Panama Covid-19 update – cases still continue to mount up, another 742 reported today, with 21,162 active cases currently. 8 more fatalities, with 116 patients now in ICU and 688 other wards.
30 September 2020
MALWARE GANG TARGETS THE MEDIA, FINANCE, AND OTHER SECTORS
On 29 September, Symantec reported that it had uncovered a new espionage campaign carried out by the Palmerworm group (aka BlackTech) involving a brand new suite of custom malware, targeting organizations in Japan, Taiwan, the US, and China, and targets organisations in the media, construction, engineering, electronics, and finance sectors. Symantec identified multiple victims in this campaign, in a number of industries, including media, construction, engineering, electronics, and finance. The media, electronics, and finance companies were all based in Taiwan, the engineering company was based in Japan, and the construction company in China. It is evident Palmerworm has a strong interest in companies in this region of East Asia.
WHISTLEBLOWER WARNED EY OF WIRECARD FRAUD 4 YEARS BEFORE COLLAPSE
The Financial Times has reported that a whistleblower told EY about possible fraud by senior managers at Wirecard and that one had attempted to bribe an auditor 4 years before the payments group collapsed in Germany’s largest postwar corporate fraud. The revelation that an EY employee identified suspicious activity at Wirecard in 2016 will increase the pressure on the accounting firm, which audited Wirecard for more than a decade and provided unqualified audits until 2018.
ALL 4 OF THE WORLD’S LARGEST SHIPPING COMPANIES HAVE NOW BEEN HIT BY CYBER-ATTACKS
On 28 September, ZD Net reported that the maritime industry needs to focus more on securing shore-based systems and stop prioritising the less likely ship-based attacks.
UAE BOOSTED ARMS TRANSFERS TO LIBYA TO SALVAGE WARLORD’S CAMPAIGN
On 29 September, the Wall Street Journal reported that the UAE ramped up deliveries of military supplies to Libyan warlord Khalifa Haftar this year, according to a confidential UN report, flouting an arms embargo as the Gulf state tried to salvage the leader’s military campaign and check the influence of regional rival Turkey.
DUTCH SHIPBUILDER IHC ‘UNDER INVESTIGATION’ IN BRAZIL OVER BRIBERY CLAIM
On 29 September, Dutch News reported that Brazilian court documents suggest the investigation focuses on 2013, when IHC was given a €1 billion order to build 6 ships to be used in laying underwater pipes, and is an offshoot of the massive Operation Car Wash.
RGcoins FOUNDER ROSEN IOSSIFOV CONVICTED IN US FOR CRYPTO MONEY LAUNDERING
On 29 September, Finance Magnates reported that Rosen Iossifov, owner of cryptocurrency exchange RGcoins, was convicted by a federal jury in Kentucky after a 2-week trial where he was accused of orchestrating a sophisticated scheme to steal money from unsuspecting victims in the US and then launder their funds using cryptocurrency. It is said that the founder of the small-scale Bulgarian exchange, which was heavily focused on local Eastern European clients, caught the eye of the US investigators last year due to suspicions that he helped a Romanian money laundry gang.
HONG KONG LAUNCHES CONSULTATION ON AML GUIDELINES
On 29 September, Sidley Austin LLP reported that on 18 September, the Hong Kong Securities and Futures Commission (SFC) launched a 3-month consultation on proposals to amend its AML/CFT guidelines.
The consultation is at –
HEAD OF SFO RE-EXAMINES THE PRIORITIES OF THE SFO AT THE CAMBRIDGE INTERNATIONAL SYMPOSIUM ON ECONOMIC CRIME
On 28 September, an article from Herbert Smith Freehills said that, on 7 September, Lisa Osofsky, the Director of the SFO, delivered a keynote virtual address at the Cambridge International Symposium on Economic Crime via YouTube. She referred to a number of new developments which she said would affect the SFO’s future work and the article provides a summary of her key points.
NORTHERN MALI CONTINUES TO BE A TRANSIT ZONE FOR DRUG TRAFFICKING NETWORKS
On 17 September, a report from ENACT Africa says that northern Mali has been and continues to be a transit zone for regional and global drug-trafficking networks transporting narcotics through Africa to Europe. However, it argues, the ways in which those involved in narcotics trafficking position themselves within political, economic and security structures have changed. Efforts to control it could threaten the already fragile peace process in which several actors involved in trafficking are participating.
THE SCOURGE OF SYNTHETIC DRUGS IN MAURITIUS
On 23 September, ENACT Africa reported that synthetic drugs, more specifically, new psychoactive substances (NPS), were first detected in Mauritius in 2013 and since then have had a significant negative impact, overtaking heroin as the most popular drug among young people.
MAURITIUS MUST PAY BETTER ATTENTION TO THE WARNING SIGNS TO AVOID SLIDING DOWN THE SLIPPERY SLOPE OF CORRUPTION
On 14 September, an article from ENACT Africa reported on the risks of corruption facing Mauritius, mentioned a recent case which it says is an episode which not only highlights the vulnerability in the energy sector with regards to corruption and procurement fraud. The incident is also said to form part of corruption scandals that have plagued the country for the past decade, thus negatively impacting on investor confidence and its image as a model of clean governance.
NORTH KOREAN IT SPECIALISTS DISGUISE NATIONALITY TO EARN FOREIGN CURRENCY
On 30 September, Dong-A Ilbo in Korea reported on a recent UN Panel of Experts report, which says that a group of 10 or 20 IT specialists earns more than 100,000 dollars per month in China. Most of them work freelance using a name of someone from a third country. For instance, 16 North Koreans dispatched to a company called Silverstar at the Yanji National High-tech Industrial Development Area in China earned a million dollars last year. Pyongyang also dispatched medical workers to African countries such as Mozambique and Angola for medical cooperation and earned foreign currencies by running private hospitals.
NORTH KOREA ARRESTS 20 REMITTANCE BROKERS FOR USING ILLEGAL CHINESE MOBILE PHONES
On 30 September, Radio Free Asia reported that North Korea is said to have arrested 20 “phone brokers” who arrange calls and money transfers from outside the country in a nationwide crackdown on illegal mobile phone users.
SUDAN DESTROYS 300,000 ILLEGAL FIREARMS
On 29 September, Relief Web reported that the Sudanese army has launched the destruction of 300,000 illegal firearms collected during disarmament campaigns in the country over the past years. It is also said that very strict measures will then be put in place to prevent the possession of guns or ammunition except by the regular forces.
GAMING COMPANY SETTLES SEC CHARGES FOR SALES OF UNREGISTERED TOKENS
On 28 September, Cadwalader Cabinet published an article saying that a company operating an online eSports gaming and gambling platform has settled SEC charges for conducting an unregistered initial coin offering (ICO).
POPULAR CUBAN DEBIT CARD ADDED TO US SANCTIONS LIST
On 30 September, The Gleaner in Jamaica reported that a debit card backed by remittances that recently became popular in Cuba because people can use it to buy home appliances, food and replacement parts has landed on the US sanctions lists. FINCIMEX is a Cuban state company that processes remittances and issues the American International Services card, which the government began accepting in July amid a pandemic that worsened the lack of food on the island and sparked long lines for goods. The card became so popular that FINCIMEX temporarily stopped accepting applications in mid-August but resumed them this month.
SPAIN CONFISCATES 35 TONNESS OF HASHISH SMUGGLED IN YACHTS
On 30 September, Latestly carried an AP report that Spanish authorities have said that they have confiscated 35 tonnes of hashish that was being smuggled aboard 4 luxury yachts in what is said to be the largest drug bust at sea. 4 boats were boarded, 9 Bulgarians and a Russian arrested, and 6 yachts confiscated.
MONEYVAL EVALUATION TEAM BEGINS 2-WEEK VISIT TO VATICAN
On 30 September, the National Catholic Register and others reported that the Council of Europe’s AML/CFT body, MONEYVAL, has begun its 2-week onsite inspection of the Holy See and Vatican City. It follows the first onsite visit to the Vatican in 2012, as well as 3 progress reports, the last of which was in December 2017.
LUXEMBOURG FINES LOCAL BRANCH OF SWITZERLAND’S BCP BANK CITING COMPLIANCE SHORTCOMINGS
On 30 September, the Luxembourg Times reported that Luxembourg’s financial watchdog CSSF had fined the local branch of Switzerland’s Banque de Commerce et de Placements (BCP) for an amount of €170,000, for non-compliance with certain professional AML/CFT obligations.
HONG KONG MONETARY AUTHORITY TO ENHANCE AML/CFT SUPERVISION THROUGH DATA & TECH
On 30 September, Regulation Asia reported that HKMA intends to increase its engagement and data collection, make better use of data, and utilise suptech tools to enhance its AML/CFT supervision, and has initiated a series of steps aimed at strengthening its use of data and suptech in its risk-based AML/CFT supervision. It refers to a new report in which HKMA outlines insights and recommendations identified by Deloitte Advisory, the project consultant, in a study which will inform the next 3 years of work to implement changes to make AML/CFT supervision “more proactive, targeted and collaborative”.
The report is at –
LIVERPOOL PROPERTY DEVELOPERS HELD IN FRAUD AND MONEY LAUNDERING PROBE
On 30 September, the Liverpool Echo reported that 2 Liverpool property developers were arrested by police investigating fraud and money laundering and police seized large amounts of cash and high value jewellery during the raids which targeted addresses across the city. The newspaper understands that the men who were arrested have links to a major development scheme in Liverpool.
PODCAST: “WHITE COLLAR CRIMINAL LAW EXPLAINED”
In the latest TRACE podcast, Randall Eliason talks about extortion, conspiracy, cover-up crimes and plea bargains – topics covered in his new 24-lecture course available through Great Courses. He also takes us through some examples from recent headlines.
UN PANEL OF EXPERTS ON NORTH KOREAN SANCTIONS
The latest report from the UN Panel of Exports covers a 6-month period to 3 August. Its contents include reporting that illicit imports of refined petroleum products and exports of coal continued in violation of UN resolutions; workers dispatched by the Munitions Industry Department are said to have remained in multiple countries throughout 2020 in violation of UN sanctions; cyberattacks targeting critical infrastructure have been used to obtain currency and dual-use technology; and DPRK continued to earn income by transferring fishing rights to entities in a third country.
FIRST ANNUAL REPORT ON THE RULE OF LAW SITUATION ACROSS THE EU
On 30 September, the EU published this report which includes input from every Member State and covers both positive and negative developments across the EU. It shows that many Member States have high rule of law standards, but important challenges to the rule of law exist in the EU. It is claimed that it should help all Member States examine how challenges can be addressed, how they can learn from each other’s experiences, and show how the rule of law can be further strengthened in full respect of national constitutional systems and traditions. Matters considered include anti-corruption frameworks, saying that the effectiveness of criminal investigations, prosecution and adjudication of corruption cases, including high-level corruption, is still a challenge in several Member States.
HIGH COURT JUDGMENT SHOWS HOW HMRC SEARCHES CAN CONTINUE EVEN IN COVID LOCKDOWN
An article from Bird & Bird on 30 September was concerned with a recent High Court case which involved the request for a civil “search order” (i.e. the name for what used to be known as Anton Pillar orders) under section 7 of the Civil Procedure Act 1997 for the purpose of preserving any relevant evidence or property. The High Court granted the order in this particular case, taking into account the COVID-19 pandemic and imposing special conditions for the search to take place. The law firm says that, although the case did not concern tax issues, it does serve as a reminder that HMRC searches can continue regardless of any lockdown imposed or social distancing requirements in place, and shows how the courts are likely to react when confronted with search warrant requests by HMRC.
EU: REPORT ASSESSING MEASURES TAKEN BY MEMBER STATES TO COMPLY WITH EU RULES ON COMBATING TERRORISM
On 30 September, the EU published a report about compliance with EU Directive 2017/541 – the main criminal justice instrument at EU level to counter terrorism. It sets minimum standards for defining terrorist and terrorism-related offences and for sanctions, while also giving victims of terrorism rights to protection, support and assistance. It says that while the measures taken by Member States to comply with the Directive are overall satisfactory, there are however gaps that are a cause for concern, and not all Member States criminalise in their national law all the offences listed in the Directive as terrorist offences.
CLICK & COLLECT FRAUD UP BY 55% FOLLOWING SHIFT TO ONLINE SHOPPING
Infosecurity Magazine reported that buy online/pick-up in store fraud rose by 55% in the first half of 2020, and a just-published study demonstrates that e-commerce is increasingly being targeted by fraudsters following the huge shift to online shopping since the start of the COVID-19 pandemic. There has been a substantial increase in the number of new customer accounts, now representing 30% of all transactions – which is around 5-times higher than pre-COVID levels. The report also noted that the dramatic increase in legitimate online transactions has meant that the proportion of fraud attacks has actually decreased, and this could be giving retailers a false sense of security, as the number of fraud cases have gone up in real terms.
FORMER ROMANIAN MAYOR JAILED FOR BRIBERY, SENTENCED TO PRISON IN ANOTHER CORRUPTION CASE
Romania Insider on 30 September reported that a court has sentenced Gheorghe Nichita, the former mayor of Iasi – the biggest city in north-eastern Romania, to 5 years and 2 months in prison. About 2 months ago, it goes on to say, Nichita was given a final 5-year jail sentence for bribery and was imprisoned. In the second case, he is accused of having used local police employees to supervise his former mistress. The former head of the local police was also sentenced to prison in the same case.
FORMER WALL STREET TRADER SENTENCED IN $19 MILLION PONZI SCHEME
On 30 September, Long Island Business News reported that Paul Rinfret, a former Wall Street trader was sentenced in federal court in Manhattan for his role in a $19 million Ponzi scheme 2016-19 in which he defrauded victims and used the money obtained through Plandome Partners for a stay in the Hamptons, jewellery and more.
CROSS-BORDER CIVIL AND COMMERCIAL LEGAL CASES: GUIDANCE FOR LEGAL PROFESSIONALS FROM 1 JANUARY
On 30 September, the MoJ issued guidance which only relates to cases involving the courts of England and Wales, i.e. not to any cross-border case relating to the courts in Scotland or Northern Ireland. It notes that the EU Commission has also published guidance on cross-border civil and commercial legal cases.
166 ARRESTED IN INTERNATIONAL CRACKDOWN AGAINST CRIME IN SOUTH-EAST EUROPE
News releases from Interpol and Europol on 30 September advised that a total of 34 countries teamed up to combat organised and serious international crime originating from South-east Europe and was aimed at tackling illegal immigration and the trafficking of firearms and drugs, which are key priorities of the European Multidisciplinary Platform Against Criminal Threats (EMPACT). 8,838 law enforcement officers were involved in the operation and included police officers, land, sea and air border guards and customs agents, and more than 390,000 individuals and 44,000 vehicles were checked at cross-border locations and in suspected hotspots for criminal trafficking.
COSTA RICA PASSES LAW TO DESTROY ILLEGAL RUNWAYS ON PRIVATE PROPERTY
On 30 September, Insight Crime reported that a new law in Costa Rica that seeks to make it easier for authorities to search for and destroy illegal runways could help to crack down on increasing drug flights. The new law allows armed forces to enter private property to search for, destroy and disable unauthorised airstrips. However, it says that most drugs still appear to be moving through Costa Rica by land and by sea.
UK GOVERNMENT LAUNCH POINTS-BASED IMMIGRATION SYSTEM CAMPAIGN
On 30 September, the Chartered Institute of Logistics & Transport reported that the UK government has launched a campaign to prepare employers for the introduction of the UK’s points-based immigration system. The new system will treat EU and non-EU citizens equally. From 1 January, employers will need to register as a licensed sponsor to hire people from outside the UK. Anyone you want to hire outside the UK (excluding Irish citizens) will need to apply for permission first and meet job, salary and language requirements.
MONETARY AUTHORITY OF SINGAPORE (MAS) HAS DIRECTED WIRECARD ENTITIES IN SINGAPORE TO CEASE THEIR PAYMENT SERVICES IN SINGAPORE AND TO RETURN ALL CUSTOMERS’ FUNDS BY 14 OCTOBER
A release on Mondo Visione on 30 September made this announcement.
GERMANY’S GOVERNMENT-OWNED KFW BANK DRAWN DEEPER INTO THE WIRECARD AG ACCOUNTING SCANDAL
On 29 September, Bloomberg Tax reported that Germany’s state-owned KfW bank has been drawn deeper into the spiralling Wirecard AG accounting scandal as the payments company’s offices were raided over a €100 million loan from the bank. Frankfurt prosecutors said they are looking into whether the loan was granted without getting proper collateral, which could constitute a breach of trust.
US PUBLISHES OR AMENDS 3 SETS OF REGULATIONS, INCLUDING THOSE CONCERNED WITH SANCTIONS RELATING TO THE INTERNATIONAL CRIMINAL COURT
On 30 September, a news release from US Treasury advised that a new set of regulations have been made to implement Executive Order 13928 (Blocking property of certain persons associated with the International Criminal Court). It also announced amendment of the Weapons of Mass Destruction Proliferators Sanctions Regulations and Iranian Transactions and Sanctions Regulations.
UK DISCLOSURE PILOT NEEDS TO CHANGE COURSE
On 24 September, Field Fisher published an article following a feedback report on the Disclosure Pilot Scheme that was introduced to the Business and Property Courts of England & Wales at the start of 2019 and, following a recent extension, is set to continue until the end of 2021. The report analyses feedback legal practitioners provided on their experience of the Pilot. The article says that while the aim of the Pilot was to initiate a “culture change” to the attitude of parties towards disclosure and ultimately to reduce costs – Field Fisher says it has failed to achieve its objective – only 4% of respondents reported costs savings; whilst an overwhelming 85% revealed costs had actually increased as a result of the Pilot.
ISLE OF MAN FINANCIAL SANCTIONS: GLOBAL HUMAN RIGHTS REGIME
On 30 September, the Isle of Man issued a news release confirming the listing of 8 individuals and the amendment of 1 existing entry made to the Global Human Rights Regime, as previously advised by HM Treasury in the UK.
SEC ALLEGES BIG-TALKING FLORIDA CRYPTO INVESTOR DEFRAUDED CLIENTS OF $6.8 MILLION
On 30 September, Coindesk reported that Thomas J Gity, a Florida crypto trader has been charged with duping $6.8 million from investors in his purported digital asset day trading shop 2018-19. Gity allegedly lured in 18 investors with lofty promises of outsize returns and assertions that he had $100 million under management. Only $970,000 of investors’ funds ever landed in Gity’s trading account, the SEC alleged. About $1.8 million allegedly went to Gity’s son. Prosecutors said Gity used the rest to perpetuate his Ponzi-like scheme.
SOUTH AFRICA: SIXTH SUSPECT TAKEN INTO CUSTODY OVER FREE STATE ASBESTOS PROJECT
On 30 September, IOL reported that the Hawks have arrested 6 suspects during a simultaneous operation in the Free State, Kwazulu-Natal and Gauteng on allegations of fraud and corruption in relation to the 2014 Free State Asbestos Project. The allegations relate to a contract that was awarded through a procurement process that was done in a fraudulent and corrupt manner.
US: FORMER PRESIDENT OF THE UNITED AUTO WORKERS PLEADS GUILTY TO AN EMBEZZLEMENT SCHEME
On 30 September AP reported that Dennis Williams, the former president of the United Auto Workers, has pleaded guilty to an embezzlement scheme, saying he suspected that union dues were being used for golf, lodging and fancy meals but “deliberately looked away” and enjoyed the bounty. He is the latest senior leader at the UAW to plead guilty in the government’s investigation of corruption in the union’s upper ranks.
TOP CAMBODIAN GENERAL’S FAMILY TIED TO $100 MILLION AUSTRALIAN FRAUD
On 30 September, Radio Free Asia reported that the daughters of one of Cambodia’s most notorious and long-serving generals acted as fronts for an Australian real estate fraud valued at roughly $100 million, according to a 2019 federal court order. Pol Saroeun is one of Cambodian Prime Minister Hun Sen’s most trusted lieutenants – commander-in-chief of the armed forces from 2009 to 2018 and now a senior minister.
US: COMMODITY FUTURES TRADING COMMISSION TOD CHARGES AGAINST CHICAGO BROKER A&A TRADING INC FOR FAILING TO FILE A SAR AND TO DILIGENTLY SUPERVISE ITS EMPLOYEES’ HANDLING OF CERTAIN CUSTOMER ACCOUNTS
On 30 September, a release on Mondo Visione advised that an order requires A&A Trading to pay a civil monetary penalty of $400,000 and to disgorge $95,329 earned in connection with its violations.
FCA UPDATE ON PROGRESS OF BUSINESS INTERRUPTION INSURANCE COURT CASE
On 30 September, a release on Mondo Visione advised that the FCA in the UK had provided an update on a test case with 8 insurers whose policies are representative of the broader group of insurers impacted by the test case involving Covid-19. The FCA says that it had hoped to reach an agreement with the insurers by now on the interpretation of some important elements of the judgment affecting which small businesses get paid and how much. This would have allowed for faster pay-out for policyholders with eligible claims. However, discussions contin with insurers and action groups, to find a solution which resolves the outstanding issues as soon as possible to enable pay-outs on eligible claims.
NEW ZEALAND COMANCHEROS TRIAL: MONEY LAUNDERING CHARGES DROPPED FOR 2 INVOLVED
On 30 September, Radio New Zealand reported that a media personality and accountant accused of money laundering for the Comancheros gang have had their charges dropped due to insufficient evidence. They were among 5 people, including the gang’s president, on trial in the High Court in Auckland, after a police operation that netted millions of dollars of property, cars, motorbikes and cash.
US GOVERNMENT WINS SIGNIFICANT SPOOFING CONVICTION UNDER FEDERAL MAIL FRAUD STATUTE
On 30 September, a post on the Compliance & Enforcement blog from the Program on Corporate Compliance & Enforcement at the New York School of Law reported that the US Government won a jury verdict in a major “spoofing” trial, where the defendants were found to have violated the federal mail fraud statute by placing orders that they did not intend to execute, in the hope that such orders would move the market and enable them to execute other profitable orders. This is the first spoofing conviction under the mail fraud statute, as opposed to the commodities law provisions of the Dodd-Frank law that expressly prohibit spoofing.
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