OTHER THINGS YOU MAY HAVE MISSED – JANUARY 28

28th January 2019

SWITZERLAND REJECTS GERMAN PANAMA PAPERS OFFER

Swissinfo on 27th January reported that Switzerland is the only country that declined an invitation from the German police to sift through the leaked Panama Papers that detail the activities of global banks and financial intermediaries on behalf of wealthy clientsThe SonntagsZeitung reports that 16 other countries sent police and prosecutors to Wiesbaden, last September to glean evidence of potential offences.  German police told the newspaper that they have not received any request for assistance from Switzerland despite having possession of the treasure trove of documents, Swiss authorities saying legal restrictions limited what evidence they could give and receive.

https://www.swissinfo.ch/eng/legal-restrictions_switzerland-rejects-german-panama-papers-offer/44712630

 LICENCES SUSPENDED FOR ISRAELI DRONEMAKER ACCUSED OF ATTACKING ARMENIA MILITARY

News.am in Armenia, and Israeli media, reported on 27th January that the Israeli Defence Ministry had suspended the export licences for Aeronautics.  It was reported that drones supplied by the company had been used for attacks on Armenian forces.

https://www.jpost.com/Israel-News/Defense-Ministry-to-suspend-drone-maker-executives-export-licenses-578809

https://news.am/eng/news/492931.html

INDIA BECOMING TRANSIT ROUTE FOR DRUGS ENTERING BANGLADESH

Eurasia Review on 28th January reported that methamphetamine tablets made in Myanmar that were traditionally smuggled through south-eastern Bangladesh are coming across the border from India.  It says that evidence suggests that smuggling routes shifted north in response to an anti-drug crackdown in Bangladesh.  India’s anti-narcotics bureau have seized huge quantities of yaba tablets, which contain a mixture of meth and caffeine, and which appeared to have originated in Myanmar.

http://www.eurasiareview.com/28012019-india-becoming-transit-route-for-drugs-entering-bangladesh/

UK: NEW PRISONS FINANCIAL CRIME UNIT SECURES FIRST BUST

A news release from the MoJ on 28th January claimed that, the Financial Investigations Unit, a special unit set up to freeze and seize the assets of criminals operating in prisons has claimed its first success.  An investigation by specialist prison service staff and police has led the to seizure of almost £8,000.  The unit was created last year as part of a wider effort to disrupt the organised crime in prisons which fuels drug use and violence.  It is made up of specially-trained prison service analysts and police financial investigators who use intelligence to identify bank accounts used for illicit transactions. They have the power to freeze bank accounts and make arrests.

https://www.gov.uk/government/news/new-prisons-financial-crime-unit-secures-first-bust

INDIA LIFTS DENEL BAN THAT HAS BEEN IN PLACE SINCE 2005

City Press in South Africa reported on 27th January that India had removed the embargo on deals with South African arms manufacturer Denel.  Denel was blacklisted in India in 2005 after allegations emerged that it paid kickbacks to a company based in the Isle of Man to help secure deals to supply the Indian army with rifles and rounds of ammunition.

https://city-press.news24.com/News/india-lifts-denel-ban-that-has-been-in-place-since-2005-20190126

MALAYSIA THREATENS TO FREEZE OUT EU OVER PALM OIL BAN

Nikkei Asian review on 28th January carried an article saying that the Malaysian government said that a recent regional agreement to upgrade relations with the EU should be deferred due to an ongoing trade dispute over palm oil, where the EU has been moving to ban the use of palm oil in biofuels, citing deforestation as a reason.

https://asia.nikkei.com/Politics/Malaysia-in-transition/Malaysia-threatens-to-freeze-out-EU-over-palm-oil-ban

GROWING ESPORTS TO A $1.6B INDUSTRY AND ITS CORRUPTION RISKS

On 25th January, Greenberg Traurig published an article which says that competitive video gaming, collectively referred to as “esports,” has exploded into a mainstream endeavour firmly established as part of current popular culture.  It also says that professional teams and players have fuelled much of esports’ explosive growth, supported by significant investments from traditional sports franchise owners and players and increased visibility on traditional media outlets, and that those unfamiliar with esports may be surprised to learn that more worldwide viewers now watch esports than the NBA Finals.  Worldwide revenues for esports are predicted to reach approximately $1.6 billion by 2021.  It is said that Esports’ increasing popularity has been accompanied by similar growth in wagering, with the global esports betting market is anticipated to be worth nearly $30 billion by 2020.  However, it says that Esports has already suffered match-fixing scandals, concentrated in South Korea and China, resulting in bans, fines, and arrests.  It says that corruption risks are particularly pronounced in esports since cohesive regulations, governing body, structure, or standards across the entire competitive ecosystem do not currently exist.

https://www.gtlaw.com/en/insights/2019/1/published-articles/growing-esports-to-a-1-6b-industry-and-corruption-risks

UK TRADE WITH IRELAND

On 28th January, the House of Commons Library published a briefing paper which says that Ireland is one of the UK’s largest trading partners, and gives some key statistics on UK-Ireland trade.  In 2017, UK exports to Ireland were worth £34.0 billion; imports from Ireland were £21.8 billion, resulting in a trade surplus of £12.2 billion with Ireland.

http://researchbriefings.files.parliament.uk/documents/CBP-8173/CBP-8173.pdf

LAW SOCIETY OF ZIMBABWE QUESTIONED ALLEGATIONS THAT LEGAL PRACTITIONERS DOMINATE THE LIST OF CORRUPT OFFICIALS

Pindula on 28th January reported that, in a statement, it questioned why the Prosecutor-General is not prosecuting the lawyers if he has incriminating evidence as he alleges.

https://news.pindula.co.zw/2019/01/28/law-society-of-zimbabwe-questions-authenticity-of-prosecutor-generals-corruption-allegations

MAGISTRATE CONSIDERS MAJOR CORRUPTION TRIAL IN PORTUGAL

The Seattle Times on 28th January reported that a Portuguese magistrate is deciding whether there is enough evidence to put a former prime minister and 2 dozen other once-powerful figures on trial for corruption, money laundering and other crimes.  It names Jose Socrates, prime minister from 2005-11, who it says is accused of pocketing €34 million through top-level corruption.  Other suspects include a former government minister, the one-time head of Portugal’s largest listed bank, which went bankrupt, and Portugal Telecom’s former president and its former chairman of the board.

https://www.seattletimes.com/business/magistrate-considers-major-corruption-trial-in-portugal

BULGARIA REVOKES CITIZENSHIP FOR RUSSIAN MILLIONAIRE ADONEV

The State on 28th January reported that the Bulgarian citizenship of Russian millionaire Sergey Adonev has been revoked over a 20-year-old fraud conviction in the US.  Adonev, 57, co-founded the Russian mobile operator Yota.

https://www.thestate.com/news/business/national-business/article225175835.html#navlink=SecList

CANADIAN ARRESTED IN MACAU FOR ‘$284 MILLION FRAUD’

The Asia Times reported on 28th January that an ethnic Chinese man, 61, allegedly tried to transfer huge sum from an entertainment company but bank staff allegedly queried his signature.

http://www.atimes.com/article/canadian-arrested-in-macau-for-284-million-fraud/

https://calvinayre.com/2019/01/28/casino/macau-police-arrest-gaming-scammer/

AUTHORITIES ACORSS WORLD GO AFTER USERS OF BIGGEST DDoS-FOR HIRE WEBSITE

A Europol news release on 28th January reported that the takedown by law enforcement in April 2018 of the illegal marketplace webstresser.org as part of Operation Power OFF has given authorities all over Europe and beyond a trove of information about the website’s 151 000 registered users.  Actions is currently underway to track down the users of Distributed Denial of Service (DDoS) attacks, and webstresser.org is believed to have been the world’s biggest marketplace to hire DDoS services, having helped launched over 4 million attacks for as little as €15.00 a month.

https://www.europol.europa.eu/newsroom/news/authorities-across-world-going-after-users-of-biggest-ddos-for-hire-website

http://www.nationalcrimeagency.gov.uk/news/1559-users-of-illegal-websites-targeted-in-joint-law-enforcement-activity

https://calvinayre.com/2019/01/28/business/europol-targeting-users-ddos-for-hire-services/

HONG KONG GANG ARRESTED FOR ALLEGED ‘LONDON GOLD’ SCAM WORTH $80 MILLION

Bullion by Post on 28th January reported that police in Hong Kong have arrested 12 men and two women who they believe are responsible for running a gold scam.  The accused are reported to have defrauded 7 people for approximately $80 million, with around $74 million of the money coming from one individual – an 85-year-old man.  Using social media, they encouraged the ‘investors’ to hand over cash for investment on the London commodities market for gold and other assets, and, inevitably, these fake investments failed.

https://www.bullionbypost.co.uk/gold-news/2019/january/28/hong-kong-gang-arrested-alleged-london-gold-scam-worth-80-million/

MoU TO ENABLE CLOSER WORKING BETWEEN GAMBLING REGULATORS IN GREAT BRITAIN AND GIBRALTAR

As part of a news release from the Department for Exiting the EU on 28th January, it was announced the conclusion of a MoU to enable closer working between gambling regulators in Great Britain and Gibraltar, described as building on the commitment that gambling operators based in Gibraltar will continue to access the UK market after the UK leaves the EU in the same way they do now.

https://www.gov.uk/government/news/uk-and-gibraltar-discuss-future-and-conclude-agreement-on-gambling

UK STATEMENT ON INFRACTION PROCEEDINGS ON VAT TREATMENT OF CERTAIN COMMODITY DERIVATIVES TRADING

On 28th January, HM Treasury issued a news release regarding the European Commission’s notification of infraction proceedings on the UK’s VAT treatment of certain commodity derivatives trading.  It said that it would respond in due course and the legal position remains as described in the release.

https://www.gov.uk/government/news/statement-on-infraction-proceedings-on-vat-treatment-of-certain-commodity-derivatives-trading

SEC WINS PONZI SCHEME LAWSUIT WITH $1 BILLION FINE LEVIED

On 28th January, The Street reported that a federal judge has ordered Woodbridge Group of Companies LLC and its former owner to pay $1 billion in penalties and disgorgement for operating a Ponzi scheme that targeted retail investors.  The company will have to pay $892 million in disgorgement, with the court ordering former owner and CEO Robert H. Shapiro to pay a $100 million civil penalty.  Shapiro and a group of unregistered investment companies, collectively called the Woodbridge Group of Companies LLC, were said to have defrauded more than 8,400 investors through unregistered Woodbridge funds.

https://www.thestreet.com/investing/sec-wins-ponzi-scheme-lawsuit-against-woodbridge-group-1-billion-fine-levied-14847567

MACEDONIAN PROSECUTOR IMPLICATES FORMER POLITICAL LEADERS IN MONEY LAUNDERING, EXTORTION, ILLICIT LAND DEALS

On 28th January, OCCRP reported that a wide-ranging corruption investigation by the Macedonian special prosecutor has unearthed new evidence of wrongdoing in dozens of deals by VMRO-DPMNE, the right-wing party that ruled the country between 2006 and 2017 – former Prime Minister Nikola Gruevski, who fled to Hungary in November.

https://www.occrp.org/en/investigations/macedonian-prosecutor-implicates-former-political-leaders-in-money-laundering-extortion-illicit-land-deals

DUAL-USE DOCUMENTS DID NOT MEET “DOMINANT PURPOSE” TEST FOR LITIGATION PRIVILEGE

A briefing from Allen & Overy on 24th January reported that correspondence passing between a claimant and art experts was not covered by litigation privilege as it was not created for the dominant purpose of litigation.  The correspondence was created for 2 purposes of equal importance, and the decision underlines the fact-sensitive nature of the court’s analysis in determining privilege.

http://www.allenovery.com/publications/en-gb/Pages/dual-use-documents-did-not-meet-dominant-purpose-test-for-litigation-privilege.aspx

ISRAELI CABINET APPROVES LAW ALLOWING EXPORT OF MEDICAL CANNABIS

On 28th January, Jurist reported that the law, which passed the Knesset last month, provides for Israeli companies to export medical marijuana with an appropriate licence.  The licences will be issued by the Minister of Health with an appropriate recommendation from the police and a committee designed to review such applications.

https://www.jurist.org/news/2019/01/israel-cabinet-approves-law-allowing-export-of-medical-marijuana/

BRAZIL ESTABLISHES DEFENCE EXPORT SUPPORT ORGANISATION

Janes.com on 28th January reported that the Brazilian Chamber of Foreign Trade (CAMEX), part of the Ministry of Industry, Foreign Trade and Services (MDIC), has established a group to support the export of military goods and services by local companies – the Time Brasil Defesa (Defence Brazil Team) will be responsible for negotiating financing operations and the concession of credits for exports by Brazilian companies of military items.

https://www.janes.com/article/85999/brazil-establishes-defence-export-support-organisation

UZBEKISTAN EXTRADITES BTA BANK CASE SUSPECT TO KAZAKHSTAN

Rferl on 28th January reported that Uzbekistan has extradited a man suspected of embezzlement to neighbouring Kazakhstan, the latest development in a politically-charged case involving the Kazakh bank BTA.  Artur Trofimov was suspected of embezzling and laundering significant amounts of cash from BTA in 2005-2009.  He is also suspected of creating and leading an organized criminal group, it said.  In 2017, a court in Kazakhstan convicted Ablyazov in absentia.

https://www.rferl.org/a/facebook-announces-new-ad-rules-to-ward-off-election-meddling/29736532.html

THE HIDDEN COST OF THE ‘FAT LEONARD’ INVESTIGATION INTO US NAVY CORRUPTION

USNI News on 28th January carried an article into the investigation into the web of corruption spun by US Navy contractor Leonard Francis.  The 6-year-long DoJ-led probe into the “Fat Leonard” scandal has resulted in 33 federal indictments.  It is now causing difficulties in Navy promotions.

https://news.usni.org/2019/01/24/paying-price-hidden-cost-fat-leonard-investigation

BRITISH LOCAL COUNCILS URGE INCREASED PENALTIES FOR ILLEGAL TOBACCO SALES

On 28th January, an article on Ekklesia said that the Local Government Association (LGA), which represents 370 councils in England and Wales, says the illegal tobacco trade is rife and undermining efforts to reduce smoking.  It is calling for courts to impose bigger fines for selling illegal cigarettes which cost the UK economy more than £2 billion a year in unpaid duty.

http://www.ekklesia.co.uk/node/27622

US CHARGES TOP CHINESE CELLPHONE MAKER HUAWEI WITH MONEY LAUNDERING AND FRAUD

On 28th January, NBC News reported that the Trump administration announced criminal charges against one of China’s largest telecommunications companies, a dramatic move that promises to ratchet up tensions on the eve of trade talks between the countries.  Indictments had been unsealed in 2 separate cases.

https://www.nbcnews.com/politics/national-security/u-s-charges-top-chinese-cellphone-maker-huawei-money-laundering-n963646

SPANISH COURT JAILS DRUG BARON, FAMILY AND CLOSES MONEY LAUNDERING ESTATE AGENCY

France 24 on 28th January reported that a Spanish court in Galicia has jailed and fined a well-known drug baron and several members of his family, shutting down the estate agents they used for money laundering. Sito Minanco was jailed for 4 years and fined €6 million for laundering drug money.  4 other defendants – his ex-wife, his eldest daughter, a former sister-in-law and a business associate – all received the same sentence. The court also ordered the seizure of their assets and possessions, including the closure of the estate agents they ran. That business was the “axis around which all the defendants committed the crime of money laundering”, said the judgment.

https://www.france24.com/en/20190128-spanish-court-jails-drug-baron-family

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US TREASURY SANCTIONS VENEZUELA’S STATE-OWNED OIL COMPANY PDVSA

On 28th January, a news release from the US Treasury said that OFAC has designated Petroleos de Venezuela, S.A. (PdVSA).   PdVSA is a Venezuelan state-owned oil company and a primary source of Venezuela’s income and foreign currency, to include US dollars and Euros.  It says that, as Venezuela’s state owned oil company, PdVSA has long been a vehicle for corruption; and a variety of schemes have been designed to embezzle billions of dollars from PdVSA for the personal gain of corrupt Venezuelan officials and businessmen.

https://home.treasury.gov/news/press-releases/sm594

https://content.govdelivery.com/accounts/USTREAS/bulletins/22b5420

ISLE OF MAN EUROPEAN WITHDRAWAL ACT NOW AVAILABLE ONLINE

The Isle of Man’s legislation website now carries the text of the European Union and Trade Act 2019, which repealed the European Communities (Isle of Man) Act 1973, makes provision consequent upon the withdrawal of the UK from the EU and the resultant cessation of Protocol 3 that governed the Island’s relationship with the EU.

https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/2019/2019-0002/EuropeanUnionandTradeAct2019_1.pdf

NO ORDER FOR COSTS FOLLOWING WITHDRAWN FORFEITURE APPLICATION

UK Police Blog on 28th January reported that the High Court confirmed that a district judge was correct to make no order for costs against the police after it withdrew its s.298 POCA 2002 application for cash forfeiture.  In considering the decision of the district judge, the High Court reaffirmed 3 points: firstly, the starting point is that no order for costs should be made provided that the public authority has acted reasonably and properly; secondly, in determining whether the police acted reasonably and properly, the court should scrutinise the behaviour of the police with care; and thirdly, it may be justifiable to award costs against the police, particularly where the successful private party would suffer substantial hardship if no order for costs were made in their favour.  Detailing the background to the case and the decision, the post says that the judgment reaffirms the high threshold faced by successful parties challenging a section 298 forfeiture application.

http://ukpolicelawblog.com/index.php/9-blog/196-no-order-for-costs-following-withdrawn-forfeiture-application

FATF: TUNISIA THIRD AML/CFT ASSESSMENT FOLLOW-UP REPORT

On 28th January, FATF published the 3rd follow-up report reports that Tunisia has made efforts to address the deficiencies remaining since its mutual evaluation in 2016 and the last follow-up report.  Following submissions, FATF has agreed to upgrade the rating of 4 Recommendations (6, 8, 26 and 34) from Partially Compliant to Largely Compliant, but to downgrade the rating of Recommendation 18 from Largely Compliant to Partially Compliant.  Recommendation 7 to remain at Non-Compliant.  Tunisia will remain in enhanced follow-up and should submit its 4th follow-up report in November 2019.

http://www.fatf-gafi.org/media/fatf/content/images/MENAFATF-3rd-FUR-Tunisia.pdf

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MALTA: BILLIONS OF EUROS IN SATABANK TRANSACTIONS DEEMED ‘HIGHLY SUSPICIOUS’

 

The Times of Malta on 27th January reported that financial regulators and police are looking into a “cornucopia” of cases with suspected links to fuel smuggling, drug trafficking, the Mafia and black listed countries.  All 12,000 of Satabank’s accounts were effectively frozen by the MFSA in October, after an inspection by the MFSA and FIAU, with EY appointed to administer the bank’s assets in “the best interests of depositors”.  The newspaper says that, prior to the bank gaining its licence in Malta, Satabank’s Bulgarian co-owner Christo Georgiev ran an e-money business in Luxembourg.  He has since faced a number of international investigations into alleged wrongdoing.  The group the bank forms part of had voluntarily surrendered its electronic money institution licence issued by Luxembourg shortly after Satabank was given its licence in Malta.

https://www.timesofmalta.com/articles/view/20190127/local/half-of-satabanks-transactions-were-highly-suspicious.700280