24th April 2019
NEW JERSEY DEFENCE CONTRACTOR SOLD $1.8 MILLION IN FAKE PARTS TO US MILITARY
The Philadelphia Business Journal on 23rd April reported that Oben Cabalceta, 53, of Owen’s Fasteners Inc. and United Manufacturer LLC, has admitted he defrauded the US military by providing it with $1.9 million in fake parts for equipment, including aircraft, for more than 11 years. A Costa Rican who overstayed a tourist visa in 2000, he also admitted to accessing technical information that is restricted to US citizens.
24 CONTAINERS OF DIRTY PLASTIC FROM SPAIN SMUGGLED INTO PORT KLANG IN MALAYSIA
Malaysia Kini on 24th April reported a minister’s comments about a company smuggling prohibited plastic waste into the country through shipping containers by making false declarations. The containers are declared containing clean used-plastic, she said, but actually they contain dirty plastic. According to regulations, only clean used-plastic is allowed to be imported into the country for recycling. The ministry would order the containers to be sent back to their country of origin by the shipping companies that brought them in. The minister also said that checks had been conducted on 300 factories involved in recycling, with 148 of them ordered to either cease or suspend operations. The Star Online also reported that the minister said that an investigation found that plastic waste was still being smuggled into Malaysia from developed countries such as the UK, Australia, US and Germany. Some 111 containers with contaminated plastic unfit for recycling remain unclaimed at Westports in Port Klang, and there are another 18 in nearby Northport. Illegal plastic waste became a cause of concern among Malaysians when a 2018 investigation into plastic recycling factories in Kuala Langat found that Malaysia took in plastic waste from at least 19 countries and that between January and July, Malaysia imported 754,000 tonnes of plastic – according to Greenpeace, only 9% of the plastic waste are clean plastic that could be recycled.
MOROCCO FOILS SMUGGLING OF 7 TONS OF CANNABIS
Xinhua reported on 24th April that Moroccan security forces have foiled an attempt to smuggle nearly 7 tons of cannabis resin in Casablanca. It is reported that it probably intended to be smuggled by sea.
JAPAN PROBES 2 CRYPTOCURRENCY EXCHANGES AFTER MANAGEMENT CHANGES
KYC 360 on 24th April reported that the FSA has carried out inspections at Huobi Japan Inc and Fisco Cryptocurrency Exchange Inc to investigate their internal oversight, including customer protection and AML measures.
UK: FCA BUSINESS PLAN FLAGS POTENTIAL ENFORCEMENT TARGETS
On 23rd April, Freshfields Bruckhaus Deringer published an article about the recently-released FCA Business Plan. In addition to the chief priority, Brexit, and other aims, the Plan says that the FCA will seek to combat financial crime and improving AML practices, by enhancing the use of intelligence-gathering, technology and data, as well as engaging with multiple agencies and government bodies.
CIVIL LITIGATION IN GUERNSEY
On 23rd April, Ferbrache & Farrell LLP published a briefing first published in July 2017 that sets out some of the more important rules and areas of interest when dealing with Guernsey civil proceedings.
EU COULD IMPOSE ADDITIONAL CUSTOMS DUTIES AS RESULT OF ONGOING US TRADE DISPUTE
On 23rd April, Bird & Bird published an article detailing a preliminary list published by the European Commission of products originating from the US that could face additional customs duties when imported into the EU. Further, more trade measures and countermeasures may be on the horizon in view of possible US-duties on EU-origin cars.
TRUMP AND THE WEAPONISATION OF INTERNATIONAL TRADE
On 23rd April, ETH Zurich published an article which contends that the Trump administration’s trade policies are causing more problems than they solve. They treat friends like adversaries, thereby weakening alliances, and are further complicating the relationship with China. By discarding the current multilateral system in favour of a bilateral approach, the Trump administration is encouraging other countries to view trade negotiations as a zero-sum, power-driven process. In an era of renewed geopolitical competition, this is eroding the dividing line between economic and security issues and, more broadly, undermining the foundations of the liberal world order.
KENYA PORTS AUTHORITY (KPA) AWARDS TENDER TO A COMPANY BLACKLISTED BY WORLD BANK
The Daily Nation on 24th April reported that the controversy surrounding the Kipevu Oil Terminal project continued to deepen, with questions asked about the award of the tender to the China Communications Construction Company (CCCC), whose parent – China Road and Bridge Corporation (CRBC) – had been blacklisted by the World Bank in 2009 for an 8-year period after an investigation discovered that CRBC had “engaged in collusive practices in World Bank-funded projects in the Philippines”.
RED NOTICE FRAUD FUGITIVE REPATRIATED FROM SINGAPORE TO CHINA
On 24th April, China.org reported that Liang Zening was former president of a village collective enterprise in Shenzhen. Liang fled to Singapore in September 2015 and was listed on the Interpol Red Notice in March 2016. A spokesman said Liang’s case was typical of grassroots corruption that infringes on people’s rights and interests, and such cases are currently a focus of fugitive repatriation and asset recovery work.
HMRC ESTIMATES US COMPANIES COULD OWE £4.6 BILLION
On 23rd April, the ICAEW reported that US-based companies could be faced with an additional £4.6 billion in UK tax bills for the year ending March 2018 – an increase of 35% on the previous year, with HMRC cracking down on transfer pricing.
FRAUDSTER WHO FLED TO BAHRAIN AFTER STEALING £670,000 FROM JERSEY COMPANY IS JAILED
The Jersey Evening Post on 24th April reported that a fraudster who ‘cynically exploited’ the sudden death of his business partner to plunder more than £670,000 from a failing Jersey company has been jailed. Russell Stephen King, 60, was jailed for 6 years. He was involved with the now-defunct Belgravia Financial Services Group, of which he was a shadow director. The court heard King manipulated a ‘yes-man’ employee.
CAMEROON’S CUSTOMS AGENCY SAID TO BE THE MOST CORRUPT IN COUNTRY
ENACT Africa on 17th April reported that if Cameroon is to fight transnational organised crime, it needs to address entrenched graft within its customs services – and a 2018 report by Cameroon’s National Anti-corruption Commission (CONAC) ranked Customs as the most corrupt agency in the country between 2010 and 2015.
MAN ARRESTED IN ALLEGED PRECIOUS METALS “ANCIENT SLAG” SCHEME
NBC in Los Angeles reported on 23rd April that a man has been arrested on federal fraud and money laundering charges stemming from an alleged scheme involving the sale of “ancient slag,” a mining waste by-product that supposedly contained precious metals. Michael Godfree, 77, was co-founder of The Minerals Acquisition Co., a Pasadena-based outfit that offered to sell slag to victims who were told the company possessed “proof of concept” of a method to extract precious metals from the slag, which was generated from copper mining, according to the indictment. It sold the slag with promises of refining the material and recovering precious metals, and provided buyers with supposedly attorney-certified “Certificates of Title” that purported to transfer ownership of the slag to the buyer, prosecutors allege. The original company was dissolved in 2015, but its operations were largely taken over by Precious Metals of North America Inc, another of Godfree’s companies, according to federal prosecutors, who allege that he generated at least $7 million in sales from more than 100 victims.
MONDAQ COMPARATIVE GUIDE TO PATENTS
These provide an overview of some of the key points of law and practice and allow one to compare regulatory environments and laws across multiple jurisdictions. As well as patents, they currently also cover trademarks, international arbitration and corporate tax.
UK: RESPONSE TO PROPOSED REVISIONS TO PACE CODES C AND H
On 24th April, the Home Office released responses concerning the outcome of the consultation on PACE Codes C and H. Changes that are to be implemented when the full revised Codes C and H are laid before Parliament, and until then the current Codes remain unchanged and in force. Code C covers detention, and Code H detention in terrorism cases.
FORMER FRENCH PRIME MINISTER TO STAND TRIAL FOR MISUSE OF PUBLIC FUNDS
The Wall Street Journal on 23rd April reported that French judges have ordered former Prime Minister François Fillon to stand trial on charges of misusing public funds, in a case that ended his 2017 bid for the presidency and cleared the way for the election of Emmanuel Macron. He is said to have been charged with misappropriating public funds by employing his wife and 2 of his children as aides while he served in parliament.
ISLE OF MAN GOVERNMENT ISSUES WARNING TO REGISTER AND PROTECT A BUSINESS NAME
The Department of Enterprise has issued a reminder that, in the Isle of Man, if you have set up a business, and are trading under a company name other than your own, you must register your Business Name with the Companies Registry. If you have previously registered a Business Name, but not completed an Annual Declaration in the last 12 months, you should send a declaration to the Registry as soon as possible to prevent the name being removed from the Register.
PODCAST: COMPLIANCE CHALLENGES IN GLOBAL DEVELOPMENT
In the latest TRACE podcast, Lauren Camilli, VP and Chief Ethics and Compliance Officer at Blumont, talks about some of the challenges that are specific to the global aid and development world, as well as some that are universal.
PHILIPPINES’ DUTERTE THREATENS TO SAIL GARBAGE BACK TO CANADA
Reuters on 23rd April reported that Duerte has berated Canada in a long-running dispute over waste exported to Philippines, threatening to sail it back to Canada. Manila has filed several diplomatic protests with Canada over tons of waste shipped to the Philippines between 2013 and 2014, but Canada has said the shipment was a commercial transaction and was not backed by its government.
GLASGOW MAN WHO CREATED FAKE DIRECTOR JAILED FOR £190,000 TAX FRAUD
The Glasgow Evening Times on 24th April reported that Richard Cusick, a former bus driver set up Discount Business Utilities Ltd, but when he was made bankrupt and no longer eligible to be a company director, he created a fictitious director called Robert Gallacher to take control of the business.
US DoJ STAFF SEEK GOLDMAN GUILTY PLEA IN 1MDB SETTLEMENT
Reuters on 24th April reported that a US government settlement with Goldman Sachs Group Inc over its role in the 1MDB corruption scandal should include a guilty plea at the parent company level, DoJ staff have recommended. The staff recommendation by prosecutors is now being considered by senior officials at the Justice Department.
ALUMINIUM COMPANY AGREES TO $46 MILLION PENALTY FOR FALSIFYING TEST RESULTS
On 23rd April, the US Department of Defense reported that an Oregon aluminium extrusion manufacturer – Hydro Extrusion Portland Inc, formerly known as Sapa Profiles Inc (SPI), and its corporate parent, Hydro Extrusion USA LLC, formerly known as Sapa Extrusions Inc (SEI) – has agreed to pay $46 million to NASA, DoD, and others to resolve criminal charges and civil claims relating to a 19-year fraud scheme that included falsifying thousands of certifications for aluminium extrusions provided to hundreds of customers.
CHINA FORMALLY ARRESTS EX-INTERPOL CHIEF
Channel News Asia on 24th April reported that China has formally arrested former Interpol chief Meng Hongwei on suspicion of accepting bribes, prosecutors announced
FORMER BARCELONA FC PRESIDENT ACQUITTED OF MONEY LAUNDERING
The Charlotte Observer on 24th April reported that the former Barcelona president Sandro Rosell has been acquitted of money laundering charges after spending nearly 2 years in prison, the court saying that there was not enough evidence for a guilty verdict on charges related to the sale of TV rights for matches involving the Brazilian national soccer team.
US SEIZED MILLIONS FROM CORRUPT VENEZUELAN KLEPTOCRATS – NOW A MIAMI LAWSUIT SEEKS TO GET IT BACK FOR THE PEOPLE
On 24th April, the Miami Herald reported that a group of Miami lawyers are challenging the DoJ position in an ongoing South Florida money laundering prosecution of wealthy Venezuelan defendants, known as “kleptocrats”. The lawyers are seeking to recover potentially hundreds of millions of dollars for Venezuela’s people, who are struggling through an economic disaster. They are hoping to obtain whatever stolen funds federal authorities seize from future convicted defendants to help the Venezuelan people — not the government of President Nicolas Maduro.
BLOOD MONEY: THE BIOTECH SCANDAL OF THERANOS ON SCREEN
On 2nd April, Nature reported that the rise and fall of the California medical-testing company features in a new documentary about Theranos, a $9 billion company founded by a 19-year-old wunderkind who promised to revolutionise medical testing and instead was charged with fraud last year. It provides a summary of the scandal itself.
SWEDEN’S GOVERNMENT MULLING A BLANKET BAN ON ONLINE CASINO ADVERTISING
Calvin Ayre on 24th April reported that Sweden’s government is mulling a blanket ban on online casino advertising, which it says would likely further entrench the dominance of the state’s former gambling monopolies.
PLANS SUBMITTED FOR JERSEY’S FIRST CANNABIS FARM AND KNOWLEDGE CENTRE
The Jersey Evening Post on 24th April reported that a partnership has submitted plans to build what could be Jersey’s first medicinal cannabis farm and research centre.
HUMAN TRAFFICKING: HUNDREDS RESCUED IN WEST AFRICA
A news release from Interpol on 24th April reported that almost 220 victims of human trafficking have been rescued by police in Benin and Nigeria in an operation co-ordinated by Interpol. Police arrested 47 people and seized vehicles, cash, mobile phones and computers. Many of 157 rescued minors were moved around as ‘merchandise’ themselves across the border, and made to work in markets all day, peddling goods, fetching water, cooking, carrying heavy loads, or working as housemaids. Some were the victims of sexual exploitation.
GOLD WORTH BILLIONS SMUGGLED OUT OF AFRICA
Yahoo Finance carried a Reuters report dated 24th April and marked as exclusive saying that billions of dollars’ worth of gold is being smuggled out of Africa every year through the UAE – a gateway to markets in Europe, the US and beyond. It says that customs data shows that the UAE imported $15.1 billion worth of gold from Africa in 2016, more than any other country and up from $1.3 billion in 2006 – but much of the gold was not recorded in the exports of African states.
BULGARIA LAUNCHES PROBE INTO FAKE BED-AND-BREAKFASTS FUNDED BY EU
On 24th April, Rferl reported that the Bulgarian Prosecutor-General’s Office has launched a nationwide investigation into “many” suspected fraud cases involving an EU rural-development programme that has provided more than €100 million to build bed-and-breakfast lodgings across the country – and a criminal case has been filed against former Deputy Economy Minister Aleksandar Manolev, just one of the suspected fraud cases being investigated. It explains that the idea of the EU programme was to inject funds into rural areas of Bulgaria to help create small, sustainable businesses and employment opportunities in the tourism sector. For each project, €200,000 euros was to help applicants build bed-and-breakfast accommodations, and those who received the funds were obliged to operate as a bed-and-breakfast for at least 5 years.
RUSSIA TIGHTENS GRIP OVER GRAIN EXPORTS WITH STATE-LED ASSOCIATION
Hellenic Shipping News on 24th April reported that major grain traders in Russia have agreed to create a new exporters’ association – the Russian Union Of Grain Exporters – led by a state-controlled firm, increasing the government’s influence over supplies from the world’s biggest wheat exporter.
POLICE RAID ANDERLECHT AND BELGIUM FA OFFICES IN MONEY LAUNDERING INQUIRY
The Guardian on 24th April reported that Belgian police have raided the offices of Anderlecht and the Belgian Football Association in relation to a money laundering investigation involving agents and transfers.