15th August 2018
HAULAGE BOSS TRIED TO SMUGGLE MORE THAN £850,000 OUT OF DOVER
On 14th August, Kent Live reported that Andrzej Miziuk, 49, has been jailed after he was stopped by Border Force officers at the Port of Dover in February as he tried to leave the UK. He was transporting second-hand clothes in a lorry; however, sniffer dogs found the cash stuffed into 2 suitcases. He later admitted he was due to be paid £2,000 for smuggling it.
EVALUATION OF TONGA’S AML LAWS
Radio New Zealand on 15th August reported that Tonga has begun the process of evaluating whether its AML/CFT legal framework meets international standards. The acting Attorney-General says the project will be carried out by the government and the regional body known as the Asia Pacific Group on Money Laundering. This comes 8 years after the last evaluation where the kingdom fell short in 16 key areas.
DRUG MONEY LAUNDERER WHO LAUNDERED OVER A QUARTER OF A BILLION DOLLARS RECEIVES 30-YEAR JAIL TERM
Lawfuel on 14th August reported that Jesus Rodriguez-Jimenez who laundered over $250 million for Central American drug trafficking organisations has been jailed for 30 years in New York. He ran an international money laundering network with ties to Mexico, Italy, Hungary, Panama, and China, facilitating the movement of hundreds of millions of dollars in drug proceeds on behalf of drug cartels in Mexico and Central America through a web of front companies, shell bank accounts, and money couriers throughout the US and Europe, The investigation begun in 2013 has so far resulted in charges against 8 defendants, including the extradition of alleged high-level money launderer Filippo Magni from Italy earlier this Summer.
THE ARMS TRADE IN THE DJIBOUTI AND HORN OF AFRICA PROMOTING CONFLICT
Defence Web on 14th August reports on a study by EXX Africa which says that the reluctance of western and other powers to act against Djibouti’s increasing arms trafficking activities poses an existential threat to the security of the Horn of Africa and imperils ongoing efforts to end long-running conflicts in the region. The study says that the trade of illegal weapons in the region remains highly lucrative and is comprehensively entwined with transnational terrorist groups, drug smuggling, and the conflict in nearby Yemen. The focus of the regional arms trade remains volatile in Somalia and its semi-autonomous regions where demand for weapons remains unabated despite various embargoes and other sanctions. It also says that over the past few years, Djibouti has emerged as an increasingly important hub for weapons trans-shipment to armed groups in the region.
SANCTIONS KEY TO ENDING SOUTH SUDAN’S CIVIL WAR
Defence Web on 14th August reported that cautious optimism surrounds efforts to end the brutal five-year civil war in South Sudan. The United Nations Security Council, after continued violations of peace agreements, imposed sanctions in July, with measures including an arms embargo to prevent the supply, sale and transfer of arms and related military support to the country, and a travel ban and asset freezes on selected individuals. Some believed the sanctions would help end the civil war, while others did not. The arms embargo passed in July is said to have been long overdue – it was first proposed in 2016, but failed to garner enough votes. Despite concerns, the sanctions are said to have started working. They at least put pressure on the conflicting parties to accept peace initiatives. Observers are viewing the progress with hope, but full success of the sanctions is yet to be seen. Violation of agreements has become the norm, and the situation could relapse. Success depends on effective and consistent enforcement of the agreements. The UN Security Council must ensure that there are enforcement mechanisms in place, and that through proper monitoring, its decisions are implemented. All UN member countries – especially South Sudan’s neighbouring countries – must co-operate with the sanctions committee and panel of experts. Only then will South Sudan’s peace efforts succeed.
COVERT SURVEILLANCE AND COVERT HUMAN INTELLIGENCE SOURCES (CHIS) CODES OF PRACTICE
On 15th August, the Home Office released updated guidance on the use of covert surveillance or human intelligence sources by public authorities in the UK under part 2 of RIPA 2000.
CODE OF PRACTICE FOR INVESTIGATION OF PROTECTED ELECTRONIC INFORMATION
Also on 15th August, the Home Office published updated guidance that applies to any investigation of protected electronic information under the Regulation of Investigatory Powers Act (RIPA).
IRAN “TO USE SRI LANKAN RUPEE FOR FUEL TRADE” WITH SRI LANKA
The Daily Mirror in Sri Lanka claimed on 15th August that the Cabinet has been told that Iran had agreed to use the Sri Lankan rupee as the medium of exchange to carry out its fuel trade transactions with Sri Lanka because of problems in using the US dollar.
UK INVESTOR HALTS IRAN SOLAR ENERGY PROJECT OVER US CURBS
The Nation on 15th August reported that British group Quercus, an investor in renewable energy, has said that it will halt work on a major solar plant in Iran after the country was hit by US economic sanctions.
ROYAL BANK OF SCOTLAND AGREES TO PAY $4.9 BILLION FOR FINANCIAL CRISIS-ERA MISCONDUCT
On 14th August the US DoJ published a news release saying that the settlement is largest penalty imposed on a single entity by the Justice Department for financial crisis-era misconduct. The settlement is to resolve federal civil claims that RBS misled investors in the underwriting and issuing of residential mortgage-backed securities (RMBS) between 2005 and 2008.
SEC HALTS TOMAHAWKCOINS ICO ON FRAUD ALLEGATIONS
Finance Magnates reports that the ICO operators have consented to a cease and desist order and agreed to pay a $30,000 fine. The SEC alleged that the operator had not only violated securities regulations but also made false statements to investors.
CORAL BOOKIES WORKER ADMITS £40,000 SCAM TO PLACE BETS ON EVENTS THAT ALREADY HAPPENED
The Dundee Evening telegraph on 15th August reported that Gavin Thomson found a glitch in Coral’s computer system that allowed him to place bets after events had finished. He gave friends and punters cash on bets guaranteeing him a winner. Thomson committed the fraud between October 2015 and January 2016.
WHY THE IRAN NUCLEAR AGREEMENT REPRESENTS THE ART OF THE POSSIBLE, AND WHY IT IS WORTH SAVING
ETH Zurich on 15th August published an article by Mark Daniel Jaeger, a Researcher at the Centre for Advanced Security Theory, University of Copenhagen. It provides a brief history of the sanctions conflict over Iran’s nuclear programme and puts the JCPOA into context. It concludes by saying that the JCPOA represents the art of the possible in relation to controlling Iran’s nuclear programme. Exiting the JCPOA gives away the great leverage of its compliance regime and recklessly risks conflict escalation. A ‘snapback’ would isolate Iran. The US exit from the JCPOA thoroughly isolates one of the agreement’s principal architects when it comes to dealing with this issue.
COURT WARNING AFTER SOLICITOR CALLED BY OWN CLIENT TO GIVE EVIDENCE
The Law Society Gazette on 14th August reported that an English High Court judge has made clear that clients should resist calling their own solicitor to give evidence, warning that to do so may give rise to a potential conflict of interest.
CRACKDOWN ON HONG KONG TRIAD-CONTROLLED GAMBLING DENS AND PROSTITUTION LEADS TO 48 ARRESTS
The South China Morning Post on 15th August reported on the conclusion of Operation “Thunderbolt 18”. In one raid, 26 female visitors from mainland China rounded up in anti-vice operation jointly mounted by police and immigration officers. In Hong Kong, operating a gambling establishment carries a maximum penalty of 7 years in jail and a HK$5 million fine. Gambling in an illegal establishment carries a maximum penalty of 9 months in jail and a HK$30,000 fine. The raids were part of a 3-month operation code-named “Thunderbolt 18” ending on 15th August.
IRAN SANCTIONS AT THE HALFWAY POINT
On 8th August, the Center for Strategic and International Studies published a briefing as August 6th marked the end of the first 90-day wind down period for sanctions on Iran, with a number of sanction measures snapping back into place. November 4th will mark the end of the 180-day wind down period upon which time oil and energy-related sanctions will come into effect. The briefing reviews the likely effects on Iran and geopolitics of the first phase of sanctions “snap back”.
EVEN FREE TOKENS FACE REGULATORY HEAT AS COIN OFFERINGS SCRUTINISED
The Wall Street Journal on 15th August reported that US securities regulators have opened a new front in their campaign to crack down on fraud in the initial-coin-offering (ICO) market by punishing a firm that didn’t sell any tokens. The SEC said Tomahawk Exploration LLC and David Thompson Laurance tried to raise $5 million in 2017 by selling a token called “TOM”. Tomahawk wound up giving away 80,000 tokens to entities that helped promote the ICO. Although it failed to sell any tokens, the law was broken, the SEC claimed, through misleading potential investors about details of their oil-drilling project and not telling potential investors that he was once convicted of criminal securities fraud.
US AND MEXICO TO ANNOUNCE NEW PLANS ON CARTELS – CONCENTRATING ON FINANCIAL INFRASTRUCTURE
On 15th August, the New York Times reported that the DEA has unveiled new plans to combat Mexican drug cartels in Chicago alongside members of the Mexican government and federal police. The new plans include putting greater emphasis on attacking cartels’ financial infrastructure. Plans also call for a new enforcement group based in Chicago that will concentrate on international investigations of cartels. The US also intends to do more to help stem the flow of guns into Mexico that contributes to deadly violence in the country.
UK: CAMPAIGN TO TACKLE PENSION SCAMS
The Reward Strategy website on 15th August reported that a new campaign to tackle pension scams has been launched, as the latest figures reveal victims of pension scammers lost an average of £91,000 each in 2017. A total of 253 victims reported to Action Fraud that they had lost more than £23 million to pension scammers in 2017. The FCA and The Pensions Regulator (TPR) have launched a new ScamSmart advertising campaign targeting pension holders aged 45-65, the group most at risk of pension scams.
US INVESTOR SUES PHONE COMPANY FOR $224 MILLION OVER LOSS OF CRYPTOCURRENCY
Reuters reported on 15th August that a US entrepreneur and cryptocurrency investor has filed a lawsuit against telecommunications company AT&T, accusing it of fraud and gross negligence in connection with the theft of digital currency tokens from his personal account. He alleges that in January the tokens were stolen from him through what he alleged was a “digital identity theft” of his cellphone account.
UK PLANT IMPORTS: ‘ADDITIONAL DECLARATIONS’ FOR PHYTOSANITARY CERTIFICATES
DEFRA on 15th August published updated information on additional declarations that you must make on phytosanitary certificates as a plant health authority in a country sending plants to the UK. These are those you need to make on the phytosanitary certificate you issue for consigments of plants, seeds or produce to be imported into the UK. The declarations required depend on the species of plant in the consignment.
FCA ENFORCEMENT ACTION INCREASES IN WAKE OF SENIOR MANAGERS REGIME
Out-Law on 15th August published an article saying that the number of enforcement actions opened by the Financial Conduct Authority has rocketed by 23% during the last 12 months, with the number of investigations into governance issues and financial crime soaring.
HATTON GARDEN RAIDER GIVEN MORE JAIL TIME FOR FAILING TO PAY CONFISCATION ORDER
The BBC on 14th August reported that Daniel Jones, 63, has been sentenced to a further 6 years and 287 days for failing to pay back £6,599,021. He was a member of the gang that stole some £14 million of goods after drilling into a vault at London’s Hatton Garden Safe Deposit in Easter 2015.
COMMON DUE DILIGENCE PITFALLS AND HOW TO AVOID THEM
On 15th August Control Risks published an article saying that it recently hosted a webinar with GAN Integrity to discuss common due diligence mistakes made by organizations of all sizes, sectors and geographies and how to avoid them. The article contains some of the main points that arose in the webinar. These include –
- take a true risk-based approach to due diligence
- integrate your due diligence program into a broader risk framework
- find the optimal level of in-house resourcing and external support
LA FASHION DISTRICT UNDERWEAR IMPORTER FACES MONEY LAUNDERING SENTENCING
Baker McKenzie on 15th August reported that Xilin Chen, 59, owner of Yili Underwear and Gayima Underwear, and a Los Angeles Fashion District underwear importer is expected to be sentenced for federal offences linked to a scheme to launder money belonging to Mexican drug cartels. She had pleaded guilty to charges in June 2015. The sentencing will probably result in the loss of his US citizenship. Prosecutors are said to be recommending a “time-served” sentence, followed by 3 years of supervised release to include up to 12 months of home confinement. “Operation Fashion Police” was an investigation into black market peso exchange schemes in downtown LA, and in September 2014, more than 1,000 agents swarmed the district to execute search-and-seizure warrants, finding $90 million in cash packed in banker’s boxes, shoe boxes and duffel bags, authorities said.
ZIMBABWE’S ELECTIONS WERE MEANT TO START A NEW ERA
Chatham House on 15th August published an article on feelings of déjà vu in Zimbabwe following the hopes of the recent election. There remains a “cash crisis” and the formal sector has contracted to only 20% of the economy, and the informal sector lacks the capacity to push an economic renewal. There has been a modest increase in foreign and diaspora investment, but the big-money Chinese, Russian and other pledges are long-horizon projects.
CRITICISM OF GIBRALTAR MARITIME AUTHORITY FOR ITS “POLITICAL” DECISION TO DE-REGISTER REFUGEE RESCUE VESSEL
As the saga of the rescue vessel Aquarius, and its 141 “passengers” continues (though the vessel has now been allowed to dock and discharge its passengers in Malta), there is criticism of the Gibraltar authorities. The vessel is registered under the Gibraltar flag as a “survey vessel”, and the GMA says the cancelling of the registration (by 20th August) is because it not operating in its registered role. In 2016, the Aquarius was chartered by 2 charities to engage in maritime rescue activities within the Italian Search and Rescue zone. SOS Mediterranee said that the GMA was “disguising a political manoeuvre behind an incoherent argument by abusively pretending that clearance should be obtained in order to conduct rescue operations, while the mere principle of rescue at sea is an overarching principle which falls upon all flags, all ships and on all seas, and while all the operations of the Aquarius have always been strictly been conducted in compliance with maritime law and SAR competent authorities”, and that it had created an “artificial difference” between ‘survey’ and ‘rescue’ ships which, it said, was not technically founded.
TRACE PODCAST – TACKLING FINANCIAL CRIME
In this series of podcasts, TRACE President Alexandra Wrage explores the world of financial crime – corruption, fraud, money laundering and sanctions through interviews with investigative reporters, business people and prosecutors. She examines different angles of financial crime and explores what motivates people to break the law, how wrongdoers cover their tracks and what can be done to put a stop to the looting. In this episode, following the previous episode on the use/abuse of casinos in British Columbia to launder money, David Eby, Attorney General of British Columbia, discusses comprehensive measures being taken to address financial crime in the province.
A FIELD GUIDE TO CIVIL ASSET FORFEITURE OF REAL PROPERTY IN THE US
The New York Law Journal on 14th August published an article saying that while asset forfeiture is commonly thought of as applying to personal property, such as a vehicle used to illegally transport narcotics, this article discusses its application to real property. It starts by explaining that asset forfeiture is a process by which the federal government of the US may seize, without compensation, any privately-owned real or personal property that facilitated or was otherwise involved in the commission of certain types of criminal activities. The government may initiate forfeiture proceedings in either civil or criminal court depending on the underlying violation, and civil and criminal forfeitures are governed by distinct sets of statutory rules.
SUSPECTED HEAD OF A MAJOR ROMANIAN ORGANISED CRIME NETWORK ARRESTED IN UK
The NCA announced on 15th August that Florin Ghinea, 43, was detained by officers from the NCA’s Armed Operations Unit as he left a gym in Watford. Ghinea (aka “Ghenosu”) was wanted by the Romanian authorities for human trafficking, conspiracy to murder, blackmail and money laundering. He was listed as one of Europol’s most wanted men.
CHINESE LOAN SHARKS MADE TORTURE VIDEOS TO RECOVER GAMBLING DEBTS
Calvin Ayre on 15th August reported that Philippine police have arrested 5 Chinese nationals who tortured a Chinese man in order to force his relatives back home to honour the man’s gambling debts.