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Culture of Greed Briefing: Global Financial Crime Clean Up for September 2012

September 30, 2012 (TSR) – The following is a rundown of global crackdown on corruption, fraud, bribery, money laundering and high level crimes around the world for the month of September courtesy of our Founder and Publisher‘s information access due to what she does. Looks like it’s been a busy month! We apologize that we cannot give you more than what you see here as these are privileged information in of itself. However, the information below is enough to inform our faithful readers to affirm that people really do their jobs behind the scenes as much as they can and are able. It shows that there are still truly caring people who do what is right for Humanity.

The culture of Greed can only be destroyed if each individual change from within. Majority are too weak and fearful of what other’s think rather than standing up for what is true, noble, ethical, morally right and honorable. Self-mastery takes strength. That is what being noble means. – Lady Michelle-Jennifer Santos, TSR Founder & Publisher

10 years imprisonment for former fugitive

Mr A (UID 12568) who fled to northern Cyprus in 1993 prior to his trial, following a Serious Fraud Office (SFO) investigation into irregularities at his FTSE 100 company Polly Peck International (PPI). He returned to the UK in 2010. He was accused of stealing GBP29 million. The judge sentenced him to five years’ imprisonment for offences committed between August 1987 and June 1989 and a further five years for three offences which took place between December 1989 and August 1990. His lawyers have stated that they will be lodging an appeal. Whether a claim will be made for compensation from him to the administrators of PPI will be decided at a hearing on 27 September.

Member of money laundering ring pleads guilty

Mr R (UID 1630018) one of the members of a money laundering ring involved in the selling of contraband cigarettes reportedly worth USD20 million has pleaded guilty to one count of money laundering. He has also agreed under the plea agreement to forfeit assets of millions of dollars as well as real estate, jewellery and several vehicles. The offences are reported to have taken place over a two year period from April 2009 until October 2011.

Malaysia: Illegal logging prompts Swiss investigation

Swiss prosecutors have reportedly opened a criminal investigation connected to funds from the alleged illegal logging in one of Malaysia’s states. A Swiss organisation has alleged that monies, reported to be USD90 million, was accepted by a bank and that this money emanated from the illegal logging activity in Malaysia’s rainforest. The chief minister of the state where the activity was said to have taken place has dismissed the allegations as untrue.

Australia: Jailed for AUSD5 million tax fraud

An illegal tax scheme promoter and accountant Mr A (UID 856066) was found guilty of conspiring to defrauding a New South Wales, Australia, court. He was sentenced to just under nine years imprisonment. Mr A was part of a Vanuatu tax haven scheme dubbed ”the round-the-world trading scheme” involving eight companies in which AUD5 million in tax had been evaded. A number of directors of the companies had previously pleaded guilty and been sentenced.

Texas, US: Money laundering ring arrests

Three individuals reported to be part of a USD27 million money laundering ring the “Black Market Peso Exchange” have been arrested and charged in Houston, Texas. The mastermind (UID 1824038)of the conspiracy recruited clients who had large amounts of US dollars they wanted converted to Mexican Pesos. He is also accused of managing the logistics by instructing one the accused to travel to various cities to pick up the drug proceeds. The third individual is reported to be the office manager of the organization and was based at its headquarters in Houston. The money-transmitting business operated from October 2009 through September 2011 and used bank accounts in the name of shell companies.

Drug money seized on Honduras-Nicaragua border

Mexican national (UID 1831182) and 17 other individuals posing as a television media crew were detained at the Honduras-Nicaragua border in late July. The authorities found USD9 million in cash hidden in their vehicles. The money is believed to be the profits of drug trafficking and was being smuggled out of the US back via Nicaragua for allegedly a major Mexican criminal organization. The 18 will appear in court on charges of organized crime and money laundering.

UK sentence investment scheme fraudsters

The mastermind behind a GBP10 million investment scam (UID 1170438) and his former wife have been sentenced. He pleaded guilty to conspiracy to defraud and two counts of money laundering at the beginning of the trial and was sentenced to nine years. His former spouse was found guilty of three counts of money laundering and one count of evading a liability by deception. In addition one other individual was found guilty of conspiracy to defraud and sentenced to six-and-a-half years imprisonment.

German deported from US to face fraud charges

A German national (UID 624418) who operated a financial company out of Florida, US has been deported to Germany, where he faces charges of investment fraud. The charges stem from the internet marketing company he set up which he used to bilk numerous investors in Germany, Switzerland and Austria out of more than USD100 million.

Sentenced to 18 years for providing material support to terrorists

In February 2011 Mr B (UID 1111297) pleaded guilty to conspiring to provide material support to terrorists, conspiring to murder, kidnap, maim, and injure persons abroad. He had reportedly attended terrorist training camps in Pakistan and Afghanistan.On his return to the US he recruited individuals and in addition provided material support and resources to terrorists. In August 2012 he was sentenced to 18 years imprisonment followed by five years of supervised release.

Denmark: Suspected fund raisers arrested

Authorities in Copenhagen, Denmark have arrested eight people across Zealand who are suspected of financing the Kurdistan Workers’ Party (PKK), which the US, EU and Canada have designated as a terrorist organization. These arrests follow the investigations into a Copenhagen-based Kurdish TV station which was fined 2.6 million Kroner in January for violating Denmark’s anti-terror laws. “In that investigation, there were indications that throughout several years money was collected in Denmark that benefited the PKK”, explained a spokesman for the Copenhagen Police. He stated that USD24.6 million has been shipped from Denmark to the PKK, USD11.8 million of that in the last three years.

Saudi national charged with terrorism offences

The Chief Prosecutor for Military Commissions at the Guantanamo Bay, Cuba, military detention center has charged Saudi national (UID 449809) with several terrorism offences. He received training in Afghanistan. According to reports from approximately 2000 through 2002, his is alleged to have been involved in a conspiracy to bomb civilian oil tankers in the Strait of Hormuz and off the coast of Yemen. He reportedly received large amounts of money directly from Al-Qaeda to purchase equipment to facilitate these attacks. He is also accused of aiding and abetting the terrorist attack against the French oil tanker MV Limburg in 2002.

Syria: Anti-government groups claim terror attacks

The Ahfad al-Rassoul Army (UID 1836028) have claimed responsibility for the recent bomb blasts near the offices of the Syrian military’s joint chief of staff in Damascus and said that the blast was done in cooperation with Farouq Battalion (UID 1836034). The Farouq Battalion is reported to be affiliated to the Syrian National Council, the Turkey-based main opposition group.

Hacker arrested for raising funds for terror group

Authorities in West Java, Indonesia have arrested an individual known as Ashaburayatisud (UID 1833427) who is accused of using his hacking skills to raise funds for a terror outfit (UID 1626279) associated to the Abu Sayyaf Group. According to the authorities terrorists have reportedly been buying assets with the proceeds obtained through hacking, which they then sell to provide cash to carry out their illicit activities.

Pakistan revises CFT regulations

The State Bank of Pakistan (SBP) has revised the existing regulations of Prudential Regulations on Corporate and Commercial Banking to strengthen the legislation to stop money-laundering and combat terrorism financing. “The revised system would ensure clean and transparent banking transactions on the one hand and enable the country to meet international standards on the other,” said the SBP in a statement.

India: Stockbrokers under the spotlight for CFT failings

The India markets regulator Securities and Exchange Board of India has indicated that it is investigating more than 30 stockbrokers in connection with possible lapses in anti-money laundering and countering the financing of terrorism controls. It is reported that action has also been taken by exchanges and depositories after similar inspections of various market entities.

Lebanon to strengthen its AML laws

The Central Bank governor has stated that Lebanon will amend existing anti-money-laundering laws to better combat terrorism funding. The newly proposed amendments would be sent to Parliament for approval. The governor said, “These are designed to buttress the monitoring of terrorism funding in accordance with the Lebanese laws and to organize the cross-border currency movement,” continuing “Lebanon, as in the case of neighboring countries, is subject to more auditing from the international community and most notably the United States and Europe.”

Dozens of offshore companies involved in Baltic bribery case

Source: Baltic Course
20 September 2012

The Corruption Prevention and Combating Bureau (KNAB) has requested the Latvia Prosecutor’s General to start criminal prosecution against 17 persons in relation to bribery of Latvenergo” AS officials in P?avi?as HES and TEC-2 reconstruction projects. According to reports the evidence collected during pre-trial investigation show that Latvenergo AS officials and employees were involved in bribery in order to ensure that decisions for contracts concerning public procurements and reconstruction works were secured. The bribes were repoted to total more than EUR18 million, with EUR 11 million being intercepted by authorities in June 2010. The bribes were paid via a network of shell companies in nurmerous offshore locations. The investigation activity spanned 14 countries.

Indonesia: Authorities detain Asian tycoon in bribery scandal

Source: Jakarta Post
13 September 2012

The Corruption Eradication Committee (KPK) has detained one of the regions wealthiest women for her suspected role in the Buol regent bribery scandal. The KPK allege that she paid a bribe of more than USD300,000 to the head of Central Sulawesi’s Buol district to secure a permit for two of her oil palm plantation companies for land concessions in the district. The head of the district had previously been detained for accepting the alleged bribes. She has denied involvement.

Communications technology company investigates possible FCPA violations

Source: Wall Street Journal
4 September 2012

Harris Corp a communications technology company based in Melbourne, Florida, US acquired a company in April 2011 which has raised red flags. It is currently investigating whether Carfx Corp’s China operations have violated any anti-bribery legislation. In its disclosure statement the company said. “In the course of our investigation, we learned that certain employees of the Carefx China operations had provided pre-paid gift cards and other gifts and payments to certain customers and potential customers.” The company has notified both the Securities and Exchange Commission (SEC) and the US Department of Justice (USDOJ) about the ongoing investigation.

China: Hospital officials and managers in kickbacks probe

Source: China Daily
5 September 2012

An investigation by Shenzhen prosecutors has found that bribery in the procurement process in the regions key public sector hospitals is prevalent. As a result of the probe earlier this year more than twenty suspects have been questioned including a former Party chief of a hospital, and a former deputy director of a hospital. The bribes are said to have taken place between 2004 and 2012.

Technology company accused of paying bribes

Source: Forbes
20 September 2012

German prosecutors have charged former employees of Hewlett Packard with criminal bribery, following a three year investigation into whether a German subsidiary of the company paid bribes to Russian officials to secure contracts worth EUR35 million, for IT equipment. A German marketing executive of the company who worked in Russia, has reportedly been charged together with an American manager who was based in Germany at the time and a Finnish citizen who was a former manager at the company. In addition to the former employees the authorities have also indicted a German business man (UID 1848767)). The company has filed with the US SEC.

Manipulation in a US military contract for services in Afghanistan

Source: The Spectrum
23 August 2012

An Arizona resident (UID 1827090) has been charged with participating in a scheme to manipulate a military contract bid for services in Afghanistan. He pleaded not guilty. He and two other suspects are all former army Special Forces soldiers. The fraud allegedly took place while the United States was transitioning security duties from US forces to Afghan personnel. The total of the contracts awarded is believed to be to USD53.5 million.

Trinidad & Tobago Integrity Commission seeks broader scope

Source: Trinidad Express
13 September 2012

The Trinidad and Tobago Integrity Commission is concerned about corruption and is looking at revising the current Integrity Public Life Act (IPLA). The commission is hoping that by broadening the scope the Act will capture additional information regarding politicians and political party donations, favours to public officials and so forth. The commission proposed recommendations focus on three areas, uncovering corruption, maintaining oversight on PEPs, and winning wider public support.

Software company pays the penalty for FCPA violation

Source: Mondaq
28 August 2012

In late August the SEC announced a settlement with Oracle Corporation who agreed to pay a USD2 million penalty to settle charges that it violated the books and records and internal controls provisions of the FCPA. The SEC complaint states that Oracle India inflated the margins between the distributor and end user prices of products and instructed distributors to retain the extra margin in side funds, reported to be USD2.2 million. The SEC alleged that the company violated the FCPA in by failing to account for the side fund as assets in its books and records, and that its India employees “concealed the existence of the side fund.” And that it lacked the proper controls to prevent its employees from creating and misusing the side funds.

Military program manager jailed for bribery

Source: Imperial Valley News
13 September 2012

A former program manager (UID 1596262) for the US Army Corps of Engineers has been jailed for six years for taking more than USD1.25 million in bribes. He and a further ten other people have already pleaded guilty for their roles in the USD30 million bribery and kickbacks scam to secure lucrative government contracts. He is the first to be sentenced in addition to his custodial term he is required to pay USD1.25 million in restitution and a USD1.25 million forfeiture money judgment.

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