OTHER THINGS YOU MAY HAVE MISSED – MAY 3

Panama Covid-19 update – another 195 cases reported today, with fatalities up at 5 today. 3,868 active cases include 68 in ICU and 275 in other wards.

3 MAY 2021

GERMAN REGULATOR ORDERS DEUTSCHE BANK TO BOOST MONEY LAUNDERING CONTROLS

On 30 April, the Wall Street Journal reported that BaFin is expanding the role of a monitor it appointed in 2018 to look over implementation, suggesting it still has found shortcomings.  BaFin said the bank should “adopt further appropriate internal safeguards and comply with due diligence obligations, in particular with regard to regular customer reviews,” adding the same applied to correspondent relationships and transaction monitoring.  It said it was expanding the role of a monitor it appointed in 2018 to look over implementation, KPMG having been appointed.

https://www.wsj.com/articles/deutsche-bank-ordered-by-german-regulator-to-improve-money-laundering-safeguards-11619829960

https://www.reuters.com/article/us-deutsche-bank-bafin/german-regulator-orders-deutsche-bank-to-do-more-to-prevent-money-laundering-idUSKBN2CH2CW

LEBANESE PROSECUTOR OPENS PROBE INTO CENTRAL BANK GOVERNOR AND BROTHER

On 3 May, Reuters reported that Lebanon’s public prosecutor is said to have launched an investigation into central bank governor Riad Salameh, after a Swiss legal request alleged that more than $300 million had been embezzled from the bank through a company owned by his brother.

https://www.reuters.com/world/middle-east/lebanese-prosecutor-opens-probe-into-central-bank-governor-brother-2021-04-30/

AUSTRAC SOUNDS WARNING ON JUNK REPORTING

On 3 May, the Australian Financial Review reported that AUSTRAC has put banks, casinos and wagering companies on notice by providing detailed guidance of the information it expects to see every time a suspicious transaction is reported.  It reminded reporting entities they are expected to spell out exactly what the grounds are for submitting a suspicious matter report (SMR), submit them within 3 days or less and inform law enforcement where required. The updated guidance is contained in 3 separate documents: a checklist, a reference guide and a third document containing crime types and keywords that entities have been instructed not to share.

https://www.riskscreen.com/kyc360/news/austrac-sounds-warning-on-junk-reporting

SANCTIONS: MYANMAR’S GENERALS AREN’T GOING ANYWHERE

On 3 May, The Diplomat published an article saying that, as sanctions are reimposed, the country’s old business elite is slowly clawing back the ground lost during a decade of reform.  The generals that seized power are from the same group that ruled Myanmar between 1962 and 2010 and as the screws tighten, they are re-visiting the system that kept them in power under their prior incarnation, the State Peace and Development Council (SPDC) junta. Myanmar’s economy is expected to contract by over 20% because of the coup.  For the generals and the crony business elite, the SPDC days are viewed with nostalgia, and the current regime is re-visiting many of the policies from that era.  While domestic and international pressure will make it nearly impossible for Myanmar to become a mainstream player in the international economy, the generals will likely survive.

https://thediplomat.com/2021/05/myanmars-generals-arent-going-anywhere/

SUCCULENT SMUGGLING: WHY ARE SOUTH AFRICA’S RARE DESERT PLANTS VANISHING?

On 3 May, the Guardian carried an article saying that unique species in ‘the world’s most biodiverse desert’ – the Richtersveld – are at risk from a warming planet and the lucrative plant poaching trade.  For example, a shows that 85% of the population of the distinctive Pearson’s aloe – endemic to the Richtersveld – has been lost in the past 5 years, having been a stable presence for the previous 4 decades.  It is said to be is just one of dozens of species Van Wyk fears may disappear in his lifetime. The plants face a number of threats, but it is the climate emergency and poaching that are having the biggest impact.  In total more than 100 Richtersveld species have been uplisted on South Africa’s red list in the past 5 years due to the climate crisis, poaching, overgrazing, but also mining. 

https://www.theguardian.com/environment/2021/may/03/drought-dust-storms-plant-theft-unique-botanical-landscape-peril-aoe

https://www.sciencetimes.com/articles/30979/20210503/why-succulents-south-africas-home-biodiverse-desert-smuggled.htm

MAN EXTRADITED FROM ROMANIA TO US TO STAND TRIAL IN FAKE PET CASE

On 3 May, Universul in Romania reported that the suspect, Desmond Fodje Bobga, 28, a Cameroon citizen, defrauded people looking for companion animals online to alleviate isolation and stress during the pandemic. Puppies, supposedly being shipped domestically in the US to their new owners, never arrived and US  federal authorities say the dogs never existed.  He is charged with conspiracy to commit wire fraud, wire fraud, forging a seal of the US Supreme Court, and aggravated identity theft.

https://universul.net/puppy-fraud-man-extradited-from-romania-to-us-to-stand-trial-in-fake-pet-case

2021 UN International Year for the Elimination of Child Labour

BRITAIN’S BIGGEST-EVER ‘SUPERGRASS’ AND A HUGE CASE INVOLVING KIDNAP, BALKAN CRIME GANGS AND BRAZILIAN COCAINE

On 2 May, the Gazette Live in the UK reported on how a ‘supergrass’ gave key evidence to put away top level dealers in north-east England.  6 major organised crime group trials saw 29 gangland villains jailed for 250 years.  Detective work had started in January 2016 in response to escalating violence on Wearside after a shipping container filled with high purity cocaine, worth around £2 million, was seized from Tilbury Docks in Essex.

https://www.gazettelive.co.uk/news/teesside-news/supergrass-kidnap-balkan-crime-gang-20490202

MEXICO PORT WORKS ON US-SANCTIONED TANKERS THAT CARRY VENEZUELAN OIL

On 30 April, NASDAQ reported that 3 Cuban-flagged tankers that are under US sanctions for transporting Venezuelan oil to Cuba have been serviced in the port of Veracruz, according to vessel tracking data and industry sources.  The maintenance work on the vessels is a potential breach of sanctions on Venezuela.  Authorities said to have been unlikely to have checked if the tankers were sanctioned so may have inadvertently authorised blacklisted vessels.  The shipyard would just have checked whether a ship was insured and classified, while the port authority would only have authorised a vessel to enter the port.

https://www.nasdaq.com/articles/mexico-port-works-on-u.s.-sanctioned-tankers-that-carry-venezuelan-oil-2021-04-30

US: FORMER CEO OF LIVE WELL FINANCIAL CONVICTED IN CONNECTION WITH $200 MILLION BOND FRAUD SCHEME

A news release from US DoJ on 30 April announced that Michael Hild, the founder and former CEO of Live Well Financial Inc, has been convicted of securities fraud, wire fraud, and bank fraud charges in connection with a scheme to fraudulently inflate the value of a portfolio of bonds owned by Live Well in order to induce various securities dealers and at least one financial institution into loaning more money to Live Well.  He is said to have used repurchase (“repo”) agreements and collateralised loans. 

https://www.justice.gov/usao-sdny/pr/former-ceo-live-well-financial-convicted-connection-200-million-bond-fraud-scheme

HONG KONG RECORDS NEARLY SIXFOLD RISE IN TECHNOLOGY-BASED CRIMES IN A DECADE

On 1 May, the South China Morning Post reported that cybercrime reports rose from 2,206 in 2011 to 12,916 last year, while the amount of money involved increased from HK$148 million to HK$2.96 billion.  It also reported a sharp rise in online shopping swindles, including mask scams, amid coronavirus pandemic.  Last year’s case figure was also up 55% from the 8,322 recorded in 2019.  In 2020, police received reports of about 2,400 mask scams involving financial losses totalling more than HK$70 million.

https://www.scmp.com/news/hong-kong/law-and-crime/article/3131840/hong-kong-records-near-sixfold-rise-technology-based

ITALIAN MAFIA’S CUT IN TOURISM SECTOR IS OVER $2.6 BILLION

On 28 April, OCCRP reported that groups take control over legitimate businesses in order to launder revenue from illegitimate enterprises like drug and arms trafficking, experts say. Though $2.6 billion is barely 1% of Italy’s total tourism revenue of over $280 billion, it still represents a significant foothold in one of Italy’s largest industries.  Tourism amounts for some 13% of Italy’s GDP. However, border shutdowns and global travel restrictions have put the industry in dire straits.

https://www.occrp.org/en/daily/14298-report-italian-mafia-s-cut-in-tourism-sector-is-over-2-6-billion

FORMER NETFLIX EXECUTIVE CONVICTED OF RECEIVING BRIBES AND KICKBACKS FROM COMPANIES CONTRACTING WITH NETFLIX

A news release from US DoJ on 30 April advised that Michael Kail, the former Vice President of IT Operations at Netflix, had been convicted of wire fraud, mail fraud, and money laundering.  He had been indicted in 2018, of 19 counts of wire fraud, 3 counts of mail fraud, and 7 counts of money laundering.  The indictment also sought forfeiture of Kail’s Los Gatos residential property.  The jury returned a verdict of guilty on 28 of the 29 counts.

https://www.justice.gov/usao-ndca/pr/former-netflix-executive-convicted-receiving-bribes-and-kickbacks-companies-contracting

REMINDER ON ANCHORING SHIPS IN MALAYSIAN WATERS OFF EAST JOHOR

On 30 April, Insurance Marine News reported that Norway-based Gard has released an alert, with details supplied by Jeremy Joseph and Matthew Van Huizen of Joseph & Partners, which reminds Gard members of the current situation regarding anchoring off the Malaysian coast.  During the past few weeks several vessels entered with Gard had been detained and fined by the Malaysian Maritime Enforcement Agency (MMEA) for anchoring in East Johor waters without the requisite permissions from the authorities.

https://insurancemarinenews.com/insurance-marine-news/gard-reminder-on-anchoring-in-malaysian-waters-off-east-johor/

NIGERIA: INVESTIGATING THE ‘BOKO HARAM’ PRESENCE IN NIGER STATE

On 30 April, a report from the Hudson Institute says that while previous Boko Haram’s operations have largely been confined to the north-east of the country since 2014, there have now been a string of attacks in the Niger State.  It is said that the lines between banditry and terrorism are increasingly blurred, and many questions remain unanswered about the militancy in Niger State.  It is said that testimonies suggest a complex and deteriorating situation in Niger State involving multiple sets of militants.

https://www.hudson.org/research/16878-investigating-the-boko-haram-presence-in-niger-state

COMMENTARY ON THE UN HIGH-LEVEL PANEL ON INTERNATIONAL FINANCIAL ACCOUNTABILITY, TRANSPARENCY AND INTEGRITY FOR ACHIEVING THE 2030 AGENDA (FACTI PANEL)

On 6 April, the Global Anticorruption Blog published Part 1 of a Commentary.  It is said that the final report laid out a series of recommendation for dealing with the problem of illicit international financial flows. Though the report states that it contains 14 recommendations, most of these have multiple subparts, which are really distinct proposals, it is claimed that the report actually lays out a total of 35 recommendations.  The author of the blog says that, of the 35 distinct recommendations in the report, 8 of them deal with tax matters (such as tax fairness, anti-evasion measures, information sharing among tax authorities etc) and, while this is an important topic, it is both less directly related to anti-corruption and is said to be well outside the author’s areas of expertise.  That left 27 recommendations, and Part 1 of the Commentary deals with 13 recommendations, with the other 14 to follow in Part 2.  The recommendations dealt with in Part 1 include that – all countries should enact legislation providing for the widest possible range of legal tools to pursue cross-border financial crimes; the international community should develop and agree on common international standards for settlements in cross-border corruption cases; businesses should hold accountable all executives, staff and board members who foster or tolerate illicit financial flows in the name of their businesses; international AML standards should require that all countries create a centralised registry for holding beneficial ownership information on all legal vehicles, and the standards should encourage countries to make the information public; and promote exchange of information internationally among law enforcement, customs and other authorities.

https://globalanticorruptionblog.com/2021/04/06/commentary-on-the-facti-panels-report-and-recommendations-part-1/#more-17977

RESEARCH ON COUNTRIES THAT HAVE ADOPTED THE EU DUAL-USE CONTROL LIST

On 16 April, the European Studies Unit at the Département de Sciences Politiques at Liege University published a report saying that it initiated research on countries that have adopted totally or partially the EU dual-use control list established in Annex I of the Council Regulation 428/2009/EC of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (itself updated lastly by EU Regulation 2020/1749/EU of 7 October 2020).  The matrix produced is the first draft based on the information available.  The authors say that they are almost certain that there are more states who are referring to the EU list. Therefore, this document should rather be seen as a call address to the international community to help us identifying countries that are referring to the EU list.

http://www.esu.ulg.ac.be/wp-content/uploads/2021/04/EU-list-worldwide-rev9.pdf

US DHS ANNOUNCES OPERATION TO TARGET CRIMINAL SMUGGLING ORGANISATIONS

On 27 April, Homeland Security Today reported that the US Department for Homeland security had announced a new counter-network targeting operation focused on transnational criminal organisations affiliated with the smuggling of migrants.  The new anti-smuggling effort, called Operation Sentinel, is a collaborative effort with US Customs and Border Protection, US Immigration and Customs Enforcement’s Homeland Security Investigations, US Citizenship and Immigration Services, the Department of State, and the FBI and DEA.  Partners in Operation Sentinel will target all personnel and identifiable resources that transnational criminal organisations require to operate.  Actions will include the freezing of bank accounts and other financial assets tied to networks, and the suspension and debarment of trade entities.

https://www.hstoday.us/subject-matter-areas/border-security/dhs-announces-operation-to-target-criminal-smuggling-organizations/

https://www.dhs.gov/news/2021/04/27/dhs-announces-operation-target-criminal-smuggling-organizations

COLOMBIAN FINANCE MINISTER RESIGNS AMID DEADLY PROTESTS

On 3 May, the Mail Online reported that Colombia´s finance minister resigned following 5 days of protests over a tax reform proposal that left at least 17 dead.  His resignation comes a day after President Iván Duque withdrew the tax plan from congress in response to the protests, which have included riots and violent clashes with police.  The tax reform, which was aimed at raising $6.7 billion for Colombia´s government as it struggles to pay debts while attempting to provide poor families with subsidies to mitigate the pandemic´s impact. It included a 19% sales tax on gasoline, as well as an effort to expand the country´s tax base by charging income taxes to people making $700 a month or more and a 19% sales tax on utilities in middle-class neighbourhoods, and a wealth tax for individuals with a net worth of $1.3 million or more.

https://www.dailymail.co.uk/wires/ap/article-9539321/Colombian-finance-minister-resigns-amid-deadly-protests.html

DIGITAL CURRENCIES’ ROLE IN FACILITATING RANSOMWARE ATTACKS: A BRIEF EXPLAINER

On 3 May, the Third Way website published this Explainer on how Bitcoin is used to facilitate ransomware attacks and how criminals try — and sometimes fail — to cover their tracks. It is said that understanding how criminals use digital currencies for ransomware attacks can lead policymakers to solutions in thwarting and enforcing cybercrimes.

http://thirdway.imgix.net/pdfs/digital-currencies-role-in-facilitating-ransomware-attacks-a-brief-explainer.pdf

US: 3 FLORIDA MEN CHARGED IN $46 MILLION HEALTH CARE FRAUD, KICKBACK, AND MONEY LAUNDERING CONSPIRACY

A news release from US DoJ on 3 May advised that 3 telemarketing company owners have been charged for their alleged participation in a $47 million health care fraud, kickback, and money laundering scheme involving the referral of medically unnecessary cancer genetic tests to labs in exchange for kickbacks.  The suspects allegedly participated in a scheme to operate a telemarketing campaign targeting Medicare beneficiaries in an effort to induce them to accept cancer genetic tests regardless of whether the tests were medically necessary or eligible for Medicare reimbursement. 

https://www.justice.gov/opa/pr/three-florida-men-charged-46-million-health-care-fraud-kickback-and-money-laundering

FRENCH LEGAL COMPLAINT AGAINST LEBANON CENTRAL BANK CHIEF

The National on 3 May reported that 2 associations have said they filed a legal complaint against Lebanon’s central bank Governor, Riad Salameh, who they accuse of fraudulently amassing a large fortune in Europe.  Sherpa, which specialises in fighting financial crime, and the “collective of victims of fraudulent and criminal activities in Lebanon” said they were also filing against Mr Salameh’s brother Raja, his son Nadi, his nephew, and a close associate at the central bank, Marianne Hoayek, in the case.

https://www.thenationalnews.com/world/europe/french-legal-complaint-against-lebanon-central-bank-chief-1.1216134

https://www.jurist.org/news/2021/05/ill-gotten-gains-complaint-filed-over-lebanons-alleged-corruption-and-money-laundering/#

AUSTRAC ISSUES AML REMEDIAL DIRECTION TO AUSTRALIAN MILITARY BANK

On 3 May, Mirage News reported that AUSTRAC has issued a remedial direction to Australian Military Bank Ltd (AMB) requiring the mutual bank to review and uplift its compliance with AML/CTF laws.  The move follows ongoing regulatory engagement with AMB which identified concerns related to the effectiveness of AMB’s AML/CTF systems and controls.

https://www.miragenews.com/austrac-issues-remedial-direction-to-australian-553670/

TURKEY CONVERTS ŞIMŞEK TARGET DRONE INTO KAMIKAZE UAV

On 3 May, Air Recognition reported that the CEO and President of Turkish Aerospace, Professor Temel Kotil said that Şimşek UAV is capable of being used as a kamikaze drone.  It was originally a High-Speed Target Drone System programme, initiated in 2009 to meet the increased training requirements of the Turkish Armed Forces.

https://airrecognition.com/index.php/news/defense-aviation-news/2021/may/7276-turkey-converts-simsek-target-drone-into-kamikaze-drone.html

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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