29 February 2020
ANOTHER PANAMA PAPERS FRAUDSTER PLEADS GUILTY IN US, TO PAY $9 MILLION
On 29 February, Newsroom Panama reported that Massachusetts accountant Richard Gaffey, 75, has pleaded guilty to charges in the US stemming from the Panama Papers leak. He pleaded guilty in New York to 8 charges, including tax evasion, money laundering, and electronic fraud and will also give up $5 4 million and pay $3.4 million in compensation. Gaffey was an accountant for Harald Joachim von der Goltz, 82, founder of Boston Capital Ventures, who pleaded guilty the week before.
PAKISTAN TAKES ANOTHER LOOK AT CHINESE ATTACK HELICOPTER AFTER US BLOCKS ALTERNATIVES
On 28 February, Defense & Security Monitor reported that Pakistan is thinking again of acquiring Chinese-built Z-10 attack helicopters to replace its ageing fleet of US-built ones. It had originally chosen an improved version of its existing helicopters, but the Trump Administration blocked the funds involved, because of Pakistan’s position on the Afghan Taliban. It also ordered Turkish-built T-129 helicopters, but the US has a veto on sales of these through the engines being built by a US/UK consortium.
EU PURSUES 8 MEMBER STATES ON AML SHORTCOMINGS EVEN AS BANKING WATCHDOG UPDATES GUIDELINES ON FINANCIAL CRIME RISK
A newsletter from ACFCS on 28 February reported and commented on the EU Commission sending letters to Cyprus, Hungary, the Netherlands, Portugal, Romania, Slovakia, Slovenia and Spain for not transposing the EU 5th AML Directive into law by January. It also referred to the European Banking Authority releasing a public consultation on revised money laundering and terrorist financing risk factor guidelines to help banks better tune financial crime risk assessments – and aid examiners in spotting weak compliance programmes. It also mentioned a second EBA report assessing, and criticising, the approach by national regulators detailing the gaps in supervision of AML/CFT risks and offering critical recommendations for improvements to stronger supervisory approaches.
CANADIAN EXTRADITED TO US OVER 2013 MONEY LAUNDERING INCIDENT
On 28 February, Inner City Press reported that Enzo Vettese, 67, from Montreal was stopped in New York in 2013 when agents searched the car he was driving, opened a suitcase and found $242,880 wrapped in individual bundles, held together with rubber bands. He appealed and lost an appeal against his extradition.
ISLE OF MAN TIGHTENING CONTROLS ON CHARITIES
In another consequence of the MONEYVAL evaluation of the Isle of Man, and the 2 national risk assessment exercises the Island has undertook, from 1 April the law on charities in the Island is being radically revised and updated – essentially bringing it more into line with that in England and Wales. The Charities Registration and Regulation Act 2019 is being brought into operation from 1 April, together with associated regulations and rules for appeals to the Charities Tribunal, and replaces the previous 1989 Act. There is already a register of charities in the Island, maintained by the Attorney General, and this is to continue, but many of the requirements on charities and their trustees will be revised, or indeed they might find that they have new requirements to meet, and the government webpages concerned with registered charities will transfer to the Attorney General’s responsibility. In September 2019, the Attorney General issued the (first-ever) Charities Bulletin, explaining the changes that the new Act would be making, and more recently those involved in the charity sector in the Island have been briefed on the changes at a public presentation.
ALBANIA: SPECIAL PROSECUTION BODY FAILS TO SUBSTANTIATE CHARGES AGAINST THE 25 DEFENDANTS IN ORGANISED CRIME CASE
On 29 February, Top Channel reports that nearly 2 years after a wide-ranging anti-crime operation, the special prosecution SPAK failed to individualise and substantiate the charges against each of the 25 defendants in the so called “ Avdylaj” file. The investigations were therefore closed in January 2020.
MAN JAILED FOR SELLING ILLEGAL FOOTBALL STREAMS TO PUBS AND CLUBS HAS BEEN ORDERED TO PAY £521,000 OR FACE MORE PRISON TIME
The Northern Echo on 29 February reported that, in April 2018, John Dodds and associate Jason Richards were jailed for 4½ years for supplying illegal streaming devices (ISD) providing unauthorised access to Premier League TV content to hundreds of pubs. Dodds has now been ordered to pay back £521,000 within 3 months or face his prison sentence being extended by an additional 5 years.
THE NAMES OF THOSE NAMED IN THE HASHEMINEJAD/PILATUS BANK TRIAL
On 29 February, Kenneth Rijock in his blog published a document from the US DoJ naming those persons of those individuals and entities that the US Attorney and the defence counsel agree will be named.
A NEW ERA FOR ENFORCEMENT AGAINST WHITE COLLAR CRIME IN THE EU – THE EUROPEAN PUBLIC PROSECUTOR’S OFFICE
On 28 February, McCann Fitzgerald, the Dublin law firm, produced a briefing on the EPPO, a new supranational prosecutorial body which will investigate and prosecute crimes affecting the financial interests of the EU in each of the 22 participating Member States, from late 2020. Based in Luxembourg where there will be a college made up of 1 European Chief Prosecutor along with 22 European Prosecutors from the participating Member States. Not involved, at this point, are Ireland, Hungary, Poland, Denmark and Sweden – though Sweden has indicated that it intends to participate.
THE REVIVAL OF AL QAEDA – ANALYSIS
On 29 February, Eurasia Review published a report saying that, from its emergence in 2013, the so-called Islamic State (IS) has been at the forefront of the US counter-terrorism effort. It says that the brash and often shocking tactics of IS largely overshadowed al-Qaeda, which was weakened due to internal fissures, robust counter-terrorism pressure, the death of Osama bin Laden, and battlefield losses in Afghanistan and the Middle East. However, al-Qaeda was quietly laying the foundation for its resurrection, says the article, which argues that al-Qaeda is resurgent due in part to its ability to exercise strategic patience. While the high-profile tactics of IS made it easy to understand IS strategy and intent, al-Qaeda pursued a more discreet path, making it more difficult to judge its actions. It diffused its leadership cadre out to a variety of geographic locations, empowered leaders, created cohesion among its global affiliates, and developed more durable havens by gaining inroads with vulnerable populations and exploiting fragile states. Amongst its initiatives and affiliates are al-Qaeda in the Indian Subcontinent (AQIS), al-Shabaab in Somalia, Hurras al-Din in Syria from 2018, al-Qaeda in the Arabian Peninsula (AQAP), al-Qaeda in the Islamic Maghreb (AQIM), and JNIM, which now controls a large portion of northern Mali and is expanding attacks into Burkina Faso and western Niger. The article concludes that al-Qaeda has likely laid the foundation for its movement to present a more durable threat.
CARDINAL HEALTH PAYS SEC $8.8 MILLION TO SETTLE CHINA FCPA OFFENCES
A post on the FCPA Blog on 28 February reported that the company had made the settlement related to a Chinese subsidiary that provided marketing services. The SEC had charged Cardinal Health with violating the FCPA books and records and internal accounting controls provisions. It is said that Ohio-based Cardinal Health agreed to disgorged $5.4 million to the SEC, plus pre-judgment interest of $916,887, and pay a civil penalty of $2.5 million. The company had discovered suspicious payments in 2016 and had made a voluntary disclosure to the SEC, having been operating in China from 2010.
MEITI REPORT – ANOTHER IMPORTANT STEP FOR TRANSPARENCY AND ANTI-CORRUPTION EFFORTS IN MYANMAR, BUT CHALLENGES REMAIN
On 28 February, Global Witness commented on the report which looks at the first tranche of publicly available beneficial ownership and politically exposed persons (PEP) disclosures in Myanmar. Set up largely in response to beneficial ownership requirements under its EITI process, the public registry is a landmark for corporate transparency in Myanmar. A requirement was issued in late 2019 for all companies registered in Myanmar to disclose information on beneficial ownership and PEP to the Directorate of Investment and Company Administration (DICA) and Internal Revenue Department. However, the NGO argues that the released data itself is riddled with incomplete and inaccurate information, and the current legal framework and available resources for implementation and enforcement are lacking.
UK: HIGH COURT RULES ON APPOINTMENT OF SPECIAL ADVOCATE IN CLOSED MATERIAL PROCEEDINGS AND ON CONFIDENTIALITY OF LETTERS OF REQUEST
In the case of Terra Services Ltd v NCA, in separate hearings and in connection with an application for permission to apply for a judicial review of a search warrant, the High Court held that –
- only in exceptional circumstances, would it be appropriate to appoint a Special Advocate to appear in closed material proceedings regarding the validity of a search warrant; and
- the public interest immunity (PII) cover for the information submitted in support of the application for a search warrant stands (the claimant’s lawyers only received a redacted version of the information), being based on a mutual legal assistance Letter of Request from the US. The Court rejected the claim that the confidentiality of the Letter of Request be set aside, saying that the “inherent and established confidentiality” of a Letter of Request can only be overridden in exceptional, specific circumstances.
ZIMBABWE: NATIONAL ANTI-CORRUPTION STRATEGY SET TO LAUNCH
The Sunday Mail in Zimbabwe in its 1 March edition carried an article saying that the Zimbabwe Anti-Corruption Commission (ZACC) – the article was written by a spokesperson and member of ZACC – has convened meetings in all the country’s 10 provinces to receive final input from stakeholders on the development of the National Anti-Corruption Strategy (NACS). The article lists the 6 strategic objectives and likely actions of the Strategy. Successful implementation and co-ordination of the NACS will be the responsibility of a National Anti-Corruption Strategy Steering Committee (NACSSC).
SLOVAK ANTI-GRAFT OPPOSITION PARTY TAKES MASSIVE LEAD IN PARLIAMENTARY ELECTIONS
France 24 and others on 29 February reported that Slovak opposition movement Ordinary People (OLANO) had took a strong lead in the EU country’s parliamentary election. It is poised to defeat the ruling centre-left Smer party, which has dominated the political landscape for more than a decade, amid growing anger over high-level graft and the murder of an investigative journalist.
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