20th April 2018
KOREAN AIR CHO FAMILY “USED AIRLINE TO SMUGGLE PERSONAL GOODS”
The Investor on 20th April claimed that family members abused their status as an airliner operator to smuggle in all kinds of goods including clothes in bulk and furniture. They were brought in under the code name “KIP,” which is short for Korean Air VIP. It is alleged that there was a flight from New York that usually served as the main carrier, and there were all sorts of stuff, from clothes to furniture to even food, which is banned from being transported. The Cho family allegedly did not pay custom duty for these shipments, as most of the time they were disguised as company goods or even aircraft parts.
http://www.theinvestor.co.kr/view.php?ud=20180420000392
EX-VENEZUELAN OFFICIAL PLEADS GUILTY TO MONEY LAUNDERING CHARGE IN US
Law 360 and others reported that a former Venezuelan official Cesar David Rincon Godoy, 50, pleaded guilty in Texas federal court to a $7 million money laundering scheme involving bribe money allegedly paid by US-based companies to government officials in Venezuela in order to obtain energy contracts. He had been the general manager of a state-run company in Venezuela and one of several oil executives implicated in the scheme.
https://www.law360.com/texas/articles/1035429/ex-venezuelan-official-cops-to-money-laundering-scheme
HOW “SHARP ARE THE TEETH” OF A FREEZING ORDER DISCLOSURE – OBLIGATIONS UNDER A WORLDWIDE FREEZING ORDER
On 23rd March, Mayer Brown published an article asking if a worldwide freezing order granted by a court in England and Wales have any “teeth”? It says that the English Commercial Court recently considered (in PSJC Commercial Bank Privatbank v Kolomoisky) the extent of the defendant’s obligations to disclose its assets in the context of worldwide freezing orders, providing useful guidance to those considering applying for such orders. A freezing order (which used to be called a Mareva injunction) is an interim injunction that restrains the subject party from disposing of, or dealing with, its assets, and is usually granted in order to preserve the defendant’s assets until the litigation has concluded and the claimant (assuming it is successful) has had the opportunity to enforce that judgment. The briefing says that they serve a valuable purpose in assisting claimants to obtain some comfort that their potential victory will be more than merely pyrrhic.
UK HIGH COURT JUDGMENT SHINES LIGHT ON SHADOW DIRECTORS
On 19th April, Accountancy Daily reported that the High Court has handed down judgment in a complex case which has shed light on the issues of what fiduciary duties are owed by shadow directors. The judge held that it might not be helpful to attempt to define the duties of a ‘typical shadow director’. Rather he said the question was particularly fact sensitive and it is usually helpful to ask whether the individual has expressly or impliedly (from the circumstances) undertaken or assumed a position of trust and confidence or whether there is a legitimate expectation that he will not use his position in a way adverse to the interests of the other. He went on to say that it is open to a court to hold that a person owed some of the usual fiduciary duties, but not all of them, or to hold that the specific fiduciary duty owed is a qualified form of the general fiduciary duty. This means that the court is not confined to an all or nothing response to the question. Whether a particular shadow director owes fiduciary duties and the extent of those duties will be highly fact sensitive – Instant Access Properties Ltd (in liquidation) vs Rosser & Ors
https://www.accountancydaily.co/high-court-judgment-shines-light-shadow-directors
EU SAYS IT MAY IMPOSE MORE SANCTIONS ON VENEZUELA IF DEMOCRACY UNDERMINED
EurActiv on 20th April reported that the EU has said it could impose further sanctions on Venezuela if it believes democracy is being undermined there, after the president called for elections next month that the main opposition has said it will boycott.
THE CHINA BELT AND ROAD INITIATIVE: THE ROLE OF BELARUS
On 20th April, HK TDC published an article on the role of Belarus, a transit country for the China-Europe rail connection. It says that, strategically located on the new Eurasia land bridge, 8 rail container routes on the China-Western Europe trade pass through Belarus, enabling cargo to move much faster between China and Germany via Kazakhstan, Russia, Belarus and Poland, taking about 17 days. In comparison, sea freight takes around 3 weeks longer, although the freight cost of travelling by rail is about 60-70% higher. Standing at the border between Belarus and Poland is the Kozlovichi-Kukuryki checkpoint – one of the busiest cargo truck checkpoints between the Commonwealth of Independent States (CIS) and the EU. Chinese investment, which grew more than 11-fold between 2011 and 2017, is one of the factors spearheading the manufacturing investment in Belarus.
US-COLOMBIA PROBE TARGETS VENEZUELA FOOD IMPORT PROGRAMME
On 20th April, Reuters reported that the US and Colombia have cited new evidence of fraud in Venezuela’s food import programme for the needy, saying part of the funds often ended up in the hands of corrupt government officials after being funnelled through businesses in nearby countries. Financial intelligence units from the US and Colombia presented fresh evidence of such activity during a meeting in Washington on the sidelines of the spring meetings of the World Bank.
$80.3 MILLION RECYCLING FRAUD CONSPIRACY BUST IN SACRAMENTO
CBS Sacramento on 19th April reported that a grand jury indicted the owner of Recycling Services Alliance Corporation and 4 employees on a total of 166 counts, including grand theft, recycling fraud, perjury and conspiracy. They allegedly fraudulently processing out-of-state empty beverage containers for California Redemption Value refunds and conspiring to manufacture fraudulent weight tickets to justify state payments and reimbursement claims.
LONDON LAW FIRM SHUT DOWN OVER DISHONESTY SUSPICIONS
The Law Society Gazette on 19th April reported that the Solicitors Regulation Authority has shut down a London firm over suspicions of dishonesty involving the 2 managers. Regulators intervened into Malik Law Chambers, which has offices in east and west London as well as Birmingham, after also expressing concerns the firm had failed to comply with SRA principles. The firm specialised in immigration, nationality, asylum, human rights and administrative law.
OVERSEAS COMPANIES BIDDING FOR UK PUBLIC CONTRACTS WILL NEED TO REGISTER BENEFICIAL OWNERSHIP ON PUBLIC REGISTER
Osborne Clarke on 19th April reported that the UK government has set out its thinking on how the forthcoming beneficial ownership register for bidding on public contracts will work ahead of the draft legislation which is due to be published by July 2018. It has confirmed a number of policy decisions about the new register for contractors. The requirement will only apply to contracts valued at more than £10 million. The regime will be mandatory for procurements by central government, and voluntary for local government and other public sector bodies.
MAPPING PALESTINE – ARMED GROUPS
As part of a comprehensive guide to Palestine politics, groups etc, the European Council on Foreign Relations provided a useful guide to Palestinian armed groups –
- Izz al-Din al-Qassam Brigades (IQB) – Hamas
- About Izz al-Din al-Qassam Brigades (IQB) – Hamas
- Mohammed Deif
- Marwan Issa
- Al-Quds Brigades (AQB) – Islamic Jihad
- Al-Aqsa Martyrs Brigades (AMB) – Fatah
- Al-Nasser Salah al-Deen Brigades – PRC
- Abu Ali Mustafa Brigades – PFLP
- National Resistance Brigades – DFLP
- Harakat al-Sabireen
- Salafi-jihadis
http://www.ecfr.eu/mapping_palestinian_politics/detail/introduction_armed_groups
BRIEFING ON THE SET-UP OF THE RUSSIAN INTELLIGENCE SERVICES
On 20th April, Cipher Brief carried a feature about the array of often overlapping and competitive security and intelligence services to create multiple sources of intelligence, encourage risk-taking and keep a wary eye on each other. It reflects on the history of such services – [the famed (infamous?)] KGB and GRU military intelligence. Since the collapse of the Soviet Union, Russia broke the KGB largely into four services – the Federal Security Service (FSB), Foreign Intelligence Service (SVR), Federal Protection Service (FSO), and the Interior Ministry (MVD) – while cutting the GRU workforce significantly. Reform has been proposed but there has been little public reporting on any progress.
https://www.thecipherbrief.com/inside-competitive-corrupt-world-russian-intelligence
GVA DICTATOR ALERT
An odd, but interesting Twitter feed, tracking planes used by authoritarian regimes landing at Geneva Airport.
https://twitter.com/GVA_Watcher
PROSECUTORS DETAIN CHIEF OF POLICE IN RAKOVSKI FOR BRIBERY
Focus Radio in Bulgaria on 20th April reported that the chief of police in Rakovski, Georgi Iliev, has been detained for requesting a bribe from a cigarette smuggler in March 2017 to stop the investigation against him. He acted together with 2 of his subordinates who were detained last month and have given detailed testimony before a judge.
MALTA: REQUEST NEW MAGISTERIAL INQUIRY INTO LATEST REVELATIONS
The Malta Independent on 20th April reported that MP Simon Busuttil and MEP David Casa today filed a court application requesting a magisterial inquiry in relation to the recent revelations by the Daphne Project on Tourism Minister Konrad Mizzi and OPM Chief of Staff Keith Schembri. A consortium of 18 news organisations are pursuing the stories that had been followed by slain journalist Daphne Caruana Galizia, and will be publishing the work. The news organisations include the New York Times, The Guardian, and Süddeutsche Zeitung, the newspaper behind the Panama Papers revelations. The project (dubbed the Daphne Project) was organised by an investigative non-profit organisation called Forbidden Stories.
FORMER RUSSIAN HIGH-RANKING INVESTIGATOR SENTENCED TO 13 YEARS FOR CORRUPTION
RAPSI, the Russian legal information portal, reported on 20th April that a Moscow City Court has sentenced ex-chief of the Investigative Committee’s Internal Security Directorate, Mikhail Maksimenko, to 13 years in a penal colony for taking especially large-scale bribes. He had been arrested along with other high-ranking investigators, his deputy Alexander Lamonov and the First Deputy Head of the Investigative Committee’s Moscow Directorate, General Denis Nikandrov. They were charged with taking €500,000 from alleged gang leader Zakhariy Kalashov, who was sentenced to 9 years and 10 months on March 29th.
http://www.rapsinews.com/judicial_news/20180420/282549050.html?src=ilaw
SWISS LAW ENFORCERS GET TOUGH ON CROSS-BORDER CRIME
Reuters on 20th April reported that Switzerland’s Attorney General took on 237 new criminal investigations last year, 25% more than in 2016, as it steps up efforts to tackle international crime. His office was also working on 307 requests for mutual assistance from abroad, after getting nearly 200 new requests in 2017, many for help on complex, cross-border cases involving bribery, money laundering and potential extremism. The 234-person staff is described as “nearing its limits” with the present caseload. At the end of 2017, the Attorney General said his lawyers were handling 478 ongoing criminal investigations.
https://lta.reuters.com/article/marketsNews/idLTAL8N1RX1UL?src=ilaw
MALAYSIAN CORRUPTION ALLEGEDLY SPREADS TO CANADA
The Business Times from Singapore reported on 20th April that a Malaysian governor and his family are accused in a lawsuit of funnelling proceeds of corruption into Canadian real estate, with a Swiss environmental group pressing some of Canada’s biggest financial firms to turn over information on how the money flowed. Sarawak governor Abdul Mahmud Taib’s family allegedly used the money to fund the expansion of the Ottawa-based real estate company Sakto Group’s C$250 million real estate empire.
US CITES TAIWAN’S HUA NAN COMMERCIAL BANK FOR MONEY LAUNDERING VIOLATIONS
The Standard on 20th April reported that the US Federal Reserve has issued a cease and desist order against Taiwan’s Hua Nan Commercial Bank and its agency in New York, citing non-compliance with AML laws, having identified significant deficiencies in the agency’s risk management and compliance with applicable federal laws, rules, and regulations relating to AML compliance, including the Bank Secrecy Act (BSA), during the most recent examination that concluded on June 30th. However, it is said that Hua Nan has taken steps to mitigate its BSA/AML risk and to continue to implement improvements.
http://www.thestandard.com.hk/breaking-news.php?src=ilaw&id=106133&sid=2
SENIOR KBR EXECUTIVE ARRESTED IN SFO UNAOIL PROBE
M Lex on 17th April reported the previously unreported arrested of the president of US oil and gas engineering company KBR’s oil and gas business, Jan Egil Brændeland. He was not charged and soon released. The revelation came at the High Court in London where KBR is challenging the SFO’s attempts to access 21 years’ worth of documents held by its US arm. The SFO is investigating suspected corruption by the company’s British subsidiary and executives connected to the company’s relationship with Monaco-based oil services company Unaoil. KBR’s US arm is not under investigation. Having initially stated that the whole group would collaborate, the company refused to hand over US-held documents. The article says that this is not the first time the SFO investigative powers have been tested in this way. In January 2017, Unaoil executive Saman Ahsani failed in a bid to force a review of such powers after the SFO ordered him to hand over documents located abroad.
HONG KONG CUSTOMS SEIZE 24 TONNES OF WOOD FROM HONDURAS IN HK$2.4 MILLION SMUGGLING CASE
The South China Morning Post on 20th April reported that officers are looking into where consignment of Honduras rosewood hidden in shipping container was headed, having arrived from Central America – the third wood-smuggling case reported in the city this year.
NOW OPEN: THE UNDERGROUND, THE MOB MUSEUM’S PROHIBITION HISTORY EXHIBITION FEATURING A WORKING DISTILLERY AND SPEAKEASY
In Las Vegas, a new attraction. This immersive experience transports guests back to the 1920s, when outlawed liquor gave rise to the Mob. A working distillery produces corn-mash moonshine and the onsite craft brewery produces beer. The speakeasy serves The Underground’s signature spirits and Prohibition era-inspired cocktails.
http://www.prweb.com/releases/2018/04/prweb15424266.htm
A PIRATE-OBSESSED NIGERIAN HACKING GROUP IS ATTACKING THE MARITIME INDUSTRY
Homeland Security Today on 18th April reported that a criminal splinter faction from a pirate symbology-obsessed Nigerian “confraternity” has been running business email compromise scams for hundreds of thousands of dollars targeting the global maritime industry. It says that researchers from SecureWorks’ Counter Threat Unit (CTU) explained to Computerworld UK how they raced to prevent a legitimate client of a small South Korean shipping company from signing off on a fraudulent claim for $325,585, and had successfully mitigated $800,000 of the $3.9 million in attempted fraud by the group.
CAUCASIAN MAFIA ORGANISATION COMMITTING BURGLARIES AND RETAIL THEFTS IN FRANCE AND GREECE DISMANTLED THANKS TO FIRST-EVER JOINT INVESTIGATION TEAM BETWEEN THE 2 COUNTRIES
Eurojust on 20th April reported that, on 17th April, more than 30 suspects, including the 4 leaders of the organised crime group, composed of Georgian and Armenian nationals, were arrested after simultaneous operations of the French and Greek judicial and law enforcement authorities in Caen and Thessaloniki.
http://www.eurojust.europa.eu/press/PressReleases/Pages/2018/2018-04-20.aspx
DUTCH CRIMINAL JAILED FOR 18 YEARS FOLLOWING EXTRADITION FROM IRELAND
The Irish Times on 20th April reported that Naoufal Fassih, 37, a Dutch citizen of Moroccan origin, and a gang leader with links to Kinahan cartel sentenced for role in 2015 shooting in Holland.
UK BOLSTERS FINANCIAL SANCTIONS WATCHDOG TO TACKLE ‘DIRTY MONEY’
On 20th April, Reuters reported that the UK is increasing by nearly 20% the number of staff in OFSI (the Office of Financial Sanctions Implementation) who are focused on detecting and investigating breaches of international economic sanctions. It will bring the total of staff, which includes intelligence and police officers, to 40.
WORLD BANK WILL TRACK OWN FUNDS AS “CORRUPTION IS EVERYWHERE”
OCCRP on 20th April reported that World Bank President Jim Yong Kim has told reporters that corruption is widespread and that the Bank has introduced measures to follow every dollar it lends to make sure that its funds are being used for the intended purposes.
SEC CHARGES ONE MORE IN CENTRA TECH ICO CASE
On 20th April, Mono Visione carried a report saying that the SEC has announced additional fraud charges stemming from an investigation of Centra Tech Inc’s $32 million initial coin offering (ICO).
In an amended complaint, the SEC charged one of Centra’s co-founders, Raymond Trapani, in a fraudulent scheme related to Centra’s 2017 ICO, in which the company issued “CTR Tokens” to investors. Earlier this month, the SEC and criminal authorities charged Centra’s 2 other co-founders, Sohrab “Sam” Sharma and Robert Farkas, for their roles in the scheme.
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