OTHER THINGS YOU MAY HAVE MISSED – NOVEMBER 5

Panama Covid-19 update – in Europe, with UK leading the pack re cases in Western Europe, the WHO warns of 500,000 deaths by February, and Germany is said to be facing an “epidemic” among the unvaccinated.

Here in Panama, numbers continue their downward trends – 1 new fatality and 94 new cases; 1,700 active cases, with 30 in ICU and 116 in other wards.

5 NOVEMBER 2021

FUNDS HAVE DISAPPEARED FROM CRYPTOCURRENCY ACCOUNTS, BUT WHERE TO, AND WHO CAN BE SUED? 

On 2 November, an article from Addleshaw Goddard concerned an English High Court case which it says shows the English courts’ willingness to assist claimants seeking to obtain information to particularise claims for misappropriated funds.   This involves Bankers Trust Orders (BTO) in particular are a powerful tool in a claimant’s search for the perpetrators of cryptocurrency fraud internationally.  A BTO is a type of third-party disclosure order, potentially available in claims for fraud where a claimant seeks confidential documents (usually) from a bank to support a proprietary claim to trace assets.

https://www.addleshawgoddard.com/en/insights/insights-briefings/2021/litigation/the-brief-case-autumn-2021/fetch-the-search-for-information-by-victims-of-cryptocurrency-fraud/

UK: OVER £5.5 BILLION OF COVID SUPPORT FUNDS LOST TO FRAUD OR ERROR

On 4 November, the Guardian reported that HMRC says nearly 9% of furlough scheme was fraudulently claimed or otherwise wrongly paid out last year.  Government coronavirus assistance schemes include furlough, self-employed support and “eat out to help out”. 

https://www.theguardian.com/world/2021/nov/04/over-55bn-of-covid-support-funds-lost-to-or-error

VIRTUAL CURRENCY PLATFORMS AND RANSOMWARE ATTACKS: OVERLAP OF SANCTIONS AND CYBERSECURITY RISKS ASSOCIATED WITH VIRTUAL CURRENCY PLATFORMS AND RANSOMWARE ATTACKS 

On 5 November, the Compliance & Enforcement blog at the Program on Corporate Compliance and Enforcement at the New York University School of Law published Part 1 of a 2-part post on the risks highlighted by OFAC advisories.  This is after OFAC issued 2 advisories that highlight the heightened US sanctions risk associated with cyber-related activities, including ransomware attacks and the virtual currency platforms that ransomware payers often use to facilitate payments.

https://wp.nyu.edu/compliance_enforcement/2021/11/04/virtual-currency-platforms-and-ransomware-attacks-ofac-advisories-highlight-increasing-overlap-of-sanctions-and-cybersecurity-risks-associated-with-virtual-currency-platforms-and-ransomware-attacks/

UKRAINE: ADDITIONAL RUSSIAN SANCTIONS

On 30 October, Ukraine designated 141 people and 49 entities.  The sanctions involved include an asset freeze, travel ban, restrictions on trade transactions and the suspension of performance of economic and financial obligations.

https://www.rnbo.gov.ua/en/Diialnist/5085.html

COP26: MORE THAN 30 FINANCIAL INSTITUTIONS TO END FUNDING DEFORESTATION

On 2 November, Bdaily reported that the pledge is backed by almost £14 billion in public and private funding.  CEO from more than 30 financial institutions with over $8.7tril of global assets – including Aviva, Schroders and Axa – will also commit to eliminate investment in activities linked to deforestation.

https://bdaily.co.uk/articles/2021/11/02/cop26-more-than-30-financial-institutions-to-end-funding-deforestation

PANAMA EXTRADITES MEXICAN WOMAN TO US

On 4 November, La Estrella de Panama reported that a Mexican woman with alleged links to a criminal organisation and money laundering the proceeds of drug trafficking was detained on arrival at the main international airport, and extradited to the US under the simplified extradition process.

https://www.laestrella.com.pa/nacional/211104/panama-extradita-ee-uu-mexicana-detenida-aeropuerto-tocumen

US COURT SAYS TURKISH HALKBANK MUST FACE CRIMINAL CHARGES IN MONEY LAUNDERING AND IRAN SANCTIONS CASE

On 4 November, an article from Ballard Spahr LLP reported that the Second U.S. Circuit Court of Appeals has held that Halkbank, the state-owned Turkish lender, cannot claim sovereign immunity under the Foreign Sovereign Immunities Act (FSIA) in a money laundering and sanctions-related prosecution.  Halkbank is accused of helping Iran evade US sanctions and covering up these transactions by lying to the US Treasury and disguising the movement of funds as purchases of food and medicine so they would qualify for a “humanitarian exception”.

https://www.jdsupra.com/legalnews/second-circuit-says-turkish-halkbank-8059282/

DELAYED UK BORDER CHECKS INCREASE RISK OF SMUGGLING AND TRADE DISPUTES

On the 4 November, the Financial Times reported on the risks associated with further delayed import checks at the UK border.  It says that the NAO has said that the UK will face “significant challenges” in preparing the country’s borders for the introduction of full customs controls on EU imports next year.  These have been delayed following completion of the Brexit transit period, although the EU introduced its controls on 1 January 2021.

https://www.ft.com/content/1c0474cc-3325-4a5c-a9a1-e1ed315a8862

UK: CILEX AML REPORT

The Chartered Institute of Legal Executives has published its AML report 2020-21.  Whilst CILEX membership of legal executives totalled just over 20,000 members in April 2021, the vast majority of members were working within law firms or other companies and organisations who, if required, are supervised by other AML supervisors, including HMRC and the FCA.  CILEx Regulation supervises for AML compliance CILEX Authorised Entities and unregulated sole practitioners (not operating through a Limited Company or LLP).  It notes that there was no identified enforcement action required during 2020/21.

https://cilexregulation.org.uk/wp-content/uploads/2021/10/Anti-Money-Laundering-Supervision-Report-2020-1.pdf

LATVIA SEIZES SECOND FLAT FROM RUSSIAN CRIME GROUP

On 5 November, EU Observer reported that Latvian authorities have seized another property in Riga belonging to a Russian crime group behind one of the best-known money laundering schemes in Europe.

https://euobserver.com/world/153436

HONG KONG CUSTOMS SMASHES DRUG TRAFFICKING AND MONEY LAUNDERING SYNDICATE

A news release from the Hong Kong Government on 5 November advised that Customs on had seized about 260 kg of suspected cocaine with an estimated market value of about $300 million at the Tsing Yi Customs Cargo Examination Compound. Customs officers found that the case also involved money laundering activities, in which about $130 million of suspected crime proceeds had been laundered.

https://www.info.gov.hk/gia/general/202111/05/P2021110500602.htm

INTERPOL-LED OPERATION TAKES DOWN PROLIFIC CYBERCRIME RING

A news release from INTERPOL on 5 November advised that a 30-month transcontinental investigation and operation has resulted in arrests and Red Notices for suspects believed to be behind a global malware crime network.  Included was the arrest in Ukraine of 6 members of a notorious ransomware family during a global operation coordinated by INTERPOL with Korean, Ukrainian and US law enforcement authorities in June.  The global strike – codenamed Operation Cyclone – follows global police investigations into attacks against Korean companies and US academic institutions by the Cl0p ransomware threat group.

https://www.interpol.int/News-and-Events/News/2021/INTERPOL-led-operation-takes-down-prolific-cybercrime-ring

3 REASONS WHY COCA CROPS ARE AT RECORD HIGH IN PERU

An article from Insight Crime on 4 November says that reports indicate that coca crops have increased and are spreading, and coca cultivation rose 22% in 2020.  It says that eradication halted due to COVID-19, crops had moved into other territories, and economic hardship from COVID-19 may also be spurring coca production.

https://insightcrime.org/news/reasons-why-coca-crops-through-roof-peru/

DUTCH SUPREME COURT OVERTURNS $50 BILLION RULING AGAINST RUSSIA IN YUKOS CASE

On 5 November, Rferl reported that the Hague-based Permanent Court of Arbitration ruled in 2014 that Moscow used tax claims to seize control of Yukos in 2003 and silence its CEO, tycoon-turned-Kremlin-critic Mikhail Khodorkovsky.  Yukos Oil, at the time Russia’s largest oil company, went bankrupt in 2006 after the government began demanding billions of dollars in alleged back taxes, and most of its assets were absorbed by the state-owned oil producer Rosneft.

https://www.rferl.org/a/russia-yukos-50-billion-dutch/31547084.html

On 5 November, Rferl reported that Danish authorities have detained a Russian research vessel north of the Jutland Peninsula in an apparent legal dispute, representatives from both countries have confirmed.  It was detained on while refuelling at the port of Skagen.  The seizure was carried out as an interim measure as part of a dispute with a Canadian company relating to previous activities, and after a policy of carrying paying passengers had stopped and the ship was no longer being used commercially, leading a Canadian partner to demand millions in damages.

https://www.rferl.org/a/russia-denmark-research-ship-detained/31546966.html

PLEASURE BOATS BOUGHT WITH EU FUNDS – ASSETS WORTH €900,000 SEIZED IN ITALY

A news release from the European Public Prosecutors Office on 4 November advised that the Italian Financial Police (Guardia di Finanza), led by the EPPO, seized assets worth €900,000 for the misuse of EU funds. The investigation is being carried out against 6 suspects in the region of Calabria, described as entrepreneurs and who purchased large pleasure boats using EU funds.

https://www.eppo.europa.eu/en/news/pleasure-boats-bought-eu-funds-assets-worth-eu900-000-seized-italy

ART MARKET MONEY LAUNDERING CRACKDOWN SPREADS FROM UK TO THE US – BUT WHAT IMPACT IS IT HAVING AND ARE BUSINESSES TAKING IT SERIOUSLY?

On 5 November, the Art Newspaper carried an article posing this question and saying that while the US is following the EU lead, its regulations do not yet include “flat art” — only antiquities.  It is said that the market’s traditional preference for discretion fuels the belief that the $50 billion-dollar global market is routinely used to launder proceeds of crime.  It is said that the UK’s implementation of the relevant 5th EU AML Directive is the broadest in scope in Europe, and possibly the world. British art dealers, auctioneers and advisors involved in the sale of fine art, photographs, prints and a few other categories are subject to strict money laundering regulations, similar to those governing UK bankers and lawyers.  It also extends beyond its borders and applies to non-UK branches and subsidiaries of UK entities. 

https://www.theartnewspaper.com/2021/11/05/art-market-money-laundering-crackdown-blows-from-uk-to-the-us-but-what-impact-is-it-having-and-are-businesses-taking-it-seriously

HONG KONG CENTRAL BANK LAUNCHES AML RegTech PLATFORM

On 5 November, Finance Magnates reported that the Hong Kong Monetary Authority (HKMA) has launched an AML Regtech Lab (AMLab).  It is said to be targeted towards banks that address the risks of fraud-related mule accounts using Network Analytics. They can also enhance data and information sharing through public-private partnerships.  Initially, a group of 5 banks will participate in the programme and will work towards enhancing the new system’s capabilities. They will use synthetic data to identify money mules, integrate alternative data into traditional datasets, and will work in the development of further capabilities for the application of network capabilities in identifying other laundering risks.

https://www.financemagnates.com/fintech/news/hong-kong-central-bank-launches-aml-regtech-platform/

CAN ETHIOPIA SURVIVE? WHAT MIGHT HAPPEN IF ABIY AHMED FALLS

On 5 November, an article in Foreign Affairs says that not only have Ethiopian troops failed to advance in their conflict with Tigray forces but they have suffered a series of defeats that have left the capital, Addis Ababa, open to attack — forcing Abiy to declare a state of emergency and to call on residents to take up arms to defend the city.  It also notes that Ethiopia is in the midst of a painful economic downturn.

https://www.foreignaffairs.com/articles/ethiopia/2021-11-05/can-ethiopia-survive

UK: THE HOUSE OF LORDS DEBATES BELARUS SANCTIONS

On 5 November, the EU sanctions blog reported on a debate held in the House of Lords and the several clarifications brought out in the debate.  It also notes that another debate in the House of Commons on 4 November confirmed cross-party support for the UK’s sanctions on Belarus.

https://www.europeansanctions.com/2021/11/uk-parliament-debates-belarus-sanctions/

RACING JOURNALIST JAILED FOR BETTING FRAUD AT PRESS ASSOCIATION

On 5 November, The Press reported that a sports journalist who misused his position at a national news agency to run a £15,000 betting fraud has been jailed.  Hull Crown Court heard how he defrauded his employer’s client by £15,000 over a few days in 2018.

https://www.yorkpress.co.uk/news/19698581.racing-journalist-jailed-betting-fraud-pa/

MAN SENTENCED FOR WIRE FRAUD AND MONEY LAUNDERING IN A MULTI-MILLION DOLLAR CATTLE PONZI SCHEME

A news release from the US DoJ on 5 November advised that Robert Blom, 59, was sentenced to 91 months in federal prison, followed by 3 years of supervised release, $24,282,865.94 in restitution, and a special assessment to the Federal Crime Victims Fund in the amount of $200.  Blom operated a custom cattle-feeding business and, as a part of his business, he solicited investors for groups of cattle.  He purchased groups of cattle from various livestock companies and those groups of cattle were raised on feedlots owned or used by Blom.  He raised the groups of cattle to maturity, and then sold them to processing plants.  After the groups of cattle were sold, he paid the profits to the investors in the groups.  However, he also sold the same groups of cattle to multiple different investors. 

https://www.justice.gov/usao-sd/pr/corsica-man-sentenced-wire-fraud-and-money-laundering-multi-million-dollar-cattle-ponzi

HAWAII MAN INDICTED FOR VIOLATING THE ATOMIC ENERGY ACT, OBSTRUCTION OF AGENCY PROCEEDINGS, MAKING FALSE STATEMENTS AND BANK FRAUD

A news release from the US DoJ on 5 November advised that Mark Kazee, 57, worked in the materials and equipment testing industry for over 30 years, serving both as an inspector and as a supervisor of inspectors who used industrial radiography.  Industrial radiography is the process of using a radiation source and a specialised camera to examine materials below the surface to check for flaws.  He had a surreptitious plan to take over his employer’s business, by, among other things, misappropriating his employer’s equipment and personnel.

https://www.justice.gov/opa/pr/hawaii-man-indicted-violating-atomic-energy-act-obstruction-agency-proceedings-making-false

 

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JET ILLEGALLY ENTERS GUATEMALAN AIRSPACE AND LANDS ON CLANDESTINE RUNWAY 

On 5 November, Prensa Libre reported that the National Civil Police (PNC) had reported that they had located a jet with possible drugs.  It landed on a clandestine runway off the coast of Retalhuleu.  The abandoned aircraft, registration N42FL, although it is not known if it is the official one, but the registration applies to a Gulfstream III business jet.

https://www.prensalibre.com/ciudades/retalhuleu/jet-ingresa-ilegalmente-al-espacio-aereo-de-guatemala-y-aterriza-en-pista-clandestina-en-champerico-retalhuleu-breaking/

 

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JUDGE IN MEXICO ORDERS ARREST OF ANOTHER FORMER PEMEX CEO

On 5 November, Bloomberg BNN reported that a federal judge in Mexico ordered the arrest of former Petroleos Mexicanos CEO Carlos Trevino for not appearing at the hearing in which he was going to be charged with criminal association and money laundering.  Another ex-Pemex CEO Emilio Lozoya testified against Trevino for alleged corruption.

https://www.bnnbloomberg.ca/judge-in-mexico-orders-arrest-of-another-former-pemex-ceo-1.1677662

 

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6 PALESTINIAN CIVIL SOCIETY GROUPS DESIGNATED BY THE ISRAELI GOVERNMENT AS TERRORIST ORGANISATIONS

On 22 October, the National Bureau for Counter terror Financing for Israel issued a news release advising that the Israeli MoD had designated 6 organisations that it said had links to the Popular Front for the Liberation of Palestine (PFLP) as terror organisations.  The organisations are the Union of Palestinian Women’s Committees; Addameer Institute; Bisan Centre for Research and Development; Al-Haq Organisation; The Defence for Children International Organisation – Palestine Branch; and The Union of Agricultural Work Committees.

https://nbctf.mod.gov.il/en/Pages/211021EN.aspx

 

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HOW A NETWORK OF OCTOGENARIANS WOUND UP HELPING A SPANISH DRUG GANG LAUNDER ITS CASH

On 4 November, an article from El Pais said that an attorney in Madrid used a group of seniors living in poverty to conceal the income from traffickers who had imported 4 tonnes of cocaine into Spain.  It starts with the story of one 84-year-old who, on paper, holds 44 bank accounts and is on the paperwork for a total of 25 companies.  He is allegedly one of the 6 frontmen used by an attorney from Madrid who has been under investigation since 2019.  The lawyer is alleged to have made use of 6 octogenarians living in poverty to legitimise the network’s flow of income, and were on the books of 387 companies, which in turn owned 414 properties in Madrid. The fictitious scheme also involved a web of nearly 300 bank accounts.

https://english.elpais.com/spain/2021-11-04/how-a-network-of-octogenarians-wound-up-helping-a-spanish-drug-gang-launder-its-cash.html

 

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EU ADDS 1 PERSON TO LIBYA SANCTIONS LIST

EU Regulation 2021/1909/EU added Osama Al Kuni Ibrahim to its Libya sanctions lists after the UN added him to its lists on 25 October.

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.LI.2021.389.01.0001.01.ENG&toc=OJ%3AL%3A2021%3A389I%3ATOC

https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.LI.2021.389.01.0003.01.ENG&toc=OJ:L:2021:389I:TOC

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