On 14 February, RTL reported that Sri Lanka had arrested a former ambassador to Russia, Udayanga Weeratunga, after he was extradited from Dubai to face money laundering charges over a controversial MiG aircraft purchase. He was arrested in connection with an investigation into the 2006 purchase of 4 second-hand MiG 27 from Ukraine.
On 14 February, Eye Witness News reported that a Supreme Court judge has rejected a bid by the Ontario Securities Commission (OSC) to enforce a $20 million sanction against a Bahamian resident – Wayne Pushka, ruling that it was a government penalty and not enforceable in the Bahamas. The penalty dated from 2014, and the case involved a claim that nearly C$5 million were transferred to The Bahamas and the balance of C$13.5 million at issue to a trust company in Liechtenstein. However, the judge noted that there was no allegation or suggestion that Pushka engaged in fraud of any kind and that thought it was possible for receivers to recover money for harmed investors, it was not, however, possible for foreign governments to enforce fines and penalties.
On 14 February, Newsroom Panama reported that the EU has added Panama and the Cayman Islands to their blacklist of tax havens which was originally created following the Panama Papers scandal in 2017. Panama had been removed from the EU blacklist in 2018 after committing to reforms but returns because it did not meet certain criteria.
13 February 2020
HM TREASURY AMENDS 1 ENTRY ON DRC SANCTIONS LIST AND ISLE OF MAN FOLLOWS
On 13 February, a Notice from HM Treasury advised that the entry relating to Seka BALUKU had been amended.
THE FUGITIVE FORMER HEAD OF MEXICAN STATE OIL COMPANY ARRESTED IN SPAIN
On 13 February, the Wall Street Journal reported that Emilio Lozoya, 45, former head of Petroleos Mexicanos, who has been a fugitive since May, when he was charged in 2 separate corruption probes for allegedly receiving more than $12 million in bribes from Brazilian construction company Odebrecht and a Mexican steelmaker.
FUGITIVE BULGARIAN GAMBLING TYCOON FIGHTS FOR HIS VAST TROVE OF ARTEFACTS
On 13 February, KYC 360 reported that Vasil Bozkhov, 63, amassed a trove of more than 3,000 archaeological artefacts said to be dating from 4,000 B.C. to the 6th Century. While their value is unknown, he has said that he was once offered €600 million for just part of it. Bozhkov built his fortune from stakes in gambling, sports betting and lottery companies. His businesses in the past have also included road construction, insurance, banking and real estate. He has been arrested in the UAE and Bulgaria is said to be seeking his extradition.
COLOMBIA SEARCHES AVIANCA AIRLINE OFFICES IN AIRBUS BRIBERY PROBE
On 13 February, KYC 360 reported that Colombia’s attorney general’s office has searched the offices of Avianca as part of an investigation into an alleged bribery scheme involving European manufacturer Airbus, and following the settlement for alleged bribery between Airbus and French, UK and US authorities.
WARNING FOR UK CBD INDUSTRY AS REGULATOR SETS APPROVAL DEADLINE
On 13 February, an article on bdaily reported that the UK Foods Standards Agency has set a deadline of March 2021 and that products containing cannabis extract cannabidiol (CBD) are set to be “taken off the shelves” next year if they fail to gain regulatory approval.
PUERTO RICO GOVERNMENT LOSES $2.6 MILLION IN PHISHING SCAM
On 13 February, AP reported that Puerto Rico’s government has lost more than $2.6 million after falling for an email phishing scam. The Industrial Development Company had reportedly sent the money to a fraudulent account.
US: GRAND JURY INDICTS 3 TOP ADMINISTRATORS OF PHILIPPINE CHURCH IN SCHEME TO TRAFFIC WORKERS AND DEFRAUD IMMIGRATION SYSTEM
A news release from US Immigration & Customs Enforcement on 13 February advised that a federal grand jury has charged 3 top administrators of a Philippines-based church – the Kingdom of Jesus Christ, The Name Above Every Name (KOJC) – with overseeing a labour trafficking scheme that forced church members to solicit donations for a bogus charity after the defendants illegally obtained visas and other immigration documents that allowed the workers to enter and remain in the US. The 3 were arrested last month.
KENYA: FAKE GOODS TAKE 40% MARKET SHARE
On 13 February, the Standard reported claims by the Anti-Counterfeit Authority (ACA) Chief Executive that agricultural inputs including fertiliser and pesticides, electronics and foodstuffs are the most affected goods, taking advantage of lax enforcement of regulations. He also said 30% of alcoholic drinks in the market are counterfeit.
THE WORDS WHISTLEBLOWER AND ACCOUNTABILITY ARE NOT FOUND IN SPANISH
An opinion piece in El Pais on 11 February says that language is important in conveying the importance of things. It says that whilst Spanish has many words for “corruption”, it is notable what terms it has no good equivalent. For example, it says, in Spanish the word “whistleblower” does not exist – and the closest equivalents all have negative connotations, sounding more like snitch, sneak, toad or rat. Another word is “accountability”, the nearest Spanish equivalents not having the same connotation, lacking the political or moral responsibility elements of the English term. The author argues that it is time to adapt Spanish to accommodate new, better terms.
GERMAN ARRESTED FOR ILLEGAL DUAL-USE EXPORTS TO RUSSIA
UNIAN in Ukraine on 13 February reported that German prosecutors said that they had arrested a businessman identified as “Alexander S” on suspicion of exporting millions of euros in dual-use machinery to Russia that could be used for military purposes, in violation of EU sanctions. The managing director of a company based in southern Germany, he is alleged to have sold machine tools to “military end users” in Russia, listing bogus end-users and incorrect information about the goods.
US: HOUSTON MAN SENTENCED FOR STEALING TRADE SECRETS TO BENEFIT CHINA
On 13 February, the Times Record reported that Shan Shi, 55, a Houston man has been sentenced to 16 months in prison for conspiracy to steal trade secrets from an oil-business technology company and use the information to benefit China. He had been convicted in July 2019. He has also been ordered to forfeit $330,000. The case involved technology to develop a synthetic foam that is used in offshore oil and gas drilling, and Shi set up a company and hired former employees of the target company who had access to trade secrets of the manufacture of the product.
TURKEY AND EXCLUSIVE MARITIME ECONOMIC ZONES IN THE MEDITERRANEAN
On 13 February, Modern Diplomacy carried an article on Exclusive Economic Zones (EEZ) in the context of the dispute over drilling and surveys in the waters around Cyprus and Turkish involvement in Libya. It explains that an EEZ is the largest sea area – which cannot exceed 200 miles – in which a coastal State exercises its sovereign rights on the body of water for managing natural resources, such as fishing or the extraction of oil, gas or other substances, as well as for the ecological and biological protection of the marine environment.
OHIO MAN CHARGED FOR LAUNDERING $300 MILLION THROUGH BITCOIN ‘MIXER’
On 13 February, various media reported that Larry Harmon is said to have used a facility called Helix, and partnered with AlphaBay, on the dark web to launder the equivalent of roughly $300 million for drug dealers and other criminals.
FRENCH COURT RULES MONEY-LAUNDERING MAYOR IS TOO ILL FOR JAIL
On 13 February, The Local reported that Paul Balkany, 71, former mayor of Paris suburb, has been released from jail in France due to poor health, having been convicted in September 2019 for tax evasion and money laundering. The Balkanys have dominated politics in the wealthy suburb of Levallois-Perret, just north of Paris, for decades. They are close friends of former president Nicolas Sarkozy, himself in the crosshairs of French prosecutors in a number of corruption cases.
UK: TRANSPARENCY IN SUPPLY CHAINS – TOOLS FOR GOVERNMENT AND ITS SUPPLIERS
On 13 February, the Home Office published tools will help government procurers and companies who supply government to understand their role in ensuring transparency in their supply chains.
UK: DOCUMENTS AND PROMOTIONAL MATERIAL RELATED TO THE GOVERNMENT’S WORK TO END MODERN SLAVERY
On 13 February, the Home Office published updated information that provides details about the government’s work to end modern slavery, including details about how to refer victims into the national referral mechanism (NRM).
UK: EXPERT WITNESS NOT FIT TO GIVE EVIDENCE GIVEN £89,000 WASTED COSTS ORDER
On 13 February, the Law Society Gazette reported that a consultant who acted as an expert witness in clinical negligence proceedings has been ordered to pay £88,800 to cover the costs wasted as a result of his input, and after he was found ‘not generally competent as an expert’ and not fit to be giving evidence.
EU TO GIVE TURKEY MORE TIME TO AVOID TAX BLACKLISTING
On 13 February, the Middle East Monitor reported claims that EU diplomats have reached a preliminary agreement to give Turkey more time to meet tax transparency requirements. Turkey was required to adopt laws by the end of last year to automatically exchange tax information with EU states -but despite having been given more than one year to meet the requirement, it failed to do so by the set deadline. The decision is described as “political”.
US CHARGES HUAWEI WITH RACKETEERING, ESCALATING CRACKDOWN ON TECH GIANT
On 13 February, CNN reported that the US government has charged Chinese technology giant Huawei with racketeering and conspiracy to steal trade secrets, according to a just-unsealed superseding indictment. A third charge alleges that Huawei engaged in wire fraud to steal intellectual property. The 3 new allegations supplement more than a dozen other charges already lodged against the company.
CFTC SLAPS FLORIDA TRADER WITH $1.2 MILLION FINE FOR COMMODITIES FRAUD
On 13 February, Finance Magnates reported that Matthew R. White, 27, who pleaded guilty to a federal wire fraud charge has been fined for his role in a trading scheme that caused approximately 6 people to incur losses of more than $1.2 million. He and his company M.W. Global Futures LLC have to pay a $200,000 civil monetary penalty and $883,974 in restitution, of which $602,003 has already been paid.
UTAH TAX RETURN PREPARERS INDICTED FOR TAX CRIMES
A DoJ news release on 13 February advised that an indictment has charged Sergio Sosa, and his adult children, Alissa and David Sosa, with conspiracy to defraud the US. According to the indictment, Sosa owned and operated Sergio Central Latino (SCL), a tax return preparation business in Orem, Utah, where both Alissa and David worked. Assessed by the IRS of owing some $750,000 in taxes, Sosa and his children allegedly agreed to obstruct IRS collection of the outstanding taxes by hiding Sosa’s personal assets, residential properties, and by titling SCL in the children’s names.
OVERSEAS PAKISTANIS REMITTED $13.3 BILLION IN JULY-JANUARY 2020
The Gulf Times in its 14 February edition reported that Pakistanis residing in foreign countries continued to send higher remittances back home as more people went abroad and the FATF conditions forced them to utilise legal remittance channels. Overseas Pakistanis remitted $13.30 billion in first 7 months of the current fiscal year, which was 4% higher than in the same period of last year. In January alone, the remittances increased 9% to $1.9 billion compared to $1.74 billion in the same month of previous year.
NCA SECURES FREEZING ORDER OVER LEEDS BUSINESSMAN’S £10.5 MILLION PROPERTY PORTFOLIO
On 13 February, a news release from the NCA advised that the freezing order prevents the sale of 17 addresses as part of an ongoing investigation into a Leeds businessman with suspected links to serious organised criminals. The Property Freezing Order (PFO) covers properties in Leeds, Cheshire and London worth approximately £10.5 million, which are under the control of 39-year-old Mansoor Mahmood Hussain.
CYPRUS TO REVOKE JHO LOW’S CBI PASSPORT
In his blog, on 13 February, Kenneth Rijock reported that Cyprus has announced that it intends to revoke the citizen-by-investment passport of Jho Low, currently a fugitive from justice in his native Malaysia, having allegedly stolen $4.5 billion from the 1MDB Malaysia Development Berhad, a sovereign wealth fund.
OECD PRESENTS ANALYSIS SHOWING SIGNIFICANT IMPACT OF PROPOSED INTERNATIONAL TAX REFORMS
A news release from the OECD on 13 February was concerned with new analysis that it says shows that a proposed solution to the tax challenges arising from the digitalisation of the economy under negotiation at the OECD would have a significant positive impact on global tax revenues. It says that the analysis puts the combined effect of the 2-pillar solution under discussion at up to 4% of global corporate income tax (CIT) revenues, or $100 billion annually. The revenue gains are broadly similar across high, middle and low-income economies, as a share of corporate tax revenues.
NISSAN FILES $90 MILLION LAWSUIT AGAINST CARLOS GHOSN
On 13 February, Jurist reported that the lawsuit was filed in Japan and claims that it is “a result of years of misconduct and fraudulent activity” by Ghosn. Nissan based the $90 million in costs upon “corrupt practices,” including Ghosn’s private use of corporate jets and payments to his sister. Nissan is also asking for costs associated with its internal investigation of Ghosn.
PAKISTANI COURT CONVICTS HAFIZ SAEED, FOUNDER OF LASHKAR-E TAIBA (LET)
On 13 February, Jurist reported that a Pakistani court had convicted him on charges of collecting funds from different cities in Pakistan’s Punjab province to finance terrorism through assets made and held ostensibly for charitable purposes. He is the alleged mastermind behind the 2008 Mumbai terror attacks.
CZECH REPUBLIC AND SLOVAKIA: SCAMMERS ARRESTED AFTER EVADING €7.2 MILLION IN TAX
On 13 February, a Europol news release reported the arrest 23 people suspected of tax evasion through employment agencies in the Czech and Slovak Republics. Criminals used employment agencies to send foreign workers to manufacturing companies in Czechia. The owners of these agencies created a large group of companies to provide false invoices and evade VAT and income tax.
METAL THIEVES IN FRANCE AND ROMANIA ARRESTED FOR THEFT FROM RAILWAY
On 13 February, a news release from Europol advised that a gang of metal thieves believed to have caused over €1 million of damage to the French national railway company (SNCF) has been dismantled following a series of coordinated actions across Romania with the active involvement of Europol. The criminal network is linked to 57 cases of theft of approximately 1,000 metal components of locomotives weighing 38 tonnes.
SATELLITE IMAGES SHOW EVOLUTION OF ILLEGAL GOLD MINING IN PERU
On 13 February, Insight Crime carried an article saying that satellite images show that while military operations against illegal mining in Peru’s Madre de Dios region might be paying off, the same fight is not yet being waged in other parts of the country. It says that illegal mining continues to decimate Peru’s Amazonian forests.
US NAVY SEIZES SUSPECTED IRANIAN WEAPONS CACHE IN ARABIAN SEA
On 13 February, Rferl reported that the USN has said that it seized advanced weapons and weapon components – including more than 150 Dehlavieh anti-tank guided missiles and 3 Iranian surface-to-air missiles – believed to be of Iranian “design and manufacture” intended for Huthi rebels in Yemen. They were seized from a stateless dhow in the Arabian Sea.
Meanwhile, Janes.com carries an article saying that he latest report from the UN Panel of Experts on Yemen has revealed that a Quds-1 cruise missile, a C802 anti-ship missile, and what it believes were surface-to-air missiles (SAM) of a previously unseen type were seized by destroyer USS Forrest Sherman on 25 November.
CEO FRAUD ON RISE AS HACKERS STEAL $3.5 BILLION ACROSS US IN 2019
On 13 February, illicit Trade reported that the FBI’s Internet Crime Complaint Centre (IC3) has revealed that 2019 saw both the highest number of complaints and the highest dollar losses related to cyber offences since it was established almost 20 years ago. Business email compromise (BEC) attacks, confidence/romance scams and spoofing were the top 3 cyber crime types in terms of reported monetary losses, according to IC3. The agency noted that the most prevalent forms of cyber crime in 2019 were phishing and its derivatives, non-payment/non-delivery scams, extortion, and personal data breach. The article says that IC3 recorded 23,775 complaints about BEC attacks in 2019, which resulted in losses worth some $1.7 billion.
11 ARMED ROBBERIES AGAINST SHIPS IN ASIA IN JANUARY 2020, BUT NO PIRACY CASE REPORTED
On 13 February, Hellenic Shipping News carried news of the latest report from the ReCAAP Information Sharing Centre. The report also says that there was 1 incident of abduction of crew that occurred off East Malaysia.
On 13 February, FATF published reports on Cyprus and Gibraltar, already published by the FATF-style regional body, MONEYVAL. On the same date it also published an updated schedule of consolidated AML/CFT ratings, incorporating updated results, including Switzerland.
On 13 February, FATF published the 3rd enhanced follow-up report on Switzerland, which follows up on developments since the original mutual evaluation report in 2016. As with other such reports, it addresses changes and re-rating of technical compliance to FATF Recommendations, and not effectiveness. The report also addresses new FATF Recommendations since the 2016 report. As a result of progress, Switzerland has been re-rated on the following FATF Recommendations: 8, 16, 19 and 33. The FATF welcomes the progress achieved by Switzerland in order to improve its technical compliance with Recommendations 2, 5, 10, 15, 18 and 21 – but the progress is judged insufficient to justify an upgrade of the rating of these Recommendations. Finally, Switzerland remains largely compliant with revised Recommendation 15 and compliant with the revised Recommendation 7. However, Switzerland remains in enhanced follow-up.
EU Regulation 2020/189/EU (and Council Decision 2020/) added Seka BALUKU to the EU Democratic Republic of Congo sanctions following a similar move by the UN.
On 13 February, Arab News reported that Bahrain had launched legal proceedings against a number of individuals and businesses involved in a vast money laundering scheme linked to state-owned Iranian banks, Bank Saderat and Bank Melli. Allegedly involved was Future Bank, which closed in 2016.
On 13 February, The East African reported that the US has lifted sanctions on Somali group of companies, Al-Barakat, which dealt in informal money transfer services. The group, involved in hawala as well as logistics, telecom and internet services, had been designated by OFAC in 2001. The UN lifted its sanctions on the group nearly 9 years ago. It is speculated that lobbying by humanitarian groups led to the US move.