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Money Laundering

FinCEN can't make its mind up. On 16 May this year, FinCEN granted to covered financial institutions a 90 day exception from the requirement to comply with the " Beneficial Ownership Rule for Legal Entity Customers." Leaving aside the fact that, as with the UK's draft Bill, the term "Beneficial Owner" has been co-opted from an entirely different area of law and is therefore a cause for confusion, FinCEN Is up to its old tricks of mitigating the effect of a Rule while pretending that the USA has a strong counter-money laundering regime. The 90 days is up and, guess, what? FinCEN has extended it. What is going on?

On Friday 13th July 2018, the UK's Serious Fraud Office obtained, from a Magistrates' Court, a warrant for the arrest of Benedikt Sobotka has been issued over his failure to appear for questioning in an ongoing corruption investigation into ENRC and related companies. Failure to appear when required to do so is itself a criminal offence, independent of the allegations under investigation.

BIScom Subsection: 

While there is global fascination with the case against Malaysia's former prime minister Najib Razak, who has been charged with offences that, at present, do not include money laundering, the world is seeing an unprecedented range of cases brought against politicians and those close to them. Has the tide turned and are politicians, previously considered largely untouchable, now legitimate targets?

AUSTRAC has released a consultation paper relating to counter-money laundering regulations in the securities sector.

BIScom Subsection: 

The news that judges, in London, have been charged with fraud is just part of a much larger problem. Alongside them are solicitors. The Metropolitan Police have been investigating what they describe as a "complex fraud team investigation." The case started after a court clerk reported suspicions of suspicious claims for state-funded payments under the Legal Aid Scheme. However, legal aid fraud has been a long-running problem in the legal system in England and Wales with criminal and immigration practitioners being most commonly reported.

If there's one thing more certain in Formula One than that there will be in-fighting between the teams, it's that every few years some kind of financial scandal will engulf at least some aspect of the sport. And if there's an allegation of cheating, there's always an Italian aspect to it. Put the two things together and you get the worst-kept secret in the sport, but one that could not be openly told because of the way the investigation is conducted: the Italian authorities have been investigating financial affairs connected to the Italian Grand Prix at Monza for more than five years.

The news that Australia is to be the latest country to limit, in some circumstances, cash transactions above a certain financial limit has raised some questions. WMLR takes a critical look at some comments.

For the past week, all the news in Australia has been about the huge give-aways planned for today's budget. Every single news broadcast since Thursday has had the story up front and pushed a message that for the first time in years, there is money in the kitty and the government intends to spend it. But the big stories are about tax reform and measures against tax evasion including banning large cash transactions. That's the headline. It's not quite the reality and, as always, a budget speech is a declaration of intent not fully reasoned legislation. Even so - it's a significant move. (edited)

This is more than a little bit scary. A criminal, exactly what kind isn't clear, has been reading the major Australian employment website Seek.com.au - and then he (it's almost always a "he") is sending invitations to become involved in money laundering or, possibly, to be a victim of a long-established scheme to defraud his victims. The scam letter is a collection of so many currently trendy phrases that it might be convincing - especially to someone who is in awe of cryptocurrencies, blockchain (as they call it) and so many other trigger words. Oh, and there's an interesting twist to the old version of this crime.

FCRO Subsection: 

Case Summary: 

Australian banks are getting a justifiable kicking in the media. and to a degree by regulators, after year after year of bad management, bad conduct and failure to put in place effective risk management and compliance policies and procedures especially in relation to money laundering, etc. But it would be wrong to read the headline that a consultant to Macquarie Bank has been convicted of money laundering means the bank made errors in law, although arguably there may have been an error in judgement.

Type of conduct: 
Tax fraud / evasion

The single over-riding principle that makes cryptocurrency accounts attractive to criminals is not the supposed anonymity (that argument is a done deal except for those who don't know what they are talking about) but the fact that, by design, there is, literally, no single body or person with regulatory authority.

What that means is that, while governments and courts (at the behest of victims) can make Asset Recovery Orders, or, as the US government is trying to do with its listing on OFAC of crypto-currency accounts that it claims it has reasonably identified as connected to listed persons, these are after the fact restrictions and to try to enforce them is, by reason of the essence of the distributed ledger, only ad hoc.

There is another way....

FCRO Subsection: 

For the second time recently, a matter before the Solicitors' Disciplinary Tribunal in England and Wales has considered the use of a firm's clients' account for the provision of quasi-banking services. The SDT is starting to impose more substantial penalties and has clearly had enough of solicitors who fail to comply with their obligations under counter-money laundering laws and regulations. Like in the first case, the solicitor concerned is elderly and one might say that he might be considered as having carried on long-standing practices in the face of changing practice requirements and culture.

The days of Easy Rider are numbered. Around the world, gangs of criminals on motorbikes (colloquially but (usually) legally incorrectly called Outlaw Motorcycle Gangs) have, quite simply, gone too far and as they have become the face of organised crime, usually in large, sparsely populated countries, they are being targeted. While the Hell's Angels have been held up as a model, the gangs are rarely truly members. But while, these days, many Hells Angels groups are filled with ageing lawyers, bankers and wannabe bad boys, the current crop have taken over the worst traits - and business practices, investing in businesses, property and with a raft of professional advisers on retainer. One regulator has had enough and put metaphorical chains on the doors of a law firm.

Case Summary: 

Two men have been sentenced to long jail terms in Australia for tax evasion and money laundering. They conspired to create an elaborate network of companies and false identities and ran a wide range of document frauds to book false losses in business activities, producing some AUD60 million in defrauded taxes. They spent the money on palatial homes, cars and boats and other luxury items and lifestyle expenditure.

Type of conduct: 
Tax fraud / evasion

It might take a stretch of the imagination to join the UK's departure from the EU and the wife-murdering, perhaps syphilitic, definitely unstable, ferociously misogynistic Tudor monarch who is, arguably, the UK's most famous king. But there is a certain logic and the admirably named Lord Judge has applied his considerable legal knowledge and intellect to make that connection and to rightly harry those responsible for the poor legal drafting that plagues English law and, in particular, that relating to the not-admirably named "Brexit." At the heart of his concerns are a major constitutional issue now known as "Henry VIII powers." This month, Parliament is making much of that while debating Sanctions and Anti-Money Laundering Bill.

CoNet Section: 

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