NEWS ARTICLES

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…

Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds

Money Laundering
SummarySeeking views on amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. This consultation closes at 11:45pm on 14 October 2021 Consultation descriptionThis consultation invites views and evidence on the steps that the government proposes to take to amend the Money Laundering Regulations (MLRs). These amendments will allow the government to make some time-sensitive updates to the MLRs, which are required to ensure that the UK continues to meet international standards set by the Financial Action Task Force, whilst also strengthening and ensuring clarity on how the anti-money laundering regime operates, following…

Transforming to a Forward Looking Regulator – Nikhil Rathi, FCA CEO

Regulation
Highlights Being more innovative – data is the lifeblood of a modern regulator. Being more assertive – acting decisively and being clear about what we’re doing, why we’re doing it and where the limitations lie. Being more adaptive – working flexibly to respond to ever-changing challenges. Measuring our success – we will be clearer on what outcomes matter and what metrics we use to measure them. When I became CEO last October, I joined a purposeful organisation. Our people working round the clock with great energy and to great effect to stand up for consumers and businesses affected by the…

UK Government to Scrap National Fraud Reporting Centre

Fraud
UK national fraud and cybercrime reporting centre Action Fraud is being scrapped, the government said in its Beating Crime Plan. This comes after an undercover investigation by The Times in 2019 revealed that the centre’s telephone handlers were being trained to mislead victims into thinking their cases would be investigated, while they were almost never looked at. According to the newspaper, as few as one-in-50 reports actually led to a fraudster being caught and that only one-in-200 police officers were assigned to fraud investigations. This prompted the Home Office to commission a review of fraud policing in the UK, led…

Companies House: ‘Enabler of Illegal Activity’

Financial Crime
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

Financial Crime
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…

Covid-19 Support Could Cost U.K. Taxpayers Billions in Fraud and Error

Fraud
The UK’s House of Commons Public Accounts Committee has estimated that fraud and error related to Covid-19 support schemes could cost UK taxpayers billions of pounds. In a new report focusing on fraud and error relating to government support schemes, the committee said undetected fraud and error resulted in losses to the public purse of around £25 billion a year. This amount could be doubled through fraud relating to Covid support, with evidence from the Cabinet Office suggesting that fraudulent claims for Universal Credit, furlough and the Bounce Back Loan Scheme could add up to losses of more than £30bn.…

European Commission Overhauls Anti-Money Laundering and Countering the Financing of Terrorism Rules

Money Laundering, Regulation
The European Commission has today presented an ambitious package of legislative proposals to strengthen the EU’s anti-money laundering and countering terrorism financing (AML/CFT) rules. The package also includes the proposal for the creation of a new EU authority to fight money laundering. This package is part of the Commission’s commitment to protect EU citizens and the EU’s financial system from money laundering and terrorist financing. The aim of this package is to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system. As…

Ex-bank Director and Minister Jailed in Portuguese Money Laundering Case

Money Laundering, Prosecutions
Armando Vara, a former director of Portugal’s state-owned Caixa Geral de Depositos bank and ex-government minister, has been imprisoned for two years for money laundering. He is already behind bars for a separate offence. The public prosecutor told Lisbon criminal court of a complex financial circuit of accounts in Switzerland and offshore companies, with Vara as the true beneficiary, and mentioned around €2m ($2.37m) being transferred to a Swiss account in the name of Vama, an offshore company of which Vara was ultimate beneficiary. When questioned by the criminal investigation judge in 2009, Vara admitted ownership of all the accounts…

Corruption and Cybercrime Top List of U.S. Anti-Money-Laundering Concerns

Money Laundering
The U.S. Treasury Department on Wednesday issued a wide-ranging set of national anti-money-laundering priorities, naming corruption and cybercrime among the areas where financial institutions should focus their compliance resources. The list is the first created by the Treasury’s Financial Crimes Enforcement Network, or FinCEN, following a major overhaul of U.S. anti-money-laundering laws in January. Legislation passed by Congress required FinCEN to develop a national strategy for countering money laundering and terrorism financing and to issue a list of priorities every four years. Financial industry groups had advocated to make the prioritization effort a part of the anti-money-laundering act, hoping it…

HSBC faces questions over disclosure of alleged money laundering to monitors

Money Laundering, Prosecutions
Bank was under supervision by US Department of Justice-appointed team because of previous violations HSBC discovered a suspected money laundering network that received $4.2bn (£3bn) worth of payments, it has emerged, raising questions over whether it disclosed the information to US monitors who at the time were ensuring the bank cleaned up its act. Insiders who spoke to journalists as part of a joint investigation by the Guardian and the Bureau of Investigative Journalism, have suggested that HSBC may not have appropriately shared the information with the monitoring team installed by US regulators in 2012 after HSBC allowed drug cartels…

Binance Crackdown: Regulators Tussle with the “Wild West” World of Crypto

Digital Currencies, Regulation
Changpeng Zhao’s company Binance is everywhere and yet based nowhere. The cryptocurrency exchange has processed trillions of dollars in trades this year as it transfers digital and conventional money around the world through a constellation of affiliates. And yet it has no headquarters. Incorporated in the Cayman Islands, the company has grown at extraordinary speed into a leading player in the fledgling industry. But the 44-year-old Canadian-Chinese mogul’s business empire is now attracting intense scrutiny from global watchdogs as they grapple with new financial entities that act in many jurisdictions but are rooted in none. Binance has led a peripatetic…

Binance CEO ‘Responds to Global Regulatory Pressure Calling Compliance a Journey’

Digital Currencies, Regulation
“We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” said CZ. Binance CEO Changpeng “CZ” Zhao has likened the recent pressures by regulators against his exchange business to that of the initial development of the car. In an open letter on Wednesday, CZ said the adoption and development of crypto contained many parallels to regulations around automobiles in that “laws and guidelines were developed along the way.” “We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” said CZ. “More regulations are, in…

Deutsche Bank Enabled Massive US Ponzi Scheme

Fraud, Prosecutions
Deutsche Bank AG is accused of turning a blind eye to a years-long Ponzi scheme that involved fraudulent investments in Florida, expanding the growing list of legal and compliance headaches for Chief Executive Officer Christian Sewing. Liquidators of two now-bankrupt Cayman Islands investment funds sued the bank in New York and Florida, claiming it “enabled theft on a massive scale” that led to hundreds of millions of dollars in losses, court records show. Deutsche Bank maintained accounts for entities involved in the scheme despite repeated red flags and SEC sanctions against them, and it failed to enforce its own rules…

Unseen and Unsanctioned, Belarusian Tycoon Slipped into the EU via Lithuanian Investments

Sanctions
Alexei Aleksin and Alexander Zaytsev have emerged as two of the wealthiest businessmen in Belarus. What are they doing in Lithuania? Key Findings Aleksin and Zaytsev began to receive generous economic preferences from dictator Alexander Lukashenko in the aftermath of 2012 sanctions against his regime. Around the same time, they managed to obtain Lithuanian residency permits and opened companies there. The nature of their activities in Lithuania raise serious questions about what they are doing in the EU member state. Aleksin registered a company in an abandoned building, then used it to buy an apartment where two more firms are…

5 Recommendations for Improving National Security & Fighting Financial Crime

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…

Nigerian influencer pleads guilty to money laundering

Money Laundering, Prosecutions
Nigerian influencer Ramon Abbas – also known as Hushpuppi – has pleaded guilty to money laundering in a US court. Hushpuppi, 37, is known for posting photos of his lavish lifestyle on Instagram, where he has 2.5m followers. Court documents filed in California said Hushpuppi’s crimes cost victims almost $24m (£17m) in total. In one scheme, Hushpuppi attempted to steal more than $1.1m from someone who wanted to fund a new children’s school in Qatar, the documents said. Court records unsealed this week show he pleaded guilty to this charge on 20 April. The documents state that between 18 January…

Money Laundering Case Against Lionel Messi Dismissed

Fraud, Money Laundering, Prosecutions
Fresh allegations accusing top footballer Lionel Messi of fraud, embezzlement and money laundering have been dismissed by a Spanish court. The national court ruled that after two years of investigation “no criminal act on the part of the people targeted by the complaint could be proven,” Agence France-Presse news agency reported. Federico Rettori, an Argentine national living in Spain, claimed he formerly worked for Messi’s charity and alleged funds received by the foundation which should have been directed to social causes went instead “towards various private activities or bank accounts that differed from those that were declared by the foundation”.…