Panama Covid-19 update – Day 3 of partial release from lockdown, with continued concerns about overcrowded buses (the private ones, not the Mi Bus ones) and lack of social distancing in some areas. Meanwhile, 514 new cases (continuing the worryingly higher daily rates of past week or so), taking the total to date to 14,609. 5 more fatalities take us to a total of 357. La Prensa says that the 5 deaths were all of males, 58 to 81 years old, and with underlying medical complications, such as diabetes. 75 patients remain in the ICU, with 327 more in ordinary wards.
3 June 2020
COMPANIES MUST PRIORITISE ANTI-BRIBERY COMPLIANCE DURING THE PANDEMIC
On 28 May, Bloomberg Law published an article which identifies red flags and offers best practices to mitigate the risk of enforcement under the FCPA. It says that, in what it describes as a high-risk environment, companies must be extra vigilant of potential corruption throughout critical supply chains by identifying red flags, and follow best practices to remain in compliance with anti-bribery laws.
ERICSSON BEGINS MONITORING UNDER US DEFERRED PROSECUTION AGREEMENT
On 3 June, the Wall Street Journal reported that the telecommunications equipment supplier has said its 3-year monitoring under its DPA with US authorities has started, following the engagement of an independent compliance monitor. The DPA followed historical foreign bribery violations in China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam.
BRAZIL: FORMER JUSTICE MINISTER ACCUSES PRESIDENT OF ABANDONING ANTI-CORRUPTION FIGHT
On 3 June, the Wall Street Journal reported that a former judge who became the face of Brazil’s anti-corruption campaign said he felt forced to step down as justice minister because President Jair Bolsonaro had abandoned the fight on graft that had helped get him elected, and he didn’t see support from the president for those reforms. Sergio Moro was lauded by Brazilians as the face of the Operation Car Wash investigation that sent prominent politicians and corporate executives to jail.
PANAMA PAPERS PROBE INVOLVES LAWMAKER IN PANAMA
On 3 June, Panama Press reported that parliamentarian Sara Montenegro is to appear before the Supreme Court, after her case was referred to it because, as a parliamentarian she cannot be tried in regular courts. Montenegro was a lawyer at the Mossack & Fonseca law firm and the case involves companies that were created in Brazil by the law firm for alleged money laundering.
PROFESSOR IN VENEZUELAN MONEY LAUNDERING CASE HAD PANAMA CONNECTIONS TO PRESIDENTS
On 3 June, Panama Press reported that Bruce Bagley, who was a professor of international studies at the University of Miami. Has pleaded guilty to money laundering in a federal court in Manhattan. It is reported that he moved in high circles in Panama and presented himself as a ” consultant ” to the government of President Mireya Moscoso (1999-2004) and who in 2017 advocated a bail bond in favour of then detained former president Ricardo Martinelli (2009-2014).
MEXICO: FINANCIAL REGULATORS HAVE FROZEN THE BANK ACCOUNTS OF 1,939 PEOPLE AND COMPANIES BELIEVED TO BE LINKED TO MOVEMENTS OF ABOUT $1.1 BILLION IN JALISCO DRUG CARTEL MONEY
On 2 June, AP reported that Mexico’s FIU said it worked with the DEA to identify the 1,770 people and 167 companies caught up in the financial dragnet, dubbed “Operation Blue Agave”. The FIU reported that thousands of suspect domestic transactions were detected, which moved the equivalent of about $666 million.
INVESTIGATION BY KUWAITI AML OFFICIALS INTO BILLIONS MISSING FROM MALAYSIA’S EAST COAST RAIL LINE (ECRL) AND PIPELINE PROJECTS
On 3 June, KYC 360 carried an article about an exclusive in Sarawak Reports which claims that Malaysia’s public funds of no less than $10 billion were looted by the Najib government from 1MDB and these 2 projects alone.
THE ABILITY OF EU COURT TO AWARD DAMAGES FOR SANCTIONS LISTING
An Advocate General to the ECJ has given his non-binding Opinion on the ability of the EU court to grant damages against EU institutions for sanctions listings. The Advocate General said that it was nonsensical that the EU court could only award damages arising out of an unlawful EU Regulation imposing targeted sanctions, not the EU Council Decision that always precedes it. However, in the specific case in question the Advocate General said there had not been a sufficiently serious breach of EU law when the listing of the bank involved was annulled in 2013 that would justify an award of damages.
CHINESE MALT IMPORTS FUEL NORTH KOREA’S BOOMING BEER INDUSTRY
On 2 June, NK News reported that, despite COVID-19 trade restrictions, DPRK imports of “essential” roasted malt continue unabated.
HONG KONG: RUSSIAN JAILED FOR SMUGGLING HORNS OF CRITICALLY ENDANGERED ANTELOPE
On 3 June, The Standard reported that a 50-year-old man who arrived in Hong Kong from Moscow in November carrying 224 saiga antelope horns in his baggage has been convicted. The man was sentenced to 20 months after a one-third reduction as he pleaded guilty.
IRELAND: 5 ROMANIAN MEN ARRESTED AFTER GARDA SEARCHES REVEAL €1.5 MILLION MONEY LAUNDERING FRAUD
On 3 June, the Irish Sun and others reported that, in the course of more than 8 searches, documentation of fake companies and bank accounts along with identifications, cash and phones were seized and are currently being examined. Gardai identified that bogus companies were established by a criminal organisation with correlating bank accounts set up under false names and money mules.
EU AT UN REASSURES RUSSIA AFTER FRENCH WARSHIP INTERCEPTED AN OIL TANKER OFF LIBYA TO ENFORCE ARMS EMBARGO
On 3 June, EurActiv reported that EU representatives spent a closed-door meeting – which Russia requested – explaining the EU’s naval mission to enforce an arms embargo on Libya. The Russian mission stressed the need for operations to be in compliance with the UN Security Council Resolution authorising it. The article says that the Gabon-flagged Jal Laxmi was collecting an oil shipment but had not received authorisation from the Tripoli-based Libyan National Oil Corporation. It appears that the ship did not then dock in Tobruk after the vessel’s owner and insurer became wary of potential sanctions.
EU COUNCIL APPROVES CONCLUSIONS ON FUTURE ADMINISTRATIVE COOPERATION AND EXCISE DUTY ON TOBACCO
On 3 June, a news release from the EU advised conclusions setting out political guidance and priorities in view of further reforms in these 2 key areas of EU tax policy. On both matters, the Council calls on the Commission to come forward with legislative proposals in order to address the issues and concerns set out in the conclusions.
UK: MISUSE OF DRUGS LAW AMENDMENT: CANNABIS-BASED MEDICINE EPIDYOLEX EXEMPT FROM THE PROHIBITIONS ON IMPORT, EXPORT AND POSSESSION
The Misuse of Drugs (Amendment) (England, Wales and Scotland) Regulations 2020 provide for a specified cannabis-based medicine called Epidyolex to be placed in Schedule 5 of the principal 2001 Regulations. The 2001 Regulations provide access to controlled drugs for legitimate medicinal or exceptionally for industrial purposes. Epidyolex is a cannabis-based medicine licensed for the treatment of rare forms of epilepsy.
SCOTTISH TRADER ACCUSED OF US FRAUD LOSES EXTRADITION BATTLE
On 3 June, BBC reported that a man wanted by US authorities over his alleged involvement in a £1.1 million shares scam has lost his extradition battle to remain in Scotland. James Craig, 66, of Dunragit in Dumfries and Galloway, is accused of using Twitter to distort prices of firms on the Nasdaq exchange in January 2013. He had argued that the UK government had acted unlawfully in failing to introduce a safeguard called the “forum bar” into Scots law. That provision prevents extradition if the alleged offence can be tried in the UK and it is not in the interests of justice that the accused be sent abroad.
DENMARK ARRESTS 6 PEOPLE SUSPECTED OF €33 MILLION TAX FRAUD AND MONEY LAUNDERING
On 3 June, Reuters reported that Denmark’s state prosecutor for economic crime said it arrested 6 people in relation to suspected tax fraud and money laundering. They are suspected of being part of “a highly professional and well-organised criminal network with threads to other countries”.
COUNCIL OF EUROPE: BULGARIA HAS IMPLEMENTED ALL ANTI-CORRUPTION MEASURES
On 3 June, Novinite reported that Bulgaria is among the 10 countries, (out of all 47 members of the Council of Europe) to have implemented all anti-corruption recommendations.
US: TEMPORARY RESTRAINING ORDER AGAINST BUSINESSMAN OFFERING FRAUDULENT CORONAVIRUS CURES/TREATMENTS
A news release from the DoJ on 2 June announced that federal authorities served a civil injunction against 73-year-old Kansas resident Marc “White Eagle” Travalino in an effort to combat alleged fraud related to the coronavirus (COVID-19) pandemic. The purpose of the civil injunction is to stop his sale of fraudulent COVID-19 cures through his business and his website, “whiteeaglenativeherbs.net”.
PHILADELPHIA WOMAN INDICTED IN $68 MILLION SECURITIES FRAUD SCHEME
A news release from the DoJ on 2 June advised that Brenda Smith, 59, an investment fund manager has been indicted in connection with an alleged $68 million securities fraud scheme. Smith managed and controlled Broad Reach Capital LP, a purported investment fund. Broad Reach Capital was a pooled investment fund/hedge fund that was established in February 2016 and was open to accredited investors with a minimum investment of $1 million.
CANADA LAW RECOGNISES DIGITAL CURRENCY FIRMS AS MONEY SERVICE BUSINESSES
ON 3 June, Coingeek reported that digital currency businesses in Canada are now recognised as MSB. On 1 June, amendments made to Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act came into effect.
SOUTH AFRICA: FARMER GETS 15 YEARS FOR MILKING SEASONED FARMERS IN PRIZED CATTLE SCAM
On 3 June, the Times Live reported that Cornelius Andries Loggenberg, 37, a cattleman who duped seasoned farmers has been sentenced to effectively serve 15 years in prison for theft and fraud. To maintain his dairy farm, he leased thousands of cattle, which he then sold in what was described as a ‘get-rich-quick scheme’, where he duped seasoned farmers who ended up being the victims of theft and fraud.
ESTONIA: SUSPECTS IN LARGE-SCALE MONEY LAUNDERING TO FACE TRIAL
On 3 June, ERR reported that the prosecutor’s office has sent the large-scale money-laundering case of entrepreneur Tiiu Järviste and her 2 fellow accused to court. A further suspect, Andrei Stsemelev, is believed to be hiding in the US and has been put on the international wanted list. It is alleged that the offences had been committed by the trio through AS GFC Good Finance Company since May 2018, and nearly €3 million of money earned through crime has passed through the company, described as a payment institution enabling predominantly non-resident customers to open accounts as well as make and mediate payments. Järviste is additionally suspected of an attempt to embezzle close to €8 million, according to public prosecutor, with parallel proceedings in Latvia.
MEXICO: FOREIGN COMPANIES THAT PROVIDE DIGITAL SERVICES INCLUDING GAMBLING MUST PAY 16% TAX DESPITE NOT HAVING RESIDENCE THERE
On 3 June, SBC Americas reported that affected companies include betting operators, gaming platforms, as well as audiovisual entertainment and transport services, such as Amazon, Netflix, Uber, PlayStation, among others. The new VAT is part of the 2020 Economic Package.
UK: MAN ARRESTED FOR ALLEGEDLY SELLING OVER 500 FAKE CORONAVIRUS TESTING KITS ON THE DARK WEB
On 3 June, a news release from the NCA said that a 38-year-old Birmingham man has been arrested for allegedly selling fake coronavirus testing kits on the dark and open webs. He was arrested at his home in the city’s Jewellery Quarter and taken into custody yesterday for alleged offences under the Fraud Act 2006. He is believed to have sold the kits to customers in the UK and US.
THIRD MAN SENTENCED FOR IMPORTING 95 LETHAL HANDGUNS INTO UK
On 3 June, a news release from the NCA advised that a man who conspired with 2 others to import 95 lethal handguns into the UK has been jailed for more than 15 years. The weapons were hidden in specially adapted concealments in engine blocks on the trailer of a van which was en route to the UK.
A TIGHTROPE ACT: GERMANY’S BAN ON HIZBULLAH ACTIVITIES
A Commentary from RUSI on 3 June says that Germany’s decision to ban Hizbullah does not signify the start of a regional shift, but generates wider foreign policy repercussions. It points out that the decision means that Hizbullah’s political arm can no longer operate on German soil, but it does not mean that it will be designated as a terrorist organisation – Germany does not have its own terrorist listing. Instead, it follows the EU’s lead, which only lists Hizbullah’s military arm as a terrorist organisation.
US CUSTOMS SEIZES 4,600 IMPORTED RADIO-CONTROLLED DRONES FROM CHINA
On 3 June, a news release from US Customs & Border Protection advised that the 4,619 drones, valued at approximately $69,000, were seized after officers and import specialists discovered the merchandise did not meet Federal Communications Commission labelling requirements. The shipment was also determined to be undervalued by nearly $62,000.
US CUSTOMS SEIZES $351,000 OF COUNTERFEIT CURRENCY IN MILWAUKEE
A news release from us Customs & Border Protection on 3 June advised that CBP seized 3,515 $100 bills “worth” a total of $351,500. The parcel arrived from Shanghai and was headed for a residence in Milwaukee. Each bill had the same serial number, and there were Chinese letters on back of bills in red.
HIGH COURT ISSUES INNOVATIVE ORDERS TO MANAGE COMPLEX FRAUD CLAIM
On 3 June, an article from Out-Law reported that the High Court in London has used its powers under the Civil Procedure Rules (CPR) to help manage a complex fraud case involving a large number of victims, in order to help identify the owners of assets connected to an ongoing claim. The case follows the conviction of businessman Gerald Smith for fraud in 2005, and litigation between Smith’s investment company Orb and former business associate Andrew Ruhan.
REMITTANCES TO YEMEN PLUMMET AS NEEDS SURGE AMID WAR AND CORONAVIRUS
On 3 June, Ekklesia reported that there has been an unprecedented decline in the flow of remittances to Yemen – a vital source of money for millions – just as cases of coronavirus surge and international aid dries up in a country already devastated by more than 5 years of war. The World Bank estimates that 1 in 10 people in Yemen rely wholly on money transfers to meet their basic needs. Remittances to Yemen in 2019 totalled $3.8 billion –13% of GDP. It says that Oxfam has called on the international community to help.
REvil RANSOMWARE GANG STARTS AUCTIONING VICTIM DATA
On 3 June, the Krebs on Security blog carried a post saying that the criminal group behind the REvil ransomware operation has begun auctioning off sensitive data stolen from companies hit by its malicious software. It says that the move marks an escalation in tactics aimed at coercing victims to pay up — and publicly shaming those who do not. However, it also suggests that it may also signal that ransomware purveyors are searching for new ways to profit from their crimes as victim businesses struggle just to keep the lights on during the unprecedented economic slowdown caused by the COVID-19 pandemic.
PODCAST: THE TRAVEL ACT AND OTHER ANGLES FROM THE CONTROL COMPONENTS INC. CASE
In the latest TRACE podcast, TRACE’s Director of Compliance Resources, Illya Antonenko, looks back at the CCI case from 2009. Although a relatively small FCPA resolution financially, there are a number of interesting issues, including a corrupt corporate culture and reaching commercial bribery via the Travel Act – a Federal criminal statute which forbids the use of the US mail, or interstate or foreign travel, for the purpose of engaging in certain specified criminal acts.
US CUSTOMS IN BALTIMORE SEIZE OVER 14,000 UNAPPROVED COVID-19 TREATMENT CAPSULES AND SEVERAL UNAPPROVED TEST KITS
On 3 June, a news release from US Immigration and Customs Enforcement announced that special agents and Maryland law enforcement partners have seized over 14,000 unapproved COVID-19 treatment capsules and several unapproved COVID-19 test kits as part of ongoing Operation Stolen Promise investigations.
TAIWAN: PROSECUTORS PROBE 92 ARRESTED IN MONTENEGRO FOR CALL CENTRE FRAUD
In its 4 June edition, the Taipei Times reported that prosecutors are investigating 92 fraud suspects arrested in Montenegro early this year, including one who is believed to have been forced into cooperating with the alleged scheme. It is reported that Chinese authorities had sought the extradition of the group, but were unsuccessful because Taiwanese investigators had already been working with Montenegrin authorities on the case.
LESSONS IN DIGITAL ASSET RECOVERY AFTER FRAUD
On 3 June, an article from Bennett Jones LLP focussed on a recent High Court case in London which, it says, provides an opportunity to consider the (Canadian) law implications for the use of civil proceedings to prevent the dissipation of digital assets and facilitate their ultimate recovery. In AA v Persons Unknown, a Canadian insurance company was the subject of a ransomware attack that successfully bypassed the firewall and anti-virus software to encrypt its computer systems. The Court found that cryptocurrencies such as Bitcoin are a form of property capable of being the subject of a proprietary injunction. However, it notes that Canadian courts have not yet considered the issues raised in AA v Unknown Persons in any reported decisions. The article neverthelesss says that the decision is significant insofar as it affirms that cryptocurrencies are in fact property to which the legal principles governing tracing can be applied; and underlines the need to act quickly and at times creatively to pursue recovery of the ransom payment, even if made in cryptocurrency. It says that the case offers a number of practical lessons for the pragmatic protection of IT assets, and the pursuit and recovery of cryptocurrency.
ISRAEL: POLICE DETAIN COMPANY EXECUTIVES OVER BRIBERY ALLEGATIONS IN RUSSIA
On 3 June, CTech reported that Israeli police detained former executives of Frutarom Industries Ltd on suspicion of bribing public officials in Russia and Ukraine. The executives are being questioned as part of a joint investigation with the Israel Securities Authority. It is said that the investigation follows a review conducted by US-based International Flavors & Fragrances Inc (IFF), which acquired Frutarom in 2018. It is claimed that Frutarom’s management is suspected of transferring funds from its marketing budget directly to company employees in Russia and Ukraine, who used them to bribe various local officials. It is also claimed that IFF had been subject to an extortion attempt due to the matter.
NEW REPORT BY COUNCIL OF EUROPE’S ANTI-CORRUPTION BODY: PUBLIC AUTHORITIES TO BE EXEMPLARY AND TRANSPARENT
On 3 June, the annual report from GRECO, the Council of Europe’s anti-corruption body, says that governments and public-office holders should act in an exemplary way by respecting anti-corruption measures and transparency standards. The report reviews the measures to prevent corruption taken in GRECO’s member states in 2019 in respect of parliamentarians, judges and prosecutors, as well as in central governments – including top executive functions – and law enforcement agencies. In 2019, GRECO decided to start a new advisory function, by which it will be able to provide, upon request, assistance to member states and Council of Europe bodies by preparing expertise reports.
The report is at –
If you would like to say thanks by making a small contribution, in case I need to upgrade or replace my computers and other paraphernalia, I have a page at https://www.buymeacoffee.com/KoIvM842y