KYC360 Weekly Roundup - 22nd Jul 2022

Published on Jul 22, 2022

Spotlight on Drug Cartels


This week we turn the spotlight on drug cartels, following the much-vaunted arrest of a major Mexican drug lord. Rafael Carlo-Quintero for his alleged involvement in the kidnapping and murder of DEA Special Agent Enrique “Kiki” Camarena in 1985 which was later dramatised in the Netflix series Narcos: Mexico. 

Meanwhile the sanctions imposed on Russia continue to be ramped up, yet questions have been raised about their legality. This has led to 30 individuals taking the EU to court asking to be removed from the lists, and about another 10 appealing to the EU directly. 

Money launderers have long seen the crypto sector as a target for their illicit activities. Yet most crypto companies are still failing to abide by the FCA’s anti-money laundering rules. In the last two years, only 35 of the 273 applications made to the UK watchdog under the regime have been approved. 

Fraud and corruption cases are rarely out of the news and this week is no exception. Sri Lankan President Gotabaya Rajapaksa fled the country with the United Arab Emirates his preferred destination. Which was no surprise to observers, since the Pandora Papers revealed secret family ownership ties to UAE properties. Finally, we report on the scourge of human trafficking, the violence and crime it fuels, and attempts to crack down on this global problem. 

Mexican drugs lord Rafael Caro-Quintero captured by Mexican navy 

Rafael Caro Quintero, a drug lord known as “the narco of narcos” who was behind the killing of a US drug enforcement agent in 1985, has been captured by Mexican forces. The co-founder of Guadalajara cartel, he was one of the FBI’s most-wanted fugitives after his contentious release from prison in 2013. 

Statement from the US Attorney General on the capture of Rafael Caro-Quintero 

“There is no hiding place for anyone who kidnaps, tortures, and murders American law enforcement. We are deeply grateful to Mexican authorities for their capture and arrest of Rafael Caro Quintero.”  
US Attorney General Merrick Garland.

Read the full statement from Attorney General Merrick B. Garland here.

The biggest and most powerful cartels in Mexico

Mexico’s horrific drug war claims thousands of lives every year, as powerful cartels fight for territory and influence. Not only do they control vast swathes of the country, but they are also responsible for political corruption, assassinations, kidnappings, while fuelling corruption wherever they operate.

Video: Why the Sinaloa Cartel is becoming more powerful than ever before 

Journalist Luis Chaparro is a journalist and producer who reports on the influence of the drug cartels, their impact on human trafficking, how they fuel the gun trade, and the involvement of the FBI and CIA. 

Radio: Narcos – The Story of Curtis Warren 

The reach of the drug cartels knows no bounds as this current radio programme demonstrates. The series covers the story of Curtis Warren, an English gangster and drugs trafficker who was formerly Interpol’s Target One and was once listed on The Sunday Times Rich List. In this episode, it covers how Curtis Warren brokered a major cocaine deal with a notorious cartel and how his first £100m shipment got through, right under the noses of customs.

Learn the secrets of money laundering from the agent who infiltrated Pablo Escobar’s Medellin cartel

Robert Mazur is the only AML professional to have laundered tens of millions in illicit profits for the likes of Pablo Escobar. While in deep cover, he learnt the secrets about money laundering from face-to-face dealings with corrupt bankers, lawyers, and businessmen. As well as leading major money laundering investigations, Robert Mazur has managed a global private sector enhanced due diligence company and is a court recognised expert in money laundering and international drug trafficking. Through these podcasts, he shares his incredible experiences and in-depth knowledge to help you in your battle against money laundering.  


Financial_ServicesMoney Laundering, Fraud & Corruption

Most crypto firms fail FCA money laundering tests 

The vast majority of crypto companies are still failing to abide by the Financial Conduct Authority’s anti-money laundering rules. Since the Fifth Anti-Money Laundering Directive (5MLD) was introduced in January 2020, only 35 of the 273 applications made to the UK watchdog under the regime have been approved. 

U.S Court imprisons Nigerian Fintech Executives over $167 million money laundering scheme 

A Fintech company has acknowledged that it failed to maintain an effective anti-money laundering and unlicensed money transmission programme. As a result, two founders were sentenced to 27 months in prison for their role in sending $160 million in fraud earnings to Nigeria through their company.

NSW poker machine laws may “increase risk of money laundering”

The New South Wales Crime Commission claims that the state’s gambling laws have increased the risk of money laundering through poker machines. The commission said a lack of detail and transparency around gambling machine tickets in NSW creates a potential avenue for illegal activity, while other laws inadvertently make the sector more vulnerable to money launderers.

Report: Casino AML risks and reforms under spotlight in global gambling hubs

Money laundering at casinos has once again come under the scrutiny of global regulators as they seek to crack down on money laundering and misconduct in the gaming sector. New regulatory reforms are targeting the conduct and compliance culture at both government agencies and the private sector.

UAE Central Bank unveils public awareness campaign surrounding hawala remittances

The Central Bank of the UAE has launched a campaign to further protect end users and introduce legal frameworks and legislation to regulate money transfers through registered hawala providers. It is another move toward ensuring transparency, integrity and financial governance in transactions executed through hawala providers in order to combat money laundering and the financing of terrorism.

Ten people jailed over £20m money laundering scheme

An investigation by the National Crime Agency (NCA) has led to ten people being jailed over a £20m money laundering scheme conducted via Northern Ireland based accounts. “Staggering amounts of cash” were said to have been seized from some of the accused, who are all Chinese nationals but lived in Belfast at the time of the offences.

Three charged over Ecuadorian bribery and money laundering racket 

A US federal grand jury is charging a Florida man and two Ecuadorian citizens for their alleged roles in a bribery and money laundering scheme to obtain business from Ecuadorian state-owned insurance companies. The three allegedly conspired to pay bribes to officials in order to obtain and retain business for themselves, an intermediary company, and reinsurance clients.

As Sri Lanka’s President flees, the Pandora Papers reveal ties to UAE properties 

When Sri Lankan President Gotabaya Rajapaksa attempted to leave Sri Lanka, he chose the United Arab Emirates as his preferred destination. This came as no surprise to observers, since the Pandora Papers revealed secret family ownership ties to UAE properties. The enormous wealth of the Rajapaksa family, who have dominated the country’s politics for nearly twenty years, became a flashpoint in the massive protests that have engulfed the country.

New anti-corruption regulations come into force in Brazil

The decree amends the anti-corruption regulations in Brazil and sets new criteria for the use of leniency agreements (the Brazilian version of settlement agreements), while enhancing procedures related to the preliminary investigation and the Administrative Liability Proceeding.

Call for stronger anti-corruption efforts in the Pacific 

Transparency International has penned an open letter calling for stronger measures to combat corruption in the Pacific Island region and commit to regional unity. The letter, addressed to the Pacific Islands Forum, urged leaders to implement the policies outlined in the 2020 Teieniwa Vision, which calls for the Pacific States to unite against corruption, demonstrate transparency and accountability, and encourage anti-corruption bodies across governments.

FBI warns investors of fake cryptocurrency apps used to defraud

The FBI has issued a warning about cybercriminals using fraudulent cryptocurrency investment apps to steal funds from investors. The US federal law enforcement agency estimates that cyber criminals have to date stolen approximately $43 million from 244 victims.

FCA hands out £2m fine to UK-based interdealer brokerage firm

According to the FCA, the TJM partnership (which is currently in liquidation) did not have adequate procedures, systems and controls to identify and mitigate the risk of being used to facilitate fraudulent trading and money laundering in relation to trading on behalf of clients of the Solo Group between January 2014 and November 2015. Fining The TJM Partnership £2m, the FCA said the company also failed to adequately apply its AML policies and did not properly assess, monitor and mitigate the risk of financial crime.


RequirementsLegislation, Regulation and Sustainability

Trafficking victims are being forced to steal billions 

Operating out of vast scam centers in Southeast Asia, criminal syndicates have created an intricate romance-meets-investment fraud called Shāzhūpán (pig butchering scams). Thousands of imprisoned and abused workers are being forced to use scripts to groom individuals to invest in cryptocurrency, before going in for the ‘slaughter’ and stealing their money.   

Webinar: Migrant Smuggling

This webinar examines the key findings from a recent FATF report on money laundering and terrorist financing risks arising from migrant smuggling and possible solutions to detect this activity. It reveals how smugglers have changed their modi operandi, how to better detect smugglers’ illegal money and what state authorities, the private sector and NPOs can do to fight this pernicious business.

Researchers use AI to help identify victims of human trafficking

new study by Canadian researchers used algorithms to identify victims of human trafficking. AI ‘web-crawlers’ looked for red flags, including phrases such as ‘available 24-7′, signs of control, cherries, growing hearts, or planes emojis, all used in trafficking scenarios. Of the 6,000 sex work advertisements scanned, the researchers concluded that 40% were indicative of human trafficking.

Report: FATF – Partnering in the Fight Against Financial Crime: Data Protection, Technology and Private Sector Information Sharing

A single financial institution has only a partial view of a large, complex puzzle. Criminals exploit this information gap by using multiple financial institutions within or across jurisdictions to layer their illicit activities. This latest FATF report aims to help jurisdictions responsibly enhance, design and implement information collaboration initiatives among private sector entities, in accordance with data protection and privacy (DPP) rules. It also examines global anti-money laundering, counter-terrorist financing and counter-proliferation financing requirements and how responsible private-to-private collaboration can assist their effective implementation.

The Uber files: the darkness of big tech and why we need whistleblowers

The 124,000 documents disclosed by the whistleblower Mark MacGann, Uber’s former chief lobbyist for Europe, detailed how Uber flouted laws and lobbied governments to drive its aggressive global expansion. The release of the Uber files clearly highlights the importance of whistleblowers, the often-unsung heroes who are prepared to put their livelihoods and even their lives on the line in the pursuit of the truth.

Global INTERPOL operation seizes $11 million in illicit medicines

94 INTERPOL member countries launched a coordinated crackdown on illicit online pharmacies, making 7,800 seizures of illicit and misbranded medicines and healthcare products, totalling more than 3 million individual units.

NCA targets criminal gang suspected of making specialist concealments for drugs 

A series of raids were launched as part of an operation linked to the interception of 125 kilos of cocaine destined for Sydney, Australia. The drugs, with a UK street value of £20 million, were found in a specially constructed hiding place built into diesel generator and police suspect the gang specialised in making concealments within machinery to hide illicit goods


Sanctions-1Russia Sanctions

Legal concerns cause EU to consider lifting sanctions on some Russians

The EU is considering removing sanctions it imposed on some Russian individuals after lawyers found that they may have been imposed on weak grounds. Around 30 individuals have taken the EU to court, asking to be removed from the lists, and about another 10 have asked the EU directly. The European Council’s legal service informed EU ambassadors that some requests were justified as the sanctioned individuals showed that evidence underpinning the penalties was either weak, out of date, or wrong. 

EU to add Sberbank and Russian metals baron to sanctions list

According to draft documents seen by Reuters, the EU is set to add Russia’s top lender Sberbank and the head of giant zinc and copper firm UMMC to its growing sanctions list. A total of 48 individuals and nine entities are to be added and include a motorcycle club, actors, politicians, as well as the family members of previously sanctioned businesspeople.

H&M sells off stock before leaving Russia

H&M has announced it will temporarily reopen its 150 stores in Russia to sell off its remaining stock before exiting the country. While it has not given a date for its exit, the world’s second-biggest clothing retailer said it was “impossible” to continue its business. The decision comes after the Swedish firm suspended all sales in Russia in March, shortly after Russian troops invaded Ukraine. 

Ukraine seizes assets from crypto brokers for working with Russians

Assets belonging to over the counter (OTC) brokers who illegally facilitated cryptocurrency purchases for Russians have been seized. The authorities seized the proceeds of illegal crypto trades totalling $1.67 million in cash, 830 kilograms of silver, six pieces of land, and three apartments. Ukrainian police are also investigating fraud, money laundering, and tax evasion charges. 

Opinion: Russia sanctions are fuelling political & economic instability and resentment in South Asia

Dr Anand Kumar writes that Western sanctions are failing to slow the Russian war effort yet are having a serious effect on millions of people across the developing world. With South Asian countries facing political and economic instability, the sanctions are becoming increasingly unpopular. 


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