Category: Money Laundering

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…

Why not a single banker was jailed over HSBC’s billion-dollar money laundering scandal

Money Laundering
Ten years after the bank admitted enabling El Chapo’s Mexican drug cartel, the drug lord is serving a life sentence but bankers only faced fines. Whose job is it to police global finance? No senior banker went to jail over 2008; no HSBC banker was charged, let alone went to jail, when the bank admitted in 2012 to enabling the laundering of billions of dollars of drugs money for El Chapo and his Mexican Sinaloa cartel. The reason, as I explain in my new book Too Big to Jail – Inside HSBC, the Mexican drug cartels and the greatest banking…

Londongrad: how the City became a money-laundering haven

Money Laundering
Which key factors have conspired to make the UK capital synonymous with financial crime? Insights outlines the root causes, and ICAEW’s Michelle Giddings highlights emerging vulnerabilities.Since the dawn of Russia’s war with Ukraine, scrutiny has intensified on illicit financial activity conducted in and around the City of London. Rooted primarily in money laundering, the cycle of criminality has earned the UK’s financial hub two damning sobriquets: ‘The Laundromat’ and ‘Londongrad’ – monikers steeped in such blithe resignation, they convey that London’s susceptibility to malign influences is essentially taken for granted. Faith in a medium- or long-term solution is conspicuous by…

Review of the UK’s AML/CFT regulatory and supervisory regime

Money Laundering
The government is publishing two post-implementation reviews and a forward-looking review of the UK’s anti-money laundering and countering the financing of terrorism regime. Review of the UK’s AML/CFT regulatory and supervisory regime Post Implementation Review of the Money Laundering Regulations Post Implementation Review of the OPBAS Regulations Details The government is publishing a forward-looking review of the UK’s AML/CFT regime, in response to the call for evidence launched last year. Alongside this, the government is also publishing two post-implementation reviews to fulfil its statutory obligations; one of the Money Laundering Regulations 2017 and one of the OPBAS Regulations 2017. Taken…

Ex-bank manager sentenced for £255,000 money laundering

Money Laundering
A former Barclays Bank manager has been sentenced today (31 May 2022) for helping to launder £255,000. Heather Smalley, 31, was sentenced to two years’ imprisonment, suspended for two years, for entering an arrangement which facilitated the laundering of another person’s criminal proceeds, at Warwick Crown Court. Smalley had pleaded guilty to this charge on 23 March, at Coventry Magistrates’ Court. Smalley had worked for Barclays Bank for 14 years and was the bank manager at a Coventry branch. On six occasions, between February and October 2020, she arranged to take in bags of low value £10 and £20 notes…

UK’s revenue and customs agency begins handing out fines to art market players

Art Dealers, Money Laundering
HMRC, the UK’s revenue and customs agency, has started to hand out fines to art market participants (those handling transactions of €10,000 or above) who failed to register under the new anti-money laundering legislations, by the June 2021 deadline. The list of companies and individuals receiving fines will not be publicly available (via the government’s website) until later this year, but one such penalty notice seen by The Art Newspaper makes it clear that “trading whilst unregistered” was now being pursued as a breach of the regulations. In addition to carrying out increased due diligence, art market participants have been…

U.K. Regulator FCA Fines Ghana International Bank $7.1M for Weak Anti-Money-Laundering Controls

Money Laundering, Prosecutions
The U.K.’s Financial Conduct Authority (FCA) said Thursday that it fined U.K.-based Ghana International Bank PLC about GBP5.8 million (US$7.1 million), for alleged failures in its anti-money-laundering and counter-terrorist-financing controls in relation to its correspondent-banking activities. By using correspondent-banking relationships, banks can gain access to financial services in various jurisdictions and provide cross-border payment services to customers. The regulator said that no money laundering was detected, but that between 2012 and 2016, the bank failed to perform required checks on its established relationships with overseas banks and assess those banks’ anti-money-laundering controls. As a result, the FCA said the risk…

Publication of the Effectiveness Through Collaboration Paper

Money Laundering, Terrorism, Wolfsberg
Today, the Wolfsberg Group is publishing its paper on Effectiveness through Collaboration. The document expands on a key element of the Wolfsberg Group’s views on developing an effective Anti-Money Laundering/Counter-Terrorism Financing (AML/CTF) programme (The Wolfsberg Factors), which is to engage with the public sector, including law enforcement. The paper specifically focuses on successful engagement through Public-Private Partnerships and is intended to be an introduction to the subject for those who may be less familiar with the principles underpinning these arrangements and the pivotal role that national authorities must play. The Wolfsberg Group urges the public sector to prioritise the establishment…

Credit Suisse Prosecutor Finds $60 Million in Money Laundering

Money Laundering, Prosecutions
A prosecutor has identified more than $60 million that he believes was laundered through Credit Suisse Group AG, in the precursor to what would be just the second Swiss criminal indictment ever against a major local lender. Geneva’s top financial-crime prosecutor, Yves Bertossa, identified a series of 8 transactions the bank failed to prevent between 2008 and 2014 at a hearing last week, which he said constituted aggravated money laundering by the Swiss lender, according to people familiar with the investigation. Patrice Lescaudron, the fraudster at the heart of the case, faked signatures and contrived dummy portfolio statements to illegally…

Deutsche Bank investors can sue in U.S. over Epstein and Russian oligarch ties

Corruption, Money Laundering
NEW YORK (Reuters) -A U.S. judge on Monday said shareholders can sue Deutsche Bank AG for allegedly hiding shortfalls in its internal controls while doing business with risky, ultra-rich clients like the sex offender Jeffrey Epstein and Russian oligarchs. U.S. District Judge Jed Rakoff in Manhattan said shareholders may try to prove in their proposed class action that the German bank was aware its know-your-customer and anti-money laundering controls were ineffective, and that its share price fell as the truth became known. In a 30-page decision, Rakoff said the complaint described specific processes that Deutsche Bank knowingly undermined through an…

The Crackdown on the Illicit-Finances Aiding Oligarchs

Money Laundering, Sanctions
The United States Department of Treasury has outlined actions it plans to take to address illicit finance, saying Russia’s invasion of Ukraine had underscored the need to close regulatory loopholes and step up the fight against related financial crime and transnational corruption. Major international financial institutions have previously been caught red handed in scandal in banking sanctioned groups and individuals the most historically notable was HSBC Mexico facilitating a money laundering scheme on a grand scale for drug cartels, which resulted in a fine in excess of $2 billion. Most recently, a massive leak outlining Credit Suisse’s less than reputable…

Crypto Exchanges Should Lose Licenses for Laundering Breaches, EU Regulators Say

Digital Currencies, Money Laundering, Regulation
Crypto exchanges should lose their licenses if found to have seriously breached anti-money laundering rules, European Union financial supervisors said. The recommendation comes as lawmakers reach the closing stages of landmark legislation known as the Markets in Crypto Assets Regulation, or MiCA, introducing an authorization regime for virtual asset companies within the 27-nation bloc.Regulatory authorities responsible for authorizing or registering crypto exchanges and wallet providers should “be empowered to withdraw the authorisation/registration for serious breaches of AML/CFT [anti-money laundering and terrorist finance] rules,” said a report published Wednesday by the three European supervisory authorities responsible for overseeing banks, insurers and…

70% Accountants and Lawyers Have Money Laundering Fears Over Russian Dark Funds

Money Laundering, Sanctions
LONDON, UNITED KINGDOM 25th MAY, 2022: 70% of accountants and lawyers are more concerned about money laundering since Russian events and sanctions began, with 75% moving anti-money laundering (AML) up the company agenda in the past year. That’s according to First AML, the end-to-end AML software solution, which surveyed 200 accountants and lawyers in the UK to discover attitudes toward current compliance and AML procedures. Despite 53% of respondents having identified an instance of suspected money laundering in the past three years (with 24% identifying more than one) only 45% are completely confident in their AML procedures. Alongside this, a…

Time to Shut Down Dirty Money’s “London Laundromat”

Money Laundering
Just before Russia launched its full-scale invasion of Ukraine on February 24, the British anticorruption advocacy group Transparency International UK estimated that Russians accused of corruption or having close links to the Kremlin owned an estimated £1.5 billion worth of property in the United Kingdom, and that front companies registered in the United Kingdom and its Overseas Territories and Crown Dependencies had concealed more than £82 billion of corrupt Russian funds. This was only part of a bigger problem. The research corroborated what countless reports and exposés have shown in recent years: the role played by institutions and expertise in…

Soldiers Arrested on Drug and Money Laundering Offences

Money Laundering
Six soldiers and a veteran have been arrested on suspicion of drug, money-lending and money-laundering offences, the Ministry of Defence has said. The MoD said six Irish Guards troops and a Coldstream Guardsman veteran were arrested by the Royal Military Police as part of a “planned operation”. The 1st Battalion Irish Guards are set to lead Thursday’s Trooping the Colour for the Queen’s Platinum Jubilee. The MoD said none of the soldiers under investigation would take part. A defence source confirmed to the BBC that items suspected to be drugs were seized in a raid at Mons Barracks in Aldershot…

U.S. Says it Imposes Sanctions on Moscow Backed Iranian Oil Smuggling Network

Money Laundering, Sanctions
The United States on Wednesday imposed sanctions on what it described as a Russian-backed oil smuggling and money laundering network for Iran’s Revolutionary Guards’ Quds Force, even as Washington tries to revive nuclear deal with Iran. The U.S. Treasury Department said the network was led by current and former Quds Force figures, “backed by senior levels of the Russian Federation government” and included Chinese companies and a former Afghan diplomat. It had raised hundreds of millions of dollars for Iran’s Quds Force and Tehran’s Lebanese allies Hezbollah, and helped Tehran support proxy militant groups, Treasury said. The Quds Force is…

Bankers Support Switzerland’s Decision not Change Banking Secrecy Law

Money Laundering
Swiss bankers defended on Tuesday the decision of a parliamentary commission not to strike down the controversial article 47 from the country’s banking secrecy law that has been criticized by the UN, journalists and human rights advocates as violating press freedom. After meeting last week to deliberate the subject, Swiss lawmakers chose not to touch the article of the Federal Act on Banks and Savings Banks that prescribes a prison sentence of up to three years and a fine for whoever discloses confidential banking information about a Swiss bank’s client. “From the point of view of the majority of the…

SEC Charges Wells Fargo Advisors with Anti-Money Laundering Related Violations

Money Laundering, Prosecutions
The Securities and Exchange Commission today announced charges against Wells Fargo Advisors for failing to file at least 34 Suspicious Activity Reports (SARs) in a timely manner between April 2017 and October 2021. Wells Fargo Advisors, the St. Louis-based broker-dealer, has agreed to pay $7 million to settle the charges. According to the SEC’s order, due to Wells Fargo Advisors’ deficient implementation and failure to test a new version of its internal anti-money laundering (AML) transaction monitoring and alert system adopted in January 2019, the system failed to reconcile the different country codes used to monitor foreign wire transfers. As…

Stricter Controls on Lawyers, Accountants and Other ‘gatekeeper’ Professionals Who Enable Money Laundering

Money Laundering
STRICTER AML regulations and supervision must be placed on the professional “gatekeepers” who enable money laundering, the Council of Europe’s AML body said today. MONEYVAL also said governments need to step up their efforts and coordination to combat money laundering and terrorist financing by adopting stricter regulation and supervision of the crypto and virtual assets sector. The group called out “the specialised ‘gatekeeper’ professions, such as lawyers, accountants and other services providers who often help launderers” as requiring more oversight. MONEYVAL is the Council of Europe’s anti-money laundering and counter-terrorist financing body. The emerging virtual assets sector and the increasing…

Report on the State of Effectiveness and the Compliance with the FATF Standards

FATF, Money Laundering, Terrorism
This landmark report gives a comprehensive overview of the state of global efforts to tackle money laundering, terrorist and proliferation financing. The report is based on data from FATF and FSRB mutual evaluation reports since 2013, which assessed the strengths and weaknesses of national frameworks to tackle these crimes. Overall, the report finds that countries have made huge progress in improving technical compliance by establishing and enacting a broad range of laws and regulations to better tackle money laundering, terrorist and proliferation financing. This has created a firm legislative basis for national authorities to ‘follow the money’ that fuels crime…

What are Wash Trading and Money Laundering in NFTs

Digital Currencies, Money Laundering
What is wash trading crypto? Wash trading occurs when a trader or investor buys and sells the same securities multiple times in a short period to deceive other market participants about an asset’s price or liquidity. As mentioned, wash trading involves an act in which the same asset is sold and purchased within a short time. To influence an asset’s trading activity and price, traders use wash trading as a market manipulation technique. Typically, one or more colluding agents undertake a series of trades without considering market risks, resulting in no change in the antagonistic agents’ original position. In October…

EU Crypto Firms Protest ‘Alarming’ Anti-Money Laundering Laws

Digital Currencies, Money Laundering, Regulation
The companies are joining forces to try to limit the impact of new proposals to identify crypto users and regulate stablecoins. The crypto sector has written to European Union finance ministers and lawmakers to urge a rethinking of anti-money laundering rules the industry regards as “burdensome” and “alarming.” The letter, seen by CoinDesk and signed by academics, lobby groups and senior executives from companies such as Ledger, Aave and Blockchain.com, says current proposals to identify crypto users, known as the travel rule, endanger privacy and innovation in the EU. “The proposals from the European Parliament, by leading to the public…

HMRC Should be Tougher on Letting Agency AML Checks

HMRC, Money Laundering
A technology platform claims that as many as a third of lettings agencies that should be compliant with anti-money laundering regulations are in fact non-compliant. From October last year, letting agents who deal in rental properties worth more than €10,000 or £8,300 a month must be registered for AML purposes with HM Revenue and Customs. Now Credas Technologies has surveyed 1,000 property professionals and claims the vast majority would like to see HMRC act more proactively to deter money laundering, as almost a third believe their own AML compliance procedures would fail. In the survey, when asked about the importance…

Financial Crime Investigators Granted More Time

Investigation, Money Laundering
Law enforcement agencies probing suspected financial crimes have the right to additional time when necessary to properly investigate, a Scottish court has ruled. The landmark decision handed down by the Sheriff Appeal Court underlines the emphasis placed by courts on “allowing law enforcement the time and space to complete their inquiries”. It comes after the Appeal Court unanimously held that Italian chef Cristian Picco had been validly excluded from a hearing on whether his bank account should remain frozen while investigators probed suspected money laundering. The court heard that Picco first had his TSB account frozen in April 2019 after…

Police Raid Trade Union Headquarters as Part of Bribery and Fraud Investigation

Bribery, Fraud, Investigation, Money Laundering
Police have raided the headquarters of Unite, one of the UK’s largest and most powerful trade unions, as part of a bribery, fraud and money laundering investigation. Sky News understands 15 to 20 officers attended the search yesterday at the union’s central London headquarters and left the building with boxes of files, paper and a computer. A Unite spokesman confirmed to Sky News: “A Unite employee is subject to a criminal investigation by the police. “On Wednesday 6th April, the employee’s office at Unite HQ, in Holborn, London, was accessed and searched by the police under warrant.” The raid was…

Trio Jailed for Trying to Launder Crime Gang Cash

Money Laundering, Prosecutions
THREE people who came to Jersey to try to launder thousands of pounds of criminal cash have been jailed for a combined total of ten years. The Royal Court heard yesterday that Muhiddin Umurzokov (50), Anvarjon Eshonkulov (49) and Batsukh Bataa (52) came to the Island in October in an attempt to spend or exchange money that they knew had come from crime. They admitted 22 separate charges of laundering or attempting to launder money. Umurzokov was jailed for four years and Eshonkulov and Bataa were jailed for three years each. They changed some of the money into US dollars…

London Lawyer Denies Charges of Tipping Off Client of Money Laundering Probe

Money Laundering, Prosecutions, Tipping Off
A City of London solicitor, accused of forging a legal letter and tipping off a client about a money laundering investigation, is set to stand on trial after denying both counts. William Osmond, founder of City of London law firm Osmond Solicitors, entered not guilty pleas on one count of forgery and one count of disclosing an investigation into possible breaches of the Proceeds of Crime Act 2002. The London lawyer is now set to face trial in March 2023 after being accused of informing his client of the Serious Fraud Office’s (SFO’s) plans for a money laundering probe The…

Deutsche Bank HQ in Frankfurt Raided Over Suspected Money Laundering

Investigation, Money Laundering
German authorities have raided Deutsche Bank’s headquarters in Frankfurt over suspected money laundering at the country’s largest lender. Officers from the financial regulator BaFin, the federal police, and the Frankfurt public prosecutor’s office launched a raid on the bank’s glass-panelled offices – known locally as the “twin towers” – on Friday morning after securing a search warrant from the local court. Deutsche Bank said the issue had been self-reported and it was “fully cooperating” with police and prosecutors who launched the raid on its offices at 10am. “This is an investigative measure by the Frankfurt public prosecutor’s office in connection…

British Virgin Islands: Premier Andrew Fahie Arrested in U.S. Drug Sting

Investigation, Money Laundering
The leader of the British Virgin Islands (BVI) has been arrested for alleged drug smuggling and money laundering in the US. Premier Andrew Fahie was detained in Miami by US agents posing as cocaine traffickers from a Mexican drug cartel. He agreed a $700,000 (£560,000) payment to allow traffickers to use BVI ports with an undercover informant, charges filed in the US said. Foreign Secretary Liz Truss has said she was “appalled” by the allegations. Mr Fahie, the elected head of government of the British overseas territory, was arrested by US Drug Enforcement Agency (DEA) officials in Florida, alongside senior…

Financial Crimes See Former Nicaragua Presidential Candidate Held for Eight Years

Money Laundering, Prosecutions
A former presidential candidate, Chamorro was found guilty of activities related to money laundering and misuse of funds, in a trial that opposition of the Nicaraguan government say was politically motivated. Chamorro may have to see out her sentence in house arrest, or in jail, depending on a forthcoming decision coming from the Nicaraguan judiciary. The children of ex-president Violeta Barrios de Chamorro, Cristiana and her brother were found guilty of their financial crimes earlier this month. Their father was victorious against the central American nation’s current premier, Danial Ortega, in elections in 1990 – an event which brought Ortega’s…

Britain’s Money Laundering Scandal Goes Back a Long Way

Money Laundering
The war in Ukraine has turned a lot of people’s attention to oligarchs in the UK. How did these guys all end up in London, seemingly owning half of Belgravia? In Butler to the World, Oliver Bullough offers an answer. I read his earlier work Moneyland slack-jawed at the blatant – and mundane – techniques employed to register UK Ltd companies through frontmen and use them to launder money. I thought the middle men would be glamorous and slick, not running a website from an office above a chip shop. In this work Bullough looks at the bigger picture: the…

Using AI to Fight Money Laundering

Money Laundering
The Fintech industry’s rapid growth and use of new technologies to meet the rise in demand for online services has brought with it increased levels of cyber crime. Criminals have taken advantage of the benefits digital banks offer to access money, launder illicit money and fund terrorism worldwide. The growth in technology for blockchain and digital payments provides new opportunities for criminals to launder funds at faster speeds and larger scales than they might have been able to previously. According to UK Finance, criminals stole a total of £753.9 million through fraud in the first half of 2021, an increase…

EU Anti Money Laundering Supervision Improving But Not Yet Always Effective

Money Laundering, Terrorism
The EBA published today the findings from its assessment of competent authorities’ approaches to the anti-money laundering and countering the financing of terrorism (AML/CFT) supervision of banks. Since the EBA started those reviews in 2019 and strengthened its AML/CFT guidance, national supervisors have started to adopt meaningful reforms to improve their AML/CFT supervision, but the EBA found that significant challenges remain in important areas such as the identification and assessment of money laundering and terrorist financing (ML/TF) risks. The EBA found that most competent authorities in its sample were committed to strengthening their approach to AML/CFT supervision. Several competent authorities…

Treasury Publishes National Risk Assessments for Money Laundering, Terrorist Financing, and Proliferation Financing

Money Laundering, Risk Assessments, Terrorism
WASHINGTON – The U.S. Department of the Treasury today issued the 2022 National Risk Assessments (NRAs) on Money Laundering (NMLRA), Terrorist Financing (NTFRA) and Proliferation Financing (NPFRA). These documents highlight the most significant illicit finance threats, vulnerabilities, and risks facing the United States. The United States is vulnerable to all three forms of illicit finance because of the size and sophistication of the U.S. financial system and centrality of the U.S. dollar in the payment infrastructure of global trade. These NRAs are the third iteration of the NMLRA and NTFRA since 2015 and second for NPFRA since 2018. They take…

Tencent Dives on Report of Record Fine for Money Laundering

Money Laundering, Regulatory Fines
Tencent Holdings Ltd. extended losses to close more than 10% lower after the Wall Street Journal reported it faces a record fine for violating Chinese anti-money laundering regulations. The People’s Bank of China found Tencent’s WeChat Pay had allowed the transfer of funds for illicit purposes such as gambling, the newspaper reported, citing unidentified people familiar with the matter. WeChat Pay was also judged non-compliant with other rules that required Tencent to identify users and merchants transacting on the platform, the Journal said. A probe into potential money-laundering would open a new front in Beijing’s sweeping crackdown on the internet…

Lack of System Tuning, Unsustainable Alert Backkigs Leads to $140 million USAA AML Penalty

Money Laundering, Regulatory Fines
Over the years, more and more attention has been drawn to banks and anti-money laundering failings, with news headlines hitting the mainstream, over the last decade hitting historic figures in the billions of dollars – just against one institution. Banks often include in their responses that such issues were “historic,” with the caveat they have since moved on and corrected the identified deficiencies, but from time to time, the failings have been found to be more recent – case in point, USAA Federal Savings Bank (USAA FSB). The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of the…