Author: gracechurchfcp

Virtual Assets Red Flag Indicators of Money Laundering and Terrorist Financing

Money Laundering, Organised Crime
Download the PDF Here. Paris, 14 September 2020 – Virtual assets use innovative technology to swiftly transfer value around the world and have many potential benefits, including making payments faster and cheaper. But the anonymity associated with them also attracts criminals, who have used virtual assets to launder proceeds from a range of offences such as the drugs trade, illegal arms smuggling, fraud, tax evasion, cyber attacks, sanctions evasion, child exploitation and human trafficking. In response, the FATF Report Virtual Assets – Red Flag Indiciators of Money Laundering and Terrorist Financing will help national authorities detect whether virtual assets are being used for…

What the FinCEN files tell us about the UK’s role as an enabler of corruption & money laundering – and what needs to change.

Money Laundering
The FinCEN files, more than 2,500 documents relating to $2tn (£1.56tn) of transactions, have once again highlighted the vast amount of illicit wealth that flows through the global economy.  This is a great piece of journalism that paints a vivid picture of the dirty money being handled by the financial sector. Nothing about this story, however, should come as a surprise. The UK Government has stated that roughly £100 billion of illicit wealth impacts the economy every year. And that’s just the UK. It’s not a surprise that the leak shows how UK banks continually failed to address suspicious activity and instead…

Statement by FinCEN Regarding Unlawfully Disclosed Suspicious Activity Reports

Compliance
The Financial Crimes Enforcement Network (FinCEN) is aware that various media outlets intend to publish a series of articles based on unlawfully disclosed Suspicious Activity Reports (SARs), as well as other sensitive government documents, from several years ago. As FinCEN has stated previously, the unauthorized disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports. FinCEN has referred this matter to the U.S. Department of Justice and the U.S. Department of the Treasury’s Office of…

Thousands of secrets suspicious activity reposted offer never-before-seen picot of corruption and complicity – and how the government lets it flourish.

Money Laundering
This is part of the FinCEN Files investigation. A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins. And the US government, despite its vast powers, fails to stop it. Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared…

Eight-year NCA investigation denies organised crime group £17 million property portfolio

Drug Trafficking, Fraud, Money Laundering
Fifty nine properties worth an estimated £17 million have been recovered following National Crime Agency investigations into a prolific organised crime group carried out over almost a decade. In addition to a successful criminal investigation, the NCA conducted four linked civil recovery investigations over an eight-and-a-half year period into dozens of individuals who were suspected of financial links to drug dealers in East Birmingham. NCA officers established that the properties were acquired using the proceeds of crime including heroin importation and distribution, fraud and money laundering. Alam and Ameran Zeb Khan have both been convicted of drug trafficking offences, the…

A U.S. judge on Monday dismissed a lawsuit accusing Denmark’s Danske Bank A/S and four former top executives of defrauding shareholders by hiding and failing to stop widespread money laundering at its former Estonian branch.

Money Laundering
U.S. District Judge Valerie Caproni in Manhattan said shareholders in the proposed class action failed to sufficiently plead that the bank improperly reported revenue derived from money laundering or downplayed its supervision failures. She also said the plaintiffs, led by four pension funds in New York and Massachusetts, failed to show that Danske acted recklessly or with conscious disregard that its statements were false and misleading. “They allege in a conclusory way that defendants and employees of (Danske) received reports contradicting public statements, and fail to connect any of those reports to specific representations by specific persons,” Caproni wrote. The…

The Quiet Man in Stockholm Who Laundered China’s Oil Money for Iran

Corruption
This article from the Organized Crime and Corruption Reporting Project (OCCRP) and Sweden’s Sveriges Television (SVT) is part of an investigation in which Courthouse News Service and NBC News are partners. By all outward appearances, Hatam Khatoun Nema was a small-time money changer working from a nondescript office in Järfälla, a workaday Stockholm suburb. In reality, the Swedish-Iranian businessman ran an obscure Hong Kong company, H M E A CO., LIMITED, that laundered hundreds of millions of dollars through a web of shell companies and businesses stretching from Singapore to Panama.  A major customer of Nema’s operation was the Islamic Republic of Iran. Between…

CP20/17: Extension of Annual Financial Crime Reporting Obligation

FCA
Why we are consulting Our annual financial crime reporting obligation shows us the potential money laundering risk faced by a firm, based on its regulated activities and the nature of its customers. The obligation is set out in our Handbook SUP 16.23 Annual Financial Crime Report (REP-CRIM). When we introduced it, we committed to consulting on any future policy change and providing a cost benefit analysis. We currently assess whether REP-CRIM applies by looking at firm type, eg banks, building societies and mortgage lenders and activity type, eg intermediaries, e-money institutions and consumer credit firms. Approximately 2,500 of the 23,000…

Banks and financial institutions need to assess money-laundering risks and conduct appropriate due diligence when dealing with foreign public officials and their families or associates, five regulatory agencies said.

Money Laundering
People who are considered politically exposed may pose higher risks because their funds may be the proceeds of corruption or other illicit activities, the banking regulators said in a joint statement. The agencies added, however, that risks associated with politically exposed individuals vary and not all of them are automatically higher risk. The agencies don’t include U.S. public officials in the politically exposed persons category. “The risk depends on facts and circumstances specific to the customer relationship,” said the statement issued Friday by the Federal Reserve Board, the Federal Deposit Insurance Corp., the U.S. Treasury Department’s Financial Crimes Enforcement Network, the National…

Lori Loughlin jailed over college admissions scandal

Corruption
Lori Loughlin, star of beloved US sitcom Full House, has been given a two-month prison sentence for paying $500,000 in bribes to get her daughters into the University of Southern California. Her husband, fashion designer Mossimo Giannulli, will spend five months in prison for the same “breathtaking fraud”, a judge ruled.  Giannulli was ordered to pay a $250,000 fine and do 250 hours of community service, while Loughlin will pay $150,000 and do 150 hours.  Prosecutors said Giannulli deserves a tougher sentence because he was “the more active participant in the scheme,” while Loughlin “took a less active role, but was nonetheless…

2,600 Belgian clients involved in Credit Suisse investigation

Investigation
Image Credit: Credit Suisse in Zurich. © Plaza Financiera, Flickr Commons The federal prosecutor’s office in Brussels has opened a criminal investigation into the Swiss bank Credit Suisse, in particular the dealings of 2,600 Belgian clients suspected of using Swiss bank accounts to evade taxes.  “A criminal investigation has been opened against Credit Suisse for money laundering and unlawfully acting as a financial intermediary, as well as against Belgian customers who have not yet undergone tax regularisation.” On several occasions, the tax authorities in Belgium have offered a partial amnesty to anyone wishing to repatriate money hidden in accounts abroad,…

Extending criminal liability for money laundering: update on Germany’s new draft law implementing the latest EU AML directive

Money Laundering
August 21 2020 In January, a draft bill reforming the crime of money laundering in Germany (section 261 of the German Criminal Code (StGB)) was leaked. In a February blog post, we criticised how broad the suggested definition was. Last week, the official draft bill was published by the Federal Ministry of Justice. Much to the surprise of German anti-money laundering (AML) circles, it goes even further. The most important change compared to the unofficial draft and the law in place today is the complete elimination of a catalogue of suitable predicate offences. A ‘predicate offence’ is the underlying crime that…

A Hidden Tycoon, African Explosives, and a Loan from a Notorious Bank: Questionable Connections Surround Beirut Explosion Shipment

Investigation
Since the devastating explosion of a store of ammonium nitrate in Beirut’s port on August 4, Lebanese citizens have taken to the streets in shock, outrage, and grief. Beirut’s Grain Silo Was One Man’s Refuge Through Years of War. On August 4, It Was Where He Died Read the story of one family’s loss from our partner Daraj.com. Above all, they have demanded answers: Where did the nearly 3,000 tons of explosive chemicals come from, and who owned it? Why did the rickety ship that brought the hazardous material to Lebanon end up stranded in the city’s port in late 2013?…

Insurance billionaire Greg Lindberg sentenced to 7 years in bribery case

Corruption
Greg Lindberg, the billionaire businessman at the heart of one of North Carolina’s worst government corruption scandals, will spend more than seven years in prison, a federal judge ruled Wednesday in Charlotte. U.S. District Judge Max Cogburn also ordered Lindberg to pay a $35,000 fine and placed him on three years’ probation for his scheme to bribe Insurance Commissioner Mike Causey with up to $2 million in campaign contributions. Eventually, Lindberg, one of the state’s largest political donors who wrote checks to both parties, funneled $250,000 earmarked for Causey through the state Republican Party, an illicit transaction handled by the party’s…

Regional Report: In face of massive EU AML scandals, prosecutors, regulators, banks looking to bolster information sharing, accountability, liability

Compliance
The Skinny:  In this regional report focusing on Europe, the ACFCS Netherlands Chapter looks at some of the EU AML scandals and issues in and out of banks that can make compliance difficult.  The takeaways come from the “Fintech and FinCrime in Europe” session, a panel from ACFCS Fincrime Virtual Week, the association’s first-ever fully online fincrime compliance conference.   More than 5,600 attendees, speakers and thought leaders registered for the event, which addressed the overarching themes of Disruption, Innovation and Resiliency. In the panel focused on compliance and regulatory trends in the EU, speakers highlighted several key trends, including: …
Download
Publication of Source of Wealth and Source of Funds (Private Banking/Wealth Management) FAQs  The Wolfsberg Group is pleased to publish Frequently Asked Questions (FAQs) on how Financial Institutions can identify, mitigate and manage money laundering risks by undertaking Source of Wealth (SoW) and Source of Funds (SoF) checks on relevant customers, when appropriate and/or required by applicable regulation. Such checks are to be considered among the key elements of customer risk assessment and risk management for certain customers, as defined by each Financial Institution. This document is primarily aimed at Financial Institutions’ Private Banking/Wealth Management customer segments and the Group…

Sanctions and Transport

Sanctions
What are Transport Sanctions? From almost the first moment someone fashioned wood into a canoe to transport people and goods across a river there has been some form of maritime regulation. As with any regulations however, there will always be someone who seeks to circumvent them. Issues such as falsifying documents, obscuring ownership and hiding a ship’s registry have been endemic in the shipping industry for centuries. Unfortunately, there is no exception when it comes to enforcing sanctions. Such a multifaceted problem can never be tackled by one Government department alone. While OFSI plays its part in the implementation of…

US calls for ‘significant’ jail time for Panama Papers tax crooks

Investigation
“Meaningful sentences must be given… to forewarn others of the consequences for engaging in multi-year tax fraud,” prosecutors argue. By Will Fitzgibbon July 31, 2020 The first people to plead guilty following the United States government’s response to the Panama Papers investigation should spend “significant” time in jail, prosecutors say. U.S. officials last week recommended prison for Harald von der Goltz and his accountant Richard Gaffey. Both men pleaded guilty to financial crimes earlier this year and are at home on bail. “For decades, von der Goltz orchestrated a complex fraudulent scheme for the purpose of evading tax payments that he owed to the United…

Will the e-money boom make the UK a hub of money laundering?

Money Laundering
openDemocracy investigation finds that international money launderers are moving into Britain’s e-money business – with the Financial Conduct Authority’s official seal of approval. Article By David Leask Richard Smith COVID is killing cash. Even as lockdowns loosen, consumers are turning away from notes and coins like never before. A survey in April found four out of five Britons – many forced to do all their shopping online – were considering new digital ways to pay. Some are turning to ‘e-money’, with a raft of new money-handling products aiming to challenge industry leader PayPal. From a health point of view, this…

FURLOUGH FRAUD AND THE FINANCE ACT 2020

Fraud
The Coronavirus Job Retention Scheme (the “Furlough Scheme”) The coronavirus pandemic (COVID-19) detrimentally impacted not just public health, the NHS and other vital public services, but the economy as a whole.  The impact of the “lockdown” was that overnight a lot of businesses closed or experienced unparalleled revenue shrinkages. This placed jobs at risk. If employers could no longer generate revenue then they could no longer keep on employees.  The spectre of redundancy loomed.  In response, the government introduced The Coronavirus Job Retention Scheme (the ‘Furlough Scheme’). Instead of mass redundancy, businesses could retain staff, as an alternative to redundancy. …

Global Witness exposes international Syrian – Russian money laundering network financing brutal Al-Assad regime (Global Witness)

Money Laundering
New report shows how Syrian-Russian money laundering network uses anonymous companies in the EU and UK Overseas Territories Read the full report, Assad’s Money Men in Moscow, here. Global Witness reveals today the workings of a Syrian-Russian money laundering network that has helped prop up President Bashar al-Assad’s regime during the ongoing armed conflict. This assistance ranged from helping the regime purchase fuel and banknotes to providing front companies possibly used by its chemical weapons and ballistic missiles programme. Close associates of the network also appear to have helped embargoed North Korean firms evade UN sanctions.  The report, Assad’s Money Men…

How Germany’s SEC failed to act on warnings about Wirecard’s financial practices (Financial Crime Compliance Education)

Investigation
Germany’s top financial supervisor received detailed warnings about deceptive financial practices at Wirecard AG starting in 2008 but repeatedly declined to investigate the allegations, turning instead against the accusers. Over more than a decade, investors, U.S. authorities, journalists and people close to the company warned of possible fraudulent accounting or money laundering, practices that are now at the heart of a criminal investigation into the disgraced fintech giant. But as the red flags piled up, Germany’s equivalent of the U.S. Securities and Exchange Commission played down the allegations, kicked the ball to other agencies and delayed examining the company’s accounts, according to previously unpublished documents,…

NCA statement on modern slavery allegations in Leicester (National Economic Crime Agency)

Exploitation, Slavery
NCA statement on modern slavery allegations in Leicester  Modern slavery The National Crime Agency can confirm that it has received information regarding allegations of modern slavery and exploitation in the textile industry in Leicester. We are now in the process of assessing that information, alongside our partners, which include Leicestershire Police, HMRC, GLAA, the Health and Safety Executive, Leicester City Council, Leicestershire Fire and Rescue and Home Office Immigration Enforcement. Our primary focus is on the protection of vulnerable people and safeguarding them from harm. As part of that, in recent days NCA officers have joined partners in attending a…

NCA and police smash thousands of criminal conspiracies after infiltration of encrypted communication platform in UK’s biggest ever law enforcement operation (National Economic Crime Agency)

Investigation
NCA and police smash thousands of criminal conspiracies after infiltration of encrypted communication platform in UK’s biggest ever law enforcement operation  Operation Venetic Entire organised crime groups dismantled during Operation Venetic with 746 arrests, and £54m criminal cash, 77 firearms and over two tonnes of drugs seized so far. UK law enforcement has made a massive breakthrough in the fight against serious and organised crime after the takedown of a bespoke encrypted global communication service used exclusively by criminals. EncroChat was one of the largest providers of encrypted communications and offered a secure mobile phone instant messaging service, but an…

Economic Crime Levy consultation (UK Treasury)

Consultation
Consultation description At Budget 2020 the government announced its intention to introduce an economic crime levy. This consultation invites views on the design principles of the levy, and how this levy could operate in practice, to ensure that it is proportionate and effective. It has been developed to help realise the public and private sectors’ shared ambition to improve the UK’s response to economic crime. The consultation seeks views on what the levy will pay for, how it should be calculated and distributed across the anti-money laundering (AML) regulated sector, and how the levy should be collected. The consultation also…

Superintendent Lacewell announced DFS imposes $150 million penalty of Deutsche Bank

Investigation
In connection with Bank’s relationship with Jeffery Epstein and correspondent relationships with Danske Estonia and FBME Bank (Department of Financial Services) First Enforcement Action by a Regulator Against a Financial Institution for Dealings with Jeffrey Epstein  Superintendent of Financial Services Linda A. Lacewell announced today that Deutsche Bank AG, its New York branch, and Deutsche Bank Trust Company America (collectively “Deutsche Bank” or the “Bank”) have agreed to pay $150 million in penalties as part of a Consent Order entered into with the New York State Department of Financial Services (“DFS” or the “Department”) for significant compliance failures in connection…

Federal Reserve Board announces termination of enforcement action with State Street Corporation and State Street Bank and Trust Company

Uncategorized
The Federal Reserve Board on Thursday announced the termination of the enforcement action listed below: State Street Corporation and State Street Bank and Trust Company, both of Boston, MassachusettsWritten Agreement, dated May 28, 2015 (PDF) on https://www.federalreserve.gov/newsevents/pressreleases/enforcement20200604a.htm Terminated May 29, 2020 Additional enforcement actions can be searched for. For media inquiries, call 202-452-2955. Article Credit: https://www.federalreserve.gov/newsevents/pressreleases/enforcement20200604a.htm

KYC Reviews: The Dragon of AML Compliance Programmes

Compliance
Written by Samantha Sheen | Jun 30, 2020 9:38:09 AM “It does not do to leave a live dragon out of your calculations, if you live near him.”J.R.R. Tolkien, The Hobbit Introduction The most common area of AML/CFT compliance programmes that organisations struggle with are in relation to KYC reviews, refresh and subsequent remediation work needed to update or patch up existing customer KYC information. It’s a tough nut to crack. This month the Jersey Financial Service Commission (“JFSC”) published feedback from its examination of firms required to comply with local AML/CFT regulations. Findings in relation to KYC reviews included: In over half of the firms who used reviews…

Treasury Targets Major Iranian Metals Companies and Foreign Subsidiaries and Sales Agents

Investigation
WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against four steel, aluminum, and iron companies operating within Iran’s metals sector, including one subsidiary of Mobarakeh Steel Company — Iran’s largest steel manufacturer. Treasury is also designating one Germany-based and three United Arab Emirates (UAE)-based sales agents for being owned or controlled by Mobarakeh Steel Company. Mobarakeh Steel Company was designated in 2018 pursuant to counterterrorism authorities for providing support to Iran’s Mehr Eqtesad Iranian Investment Company, an entity designated for being owned or controlled by the IRGC-affiliated Bonyad Taavon Basij. Mobarakeh Steel Company was…

POLICE RECOVER ‘MILLIONS’ IN STOLEN TREASURES AFTER BUSTING ARCHAEOLOGICAL CRIME GANG IN BULGARIA

Investigation
An international crime gang that ransacked ancient sites in Bulgaria and trafficked stolen archaeological goods whose total worth exceeds several millions of euros has been broken up as a result of an international police operation coordinated by Europol. 8 individuals were arrested and some 4,600 archaeological items were recovered as a result of this sting.  Nicknamed Operation MEDICUS, this effort was led by the General Directorate for the Fight against Organised Crime of the Bulgarian Ministry of Internal Affairs (Главна дирекция “Борба с организираната престъпност” при Министерството на вътрешните работи на Република България) together with the British Metropolitan Police and…