KYC360 Weekly Roundup

Published on Feb 09, 2024

Top stories this week: 

Fake IDs generated by AI claimed to pass crypto exchange KYC | Russian accounts closed by Turkish banks due to sanctions threat | 70 current and former employees of New York City Housing Authority (NYCHA) arrested on charges of corruption and fraud

Welcome to this week’s edition of the KYC Roundup. In the AML arena articles cover the top 12 developments in AML enforcement from 2023 according to Gibson Dunn. Fake IDs generated by AI are claimed to pass crypto exchange KYC and FinCEN feels pressure from Senators to fully implement the AML Whistleblower Program.

In the fast-paced world of sanctions Russian accounts have been closed by Turkish banks due to sanctions threat. U.S. Department of the Treasury’s sanctioned a key procurement network supporting Iran’s ballistic missile and Unmanned Aerial Vehicle (UAV) programs and shares of Santander and Lloyds fell after FT reported on accounts used by Iran.

In the corruption space, Ex-PM for Malaysia, Najib Razak’s jail term has been reduced in the 1MDB corruption scandal. The alarm has been raised by lawyers to tackle UK local government corruption and claims of corruption in an Iraq aid project are to be investigated by the UN.

We round off this week’s roundup in the world of gaming where SkyCity set aside $48.4M as a penalty for AML failures.

 

Financial_ServicesKYC & AML

2024 National risk assessments for money laundering, terrorist financing, and proliferation financing – U.S. Department of the Treasury

US Treasury Department has implemented measures to strengthen the transparency and accountability of financial systems. These measures include increased scrutiny on foreign investments, enhanced regulations for virtual currencies, and stricter enforcement against investment advisers involved in fraudulent activities. 

US credit union AML executive fined $100,000 for failing to flag high risk transactions amounting to $1BN

A credit union official in the US has been fined $100,000 for not reporting millions of high-risk transactions, violating anti-money laundering regulations. The Financial Crimes Enforcement Network (FinCEN) found that the official failed to file suspicious activity reports for nearly 2,000 transactions worth over $350 million. 

Gibson Dunn release the top 12 developments in AML enforcement from 2023

Some notable developments include increased international cooperation, stricter regulations, and the use of advanced technology in AML efforts. Significant enforcement actions were taken against financial institutions and individuals involved in money laundering activities. 

Fake IDs generated by AI claimed to pass crypto exchange KYC

The emergence of artificial intelligence (AI) generated fake identification documents are being used to bypass Know Your Customer (KYC) procedures on cryptocurrency exchanges. Criminals are utilizing advanced algorithms to create highly realistic IDs, which are then used to open accounts and conduct illicit activities.  

Two people jailed by Danish Court for laundering $4.2bn

A Danish court has sentenced two individuals to prison for their involvement in a money laundering scheme worth 4.2 billion euros. The case involved an international criminal network using fake companies to transfer large sums of money across borders.

FinCEN feels pressure from Senators to fully implement AML Whistleblower Program

A group of senators is urging the Financial Crimes Enforcement Network (FinCEN) to promptly implement the Anti-Money Laundering (AML) Whistleblower Program. This program aims to incentivize individuals to report potential money laundering activities by providing them with financial rewards. The senators argue that the program is crucial for combating financial crimes and protecting the integrity of the financial system. 

United Arab Emirates appears on the EU’s list of suspect dirty-money jurisdictions

The Dubai International Financial Centre (DIFC) has been denied access to the European Union (EU) due to concerns over money laundering. The EU's executive commission has identified deficiencies in the DIFC's anti-money laundering framework, leading to the removal of the Dubai clearinghouse's access to EU customers. 

 

SanctionsSanctions

Russian accounts closed by Turkish banks due to sanctions threat

The US Senate recently passed a defense policy bill that includes measures to penalize Turkey for purchasing Russian missile defense systems. If the bill becomes law, Turkish banks could face restrictions on their ability to conduct transactions with US financial institutions. This could potentially lead to the closure of Turkish banks' correspondent accounts with Russian banks, which would have significant consequences for their international operations. 

U.S. Department of the Treasury’s sanctioned a key procurement network supporting Iran’s ballistic missile and Unmanned Aerial Vehicle (UAV) programs

Office of Foreign Assets Control (OFAC) has sanctioned a key procurement network of prolific suppliers of materials and sensitive technology for Iran’s ballistic missile and Unmanned Aerial Vehicle (UAV) programs. 4 entities based in both Iran and Hong Kong have been sanctioned.

Shares of Santander and Lloyds fell after FT reported on accounts used by Iran

Shares of Santander and Lloyds fell as a report suggested that Iran had used the banks' accounts to evade sanctions. This news resulted in a decline in their stock prices. The report claimed that Iranian entities transferred money through these banks' accounts, potentially violating sanctions imposed by the United States. 

Tucker Carlson criticized sanctions in interview with Putin

In a recent interview, Fox News host Tucker Carlson criticized the European Union's decision to impose sanctions on Russian officials over the treatment of opposition leader Alexei Navalny. Carlson argued that the EU's move was hypocritical, given its own human rights violations and close ties with countries like China. This could now see Carlson become a target for EU lawmakers. 

 

CryptoCorruption

Ex-PM for Malaysia, Najib Razak’s jail term has been reduced in 1MDB corruption scandal

Initially convicted in 2020 for corruption and money laundering related to the 1MDB scandal, Razak's sentence has been reduced from 12 years to 10 years. The court also reduced his fine. The decision comes after Razak's appeal argued that his conviction was based on incomplete evidence and errors in the trial process.

Alarm raised by Lawyers to tackle UK local government corruption

Lawyers in the UK are expressing concern about the challenges faced in addressing corruption within local government. They argue that the current legal framework is inadequate and fails to provide effective measures to tackle the issue. The lack of resources and expertise dedicated to investigating and prosecuting such cases further hinders efforts. 

Lee Jae-yong, chief at Samsung is acquitted of financial crimes related to 2015 merger

The court's ruling clears Lee of bribery and embezzlement allegations, providing relief for Samsung and its leadership. However, this decision has stirred controversy, with critics claiming it reflects a lack of accountability for powerful conglomerates.

Claims of corruption in Iraq aid project to be investigated by UN

The United Nations has launched an investigation into allegations of corruption in an aid project in Iraq. The project, aimed at providing essential services to millions of Iraqis affected by conflict, is under scrutiny due to allegations of fraud, mismanagement, and nepotism. The investigation will examine the procurement process, financial management, and accountability of funds. 

Transparency International expresses deep concern over the Brazilian Supreme Court's investigation order. 

The organization highlights the potential impact on ongoing anti-corruption efforts and the independence of institutions. It calls for a transparent and impartial process, emphasizing the importance of upholding the rule of law and ensuring accountability. Transparency International underscores the need for a robust anti-corruption framework and urges the government to safeguard democratic values. 

70 current and former employees of New York City Housing Authority (NYCHA) arrested on charges of corruption and fraud

The individuals allegedly accepted bribes in exchange for awarding lucrative repair contracts to contractors. The investigation revealed a widespread culture of corruption within NYCHA, with allegations of kickbacks and nepotism. The arrests are part of a broader effort by the government to address the longstanding issues and mismanagement within NYCHA. 

Gambling_GamingGaming and Gambling

$48.4M set aside as penalty for AML failures by SkyCity

SkyCity Entertainment Group, a New Zealand-based casino operator, has allocated NZD 79 million (USD 48.4 million) as a penalty for failing to comply with anti-money laundering (AML) regulations. The company faced scrutiny from the country's Department of Internal Affairs, which found several shortcomings in its AML procedures. 

Resources

KYC360 News

A new article by our guest author Robert Mazur has been recently published. 

Robert Mazur, a federal agent for 27 years, is a court-certified expert in money laundering-related matters in both the U.S. and Canada. The article covers “Trump's Honduran ally likely imprisoned for life”. In 2021, then President Donald Trump praised Juan Orlando Hernández, the President of Honduras for "working with the United States very closely" and for his help "stopping drugs at a level that has never happened." Contrary to what Trump told the world about the Honduran President, agents of the DEA, prosecutors with the Department of Justice, and anyone that listened to the truth, knew Juan Orlando Hernandez was an enemy of the American people.

Read the full article here

 

Advance your CPD minutes for this content,
by signing up and using the CPD Wallet

Get started

Catch up on previous KYC360 Roundups

Your latest weekly update from the worlds of money laundering, legislation and regulation, sustainability, gaming and gambling, crypto and sanctions.

KYC360 Weekly Roundup  
Roundup

KYC360 Weekly Roundup

AML news this week looks at the announcement of a new Anti-Money Laundering Authority in the EU
KYC360
Mar 01, 2024
KYC360 Weekly Roundup  
Roundup

KYC360 Weekly Roundup

AML news this week looks at the cryptocurrency scam, OneCoin where a former partner at a law firm has been sentenced to 10 years in prison.
KYC360
Feb 23, 2024