17th September 2019
CONTROL OF ARMS EXPORT: EU COUNCIL ADOPTS CONCLUSIONS AND NEW DECISION UPDATING THE EU COMMON RULES AND A REVISED USER’S GUIDE
On 16th September, a news release advised that the EU Council had adopted a Decision amending the Council Common Position of 2008 on the control of arms exports, as well as a revised user’s guide. The changes take account of developments, including the entry into force of the UN Arms Trade Treaty, which regulates the international trade in conventional arms and to which all Member States are parties. The Council reaffirms that military equipment and technology should be traded in a responsible and accountable way, and renews its commitment to promote co-operation and convergence in Member States’ policies to prevent the export of military technology and equipment which might be used for internal repression or international aggression, or contribute to regional instability.
NSO GROUP INTRODUCES NEW HUMAN RIGHTS POLICY FOLLOWING SCRUTINY OF ITS SPYWARE
On 16th September, Verdict reported that the Israeli company NSO Group has introduced a new Human Rights Policy and a supporting governance framework in an apparent attempt to boost its reputation and comply with the UN Guiding Principles for Business and Human Rights following criticism that its technology was being used to violate the rights of journalist and human rights defenders.
NEW CASH-SMUGGLING ALLEGATION IN HAWAII AGAINST MEGACHURCH LEADER QUIBOLOY AND AIDE
The Inquirer on 17th September reported that a former follower in Hawaii of Filipino megachurch leader Apollo Quiboloy has made new allegations of cash smuggling by a church officer and the pastor himself. It is alleged that Quiboloy and Felina Salinas ordered members of the Kingdom of Jesus Christ Church to smuggle hundreds of thousands of dollars from California to the Philippines on 2 separate occasions in 2013 and 2014. Last year Salinas was indicted for trying to smuggle more than $300,000 in cash from Hawaii to the Philippines on the private jet of church founder Quiboloy.
FLIPPING DEFENDANTS – SOCPA AGREEMENTS IN THE UK
On 13th September, Kingsley Napley published an article about one of the means that the SFO can use in serious fraud investigations, by getting defendants or would-be defendants to co-operate with the investigation by use of SOCPA Agreements, i.e. agreements under sections 71 to 75 of the Serious Organised Crime and Police Act 2005. What can be seen as a form of the old common law principle of someone “turning Queen’s evidence”, the provisions offer (rarely) full immunity or, more usually, a status of a co-operating witness, which requires the offender to plead, co-operate with the prosecutor including giving evidence in return for a discount on sentence. However, use remains unusual – in the period May 2017 – April 2018, there were none of the former and only 14 of the latter type of agreement – amounting to only 0.002% of cases. The article considers why use of the agreements is so rare, what the agreement might involve and what benefits has it for a defendant.
2 EUROPEAN WEALTH MANAGERS CHARGED WITH MONEY LAUNDERING AS A US PROBE INTO $1 BILLION VENEZUELA BRIBERY SCHEME EXPANDS
On 17th September, KYC 360 reported that the 3 charged are Javier Alvarado Ochoa, a Venezuelan citizen and former president of PDVSA purchasing unit Bariven, and asset managers Daisy Teresa Rafoi Bleuler, a Swiss citizen, and Paulo Jorge da Costa Casqueiro Murta, a citizen of Switzerland and Portugal. The case concerns the concealing movement of money stolen through bribery and fraud from the PDVSA oil company, Venezuela’s main source of income and foreign currency.
CHANCELLOR WARNED BY BUSINESS GROUPS OVER INSOLVENCY ‘CASH GRAB’ BY MAKING HMRC PRIORITY CREDITOR
On 16th September, Accountancy Daily reported that a letter signed by ICAEW, ACCA, ICAS and trade body R3 among others warns that plans to prioritise repayments to HMRC over repayments to other creditors in insolvencies ‘will have serious consequences for the UK economy’. The change, announced in the Budget 2018, is to make HMRC a preferential creditor again, whereas for several years it has been treated as an unsecured creditor and, as a result, there have been repeated cases of collapses of companies resulting in huge losses in taxes owed to the Government.
AUSTRALIA: CHINESE NATIONAL ADMITS TO MONEY LAUNDERING OVER ‘LARGE SCALE PROSTITUTION’ RING
On 17th September, ABC News reported that Hon Leung Chu, 33, a Chinese national, described in court as the main player in a nationwide ‘large scale prostitution’ ring, has pleaded guilty to money laundering charges.
FREIGHT FORWARDER IN HONG KONG CERTIFIED AHEAD OF MANDATORY AIR CARGO SCREENING FROM 2021
On 16th September, Lloyds Loading List reported that the U-Freight Group (UFL) has become one of the first freight forwarders to have one of its logistics hubs in Hong Kong certified by the Hong Kong Civil Aviation Department (CAD) as a Regulated Air Cargo Screening Facility (RACSF) as it prepares for industrywide mandatory air cargo screening requirements from 2021.
MASSIVE COCAINE SEIZURE BY BRAZIL CUSTOMS AS PART OF THE CONTAINER CONTROL PROGRAMME
On 17th September, a news release from the WCO advised that, based on indicators developed using risk analysis techniques and X-ray technology, a container filled with bags of granulated sugar was selected for control. 49 bags containing 1,482 kg of cocaine was found, Antwerp. It is said that the Port Control Unit (PCU) in Santos, which was established under the UNODC-WCO Container Control Programme (CCP), is one of the most effective out of over 100 PCUs worldwide.
CHINESE STATE-OWNED INSURER PROTECTS EXPORTERS WITH LOW-COST COVERAGE AND PURSUING US IMPORTERS OVER MOUNTING TARIFFS
On 16th September, Insurance Marine News reported that a state-owned Chinese insurer, China Export & Credit Insurance Corp (Sinosure), is supporting Chinese exporters with low-cost coverage, chasing up US importers who prove unwilling or unable to pay mounting tariffs; and there are suspicions among some that this might contravene WTO commitments.
US: PORSCHE SALESMAN GOT $3 MILLION FOR CARS THAT WILL NEVER EXIST
The Miami Herald on 17th September reported that a salesman at a Porsche dealership ran his own fraudulent shadow business selling cars that never existed.
WAREHOUSES NEAR TUNBRIDGE WELLS USED IN HUGE GOODS SCAM
A news release from the Kent Police on 17th September reported that 2 men have been jailed for their roles in a large-scale fraud which saw thousands of goods including shipments of wine and flat screen TV delivered from abroad. Police needed 4 lorries to recover a total of 281 pallets of illegally obtained items which also included nappies, paint, pressure washers and bathroom fittings. Companies across Europe were duped into fulfilling purchase orders from bogus wholesalers, operating under names of established UK retailers and manufacturers.
JAILED AIRPORT CAR PARK BOSS MUST REPAY ALMOST £300,000 IN STOLEN TAX
The Knutsford Guardian on 17th September reported that jailed airport car park boss Brian Pearson, 59, must repay almost £300,000 in stolen tax or face another 3 years behind bars. He was jailed in 2017 HMRC revealed the Manchester Airport ‘meet and greet’ parking boss stole more than £466,000 from his employees’ income tax and National Insurance Contributions. He faces losing assets including a villa in Portugal, a personal pension and savings. He was an employer, but employee records and salary statements proved that he was taking income tax and NIC for up to 60 of his employees, none of which was paid to HMRC.
FORT LAUDERDALE ATTORNEY ACCUSED OF PERPETUATING A $330 MILLION FRAUD RUN BY PAYDAY LOAN COMPANY 1 GLOBAL CAPITAL LLC
On 17th September, Law.com reported that Jan Douglas Atlas has been charged with securities fraud over his alleged involvement in a $330 million scheme that prosecutors say hurt almost 3,600 investors across 42 US states. Prosecutors say Atlas provided “false legal cover” for unlawful practices when he served as outside counsel to 1 Global Capital LLC, which operated from 2014 until it filed for bankruptcy protection in 2018.
UKRAINE UNDER EU PRESSURE TO CRIMINALISE TOBACCO SMUGGLING
On 17th September, EurActiv reported that the EU is stepping up the pressure on Ukraine to take a firmer stance on tobacco smuggling and criminalise it in line with the country’s commitments under the terms of the EU-Ukraine Association Agreement.
FBI RAIDS MyPayrollHR OWNER’S HOME IN $35 MILLION FRAUD PROBE
The New York Post on 17th September reported that FBI agents have raided the upstate New York home of a payroll company owner, ValueWise CEO Michael Mann, in connection with an investigation involving MyPayrollHR, a ValueWise subsidiary. MyPayrollHR processed payrolls for about 4,000 companies across the US.
AUSTRALIAN POLICE UNCOVER SYNDICATE INVOLVED IN CRYPTO LAUNDERING
Coin Telegraph on 17th September reported that law enforcement bodies have uncovered a criminal gang allegedly involved in laundering millions of stolen funds through untraceable assets, including cryptocurrencies. The Australian Securities and Investments Commission and the Australian Federal Police have been conducting investigations into a major fraud and identity theft syndicate which allegedly created fraudulent bank accounts at various Australian banking establishments. The syndicate laundered the stolen funds via untraceable assets such as jewellery, with the money being transferred back to Australia in the form of crypto.
MALTA: POLICE BEEFING UP ITS FINANCIAL CRIME UNIT WITH CIVILIAN EXPERTS AND NEW SOFTWARE
In the wake of the critical Moneyval report, Malta Today reported on 17th September that the police force is using the services of civilian financial crime analysts in its efforts to combat money laundering and fraud, and that its financial crime unit will be moving out of police headquarters into a dedicated building at the start of next year. The Economic Crimes Department now has 58 police constables and sergeants, up from 41 last year., and the force is also investing in specialised intelligence software to create a centralised database of information that would facilitate financial investigations.
UK: GAMBLING LAWS SHOULD APPLY TO GAMING ‘LOOT BOXES’, SAY MPs
On 17th September, an article from Out-Law says that the Digital, Culture, Media & Sport Committee has said loot boxes that can be bought with “real-world money” and the contents of which are unknown at the time of purchase should be considered to be “games of chance played for money’s worth” and regulated as such under gambling laws in Great Britain. It refers to a Gambling Commission survey in 2018 found that 31% of children aged between 11 and 16 have paid money or used in-game items to open loot boxes. The Committee said that there should be a ban on loot boxes that contain the element of chance being sold to children playing games.
CHANGES TO THE UK IMMIGRATION RULES FROM OCTOBER 2019
On 17th September, Out-Law published a detailed article saying that the UK will implement all changes to the shortage occupation list recommended by the Migration Advisory Committee (MAC) from October 2019, alongside a number of other changes to its points-based immigration system.
US COMMODITY FUTURES TRADING COMMISSION FILED FRAUD CASE AGAINST GLOBAL BINARY OPTIONS BUSINESS
A release on Mondo Visione on 17th September reported that the CFTC has filed a civil enforcement action in Ohio, charging Jared J Davis of Ohio with fraud relating to a global binary options business he created and operated, using call centres and trade names such as Option Mint, Option King, and Option Queen.
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