Author: gracechurchfcp

The $30m Embezzlement Scandal Behind Ukraine’s Winter Olympics Hopes

Corruption
Plans to build a new ski resort in Ukraine’s protected Carpathian Mountains lead back to an alleged corruption scheme tied to oligarch Serhiy Lovochkin. Key Findings Between 2012 and 2014, the head of a newly created state agency, Vladyslav Kaskiv, allegedly worked with accomplices to steal $30 million from the Ukrainian state and embezzled it through a network of offshore companies Part of the money was used to buy land in the Carpathian mountains, where Kaskiv knew the government planned to build a winter sports venue. The company that owned the land was secretly controlled by powerful Ukrainian politicians Serhiy…

Millions Seized in Gibraltar Money Laundering Operations

Money Laundering
Since 2016, the Gibraltar Money Laundering Investigation Unit has seized almost 2.4 million euros, as well as luxury yachts and apartments, from the proceeds of organised crime. Chief Inspector Tunbridge of the Economic Crimes Unit has attributed a collaborative relationship with Spain to its success, but admits that Brexit has made investigations all the more difficult. A huge amount of drugs is trafficked from Morocco to Spain, and foreign criminal organisations have money laundering through illegal activities in Gibraltar down to a fine art. Mr Tunbridge explained that criminals know very well that if they commit a crime in one…

Chinese Police Make First Arrest For CBDC Money Laundering

Money Laundering
Chinese officials have hunted down a gang suspected of laundering money using the digital yuan. Chinese officials have arrested members of a criminal group charged with alleged money laundering using the country’s CBDC, the digital yuan. The news implies the Chinese government and law enforcement will have greater control and oversight over financial activities in the country with its CBDC. China Records First Illegal Use Case of e-CNY The Xinmi Public Security Department arrested members of a gang, composed of 11 members, in the Fujian Province for allegedly scamming a person for 200,000 yuan ($32,000). Reportedly the victim, named Qu,…

State of Corruption in South Africa

Corruption
How deep corruption stretches into the South African government was revealed last week, after South Africa’s Judicial Commission dropped the first of its three-part report into state capture in the African nation. Deep is the answer. “Approximately 1,438 persons and entities were implicated by evidence led before the Commission,” read the nearly 900 page report produced by the commission that was set up almost four years ago to examine the extent of corruption within the South African State. One of the focal points it assessed were the connections between former South African President Jacob Zuma and the powerful Gupta Family,…

As U.S. Sanctions Loomed, a Tycoon Mopped Up Zimbabwe’s Scarce Dollars

Corruption, Sanctions
As Zimbabweans faced the economic consequences of a crashing currency, well-connected businessman Kudakwashe Tagwirei skirted the rules to convert government-backed securities into scarce U.S. dollars —which he used to acquire shares in a lucrative platinum mine. Key Findings Even after Zimbabwe cut off its citizens from accessing U.S. dollars in mid-2019, the central bank governor allowed Tagwirei’s company to cash out large portions of a treasury bill he held before it matured, and unlawfully convert them into tens of millions of U.S. dollars. Documents indicate Tagwirei’s staff repeatedly used treasury bills as a source of U.S. dollars — which were…

Crypto Scam Revenues Surge as ‘Rug Pulls’ Become ‘Go-To’ for Crooks

Digital Currencies, Fraud
Investment scams involving digital coins have become the biggest source of cryptocurrency-based crime in 2021, according to new data released on Thursday. In a report, Blockchain analytics company Chainalysis found that “rug pulls” has been a key driver behind the $7.7 billion in crypto taken from victims this year. The term describes a new scam in which developers of a crypto project issue what appears to be a legitimate crypto asset, lure in unsuspecting investors — only to run off with the funds, or sell all their holdings at a significantly higher premium. Rug-pulling drew attention recently, as a cryptocurrency…

Strategies Used by Criminal Groups and Terrorists and Federal Efforts to Combat Them

Financial Crime
Fast Facts We reviewed how transnational criminal organizations and terrorist groups traffic goods such as illegal drugs, engage in human trafficking, and launder money. We also looked at the information sharing used to help detect these activities. Responsibility for combating trafficking is spread across multiple federal agencies. Agencies collaborate via task forces that share information and resources with each other, the private sector, and foreign counterparts. The U.S. Treasury Department, for example, shares information with more than 160 international financial intelligence agencies. Criminal groups move heroin and more from Afghanistan to western Europe via the Balkan route. Highlights What GAO…

Should Lawyers, Accountants be Filing More SARs?

Financial Crime
Suspicious activity reports (SARs) are a vital part of the fight against money laundering and financial crime. They alert law enforcement to potential criminal activity, providing critical evidence in any investigation. The U.K. National Crime Agency (NCA) reported a record number of SARs received and processed (573,085—a 20 percent increase on the previous period) in 2019/20. The majority of reports were submitted by credit institutions, such as banks and building societies. Few SARs were submitted from the service sector, such as accountants, lawyers, and estate agents. Banks’ systems focus on the financial transactions they administer, highlighting those that either breach…

U.K. Hands Down Largest Sentences for Money Laundering

Money Laundering, Prosecutions
A U.K. court sent two men behind bars for a total of 33 years for laundering the equivalent of nearly US$95 million and fraudulently claimed $13.44 million in COVID-19 Bounce Back Loans for their fake companies, the National Crime Agency reported. Artem Terzyan, 38, from Russia was sentenced to 17 and Deivis Grochiatskij, 44, from Lithuania to 16 years in prison after a seven-weeks-long trial in September. Their sentences are believed to be one of the largest ever handed down in the U.K. for money laundering, the NCA said. The investigation started in October 2017 when the police noticed another…

NatWest Fined £264.8 Million Over Anti-Money Laundering ‘Failures’

Money Laundering, Prosecutions
NatWest received a £264.8 million fine after failing to comply with account-monitoring requirements, becoming the first bank to be criminally convicted under the UK’s anti-money laundering regulations. The fine relates to NatWest’s failure to properly monitor its business relationship with jewellery firm Fowler Oldfield. Over a period of less than four years, the Fowler Oldfield deposited around £365 million—mostly in cash—despite having an estimated annual turnover of just £15 million In sentencing remarks published on Monday, Mrs Justice Cockerill accused NatWest of “failing to comply” with its legal obligations, but without “any deliberate flouting of the rules or any criminal…

FCA Fines HSBC £64m for Failings in its AML Processes

FCA, Money Laundering, Regulatory Fines
Banking giant HSBC has been fined £63.9 million by the UK’s Financial Conduct Authority (FCA) for failings in its anti-money laundering (AML) processes. The FCA claims HSBC’s transaction monitoring systems showed “serious weaknesses” over a period of eight years from March 2010 to March 2018. The regulator says HSBC did not dispute its findings and agreed to settle “at the earliest possible opportunity”. As a result, the bank’s total fine was discounted by 30% from £91,352,600 down to £63,946,800. In particular, the FCA says HSBC failed to “consider whether the scenarios used to identify indicators of money laundering or terrorist…

Former Petrofac Executive Ordered to Pay £140,000 Over Bribery Case

Bribery, Prosecutions
A former Petrofac executive has been ordered to pay £140,000 over bribery offences in the Middle East. The Serious Fraud Office (SFO) secured a confiscation order during a hearing today at the Southwark Crown Court against former head of sales at Petrofac, David Lufkin. In October, Mr Lufkin was handed a two-year sentence, suspended for 18 months, for making bribery payments to win oil and gas contracts for Petrofac in Iraq, Saudi Arabia and the United Arab Emirates. He had previously pleaded guilty to 14 counts of bribery and admitted to making corrupt payments between 2011 and 2018. A confiscation…

FCA Fines Sunrise Brokers LLP £642,400 for Serious Financial Crime Control Failings

FCA, Money Laundering, Regulatory Fines
Sunrise Brokers LLP has been fined over £600,000 for deficient anti money laundering systems and controls. This is the second case brought by the FCA in relation to cum-ex trading, dividend arbitrage and withholding tax (WHT) reclaim schemes. The first FCA case relating to cum-ex trading concluded in May 2021. The FCA found that Sunrise had deficient systems and controls to identify and mitigate the risk of facilitating fraudulent trading and money laundering in relation to business introduced by the Solo Group, between 17 February 2015 and 4 November 2015. On review it was found that the Solo trading throughout…

Gambling Commission Orders Greentube to Pay £685,000 for AML and Safer Gambling Failings

Money Laundering, Regulatory Fines
The GB Gambling Commission has ordered Novomatic subsidiary Greentube Alderney to pay £685,000 (€805,448/$912,304) over social responsibility and money laundering failings. A review of the business’ activities, launched in December 2020, uncovered failings in the anti-money laundering (AML) policies and safer gambling protocols across Greentube’s Admiralcasino.co.uk and Bellfruitcasino.com sites. This amounted to breaches of licence condition 12.1.1, 12.1.2, 15.2.1 of the Licence Conditions and Codes of Practice (LCCP), and provision 3.4.1 of the Social Responsibility Code. The condition 12.1.1 breaches related to Greentube Alderney’s AML processes, with the review finding deficiencies in its record keeping and evaluation of the assessments…

The U.S. Releases its First-Ever Strategy on Countering Corruption

Corruption, Regulation
Corruption is a cancer within the body of societies—a disease that eats at public trust and the ability of governments to deliver for their citizens. The deleterious effects of corruption impact nearly all aspects of society. It exacerbates social, political, and economic inequality and polarisation; impedes the ability of states to respond to public health crises or to deliver quality education; degrades the business environment and economic opportunity; drives conflict; and undermines faith in government. Those that abuse positions of power for private gain steal not just material wealth, but human dignity and welfare. Recognising corruption’s ability to corrode democracy,…

Cryptocurrency – Cardiff Terrorist Khuram Iqbal Jailed Over Trading

Corruption, Regulation
A convicted terrorist has been jailed for 16 months over his cryptocurrency trading on the dark web. Khuram Iqbal, 29, from Cardiff, was originally jailed in 2014 for three years and three months for disseminating terrorist publications and possessing terrorist information. He was released on licence in May 2015 but recalled to jail in 2016. Iqbal breached a 10-year notification order by failing to tell police about two cryptocurrency accounts. He pleaded guilty to four breaches between July 2019 and August this year and appeared at the Old Bailey to be sentenced by Mr Justice Sweeney. The defendant had originally…

FinCEN Launches Regulatory Process for New Real Estate Sector Reporting Requirements

FinCEN, Money Laundering, Regulation
WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) announced today an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on a potential rule to address the vulnerability of the U.S. real estate market to money laundering and other illicit activity. The systemic money laundering vulnerabilities presented by the U.S. real estate sector, and consequently, the ability of illicit actors to launder criminal proceeds through the purchase of real estate, threatens U.S. national security and the integrity of the U.S. financial system. FinCEN has long been concerned with the potential for corrupt officials and illicit actors to launder the proceeds of…

FinCEN Seeks Comments on Modernization of U.S. AML/CFT Regulatory Regime

FinCEN, Money Laundering, Regulation
WASHINGTON— Today, FinCEN is issuing a request for information (RFI) seeking comments on ways to streamline, modernize, and update the anti-money laundering and countering the financing of terrorism (AML/CFT) regime of the United States. FinCEN is particularly interested in comments on ways to modernize risk-based AML/CFT regulations and guidance, issued pursuant to the Bank Secrecy Act (BSA) so that they, on a continuing basis, protect U.S. national security in a cost-effective and efficient manner. Today’s RFI also supports FinCEN’s efforts to conduct a formal review of BSA regulations and related guidance, which is required by Section 6216 of the Anti-Money…

EU Imposes Restrictive Measures Against the Wagner Group

Sanctions
The Council today adopted a set of restrictive measures against the Wagner Group, a Russia-based unincorporated private military entity. The measures target the Wagner group itself, and eight individuals and three entities connected to it. The Wagner Group has recruited, trained and sent private military operatives to conflict zones around the world to fuel violence, loot natural resources and intimidate civilians in violation of international law, including international human rights law. The individuals listed by the EU are involved in serious human rights abuses, including torture and extrajudicial, summary or arbitrary executions and killings, or in destabilising activities in some…

U.S. Designates Serbian, Salvadoran Gangs with Political Ties

Bribery, Corruption, Sanctions
The U.S. authorities announced Wednesday they have targeted 16 individuals and 24 entities suspected of corruption and serious human rights abuses. The ruling freezes U.S. property and money connected to those people and entities. The Office of Foreign Assets Control (OFAC) took the actions “pursuant to Executive Order 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act,” according to the U.S. Treasury Department’s statement. “All property and interests in property of the persons above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to…

Trail of Venezuela’s Stolen Billions Leads to Carribbean Luxury Properties

Bribery, Corruption, Money Laundering
Key Findings A Venezuelan under investigation for laundering stolen oil money acquired a lucrative stake in a luxury hotel in Colombia through a company registered in Luxembourg. He and another woman under investigation, the girlfriend of former Venezuelan energy official Javier Alvarado Ochoa, sat on the board of directors of the company that owns the hotel. Three senior executives at an energy consultancy that received a $23 million contract from Venezuelan state power company Corpolec, which was led by Alvarado, also had stakes in the hotel. A Venezuelan expert in anti-money laundering said the setup was “unusual” and should be…

Balfour Beatty to Pay £49m Fine for Fraud Against U.S. Military

Fraud, Prosecutions
British construction company Balfour Beatty will pay $65m (£49m) in fines after pleading guilty to fraud committed against the US military. The company’s US arm was one of the biggest providers of privatised military housing to the US army, navy and air forces at 55 bases across the states of Georgia, Oklahoma and Texas, but it lied about repairs in order to increase bonus payments, the US Department of Justice said on Thursday. The company, a member of the FTSE 250 index of mid-sized companies, had to meet various maintenance and resident satisfaction targets to qualify for the bonuses. But…

Scotland Has Become a Financial Crime Hotspot

Financial Crime
In the UK context when you think about white-collar crime over the last couple of decades, names like Barings Bank, the Bank of Credit and Commerce International (BCCI), and Polly Peck come to mind. While we haven’t seen bumper cases like these in more recent times, white-collar crime continues to make the front pages and statistics have revealed that corporate fraud has increased during the pandemic. From a legal point of view, it remains a thicket when it comes to the processes in place. The recent postponement of a trial against three former G4S executives accused of defrauding the taxpayer…

Fraudsters of the World Come to London and Bring Your Dirty Money

Fraud
There is no better representation of the decline of the English upper class into the global rich’s servant class than Ben Elliot. On the one hand, the co-chairman of the Tory party is now a rent collector, hauling in money for the Johnson administration from the Russian rich and native hedge fund bosses. On the other, he is an actual servant: an upmarket flunkey, to be sure, praised by society magazines for his “puppyish schoolboy charm”, but a flunkey nonetheless. Elliot is a founder of the Quintessentially “concierge” service that gives the super-rich anything they want: luncheon on an iceberg;…

Nearly Half of UK’s E-Money Firms Red Flagged for Money Laundering Risk

Money Laundering
Nearly 40% of the e-payment sector in the United Kingdom, which made more than £500 billion (US$660.2 billion) worth of transactions in 2020/21, have been flagged red — a warning of money laundering risk, a Transparency International UK research published on Tuesday found. While most e-payment enterprises appear to respect the regulations, the paper warns that without stronger oversight, Electronic Money Institutions (EMI) will become a preferred channel for those trying to launder the proceeds of crime and corruption through Britain — “if they are not already.” Transparency International UK examined all 261 enterprises in the country that had been…

U.S. Expands Sanctions on Belarus Over Migrant Crisis

Sanctions
The U.S. Treasury Department tightened the screws on Belarussian strongman Alexander Lukashenko and his allies, according to a statement released Thursday. Treasury officials listed 20 individuals, 12 entities and three aircraft as “blocked property” in the United States. They said the move was “in response to the Lukashenko regime’s blatant disregard for international norms and the well-being of its own citizens.” The sanctions come amid a widening migrant crisis unfolding on Belarus’s border with Poland and Lithuania — both members of the European Union. Tens of thousands of immigrants, primarily from Iraqi Kurdistan, have gathered in the eastern European nation,…

Danish Woman Remanded Over Laundering of $4.5b in Danske Bank Scandal

Money Laundering
A Danish woman was remanded in custody on Wednesday over her alleged involvement in a money laundering case in which more than 30 billion Danish crowns ($4.5 billion) was channelled through Danske Bank’s (DANSKE.CO) Estonian branch, Denmark’s public prosecutor said on Wednesday. The 49-year old Danish citizen faced preliminary questioning at Copenhagen city court on Wednesday, where she was put into custody for 21 days, the prosecutor told Reuters. The woman, whose name is protected by a publication ban, had been extradited to Denmark from Britain, where she had been kept in custody, the prosecutor said, adding she had ties…

Swiss Court Confiscates Funds Linked to Uzbek Ex-President

Money Laundering, Prosecutions
The Federal Criminal Court has ordered the confiscation of over $293 million (around CHF270 million) belonging to a shell company linked to Gulnara Karimova. The company, called Takilant, of which Karimova (daughter of the former president of Uzbekistan Islam Karimov) was the beneficial owner, was linked to two of the five Swiss bank accounts under criminal investigation. The total amount confiscated from the company was over $350 million. The court came to the conclusion that a large part of this sum had to be confiscated, since several of those involved – including Karimova and her assistant – were found guilty…

Notorious Money Launderer Reza Zarrab’s Lavish Life and New Business in Miami

Money Laundering, Organised Crime, Sanctions
Facing 130 years in prison, infamous Turkish-Iranian money launderer Reza Zarrab took a plea deal in 2017 agreeing to testify in U.S. courts. Federal officials have since kept him out of the spotlight, while allowing him to live a government-sanctioned life of luxury under a false identity in Miami. But the man who made his fortune cleaning profits from sanctions evasion and dealing with companies tied to slave labor and organized crime has been anything but idle. An investigation by OCCRP, Law&Crime and the Miami Herald found that Zarrab remains connected to his former criminal network and has received multiple…

Gang Smuggled 117m illegal Cigarettes into the U.K.

Tax Evasion
A gang who smuggled more than 117 million illegal cigarettes into the UK and cheated the taxman out of £36million were caught out by the EncroChat hack. The Rochdale-based gang smuggled the illicit cigarettes into the country on a ‘massive scale’, hiding them in lorries. They also sent millions of pounds worth of cash – from selling the cigarettes – out of the UK in the same way to Poland to a mysterious figure referred to as ‘Big Boss’. Hazhar Mohammad-Pani, 31, and Hubert Smolarek, 41, were both jailed for more than seven years. “Although quite short lived, the offending…

NCA Set to Recover an Estimated £1.1 million After Derby Family Failed to Pay Tax For Over a decade

Tax Evasion
The National Crime Agency has secured assets worth an estimated £1.1 million, after an NCA tax investigation into a Derby man revealed that his family run business had avoided paying tax for 18 years, on profits suspected of being linked to drugs and other criminal activity. Tonino (otherwise known as Tony) Persico, 58, of the Sinfin area in Derby, and members of the wider Persico family, operated ice cream vans and rented industrial units on Osmaston Road. A Derbyshire Police investigation looked at the family of Mr Persico after suspicions were raised about links to drugs, fraud and money laundering,…

Pandora Papers Unveil Ex-Putin Aide, Indian Businessmen Behind Maldives Island Scandal Deals

Bribery, Corruption
A former deputy chief of staff for Russian leader Vladimir Putin, as well as a wealthy Russian businessman with reputed organized crime ties, were secretly involved in the illegal leasing of a lagoon for tourist developments in the Maldives, newly leaked documents show. The documents reveal that a venture fund found to have been financed by Evgeny Novitsky — reputed to be a member or associate of Russia’s Solntsevo crime group — and run by former Putin aide Kirill Androsov was behind a 2015 deal to obtain the rights to develop a resort in the Indian Ocean archipelago nation. Novitsky…

Money Laundering Probe Heartens Anti-Corruption Activists But Fails to Lift Pandora Papers’ Pall Over Seychelles

Bribery, Corruption
In handcuffs and a striped shirt, one of the Seychelles’ wealthiest and most powerful men shuffled toward prison after an unprecedented hearing last month. Mukesh Valabhji faces years behind bars for allegedly laundering $50 million and is among the first high-profile figures from the East African island nation’s efforts to cast off its reputation as a financial crime hotspot. Police arrested Valabhij last month when he alighted from his helicopter, on his return from a hotel he owns on the private island of Felicite, and later seized weapons at his home, according to local news reports. He was taken into…

Thailand to Define ‘Red Lines‘ for Crypto in Early 2022

Digital Currencies, Regulation
“Cryptocurrencies cannot become a means of payment,” Bank of Thailand governor Sethaput Suthiwartnarueput stated. The government of Thailand is preparing a new regulatory framework for cryptocurrencies like Bitcoin (BTC) to minimize risks and improve investor protection. The Bank of Thailand (BoT) will release a consultation paper in January that will define “red lines” for the crypto industry, governor Sethaput Suthiwartnarueput said in a Dec. 14 interview with The Bangkok Post. “We want to ensure that we strike the right balance between allowing financial innovation and managing risks,” the official stated. The new rules will provide adequate safeguards for consumers as…

Are Trade Finance Firms Failing to Tackle Crime Risks

FCA, Financial Crime
UK trade finance firms are failing to assess their financial crime risks adequately, according to regulators. These firms must fundamentally reassess their anti-crime regime, said the Financial Conduct Authority (FCA) as it promised to step up policing efforts. But experts say trade finance firms also lack the skills and technology necessary to achieve adequate compliance. Trade finance covers a variety of instruments that support international trade, including credit, factoring, and insurance. These mitigate risks such as currency fluctuations, political instability, non-payment, and counterparty default. But the complex nature of trade finance leaves it open to abuse by international criminals. A…

Anti-Money Laundering and Counter Terrorist Financing: Supervision Report 2019-20

Money Laundering, Terrorism
Annual report for 2019 to 2020 on anti-money laundering and counter-terrorist financing supervision. Downoad: Anti-money laundering and counter-terrorist financing: Supervision Report 2019-20 This report provides information about the performance of AML/CTF supervisors between 6 April 2019 – 5 April 2020 and fulfils the Treasury’s obligation, under Section 51 of the MLRs, to publish an annual report on supervisory activity. The report includes supervisory and enforcement data on both the statutory and Professional Body Supervisors, highlighting any notable changes in supervisory activity and any fines that supervisors have issued. The report concludes that actions taken by supervisors have remained broadly consistent…

Post-Brexit payments space is ‘breeding ground for financial crime as Wild West culture’ looms, warns rising City star

Financial Crime
After the UK left the European Union, a range of payment providers reported so-called IBAN discrimination as a number of companies across Europe began to refuse Euro account bank details if they contained the country code ‘GB’. As a result of Brexit, sending a payment to Eurozone countries resulted in additional charges. Whilst the fee is nominal, it means that payments can be short of the required full amount being sent. In an exclusive interview with City A.M., rising City star Anastasia Demetriou, a former Howard Kennedy solicitor and currently general counsel at IFX Payments in London, warns that without…

How Goes the War Against Laundering

Money Laundering
If a willingness to do the right thing were the fuel that powered the attack on money launderers, that initiative would be a total success. Compliance professionals, regulators and law enforcement officers are motivated, but we struggle to think outside the box and change our method of operation. It’s time for us to work together and recalibrate. We have a pretty good idea about the amount of illicit funds that slip past the efforts of law enforcement, regulators, and the private sector. One need only assess the findings of the UNODC about their estimates of illicit funds seeking money laundering…

Singapore: MAS Proposes Information Sharing to Prevent Money Laundering & Terrorism Financing

Money Laundering, Regulation
The Monetary Authority of Singapore (MAS) has released1 for consultation the proposals in its paper, FI-FI Information Sharing Platform for AML/CFT, which will require Financial Institutions (FIs) to share with each other information on customers or transactions, where they cross material risk thresholds, on a secured digital platform owned and operated by MAS to be named ‘Collaborative Sharing of ML/TF Information & Cases’ (COSMIC). Although the proposals are primarily addressed to the initial participant FIs that MAS has identified as major players in the commercial and small-medium enterprises banking segment comprising the three local banks and three qualifying full banks,…

Understanding the Impact of Job Scams

Fraud
As part of our latest job scams campaign, the Disclosure and Barring Service (DBS) has been working with JobsAware and Cifas, to understand the impact of scams, and how information collected as part of a scam, is then used by scammers. Signs of a potential job scam Job scams are on the rise, and in 2020, seasonal job scams increased by 88% compared to 2019. With figures predicted to increase again this year, it’s important to remain vigilant and familiarise yourself with the signs of a potential job scam or fraudulent job advert. The first two phases of this campaign…