Category: Money Laundering

Most Criminal Cryptocurrency Funnels Through Just 5 Exchanges

Digital Currencies, Money Laundering
The crypto money-laundering market is tighter than at any time in the past decade, and the few big players are moving a “shocking” amount of currency. FOR YEARS, THE cryptocurrency economy has been rife with black market sales, theft, ransomware, and money laundering—despite the strange fact that in that economy, practically every transaction is written into a blockchain’s permanent, unchangeable ledger. But new evidence suggests that years of advancements in blockchain tracing and crackdowns on that illicit underworld may be having an effect—if not reducing the overall volume of crime, then at least cutting down on the number of laundering…

FCA penalises Al Rayan Bank PLC for anti-money laundering failures 

Money Laundering, Prosecutions
The Financial Conduct Authority (FCA) has fined Al Rayan Bank PLC (Al Rayan) £4,023,600 for failing to put in place adequate anti-money laundering (AML) controls. Between 1 April 2015 and 30 November 2017, Al Rayan allowed money to pass through the bank and be used within the UK without carrying out appropriate checks. The firm failed to adequately check its customers’ Source of Wealth and Source of Funds when it was required to make sure the money was not connected to financial crime.  The failings were made worse by the lack of proper training provided to staff about how to handle…

St. Louis Man Sentenced to 19+ Years for Money Laundering

Money Laundering, Prosecutions
A St. Louis man was sentenced to 19 years and seven months in prison after admitting to his involvement in a methamphetamine operation in southern Illinois. Terrence Thompson, 35, pled guilty to one count of conspiracy to launder monetary instruments. According to court records, Thompson conspired with the co-defendants to distribute more than 500 grams of methamphetamine in the Southern District of Illinois. Law enforcement conducted a search warrant on Thompson’s residence and recovered more than 10 kilograms of methamphetamine. Members of the conspiracy utilized various payment methods to deal the illegal narcotics, including CashApp, cashier’s checks, bank transfers and…

UK Government Expands Enforcement Measures To Address Fraud and Money Laundering

Money Laundering
On 22 September 2022, the U.K. government introduced the Economic Crime and Corporate Transparency Act 2022. The new bill is currently navigating its way through the U.K. Parliament and is likely to receive royal assent in 2023. The bill seeks to build on the Economic Crime (Transparency and Enforcement) Act 2022 (ECA 2022), which took effect on 15 March 2022. (See our 26 April 2022 client alert “New UK Economic Crime and Transparency Laws Take Effect” to review the key provisions of the ECA 2022.) Since that update, the “Register of Overseas Entities” requirements came into force on 1 August…

UK crime agency arrests ‘wealthy Russian’ over money laundering

Money Laundering
Britain’s National Crime Agency (NCA) said on Saturday it had arrested a “wealthy Russian businessman” on suspicion of money laundering and other offences as part of a crackdown on corrupt oligarchs. The NCA said the 58-year-old was among three men arrested by officers from the Combatting Kleptocracy Cell (CKC) on Thursday at a “multi-million pound residence” in London. The Russian embassy in London has demanded information from Britain’s Foreign Office on the reasons and circumstances of the detention of the unidentified businessman and the conditions in which he was being held, Russian news agencies said. The man was detained on…

SEC Charges Danske Bank with Fraud for Misleading Investors about Its AML Compliance Failures in Estonia

Fraud, Money Laundering, Prosecutions, Regulatory Fines
The Securities and Exchange Commission today announced fraud charges against Danske Bank, a multinational financial services corporation headquartered in Denmark, for misleading investors about its anti-money laundering (AML) compliance program in its Estonian branch and failing to disclose the risks posed by the program’s significant deficiencies. Danske Bank agreed to pay $413 million to settle the SEC’s charges. According to the SEC’s complaint, when Danske Bank acquired its Estonian branch in 2007, it knew or should have known that a substantial portion of the branch’s customers were engaging in transactions that had a high risk of involving money laundering; that…

Santander Fined £108M for AML Failings

Money Laundering, Prosecutions, Regulatory Fines
BRITAIN’S Financial Conduct Authority (FCA) today announced it has fined Santander almost £108M for AML failures in its business banking division. The FCA ruled the UK division of the Spanish bank had failed to manage its anti-money laundering systems properly – affecting the way it dealt with 560,000 business customers. Between 2012 and 2017 the bank’s systems were not able to verify properly information provided by customers about their businesses. “Santander’s poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime,” said Mark…

Rabobank Investigated for Suspected Dutch Money Laundering Violations

Money Laundering
Dutch co-operative bank Rabobank (RABO.UL) on Wednesday said it is under investigation by public prosecutors in the Netherlands for suspected violations of national money laundering laws. The bank in a statement said it was cooperating with the investigation. The disclosure follows a 2021 warning by the bank that it had been instructed by the Dutch central bank (DNB) to fix its customer due diligence practices and that it was facing a “punitive enforcement procedure.” Rabobank is one of the Netherlands’ three largest banks. Competitors ING Group and ABN Amro incurred massive fines in similar situations, with ING docked $900 million…

Angolan Court orders Seizure of Dos Santos Assets

Money Laundering, Proceeds of Crime
Angola’s Supreme Court has ordered the “preventive” seizure of assets worth around $1 billion held by Isabel dos Santos, the daughter of the southern African country’s former president, Portugal’s Lusa news agency said on Tuesday. The court document cited by Lusa, dated Dec. 19, said authorities had evidence of alleged embezzlement and money laundering and ordered the seizure of the money dos Santos holds in “all banking institutions”. The seizure also includes all of dos Santos’s shares in Angolan company Embalvidro, as well as 100% of shares in Cape Verde’s telecom company Unitel T+ and Unitel STP in Sao Tome…

EU Court of Justice Rolls Back Anti-Money Laundering Rules

Money Laundering, Regulation
In a stunning reversal, the Court of Justice of the European Union weakened an existing anti-money laundering rule on Tuesday, limiting use of one of the most potent tools against financial secrecy – access to beneficial ownership information. “Beneficial ownership” is the term for who, in reality, benefits from (or owns) a given company or corporate structure. Wealthy individuals, criminals and tax cheats are among those who routinely disguise ownership of such entities, often to hide their wealth from authorities. Organizations fighting for tax equity and reform immediately denounced the ruling. “By requiring corporations and offshore entities to publicly disclose…

NCA secures £50m identified by Barclays as the Proceeds of Crime

Money Laundering, Proceeds of Crime
The National Crime Agency (NCA) has obtained a ruling from the High Court that allows Barclays to hand over criminal funds to the NCA in a first-of-its-kind civil recovery case. The money – amounting to over £50m – was identified by the bank in a number of accounts and transferred to secure holding accounts. The civil recovery order means that for the first time, legal powers were used to recover the proceeds of crime where the account holders were not named in the court action. Adrian Searle, Director of the National Economic Crime Centre (NECC) in the NCA said: “Identifying…

FCA Fines Gatehouse Bank £1.5m for Poor Anti Money Laundering Checks

Money Laundering, Regulatory Fines
The Financial Conduct Authority (FCA) has fined Gatehouse Bank Plc £1,584,100 for significant weakness in its financial crime systems and controls. Between June 2014 and July 2017 Gatehouse failed to conduct sufficient checks on its customers based in countries with a higher risk of money laundering and terrorist financing. Gatehouse also failed to undertake the correct checks when some of the customers were classed as Politically Exposed Persons (PEPs). In one instance, Gatehouse Bank set up an account for a company based in Kuwait to aggregate customer funds. Gatehouse Bank did not require the company to collect information about customers’…

European Countries Top of Basel AML Index

Counter Terrorist Financing, FATF, Money Laundering
EUROPEAN countries and New Zealand comprise the Top 10 countries in the Basel Institute AML Index. On the other end of the scale, the bottom 10 are dominated by African countries along with Haiti, Myanmar and Cambodia. Finland – whose FATF assessment was also released today – comes out on top of the ratings with Congo ranked bottom stacking up a rating of 8.3 out of 10 for its money laundering risk. Under the Basel AML Index, countries are assessed under 18 indicators including the quality of their AML/CFT Framework, their Corruption and Bribery Risk, Financial Transparency and Standards, Public…

Money Laundering Cases Registered at Agency Doubled in Last 6 Years

Digital Currencies, Money Laundering
Almost 3 000 cross-border money laundering cases have been registered at Eurojust during the past six years. Since 2016, the number of cases brought to the Agency has been steadily rising. Over 600 cases were brought to the Agency in 2021, representing more than double of those registered in 2016.These are some of the findings of Eurojust’s first comprehensive report on money laundering, published on 20 October. Due to its clandestine nature, the global scale of money laundering is difficult to measure, but it is considered to be significant. The United Nations Office on Drugs and Crime (UNODC) estimates that…

Danske Bank Estimates Money Laundering Fines at €2.08b

Money Laundering, Prosecutions, Regulatory Fines
Danske Bank predicts in its third-quarter report that the United States and Danish governments could fine the bank €2.08 billion for money laundering in Estonia. Danske Bank estimates in its third-quarter review that the solution agreed upon with the U.S. Department of Justice (DOJ), the Securities and Exchange Commission (SEC) and the Danish National Special Crime Unit (NSK) is expected to cost €2.08 billion. The bank previously estimated the potential fine at €200 million. However, Danske Bank said that negotiations with the authorities are still ongoing and it remains uncertain whether a deal could be reached soon. The bank anticipates…

HMRC cracks down on unlawful estate agents

Money Laundering
Dozens of estate agents have been fined more than £500,000 for breaching anti-money laundering requirements, HM Revenue and Customs (HMRC) has announced today (11 October 2022). HMRC named the 68 estate agents that have been fined a total of £519,645 for not complying with rules designed to stop criminals laundering money from illegal activity. The fines followed the first prosecution of an estate agent for trading despite not registering with HMRC, to ensure compliance with money laundering regulations. Felix Uwuigbe, Director of Century House Estates Ltd in London, was sentenced to 120 hours of unpaid community service and banned from…

The veneer of legitimacy: professional money launderers and how they impact the legal sector

Money Laundering
When we talk about crime, and the harm it causes to communities and individuals, money laundering is rarely more than an afterthought. It shouldn’t be; money laundering is key to organised crime. Without the ability to wash dirty money, criminals would struggle to further their operations and hide their assets. Money laundering underpins and enables organised crime. What are professional money launderers?Professional money launderers – or PMLs – are people who, for a fee, provide services to organised crime groups (OCGs) by laundering the proceeds of their crimes. PMLs launder for multiple OCGs and don’t concern themselves with how the…

Middle East & North Africa Trade based financial crime guide

Money Laundering, Trade Based Finance
Today the MENA Chapter of the GCFFC and MENA FCCG launched their jointly developed bilingual Reference Guide for practitioners to assist in improving awareness of trade-based financial crime risks. The guide was simultaneously published as an open source on the GCFFC and MENA FCCG websites and introduced to the market at the London Stock Exchange Group (LSEG) 14th MENA Regulatory Summit 2022 in Abu Dhabi, organized by LSEG under the patronage of the UAE Executive Office of Anti-Money Laundering and Counter Terrorism Finance. TBFC is persistently flagged as one of the most poorly understood risk areas within the anti-money laundering…

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…

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…

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…

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…

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”…

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…

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…

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…

Five problems with Economic Crime Policing and how to solve them

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

Lyne Barlow: Travel agent faces money laundering and fraud charges

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

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

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

Risk-based Approach Guidance for the Real Estate Sector

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

Deutsche Bank Settles Money-Laundering Case for $7.1m

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