To download the full 28-page report, click here.

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UK solicitor jailed for laundering - 4 October 2004

A Belfast solicitor has been jailed for six months for failing to report a money laundering suspicion.  Gavin McCartan received a £70,250 deposit on a bungalow worth £105,000 in his capacity as a conveyancing solicitor.  The situation was revealed only when a mortgage broker working on behalf of Cecil Walsh, the buyer, made a suspicious transaction report in July 2002, as he "became concerned" about his client's activity.

A search of McCartan's office turned up evidence that the £70,200 in cash had been paid into the solicitor's business account.  The solicitor told police he had never met Mr Walsh as he believed he could not come to his office because he had been involved in a serious road crash.  Instead, an "associate" of Walsh had acted as a go-between; paperwork would be collected by Mr Walsh's associate and would then be returned signed.  Comparison of these documents to others signed by Mr Walsh showed that the signatures did not match.

McCartan later pleaded guilty to one charge of failing to disclose information on 8 January 2001 in that he suspected Mr Walsh to be involved in drug trafficking.  Jailing McCartan for six months, Mr Justice Higgins said that while behaviour causing suspicion would vary from case to case, "the presentation of very large sums of money in cash, in the absence of some verifiable good reason, must be one of them".  The judge told McCartan that the public were entitled to expect officers of the court to be "beyond reproach" and that solicitors who became suspicious of money laundering "have a duty to tell the police".
 

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KPMG publishes AML survey - 20 September 2004

KPMG has published its "Global Anti-Money Laundering Survey 2004".  The 55-page document looks at such issues as the cost of AML compliance, transaction monitoring, and staff training.  From a training point of view, it was gratifying to see that respondents around the world consistently rate face-to-face training as the most effective method, pipping computer-based training.

To download the full survey (you'll need to give some details about who you are), visit the KPMG UK website and go to their "Hot Downloads" section.

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Thinking about Crime workshops awarded ICA CPD rating - 6 September 2004

We have just been informed that our workshops for MLROs have been approved by the International Compliance Association as counting towards the CPD requirements of their students.  If you are an ICA student and attend a TaC workshop, you will be able to rack up six hours' CPD.

The next MLRO workshops are taking place in Guernsey on 16 September (full), London on 21 October (some places left) and Jersey on 10 February 2005 (places left).  If you are interested in hearing more, please email Susan.

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FSA fines Bank of Ireland £375,000 for breaches of AML regulations - 2 September 2004

The UK's financial regulator the Financial Services Authority (FSA) has fined the Bank of Ireland £375,000 for failing to have in place systems to detect a series of high-risk cash transactions totalling £2 million.  The FSA found that between 1998 and 2002, forty bank drafts were issued for cash for one of the bank's largest customers.  The drafts were made payable to the BoI and, because the identity of the owner of the cash was disguised, were an effective means of money laundering.  Bank staff that were aware of the circumstances of the transactions did not identify them as suspicious, and the transactions are now being investigated by law enforcement.

Philip Robinson, financial crime sector leader at the FSA, commented that "These transactions were high-risk in terms of providing scope for money laundering and were in breach of BoI's policies and procedures.  Furthermore, they continued for a period of four years.  BoI did not establish adequate systems and controls to monitor the issuing of bank drafts and did not check that its staff understood fully their anti-money laundering responsibilities in relation to the recognition and reporting of suspicious transactions."

To read the full FSA statement, please click here.

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Swiss agree to hand back Abacha millions - 18 August 2004

The Federal Office of Justice (FOJ) in Switzerland has ruled that the majority of the US$500 million of Abacha funds that have been frozen in Swiss accounts is of criminal origin and therefore will be handed back to the Nigerian authorities.  In its 50-page ruling, the FOJ details how it followed the paper trail to conclude that the money was the proceeds of theft by former dictator Sani Abacha from his country, and particularly from the central bank.  Following co-operation between the two countries, US$200 million has already been repatriated.  This further US$500 million will be transferred to an account at the Bank for International Settlements, in favour of Nigeria.

To read the full FOJ press release, please click here and then select the Press releases link.

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New directors for CI regulators - 17 August 2004

Both the Guernsey Financial Services Commission and the Jersey Financial Services Commission have announced new appointments this week.

In Jersey, Mark Sumner has been appointed as Director of Banking, heading up the new Banking Division.  Mr Sumner has worked for Barclays in the UK and HSBC in Jersey, and has been on secondment to the JFSC for the past eighteen months.

And in Guernsey, Stephen Trevor is getting ready to take on the directorship of Fiduciary Services and Enforcement at the GFSC.  Mr Trevor was previously deputy director of this division, which is responsible for licensing Guernsey's fiduciary businesses, co-ordination with other jurisdictions and intelligence.

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SOCA allocates top spots - 13 August 2004

The Home Office has announced who will fill the top spots at the Serious Organised Crime Agency.  Sir Stephen Lander (currently independent commissioner to the Law Society) will the chairman, while Bill Hughes (currently director general of the National Crime Squad) will be the director general.  Both men will take up their new posts in September of this year, and the SOCA is scheduled to become fully operational on 1 April 2006.

To read the Home Office press release, click here.

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Home Office publishes consultation paper on accountants and PoCA - 4 August 2004

The Home Office has published a consultation paper entitled "The Proceeds of Crime Act 2002 & the Money Laundering Regulations 2003: Obligations of Accountants to Report Money Laundering".  The paper seeks views on whether and when accountants in practice should benefit from the same exemptions from reporting money laundering suspicions that currently apply to lawyers.  If the proposals become law, current inequalities between the ways in which lawyers and accountants are treated under the money laundering legislation will be removed in those cases where they are providing directly comparable services.  Responses to the consultation paper should be submitted by 30 September 2004.

To download the consultation paper, click here.

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UK estate agents to be required to register - 22 July 2004

A new initiative announced by the Department of Trade and Industry will require estate agents in the UK to sign up to independent ombudsman schemes.  The ombudsmen will provide a route via which consumers can seek compensation for poor service.  The ombudsmen will also be required to refer rogue agents who commit serious offences to the Office of Fair Trading (OFT) for further investigation.  There is currently a voluntary ombudsman scheme but only about 40% of estate agents belong to the voluntary scheme and the ombudsman is not required to refer rogue agents to the OFT.

The compulsory ombudsman scheme is one of a package of proposals to be put to consultation in the autumn.  The other proposals include:

For more information, please read the DTI press release.

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Guernsey FIU to take on computerised AML system - 21 July 2004

The Financial Intelligence Service (FIS) - Guernsey's FIU - has commissioned a cutting edge anti-money laundering system from UK company Solcara.  The new system will interrogate information on suspicious transactions and provide data on the use of language in the documentation, other transactions from the same source, and intelligence from worldwide databases on the company, product or individual involved.  Mark de Garis, Director of the FIS, says that "the system has been designed to enable the FIS to obtain best value from the large volume of information it receives".

For more information, please read the Solcara press release.

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Riggs Bank accused of laundering for dictators - 14 July 2004

US Senator Carl Levin (one of the prime movers behind the USA PATRIOT Act and the author of many of the money laundering provisions contained in it) has accused Riggs Bank of laundering money for Chilean former dictator Augusto Pinochet and Equatorial Guinean dictator Teodoro Obiang Nguema.

According to Senator Levin, staff at Riggs Bank changed the name of some of Pinochet's accounts to disguise their ownership.  They also apparently took millions in cash deposits for Obiang - some of it wrapped in plastic inside the traditional launderer's suitcase - without filing SARs (as are required under US law for cash deposits of more than US$10,000, regardless of suspicion).

Senator Levin says that he may refer possible criminal violations by Riggs Bank and by its officials to the US Department of Justice.  Riggs Bank, which had many foreign political and diplomatic figures among its clients, is now thinking of selling its operations.

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Dormant account mystery - 9 July 2004

Police are trying to trace the holders of an account which was opened in 1960 and since the mid 1990s has been receiving substantial amounts of cash.  The account is in the names of Donald J Smith and Paula Jones and was originally at a Leeds branch of the now-defunct Old Co Building Society, which is now part of the Halifax.  South Yorkshire Police are looking into the account's activity as part of a larger fraud investigation, and are of the opinion that the couple's identities have been used fraudulently to launder money through the account.  They are trying to trace Mr Smith and Ms Jones, whose last known home was demolished in the 1980s.

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FATF removes Guatemala from NCCT list - 2 July 2004

At its plenary meeting which took place in Paris from 30 June to 2 July, the FATF decided to remove Guatemala from its list of Non-Cooperative Countries and Territories.  The FATF noted that Guatemala had taken "significant steps" to improve its AML regime, including passing laws requiring offshore banks to be licensed and supervised, requiring enhanced customer identification for financial institutions, and requiring reporting by banks to authorities of any suspicious transactions.  However, FATF President Claes Norgren commented that "the FATF will continue to monitor Guatemala's progress".

The countries which remain on the NCCT list are: the Cook Islands, Indonesia, Myanmar, Nauru, Nigeria and the Philippines.

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Swiss banks now required to have computerised AML systems in place - 1 July 2004

In December 2002, the Swiss Federal Banking Commission issued an "Ordinance Concerning the Prevention of Money Laundering".  One of its requirements was that banks and other financial intermediaries should implement - by 1 July 2004 - "computer systems to facilitate the detection of higher risk transactions".

The relevant ordinance is reproduced (in four languages, with English coming fourth) in Bulletin 44/2003 published by the Swiss Federal Banking Commission.

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Benazir Bhutto faces new laundering charges - 1 July 2004

Former Pakistani Prime Minister Benazir Bhutto has been charged again by a Swiss prosecutor with money laundering.  Ms Bhutto and her husband Asif Ali Zardari were convicted of money laundering in Geneva in 2003 but the conviction was thrown out on appeal.  This time, she has been charged by investigating magistrate Christine Junod of "money laundering by profession" - an aggravated charge of repeatedly profiting from criminal proceeds.  This aggravated charge carries a penalty of up to five years' imprisonment (as opposed to three years' for the simple version).  A summons has been issued for Mr Zardari, who is currently serving a jail term in Pakistan for corruption.

This case stretches back to 1998, when Ms Bhutto was accused of having access to money obtained through kickbacks and commissions from two Swiss companies with contracts with the then Pakistani government.  An investigation found several numbered accounts in Switzerland in which more than US$11 million had been deposited, and the accounts were frozen following a request from Pakistan.  Ms Bhutto and Mr Zardari both deny misappropriating any money.
 

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FSA publishes Annual Report - 1 July 2004

The Financial Services Authority has published its Annual Report 2003/04.  You can download it by clicking here.

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EU Commission publishes proposal for third directive - 30 June 2004

The Commission of the European Union has published proposals to update and improve its money laundering directive.  Commenting on the proposal, Internal Market Commissioner Frits Bolkestein said that "The fight against money laundering and terrorist financing is a top political priority for the Commission....  The June 2003 revision of the Forty Recommendations of the FATF has strengthened the world anti-money laundering standard and extended the rules to cover the financing of terrorism.  The EU Directive must match that standard and ensure its co-ordinated application in the enlarged Union."

The new proposal suggests (among other things):

Technical discussions on the proposal are due to begin immediately, and the text of the proposal can be downloaded here.

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PA's hubby and mummy sentenced for money laundering - 14 June 2004

Joyti De Laurey, the former Goldman Sachs PA, was today sentenced to seven years in prison for stealing £4.3 million from her employers.  Her husband Anthony was sentenced to 18 months for money laundering, and her mother Dr Devi Schahhou was given a six month suspended sentence for money laundering.

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Lazarenko found guilty of money laundering - 4 June 2004

Former Ukrainian Prime Minister Pavlo Lazarenko has been found guilty in a US federal court of seven counts of money laundering, one count of conspiring to launder money, ten counts of wire fraud and eleven counts of inter-state transportation of stolen property.  The predicate crimes took place in the Ukraine and include the extortion of Lazarenko's former business partner Petro Kirichenko and the defrauding of Naukovyy State Farm.

Lazarenko faces up to twenty years in prison but will not be sentenced until 16 September, by which time he will already have served five years.  He is expected to appeal against his sentence and will remain for the time being under house arrest in San Francisco.  Were it not for the US charges against him, he would already have been deported to the Ukraine.

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Home Office publishes consultation paper on new offence of fraud - 17 May 2004

The Home Office has published a consultation paper entitled "Fraud Law Reform: Consultation on proposals for legislation".  Responses should be submitted by 9 August 2004.

The purpose of the paper is to seek stakeholder views on the Government's proposals to reform the law of fraud.  The main proposal is for a general offence of fraud which can be committed in three different ways: by false representation, by wrongfully failing to disclose information or by abuse of office.  The paper is also seeking views on proposals for new offences of ‘obtaining services dishonestly’ and ‘possessing equipment to commit frauds' and on the extension of the existing offence of fraudulent trading.

To read the full 32-page consultation paper, click here.

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FATF receives record 8-year mandate - 14 May 2004

At a meeting of the OECD Ministerial Council on 14 May 2004, the Financial Action Task Force was granted a record 8-year mandate to continue its work.  Its current remit expires at the end of August.  The new mandate - operational from September 2004 to December 2012 - recognises that "the FATF still has a major task to perform in continuing to set standards in the context of an ever more sophisticated international financial system".

To read the full FATF press release and the mandate, click here.

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Northern Ireland OCTF publishes threat assessment - 11 May 2004

The Northern Ireland Organised Crime Task Force has published "Confronting the Threat: Serious and Organised Crime in Northern Ireland Threat Assessment & Strategy 2004".  This latest assessment - the fourth published by the OCTF - has identified about 235 Northern Ireland-based organised crime gangs, 150 of which operate at a local or regional level, with 85 ‘top-level’ gangs having established international links.

To read the full report, click here.

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PA's mother and husband convicted of money laundering - 20 April 2004

High-flying secretary Joyti De-Laurey stole £4.3 million from her three bosses at London investment bank Goldman Sachs.  Aided by her husband Anthony (a chauffeur) and her mother Dr Devi Schahhou (a Hampstead GP), De-Laurey forged cheques and switched money between accounts, successfully transferring more than £2 million to Cyprus before her theft was discovered.  Here she bought a luxurious villa and a new Range Rover, while on other shopping trips she spent £18,000 on Cartier jewels and put down deposits on a £175,000 Aston Martin and a £150,000 power boat.

Joyti De-Laurey was convicted on several counts of using a false instrument and obtaining a money order by deception.  Anthony De-Laurey and Dr Schahhou were each convicted on four counts of money laundering.  All three were refused bail and are to be sentenced on 14 June.

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EU updates its list of terrorists and terrorist organisations - 3 April 2004

The Council of the European Union has published an updated list of "persons and entities" who may be connected with terrorist activities.

To read the full list, please click here.

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Three Ely men jailed for laundering - 2 April 2004

Three "gangmasters" from Cambridgeshire have been jailed for laundering the proceeds of supplying illegal workers to farms and food processing plants across the UK.  The scheme generated more than £4 million in just under three years, which the men laundered by buying seven properties and stashing money in 30 bank accounts.  The men were found guilty of concealing or transferring the proceeds of criminal activity, and were sentenced to 4½, 6 and 7 years in jail.

To read the full BBC News report, please click here.

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Home Office publishes white paper on tackling organised crime - 26 March 2004

The Home Office has published a white paper entitled "One Step Ahead: A 21st Century Strategy to Defeat Organised Criminals".  Responses and comments should be submitted to the Home Office by 30 July 2004.

The white paper sets out a new strategy and radical new powers to deter and disrupt criminal gangs by:

At the launch of the white paper, Home Secretary David Blunkett said "Modern crime bosses are sophisticated, organised and determined.  No group of defendants is more adept at exploiting our legal safeguards for their own ends.  The strategy I am setting out today will reduce the harm organised crime causes on out streets and make the UK one of the most difficult environments in the world for organised criminals to operate in."

To download the full 72-page white paper, please click here.

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IMF publishes review of its pilot AML/CFT project - 10 March 2004

The International Monetary Fund has published a review of its pilot program of Anti-Money Laundering and Combating the Financing of Terrorism assessments.  It also announced that - in conjunction with the World Bank - it intends to carry out ten AML/CFT assessments per year.

To download the full 68-page project review, please click here.

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OECD publishes harmful tax practices progress report - 22 March 2004

The Organisation for Economic Co-operation and Development has published its 2004 progress report on its harmful tax practices project.  The report focuses primarily on the project work as it relates to OECD member countries, and also updates other aspects of the work undertaken since the last progress report was published in 2001.

To download the full 2004 progress report, please click here.

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US publishes International Narcotics Control Strategy Report 2003 - 1 March 2004

The US Department of State has published its 2003 International Narcotics Control Strategy Report (INCSR).  This INCSR is an annual report made by the Department of State to Congress to describe the efforts of key countries to attack all aspects of the international drug trade.  Part I of the INCSR covers drug and chemical control activities, while Part II covers money laundering and financial crimes.

To download the full INCSR, please click here.

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FATF removes Egypt and the Ukraine from NCCT list - 27 February 2004

At its plenary meeting this week, the Financial Action Task Force has decided to remove Egypt and the Ukraine from its list of Non-Cooperative Countries and Territories.

To read the full press release from the FATF, please click here.

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UK police to get a share of seized criminal assets - 24 February 2004

The Home Office Minister Caroline Flint has announced that, from next year, UK police forces will receive a third of all recovered assets above £40 million, increasing to 50% in 2005/06.  The cash seizure threshold is being halved from £10,000 to £5,000, allowing police and customs officers to seize suspect cash stashes of £5,000 or more.

To read the full press release from the Home Office, please click here.

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UK announces new "FBI-style" Serious Organised Crime Agency - 9 February 2004

The UK government has announced that there is to be a new UK-wide elite agency which will merge the National Crime Squad, the National Criminal Intelligence Service and investigative branches of Customs and the Immigration Service.

The Serious Organised Crime Agency will deal with crimes like drug trafficking and people smuggling, but not terrorism or murder.  It is expected to become operational in 2006 and to employ up to 5,000 agents.

Home Secretary David Blunkett said that the UK needs such an agency because "we must become better organised, more sophisticated and more technologically capable than the criminals".  A policy paper, to be published next month, will set out the Government’s comprehensive strategy to tackle organised crime and arrangements for the new agency in more detail.

To read the full press release from the Home Office, please click here.

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European Commission issues warning to six non-compliant member states - 9 February 2004

The European Commission is to send formal requests to Italy, Portugal, Greece, Sweden, Luxembourg and France to implement the second Money Laundering Directive.  None of these states has yet notified the Commission of their measures to write the Directive into national law.

The Commission's requests will take the form of "reasoned opinions", the second stage of infringement procedures.  If they receive no response, they may decide to refer the member states in question to the EU's Court of Justice.

To read the full press release, please click here.

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Thinking about Crime Limited launches innovative customer referral programme - 1 January 2004

Thinking about Crime Limited has launched a unique (we think) customer referral programme, involving shirts.  To read more, please click here.

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