Panama Covid-19 update – disappointing news today that 265 newly confirmed cases is higher than past few days – although this might be a result of delays in testing, and it is the longer-term trend that really matters. We now have 4.106 confirmed cases with 109 fatalities (6 more than yesterday). After the “success” of the Easter Weekend total lockdown it has been announced that this Saturday and Sunday will also be a total lockdown – so I cannot go out now until Tuesday…luckily I have my office, my new desktop and laptop and even some exercise equipment on the veranda…it could be worse.
16 April 2020
US COMPANIES PURSUING FEWER FRAUD CASES AGAINST EMPLOYEES, RELYING MORE ON INTERNAL DISCIPLINE AND OUT-OF-COURT SETTLEMENTS
On 16 April, the Wall Street Journal reported that a report says that 59% of occupational fraud cases were referred to law enforcement between January 2018 and September 2019 – 5 points fewer than in the previous decade. It points out that companies generally are not required to report fraud to law enforcement.
DoJ PUBLISHES LIST OF ACTIVE MONITORSHIPS
On 14 April, the DoJ in the US published a list of those companies on which an active compliance monitor has been imposed, the year the monitor was appointed and the reason (e.g. FCPA). Under settlements US authorities can require companies to hire independent monitors to oversee internal reforms and ensure requirements set out in settlement agreements are followed.
DUTCH COURT REJECTS ARGUMENT THAT EXTRADITING IRANIAN TO US WOULD BREACH EU BLOCKING STATUTE
On 16 April, the EU Sanctions Blog reported that the Dutch Supreme Court has denied an Iranian national’s challenge to a US extradition request, and rejected the argument that extraditing the individual would violate the EU Regulation.
ROMANIA: FACE MASK SCANDAL LINKED TO ALLEGED ORGANISED CRIME ASSOCIATE
On 16 April, KYC 360 reported an OCCRP article about a case in Romania involving a supply of sub-standard face masks said to be linked to one obvious beneficiary: a middleman company controlled by a convicted organised crime associate and ex-employee of a government ministry.
VATICAN REMOVES FINANCIAL WATCHDOG HEAD AS SCANDAL CONTINUES
On 15 April, AP reported that the Vatican has replaced Tommaso di Ruzza, the director of its financial watchdog agency – the Financial Information Authority (AIF), following the controversial police raids on the watchdog offices in October and an investigation into a London real estate deal. 7 months after the raids, neither di Ruzza nor anyone else has been charged. It is said that the raids and the scandal over the replacement of AIF’s leadership has raised questions once again about the Vatican’s murky finances.
US INDICTS CO-FOUNDER OF ONECOIN PONZI SCHEME
On 15 April, Federal prosecutors have brought fraud charges against the co-founder of a cryptocurrency scheme that allegedly defrauded would-be investors of as much as $16 billion. The indictment filed in February 2018, but only just unsealed, alleges that Karl Sebastian Greenwood personally conspired with several others to embezzle at least $1 billion through fraudulent sales of the cryptocurrency OneCoin.
IRELAND: HOW DO RECENT DEVELOPMENTS IN ASSET SEIZURE REGIMES AND UNEXPLAINED WEALTH ORDERS AFFECT CAB?
On 15 April, Irish law firm McCann Fitzgerald has published an article reflecting on recent developments – the European court decision that EU law does not preclude use of civil forfeiture proceedings unrelated to a criminal conviction, and recent UWO cases in the UK.
REPORT: BALKAN GANGSTERS PROFITING FROM CORONAVIRUS CRISIS
A Balkan Insight on 16 April says that a report has found that criminal traders in drugs and medical and protective equipment are thriving, as are online scams. The report is based on data taken from the first 6 weeks of the outbreak of the health crisis, starting from 26 February. For example, police in Serbia, Bosnia and Herzegovina and North Macedonia have continued to register illicit border crossings and cases of human smuggling and, in Albania, police estimate that the diversion of police attention to other tasks will lead to an increase in cannabis production.
UK LEGAL SECTOR ADVISORY GROUP – ADVISORY NOTE ON KEY AML RISKS AND CHALLENGES FOR LEGAL PROFESSION ASSOCIATED WITH COVID-19 CRISIS
On 16 April, Scottish Legal News reported that the UK Legal Sector Affinity Group (LSAG), which includes the Law Society of Scotland, has jointly published an advisory note, highlighting key AML risks and challenges for the legal profession associated with the COVID-19 crisis. It also includes information to help the profession comply with their ongoing obligations under the money laundering regulations.
INDIA: SEIZURE OF PROPERTY ACQUIRED USING PROCEEDINGS OF CRIME DOES NOT VIOLATE OF THE CONSTITUTIONAL RIGHT TO PROPERTY
Tax Scan in India on 16 April reported on the decision of the High Court in Madras that the attachment property purchased using the proceeds of crime cannot be said to be manifestly arbitrary and it is not violative of the constitutional right to property under Article 300A of the Indian Constitution.
MALTA GAMING AUTHORITY (MGA) SIGNS MoU WITH THE FINANCIAL INTELLIGENCE ANALYSIS UNIT (FIAU)
On 16 April, SBC News reported that the MoU will specifically focus on improving the sharing of information on the areas related to the supervision of AML/CFT, provided for by the Prevention of Money Laundering Act.
ITALIAN MOB SEEKS TO PROFIT FROM CORONAVIRUS CRISIS
On 16 April, Swissinfo reported that mafia clans are taking advantage of the coronavirus pandemic to buy favour with poor families facing financial ruin, prosecutors and officials say, and are offering loans and food in what is seen as an age-old recruitment tactic.
GULF OF GUINEA STILL WORLD’S PIRACY HOTSPOT
On 16 April, Defence Web reported the latest information from the International Maritime Bureau reporting 47 attacks in the first three months of 2020, up from 38 in the same period last year. 17 crew were kidnapped in 3 incidents between 45 and 75 nautical miles from the coast. The article also mentions other spots – Indonesia, Singapore Straits, Brazil, Peru and Sabah, Malaysia.
UK: BUSINESSMAN WHO OBTAINED MORE THAN £13 MILLION BY FRAUD AFTER CONNING INVESTORS HAS BEEN JAILED FOR 14 YEARS
The Boston Standard in Lincolnshire on 16 April reported on the case of a local businessman, financial services director Alistair Greig, 66, who told investors he would put their money into a guaranteed, short-term deposit scheme, telling clients of Midas Financial Solutions in Aberdeen he had exclusive access to high interest accounts with RBS. In reality he was using the money to invest in property, a classic car business and to treat himself to trips.
US: COURT ORDERS FINAL FORFEITURE OF OVER $54 MILLION IN CONNECTION WITH BILLION DOLLAR PONZI SCHEME
A news release from the US Attorney for Eastern California advised on an order for the final forfeiture of $3.9 million in private jet shares bringing the total court-ordered forfeiture this year to more than $54 million related to the DC Solar Ponzi scheme. DC Solar manufactured mobile solar generator units (MSG), solar generators that were mounted on trailers and promoted as providing emergency power to cellphone towers and lighting at sporting events. A significant incentive for investors were generous federal tax credits due to the solar nature of the mobile units. The defendants sold solar generators that did not exist to investors, making it appear that solar generators existed in locations that they did not, creating false financial statements, and obtaining false lease contracts, among other efforts to conceal the fraud. In reality, at least half of the approximately 17,000 solar generators claimed to have been manufactured by DC Solar did not exist.
FRENCH INSIDER TRADING PROBE NEAR COLLAPSE AFTER PRIVACY RULING
On 16 April, BNN Bloomberg reported that France’s biggest insider trading case may collapse after a court questioned whether evidence used to wiretap the burner phone of a man passing confidential tips from bankers to traders was obtained illegally. It is alleged that investigators did not obtain proper authorisation before requesting phone records for the traders at the heart of the probe. The judges have referred the matter to the EU ECJ for a ruling. At least 8 people, including 2 former bankers, have been charged in insider trading cases focused primarily on a failed oil services deal and Air Liquide SA’s takeover of US chemical producer Airgas Inc.
PHILIPPINES RED FLAGS ‘THE BILLION COIN’ SCAM THAT PROMISES TO END WORLD POVERTY
On 16 April, Coingeek reported that the Philippines SEC has warned investors to beware of an alleged digital currency fraud dubbed “The Billion Coin”, describing as being likely a form of pyramid scheme with promises of significant returns on investment in a matter of days. Neither the company behind The Billion Coin nor its founder were registered to offer or promote securities.
UK: CONSULTATION ON REVISIONS TO THE ATTORNEY GENERAL’S GUIDELINES ON DISCLOSURE AND THE CPIA CODE OF PRACTICE
On 16 April, the Attorney General’s Office launched a public consultation to seek views on the revised Disclosure Guidelines and CPIA Code of Practice, to identify and incorporate improvements to these sources of guidance on disclosure. The consultation closes on 22 July.
FRANCE ISSUES COMPREHENSIVE DRAFT GUIDANCE ON DIGITAL SERVICES TAX
On 16 April, STEP reported that the French tax authority has issued draft guidance on the scope and computation of the new digital services tax (DST) and the related compliance issues. DST was enacted in July 2019, and imposes a 3% levy on gross turnover derived from digital services.
EU WHITE PAPER ON ARTIFICIAL INTELLIGENCE: THE 5 REQUIREMENTS
On 16 April, an article from Dentons says that the European Commission recently published a White Paper, which is aligned with the key principles set out in the Guidelines on Trustworthy AI published by the EU High-Level Expert Group, namely human agency and oversight, technical robustness and safety, privacy and data governance, transparency and accountability, diversity, non-discrimination and fairness, societal and environmental well being. The article says that the Commission proposes to opt for a risk-based approach, to make proportional regulatory intervention in order to address mainly “high-risk” AI applications – which it identifies. It lists the 5 requirements for the AI regulations, and says that other requirements may be set for other specific systems, including remote biometric identification.
REFORMING THE RESPONSE TO FINANCIAL CRIME: MAKING THE MOST OF A CRISIS
In a Commentary on 15 April, Tom Keating of RUSI argues that the coronavirus pandemic presents significant financial crime challenges; but that it also presents opportunities for reform that should not be squandered. He says that challenges are emerging for the public and private sector that could pave the way for a step-change in the way in which the current anti-financial crime system operates. He says that it is exacerbating 2 existing weaknesses of the system: the inefficiency and ineffectiveness of many CDD processes and requirements; and providing support to the unbanked – an issue that afflicts not only countries with lesser-developed financial sectors, but also a meaningful number of people in advanced economies. He goes on to argue that the use of technology to make due diligence checks more efficient and less onerous must be incentivised; the embedding of genuinely risk-based responses to financial crime must be encouraged; and the revolutionising of unnecessarily burdensome and restrictive regulatory environments must be expedited.
3 REASONS WHY THE US IS THE EPICENTRE FOR BIG CAT BREEDING AND TRADING
On 16 April, and in the light of Netflix’s “Tiger King”, Insight Crime published an article on why wildlife trafficking has proliferated in the US. It asks what makes the US such a great place for this business? Its answer is, basically, the same thing that makes wildlife trafficking so lucrative in many parts of the world –
- antiquated laws, no regulations;
- poorly resourced law enforcement; and
- lack of education on wildlife trafficking and abuse.
SEC MAKES AWARD OF OVER $27 MILLION TO WHISTLEBLOWER
On 16 April, a release on Mondo Visione advised that the SEC had announced an award of more than $27 million to a whistleblower who alerted it to misconduct occurring, in part, overseas. After providing the tip to the SEC, the whistleblower provided critical investigative leads that advanced the investigation and saved significant SEC resources.
INDIA@ MONEY LAUNDERING CASE AGAINST TABLIGHI JAMAAT SECT CHIEF
The Hindustan Times on 16 April reported that the case followed a police investigation into Tablighi Jamaat chief Maulana Muhammad Saad and 5 others under the Epidemic Disease Act of 1897 and Indian Penal Code after it was found that the Jamaat members flouted the nationwide coronavirus lockdown. Tablighi Jamaat is an Islamic missionary movement.
US: PERUVIAN FAMILY BUYS $27 MILLION IN CONDOS TO STASH CASH DURING CORONAVIRUS CRISIS
On 15 April, the New York Post reported claims that a South American family paid nearly $27 million to buy 8 luxury condos in a new development on the Upper West Side of New York — so they can keep cash in the condos amid the coronavirus outbreak. The family received a 7% discount from the asking price for buying them in bulk at such an uncertain time in the housing market.
US STATE DEPARTMENT SHOULD DESIGNATE THE RUSSIAN IMPERIAL MOVEMENT AS A FOREIGN TERRORIST ORGANISATION
On 14 April, Lawfare carried an article which says that after acting upon the threat of far-right extremist violence in the US by designating the Russian Imperial Movement (RIM) and 3 of its leaders as Specially Designated Global Terrorists (SDGT), it should take the next step and designate RIM, as well as other violent foreign white supremacist groups, as Foreign Terrorist Organizations (FTO). This, it says, would unlock a suite of federal civil and criminal laws that not only block the assets of designated groups but also prohibit providing any material support or resources to such groups, thus opening the door to the use of more investigatory tools and information sharing necessary for an effective counterterrorism regime.
FREIGHT FORWARDERS ASKED TO WATCH FOR FAKE PPE EQUIPMENT IN THE SUPPLY CHAIN
On 16 April, Loadstar reported that UK Border Force and its partners have warned the industry it has identified trends showing criminals are exploiting the current situation, pushing fake medicines and PPE into supply chains.
CHINA’S EXPORT RESTRICTIONS STRAND MEDICAL GOODS DESTINED FOR US
On 16 April, the Wall Street Journal reported that products made by 3M, Owens & Minor and PerkinElmer sit in warehouses; while the GE ventilator production line in Wisconsin was nearly brought to a halt. New Chinese export restrictions have left US-bound face masks, test kits and other medical equipment urgently needed to fight the coronavirus stranded. Large quantities of critical protective gear and other medical goods are sitting in warehouses across China unable to receive necessary official clearances, said some suppliers and brokers.
ILLEGAL MINING IN VENEZUELA
On 16 April, CSIS in the US released a report (plus video and podcast) saying that, while the economic, humanitarian, and political crisis in Venezuela worsens, criminal groups —-including gangs, Colombian guerrilla groups, and colectivos (paramilitary groups) — are competing for control of the country’s valuable mineral resources. These resources include bauxite, coltan, diamonds, and, particularly, gold. Illegal mining is causing irreversible damage to the environment, fuelling human rights abuses, and creating significant security threats for Venezuela and the region.
THE AGGRESSIVE EXTRATERRITORIAL REACH OF US ECONOMIC SANCTIONS: FOREIGN COMPANY EXPOSURE TO OFAC ENFORCEMENT
On 16 April, the National Law Review carried an article which provides an overview of the principal hooks through which OFAC can assert jurisdiction over foreign parties and it briefly recaps the significant business consequences that can flow from violation of US sanctions, and illustrate with some enforcement examples. It concludes that US economic sanctions present significant risks for foreign companies.
US: OPERATOR OF MEDICAL EQUIPMENT COMPANY CHARGED IN MULTI-MILLION-DOLLAR TELEMEDICINE KICKBACK SCHEME
A news release from the US Attorney’s Office of Southern Georgia advised that a man from California is the second man charged in the Southern District of Georgia as part of an investigation that uncovered more than $410 million in fraudulent claims to Medicare, in the largest fraud case in the history of the Southern District of Georgia. Scott M Hirsch, the operator of JI Medical, Inc., a California company, is accused of conspiring to pay kickbacks in exchange for obtaining orders. Previous charges in this string of cases include 8 physicians, 2 nurse practitioners, 2 operators of telemedicine companies, and 2 brokers of patient data.
ARMENIAN ARCHBISHOP INDICTED ON FRAUD AND MONEY LAUNDERING CHARGES
On 16 April, Azatutyun reported that an influential archbishop has been charged with fraud and money laundering amid mounting tensions between Armenia’s political leadership and the Armenian Apostolic Church. It is alleged that Archbishop Navasard Kchoyan had colluded with an Armenian businessman to defraud another entrepreneur.
MOLDOVA: FRAMEWORK OF REGULATION ON PREVENTING, COMBATING MONEY LAUNDERING TO BE CHANGED
The Moldpres news agency in Moldova reported on 16 April that the legal will be adjusted to match EU legislation, and a draft law was approved at an online meeting of the parliamentary commission for national security, defence and public order.
SANCTIONING FOR HUMAN RIGHTS ABUSES – THE CHOICES FACING BRITAIN
On 15 April, a Commentary from RUSI says that, as the UK government prepares to use new sanctions powers to target those responsible for gross violations of human rights, it must ensure clear criteria for their use are established from the start. It points out that the legislation which sets out the powers for UK sanctions after Brexit, includes specific provisions for human rights sanctions and that using sanctions to address gross human rights violations is not a new idea. The UK will join a small group of (Western) countries who have embraced so-called ‘Magnitsky’ sanctions regimes.
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