Panama Covid-19 update – another 3 fatalities reported today, alongside 394 new cases – giving us 4,459 active cases, with 64 in ICU and 423 in other wards.
9 APRIL 2021
CHINA CONTINUES CRACKDOWN ON CROSS-BORDER GAMBLING ACTIVITY
On 9 April, iGB reported that China’s Ministry of Public Security has vowed to continue the enforcement of stringent anti-gambling punishments following a rise in cross-border gambling. It is said to have uncovered 17,000 cross-border gambling incidents and apprehended more than 110,000 suspects. More than 3,400 online gambling platforms and 2,800 gambling payment platforms were also discovered and shut down.
WHEN POLITICS AND CRIME COLLIDED IN PERU
On 26 January, Americas Quarterly carried an article saying that the rise and fall of César Álvarez, a powerful governor allegedly shows the influence of criminal groups. Known as “the Beast” because of his reputation for political violence, Álvarez asserted control through an elaborate network of government institutions and criminal organisations. He has been sentenced to 14 years in prison due to his involvement in the international Odebrecht scandal – but has denied any wrongdoing, and in 2018 declared, from prison, his intention to run again for governor. The article asks how did someone like Álvarez become so powerful? How do organised crime and politics end up mixing? It says that Álvarez’s early days in politics may shed some light.
A HIGH-PROFILE BANKRUPT ISRAELI BUSINESSMAN DELIBERATELY SOUGHT TO PUT GERMAN REAL ESTATE ASSETS OUT OF REACH OF HIS CREDITORS
A news release from law firm Field Fisher advised that the firm had secured an important judgment for an Israeli court-appointed trustee in bankruptcy. It says that the win fully vindicates the almost 3-year battle to prove that high-profile bankrupt Israeli businessman Eliezer Fishman had deliberately sought to put German real estate assets out of reach of his creditors.
HOW AN OBSCURE FERTILISER DEAL ENRICHED A MEXICAN BILLIONAIRE
On 8 April, the Wall Street Journal carried an article saying that Ricardo Salinas Pliego used shell companies to gain control of a struggling company called Fertinal from a government agency at a discount. Grupo Fertinal was to file criminal complaints against a dozen of a Dutch insurer’s local executives, prompting them to flee Mexico and, within months, it had paid Fertinal $120 million on the claim of an illicit pressure campaign, sold its Mexican operations and left the country.
IRAN RELEASES SOUTH KOREAN OIL TANKER SEIZED OVER FROZEN FUNDS
On 9 April, the Wall Street Journal reported that Iran released a South Korean oil tanker that it had detained for 3 months. The Hankuk Chemi, a South Korean-flagged ship was impounded in January over alleged environmental charges. It is said that South Korea paid $100,000 for the release of the ship — lower than Iran’s asking price of $14 million. It is said that the release could signal the end of a dispute between the two countries over blocked bank deposits.
DATA PROTECTION TIMES NEWSLETTER
Law firm Field Fisher produces a regular newsletter, a monthly round-up of news, articles and fines imposed. The feature is concerned with children’s data and online harms.
BUSINESS TEXTS ON PERSONAL PHONES: THE GROWING COMPLIANCE AND ENFORCEMENT RISK AND WHAT TO DO ABOUT IT (PART I)
A post on the Compliance & Enforcement blog from the Program on Corporate Compliance & Enforcement at the New York University School of Law says that securities and commodities regulators are increasingly focusing on employees’ use of personal mobile devices for business-related communications via applications that are not approved by employers or captured by employers’ archival systems. Regulators believe that many employees are less guarded when texting outside of their surveilled work platforms, particularly among workplace friends and colleagues at other firms, and that some employees may even be doing so to further questionable conduct and evade detection. The post says that employers should take heed of their employees’ conduct and the recent uptick in regulatory focus, and make sure their written policies concerning the use of unapproved messaging applications for business purposes are up-to-date, consistent with industry standards, and communicated clearly and often to their employees, including through live training. Part 2 is to follow.
DIRECTORS OF BVI COMPANIES: TO WHOM DO YOU OWE DUTIES IF YOUR COMPANY IS EXPERIENCING FINANCIAL STRESS?
On 7 April, an article from Ogier reported that the general position under BVI law is that a director owes duties solely to the company as a whole. This means that the directors must consider the interests of the current and future shareholders of the company. However, where a company is insolvent, or even of doubtful solvency, the directors have a duty to consider the interests of the company’s creditors.
OBTAINING EVIDENCE IN JERSEY OR GUERNSEY FOR USE IN FOREIGN PROCEEDINGS
On 8 April, an article from Walkers is concerned with the use of a “Commission Rogatoire” (or as they are more commonly known in English, a Letter of Request) – a request for judicial assistance from a foreign entity to the Bailiff of Jersey or Guernsey. Most often, this sort of application will involve a request for evidence to be taken on oath, or the production of documents in Jersey/Guernsey for use in foreign civil matters.
LUCK RUNS OUT FOR ITALIAN LOTTO STAFF WHOSE FRIENDS WON €24 MILLION
On 8 April, KYC 360 reported that staff at Italy’s national lottery hacked into company computers to identify winning numbers and claim €24 million for friends and family. Luxury cars, villas, cash and shares have been seized after employees acquired enormous wealth while managing the popular scratch-and-win card scheme, which has paid out €90 billion in the past 16 years.
SOUTH AFRICA: UTILITY COMPANY CONTRACTS SWAPPED FOR PARTY FUNDING
On 9 April, KYC 360 reported that an oil blending and storage company secured deals to supply South Africa’s state power utility Eskom with fuel oil worth more than $1 billion at inflated prices by paying inducements, including donations to the ruling party, a forensic investigation has found.
PANAMA: SECRETARY OF FORMER PRESIDENT ARRESTED IN ITALY OVER CORRUPTION ALLEGATIONS
On 8 April, Newsroom Panama reported that Adolfo Chichi De Obarrio, who served as Ricardo Martinelli’s private secretary when the latter was President of Panama (2009-2014), has been arrested in Milan in response to a request from Interpol. He is said to have been detained on a request from panama in connection with the alleged payment of bribes by businessmen in exchange for the award of public contracts.
NORTH KOREAN CYBERCRIMINALS ATTACKED SOUTH AFRICAN LOGISTICS COMPANY
On 9 April, NK Pro reported that the Lazarus Group likely used access to infected computers for espionage. They used a previously unknown type of malware called Vyveva to take control of computers at a South African freight logistics company, and enabled hackers to steal data, gather information and run malicious code from at least 2 infected computers reportedly controlled using Tor.
INDIA: SMUGGLING OF 2,500 KG PEACOCK FEATHERS TO CHINA
On 9 April, India Legal reported on an ongoing court case in Delhi relating to smuggling peacock tail feathers to a China-based entity. It is alleged that several consignments of peacock feathers were sent via 26 shipping bills from September 2020 to February 2021. Customs seized peacock tail feathers, weighing over 2,500 kg, while they were allegedly being smuggled to China and declared as “plastic flexible pipes”. The peacock, the national bird of India, is protected and hunting of peacocks is also prohibited.
KUWAIT REFERS COMPANY FOR ALLEGED MONEY LAUNDERING WITH IRAN CONNECTIONS
On 9 April, the Middle East Monitor reported that Kuwait’s State Security Agency has referred a large company for investigation into alleged money laundering after it was found to have had financial ties with the so-called Iranian Fouad Network. It is said that senior company officials, including the general manager and his assistant, the financial manager and his deputy — who are both Egyptian nationals — and 2 accountants with Yemeni nationality, were interrogated. All are banned from travelling pending the conclusion of the investigations.
UK: SOLICITORS REPORT VENDOR FRAUD AS ‘KEY MONEY LAUNDERING’ ACTIVITY DURING 2020
On 9 April, The Negotiator reported that a report to the Solicitors Regulation Authority board says suspicious activity worth £200 million was reported to NCA last year, much of it involving conveyancing. It says that says the SAR included residential property conveyancing along with 9 other categories of likely criminal activity, and laundering linked to vendor fraud was identified as a key theme in the SAR – where homes are targeted by fraudsters and sold without the knowledge or consent of the true owners, with the elderly and vulnerable often the victims.
LUXEMBOURG, A TAX HAVEN FOR FINNISH COMPANIES AND THE SUPER-RICH
On2 April, an article in EurActiv says that hundreds of Finnish companies, high profile business tycoons and CEO have been seeking tax relief in Luxembourg, with assets managed by favourable agreements amounting to tens of billions of euros. A list of names, revealed by a Finnish Broadcasting Company’s investigative journalism programme includes former Nokia CEO Jorma Ollila and Ilkka Herlin, member of the Herlin family, which owns Kone, a leading international engineering and service company specialised in the building of elevators and escalators. The information was originally collected from an OpenLux database.
UK: MoJ COULD FACE JUDICIAL REVIEW – OVER CONSULTATION ON REFORM OF JUDICIAL REVIEW
On 9 April, the Law Society Gazette reported that the UK Government could face the prospect of a judicial review if it does not extend a consultation deadline on proposals to reform the judicial review process. A 6-week consultation closes on 29 April and the Ministry of Justice has been asked to extend the deadline with the consultation running for at least 12 weeks.
ACCOUNTANT JAILED FOR £400,000 CITY FIRM FRAUD BANNED FROM WORKING IN LAW
On 9 April, the Law Society Gazette reported that a management accountant who stole £400,000 from City firm Clyde & Co over the course of 6 years has been banned from working in the legal profession.
TAX TRANSPARENCY RULES WOULD HAVE ‘SERIOUS IMPLICATIONS’ FOR IRELAND’S COMPETITIVENESS
On 9 April, the Irish Examiner reported that planned EU rules for country-by-country tax reporting by multinationals would have “serious implications” for Ireland’s competitiveness and ability to attract investment to the country, a Department of Enterprise, Trade and Employment briefing has said. Ireland has consistently opposed the changes because they consider it a tax measure, which the Government claims should be dealt with using different legislation and by finance ministers. This would mean unanimous support would be required rather than a qualified majority, meaning the new laws could be vetoed by a Member State.
UK: SFO CONDUCTS RAIDS OVER SCHEME BY Buy2Let CARS OWNER
On 9 April, the Guardian reported that the SFO has made an arrest and raided 2 residential premises as part of an investigation into a company that operated a hire car investment scheme. It is said to be investigating the activities of Raedex Consortium, which runs a string of companies including Buy2Let Cars, PayGo Cars, Wheels4Sure and Rent2Own Cars. Buy2Let Cars promised annual returns of up to 11% to investors who lent the company a minimum of £7,000 over 3 years, but the FCA ordered Raedex to cease trading in February.
INDIAN CRICKET’S ANTI-CORRUPTION CHIEF AGAINST LEGALISED BETTING
On 9 April, gambling News reported that the new head of theAnti-Corruption Unit of the Board of Control for Cricket in India (BCCI) said that he opposes the legalisation of betting on cricket on the grounds of match-fixing risks. He argued that betting encourages corruption and said that he believes that the rules need to be stricter, and the BCCI can make that happen, adding that cricket is a prestigious game because it is not “largely corrupt” and the BCCI should take credit for that.
SINGAPORE REMAINS COMMITTED TO HELPING INDONESIA CRACK DOWN ON CORRUPTION
On 9 April, the Straits Times reported that Singapore has been and will remain committed to helping Indonesia crack down on corruption, Singapore’s Ministry of Foreign Affairs (MFA) has reaffirmed. The statement was in response to reports in Indonesian media which said it was difficult to pursue Indonesian corruption suspects in Singapore and that the countries did not have an extradition treaty.
SUDAN: NEW BILL WOULD LIFT BOYCOTT OF ISRAEL
In another sign of changing patterns in the Middle east, on 9 April, Jurist reported that the Council of Ministers had agreed a new Bill to normalise relations and repeal a 1958 law. The 1958 law forbade diplomatic and business relations with Israel, with penalties including up to 10 years in jail and large fines for violators. In October, the countries agreed to normalise relations in a deal brokered by the Trump Administration.
US CUSTOMS: 20 MILLION FAKE MASKS SEIZED SINCE BEGINNING OF YEAR
On 8 April, ABC7 News reported that millions of counterfeit masks have been seized by US Customs and Border Protection since the start of the pandemic. But the last few months have seen an “exponential increase” in counterfeit mask seizures. CBP has seized more than 34 million counterfeit masks, most of them modelled to resemble N95 or KN95 masks, and around 20 million of those masks were caught in 2021. Officers have also seized around 180,000 unauthorised Covid-19 tests and nearly 39,000 chloroquine and hydroxychloroquine tablets were seized, a measure the agency takes when drugs are imported into the US without FDA approval.
UPDATE ON THE LATEST ENCROCHAT POSITION FOLLOWING THE JUDGMENT IN THE COURT OF APPEAL
On 25 March, an article from law chambers 5 St Andrew’s Hill is concerned with a hearing in which the Court of Appeal was asked to determine whether interception evidence obtained from the EncroChat application can be admitted in evidence in criminal proceedings, or whether it is excluded by the Investigatory Powers Act 2016 (“the 2016 Act”). Under English law, the general position is that no evidence may be adduced, question asked, assertion or disclosure made or other thing done in, for the purposes of or in connection with any legal proceedings or Inquiries Act proceedings. However, in the EncroChat situation a French and Dutch Joint Investigatory Team (JIT) had obtained the material from servers located in France and had supplied the material obtained to the UK authorities. The Court of Appeal agreed with the Crown Court judge that the EncroChat material was admissible.
COMPANY DIRECTOR DISQUALIFICATION UNDERTAKINGS AND SECOND CHANCES
On 24 March, an article from law chambers 4 New Square was concerned with a case in which a court held that a disqualified director’s rehabilitation from drug and alcohol addiction did not amount to ‘special circumstances’ for the purposes of the court’s discretion to discharge a disqualification undertaking. It is said that the decision provides important guidance on the situations under which a disqualified director can obtain permission to act.
US ANNOUNCEMENT AGAINST CORRUPT PARAGUAY OFFICIAL MAY SIGNAL POLICY SHIFT
On 9 April, Insight Crime reported that recent judicial and diplomatic action taken by the US against Paraguayan officials could mark a new, slightly more tense period in bilateral relations. Paraguayan congressman, Ulises Rolando Quintana Maldonado, had been banned from entering the US due to his involvement in “significant corruption”. Other Paraguayan politicians have also run afoul of the US in recent months.
SOLICITOR PAID AWAY £290,000 OF SALE PROCEEDS AFTER FALLING FOR EMAIL FRAUD
On 9 April, Legal Futures reported that a veteran solicitor who was tricked by an email fraud to pay out £290,000 in proceeds from a conveyancing transaction to a third party has been fined £10,000 by the Solicitors Disciplinary Tribunal. He was also ordered to pay costs of £16,000 and file accountant’s reports every 6 months for the next 3 years.
SPAIN: JUAN CARLOS PAID TAX BILL WITH RICH FRIENDS’ GIFT
On 7 April, The Times reported a “dubious” €4.4 million loan from wealthy business friends that was used to pay off a tax debt by the former King. Juan Carlos, 83, was forced abroad over corruption allegations.
FORMER CHIEF OF LOGISTICS FOR A REGIONAL SWISS POLICE FORCE ACCUSED OF SELLING GUNS AND BULLETS VIA THE DARKNET
On 8 April, Reuters reported that the former chief of logistics has appeared in court accused of falsely buying guns and bullets on behalf of his employer and selling them via the darknet. Swiss police investigating the case recovered 80 guns and tens of thousands of bullets when they searched his home during the investigation. Court documents did not say to whom the weaponry was sold.
US: CRIMINALS HID GUNS, CASH AND DRUGS IN IRIS-SCANNING VAULTS IN A STRIP MALL
On 7 April, Vice reported that for years US Private Vaults sat in a strip mall in Beverly Hills next to a nail salon and promised customers easy access to secure safe deposit boxes completely anonymously, and required no ID of any kind from customers. The DEA seized the contents of the boxes in March. According to the DEA, the company encouraged drug dealers to stash controlled substances in its safe deposit boxes, advised its customers on how to avoid government scrutiny, used a nearby gold business to help its customers launder money, and facilitated drug deals inside the business. To access the vaults, customers had to use an iris and handprint scanner. The keys used to open their vaults were unmarked so the employees and law enforcement could not know which key goes to which vault.
UK: HOW COMPANIES HOUSE DATA ENHANCES AML SOFTWARE
A post on the Companies House blog on 9 April claims that a recent report placed the value of Companies House data between £1 billion and £3 billion a year, although Companies House makes all the public data it holds on companies available free of charge. It is also said that Companies House uses real-time data through its streaming API service, which is why Companies House is so important for companies and AML controls.
EXTRADITION OF CANADIAN CITIZEN FOR ROLE IN AN INTERNATIONAL FRAUD AND MONEY LAUNDERING NETWORK
On 9 April, a news release from US DoJ advised that Canada-Based Yusuf Abdul and others in the US, Europe, and Middle East conspired to use phone “spoofing service” to fraudulently access and launder victims’ funds.
CHINESE SOCIAL MEDIA CANCELS COMPANIES OVER XINJIANG COTTON BOYCOTT
On 9 April, an article on Lawfare says that H&M, Nike and others have become the targets of a viral campaign on Chinese social media after previous pro-Uighur statements resurfaced online. H&M and the other companies have seen their products boycotted by Chinese consumers in response to the companies’ own disavowals of Xinjiang cotton. It notes that online support for Xinjiang cotton may have created some unexpected difficulties for Chinese Communist Party (CCP) censors. The flood of calls to “support Xinjiang cotton” left some Chinese internet users, who were unaware of the controversy of Uighur labour, asking why Xinjiang cotton was under attack in the first place.
US: AMENDMENT OF THE DEFINITION OF THE TERM “APPLICABLE SCHEDULE AMOUNT” WITHIN THE ECONOMIC SANCTIONS ENFORCEMENT GUIDELINES
On 9 April, a news release from OFAC advised that this “technical amendment” will take effect upon publication in the Federal Register on 12 April.
CRYPTO WEBINAR – REMOVING THE FEAR, UNDERSTANDING VIRTUAL CURRENCY
On 8 April, Bartfield Accountants released this You Tube video to cover the history and development of virtual currencies, criminal exploitation of virtual currencies. It sets out to provide a clear understanding of the Blockchain and its uses and cover recent amendment to Regulations covering virtual asset service providers (VASP) and ATM holders.
CUSTOMS AND DEA SEIZE $1.28 MILLION IN CASH AND ARREST 4 IN US VIRGIN ISLANDS
A news release from US Immigration and Customs Enforcement on 9 April advised that Special Agents from Homeland Security Investigations (HSI), working jointly with US Customs and Border Protection, the DEA and the Caribbean Anti-Money Laundering Alliance (CMLA) have seized $1.28 million in cash from an abandoned vehicle in St Thomas and arrested 4 men.
STEP REPORTS ON US TAX PLAN TO TARGET MULTINATIONAL PROFIT-SHIFTING
On 9 April, Accountancy Daily reported that the Biden Administration has published a plan to tax foreign-source income of US multinational corporations at a much higher rate and reduce incentives for companies to make offshore investments. The Report commits to seek a global agreement on a minimum corporation tax rate currently under intense discussion at the OECD and G20 base erosion and profit shifting (BEPS) meetings. The plan will also replace the US’ base erosion and anti-abuse tax (BEAT) with a regime that denies tax deductions to US-owned multinationals that make payments to foreign persons in jurisdictions that have not adopted the minimum tax.
ANGOLA INTRODUCES FREE TRADE ZONES ACT
On 9 April, International Tax Review reported that, according to the Africa Economic Zones Organization, there were close to 189 operating SEZ in Africa in 2019, while an additional 57 were being implemented in 47 out of the 54 countries that make up the African Continent. Angola has tried its hand at SEZ to varying degrees of success. The Luanda-Bengo SEZ, created in 2009, is being transformed it into a free trade zone (FTZ), and the Free Trade Zones Act approved in December 2020, followed by regulations in January 2021, allows all types of private investment in the FTZ, but is primarily focused on developing the agricultural and industrial sector, labour-intensive industries, high-tech industries with high national added value, that use and transform domestic raw materials and are export-oriented. The article details what might be allowed in the FTZ.
US: 3 MORE CHARGED IN MASSIVE CALIFORNIA UNEMPLOYMENT FRAUD
On 9 April, the Daily Mail reported that Federal prosecutors said that they have charged 3 Southern California women with using prison inmates’ names to defraud a state agency out of a combined nearly $1.25 million in coronavirus-related unemployment benefits, the latest allegations in an ongoing scandal that has cost hundreds of millions of dollars. They are among a dozen charged just in the greater Los Angeles area and among 150 charged federally nationwide with exploiting federal benefits that were supposed to aid those who lost their jobs during the pandemic.
US TREASURY PUBLISHES UPDATED LIST OF BOYCOTTING COUNTRIES AND REMOVES UAE
An article from Wiley rein LLP on 9 April advised that the US Treasury had published an updated list of boycotting countries. Notably, Treasury removed the UAE from the list, a move it says reduces reporting burdens and potential tax penalties for US companies and their subsidiaries. The rules apply to U.S. taxpayers, regardless of whether a transaction involves any US goods or services; and do not prohibit conduct, but rather impose reporting requirements on US taxpayers and their related companies. They also deny certain tax benefits as a penalty for participating in or cooperating with an international boycott that is not sanctioned by the US. Primarily concerned with the Arab boycott of Israel, the list now consists of Iraq, Kuwait, Lebanon, Libya, Qatar, Saudi Arabia, Syria and Yemen.
US: 3 DEFENDANTS PLEAD GUILTY IN VIRTUAL EDUCATION FRAUD CASE
On 9 April, a news release from the US DoJ advised that 3 defendants had pleaded guilty to conspiring to defraud the Alabama State Department of Education (ASDE) by falsely inflating the number of students enrolled in public virtual schools, announced the United States Attorney’s Office for the Middle District of Alabama.
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