28 January 2020
TECHNOLOGY COMPANY PAYS $145 MILLION IN US TO RESOLVE CASE INVOLVING ALLEGED KICKBACKS FOR HELPING INFLUENCE THE PRESCRIPTION OF OPIOID PAIN MEDICATIONS
On 28 January, the Wall Street Journal reported that Practice Fusion Inc of San Francisco reached an agreement with the DoJ for alleged violations of the Anti-Kickback Act. The allegations included seeking a payment of nearly $1 million from one opioid company to create an alert in the electronic health records (EHR) software it developed.
NETANYAHU WITHDRAWS IMMUNITY REQUEST OVER CORRUPTION CHARGES
On 28 January, the Wall Street Journal reported that Israeli Prime Minister Benjamin Netanyahu has dropped his bid for parliamentary immunity from prosecution, exposing him to a criminal case. He was indicted in November on charges of relating to 3 corruption probes, making him the first Israeli prime minister to be criminally charged while in office. Later, also on 28 January, it was reported that he had been formally indicted.
DEUTSCHE BANK’S PAYMENTS TO SAUDI ROYAL ADVISER UNDER SCRUTINY
On 28 January, KYC 360 referred to a FT report claiming that the bank’s Swiss-based wealth management division paid $1.1 million to secure lucrative business arrangements with a senior member of the Saudi royal family, sent in 4 instalments through an offshore company in the BVI that was owned by the wife of the Saudi royal’s financial adviser and created by Deutsche Bank’s subsidiary in Mauritius. However, following the conclusion of a later internal investigation, 6 employees involved with the Saudi payments left the bank, some of whom went on to take senior roles at other banks. The bank also suspended bonuses for 12 staff and reported 2 former Germany-based employees to criminal prosecutors in Frankfurt for suspected bribery and embezzlement – these challenged their dismissals, with one of the individuals winning and the other settling with the bank.
US $511 MILLION BIOFUEL FRAUD TRIALS CONTINUE
On 28 january, KYC 360 reported on continuing trials in Utah surrounding Washakie Renewable Energy, where it is claimed that the proceeds of a $511 million biofuel fraud were laundered in expensive homes, expensive cars and businesses in Turkey. The alleged ringleader, Lev Aslan Dermen, has said he is innocent of the crimes, but other defendants have pleaded guilty – they being associated with a polygamous Utah-based religious sect. The case also involved alleged bribery of a Belize official. The fraud involved a federal biofuel programme, with the buying biofuel, instead of producing themselves, and then claiming a tax credit on that fuel.
UK: COVERTLY OBTAINED INFORMATION CANNOT BE DEPLOYED UNTIL ITS LEGITIMACY IS ESTABLISHED
A briefing from RPC on 28 January said that the Court of Appeal had recently affirmed the point that where a party has covertly obtained confidential information, any dispute as to the information’s confidentiality must be resolved before it can be deployed in civil proceedings. The Respondent in the case had became concerned that something was wrong with a £23 million transaction he had entered into, and placed recording devices in the office of the other side’s in-house solicitor. He then recorded approximately 40 hours of conversations, all of which were confidential and many of which were privileged, including conversations with their external solicitor. The approach of the law is said to preserve the confidentiality of the material and upholds the broad equitable principle that a person who has received information in confidence should not be permitted to take unfair advantage of it.
PORTUGAL GOLDEN VISA GENERATES €4.8 BILLION IN INVESTMENT SINCE 2012
An article from Discus Holdings on 27 January reported that most investors chose the real estate property purchase option.
US: MAN WHO SHIPPED GUN PARTS TO SWEDISH NAZIS GETS 7-PLUS YEARS
On 28 January, Republic World and others reported that a Washington State man, Hany Veletanlic, a 36-year-old Bosnian citizen, convicted of gun crimes that included shipping firearm parts to neo-Nazis in Sweden has been sentenced to more than 7 years in prison. Veletanlic labelled the items on customs forms as bicycle parts, and he used fake names and return addresses when he sent them.
ASSESSING CHINA’S COMMERCIAL SPACE INDUSTRY
On 27 January, The Space Review carried an article saying that the closest competitor to the US in entrepreneurial space might be China. Dozens of start-ups have emerged in just the last few years, pursuing everything from launch vehicles to constellations of communications or remote sensing satellites, much like their US counterparts. It says that a recent report found 78 companies in China that could be considered “commercial” space companies, and the article says that 45 were founded no earlier than 2015, evidence that the country’s space economy has only recently blossomed.
INDIA: DIRECTOR GENERAL OF FOREIGN TRADE HAS BLACKLISTED TELECOM OPERATOR BHARTI AIRTEL ON THE GROUNDS OF NOT MEETING THE EXPORT OBLIGATIONS
On 28 January, NDTV and others reported that the DGFT had placed the company on the “Denied Entity” list, meaning it has lost its import/export licence(s). Government sources said Airtel failed to fulfil export obligation under Export Promotion Capital Goods Scheme. Under that scheme, the import of capital goods is allowed at zero customs duty for manufacturing goods and services.
FRANCE: BANK OF CHINA SETTLES MONEY LAUNDERING CASE FOR $4 MILLION
On 28 January, Bloomberg Law reported that Bank of China Ltd has agreed to pay a total of €3.9 million to settle a French probe into allegations it turned a blind eye as customers moved millions to their Asian accounts without paying European taxes. It is said that the case will continue against 28 business owners and intermediaries involved in transferring the funds to China.
UK: EY WHISTLEBLOWER TAKES STAND IN GOLD BULLION MONEY LAUNDERING CASE
City AM on 28 January reported that Amjad Rihan, was an EY partner based in the firm’s Dubai office, and alleges he was forced out after he threatened to blow the whistle on a client of the firm whose behaviour led to serious money laundering concerns.
LATVIA: ABLV BANK RAIDED AS PART OF €50 MILLION MONEY LAUNDERING INVESTIGATION
On 28 January, LSM.LV reported that law enforcement agencies conducted searches at the ABLV Bank building in Rīga in connection with suspicions that at least €50 million may have been laundered by the bank between 2015 and 2018. The bank collapsed following US allegations that it was involved in money laundering on a grand scale.
UK: NEW IMMIGRATION SYSTEM: WHAT YOU NEED TO KNOW
On 28 January, the Home Office published a webpage on the new point-based system which the UK is introducing from 2021. The page will be updated with the latest information about the new points-based immigration system as it becomes available, and those who might be affected are invited to register their email addresses for notification of future developments.
BANK OF CHINA, BUYER OF IRISH BROKER, PAYS €3.9 MILLION FINE IN FRANCE OVER FRAUD
On 28 January, RTE reported that one of China’s top banks has agreed to pay €3.9 million to settle a fraud probe in France. The Bank of China is buying Irish stockbroker Goodbody, confirmed the agreement, saying: “This principally concerns fund transfer activities of a Bank of China branch in China and has nothing to do with its Paris or other branches abroad”.
FCA HAS NOT BROUGHT A SINGLE PROSECUTION UNDER NEW AML POWERS
City AM on 28 January reported that the FCA has not brought a single prosecution under new tougher criminal powers in the Money Laundering Regulations 2017 to combat money laundering, a freedom of information (FOI) request shows. It says that the FCA has the power under the Regulations to criminally prosecute a person or organisation it suspects of not putting in place sufficient safeguards against money laundering. The FCA said it was investigating people in connection with suspected criminal breaches of the regulations and is currently running 4 dual-track criminal/civil investigations into money laundering – 1 into an individual and 3 into firms; as well investigating offences that predated the Regulations.
ANGOLA AND THE MONEY LAUNDERING PARADOX
On 28 January, an article from the Brookings Institute comments on the recent revelations about Isabel dos Santos, the daughter of Angola’s former president. It says that what should raise eyebrows is the fact that dos Santos’ network — which covered 41 countries — managed to go undetected as long as it did, despite mainly operating in countries that are meant to have strong AML institutions designed to prevent, identify, and root out dirty money. One of the basic tenets of AML policy is KYC and it seems that banks in the dos Santos network either didn’t know who they were dealing with, or didn’t ask the right questions as to where the money was coming from. The author says that he investigated whether certain types of jurisdictions were more likely to be part of the network than others. He says that his results reflect the paradox of money laundering institutions: the places that score well on indicators are actually the places where people want to keep illicit wealth. They are places where money buys you nicer things, but, most importantly, they are places that allow money launderers to hide the origin of their assets under a sheen of legitimacy and respectability.
IRELAND: “PETRIFIED” BUSINESSMAN ADMITS BEING FRONTMAN FOR MASSIVE VAT “CAROUSEL FRAUD”
On 28 January, the Irish Independent reported that a businessman has consented to being disqualified as a company director after admitting being the front man for a massive VAT fraud involving the purchase of millions of euro worth of plant machinery. Kevin Rabbitte is claiming another person, who he is “petrified” of and refuses to name, directed him and was behind the illegal operation.
BREXIT: MOVING BALAI DIRECTIVE ANIMALS, SEMEN AND EMBRYOS FROM 1 JANUARY 2021
On 28 January, a news release from DEFRA is concerned with the Balai Directive. The Balai Directive (a 1992 EU Directive) tells you what to do if you need to move certain animals that are not traditional livestock and their germplasm (semen, ova and embryos). The changes result, as does much else, from Brexit.
UK: FENTANYL SUPPLIER JAILED FOR 9 YEARS AFTER SELLING THE KILLER DRUG ON THE DARK WEB
On 28 January, the NCA issued a news release saying that a man who ran a dark web business selling the lethal drug fentanyl to customers across the UK and worldwide has been jailed for 9 years. Justas Bieksa, 34, from Northampton, sold fentanyl, which is up to 100 times stronger than morphine, and its analogues carfentanyl and furanyl, which are around 10,000 times stronger. He also sold ethyl-hexedrone crystals, a Class B drug commonly known as Hexen.
HMRC: OPTIONS WHEN CUSTOMS SEIZES YOUR THINGS
On 28 January, a news release on UK.gov says that Customs will destroy or sell anything it seizes for breaking the rules on bringing or receiving goods from abroad, unless you ask for it back – you can do this even if you agree Customs was right to seize them; or you think Customs was wrong to seize the things – you will then have to go to court to challenge the seizure. It provides links, and information on the seizure of cash and vehicles.
SWITZERLAND’S ONLINE GAMBLING BLACKLIST IS GROWING AGAIN – TARGETS CURACAO
On 28 January, Calvin Ayre reported that Switzerland’s federal gaming board (ESBK) issued the latest updates to its list of internationally licensed online gambling domains that local ISP have to block. The current update adds 35 domains to the list, bringing the total number to 145 since the most recent update last November.
EU LEADS EFFORT TO CREATE ALTERNATE TRADE COURT AS US PREPARES FOR WTO REFORM TALKS
On 27 January, Sandler Travis Rosenberg reported that more than a dozen WTO members have announced their own interim appeal arrangement. The move comes amid signals that the Trump administration is ready to discuss WTO reform, which could ultimately allow the Appellate Body to resume operations.
ROMANIAN KINGPIN OF RARE BOOK THIEVES BEHIND BARS AFTER ARREST IN ITALY
A news release from Europol on 28 January advised that a 40-year-old Romanian national, who was wanted by the British authorities since June 2019, was arrested earlier this month in Turin. He is said to have been behind the theft in 2017 of 260 antique books in the UK worth an estimated €2 million. The 15 other members of the organisation to which he belonged were arrested earlier last year.
UK: PING CASE CONFIRMS OUTRIGHT ONLINE SALES BANS ARE UNLAWFUL
A briefing from Out-Law on 28 January says that agreements that prevent retailers selling manufacturers’ goods online in all circumstances are in breach of competition law, the Court of Appeal in London has said. The Court upheld earlier decisions from the UK’s Competition and Markets Authority (CMA) and Competition Appeal Tribunal (CAT). The specific case involved the policy that prohibited Ping’s authorised dealers from selling its golf clubs online.
RUSSIAN CYBERCRIME BOSS BURKOV PLEADS GUILTY
A post on the Krebs on Security blog site on 27 January said that Aleksei Burkov, described as “an ultra-connected” Russian hacker once described as “an asset of supreme importance” to Moscow, has pleaded guilty in a US court to running a site that sold stolen payment card data and to administering a highly secretive crime forum that counted among its members some of the most elite Russian cybercrooks. He admitted to running CardPlanet, a site that sold more than 150,000 stolen credit card accounts, and to being the founder and administrator of DirectConnection — a closely guarded underground community that attracted some of the world’s most-wanted Russian hackers.