8th September 2018
MONEYVAL: ARMENIA MADE GOOD PROGRESS IN TACKLING MONEY LAUNDERING
Panarmenian on 7th September carried an article about the recently released MONEYVAL report saying that Armenia has made good progress in strengthening its framework to tackle money laundering and terrorist financing since December 2015 and implementing a number of recommendations considered outstanding, especially in the area of risk assessment, targeted financial sanctions related to proliferation and preventing terrorism financing abuse of non-profit organisations. However, other deficiencies remain and need to be addressed, and MONEYVAL decided that Armenia would remain in regular follow-up and will continue to report back in 2½ years on further progress.
ENHANCING CO-OPERATION IN NUCLEAR SECURITY
On 8th September, the New Strait Times in Malaysia reported on the latest Global Incidents and Trafficking Database prepared by the James Martin Centre for Nonproliferation Studies (CNS). It says that there were 870 reported incidents involving radioactive materials (theft, missing, leaked, smuggled, etc) from 51 countries between 2013 and 2017, and 4 were reported in SE Asia, including 1 case in Malaysia last year. The need to strengthen radiological security cannot therefore, be overstated, it concludes. National governments are responsible for legal and regulatory framework that governs how security at relevant facilities are maintained and how radioactive material is managed, utilised and transported. The article says that a key regional collaboration on nuclear security is the Regional Radiological Security Partnership in South-east Asia (RRSP), which brought together SE Asian states, Australia, the US and the IAEA. The article links the report to news that an industrial device containing radioactive material was reported missing in August, a reminder that nuclear security is an important issue that needs attention in SE Asia. It says that the device was lost while being transported in Malaysia and there are concerns that the unknown amount of radioactive iridium in the device could cause radiation exposure or be used as a weapon.
US DEFENCE COMPANY OWNER ACCUSED OF FRAUD AND CONSPIRACY TO EXPORT DEFENCE PLANS TO TURKEY
The Paterson Times on 7th September reported that Ferdi Murat Gul, (aka “Fred Gul”), 42, of Turkey, the owner of a defence contracting business has been indicted for allegedly acquiring $7 million in military contracts through a fraudulent scheme and conspiring to unlawfully export military technical drawings to Turkey. He owns 2 US companies – Bright Machinery Manufacturing Group and FMG Machinery Group – and he also maintains an ownership interest in HFMG Insaat, a manufacturing company in Turkey. In 2010-15, he allegedly obtained hundreds of contracts worth $7 million from the Department of Defense by falsely claiming military parts contracted to produce would be manufactured in the US, but allegedly manufactured the parts at his Turkish production facilities and, in doing so, he unlawfully exported drawings and technical data to Turkey that are subject to US export control laws.
CIGARETTE SMUGGLING BOOMING IN SRI LANKA OWING TO HIGH TAXES
The Colombo Gazette on 8th September reported that Sri Lanka, having one of the highest cigarette prices in the region, faces illegal cigarette smugglers who make huge profits. High taxes play a significant role in incentivising the smuggling of cigarettes, the Research Intelligence Unit’s 2018 report on Towards Sensible Policy Reforms to Combat Illicit Tobacco Markets said. In 2018, the illicit market share is around 14% to 18% for cigarettes and 26% to 29% for beedi [an Indian term for a thin cigarette or mini-cigar filled with tobacco flake].
CHINESE POLICE SEIZE 70 RARE MONKEYS SMUGGLED FROM VIETNAM
Xinhua on 7th September reported that police have seized 70 crab-eating macaques, also known as long-tailed macaques, at the China-Vietnam border. The global demand for animal test subjects is driving an illegal cross-border trade in wild macaques.
LARGEST SEIZURE IN MUMBAI: WOMAN HELD FOR SMUGGLING 523 TORTOISES
MENAFN on 7th September reported that a 42-year-old was intercepted at a Mumbai railway station and a whopping 523 tortoises seized from her. This is the largest seizure in Mumbai, said a Wildlife Crime Control Bureau (WCCB) official.
FORMER MORMON LEADER “USED POSITION TO SWINDLE CHURCH MEMBERS”
Huffington Post on 7th September reported that prosecutors have charged Robert Glen Mouritsen, 71, from Utah with 3 counts of wire fraud and 3 counts of money laundering, saying that the former Mormon leader used his “position of prominence” to cheat friends and fellow church members out of more than half a million dollars. He was the presiding high priest and spiritual leader of a group of 5 to 12 local congregations. The investment scheme, which he called “The Project,” allegedly began in 2006 and continued to August 29th this year.
MIAMI BILLIONAIRE PHILLIP FROST CHARGED WITH SECURITIES FRAUD
7 News Miami reported on 7th September reported that a Miami biotech billionaire with his name on the city’s science museum has been charged in a market-manipulation scheme. The SEC announced that OPKO Health founder and CEO, Phillip Frost, and 9 others participated in long-running fraudulent schemes that generated more than $27 million from unlawful stock sales and caused significant harm to retail investors who were left holding virtually worthless stock.
SEC CHARGED A GROUP OF 10 INDIVIDUALS AND 10 ASSOCIATED ENTITIES FOR THEIR PARTICIPATION IN MICROCAP LONG-RUNNING FRAUDULENT SCHEMES
A news release on Mondo Visione on 7th September reported that the SEC has charged a group of 10 individuals and 10 associated entities for their participation in long-running fraudulent schemes that generated over $27 million from unlawful stock sales and caused significant harm to retail investors who were left holding virtually worthless stock. According to the SEC’s complaint, from 2013 to 2018, a group of prolific South Florida-based microcap fraudsters led by Barry Honig manipulated the share price of the stock of 3 companies in classic pump-and-dump schemes.
IRELAND UNVEILS PLANS TO COMBAT CORPORATE TAX AVOIDANCE
On 5th September, Bloomberg reported that the Irish government has set out its plans to implement international reforms to help combat tax avoidance from multinational companies. The Corporate tax Roadmap reveals how and when Ireland plans to act on the OECD’s base erosion and profit shifting (BEPS) reforms and the EU Anti-Tax Avoidance Directive (ATAD). Ireland has come under fire for its 12.5% corporate tax rate.
The Roadmap itself is available at –
CYPRUS CONCEDES MORE NEEDS TO BE DONE ON GRECO RECOMMENDATIONS ON CORRUPTION
The Cyprus Mail on 8th September reported that the state Law Office has said more needs to be done to implement the recommendations of the Council of Europe’s Group of States against Corruption (GRECO), but that it was satisfying that the country had not been ranked as ‘not satisfactory’ when it came to compliance. According to GRECO, Cyprus has satisfactorily implemented only 2 of the 16 recommendations contained in an evaluation report. Of the remaining recommendations, 8 have been partly implemented and 6 have not been implemented. The GRECO report focuses on corruption prevention in respect of members of parliament, judges and prosecutors.
NORTH KOREA APPARENTLY TRYING TO ATTRACT FOREIGN INVESTMENT AND TOURISTS
Kyodo News in Japan on 8th September reported that North Korea has allowed foreign media to visit its cutting-edge facilities and historical sites, as leader Kim Jong Un has pledged to boost the country’s economy, to attract foreign investment and tourists to earn hard currency.
GERMANY: PAN-EUROPEAN TAX FRAUD WEB LEADS TO NEW JERSEY AND DUBAI
Handelsblatt on 8th September claimed that a handful of conspirators teamed up to steal from European taxpayers, aided by an unknown German bank, and prosecutors are just now catching up with the suspects. It says that a trail of tax fraud that flowed from Denmark to Germany, the UK, Canada, Luxembourg and Malaysia, led Danish investigators to a corporation in Delaware whose name translated to “Robber Baron” in German! Raubritter LLC is suspected of stealing €9.3 million from Denmark. On paper, it says, Raubritter is a pension fund, but in reality, it may just be a shell company created to launder cash stolen from European taxpayers – one of 23 allegedly fake pension funds set up by Adam LaRosa and said to have extracted €1.7 billion from Denmark and €500 million from Belgium by requesting tax refunds on fictional investments. Also named is a British auditor, Sanjay Shah, though he claims the activity was legal, and who founded Solo Capital – allegedly the hub of a billion-dollar fraud in Germany that specialised in a special kind of dividend stripping known as “cum-ex trading”. It says that Shah is just one of 130 investors and banks accused of the practice, which cost Germany €12 billion in capital gains tax.
EY in Germany has explained cum-ex (or cum/ex or dividend stripping) as follows – cum/ex trades involved the acquisition of shares with (cum) a dividend on or just before the dividend record date and delivery of these shares after the dividend record date without (ex) dividend which, in certain circumstances, apparently made it possible to obtain multiple refunds of capital gains tax that had only been paid to the German fiscal authorities once.