2nd October 2018
US PASSPORT REVOCATION
On 27th September, Dickinson Wright PLLC published in a blog a short article explaining how the process whereby the IRS can have the US passport of a “seriously delinquent” taxpayer revoked. It says that in February 2018 Congress authorised the IRS to begin certifying US passports for revocation, and by August it had begun revocation actions in at least 260,000 cases.
AUSTRALIA: ILLEGAL “PHOENIX” ACTIVITY – PROPOSED REFORMS
On 29th September, Bartier Perry published an article about legislative changes being made in Australia which includes civil and criminal offences for directors, pre-insolvency advisers (such as lawyers or accountants) and individuals who facilitate illegal phoenix activity. Such activity involves the contrived collapse of a business that then is resurrected with the same ownership to avoid debts, tax and other liabilities.
BRAZIL: FIRST SANCTION AGAINST EXECUTIVE FOR LACK OF DILIGENCE IN CORRUPT PRACTICES
On 28th September, Mayer brown Tauil Chequer published an article about the first-ever penalties imposed by the CVM (the Brazilian SEC) involving violation of fiduciary duties of company administrators due to corrupt practices. It imposed a 5-year disqualification on a public company for alleged involvement in the dissimulation of undue payments made to foreign public officials.
US: WOMAN SENTENCED FOR SMUGGLING TECHNOLOGY INTO CHINA
My News LA on 1st October reported that a woman from California who participated in a scheme to smuggle space and military technology to her native China has been sentenced to more than 5 years in prison. Si Chen, aka Cathy Chen. She bought and smuggled military technology, commonly known as “jammers,” to her native China from March 2013 to 2015.
CONCERNS OVER RISING MARITIME CRIME IN NIGERIAN WATERS
This Day in Nigeria on 2nd October published an article commenting on a recently released report from the US Department of State’s Bureau of Economic and Business Affairs revealed that maritime criminality in Nigerian waters, including piracy and crew kidnap for ransom has been on the increase in recent years “and law enforcement efforts have been limited or ineffectual”. For example, as recently as 22nd September, a gang of pirates took hostage 12 crew members of a Swiss cargo ship they attacked in Nigerian waters.
SMUGGLED AMBER WORTH $1 MILLION DETAINED IN UKRAINE
On 1st October, the Kiyv Post reported that officers of the Security Service of Ukraine (SBU) jointly with the Prosecutor’s office blocked the export of smuggled amber with the weight of more than 1 ton to the European countries.
For more on amber smuggling in Ukraine see –
and a video from Rferl at –
ISTANBUL PROSECUTOR ORDERS DETENTION OF 417 SUSPECTS IN MONEY LAUNDERING PROBE
Daily Sabah in Turkey on 1st October reported that the Istanbul Chief Public Prosecutor’s office ordered the detention of 417 suspects in a money laundering investigation over the transfer of some $419 million to bank accounts abroad, Turkish media reported. Police teams launched simultaneous raids across 40 Istanbul provinces and detained so far 216 suspects, also carrying out searches of properties. It is said that the suspects had received commission for sending the money to 28,088 accounts abroad and that the accounts mainly abroad belonged to Iranians living in the US. Kenneth Rijock in his blog says that reports from Cyprus indicate that Turkish authorities allege that funds were mostly going to Iranian citizens resident in the US.
ROMANIA: €4.7 MILLION SEIZURE OF ASSETS IN HIDROELECTRICA INFLUENCE PEDDLING AND MONEY LAUNDERING CASE
BR Business Review on 1st October reported that magistrates in Bucharest have decided to impose a seizure on the assets owned by former minister, Elena Udrea, to the tune of €4.7 million, as part of the special forfeiture in the Hidroelectrica case. She is accused of influence peddling and money laundering and indicted in December. She is alleged to have asked for $5 million from businessman Bogdan Buzaianu in 2011 in exchange for an intervention to maintain the contract between Hidroelectrica and his company. She was sentenced to 6 years in prison in June for bribery and abuse in office in a separate case, but has been in Costa Rica since February, with which Romania has no extradition treaty.
BILLIONS FOUND IN PAKISTANI STREET VENDOR’S BANK ACCOUNT
Money Control reported on 1st October that the vendor learned that he has 2.225 billion rupees in his bank account when he got a letter from the Federal Investigation Agency. It is said to be linked to a money laundering scam involving former president Asif Ali Zardari. An official claimed that there are over 500 such accounts in Pakistan and investigators are said to be tracing them.
SINGAPORE: FINANCING INDIVIDUAL TRAVEL FOR TERRORIST TRAINING AND ACTING AS A MONEY MULE TO BE ILLEGAL UNDER PROPOSED LAW CHANGES
Channel News Asia on 1st October reported that proposed amendments to Singapore law would also will also allow the Government to prosecute money mules who transport criminal proceeds for organised syndicates. The amendment to the Terrorism (Suppression of Financing) Act (TSOFA) would align laws with obligations under the UN SCR 2178. The money mules offence would be to possess or use property reasonably suspected of being criminal proceeds and not being able to satisfactorily account for it.
FRENCH NAVY SEIZES 7 TONNES OF HASHISH OFF EAST AFRICA
On 1st October, Defence Web reported that a French frigate struck twice in 24 hours to seize over 7000 kg of hashish, valued at $3.5 million, from suspicious dhows off the Horn of Africa.
ISRAELI TYCOON BEGINS 3-YEAR PRISON TERM IN SECURITIES FRAUD
KSL.com on 2nd October reported that former IDB Holding Corporation controlling shareholder Nochi Dankner, described as one of Israel’s most prominent businessmen, has entered prison. He was convicted of carrying out millions of dollars’ worth of fraudulent transactions in an attempt to influence the share price of the troubled company.
HIGH COURT REOPENS CORRUPTION CASE TARGETING ROMANIA’S RULING PARTY LEADER
Romania Insider on 2nd October reported that Romania’s High Court of Cassation and Justice decided to reopen a corruption case related to the privatisation of construction company, Tel Drum. The investigation also targets Liviu Dragnea, the leader of the Social Democratic Party (PSD), the current ruling party in Romania.
MALDIVES PRESIDENT YAMEEN ‘RECEIVED $1.5 MILLION IN CASH’ AHEAD OF VOTE
Al Jazeera on 2nd October reported that an AML body in the Maldives has informed police that President Abdulla Yameen received $1.5 million in hard currency days ahead of a contentious presidential election. It reports that a confidential letter seen by Al Jazeera said the president received the money in 2 instalments to a private bank account at the Maldives Islamic Bank.
NEW US ANTI-TRAFFICKING LEGISLATION MAY SPUR CLOSER LOOK AT MANUFACTURERS’ SUPPLY CHAINS
Foley Hoag on 1st October published an article about the Frederick Douglass Trafficking Victims Prevention and Protection Reauthorization Act 2018. The Act would enhance the List of Goods Produced by Child Labor or Forced Labor that is issued and updated periodically, and require the List to also include “to the extent practicable, goods that are produced with inputs that are produced with forced labor or child labor”. The current covers 2018 edition of the List covers 148 goods in 76 countries – and the article includes peppers and poppies from Mexico, and bricks and timber from Russia; and goods that were produced by child labour, such as mica from India, cocoa from Brazil, and garments from Turkey. US manufacturers are encouraged to use the List as a reference tool for due diligence and carrying out human rights risk assessments.
NEW UK RULES FOR RESOLVING DISPUTES WITH GAMBLING OPERATORS
Calvin Ayre on 1st October reported that the UK’s gambling regulator has issued a new set of rules under which third parties are to handle disputes between gambling operators and consumers. The new rules take effect from 31st October.
See the new rules for alternative dispute resolution –
PAKISTAN ARRESTS SOFTWARE FIRM HEAD FOR FAKE DIPLOMA SCAM
OCCRP on 1st October reported that Pakistan authorities have arrested Shoaib Shaikh, the CEO of the software company Axact, for selling fake online academic degrees worth $140 million to customers worldwide. He and 22 others were sentenced to 20 years in jail by an Islamabad court in July but absconded.
AUTHORISED PUSH PAYMENT (APP) STEERING GROUP VOLUNTARY GUIDANCE – 5 KEY POINTS
TLT Solicitors published an article on 1st October saying that the APP Steering Group has published the draft voluntary code designed to help protect consumers from APP. The draft code is open for consultation until 15th November with a final code expected in early 2019. The article highlights the 5 key points that the firm says you should take note of.
ECOFIN: COMMISSION WELCOMES PROGRESS ACHIEVED ON THE ROAD TO A REFORMED EU VAT SYSTEM
On 2nd October, a news release from the EU said that the European Commission has welcomed the progress made by Member States on much-needed improvements to how VAT works in the EU. This was after a meeting of EU finance ministers in Luxembourg saw agreements on a number of files in this field, all of which should help in the day-to-day running of an EU VAT system which is in urgent need of further far-reaching reform.
COLOMBIA SEIZES FIRST ASSETS LINKED TO EX-FARC MAFIA
Insight Crime on 1st October reported that authorities in Colombia have seized the first set of assets, ranging from a supermarket to commercial properties, allegedly linked to a dissident ex-FARC mafia network, saying that this provides further insight into the economic standing of these dissident groups. It says that the use of supermarkets was one of many ways in which the FARC insurgency laundered its criminal proceeds. In February, authorities seized 60 supermarkets and other assets
THE SEATRADE VERDICT IN THE NETHERLANDS AND WASTE DISPOSAL: HAS SCRAPPING A SHIP JUST GOT A LOT MORE ONEROUS?
A briefing from Ince & Co on 2nd October, says that a judgment of the District Court of Rotterdam in the Seatrade case in March, in which a company and its 2 directors were found guilty of violating EU Regulation No. 1013/2006 on shipments of waste (EWSR), has potentially wide-reaching implications for ship-owners based in Europe and beyond who are considering scrapping their vessels. In 2012, Seatrade sold 4 reefer vessels for scrapping, sending them to India, Bangladesh and Turkey, where they were beached then scrapped. 3 out of them carried cargo en route to their destinations. The decision highlighted the interaction between EWSR and the EU Regulation No. 1257/2013 on ship recycling. The Court concluded that the ships were a combination of non-hazardous and hazardous waste and must, therefore, be regarded as hazardous waste.
NORTHERN IRELAND: CRIMINALS EXTORTING MILLIONS – AND MANY STILL LINKED TO PARAMILITARIES
The Irish Times on 2nd October reported that more than 100 organised crime gangs are operating in Northern Ireland, with around one quarter of those linked to paramilitaries, a senior police officer has said, with extortion and drug dealing remain the biggest earners. Extortion remains an under-reported crime with most victims too afraid to go public. About 10-15% of the organised crime groups are said to have a foreign dimension. Since the establishment of the PSNI’s Asset Confiscation and Enforcement Team last year, there has been a 150% rise in the number of PSNI restraints being put in place and a 50% increase in the number of confiscation orders granted by the courts; and around £1.9 million in criminal assets was recovered last year, with half returned to law enforcement agencies, prosecutors and the courts.
GERMAN MEDIA REVEALS HOW CHINESE BRIBES FOR SIEMENS PRODUCTS FLOWED
On 1st October, ICIJ published an article about court records detailing dozens of bribery prosecutions against Siemens’ medical device distributors in China since 2004, despite massive fines imposed on the company for previous corrupt practices worldwide. From 2004 to 2014, Süddeutsche Zeitung found Siemens had been named in “dozens” of graft cases before Chinese courts.
STANDARD CHARTERED “BRACES FOR $1.5 BILLION FINE OVER IRAN SANCTIONS”
KYC 360 on 2nd October reported that Standard Chartered reportedly expects to be fined around $1.5 billion by US agencies for violating Iran sanctions dating from at least 5 years ago, involving charges that it allowed Iranian-linked firms to transfer money through a Dubai unit.
DRUG WHOLESALER AMERISOURCEBERGEN TO PAY $625 MILLION IN US CIVIL FRAUD SETTLEMENT
KYC 360 on 2nd October reported that one of the largest US drug wholesalers, will pay $625 million to resolve civil fraud charges over the sale of syringes containing drugs for cancer patients, double billing, and providing kickbacks to doctors. The Wall street Journal reported that a former executive said he revealed information that led to the penalty.
START LAUNCHES TERRORISM 360 PODCAST
On 25th September, the National Consortium for the Study of Terrorism and Responses to Terrorism (START) announced that it had launched a new podcast series, Terrorism 360, which features interviews with leading experts on terrorism offering their insights on the threat of terrorism and the effectiveness of counter-terrorism policy, as well as recommendations for policymakers. It says that the 14-episode first season, released weekly, features researchers who have contributed directly to scholarship on terrorism and hold diverse opinions. Some of these experts feel that worldwide responses to terrorism have not been strong enough — others feel that they have been far too strong. Some feel that the threat of terrorism is increasing — others that it is diminishing.
The podcasts are at –
FRANCE FREEZES IRANIAN INTELLIGENCE ASSETS OVER SUSPECTED BOMB PLOT
Rferl reported on 2nd October that France says it has frozen the assets of Iran’s Ministry of Security and Intelligence, as well as those of 2 Iranian men (one of which has been identified as Assadollah Assadi) thought to be members of the country’s intelligence service. Assadollah Assadi is the name of a diplomat who has been arrested over an alleged plot to bomb an Iranian opposition group in France in June, and whose extradition to Belgium in connection with the plot a German court has approved.
MONEYVAL TRAINS NEW ASSESSORS FOR ITS MUTUAL EVALUATIONS
On 2nd October, the Council of Europe reported that on 24th to 28th September, MONEYVAL, jointly with FATF and the Eurasian Group on Combatting Money Laundering and the Financing of Terrorism (EAG), held an assessor training workshop in Moscow. 43 prospective assessors (25 from MONEYVAL member states and jurisdictions) received training on the 2012 FATF Recommendations and the 2013 FATF Methodology.
OFAC ADDS NAMES TO ITS TRANSNATIONAL CRIMINAL ORGANISATION SANCTIONS LISTS
On 2nd October, OFAC added a number of names to its SDN List – including 4 individuals and 2 entities said to be connected to a Japanese yakuza organisation. At the same time, 1 Mexican and 1 Colombian individual were removed.
The Washington Times on 2nd October reported on OFAC imposing sanctions on Japan’s largest Yakuza organised crime syndicate, placing 4 senior officials of the Yamaguchi-Gumi on its blacklist, in addition to 2 companies the gang controls.
‘DECEITFUL’ £17 MILLION SOLAR PANEL SCAM GANG JAILED FOR FRAUD
The BBC on 2nd October reported that 6 men have been jailed over a fraud involving selling solar panels to elderly, retired and vulnerable people. The 1,500 victims were “manipulated” to buy panels with the promise they would get their money back from investments, the SFO said. The men ran a company called Solar Energy Savings Ltd, based in Manchester, which is no longer trading.
SUSPECTED MONEY LAUNDERING AT NORDEA
CPH Post Online in Denmark on 2nd October reported that Nordea, one of the largest financial services group in northern Europe, is suspected of being part of a major international money laundering scandal involving a Russian client and a tax company; and for almost 4 years, police have tried to pursue a criminal case against a Russian client and a company in Belize, suspected of having laundered £38 million using bank accounts in Nordea.
SFO DECIDES AGAINST APPEALING ENRC PRIVILEGE RULING
Reuters reported on 2nd October that the SFO has said it would not appeal a landmark judgment that protects the advice a law firm gave ENRC, a mining company being investigated by the agency over allegations of fraud, bribery and corruption.
EUROPEAN COURT: ACCESS TO PERSONAL DATA NEED NOT BE RESTRICTED ONLY TO CASES INVOLVED “SERIOUS” OFFENCES
The CJEU had ruled that criminal offences that are not particularly serious may justify access to personal data retained by providers of electronic communications services provided that that access does not constitute a serious infringement of privacy. This arose from a Spanish case where, following robbery of a wallet and mobile phone access was sought to data identifying the users of telephone numbers activated with the stolen telephone. This “interference” involving personal data was not held to be serious enough to justify it being prevented.
UK: SPECIALIST FINANCIAL CRIME UNIT TO CRACK DOWN ON PRISON GANGS
On 2nd October, in a news release obviously timed to coincide with the Conservative Party Conference, the MoJ announced a new specialist unit will identify and freeze bank accounts linked to organised crime behind bars. Staffed by members of Police and Prison Service, it will be able to freeze bank accounts and make arrests.
2 LITHUANIAN BROTHERS JAILED FOR 5 YEARS EACH FOR SMUGGLING INTO UK 22 STUN GUNS DISGUISED AS TORCHES
A news release from the NCA on 2nd October reported that the NCA investigated the pair after Border Force officers stopped the brothers in a car at Dover Eastern Docks on 10th March. A search of the vehicle uncovered 22 stuns guns, and £10,445 in cash.
LIBERIA: US FUNDS TO CENTRAL BANK FROZEN OVER $104 MILLION IN MISSING BANKNOTES
OCCRP on 2nd October reported that the US Federal Reserve has frozen transactions with the Central Bank of Liberia as a part of an ongoing investigation into the mysterious disappearance of $104 million earlier this year. The missing funds comprise about 5% of the country’s total GDP. Authorities are said to be investigating 35 officials and have barred them from leaving the country, key among them Milton Weeks, the bank’s former governor who resigned in July, and Charles Sirleaf, a deputy governor of the bank. A Special Presidential Committee has been established to investigate the missing funds.