Money Laundering
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June 19, 2018
Luis Diaz and Luis J. Diaz, owners of a Miami-based export business, were convicted of operating an unlicensed money transmitting business and running a large, international money laundering scheme. The Diaz brothers avoided the anti-money laundering safeguards required of licensed institutions and moved over $100M through US banks and other financial institutions. Both brothers were sentenced to two years in prison. USAO Southern District of New YorkWhat the Panama and Paradise Papers Tell Us
Posted 06/15/18
At this spring’s OffshoreAlert Conference in Miami, journalists involved in two of the biggest document leaks in history, the Panama and Paradise Papers, spoke on panels about secrecy jurisdictions and discussed the tax avoidance, corruption, and money-laundering they permit. Their fascinating presentations provided a chance to reflect on the magnitude of the information released to the public and on how far the...
May 16, 2018
The SEC announced settled charges against broker-dealers Chardan Capital Markets LLC and Industrial and Commercial Bank of China Financial Services LLC (ICBCFS) for failing to report suspicious sales of billions of penny stock shares. Broker-dealers are required to file Suspicious Activity Reports (SARs) for transactions suspected to involve fraud or with no apparent lawful purpose. According to the SEC, from October 2013 to June 2014, Chardan, an introducing broker, liquidated more than 12.5 billion penny stock shares for seven of its customers and ICBCFS cleared the transactions. Chardan failed to file any SARs even though the transactions raised red flags, including similar trading patterns and sales in issuers who lacked revenues and products. The SEC found that ICBCFS similarly failed to file any SARs for the transactions despite ultimately prohibiting trading in penny stocks by some of the seven customers. The SEC’s orders found that Chardan and ICBCFS violated the Exchange Act and an SEC financial recordkeeping and reporting rule and that Chardan’s anti-money laundering (AML) officer, Jerard Basmagy, aided and abetted and caused the firm’s violations. The SEC also found that ICBCFS failed to produce documents promptly to SEC staff. Without admitting or denying the SEC’s findings, the parties agreed to settlements requiring Chardan to pay a $1 million penalty, ICBCFS to pay $860,000, and Basmagy to pay $15,000. Both firms consented to censures and, along with Basmagy, to cease and desist from similar violations in the future. Basmagy also agreed to industry and penny stock bars for a minimum of three years. SECMarch 28, 2018
Aegis Capital Corporation, a New York-based brokerage firm, has admitted that it failed to file Suspicious Activity Reports (SARs) on numerous suspicious transactions.Broker-dealers are required to file SARs for certain transactions suspected to involve fraudulent activity or have no business or apparent lawful purpose. The SEC’s order found that Aegis failed to file SARs on suspicious transactions that raised red flags indicating the transactions were potentially related to the market manipulation of low-priced securities. The SEC’s order found that Aegis willfully violated an SEC financial recordkeeping and reporting rule. Aegis agreed to pay a $750,000 penalty and retain a compliance expert. FINRA also announced a settlement with Aegis today that includes an additional $550,000 penalty. In a separate settled order, Aegis’ former anti-money laundering (AML) compliance officer Kevin McKenna was found to have aided and abetted the firm’s violations. Aegis CEO Robert Eide was found to have caused them. Without admitting or denying the SEC’s findings, Eide and McKenna agreed to pay penalties of $40,000 and $20,000, respectively. McKenna also agreed to a prohibition from serving in a compliance or AML capacity in the securities industry with a right to reapply. SECQuestion of the Week -- Can Authorities Stop the Mob from Laundering Money Through Online Gambling Sites?
Posted 05/30/18
By the C|C Whistleblower Lawyer Team
The Italian mafia has entered the 21st century. According to multiple news accounts and criminal investigations, many of the major Italian mafia families are using online gambling websites-both real and fake-to launder their ill-gotten proceeds. Favoring online sites set up in Malta hidden behind layers of shell companies, Mafiosos have been running betting websites that allow...
February 7, 2018
Rabobank National Association, the California subsidiary of Netherlands-based Coöperatieve Rabobank U.A., pleaded guilty to concealing deficiencies in its anti-money laundering (AML) program and for obstructing the OCC’s examination of Rabobank. Rabobank will forfeit roughly $369 million as a result of allowing illicit funds to be processed through the bank without adequate Bank Secrecy Act or AML review. DOJSouth Korean Official Convicted for Laundering $1 Million in Bribes
Posted 07/19/17
By the C|C Whistleblower Lawyer Team
Heon-Cheol Chi, the former Director of South Korea’s Earthquake Research Center at the Korean Institute of Geosciences and Mineral Resources (KIGAM), was convicted this week for laundering over $1 million in bribes he received from American and British companies. His conviction followed a four-day jury trial in the U.S. District Court for the Central District of...
Five Israeli State Electric Company Executives Sentenced in Siemens Bribery Scandal
Posted 06/15/17
By the C|C Whistleblower Lawyer Team
This past May, Siemens paid $43 million to settle bribery allegations involving its business with the Israeli government. Siemens was accused of bribing executives at the Israeli state-owned power company to win contracts to manufacture power turbines. The conduct allegedly went on between 1999 and 2005, during which time Israel purchased more than $650 million worth of gas...