Panama Covid-19 update – life goes on, such as for the 2 sons of former President Martinelli, who recently were granted bail (for $7 million) on alleged corruption charges and which would have allowed them to return home. They have now been detained in Guatemala, possibly while on their way home, and face extradition to the US to face charges of conspiracy to money launder.
Meanwhile, the relatively high recent statistics continue, with another 1,185 new cases (now 39,334 total to date) and 23 more fatalities (770 to date since the start of March). There are said to now be 20,528 active cases, with 162 in ICU, 846 in other wards and 676 in requisitioned hotels. 3,197 new tests have been undertaken, and it is said that 18,036 people are now considered to be “recovered”.
6 July 2020
PANAMA: EX-PRESIDENT HAS ASSETS OF NEWSPAPER GROUP RESTRAINED OVER MONEY LAUNDERING ALLEGATIONS
On 5 July, Newsroom Panama reported that former Panama President , Ernesto Pérez Balladares, has had shares and bank accounts of Corporación La Prensa, SA (Corprensa) totalling $1.13 million restrained as part of a civil lawsuit filed 8 years ago against the media for alleged damages following claims that the ex-President was to be interviewed over alleged money laundering. The action has been criticised by the National Council of Journalism.
https://www.newsroompanama.com/business/ex-president-grabs-113-million-newspaper-assets
TURKISH JUDGE RELEASES MANAGER, PILOTS IN CARLOS GHOSN ESCAPE TRIAL
On 3 July, the Wall Street Journal reported that a Turkish judge has ordered the release of 5 defendants accused of assisting Carlos Ghosn in making an undeclared layover in Turkey late last year after he fled Japan.
US SENATE PASSES SANCTIONS BILL AGAINST CHINESE OFFICIALS OVER HONG KONG
On 5 July, the Wall Street Journal reported that the US Senate has passed by unanimous consent a bipartisan Bill to impose sanctions on Chinese officials who threaten Hong Kong’s limited autonomy, as well as the banks and firms that do business with them, sending the legislation to the president’s desk. The Bill has already been passed by the House of Representatives.
IRANIAN MILITARY-OWNED CONGLOMERATE SETS UP RETAIL OPERATION IN VENEZUELA
On 5 July, the Wall Street Journal reported that an Iranian conglomerate owned by the country’s military has established a retail foothold in Venezuela, according to officials and records detailing the move. The Iranian company is working with the Maduro government’s emergency food program, which is the subject of US enforcement action as an alleged money laundering operation.
ENRON – BATTLE OVER $80 MILLION YACHT
On 6 July, KYC 360 reported that, almost 2 decades after the collapse of Enron, the energy-trading giant, there is a legal dispute over the proceeds of the sale of a luxury yacht, the Galactica Star — a 213-feet vessel once worth more than $80 million. US authorities seized the yacht in 2018 after filing a lawsuit to recover assets it said were acquired by Nigerian businessman Kolawole Aluko. It says that prosecutors alleged that Aluko bought the yacht with bribes paid to Diezani Alison-Madueke — the first female president of OPEC and a former Nigerian oil minister. The boat was auctioned for $37 million in 2019 and renamed Illusion. In May, after Nigeria dropped its own claim to the funds, a US court agreed that the proceeds should be retained by the US government, but Enron Nigeria Power Holding Ltd says it’s entitled to part of the takings and is demanding $22 million.
https://www.riskscreen.com/kyc360/news/enron-legacy-returns-in-battle-over-80-million-yacht/
THE BIZARRE ENDANGERED SPECIES IMPORTED INTO IRELAND
On 6 July, the Irish Examiner carried an article about some of the items that people unsuccessfully tried to smuggle into the country through airports and mail centres last year. These included more than 2 dozen dead seahorses, 2 desiccated snakes and a pair of alligator heads, wildcat teeth, a turtle shell, and 2 kg of meat from a near-threatened species of antelope, a pair of dead snakes and 2 plastic bags full of meal worms from Angola.
12-MONTH BARBADOS WELCOME STAMP FOR VISITORS PROPOSED
On 2 July, Invest Barbados said that the PM had said that the Barbados Government could soon be introducing the 12-month Barbados Welcome Stamp to allow visitors the option to work remotely from Barbados for a year at a time. This would allow persons to work remotely from there using digital services.
IS MAFIA ENTREPRENEURSHIP EXPLOITING THE PANDEMIC?
A paper from the Global Initiative Against Transnational Organised Crime looks at how the mafia groups have reacted to, or taken advantage of, the effect of Covid-19 in Italy – a country one of the worst affected in Europe. The Global Initiative Against Transnational Organized Crime (GI-TOC) brought together 4 leading figures in Italy’s fight against the mafia in April for a virtual roundtable to discuss how the mafia is repositioning itself during the pandemic, what the implications are and how the Italian government is responding.
https://globalinitiative.net/wp-content/uploads/2020/04/Italian-Connection-v7.pdf
SOUTH KOREA REJECTS REQUEST TO EXTRADITE CHILD PORNOGRAPHY SITE KINGPIN
On 6 July, the Sydney Morning Herald reported that a South Korean court has rejected an extradition request by the US for Son Jong-woo, 24, a South Korean citizen convicted of running one of the world’s biggest child pornography websites on the dark web.
BRAZIL: FEDERAL POLICE INVESTIGATION FOR FRAUD IN GOVERNMENT PENSION FUNDS
On 6 July, the Rio times reported that the investigation is one of the main priorities of Operation Greenfield, which uncovered losses in Brazil’s largest pension funds. It claims that Economy Minister Paulo Guedes is being investigated in for alleged fraudulent actions from 2009 to 2013.
UK EXPORT FINANCE UNDER FIRE FOR PAST INVOLVEMENT WITH AIRBUS DEALS
On 6 July, various media reported that the agency has been criticised by an anti-corruption group for providing at least £340 million of support to Airbus SE and aero-engine manufacturer Rolls-Royce Holdings Plc to help secure suspect contracts. It backed deals that were later found to have been tainted by graft, according to a report by Spotlight on Corruption. In the case of Airbus, the agency identified wrongdoing but took more than a year to report its suspicions to the SFO, the report said.
https://www.bnnbloomberg.ca/u-k-agency-under-fire-for-past-involvement-with-airbus-deals-1.1461046
MEXICO: SUSPECTED MEXICAN DRUG CARTEL PLANE CRASH LANDS ON HIGHWAY
On 6 July, Newsweek reported that an aircraft suspected of being used to carry illegal drugs burst into flames after landing on a highway in southern Mexico. It is said that the military later found a van containing more than 850 lb of cocaine, thought to have come from the aircraft. The twin-engine business jet is shown burnt-out on the highway.
https://www.newsweek.com/mexico-cocaine-plane-quintana-roo-1515604
GERMAN PROSECUTOR ARRESTS HEAD OF WIRECARD’S DUBAI UNIT
On 6 July, Reuters reported that German prosecutors have said they had arrested the head of Cardsystems Middle East FZ-LLC, a Dubai-based subsidiary of payments company Wirecard.
OECD RELEASES NEW GLOBAL TAX REPORTING FRAMEWORK
On 3 July, the OECD released the Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy (MRDP). Digital platforms are required under the MRDP to collect information on the income realised by those offering accommodation, transport and personal services through platforms and to report the information to tax authorities. OECD says that the MRDP are designed to help taxpayers in being compliant with their tax obligations, while ensuring a level-playing field with traditional businesses, in key sectors of the sharing and gig economy. They further seek to avoid a proliferation of different and unilateral reporting regimes, allow for the use of novel technology solutions and help create a sustainable environment supporting the growth of the digital economy. It is also said that OECD will take forward work on the international legal and technical framework to facilitate the automatic exchange of the information collected under the MRDP.
THE EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE
On 6 July, the UK Department of Business, Energy and Industrial Strategy published information on the EITI, a global drive to promote the open and accountable management of oil, gas and mineral resources. It is intended to ensure that each country manages its natural resources in a transparent and accountable way. In many resource-rich developing nations the benefits of resource extraction may be lost through mismanagement and corruption. EITI requires oil, gas and mining companies to voluntarily disclose their payments to government agencies. The payments are then reconciled with government receipts from the companies. This data is published in the annual EITI reports.
VENEZUELA DENIED ACCESS TO $1 BILLION IN GOLD IN THE UK
On 4 July, Jurist reported that the High Court in London has rejected an application by Venezuelan President Nicolás Maduro access because the UK does not recognize him as president of Venezuela.
WHY “DEVELOPMENT BANKS” IN AFRICA NEED TO FOCUS ON ESG MANAGEMENT
An article from Control Risks on 6 July says that the Development Finance Institution (DFI) community has a critical role in supporting the rehabilitation of the private sector in Africa in the wake of the COVID-19 pandemic, and promoting positive environmental, social and governance (ESG) practices that will result in more resilient and sustainable businesses. The article looks at how ESG issues have become more pressing in Africa as a result of COVID-19, and the role that DFI play in supporting companies to priorities these challenges. It then provides recommendations on effective ways for DFI to support their investees through this challenge to ensure a lasting impact. It argues that DFI need to “future proof” their approach to ESG management, and that this can be done in 3 ways – monitoring and tracking trends and assessing levels of preparedness; revisiting investees’ ESG practices and approaches, focusing specifically on labour relations and crisis preparedness; and with deep stakeholder engagement, particularly around worker/management relationships.
https://www.controlrisks.com/our-thinking/insights/why-dfis-need-to-focus-on-esg-management
UK: LORD CHANCELLOR SEEKS VIEWS ON POST-BREXIT COURT POWERS
On 2 July, the Law Society Gazette reported that the MoJ is seeking lawyers’ views on which British courts should have the power to depart from retained EU case law after the Brexit transition period ends.
US CUSTOM INTERCEPTS $5.5 MILLION OF FAKE GUCCI, FACEBOOK AND INSTAGRAM WOMEN’S SLEEPWEAR
A news release from US Customs & Border Protection on 3 July advised that officers had seized 16,340 counterfeit sleeping dresses arriving from China at the Los Angeles/Long Beach Seaport. It is said that the goods arrived from China in a shipment containing 329 bales of clothing, and in 189 of those bales, officers discovered the counterfeit products hidden in between generic versions of the sleeping dresses in a clear smuggling attempt.
THE EFFECTS OF PARALLEL TRADE OF DRUGS IN EUROPE
An article from VOX, the Centre for Economic Policy Research (CEPR) website, on 4 July says that differences in regulated pharmaceutical prices within the EEA create arbitrage opportunities that pharmacy retailers can access through parallel imports. It discusses recent findings showing that in a country which does not regulate pharmacy retailers’ margins, retailer incentives to bargain lower wholesale prices play a significant role in fostering parallel trade penetration, and that banning parallel imports would benefit manufacturers.
https://voxeu.org/article/effects-parallel-trade-drugs-europe
WHY DOES THE PHILIPPINES ATTRACT FINANCIAL FRAUD?
An opinion piece in the Nikkei Asian Review by a a security analyst and AML consultant on 6 July says that Wirecard is only latest example of the country being caught up in corporate misdeeds. It argues that recent cases point to is a lack of enforcement capacity on the part of the Philippines’ SEC; the Bangko Sentral ng Pilipinas, its central bank; and the Anti-Money Laundering Council (AMLC) – and a lack of the ability and willingness of these bodies to conduct meaningful routine monitoring and verification of financial institutions.
https://asia.nikkei.com/Opinion/Why-does-the-Philippines-attract-financial-fraud
BROOKLYN MAN INDICTED ON CULTURAL ARTIFACTS SMUGGLING CHARGES
A news release from US Immigration and Customs Enforcement on 6 July advised that Ashraf Omar Eldarir, 47, a US citizen, is being charged with smuggling Egyptian cultural property into the US and alleged involvement in the smuggling of nearly 590 artifacts pillaged from Egypt. It is reported that, on 22 January, Eldarir arrived at JFK airport from Egypt with 3 checked suitcases and he falsely declared to CBP that he was carrying goods valued at only $300. However, when officers opened his suitcases they found approximately 590 bubble and foam-wrapped Egyptian antiquities.
https://www.ice.gov/news/releases/brooklyn-man-indicted-cultural-artifacts-smuggling-charges
US SEEKS SEIZURE OF ALL IRANIAN GASOIL ABOARD 4 TANKERS HEADED TO VENEZUELA BASED ON CONNECTION TO IRGC
A news release from US Immigration and Customs Enforcement on 6 July advised that a forfeiture complaint and warrant filed in Washington DC alleges that all petroleum-product cargo aboard 4 ships – Bella (IMO number 9208124), Bering (IMO number 9149225), Pandi (IMO number 9105073), and Luna (IMO number 9208100) – are subject to forfeiture based on the terrorism forfeiture statute. Documents allege a scheme involving multiple parties affiliated with the Islamic Revolutionary Guard Corps to covertly ship Iranian gasoil, obtained via ship-to-ship transfers, to Venezuela. A judge issued a warrant to seize all Iranian gasoline on these 4 vessels, based on a probable cause showing of forfeitability.
WHAT IS BEHIND THE FINANCIAL CRISIS IN LEBANON?
For a background on the financial crisis and protests in Lebanon, you could do worse than listening to this 18 May podcast from the Foreign Policy Research Institute in the US. In the podcast, the host interviews the Washington correspondent of The National, the UAE-based newspaper.
https://www.fpri.org/multimedia/2020/05/a-financial-crisis-in-lebanon/
SPANISH COURT CLEARS EXTRADITION OF FORMER OIL EXECUTIVE TO MEXICO
On 6 July, Courthouse News carried an AFP report saying that a Spanish court is allowing the extradition of a former chief executive of Mexican state oil company PEMEX, Emilio Lozoya, its head from 2012 to 2018, who is accused of corruption in Mexico. He was a top advisor to former president Enrique Pena Nieto (2012-18) and allegedly used the bribes to help fund Nieto’s presidential campaign bid and is also accused of having authorised the acquisition by PEMEX of a factory for a $500 million price that prosecutors deem to have been suspiciously high.
https://www.courthousenews.com/spain-court-clears-extradition-of-former-mexico-oil-chief
UAE ARRESTS GOVERNMENT OFFICIAL FOR CORRUPTION
On 6 July, Gulf News reported that a government official at the Ministry of Interior and his accomplices have been arrested on charges of corruption, and for allegedly blackmailing others by threatening them to add their names to a ‘wanted’ list.
https://gulfnews.com/uae/government/uae-arrests-government-official-for-corruption-1.1594054738531
HOW TO IDENTIFY SUSPICIOUS USE OF VIRTUAL CURRENCIES
On 6 July, Barnea Jaffe Lande & CO published an article saying that the Israel Money Laundering and Terror Financing Prohibition Authority has published a document aimed at assisting financial bodies and law enforcement agencies to identify improper activity. It says that the “red flags” document is intended for providers of financial services in virtual assets, but may also assist different “outer circle” supervised bodies that provide services to such providers. In addition, this document may also help private individuals who hold virtual assets to recognise improper activity.
https://www.jdsupra.com/legalnews/israel-how-to-identify-suspicious-use-22803
MEXICO’S SPIRALLING CRIMINAL MARKET
On 6 July, an article from the Brookings Institute says that recent spectacular attacks have highlighted that Mexican criminal groups believe that they have essential impunity from law enforcement response. It says the essence of Mexico’s security problem is that 3 decades ago, its law enforcement lost its deterrence capability and has not been able to restore it since. The article contrasts Mexico’s bloody criminality with its extensive drug smuggling and other illegal economies, to those in other regions of the world which can be essentially peaceful.
https://www.brookings.edu/blog/order-from-chaos/2020/07/06/mexicos-spiraling-criminal-market
SAUDI ARABIA: CROWN PRINCE PREPARING NEW CHARGES AGAINST DETAINED FORMER CROWN PRINCE
On 6 July, Middle East Eye reported that Saudi Crown Prince Mohammed bin Salman is in the process of levelling corruption and disloyalty charges against his predecessor Mohammed bin Nayef. It is reported that that an “anti-corruption committee” will level charges against him for allegedly siphoning billions of dollars through a network of front companies and private accounts when he was in charge of the interior ministry, and that he will be asked to re-pay more than $15 billion that it is claimed that he stole.
https://www.middleeasteye.net/news/saudi-crown-prince-demanding-15bn-bin-nayef
SAUDI ARABIA: CONTROL AND ANTI-CORRUPTION AUTHORITY INITIATED 105 CRIMINAL CASES IN THE LAST YEAR
On 6 July, the Saudi Press Agency reported that the Control and Anti-Corruption Authority had stated that the Authority had initiated 105 cases during the last period and the most prominent cases were as follow. The news release details some of the most prominent of these cases.
https://www.spa.gov.sa/viewfullstory.php
EY’S SHAMEFUL YEAR – NMC HEALTH, LUCKIN, WIRECARD AND A FAILED ATTACK ON A WHISTLEBLOWER
On 6 July, an article in Forbes was concerned with the common factor in the NMC Health, UAE’s largest private healthcare provider; Luckin, China’s largest coffee chain; and German payments company Wirecard scandals was the involvement of an EY affiliate as auditor. Then, in April, a London court ordered EY to pay $11 million to a former partner in Dubai who blew the whistle on an alleged money laundering scheme by a client and sued for damages and expenses for the retaliation he suffered.
US: 10 INDIVIDUALS CHARGED FOR $1.4 BILLION HEALTH CARE BILLING SCHEME
A DoJ news release on 29 June advised that an indictment contained charges against 10 individuals with health care fraud and wire fraud for allegedly participating in a pass-through billing scheme that used hospitals located in rural areas as shells to submit fraudulent claims worth $1.4 billion for laboratory testing. The individuals, including hospital managers, laboratory owners, and billers, were ultimately paid about $400 million by private insurers. It is alleged that the defendants would take over rural hospitals in Florida, Georgia, and Missouri that were in financial trouble using their own management companies.
THE STRUGGLE TO ERADICATE MONEY LAUNDERING FROM CAMBODIA
On 6 July, an article from Southeast Asia Globe said that Cambodia has introduced new laws to tackle money laundering following an EU ruling placing the country at “high-risk” for illicit cash flows – but experts say it will take extensive efforts and real political will to end the entrenched practice in the Kingdom.
https://southeastasiaglobe.com/the-struggle-to-eradicate-money-laundering-from-cambodia/
PANAMA: MARTINELLI SONS DETAINED IN GUATEMALA
On 6 July, Newsroom Panama and local media in Panama reported that Ricardo Alberto Martinelli Linares and Luis Enrique Martinelli Linares, sons of former Panama President, Ricardo Martinelli, have been detained in Guatemala. They were detained on a US request for extradition to the US on charges of conspiracy to commit money laundering. It is said that they were detained as they were preparing to board a private humanitarian flight in an aircraft reportedly owned by their father. It is reported that they carried passports that accredited them as members of the Central American Parliament (Parlacen), whose headquarters are in Guatemala, and said they had Italian-Panamanian nationality. Recently, one of the brothers had requested permission to enter Panama (which is under severe lockdown) and they were given bail of $7 million each on charges there relating to alleged corruption.
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