers to check, challenge and decline incorrect or fraudulent information, making it a more active gatekeeper over company creation. The investigation…

Money laundering: new Bill to give SRA more power to fight economic crime

Money Laundering, Regulation
As the perpetual war on economic crime continues to be waged, a new Bill introduced into the House of Commons on 22nd September could be set to offer much needed reinforcements to solicitors’ regulators. The government’s Economic Crime and Corporate Transparency Bill 2022 – dubbed the “Economic Crime Bill 2.0 by the Law Society – aims to give the Solicitors Regulation Authority (SRA) greater powers on economic crime disciplinary matters. “We are pleased the UK government is introducing a second Economic Crime Bill, with the express provision of stopping money laundering in the UK,” said Law Society president I. Stephanie…

Betfred’s Owner Faces £2.87-Million UKGC Fine Due to Anti-Money Laundering and Social Responsibility Failings

Money Laundering, Regulatory Fines
The UK Gambling Commission (UKGC) announced that Petfre (Gibraltar) Limited is set to pay a monetary penalty worth £2.87 million as a result of violations of some anti-money laundering and social responsibility rules. The gambling company, which operates betfred.com and oddsking.com betting platforms is also set to receive an official warning for failures in its business. As a result of a review that the country’s gambling regulator carried out in the company’s operations, it was found there were several breaches of anti-money laundering and social responsibility regulations in the period from October 2019 and December 2020. The Gambling Commission revealed…

Oracle to Pay SEC $23 Million Over Foreign Bribery Allegations

Bribery, Regulatory Fines
Oracle Corp. has agreed to pay $23 million to resolve allegations that it used slush funds to bribe foreign officials in return for business, the U.S. Securities and Exchange Commission said Tuesday. The regulator claims Oracle subsidiaries in Turkey, the United Arab Emirates and India created the slush funds between 2016 and 2019. In addition to bribery, the Turkey and U.A.E. subsidiaries also used the slush funds to send foreign officials to tech conferences, and in some cases, have their families accompany them to conferences or take side trips to California, according to the agency’s order. Without admitting or denying…

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…