NEWS ARTICLES

Behind Suex.io: the first sanctioned cryptocurrency exchange

Digital Currencies, Sanctions
This morning, OFAC sanctioned SUEX.io, a concierge cryptocurrency exchanger incorporated in Czechia but operating in Russia. This action comes as OFAC and the US Government writ-large try to tackle the festering problems posed by ransomware, and the criminal syndicates using it to extort billions of dollars out of victims around the world. SUEX filled an essential niche in the ecosystem of underregulated exchanges that, either through willful ignorance or witting cooperation, facilitate the conversion of illicit crypto ransoms into real-world currency. SUEX largely communicated with its clients on the Telegram app and accepted new customers on a system of referrals…

UK Fraud is Big Business at £52bn Each Year Says Financial Crime Guru

Fraud
Financial crime, fraud and hacking soared during the pandemic as criminals took advantage of behavioural changes during three strict lockdowns. In fact, fraud and cybercrime jumped by nearly a third in the last twelve months. Time for City A.M. to catch up with financial crime guru Richard Wood, a former Morgan Stanley fraud manager who became CEO of economic crime solution provider Synectics Solutions in January of last year. For the last 30 years, the company has been working to prevent financial crime, fraud and money laundering and helps clients such as the Cabinet Office, a range of City banks…

IRS chief tells Elizabeth Warren: More transparent bank data can fight tax evasion

Tax Avoidance
The head of the IRS believes more rigorous disclosures from the nation’s banks could help fix a yawning tax gap and recoup billions in owed revenues. In a letter viewed by CNBC, IRS Commissioner Charles Rettig told Sen. Elizabeth Warren, D-Mass., that relying on banks to report basic information about their customers’ deposits and withdrawals could put a big dent in annual tax evasion. A source provided CNBC access to the letter, which is expected to be released Thursday. The source disclosed its contents on condition of anonymity. The IRS chief told Warren in Friday’s letter that years of budget…

Spanish Police Seize Over a Tonne of Cocaine Bound for Europe

Drug Trafficking
Spanish authorities seized more than 1,200 kilograms of cocaine off the coast of the Canary Islands, an archipelago frequently targeted by transnational crime groups as a launch point for European-bound cocaine shipments because of its geographical position. Spain’s National Police, in a joint operation with the country’s Civil Guard and Tax Agency, reported on Sunday that they intercepted a vessel on the morning of September 20th, while it was still some 600 miles west of the islands, in international waters. Upon investigating the ship’s interior, police uncovered the drugs, which originated from South America. It is presumed that the cargo’s…

N26 Fined for Delayed Money-Laundering Reports by German Finance Regulator

Regulatory Fines
Germany’s financial watchdog BaFin has issued a fine to digital bank N26 for delayed reporting of suspicious money-laundering activity, the bank said on Tuesday. BaFin ordered N26 to pay 4.25 million euros ($5.0 million) in June related to the delayed submission of suspicious activity reports “in the area of anti-money laundering,” in 2019 and 2020. The fine, related to fewer than 50 reports, was paid on July 14, Berlin-based N26 said, adding that all proceedings have been closed. In May, the regulator ordered N26 to implement internal safeguards to prevent money laundering and terrorist financing, including by rectify deficiencies in…

Buckland calls for tougher corporate crime laws

Legislation
The lord chancellor has called for stronger laws against companies that facilitate economic crime – but said that firms should not face an ‘undue burden of compliance’. Speaking at the International Symposium of Economic Crime, Robert Buckland said there are concerns that the current law on corporate criminal liability is not fit for purpose, especially when applied to large corporates. ‘Reform may indeed be needed to ensure that organisations of all sizes can be held to account and serious crimes can be punished appropriately,’ he said. ‘At the same time, it is of course important to ensure that any reform…

SEC Issues $114 Million to Two Whistleblowers

Whistleblowing
The U.S. Securities and Exchange Commission awarded about $114 million in total to two whistleblowers, including one who provided independent analysis to the regulator that helped substantially advance investigations, the SEC said. With the latest awards, the SEC whistleblower program has paid out more than $1 billion to 207 whistleblowers since issuing its first award in 2012, the agency said. That marks a milestone for the SEC whistleblower program created by the 2010 Dodd-Frank Act. The SEC announced the awards Wednesday but didn’t name the cases involving two companies that the awards are connected to and didn’t identify the tipsters,…

29 Crypto Exchanges Meet Registration Deadline But Face Challenges

Digital Currencies, Regulation
Twenty-nine of Korea’s 66 cryptocurrency exchanges met a legal deadline to put themselves under regulatory supervision, but they still face challenges, market insiders said Sunday, such as risks from legal breaches and an inability to convert coins into Korean won. The Financial Services Commission said Saturday that 29 exchanges submitted applications to register their businesses by Friday and will process them within three months, legitimizing their status as market players but also subjecting them to regulatory monitoring and supervision. The registration brings them out of local legal blind spots, but the exchanges now have to abide by global rules on…

U.S. Charges 138 Medical Workers for US$1.4 Billion Fraud

Fraud, Prosecutions
The Department of Justice last week announced criminal charges against 138 doctors, nurses and licenced medical professionals for their alleged involvement in fraud schemes worth around US$1.4 billion. Authorities accused 43 suspects from 31 federal districts of causing $1.1 billion of that loss through fraudulent claims in telemedicine — medical services offered online. The rest involved “sober homes”, COVID-19 related fraud and opioid distribution schemes. Court documents show that some telemedicine executives paid doctors and nurses to order unnecessary medical equipment and pain medications often after interacting with patients only briefly over the phone or not at all. The companies…

CLSAP NZ hit with $770,000 fine for anti-money-laundering law breaches over $50m in transactions

Money Laundering, Regulatory Fines
A New Zealand derivatives trading firm and subsidiary of a Hong Kong company has been fined $770,000 for breaching anti-money-laundering laws over nearly $50 million of suspicious transactions. CLSA Premium New Zealand Limited (CLSAP NZ) admitted it was out of line with the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act in a High Court settlement with the Financial Markets Authority (FMA) earlier this year. As part of its agreement with the markets watchdog, CLSAP NZ admitted to failing to conduct enhanced customer due diligence over 12 transactions and failing to conduct customer due diligence in relation to one…

How the Taliban is funded: Where the Militant Group Gets Money and Weapons

Drug Trafficking
The Taliban have built a financial empire, but it could be thinly stretched as they become the Afghan government The swift Taliban military onslaught that saw the militant group take over the whole of Afghanistan in a matter of weeks revealed how wealthy it has become since the ousting of its regime in 2001. In the past two decades, the insurgents have run a state-like economy in the areas they controlled. They relied on various fundraising sources, such as drug trafficking and other criminal activities, extortion and taxes, charitable donations and foreign assistance. “The Taliban operates a classic ‘territory controlling’…

Ex-MP Charged With Making Fraudulent Invoices

Fraud, Prosecutions
Rosemary Ainslie, head of Special Crime at the CPS, said: “The Crown Prosecution Service has today authorised police to charge Jared O’Mara, former MP for Sheffield Hallam, with seven counts of fraud by false representation. “The charges relates to an allegation he made fraudulent invoices to the Independent Parliamentary Standards Authority in 2019 jointly with Gareth Arnold, who is also charged with six counts of the same offence. “Jared O’Mara is charged jointly with John Woodliff with a Proceeds of Crime Act offence. The CPS made the decision that the three men should be charged after reviewing a file of…

HM Treasury Consults on Extending SMCR to FMI

Senior Managers & Certification Regime
It is little over six months since the phased roll-out of Senior Managers and Certification Regime (SMCR) reached a climax-of-sorts, with the introduction of the regime for benchmark administrators. The scope of the landmark regime – which is part of the UK regulators’ drive to improve culture, governance and accountability – is, however, set to be further extended, with HM Treasury having launched a consultation on applying the SMCR to financial market infrastructures (FMIs). The consultation proposes a regime for the following Bank of England-supervised entities: central counterparties (CCPs); central securities depositories (CSDs); and recognised payment systems and specified service…

Scrap €10k AML Monthly Rent Limit for Letting Agencies, say Propertymark

Money Laundering
Trade body leader, Mark Hayward, suggests that letting agencies should be treated like their sales counterparts to aid AML and stamp out money laundering via property in the UK. Propertymark has called for the €10,000 euro limit on lettings agents having to comply with anti-money laundering (AML) legislation to be scrapped. The trade body’s remarks follow HM Treasury’s announcement that it has launched two consultations to ensure its anti-money laundering processes and supervisory regimes are up to scratch. The Treasury says this offers the opportunity to ensure the regime responds to the UK’s particular circumstances and risks, is as effective…

Crown Court Clogged by Low Value Fraud Cases

Fraud
The Crown court heard almost double the number of fraud cases in the first half of 2021 than in the same period last year – but a drop in the value of alleged frauds suggests that complex hearings are still being delayed. Research by Big Four firm KPMG found that 151 criminal fraud cases – each worth over £100,000 – were heard in the first six months of 2021, as courts began to recover from the pandemic. Just 180 cases were heard in the whole of 2020. Cases relating to rogue tradesmen more than doubled in volume in the first…

China’s Planned Anti-Sanctions Law for Hong Kong Unsettles Financial Sector

Sanctions
Global banks and other financial institutions in Hong Kong are scrambling to find out details of China’s planned imposition of an anti-sanctions law on the city, and trying to understand how it could impact their operations in the financial hub. Beijing adopted a law in June under which individuals or entities involved in making or implementing discriminatory measures against Chinese citizens or entities could be put on a government anti-sanctions list. Financial firms are closely watching a meeting this week of the National People’s Congress Standing Committee, the highest organ of China’s parliament, for signs on how and when similar…

London Court Orders Binance to Trace Cryptocurrency Hackers

Digital Currencies, Financial Crime
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…

EBA Consults on New Guidelines on the Role of AML / CFT Compliance Officers

Money Laundering
The European Banking Authority (EBA) recently launched a public consultation on new Guidelines on the role, tasks and responsibilities of anti-money laundering and countering the financing of terrorism (AML/CFT) compliance officers. The Guidelines also include provisions on the wider AML/CFT governance set-up, including at the level of the group. Once adopted, these Guidelines will apply to all financial sector operators that are within the scope of the AML Directive. This consultation runs until 2 November 2021. The draft Guidelines comprehensively address, for the first time at the level of the EU, the whole AML/CFT governance set-up. They set clear expectations…

Danske Bank Defeats Appeal in U.S. Over Money Laundering Scandal

Money Laundering
NEW YORK, Aug 25 (Reuters) – Danske Bank A/S (DANSKE.CO) and former top executives on Wednesday defeated an appeal in New York by shareholders claiming they were defrauded because the Danish bank allowed widespread money laundering at its former Estonian branch. The lawsuit began after Danske said in September 2018 that an internal probe had uncovered about 200 billion euros ($235 billion) of suspicious transactions through its Estonian branch from 2007 to 2015. But the 2nd U.S. Circuit Court of Appeals concluded that “money-laundering at a single branch in Estonia cannot alone establish that Danske Bank itself carried out a…

UK/US Impose Sanctions on Russian Intelligence Agents Over Navalny Poisoning

Sanctions
Britain and the United States imposed sanctions on Friday on men they said were Russian intelligence operatives responsible for the poisoning one year ago of Kremlin critic Alexei Navalny. The two countries both targeted seven Russians with sanctions and also issued a joint statement warning Russia over chemical weapons. Washington separately imposed sanctions on another two men and four Russian institutes it said were involved in chemical weapons research or what it described as an assassination attempt against Navalny. Navalny was flown to Germany for medical treatment after being poisoned in Siberia on Aug. 20 last year with what Western…

Cryptocurrency is Better for Anti-Money Laundering Than You Might Think

Digital Currencies, Money Laundering
Cryptocurrencies are a haven for fraud, money laundering, and all sorts of criminal activity —this has been a truism since the first days that cryptocurrencies became a topic of conversation in regulatory circles. This perceived risk carried through to compliance functions in banks across the country, where account closures were common for anyone found to be buying Bitcoin. This mindset shifted in recent years, with FinCEN, FATF, and other regulatory bodies acknowledging that blockchain technology carries significant potential worth exploring. They began developing new frameworks to manage the risks presented by the many novel aspects of blockchain technology without stifling…

U.K. Fraud Watchdog Digs into Alleged Mine Bribes in D.R. Congo

Bribery, Corruption
The U.K.’s Serious Fraud Office (SFO) is investigating alleged corruption in mining deals in the Democratic Republic of Congo (DRC), where foreign companies purportedly bribed officials up to US$360 million between 2006 and 2011. U.K. investigators first referred the case to Swiss authorities in 2014, and again in 2019 on the back of related claims of money laundering. The March 30 Swiss Federal Criminal Court decision dismissing the appeal made by one of the companies in question, which reveals details about the case for the first time, was only recently made public. The judgment identifies an anonymous individual “C” as…

Money Laundering Thrived During Covid Pandemic

Money Laundering
There was a dramatic increase in money laundering fines in 2020 as financial crimes boomed during the coronavirus pandemic. Authorities handed out $2.2 billion in fines last year, five times larger than 2019’s total, according to a report from Kroll, a risk consultancy. Financial firms were given the largest fines for failures in anti-money laundering (AML) and suspicious activity monitoring. “The tolerance level for AML failings is seriously reducing and as a result we think fines are going up to reflect that,” says Claire Simm, managing director of financial services compliance at Kroll. Australia doled out the largest fines in…

Why Italian Mafia are Setting Up Home in Spain

Organised Crime
Spain is a second home to many criminal groups, in particular the Italian mafia. The recent arrests of two mafia bosses highlight this trend. At the beginning of August, Domenico Paviglianiti, a high-ranking member of the ‘Ndrangheta mafia group, was arrested in Madrid, where he had been hiding after being wrongly released from prison in Italy. Just two days later, Maria Licciardi, a top boss from the Camorra criminal organization, was detained on her way to Málaga in Spain’s Costa del Sol. Italian mafia groups have taken root in Spain and helped turn the country into a laboratory of organized…

Dark Web Drug Dealer Indicted for Laundering $137 Million in Bitcoin From Prison

Digital Currencies, Money Laundering
A drug dealer, jailed since 2018 over drug charges, has been indicted for laundering 2,933 Bitcoin while in prison. In brief Maryland’s “Xanaxman” had to forfeit 4,000 Bitcoin in November 2018. That would be worth $187.2 million today. But he allegedly continued his Bitcoin dealings while in prison. He is now indicted for laundering 2,933 Bitcoin, worth $137 million. A dark web drug dealer from Maryland known as Xanaxman is accused by a Maryland federal court of laundering $137 million worth of Bitcoin from prison. Xanaxman, real name Ryan Farace, was imprisoned three years ago for selling Alprazolam, a form…

Serious Fraud Office Investigate Former Owner of Fourcroft Hotel, Tenby and Fishguard Bay Hotel

Fraud, Money Laundering
The Serious Fraud Office (SFO) is investigating suspected fraud and money laundering in relation to the conduct of business by the purchaser of two major Pembrokeshire hotels. The investigation relates to Gavin Woodhouse and individuals and companies associated with him, with the conduct under the spotlight referring to investments offered in care homes and hotels between 2013 and 2019. In 2017, the Fourcroft Hotel in Tenby and the Fishguard Bay Hotel were amongst several in Wales bought by Northern Powerhouse Developments, which was headed by Woodhouse. He encouraged investors to pay thousands of pounds for individual rooms in the hotels,…

Inside the Ndrangheta Drugs Pipeline

Drug Trafficking
In the first part of this investigation, we explored how the ’Ndrangheta syndicate moved cocaine across Europe. Now, we examine their pipeline through Latin America and Africa, showing how the highly-connected Giuseppe Romeo moved drugs through corruption-plagued ports to Antwerp, Rotterdam, and beyond. Key Findings The son of a leading figure in the feared ’Ndrangheta’s Romeo-Staccu clan, Giuseppe Romeo built his own cocaine empire after his father was jailed for 30 years. Known as “Maluferru,” he sourced drugs in Colombia and Brazil, had them shipped to West Africa, and then oversaw their collection on the docks of Europe. Maluferru used…

Active Shipping Companies Linked to Oil Smuggling and Sanctioned Terror Financiers

Sanctions, Terrorism
On Jun. 10, 2021 the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) designated a group of individuals and companies as Specially Designated Global Terrorists (SDGT). The designation is due to the group’s role in smuggling petrochemicals for Iran’s Revolutionary Guard Corps – Qods Force (IRGC-QF) and using the proceeds to finance Houthi rebels in Yemen. Using public records, we found multiple active companies linked to this network in the Middle East, Europe, and Latin America. These general trading and shipping companies, which remain unsanctioned, pose a risk to individuals or companies that might unknowingly do business with them,…

FinCEN Announces New Acting Director

Sanctions, Terrorism
WASHINGTON—Financial Crimes Enforcement Network (FinCEN) Acting Director Michael Mosier today announced he will depart FinCEN at the end of the week for a new opportunity, after serving as the organization’s acting director. Himamauli “Him” Das, a national security expert with experience at the White House, National Security Council, National Economic Council, and Departments of State and the Treasury, will assume the role of acting director of FinCEN. Today, Treasury launched a public search for a permanent FinCEN director. “It is an honor to be returning to the Department of the Treasury as acting director of FinCEN to continue the important…

Sanctions Fine for U.K. FinTech

Sanctions
Over a period of around 21 months up to 18 December 2019, TransferGo facilitated a series of 16 payments to accounts held at the Russian National Commercial Bank (RNCB). During that period, the RNCB was subject to EU sanctions imposed in relation to Russia’s annexation of Crimea. The EU’s sanctions regulations applied directly in the UK during that time as it preceded the end of the Brexit transition period. RNCB remains a sanctions target under the UK sanctions regime, which now operates distinctly from the EU sanctions framework. According to the OFSI, TransferGo had claimed that because “the relevant clients…

EU Takes Another Step to Harmonize Anti-Money-Laundering Rules

Money Laundering
European Banking Authority proposes guidance for financial-sector compliance officers, part of a wider revamp of how the bloc deals with money laundering The European Union’s banking regulator has proposed guidance for financial-sector compliance officers, another step in the bloc’s effort to revamp its anti-money-laundering system. The proposal from the Paris-based European Banking Authority is the latest move by the EU to harmonize anti-money-laundering rules across member states and shift implementation away from national authorities. In July, the European Commission—the EU’s legislative arm—proposed creating an anti-money-laundering agency with direct supervisory authority over financial companies. The proposal came after twin scandals involving…

Equatorial Guinea to Close Embassy After U.K. Sanctioned President’s Son

Sanctions
In protest of the United Kingdom’s decision to put the son of President Teodoro Obiang Mangue on the latest list of individuals sanctioned for corruption, Equatorial Guinea said on Monday it will close its embassy in London. The U.K. last Thursday announced new sanctions against five individuals from Equatorial Guinea, Zimbabwe, Venezuela and Iraq for their involvement in “serious corruption” that has deprived citizens in these countries of “vital resources.” The announcement marks the second round of designations under the U.K.’s Global Anti-Corruption sanctions regime inaugurated in April when 22 individuals were targeted with asset freezes and travel bans. The…

Man Wanted for Buying Stolen van Gogh Paintings Arrested in Dubai

Drug Trafficking, Financial Crime
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…

American Pleads Guilty To Laundering Over $300 Million In Bitcoin

Digital Currencies, Money Laundering
A man in Ohio pled guilty on Wednesday to laundering over US$300 million in bitcoin through his cryptocurrency service accessible on the Darknet. Larry Dean Harmon, 38, admitted to having orchestrated the operation through his bitcoin “mixer”, known as Helix. Helix allowed users, for a fee, to transfer bitcoin, whilst concealing their identity, according to the U.S. Department of Justice. At its core, Helix gave customers the means to conceal their illicit transactions from law enforcement. The service could be accessed through a Darknet search engine known as Grams, which was also run by Harmon. Over 350,000 bitcoin found their…

South Africa Arrests “World’s Most Wanted” Rhino Horn Poachers

Wildlife Trafficking
A rumored aphrodisiac. A cure for cancer and hangovers. A symbol of status and wealth. This is the value and function of rhino horns in Southeast Asia—and what drives its highly lucrative, and highly illegal, trade. South Africa arrested last week two of the biggest names in the industry, Johannes Groenewald – known as Dawie – and Schalk Steyn – known as AB Steyn. For more than a decade, the two were considered rhino horn kingpins and have been cashing in on this market, where rhinos can sell for up to US$30,000. South Africa’s crime investigation team – the Hawks…

Tax Evasion Most Prevalent Financial Crime in Rwanda

Tax Evasion
Tax evasion is the most prevalent financial crime in Rwanda, in terms of money lost, according to statistics from over the last five years, indicating that over Rwf20bn were lost to the vice during this period. According to a report by the Financial Intelligence Centre (FIC), corruption which involves embezzlement of government funds is the most prevalent financial crime in terms of cases, with 1,076 of them recorded. The Financial Intelligence Centre, which previously operated under the National Bank of Rwanda (BNR) is involved in ensuring compliance of regulation and enforcement of the laws and rules in finance and the…

Mozambique ‘Tuna Bond’ Scandal: Ex-President Guebuza’s Son on Trial

Money Laundering
The son of Mozambique’s ex-president and 18 others have gone on trial over the $2bn (£1.5bn) “tuna bonds” affair. Ndambi Guebuza, son of former President Armando Guebuza, and the others face charges of blackmail, embezzlement and money laundering. They have not yet commented on the charges. Mozambique’s biggest corruption scandal led donors including the IMF to cut funding for the country and the economy to collapse. The trial is being held in a large canvas tent in the grounds of a maximum-security prison in the outskirts of the capital, Maputo. The city’s courtrooms were deemed too small for the scores…

Africa Must Build Robust Financial Compliance Systems Against Financial Crime – President Akufo-Addo

Corruption, Money Laundering, Tax Evasion
The President of the Republic, Nana Addo Dankwa Akufo-Addo, has stated that for Africa to be able to transform herself, and become the epitome of economic empowerment and self-reliance, she needs to have the wherewithal to be able to protect and optimise the resources at her disposal. To this end, President Akufo-Addo, speaking at the EBII Africa Investments Risk and Compliance (IRC) Summit, on Friday, 30th July 2021, at the University of Oxford, has admonished African governments to build robust financial compliance systems, and ensure strict enforcement of these systems. Speaking on the theme “Financial Crime Compliance and ESG –…

United Kingdom Threat Assessment 2021 by Financial Crime News

Financial Crime
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…

The Bribery Act – 10 years on

Bribery, Legislation
When the Bribery Act 2010 was introduced it was feted and condemned in equal measure. While supporters claimed it would be the international gold standard for bribery legislation, critics called it draconian. A decade later it seems that, at least in terms of prosecutions, the act falls far short of Draco’s standards. The Crown Prosecution Service and Serious Fraud Office have prosecuted a handful of individuals, and use of the corporate offence under section 7 (failure to prevent bribery) has almost exclusively been confined to deferred prosecution agreements (DPAs), rather than convictions. However, before declaring the act a failure, one…