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Reports by agencies hint at increasing financial crimes
A report from Syracuse University found that 25% fewer white-collar criminals are prosecuted by the US authorities now compared to 30 years ago. Meanwhile, an AML report by the US Department of State has accused the northern part of Cyprus held by Turkey of an inadequate legal and institutional framework to fight money-laundering, with casinos and the offshore banking sector still posing significant threats. Elsewhere, the National Police Agency of Japan reported a record 537 criminal cases of money-laundering and other illegal transactions against financial institutions in 2019. In similar news, financial crime in the Middle East has been rising for the last 2 years as per a PwC survey with over $42 billion lost and about half of all local companies reporting at least one occurrence in that duration. The report identified procurement fraud as one of the most disruptive crimes hitting local businesses and suggested that the right technologies must be deployed for businesses to identify fraud risks and respond swiftly. Similarly, research by Fenergo shows that banks received almost $10 billion worth of fines in 15 months through 2019, many of which could have been avoided with better software technology. In some positive news in this direction, newly launched AMLOCK Analytics, an advanced AML solution powered by artificial intelligence, will help financial institutions to spot complex and hidden AML patterns and detect and manage money-laundering.
Cross-border transactions of illegal funds
As a result of the high inflow of 100 billion pounds of corrupt money from Russia, Nigeria, Pakistan, former Soviet States and Asia, the UK is set to issue a new tax on banks and other firms associated with AML regulations to raise about 100 million pounds to fight illegal money. Funds will be used to develop new technology for law enforcement and to employ more investigators. The move has found support in several champions of the fight against illegal funds, such as the director of financial crime compliance at consultant Lexis Nexis Risk Solutions, the financial intelligence unit and the director of campaign group Spotlight on Corruption. Elsewhere, the Philippines Bureau of Customs has decided to launch a probe with the AML Council on the huge amounts of cash brought into the country by foreign syndicates. An estimated $370 million were imported into the country by two groups, one of which supposedly involved Chinese nationals. Recommendations have been made to create an interagency body to watch over the country’s entry ports against the inflow of foreign currency. Suspicions are rife that the money might have been funneled into the country by Philippine offshore gaming operators (POGO) workers.
Money-laundering news from around the world
For his role in a money-laundering scheme designed to promote violations of the Foreign Corrupt Practice Act, Lawrence Hoskins, a former executive of the French company Alstom, has been sentenced to 15 months in prison by a US judge. Hoskins engaged in a conspiracy to bribe Indonesian officials in exchange for aid in securing $118 million contracts. He also incessantly emailed and called his US-based co-conspirators regarding the scheme. Meanwhile, in India, Yes Bank founder Rana Kapoor has been arrested for money-laundering of $581 million. The Reserve Bank of India will work on a rescue plan for the estimated deposits of $28 billion in the private bank by seeking assistance from the State bank of India. In other news, several people in Latvia were found to be involved in a money-laundering scheme through the ABLV Bank. Some employees and authorities of the bank were also involved, triggering an investigation by the Financial Crimes Enforcement Network. Over $55 million are suspected to have been laundered by the bank between 2015 and 2018 after it collapsed from the US Treasury allegations of money-laundering.
Money-laundering through drug-trafficking in the US
US authorities have carried out a series of raids nationwide and arrested more than 600 Mexican cartels. Large quantities of illicit drugs and funds were seized from one of Mexico’s most brutal cartels led by Nemesio Oseguera Cervantes, also known as El Mencho. This was a part of Project Python, aimed at disrupting, dismantling and destroying drug-trafficking organizations all over the world while also subjecting their leaders to captivity. Meanwhile, according to the US Drug Enforcement Agency, over $200,000 proceeds of drug money laundered through 24-hour fast-food restaurants with falsified invoices in Wyoming and Colorado have been forfeited by defendants. Jose Aguilar-Martinez, a full supplier in Colorado with known links to a Mexican drug cartel, has been accused of being the mastermind of the scheme. Martinez would give drug money to restaurants, who would then deposit it into restaurant bank accounts to avoid suspicion. Martinez would issue fake invoices for ingredients and suppliers to the restaurants who then paid him for the ‘service’.
