14th April 2018
REPORT EXAMINES US CIGARETTE TAX EVASION
On 13th April, WSJN in the US reported that a new report from the Mackinac Center for Public Policy takes a look at the rate of inter-state cigarette tax evasion, noting how common smuggling is largely depends on what a given state’s cigarette tax is. It says that New York is the top in-bound smuggling state in the nation, with nearly 56% of all consumed cigarettes being smuggled in from elsewhere. The state’s excise tax of $4.35 per pack.
The report is available at –
FUGITIVE NABBED AFTER 37 YEARS WHEN MOTHER’S OBITUARY LISTS HIS ALIAS
On 13th April, WHIO TV in the US reported that a fugitive was caught in Texas after 37 years on the run, and law enforcement officials are crediting an obituary with leading them to him. Stephen Michael Paris was 22 years old in 1981 – and 19 months into a nine-year sentence on a drug conviction – when he escaped. Agents discovered an obituary for his mother, who lived in Houston before her death and the obituary lists Rahimi’s family, including a son, Steve Chavez. They tracked down the name and found that Paris, now 58, was living and working under that alias in Houston.
IRAQI SHIA MILITIA SMUGGLES OIL INTO IRAN
Oilprice.com on 13th April reported that the Hashd al-Shaabi paramilitary organisation in Iraq is smuggling crude from fields around Kirkuk to Iran, an Iraqi MP told Kurdistan 24, a local news outlet. The Shia organisation is backed by the Iranian government. It reported that the Hashd al-Shaabi, which helped the Iraqi army regain control of Kirkuk and the fields around it from the Kurdish peshmerga, do not report to anyone and the Iraqi government has no way of forcing them to stop smuggling oil to Iran.
IMF STAFF COMPLETES 2018 ARTICLE IV MISSION TO HONDURAS
A news release from the IMF on 13th April at the conclusion of a mission to Honduras includes the comments that sustained anti-corruption efforts must continue to enhance the rule of law, which is a key determinant for both domestic and foreign investment in Honduras. In this regard, it is critical to deepen the advances made in the fight against corruption, including by raising the criminal prosecution rate, enhancing the transparency of the current asset disclosures regime of public officials, and increasing funding and effectiveness of agencies in charge of AML/CFT.
POLICE LOST KEY EVIDENCE IN RUSSIAN WHISTLEBLOWER CASE, INQUEST TOLD
The Guardian on 13th April reported that, at the inquest in London into the death of Alexander Perepilichnyy in November 2012, evidence of half billion-dollar transactions, threats and links to a high-profile money-laundering case were lost by police according to a civilian police translator who documents, text messages and Skype chats taken from his computer. The dead man was helping the UK-based investment fund Hermitage Capital, co-founded by the financier Bill Browder, to expose a $230 million money laundering operation.
SWITZERLAND: BANKING REGULATION
On 13th April, Bärr & Karrer published an article about the Global Legal Insight report, the content of which was prepared by the firm. The article says that, in the aftermath of the financial crisis of 2008/2009, Switzerland launched a massive overhaul of its financial regulations. The reforms followed several objectives. The report can be seen at –
ZAGARIA MAFIA CLAN LEADER APPREHENDED IN ROMANIA
Eurojust on 13th April reported that in a joint operation was conducted by the Italian and Romanian police and the competent judicial authorities concerning a powerful, well-established mafia-style transnational criminal association, the well-known Italian clan, Zagaria (camorra). According to the Italian investigation, the prime suspect and his Italian accomplices have, for many years, been laundering in Romania the proceeds of crime of the powerful criminal ‘family’. The suspect, who was arrested in execution of an Italian European Arrest Warrant, was a trusted member of this criminal organisation, able to set up numerous commercial companies and business activities in Romania to launder millions of euro for the criminal organisation. He also ensured – via fictitious transactions – the repatriation of laundered funds to Italy to sustain the numerous members of the criminal ‘family’ currently in detention. Funds were provided to the families of those in detention to prevent their co-operation with law enforcement and judicial authorities.
FIRST “COUNTY LINES” DRUGS CONVICTION FOR MODERN SLAVERY ACT OFFENCES
On 13th April, the Home Office blog reported that 2 men have been found guilty of human trafficking offences under the UK’s Modern Slavery Act. Mahad Yusuf, 20, and Fesal Mahamud, 19, are the first “county lines” drug dealers to be sentenced for offences under the Modern Slavery Act and have been sentenced to 10 and 9 years respectively. “County lines” is the term for where organised crime groups based in urban areas use violence and intimidation to force young and vulnerable people to sell drugs remotely in rural or seaside areas. It is also said that the new National County Lines Co-ordination Centre, which we will establish with £3.6 million of funding, will bring forces together, improve their understanding of this crime and support operational policing.
GUPTA PLANE GROUNDED IN CORRUPTION PROBE
enca on 14th April reported that a Bombardier Global 6000 private jet used by the Gupta business family at the heart of corruption allegations against ex-president Jacob Zuma has been flown back to South Africa where it was grounded by a court order.
ALLEGED BRITISH BITCOIN FRAUDSTER EXTRADITED TO US
Nation Media on 14th April carried an AFP report that US authorities have extradited a British citizen from Morocco to face charges of allegedly defrauding investors of more than $36 million. Renwick Haddow, 49, has been charged with 2 counts of wire fraud connected to a pair of purported start-ups: Bitcoin Store, an online marketplace for the cryptocurrency, and Bar Works, a venture to transform former restaurants into work spaces.
US DOJ HONOURS ASSET FORFEITURE PROGRAMME TEAM WITH THE CRIMES VICTIMS’ FINANCIAL RESTORATION AWARD
A US DoJ news release on 13th April reported that the Criminal Division’s Program Management and Training Unit within the Money Laundering and Asset Recovery Section had been awarded the Crime Victims’ Financial Restoration Award. The news release says that over the past 3 years, the Money Laundering and Asset Recovery Section has returned over $1.3 billion in forfeited funds to crime victims. Most recently, the Unit oversaw a $772 million distribution to 24,000 victims of Bernard Madoff, the first in a series of payments that will eventually return over $4 billion to victims of the Madoff fraud. In 2016 the Unit began oversight and administration of the US Victims of State Sponsored Terrorism Fund, established to compensate victims of international acts of terrorism. To date, the Fund has issued more than $1 billion to over 2,000 victims. These victims include the Iran hostages held from 1979 to 1981 and their spouses and children; victims of the embassy bombings in Kenya and Tanzania; and victims of the attack on the USS Cole.
MORE THAN 200 PSNI OFFICERS INVOLVED IN MAJOR CRACKDOWN ON BELFAST INLA
The JOE website on 13th April reported that the PSNI has arrested 5 people in connection to the criminal activities of the Belfast INLA. Carried out by the Paramilitary Crime Task Force, this was its largest operation to date with over 200 police officers supported by colleagues from the NCA and HMRC.
US CEMETERY OWNERS EMBEZZLED $500,000, USED SOME OF IT FOR GAMBLING, ACCORDING TO FEDERAL CHARGE
On 13th April, Penn Live in the US reported that the former owners of a York County cemetery have been charged with scamming customers out of $500,000. hey said that between 2003 and 2016 they are alleged to have stolen money provided by about 200 customers for prepaid services for burial plots and vaults, caskets and grave markers.
ANTIGUAN POLICE RAID AND SEIZE DOCUMENTS FROM ASSISTANT SUPERINTENDENT’S HOME
On 13th April, the Daily Observer reported that numerous documents and other items were seized this morning during a 3-hour search at the home of Assistant Superintendent of Police Ray John. Officers were said to be investigating a passport matter emanating from his St. Vincent.
SUSPECTED PASSPORT RACKET UNDER INVESTIGATION
MENA FN on the 11th April had reported this. [Other sources claim that perhaps 200 blank passports might have been involved, intended for sale to Chinese clients in Hong Kong]
UKRAINE BUSTS RUSSIAN ONLINE CASINO OPERATION
On 13th April, Calvin Ayre reported that police in Ukraine announced that its officers, in conjunction with prosecutors in Kiev, had conducted searches of 15 locations connected to the operations of 8 unauthorised online casino sites, including several domains that appear to be related to the Vulkan family of gambling sites. The 8 domains were listed as: eldoradoclub.com, vulkanclub.com, 24vulkan.com, slotvulkanclub.com, estcasino.com, greencasino.com, anonymcasino.com and pharaonclub.com. The organisers are said to be Russian citizens who transferred their operations to the Ukraine in 2013 after Russian law enforcement agencies began making their life difficult. The article says that Vulkan is a Malta- and Curacao-licensed operation that primarily targets gamblers in the Commonwealth of Independent States. Russia’s telecom watchdog Roskomnadzor has nearly 5,000 Vulkan-related domains on its online gambling blacklist.
US PROSECUTORS SAY BRITISH CURRENCY TRADER SHOULD BE IMPRISONED FOR AT LEAST 7 YEARS
The Dily Echo on 14th April reported that a millionaire currency trader from Hampshire, HSBC executive Mark Johnson, 51, could be jailed for at least 7 years after defrauding an energy company in a £2.7 billion currency deal following a month-long trial in New York. He was found to have manipulated currency values, making £5.5 million for HSBC at the expense of its client.
PANAMA PAPERS: PAKISTAN’S SHARIF BANNED FROM POLITICS FOR LIFE
The OCCRP on 13th April reported that Pakistan’s Supreme Court has clarified in a ruling that its July 2017 decision to oust Prime Minister Nawaz Sharif means he will have to stay away from politics for the rest of his life. He was removed after the Panama Papers revealed that his children owned offshore companies registered in the BVI and that they used them to buy flats in London.
SNUS BAN STILL VALID – ACCORDING TO ADVOCATE GENERAL’S OPINION
TJI on 12th April reported that the sale of the moist pouched tobacco product has been prohibited in the EU since 1992, with Sweden having been granted an exception due to its tradition of snus use. Stockholm-based snus manufacturer, Swedish Match, had challenged the validity of the ban on snus in the UK and, consequently, the validity of the EU Tobacco Products Directive of 2014 which it transposes. The EU ban on the oral tobacco product snus is still valid, Advocate General Henrik Saugmandsgaard Øe of the CJEU has said in a press statement.
FORMER TEXAS CONGRESSMAN FOUND GUILTY OF 23 FELONIES
Baker McKenzie reported on 12th April that former US Representative Steve Stockman (Rep) was found guilty on 23 out of 24 felony charges related to the defrauding of 2 conservative donors.
FORMER PUERTO RICO SENATOR AND BUSINESSMAN SENTENCED TO PRISON FOR BRIBERY
Baker McKenzie on 13th April reported that a former Puerto Rico Senator, Hector Martinez Maldonado, was sentenced to 4 years in federal prison for accepting high-priced boxing tickets in exchange for legislation favourable to a private company. The man who offered the bribe, Juan Bravo Fernandez, the former president of Ranger American, one of the largest private security companies in Puerto Rico will also serve 2 years in prison.
GREECE A HUB FOR DRUG AND HUMAN TRAFFICKING, POLICE REPORT SHOWS
Ekathmerini on 14th April reported that criminal gangs operating in Greece make more than an estimated €100 million annually from crime, with drug and migrant trafficking being the 2 major illegal activities recorded in the country, the Greek police said in its 2017 report on serious and organised crime. The trafficking of migrants continued to be the biggest illegal activity in the country last year. Concerning drug trafficking, Greece is described as a transit country for heroin produced in Asia and sold in Europe through the “Southern Balkan Axis”. It says that the report confirmed again in 2017 that cannabis from Albania is used to purchase heroin from Turkey, and that Libya is a hub for transporting cannabis into the EU.
15th April 2018
COULD ELUSIVE LAOS CASINO OPERATOR BE BEHIND RACKETS THAT RUN TO DRUGS, CHILD PROSTITUTION?
The South China Morning Post on 14th April says that mystery surrounds business empire with office in Hong Kong accused by US authorities of running an international criminal organisation in a small corner of Laos. It says that Powerful, well connected and fabulously wealthy, 58-year-old Su Guiqin is queen of the Golden Triangle Special Economic Zone in Laos, and with her husband, Zhao Wei, runs the Kings Romans empire, a Hong Kong-registered business that took out a 99-year lease on a 3,000-hectare chunk of Bokeo province in a deal with the Laos government in 2007 and transformed it into a lavish gambling resort – the only currencies accepted are Chinese yuan and Thai baht, as a place for Chinese tourists to gamble and party, and few employees are Lao nationals. Then, in January, the US Treasury announced sanctions against what it calls Zhao’s transnational criminal organisation, naming 2 Hong Kong companies under the Kings Romans Group as its corporate fronts and identifying Zhao and Su as the organisation’s leaders. The US Treasury says that Zhao “engages in extensive bribery to facilitate money laundering, narcotics trafficking and wildlife trafficking at the Kings Romans casino”. A fascinating, troubling article.
TIGER FARMS AND ILLEGAL WILDLIFE TRADE FLOURISHING IN LAOS DESPITE PROMISE OF A CRACKDOWN
The South China Morning Post on 15th April also carried another article which says that in 2016, the Laos government told the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in 2016 that it intended to shut down the tiger farms. However, a Post Magazine investigation has found the farms are flourishing, with another major operation having opened since the pledge was made. One expert described the trade in tiger parts used for medicines and potency treatments as “out of control”.
BRAZILIAN PASTOR: POLICE SAY HE RAN A SLAVE LABOUR RING
NDTV carried a Washington post story on 15th April about a sprawling slave labour and racketeering ring said to be led by Pastor Cicero Vicente de Araujo, a former salesman. Federal police are calling it another in an unusual string of high-profile criminal cases tied to evangelical churches in Brazil. The bearded 61-year-old founded the Evangelical Community of Jesus’ Everlasting Truth. In February, authorities charged Araujo and 21 others with running a ring involving money laundering and human trafficking, with worshippers were duped into handing over their savings and becoming laborers at 9 farms and 17 businesses – from high-end steakhouses to gas stations.
SEEKING THE HOME OF THE MIAMI MARLIN BASEBALL TEAM – IN THE BVI
Deadspin on 14th April carried an article about a supporter of the Marlins baseball team, “Marlins Man”, who apparently flew to the BVI and sought the location of the corporate home of the Miami Marlins, to discover what he could about his team’s foreign citizenship. He found that the Marlins’ corporate address in a Caribbean tax haven is apparently nothing more than a PO Box.
PROBE INTO CORRUPTION AT ISLAMABAD AIRPORT
The Nation in Pakistan on 14th April reported that government had said that a National Accountability Bureau (NAB) investigation would help unearth corruption and will expose corrupt stakeholders in the construction of New Islamabad International Airport, a project initiated during 2008.
APPLE LOSES COURT BATTLE OVER COUNTERFEIT IPHONE PARTS IN NORWAY
Customs Today on 14th April reported that Apple had a shipment of 63 iPhone 6 and 6S replacement screens from Asia seized by Norwegian customs agents, and then offered the importer a settlement. Instead the importer went to court and the case hinged on the question of how exactly the importer obtained the Chinese parts, and how the parts were marked.
CONVINCING EUROPEAN POLITICIANS THAT JERSEY IS WELL-REGULATED IS AN UPHILL STRUGGLE
Jersey’s external affairs minister is reported in the Jersey Evening Post on 15th April as saying the reputation of other offshore finance centres could potentially damage Jersey’s image in Europe.
UK: POLICE GIVEN POWERS TO SEIZE BETTING SLIPS AND JEWELLERY FROM CRIMINALS
BBC reported on 15th April that police fighting organised crime will be able to seize betting slips, casino chips, jewellery and precious stones from criminals under new powers. The measures, which come into force from 16th April, are part of changes to the Criminal Finances Act 2017. Under the new provisions in the legislation, betting slips, casino chips and gaming vouchers, as well as jewellery, watches and stamps, can be seized as if they were cash assets.
THE CYBER THREAT TO UK BUSINESS 2017/18
The NCA is publishing this report which recognises the most significant incidents from last year, but it also presents case studies where action has led to successful mitigation. It’s been produced with the input of many in government and industry. The report details some of the biggest cyber attacks from the last year and notes that risks to UK businesses continue to grow. Emerging threats are also highlighted, such as theft from cloud storage and cryptojacking, in which computers are hijacked to create crypto currencies such as bitcoin. It acknowledges that a basic cyber security posture is no longer enough and most attacks will be defeated by organisations which prioritise cyber security and work closely with government and law enforcement.
US LEGISLATURE ADVANCES BILL TO CRACK DOWN ON HUMAN TRAFFICKING THROUGH FINANCIAL SYSTEM
On 13th April, Homeland Preparedness reported that the US House of Representatives was progressing the End Banking for Human Traffickers Act, which would add the Secretary of the Treasury to the President’s Interagency Task Force to Monitor and Combat Trafficking. The task force would also make recommendations to Congress to improve AML programmes related to human trafficking.