26 February 2020
US OPIOID CRISIS: UK DRUGMAKER CONTINUED TO SHIP SUSPICIOUS ORDERS WITHOUT MAKING SURE THE DRUGS WEREN’T GOING TO BE DIVERTED TO THE BLACK MARKET
On 25 February, AP reported on the $1.6 billion settlement between UK-based company Mallinckrodt and the DoJ. It was one of the highest-volume opioid producers in the US at the height of the nation’s prescription drug crisis, shipping 2.3 billion pills from 2006 to 2014. The company’s potent 30 milligram pills were especially sought after by people with addiction. However, whilst it did not promote opioids to doctors or understate the addiction risks, it was accused of continuing to ship suspicious orders without making sure the drugs weren’t going to be diverted to the black market. In a deal similar to another major supplier, Mallinckrodt is filing for bankruptcy and will make payments for 8 years after the company emerges from the protection of the bankruptcy regime.
HOW THE NIGERIA ADMINISTRATION PLANNED TO TRANSFER $110 MILLION IN ABACHA LOOT TO ANOTHER ALLEGED MONEY LAUNDERER
On 26 February, KYC 360 carried a Preium Times story from Nigeria claiming that, despite attempts by the Buhari administration to deny the transfer of $110 million stolen from government treasury by late military tyrant, Sani Abacha (and apparently kept in a trust held in the UK), to Abacha’s associate, and current governor of Kebbi State, Abubakar Bagudu, US court papers are said to show that the administration signed 2 agreements – in 2018 and 2019 – with Bagudu, said to be a close friend of the President, that effectively sealed the transfer of the money to the governor. The US Government is resisting a plan by the Nigerian government to transfer over $110 million to Bagudu.
CYPRUS CASINO OWNER MELCO UNDER REGULATORY SCRUTINY ON 3 CONTINENTS OVER MONEY LAUNDERING AND BRIBERY CONCERNS
On 26 February, KYC 360 reported that Moneyval, said in December 2019 that it had discovered “weaknesses” in compliance at the casino at a time when the business was planning an “aggressive expansion”. However, it is also said that Lawrence Ho’s Melco Resorts is under the scrutiny of regulators in at least 3 jurisdictions, while Japanese authorities are investigating its potential links to bribery claims and a powerful Australian probe considers its purchase of a 10% stake in Crown Casinos last year.
NETHERLANDS: CONFIDENTIALITY OF PARTIES REPORTING POSSIBLE MONEY LAUNDERING
On 18 February, law firm NautaDutilh published an article about questions asked in the Dutch parliament about the confidentiality of SAR submitted to the national FIU by civil law notaries. The questions essentially were concerned with asking whether it would be possible for civil-law notaries filing reports could to do so without their identity being disclosed in the criminal case file, given the potential risks (such as threats) that might then arise. It was said that, wherever possible, the prosecution service was cautious about giving the name of a reporting party in a criminal file, but in cases where a transaction declared suspicious by the FIU was important in a criminal case, the transaction might need to be referred to in the file. One suggestion was that an SAR could be submitted by the sector’s trade body, rather than individual notaries. The minister involved indicated that he was prepared to consult with the notaries’ representatives to investigate whether and how improvements could be made to the reporting process.
TURKEY: EXPORT OF NUCLEAR MATERIALS WILL BE SUBJECT TO THE LICENCE GRANTED BY NUCLEAR REGULATORY INSTITUTION
On 24 February, Herdem, a law firm in Turkey, published an article on Regulations on Nuclear Material Control designed to assist in preventing the spread of nuclear weapons. The Nuclear Regulatory Institution (NDK) regulates the procedures and principles of the export control regarding the designated and/or created materials, products, equipment, component and related technology which are deemed to be used for nuclear activities – and issues relevant export licences, which are valid for 6 months. Under the amended regulations, the export of any nuclear material falling in scope of the Regulation will be subject to the written opinion of the Ministry of Defense and Foreign Affairs, as well as the written approval of NDK.
2 BROTHERS SMUGGLED RARE CORALS AND OTHER MARINE FAUNA FROM FLORIDA TO LATIN AMERICA
The Sun Sentinel on 25 February reported that Alvaro Cortes and Olga Rodriguez were allegedly at the centre of a wider conspiracy to traffic internationally protected marine wildlife. The case follows the 2015 seizure in Miami of a consignment to Bogota that included rare elkhorn, frogspawn, and green leather corals, alongside vulnerable giant clams, puffer fish, and damsel fish. Recently, 2 brothers, their alleged co-conspirators, were sentenced to 6 months in federal prison in Florida for wildlife trafficking.
SWITZERLAND: BERN POLICE UNCOVER EXTENSIVE PEOPLE SMUGGLING
On 26 February, Swissinfo reported that Swiss police have charged 5 people in connection with extensive people smuggling operations. 3 men living in Bern are accused of having illegally transported or organised the smuggling of over 90 people in at least 30 cases between June 2017 and April 2019. It is said that mostly adults from the Middle East were picked up in northern Italy and transported across the border into Switzerland, or via Switzerland to Germany or Austria, using private or company vehicles.
KPMG ISSUES WARNING TO ISLE OF MAN BUSINESSES IN BREACH OF ECONOMIC SUBSTANCE RULES
International Investment on 26 February said that Robert Rotherham, a tax director at accounting consultancy KPMG, has said that economic substance is here to stay and with the Isle of Man Income Tax Division now having released the new company tax returns it is imperative that affected businesses understand how they should complete them and what this means for them in the context of the economic substance rules. The Division can issue penalties of £10,000 to £50,000 for breaches of the economic substance rules.
GEORGIA’S FINANCE MINISTER PRESENTS NEW INITIATIVE TO REDUCE GAMBLING-RELATED MONEY LAUNDERING
On 26 February, European Gaming published an article on a new initiative just announced to reduce money laundering risks related to gambling. The initiative includes the implementation of a new system for the registration and verification of the identity of players. It also aims to create a list of people addicted to gambling and to control the movement of funds through identified channels.
US COURT CASE ALLEGING DELIBERATE UNDERVALUING OF FANDUEL FANTASY SPORTS COMPANY
On 25 February, the Wall Street Journal reported that FanDuel’s founders and more than 100 former employees allege the company’s board of directors and private-equity investors intentionally undervalued the sports-betting operator to shut them out of an acquisition deal. FanDuel was a fantasy-sports giant now pursuing the US sports-betting market. It merged with the US operations of Dublin-based Paddy Power Betfair PLC in 2018 to create FanDuel Group. The Paddy Power company was later renamed Flutter Entertainment PLC.
TURKEY’S STATE-OWNED HALKBANK HAS AGREED TO APPEAR IN US COURT TO CHALLENGE AN INDICTMENT OVER ALLEGED CONSPIRACY TO CIRCUMVENT US SANCTIONS AGAINST IRAN
The EU Sanctions Blog on 26 February reported that. Halkbank had previously refused to enter a plea in response to the charges relating to a $20 billion oil for gas scheme on the basis it did not accept US jurisdiction.
THIRD COUNTRIES AGREE TO ALIGN WITH EU TERRORISM SANCTIONS
An EU news release on 25 February advised that North Macedonia, Montenegro, Serbia, Albania, Bosnia and Herzegovina, Ukraine, and Moldova had agreed to align themselves with the terrorism sanctions first imposed in 2001 and recently renewed for a further year.
MÉDECINS SANS FRONTIÈRES (MSF) GRANTED AN EXEMPTION FROM UN SANCTIONS ON NORTH KOREA
On 26 February, the EU Sanctions Blog reported that MSF had been granted an exemption to UN sanctions on the DPRK to assist with the diagnosis and management of coronavirus.
UK: CALL FOR VIEWS ON PROCESSING OF PERSONAL DATA RELATING TO CRIMINAL CONVICTIONS
On 26 February, the British International Freight Association reported that the Information Commissioner’s Office is undertaking a consultation to find out if gaps exist in controllers’ awareness and understanding of the data protection requirements for processing Article 10 data – which allows organisations to process personal data relating to criminal convictions and offences, or related security measures for many reasons. The deadline for responses is now 13 March.
EX-MP IN PAPUA NEW GUINEA FACING 6 FRAUD-RELATED CHARGES
On 26 February, Radio New Zealand reported that a former MP in Papua New Guinea is facing 6 fraud-related charges linked to an illegal transfer of company shares. Alois Kingsley is due to appear before a Port Moresby court charged with 2 counts each of forgery, utterance and stealing. He was a former culture minister and an MP from 2002 to 2007.
US: RHODE ISLAND WOMAN’S REAL ESTATE PONZI SCHEME
On 26 February, the FBIO published a report saying that Monique Brady, a Rhode Island woman, preyed on the trust of friends, family, and neighbours in a dubious investment scheme, was sentenced to 8 years in prison and ordered to pay back her victims. She claimed her property preservation company, MNB, had contracts to rehabilitate New England properties and that she said she needed investments of $20,000 to $80,000 to pay subcontractors to perform the work. In return, investors were promised a 50% yield once the rehabilitation work was complete.
CLAIM THAT OVER US$7 BILLION STASHED OUTSIDE ZIMBABWE
Zbc IN Zimbabwe on 26 February reported that the Zimbabwe Anti-Corruption Commission (ZACC) claimed to have identified over US$7 billion in cash and properties stashed outside the country by former and current senior government officials and captains of industry. Some of the properties and cash were reportedly identified in Switzerland, London, the US, Singapore, Hong Kong, Malaysia, Mauritius and Spain.
CORRUPTION CONTINUES TO BE A MAJOR PROBLEM FOR THE BUSINESS ENVIRONMENT IN ROMANIA, SAYS EU
On 26 February, the Romania Journal reported on an European Commission report which says, inter alia, that corruption continues to be a major problem for the business environment in Romania, and that while the government currently supports actions to prevent and sanction corruption, Romania is facing important challenges to restore progress in the fight against corruption following damages done in the past years through legislative amendments and continued pressure on judicial institutions.
NIGER: POLICE RESCUE 232 VICTIMS OF HUMAN TRAFFICKING
An Interpol news release on 26 February advised that police in Niger have rescued 232 victims of human trafficking, including 46 under the age of 18, during an INTERPOL-supported operation targeting organised crime groups in West Africa.
FINLAND’S CUSTOMS SITS ON $14 MILLION WORTH OF CONFISCATED BITCOINS
On 26 February, the Crypto Potato website claimed that Finnish Customs seized 1,666 bitcoins several years ago during drug busts.
BLACK MARKET FOR MAYAN ARTEFACTS STILL THRIVES IN GUATEMALA
On 26 February, Insight Crime carried an article saying that Guatemalan authorities have carried out raids at a shop selling illegally sourced artefacts, renewing focus on the country’s struggles to stamp out the remains of a once-flourishing black market. It says that raids on local store owners may not be enough to protect Guatemala’s Mayan sites from looting, or to keep antiquities stolen from them off the black market. It is said that Mayan sites were mostly plundered between the 1960s and 80s, when a wave of pre-Colombian exhibitions in the US increased demand from museums and private collectors, and civil war forced some archaeologists to flee excavation sites, leaving them exposed. The black market today mostly comprises small pieces like shells, jewellery and bones featuring detailed carvings and calligraphy.
CAMBODIA: NEW DEEP-WATER PORT IN SE ASIA TO HELP SHIPPERS BYPASS CHINA
On 25 February, Port technology reported that Cambodia is going to build a new multi-purpose deep-sea port alongside the Sihanoukville Autonomous Port within the Sihanoukville Port Special Economic Zone (SPEZ) to transport goods directly to the US. It is said that it will be built with assistance from the Japan International Cooperation Agency (JICA), an organisation that looks to increase trade collaboration across Asia.
FORMER BRITISH ALSTOM EXECUTIVE HOSKINS WIN PARTIAL ACQUITTAL ON FCPA CHARGES
The FCPA Blog on 26 February carried a post saying that a federal judge has achieved a partial acquittal for Lawrence Hoskins, the former Alstom SA executive convicted by a federal jury in November of bribing officials in Indonesia, ruling that prosecutors had failed to prove he violated the FCPA by acting as an agent of Alstom’s Connecticut subsidiary. However, the money laundering convictions were upheld, and federal prosecutors can appeal the judge’s decision.
US DEPORTS THAI MAN CONVICTED OF UNLAWFUL EXPORT OF FIREARM COMPONENTS
On 26 February, a news release from US Immigration and Customs Enforcement announced that it had removed Thai national Apichart Srivaranon, 35, to Thailand. He had pleaded guilty to charges in January and March 2019 and was sentenced to 26 months in prison. He had been convicted of for conspiring to violate the Arms Export Control Act and for attempts to export firearms parts to Thailand and he had purchased firearms parts online from US gun manufacturers. He also directed his co-conspirators to falsely declare the contents of these packages when shipped, listing the contents as spare parts, bicycle parts, fishing parts, or toy parts, and then ship them to Thailand via USPS and private shipping companies. To avoid detection, he instructed his co-conspirators to alternate the frequency and addresses of shipments, as well as the estimated value of the contents of the shipments.
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