Category: Financial Crime

FinCEN’s 2023 Report Highlights Robust Compliance Enforcement and the Power of Financial Data in Fighting Crime

The Financial Crimes Enforcement Network (FinCEN) has released its Year in Review for Fiscal Year 2023, underscoring the critical role of regulatory compliance and enforcement in safeguarding the U.S. financial system. The report showcases how the bureau leverages the Bank Secrecy Act (BSA) data to combat money laundering, terrorism financing, and other financial crimes, while holding non-compliant entities accountable. In FY 2023, FinCEN’s enforcement actions resulted in four civil money penalties totaling $60,780,829. These penalties serve as a stark reminder to financial institutions of the cost of non-compliance with BSA regulations. The message is clear: failure to adhere to reporting…

EU told Slovakia that its reforms risked ‘irreparable damage’ to rule of law

Brussels told Slovakia it risked doing “irreparable damage” to the rule of law, it has emerged, before the country’s MPs approved legal reforms that critics say are aimed at protecting the prime minister’s political and business allies. The Slovakian news outlet SME reported on Wednesday that the European commissioner for justice, Didier Reynders, had written last week to Robert Fico’s government urging it not to fast-track the legislative package through parliament. The request was ignored and the changes – including scrapping a special prosecutor’s office dealing with high-level corruption, lowering penalties for financial crimes and cutting the statute of limitations…

New Europol report shines light on multi billion euro underground criminal economy

The world is getting smaller, as trade, communication and infrastructure on a global scale brings us closer together. However, there is another, darker, side to the coin: our interconnected world is being abused by criminals who have created an underground economy to sustain their illegal operations. Europol’s first ever threat assessment on the topic, ‘The other side of the coin: an analysis of financial and economic crime in the EU’, sheds a light on this system which, from the shadows, sustains the finances of criminals worldwide. The report is based on a combination of operational insights and strategic intelligence contributed…

Hackers Steal $53m Worth of Cryptocurrency from CoinEx

Global cryptocurrency exchange CoinEX announced that someone hacked its hot wallets and stole large amounts of digital assets that were used to support the platform’s operations. The incident occurred on September 12 and preliminary results of the investigation show that the unauthorized transactions involved Ethereum ($ETH), Tron ($TRON), and Polygon ($MATIC) cryptocurrency. CoinEx has not provided any info about the financial impact incurred, as the investigation has yet to determine the complete losses. However, a report from blockchain security firm PeckShield says that the attack drained CoinEx of about $19 million in $ETH, $11 million in $TRON, $6.4 million in…

Has the Government forgotten about Serious and Organised Crime

The threat from serious and organised crime is increasing year on year, yet an up-to-date articulation of the government’s strategic approach is missing in action. Five years ago, in November 2018, the UK’s newly published Serious and Organised Crime Strategy pledged to leave ‘no safe space’ for serious and organised criminals to operate. Promising a whole-system approach, the strategy was the first to set out how the UK would ‘mobilise the full force of the state, aligning our collective efforts to … disrupt serious and organised criminals’ as ‘one cohesive system’. Launching the strategy at the top of The Shard,…

Your 5-minute snapshot of all the latest fincrime developments in the US

Last year, the US published its 2022 National Illicit Finance Strategy, providing a roadmap to close the loopholes that criminals and illicit actors exploit. It outlines four main priorities and 14 supporting actions: Increase transparency and close legal and regulatory gaps in the US AML/CFT frameworkMake AML/CFT regulatory framework for financial institutions more efficient and effectiveEnhance operational effectiveness in combating illicit financeSupport technological innovation and harness technology to mitigate illicit finance risksIn this article, I’m going to look at the latest developments across the US AML/CFT regime which it can be argued remains a model of effectiveness and innovation. Treasury…

Investigating the illicit trade in stolen art and antiquities

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

UNODC Launch Manual to Tackle Underreported Crime of Organ Trade

The United Nations Office on Drugs and Crime (UNODC) has launched a new toolkit on how to effectively investigate and prosecute the trafficking of people for the purpose of organ removal – a form of trafficking that has been persistently left in the dark, yet is detected in many countries around the world. Driven largely by the global shortage of organs available for transplant, it is estimated that ethical transplants cover less than 10% of the global need. This disparity has resulted in sick patients seeking out organs from the black market, a process facilitated by criminal groups who engage…

New Crackdown on Fraud and Money Laundering to Protect U.K. Economy

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…

Financial and cybercrimes are the top global policing concerns

Financial and cybercrimes are the world’s leading crime threats and also those projected to increase most in the future, according to a majority of the police respondents globally. The findings, part of INTERPOL’s first-ever Global Crime Trend report, saw more than 60 per cent of respondents rank crimes such as money laundering, ransomware, phishing and online scams as high or very high threats. Moreover, more than 70 per cent of respondents expect crimes such as ransomware and phishing attacks to increase or significantly increase in the next three to five years. The report, which is restricted to law enforcement, brings…

CoinSwitch Cooperating with Financial Crime Agency Probe

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…

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

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…

ESG is Becoming a Magnet for Financial Crime

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…

French Woman Violaine Clerc Takes Over as FATF’s New Executive Secretary

FRENCH regulator Violaine Clerc was today unveiled as the new FATF Executive Secretary. Ms Clerc comes to the international position with more than 25 years experience in prudential, AML and CFT supervision through positions at the French Central Bank and French financial supervision authority (ACPR). She previously served as a member of the AML standing committee of the three European supervisory authorities, as well as a senior member of the French delegation to FATF. She was co-chair of the Evaluation and Compliance Group of the FATF for eight years. FATF said Ms Clerc takes the lead at an “important time,”…

INTERPOL Introduces New Center to Fight Financial Crimes

INTERPOL said that it has launched a Financial Crime and Anti-Corruption Center (IFCACC) in order to fight the exponential growth in sophisticated transnational financial crime. The IFCACC is intended to prevent financial criminals from “undermining global financial systems, impeding economic growth and causing huge losses to businesses and individuals worldwide,” the world police body said in a statement Tuesday. The new crime center will expand and streamline the existing initiatives in tackling financial crimes, illicit money flows and asset recovery by “centralizing the international response to transnational financial crime and corruption,” INTERPOL Secretary General, Jürgen Stock, said. The Lyon-based organization…

Russian Money Diverted to “Grey Listed” UAE as Sanctions Mount

Huge swathes of Russian money are being diverted from Europe to Dubai as Western sanctions increase pressure on Russia over its invasion of Ukraine. Last week, the Financial Action Task Force (FATF) placed United Arab Emirates on a “grey list”, singling out the Gulf nation for greater scrutiny with regards to potential for money-laundering. A high-profile business hub, UAE has always attracted the world’s mega-rich. Its present reluctance to side with either the West or the Kremlin has sent out a message to Russians that their money will still be protected there. UAE has also failed to match sanctions imposed…

“No One in Government Cared Until the War”: How the U.K. Left it Too Late to Fight Financial Crime

“It’s not like anyone sat down in London and said, ‘how do we attract all this money?’. There isn’t an ‘attract illicit finance to the UK’ strategy department in the Cabinet Office”. Yet over decades of experience monitoring the financial connections between the UK and Russia, Tom Keatinge has seen that whenever our government has had the opportunity to address international money laundering and tax avoidance, “it always seems to have gone in the direction of enabling this to occur. Doors have been left ajar.” Two and half weeks after Russian tanks rolled into Ukraine, the British government was scrambling…

We Were Leaked the Panama Papers. Here’s How to Bring Down Putin’s Cronies

Seven years ago, an anonymous source who went by the name “John Doe” provided us with the data that became the Panama Papers – 2.6 terabytes of leaked documents from the Panamanian law firm Mossack Fonseca. The leak turned out to have quite an impressive Russian component. We found shell companies connected to Vladimir Putin’s judo friends, Boris and Arkady Rotenberg, to the oligarch Alisher Usmanov and the wife of the Kremlin spokesman Dmitry Peskov. But, most significantly, we stumbled across Sergej Roldugin, a professional cellist and godfather of Putin’s eldest daughter, who had a central role in a network…

Deutsche Bank to Wind Down in Russia, Reversing Course After Backlash

FRANKFURT, March 11 (Reuters) – Deutsche Bank (DBKGn.DE), which faced stinging criticism from some investors and politicians for its ongoing ties to Russia, said on Friday in a surprise move that it would wind down its business in the country. Deutsche joins the ranks of Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N), which were the first major U.S. banks to exit after Moscow’s invasion of Ukraine. Those moves put pressure on rivals to follow. read more . Deutsche had resisted pressure to sever ties, arguing that it needed to support multinational firms doing business in Russia. But on Friday evening…

Competition for Compliance Officers Intensifies Amid Regulatory Pressures

A labor-market squeeze and evolving regulatory pressures are driving demand for compliance officers. Competition for such talent has heated up in recent months as companies fear they will be short-staffed at a time of rapid growth and increasing regulatory scrutiny, and businesses are luring compliance staff with salary increases, remote-working opportunities and company equity. “It’s all hands on deck for corporations to attract the talent,” said Paul C. McDonald, a senior executive director at human resources consulting firm Robert Half International Inc. “They are looking to pay the most they can, and with benefits and in perks the best they…

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

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?

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…

Scotland Has Become a Financial Crime Hotspot

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…

Are Trade Finance Firms Failing to Tackle Crime Risks

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…

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

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…

Moscow’s Tallest Tower Is a Cybercriminal Cash Machine

The crown jewel of Moscow’s business district, a 97-story glass tower known alternately as Federation Tower East or Vostok, is a tribute to Russia’s post-Soviet economic influence and national strength. Promotional materials for the building, which was the tallest in Europe when it was completed in 2017 and is now No. 2, boast of its highly paid staff and its supposed fortification against “missiles and explosions.” Its apartments are rented and owned by high-ranking government officials and C-suite executives. Residential units sell for upwards of $36 million. The building has also been home to more than a dozen companies since 2018…

Police Seize $2.7m of Crypto From a British Teenager in a Credit Card Fraud Scheme

Police in England seized more than $2 million worth of crypto from a 17-year-old involved in a credit card scam. Lincolnshire Police said seized 48 bitcoin and other cryptocurrencies after discovering money-laundering links in the case. The teenaged boy was charged with false representation and money laundering. Police in an English county said they’ve seized more than $2 million worth of cryptocurrency from a 17-year-old boy who obtained the coins through online fraud. Detectives from the Lincolnshire Police’s cybercrime unit took possession of the digital currency in a case centered on an unnamed boy involved in an April 2020 credit…

Cultural Property Crime Thrives Throughout Lockdown Pandemic

Cultural property crime has continued unabated throughout the global COVID-19 pandemic and in some cases even surged to new heights, INTERPOL’s 2020 Assessing Crimes Against Cultural Property survey finds. The first such report compiled since the onset of the pandemic – and the first made publicly available – the survey leverages information supplied by 72 INTERPOL member countries on cultural property crimes, arrests and trafficking routes in 2020. The consolidated intelligence allows INTERPOL to analyze and compare emerging trends around the world. In total, 854,742 cultural property objects were seized globally in 2020, including numismatic items (coins, money or medals),…

The Netherlands Has Twice as Many Compliance Officers as Community Police

Every day, 20% of all bank staff in the Netherlands is engaged in detecting financial crime. This is a direct consequence of the anti-money laundering and terrorist financing legislation introduced since 2001. Detection efforts are mostly manual and therefore very inefficient: 95% of all alerts generated by transaction monitoring systems are false positives. These are the findings of regulatory technology specialist Hyarchis in its new Regulatory Technology on the Rise report, published recently. In the Netherlands, more than 8,000 bank employees search for suspicious transactions every day. This is twice the number of community police officers in the Netherlands, according…

London Court Orders Binance to Trace Cryptocurrency Hackers

London’s High Court has ordered Binance, one of the world’s largest cryptocurrency exchanges, to identify hackers and freeze their accounts after one user said it was the victim of a $2.6 million hack. In a judgment made public this week, a High Court judge granted requests by artificial intelligence (AI) company Fetch.ai for Binance to take steps to identify the hackers and track and seize the assets. While involving a relatively small sum, the case is one of the first public ones involving Binance and will be a test of the English court system’s ability to tackle fraud on cryptocurrency…

Man Wanted for Buying Stolen van Gogh Paintings Arrested in Dubai

Raffaele Imperiale, 56, supposedly has ties to the Camorra crime family, based in the Italian city of Naples. Earlier this year, in a newspaper interview, he said: “I bought [the paintings] directly from the thief, because the price was attractive. But most of all because I love art.” A man wanted in Italy for allegedly buying stolen Vincent van Gogh paintings – and also being an international drug trafficker – has been arrested in Dubai. Raffaele Imperiale, 46, is supposedly a kingpin in the Camorra crime syndicate, based in the city of Naples. He was arrested on 4 August, according…

United Kingdom Threat Assessment 2021 by Financial Crime News

This United Kingdom Threat Assessment by Financial Crime News for 2021 is now published. To download the UK Threat Assessment click here: UK Final July PBd 2021 The main Financial Crime threats are from fraud, drug trafficking, cybercrime, human smuggling, human trafficking, acquisitive crime, wildlife trafficking, tax offences and corruption (mostly from overseas). Based on an evaluation of all 43 FATF Member/Observer Countries by FCN (representing 87% of Global GDP), the UK faces significant threats ranked as equal 7th/43 (with Italy) behind Russia, India, Mexico, Brazil, Turkey & China. On Responses the UK is ranked 3rd best out of 43…

Companies House: ‘Enabler of Illegal Activity’

Many of us routinely use Companies House to check the legitimacy of a business, yet an investigation by The Sunday Times has shown it may not be a reliable source of information. Every UK business has to be registered with Companies House, but the investigation has revealed that the organisation carries out only basic checks on the information it is given and has no statutory power to verify the accuracy of the information it receives. As a result of the limited checks, UK companies registered with Companies House are involved in money laundering on an industrial scale. One example found…

The U.K.’s Reputation Management Industry is Destroying Journalism

Protecting media freedom and tackling corruption are intrinsically linked. The UK needs to address both to achieve either effectively This month, British newspapers reported that an Azerbaijani millionaire DJ, Mikaela Jav, and her husband, Suleyman Javadov, had been forced to forfeit £4 million to the National Crime Agency, after admitting the funds had entered the UK illegally through a complex money laundering system known as the ‘Azerbaijan Laundromat’. Pictures of the Javadovs’ lavish lifestyle, including four multi-million pound properties in London, ran alongside commentary pointing out that the NCA actually reclaimed £10 million less than was originally under question. The…

5 Recommendations for Improving National Security & Fighting Financial Crime

How can financial institutions and law enforcement better fight criminals in an increasing complex and borderless society? Modernizing FinCEN may be a way. The Financial Crimes Enforcement Network (FinCEN) is one of U.S. Treasury’s primary agencies that oversees and implements policies to prevent and detect money laundering. FinCEN’s role in stopping terrorist financing, drug traffickers, and international criminal organizations cannot be overstated, working on a global scale in anti-money laundering (AML) efforts. But how can financial institutions and law enforcement better work together to fight criminals in an increasing complex, technologically sophisticated, and borderless society? Some would argue modernizing FinCEN…

Malta to be ‘grey listed’ by FATF, Pakistan to remain and Ghana removed

It has been confirmed that the EU’s smallest Member State, Malta, has been added to the Financial Action Task Force’s ‘grey list’, something which may cause detrimental effects to the Maltese economy. Following the FATF’s five-day plenary session, it has been announced that Haiti, Malta, the Philippines, and South Sudan, have been grey listed by the global financial watchdog. They join countries such as Albania, Myanmar, Nicaragua, Uganda and Syria under increased monitoring by the body, which has called for these jurisdictions to “complete their action plans expeditiously and within the agreed timeframes”, after “strategic deficiencies” were identified in their…

‘Overwhelming majority’ of countries were against greylisting of Malta

An “overwhelming majority” of countries expressed opposition to Malta being placed on a global watchdog’s financial crime greylist. Sources briefed on the confidential greylisting discussions in the past week said numerous FATF member countries were of the view that Malta had done enough to avoid being placed on the list of jurisdictions deemed untrustworthy in the fight against financial crime. Despite having majority support, Malta’s efforts to remain off the greylist were torpedoed by the US, UK and Germany. “The FATF does not take decisions by a vote. Decisions are taken by consensus which is neither based on unanimity nor…

Global spend on Financial Crime compliance at financial institutions reaches $213.9B USD

Lexis Nexis Risk Solutions released its annual True Cost of Financial Crime Compliance Global Report. The results derived from the comprehensive survey of 1,015 financial crime compliance decision makers at financial institutions including banks as well as investment, asset management and insurance firms globally. The projected total cost of financial crime compliance across all financial institutions reached $213.9 billion in 2021, surpassing the $180.9 billion recorded in 2020. The majority of this sizeable year-over-year increase is represented by Western Europe and the United States. The decision makers who took part in the study oversee financial crime compliance processes such as…

TRACE Foundation announces recipients of the 2021 TRACE prize for investigative reporting

The TRACE Foundation, a non-profit organization established to support projects that encourage greater commercial transparency, today announced the winners of the 2021 TRACE Prize for Investigative Reporting. The annual award recognizes journalism that uncovers business bribery or related financial crime. Zorayda Gallegos Valle, a freelance journalist writing for El País in Mexico, won the TRACE Prize for her investigation that uncovered the Mexican Army’s scheme to divert at least $156 million of public resources through hundreds of shell companies contracted to complete infrastructure projects. “I am grateful to the TRACE Foundation for supporting investigative journalism because it plays an important…

Council of Europe calls for stronger financial intelligence units

THE PARLIAMENTARY ASSEMBLY of the Council of Europe has criticised recent efforts to combat money laundering and terrorism financing and has stressed that financial intelligence units must be strengthened. In a resolution adopted in last month and announced Tuesday, the Parliamentary Assembly has invited all member states of the Council of Europe to improve their national FIUs and bring them more in line with the standards of the Financial Action Task Force, and its own FinCrime watchdog – MONEYVAL. The Parliamentary Assembly is a CoE body composed representatives elected to the national parliaments of its member states. It is entirely…