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KAYE TESLER SOLICITORS |  |
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ARCHIVED MONEY LAUNDERING NEWS 2005
30/12/05 The New Law Of Business Tenancies.
Dear Reader
Our news service is currently on a winter break resuming on Monday 16th January. Until then we are daily giving details of our range of CD lectures.
On 1st June 2004 everything changed. Part II of the Landlord and Tenant Act 1954 has not been repealed but amended. Out go all the old forms and time limits. Our talk on double audio CD is a full lecture written by our Mr. Michael Kaye, and Mr. Simon Brilliant, a barrister specialising in Landlord and Tenant Law. Mistakes relating to the Landlord and Tenant Act 1954 result in more negligence claims than any other piece of legislation. Can you afford not to be up to date on the complex procedures?
CPD available of 3 hrs. Cost 85.00+ VAT = £99.88 per practice.
To purchase this CD and to see the order form for our full range of talks on CD please click on this link. http://kt.uklaw.net/pages/training/purchase.html Regards to all.
29/12/05 The New Employment Regulations.
Dear Reader
Our news service is currently on a winter break resuming on Monday 16th January. Until then we are daily giving details of our range of CD lectures.
These new Regulations affect every employer and employee in the country. They impose procedures which if not followed may result in an employer automatically losing an application before an Employment Tribunal even when his actions are justified, or an employee losing the right to take an employer to the Employment Tribunal. We are all employers or employees and changes in law and practice dramatically affect all of our rights in a way that may be unexpected.
CPD available of 1 hr. Cost £45.00+ VAT = £52.88
To purchase this CD and to see the order form for our full range of talks on CD please click on this link. http://kt.uklaw.net/pages/training/purchase.html Regards to all.
28/12/05 VoIP – Make Telephone Calls For Practically Nothing.
Dear Reader
Our news service is currently on a winter break resuming on Monday 16th January. Until then we are daily giving details of our range of CD lectures.
The newspapers are full of articles about internet telephony and how calls can be made for a fraction of current cost. Our talk explains the systems that are available and shows how we have reduced our own telephone bills from hundreds of pounds per month to less than £25 per month. On our CD you hear us make a call to demonstrate that on making a call to an ordinary landline in the UK, no matter where it is, or the duration of the call and whatever the time of day, you only pay 2p for connection and then the call is free. We are making massive savings and show how you can do so as well. We have done the research for you. After the connection is made at a cost of 2p,you will hear the operator actually announce that the call itself costs ‘0’ pence.
CPD available of 1 hr. Cost £45.00+ VAT = £52.88 per practice.
To purchase this CD and to see the order form for our full range of talks on CD please click on this link. http://kt.uklaw.net/pages/training/purchase.html Regards to all.
27/12/05 Home Information Packs.
Dear Reader
Our news service is currently on a winter break resuming on Monday 16th January. Until then we are daily giving details of our range of CD lectures.
Estate agents will in the future have complete control of most of the pre-contract elements of a house/flat sale. They face considerable increase in regulation and responsibility but gain an exciting business opportunity. The changes which come into effect in January 2007 spell considerable danger to High Street estate agents and solicitors. Only with the knowledge of what is about to happen – remember the Housing Act 2004 has already been passed - can you plan a way to deal with the coming new world.
CPD available of 3 hrs. Cost 85.00+ VAT = £99.88 per practice.
To purchase this CD and to see the order form for our full range of talks on CD please click on this link. http://kt.uklaw.net/pages/training/purchase.html Regards to all.
23/12/05 Compulsory Lease Clauses.
Dear Reader
Our news service is currently on a winter break resuming on Monday 16th January. Until then we are daily giving details of our range of CD lectures.
From June 2006 the Land Registry will refuse to register the overwhelming majority of leases unless certain clauses appear in a prescribed format.
Every office with a residential or commercial conveyancing department will be affected so we are pleased to announce the publication of an appropriate talk on CD. Supporting documents include a simple guide to relevant clause requirement
CPD available of 3 hrs. Cost 85.00+ VAT = £99.88 per practice.
To purchase this CD and to see the order form for our full range of talks on CD please click on this link. http://kt.uklaw.net/pages/training/purchase.html Regards to all.
22/12/05 CD Lecture Money Laundering 2005 Updates
Dear Reader
Our news service is currently on a winter break resuming on Monday 16th January. Until then we are daily giving details of our range of CD lectures.
The year 2005 has seen significant clarification/change in understanding and practice. We have split our talks into two sections as the case of Bowman v Fels only affects lawyers and concerns questions of professional privilege. The second part is on general updates affecting all parts of the regulated sector.
Part 1. Bowan v Fels CPD available of 1½ hrs Cost £55.00+VAT = £64.63 per practice.
Part 2. 2005 General Updates CPD available of 1½ hrs Cost £55.00+VAT = £64.63 per practice.
Combined parts 1 + 2 CPD available of 3hrs Cost £85.00+VAT = £99.88 per practice.
To purchase this CD and to see the order form for our full range of talks on CD please click on this link. http://kt.uklaw.net/pages/training/purchase.html Regards to all.
21/12/05 CD Lecture Anti Money Laundering – Implementation - FAQS
Dear Reader
Our news service is currently on a winter break resuming on Monday 16th January. Until then we are daily giving details of our range of CD lectures.
This talk covers the FAQs put to our Mr. Kaye and Mr. Fisher QC when they have given live lectures. The talk is broken into specific areas of concern to different parts of the regulated sector.
CPD available of 3 hrs. Cost 85.00+ VAT = £99.88 per practice.
To purchase this CD and to see the order form for our full range of talks on CD please click on this link. http://kt.uklaw.net/pages/training/purchase.html Regards to all.
20/12/05 CD Lecture Anti Money Laundering - Basic law
Dear Reader
Our news service is currently on a winter break resuming on Monday 16th January. Until then we are daily giving details of our range of CD lectures.
This lecture on double audio CD has been written, and updated with developments in the law, by our Mr. Michael Kaye and Mr. Jonathan Fisher QC. It is a comprehensive talk on the law. We deal with the twin track approach to the regulatory scheme covering both the criminal law (the offences and the defences) and the civil compliance code (dealing with the way that you are required to organise your office).
The talk is intended for qualified people or your nominated officer and will give him/her all the information necessary to ensure that your office complies with the very onerous obligation now placed upon us all.
CPD available of 3 hrs. Cost 85.00+ VAT = £99.88 per practice.
To purchase this CD and to see the order form for our full range of talks on CD please click on this link. http://kt.uklaw.net/pages/training/purchase.html Regards to all.
19/12/05 WINTER BREAK
Dear Reader,
Thank you for visiting our website and in particular our news service. We hope that you have found our postings to be of interest during the last few years.
We shall resume our news service on Monday 16th January after our winter break.
Until then we have set the system to remind you of the wide range of lectures that are available from us on CD. All have the benefit of CPD points and are written on the precept that “we do your reading for you.
Have a good break and remember that our full news service resumes on Monday 16th January.
16/12/05 SLOUGH CASINO OBJECTION
Chief Inspector Pete Davies of Thames Valley Police was asked to contribute to the public consultation concerning the social and economic impact of permitting a casino to open in Slough. The Chief Inspector expressed the views that Casino’s should not be allowed because of concerns that Casino’s may by linked to money laundering and prostitution.
We shall have to see the view that the council takes.
15/12/05 SCOTTISH MEETING
Loch Lomond has seen a meeting of experts from across Europe and the US to discuss links between the activities of organised crime groups. The meeting between these experts was under the aegis of the European Commission and also discussed Money Laundering of these criminal associations through banking and commerce.
The European suspicious transaction reporting conference lasted 2 days and has been acclaimed as the first ever European conference which looked at the financial aspect of organised crime.
14/12/05 MCAFEE VIRUS WARNING
McAfee have issued a medium risk warning concerning a new worm. Beware of emails with the subject line:-
Registration Confirmation
Paris Hilton and Nicole Richie
Hi I’ve a new mail address
Another indication may be emails containing words like, “Hey it’s me my old address don’t work at times”.
If you find your system is infected go to the McAfee website for the cure.
13/12/05 CAREER OPPORTUNITIES
Regular readers of our news page will know that in the past we have spoken of career opportunities offered by the Anti-Money Laundering regime. Quite simply there are thousands of companies and firms that fall within the regulated sector but very few have or can even recruit properly trained MRLO’s.
The gap in the market has been recognised by CASS Business School who are running the first graduate diploma course in Anti-Money Laundering. Initially only two dozen or so employee’s from both the public and private sectors have enrolled for the qualification but undoubtedly the number of students will grow as the market place demands qualified people and the supply is currently limited, consequently career opportunities with high salaries seem inevitable.
12/12/05 PROCEEDS OF CRIME TO FUND DEFENCE
The Department for Constitutional Affairs (National) have released the following press release which is important to everyone dealing with money laundering matters.
New measures to ensure that defendants who have frozen assets pay their own legal costs rather than relying on the taxpayer to pick up the bill were published today. The measures will save around £3 million a year from the legal aid budget.
They amend the Proceeds of Crime Act 2002 to allow assets frozen as the alleged proceeds of crime to be used to pay legal expenses in civil recovery proceedings. The regulations will ensure that the assets can only be used to fund a reasonable defence, not to fund proceedings that extend and frustrate the legal process by spending all the assets on legal fees.
Introducing the measures, legal aid minister Bridget Prentice said:
"Defendants must have appropriate legal representation in court, but crime must not pay. Justice is frustrated both where no defence is available when required and where the most expensive representation is used, simply to squander the assets. These measures will achieve a balance that will ensure that the taxpayer does not foot the bill for defendants who can afford to pay their own legal costs, while also ensuring that frozen assets are not misused to fund a 'champagne defence'. They will ensure that funds are only released for legal costs where reasonable and proportionate."
The regulations laid today will allow frozen assets to be released to fund defence costs in civil recovery cases brought by the Assets Recovery Agency. They also include provisions limiting the hourly rates defence lawyers may charge and only allowing solicitors to carry out work pre-agreed with the court. Civil legal aid will remain available for cases where access to the assets is not possible.
09/12/05 WARNING
A New Phishing email is going around. It masquerades as a Microsoft security patch. People receiving the email are asked to visit a website which is made to appear as Microsoft’s update centre. IT ISN’T!
Once you click on the link you are advised to download a file that is called ‘plugandplayfix.exc’. DON’T!
Downloading that file puts a Trojan into your system which allows your system to be controlled remotely.
08/12/05 USA TIGHTENS REGULATIONS
The Bush administration has put new rules in place which are aimed particularly at catching drug dealers, terrorists and other money launderers. The new rules affect insurance companies who now have to train their employees to detect money laundering methods etc. They are also now required to file reports on suspicious activities.
Big deal! The are at last catching us up.
07/12/05 RED TAPE
Everyone is aware of the increase in Red Tape and the recently reported incidents of an Irish engineer moving to London is typical. This gentleman after 3 months of trying has been unable to open a bank account. The reason simply is that having moved to England from Ireland, he has, as yet, no utility bills showing his address and, looking for a new job, he has no proof of his earnings. The result is that he has been unable to open a bank account. Different banks have wasted considerable amounts of time in meetings with him and even in correspondence. The bank clerks, doing their job, feel that they are working hard but the end is a frustrated client and a waste of time for the bank.
A spokesman for a bank is reported as having said that the real problem is the “fear factor” engendered by the FSA who impose swingeing fines if procedures are not followed. In the circumstances the banks have adopted a rigid account opening regime.
This is a typical case for allowing an MLRO a discretion.
06/12/05 FSA FINES FIRST INDIVIDUAL
While many of the largest institutions in this country have been fined by the FSA for failures in connection with their anti-money laundering procedures, until now no individual has been fined. The first fine that they have meted out was to an individual and his private limited company. The fine was £175,000.00 for not conducting business with due skill, care and diligence. The FSA has reported that through this individual and his investment company, more than £8,000,000.00 entered the financial system without the person or his company knowing his customer’s identity, the source of their funds and when even operating anonymous accounts.
The individual was fined because he was in danger of aiding and abetting money launders in the first phase of money laundering known as “placement” and possibly aiding in the second phase known as ‘layering’.
05/12/05 OPERA NEWS
The overwhelming majority of web users use Microsoft Internet Explorer as their browser simply because the likelihood is that it was part of the bundled package when they bought their computer. Many others bought/use Netscape Browser because it was one of the earliest in the market.
However so called cognoscenti have for sometime considered that the Opera Web Browser incorporating its own search engine is by far and away the best of the current crop of internet browsers. Unfortunately, the free download version is plagued with adverts and while not expensive few people will pay for a full version which allows the user to avoid this modern plague. The good news is that the next version of Opera is now available for download, it includes an improved popup blocker and some new keyboard shortcuts. The test version is free!
We would not recommend that users download this Opera test in place of their existing web browser but a few minutes spent with the free version as an alternative, is probably well worth the time.
02/12/05 MORE ON PHISHING
Regular readers will know that we have in the past run many warning over the new phenomenon of phishing.
We can now report that a new pan European internet service has been established to give guidance on anti-phishing measures.
The website can be found at www.euroispa.org/antiphishing.
01/12/05 GOVERNMENT OF NIGERIA AND MICROSOFT AGREEMENT
The Government of Nigeria and Microsoft have reached an agreement to help in the war on e-mail scams originating from the African country. The agreement involves training and sharing information. These scams are well known, the most common is by e-mail which entails the recipient being asked to pay a fee. In return the recipient is told that he will receive a much larger sum of money, spuriously said to be owned by a person of importance but blocked from being remitted out of Nigeria. Of course the recipient never receives the money and if gullible enough to have fallen for the scam is often thousands of pounds out of pocket at the end of the day.
The executive chairman of EFCC, welcomed the partnership and said:
"They (Microsoft) will help us with one of the difficult areas, particularly when it comes to technology, and we will do the physical work of enforcement."
01/12/05 BANK OF NEW YORK FINED
The Bank of New York has agreed to pay $38,000,000 in fines and to change its operating practices and systems. The U.S.’s oldest bank has been subject to a long running fraud and money laundering investigation and while the fine might be regarded as swingeing, it is a drop in the ocean for so large a corporation and possibly is a cheap price to avoid their being prosecuted for failing to enforce federally mandated anti-money laundering measures.
The investigation basically was over $7,000,000,000 of transfers from Russia in the last 1990s which resulted in a bank of New York executive and her husband pleading guilty in 2000 to money laundering. Of the $38,000,000 fine, $26,000,000 will go to the Government and $12,000,000 to victims of fraud.
30/11/05 EUROPEAN LAW TOO WIDE
Once again we find sledgehammer style European legislation in conflict with UK legislation.
Under new European public procurement legislation where a director of a company has a conviction for white collar crime, the company will be barred from bidding for public sector contracts. UK lawyers have already expressed the fears that such legislation could hit far too many companies simply because that law is too widely framed and because the law may be directly contrary to provisions of the Rehabilitation of Offenders’ Act.
Would it not be sensible for all European legislation to be considered by its member state, prior to implementation, to ensure that there is no incompatibility.
29/11/05 C$2,000,000,000 UNCOVERED
Anti-Money Laundering Regulations appear to be working in Canada. According to published figures they uncovered C$2,000,000,000 worth of transactions during 2004.
The Financial Transactions and Reports Analysis Centre of Canada known as FINTRAC passed 142 cases to the police and intelligence services. That was 50 or so cases fewer than the previous year but involved three times as much money.
A representative of the FINTRAC said that he doubted that the figures mean that money laundering is increasing in Canada but that the reality is that FINTRAC is getting better and more efficient.
28/11/05 THE DEFAULTERS
The European Commission recently made the shocking announcement that it has referred seven member states to the EU court of justice for failing to implement an EU law on money-laundering. The seven countries are Austria, Finland, France, Italy, Greece, Portugal and Sweden.
It is no wonder that the number of SARs in those countries is far fewer than in the UK.
24/11/05 FRAUD THREAT
Just a few months ago The National Criminal Intelligence Service (NCIS) issued advice to the Public that it had received reports of criminals seeking to obtain money by claiming to be collecting on behalf of organisations responsible for relief of those affected by the Tsunami disaster.
It said that the following scams had been identified:
1. Unsolicited incoming emails (SPAM) that offer, for a fee, to locate loved ones who may have been a disaster victim.
2. Unsolicited emails requesting that money be deposited in overseas banks to support the tsunami relief effort.
3. Unsolicited emails which seek personal or financial information in an effort to retrieve large amounts of inheritance funds tied up in relation to the tsunami disaster. Red
BEWARE SUCH UNSCRUPULOUS PEOPLE ARE LIKELY TO BE AT IT AGAIN OVER THE RECENT TERRIBLE EARTHQUAKE DISASTER.
Don't let these leaches prevent you from giving but equally don't let your generosity line their pockets.
23/11/05 NEW LEXISNEXIS SERVICE
LexisNexis, one of the best known legal publishers and providers of legal, news, business information and risk management services, has announced a new anti-money laundering compliance tool.
Named Negative News, the tool searches over 13,000 news sources for negative news about a specific subject person or business and enables users to find out information about an individual or organization that might not be readily available through regular public records searches. It is reported that all that you need to do is input the name of a person or business, and Negative News automatically searches for articles in which the name of the person or business appears in close proximity to mentions of criminal acts, bankruptcies or illicit behaviour.
All tools are useful but we would have some reservation about a tool that searches news reports which are themselves unreliable at the best of times. However unfavourable search results clearly would at least put one on notice to be extra vigilant.
22/11/05 WARNING ON BILINGUAL SOBER VIRUS
Be careful there is a new worm out there and a phishing attack on payment service Escrow.com.
MacAfee has issued a warning and raised its threat level for Sober R, a worm which is spreading fast. The virus arrives as a Zip file attachment named 'pword_change.zip' or 'KlassenFoto.zip' and has the following message:
Subject: 'Your new Password'
Body: 'Your password was successfully changed! Please see the attached file for detailed information.'
The virus when activated results in an error message and installs itself onto the system. Sober R is what MacAfee calls 'Stinger aware' ie it disables some automatic malware identifiers. The author is thought to be German but has not been caught, despite Microsoft offering a substantial reward.
21/11/05 A POWERFUL COMPUTER
The Department of Work and Pensions once again has announced that it is fighting benefits fraud. To do so it is using one of Europe’s largest databases which holds personal information on the UK public and is designed to hold information on 85 million people.
As there are only 60 million people in the Country they clearly intend to keep information on the dead as well as the living ie they will not remove records when people die.
How much information is big brother holding on you.
18/11/05 NEW ANTI-PHISHING TOOL
Our regular readers will know that we have run numerous articles about ‘phishing.’ It may interest you to learn that there is now a new weapon available in the fight against phishers. See www.trustwatch.com for details of their searchsite which will help you to determine the trustworthiness of any enquiry.
For more phishing stories please see news posts for week commencing 12th September last.
17/11/05 NEW OFT DEPARTMENT
Yesterday we reported on a warning issued by the FSA over Boiler Rooms scams. UK authorities are clearly taking this and other scams, often internet based, increasingly seriously.
Adding to the weight of fire power lined up against these fraudsters is a new department that has been created within the Office of Fair Trading. The new ‘scambusters’ department brings together the two departments formerly dealing with international ‘advance fee’ type fraud cases and the department dealing with misleading advertising. The department will of course continue to be responsible for dealing with these areas but will also look into bogus prize draws, lotteries, premium rate prize promotions and miracle health cures.
We wish them luck in fighting the £3b worth of scams estimated to be perpetrated annually in the UK alone.
16/11/05 BOILER ROOM SCAMS
Have you noticed a recent increase in the number of spam e-mails from companies extolling the virtue of this share or another? We have, so it isn’t surprising that the FSA has issued a warning to investors and businesses against these boiler room scams, ie telephone or e-mail marketing operations to persuade investors to buy shares in unauthorised overseas companies, most often ones that are worthless.
The new warning follows one given by the FSA last April over a new trend in which are non-authorised ‘brokers’ were starting to offer shares.
A survey by the FSA has found that the typical victim of a boiler-room scam was a middle-aged professional with considerable investment experience.
You’ve been warned. Don’t you get caught.
15/11/05 SENDING MONEY ON YOUR MOBILE
A well informed writer is concerned about the implications following the birth of a new system of transferring money to be conducted by such unlikely players as telephone companies. New forms of e-money are emerging whereby a Filipino nanny working in Hong Kong can deposit earnings into a telephone account and then phone the cash credit back home to her family in Manila. It will be appreciated that this new non-bank system of cash transfer can even reach areas that have never seen a bank branch or even a teller machine. Expert opinion says that such a system will be quick to catch on in those parts of the world where prepaid cell phone accounts are the norm and people are already comfortable with the notion of handing cash to a merchant and getting nothing but an electronic blip in return.
Should the writer be so concerned about small sums being transferred in this way? Surely the global anti-money laundering regime was not intended to bring under a microscope ex pat workers sending part of their pay home.
14/11/05 AN ARTICLE IN FORBES
One may argue that it is not the proper function of a news organisation such as Forbes, or indeed this page to detail how to ‘export’ money. That being said we feel that our job is to inform/train so that you can recognise money laundering. For this reason we repeat a series of steps first published by Forbes on a typical way in which money has been illegally ‘exported.’
1. An individual walks into a convenience store in the U.S. that also sends money overseas.
2. He hands over $200 to be sent to Pakistan.
3. The convenience store owner, also a hawaladar, takes a fee for maybe 1% for the service and calls his hawaladar cousin in Peshawar to give him details of the transaction.
4. The hawaladar in the U.S. puts the money in the cash register, mixing it with other funds from the day's sales.
5. Within 24 hours the cousin in Peshawar delivers, often by hand, an equal amount of cash to the recipient.
6. Later the Pakistani cousins settle up. One way: The convenience store owner ships his cousin $1,000 worth of goods but invoices for only $800.
7. The cousin sells the goods for $1,000 and wire-transfers back the $800, thus closing the cycle.
This really is small beer!
11/11/05 USING ANTI MONEY LAUNDERING LAWS
Two years ago, in the USA, Federal authorities arrested Abad Elfgeeh and in doing so they thought that they had broken a link in the chain of terrorist financing. The Yemeni immigrant and members of his family, with his friends and associates had sent $22 million via a JPMorgan Chase bank account to countries all over the world. Recipients included Mohammed Ali Hassan al-Moayad, a Yemeni sheikh who reports say boasted of his ties to Osama bin Laden and who is currently serving a 75 year jail term.
Suprisingly when brought to trial the indictment made no mention of terrorism, but Elfgeeh was found guilty of five counts including operating a money-transfer business without a license and other anti-money laundering related matters.
10/11/05 ONLINE BETTING
Yesterday we reported on match fixing in the so called beautiful game. The increase of incidents has been linked with the growth of spread of betting over the internet and the difficulty of regulating it. As we have already reported, during the summer the chief executive of European soccer's ruling body UEFA, Lars Christer Olsson, said that criminals were using football as a "gigantic money-laundering machine" by betting illicitly earned cash on matches, especially those that were fixed.
FIFA's response has been to create a Task Force whose job is to create an early warning system with bookmakers to track unusual betting patterns. The hope is that by watching for so called betting ‘coups’ the fixers will be identified, the criminals brought to book and the game cleaned up.
08/11/05 PROBLEMS FOR THE BEAUTIFUL GAME
Speaking recently in Peru, FIFA general secretary Urs Linsi admitted:
"There are matches every day, 365 days a year, 24 hours a day. Corruption is therefore inevitable. We don't live in a perfect world, but we're here to try and address the problem. The philosophy of FIFA is to protect the Beautiful Game."
To give examples of the problems that the game faces during his year alone, Germany and Brazil have had to deal with serious match-fixing cases. In Brazil a referee, Edilson Pereira de Carvalho admitted in a television interview he had accepted money to fix results. While another Brazilian referee, Paulo Jose Danelon has admitted fixing matches too and he, like Carvalho, seems certain to face a life ban from officiating.
In Germany referee Robert Hoyzer stands trial charged with offences related to his admission of fixing the results of German league, he accepted 67,000 euros ($79,880) and a flat screen television from a betting gang to rig matches.
Italy, the Czech Republic, Finland, Austria and Greece have all either suffered soccer match-fixing scandals or come under suspicion this year .
In earlier reports we reported on the determination of FIFA to stamp out this new form of money laundering but football is big business and the temptations are vast.
07/11/05 SARs UNDER UTILISED
The effectiveness of the anti money laundering regime is the subject of a long delayed Home Office-sponsored study which criticises the system. The report reaches a clear conclusion that there is "under-utilisation” of SARs and further states that there is “insufficient resources to develop and exploit the information they contain as part of a wider investigation.
Research carried out on the operation of the SARs over the past year found that some financial investigators whose job is to analyse and make use of SARs believe they were competing for "scarce resources" with those focusing on property confiscation and cash seizures even though both aspects of policing were supposed to be complementary.
Even though the numbers of SARs have fallen they still vastly out number those made in France and Germany combined – yet another reason for common sense and a di minimis rule.
04/11/05 MONEY LAUNDERING CASES SUCCESSFUL
Latest statistic from the US show how useful a tool the anti-money laundering rules are proving for prosecutors. The figures reveal that approximately 18,500 defendants faced money laundering charges in US courts during the years 1994 / 2001, and of these approximately 10,600 defendants had a money laundering charge as the most serious offence, and of these 86 percent were convicted.
In 2001, the last year for which the data is available, courts disposed of 1,420 money laundering cases, convicting 1,243 defendants (87.5 percent). Of equal importance to the smooth running of the administration of justice, of those convicted, 91 percent pleaded guilty and 9 percent were found guilty following a trial.
03/11/05 IMF FALLING BEHIND
Despite universal acceptance of the need for a proper anti money laundering regime, the IMF has admitted that it is falling behind in getting many countries to apply the FATF's revised (2003) anti-money laundering recommendations.
The Fund announced that it was adjusting its anti-money laundering program on combating the financing of terrorism to focus more on helping countries in implementing standards and regimes that will be standardised worldwide.
02/11/05 STATEMENT BY G-7 FINANCE MINISTERS AND CENTRAL BANK GOVERNORS
We quote from their statement::
The tragic events in London in July remind us of the continued threat posed by terrorism. As such, we renewed our commitment to fight terrorist financing through strengthening our asset freezing systems and actions, enhancing information sharing, and considering multilateral financial tools to disrupt criminal and illicit activity. We reiterate our support for the IFIs' continuing commitment to countering terrorist financing and illicit finance, including money laundering.
01/11/05 A NEW WORD
We have come across a new word in the world of computing.
SPIM
It stands for spam over internet messages and describes telephone text messages that are the equivalent of spam when received by e-mail.
31/10/05 FRESH WARNING
We are all aware of advance fee frauds along the line of ‘please help me obtain money due to my father which has been wrongly withheld in XYZ Country.’
We now have received a variation on the scam. It is an e-mail from a Mr. Robert Taylor and says that he is an employee of Coutts Bank, that he is aware of the whereabouts of £8.7m secretly invested by someone who has died with no heirs and no will. He is looking for a recipient.
No only is this in my view and attemp to entice people to in due course part with money in a classic advance fee fraud, but it also is an invitation to partake in a conspiracy to defraud.
DON’T TOUCH IT WITH A BARGE POLE.
28/10/05 IRA MONEY?
A few weeks ago the news was full of reports of massive raids carried out by police seeking the proceeds of IRA criminal acts. Clearly any investigations will take a long time and this column makes no comment except to say that here is a proper use of the anti-money laundering legislation.
A careful investigation will follow as to the source of money used to buy assets and if that investigation shows no real evidence of the legitimacy of the funds then the Proceeds of Crime Act will find its proper use as opposed to being the basis of a SAR relating to few quid in a cleaning woman’s hands.
27/10/05 SARS FALL
The number of SARS (Suspicious Activity Reports)made by solicitors has fallen by half. This clearly is the result of the clarification of the law made by the Court of Appeal in a series of cases, noteably Bowman -v- Fels which reinforced the laws of privilege.
26/10/05 CORRECT APPLICATION OF M-L LAWS?
Prison sentences totalling 22 years have been given to four people found guilty of stealing £40m in a VAT fraud case. The case involved a well known type of fraud that has been prosecuted many times. The offence is one of cheating the public revenue.
Why then were they also charged with money laundering. Unless there was something specific on the question of money laundering there was no reason to add the charge. If the defendants were guilty of cheating the revenue it follows automatically that they would be guilty of money laundering by being in possession of the proceeds of their crime. The anti-money laundering legislation is not intended as an add on to an indictment for criminal offences. We believe that it is legitimate to ask why it is added? After all it could be added to the indictments to all offences affecting property.
25/10/05 REAL MONEY LAUNDERING
A scene in Gulfport, Mississippi would make an old time bootlegger laugh (if the circumstances were not really tragic). Banking staff working in a windowless hallway can be seen gathering armfuls of grimy cash out of plastic bags and throwing them into a washing machine. While they do this other staff members fill the dryers and iron the clean bills. The money is then counted the freshly laundered notes and are bundled into thousand-dollar wads.
This true money laundering operation has been up and running since shortly after Hurricane Katrina hit on Aug. 29 and is part of the recovery process for one of Mississippi's largest financial institutions, Hancock Bank who have numerous branches in the worst-hit areas.
Hancock Bank have clean money available for their customers.
24/10/05 A NEW TYPE OF PHISHING
Regular eaders will know that we have run numerous warnings about ‘phishing.’ We now unfortunately have come across reports of an entirely new method of Phishing this time targeted at VoIP telephone users.
Symantec has warned that internet telephony services are likely to be the next services hit by hackers. In a press release it announced that internet-based phone calls, which are growing rapidly in popularity, were at risk of "significant" attacks.
Attacks are by fraudsters and hackers and include encouraging audio spam that clogs voicemail boxes with spoken adverts, or attempts by criminals try to con people out of confidential details.
As with all things computer based – be careful. However do not be put off your very early introduction of VoIP telephone systems, they are truly the next Killer ‘ap.’ We use one and are saving thousands of pounds per annum on our telephone bills.
Remember our talk on VoIP is available on audio CD at £45 plus VAT per practice.
21/10/05 THE MEXICAN GOVERNMENT REPLIES
Yesterday we reported on the remarks of a Mexican Bishop over drug money being ‘purified’ when given as alms.
Unsurprisingly the Mexican Government was quick to respond. It’s spokesman, Ruben Aguilar slammed the Bishop’s remarks saying that "no one can allow organised crime to act with impunity, and adding that, “nobody can be allowed to receive illegal funds under any circumstances (and) no one can promote money laundering in this way."
This all being against a background where reports say that more than 1,000 people have been gunned down this year in a spiralling war between rival drug gangs and where President Vicente Fox has sent hundreds of troops and federal police to frontier states this year.
20/10/05 PURIFIED MONEY
Reuters are carrying the story of a Mexican bishop who has admitted that the Catholic Church in Mexico has accepted donations for the poor from drug traffickers. The Bishop states that these monies were "purified" when they reached the church. Ramon Godinez, the bishop of Aguascalientes, said donations from drug gangs occurred "everywhere" in the country, adding that it was "not up to us to investigate where the money comes from."
He apparently added, "You don't have to burn the money just because it's bad. It's better to transform it ... I've known of cases (where) it's been purified."
As you can well imagine the Bishop’s remarks have caused a row with the government.
19/10/05 IMF PRESS RELEASE
Below is the text of an important press release from the IMF and the World Bank
IMF and World Bank Move to Address Challenges Countries Face in Implementing Anti-Money Laundering and Combating Terrorist Financing Standards
The Executive Board of the International Monetary Fund (IMF) has endorsed an adjustment of the IMF's anti-money laundering/combating the financing of terrorism (AML/CFT) program to focus more on tackling the challenges faced by countries implementing standards and regimes. The IMF's Board has also endorsed the Financial Action Task Force (FATF)'s Special Recommendation IX concerning measures to deter cross-border movements of currency and monetary instruments, related to the financing of terrorism and money laundering. These decisions are based on a review of the Fund and the Bank's respective work programs following a call by their Boards' in March 2004 to make AML/CFT a regular part of the work of both institutions.
The Fund and the World Bank have been delivering an intensive work program that is yielding results in strengthening AML/CFT regimes in their 184 member countries. The review indicates, nevertheless, that the revision of the FATF standard in June 2003 significantly raised the bar for countries' legal, regulatory, and institutional frameworks. Comparing assessments performed before and after the revision, the review shows that all countries are facing difficulties in achieving compliance with the revised standard. It advises that given the complexity of the revised standard, the higher costs of implementation and the competing demands on national resources, there is a need to focus on practical considerations, vulnerabilities, priorities, and sequencing in putting in place AML/CFT regimes.
The review notes that the IMF and the World Bank, in collaboration with other donors, have greatly intensified the delivery of their technical assistance to respond to countries' needs. Nearly 1,000 officials from 111 countries have been trained on AML/CFT, including legal, financial intelligence unit and supervisory issues, and 37 countries have adopted or are in the process of enacting AML/CFT legislation while a number of others are at various earlier stages in the process. However, the review also points out that Fund and Bank resources are limited and urges the donor community to commit additional resources, given the clear and urgent need to support countries in the implementation of the revised standard.
Going forward, the Fund and the Bank will continue their intensive work on AML/CFT focusing on assessments of members' AML/CFT regimes, technical assistance delivery, and broader regulatory and economic policy issues.
They will direct special attention to:
• Better integration of AML/CFT work in the context of the Fund's Article IV surveillance and the Bank's country operations, with particular links to the Bank's anti-corruption work;
• Enhancing work on the design and sequencing of AML/CFT regimes;
• Increasing outreach to raise awareness among parliamentarians and key decision makers on AML/CFT; and
• Continuing to work with the donor community to commit additional resources to meet increasing technical assistance needs for countries.
18/10/05 FROM NCIS WEBSITE
A few days ago we repeated a warning from the NCIS website, here is another:-
Tsunami Fraud Threat - Advice to the Public
The National Criminal Intelligence Service (NCIS) has received reports of criminals seeking to obtain money by claiming to be collecting on behalf of organisations responsible for relief of those affected by the Tsunami disaster.
The following scams have been identified:
1. Unsolicited incoming emails (SPAM) that offer, for a fee, to locate loved ones who may have been a disaster victim.
2. Unsolicited emails requesting that money be deposited in overseas banks to support the tsunami relief effort.
3. Unsolicited emails which seek personal or financial information in an effort to retrieve large amounts of inheritance funds tied up in relation to the tsunami disaster.
Other criminals have used the disaster as a front for spreading computer viruses. False websites have been established which appear to be managed by legitimate relief organisations asking for donations. One of these contains an embedded object that can infect computers with a virus if accessed.
NCIS encourages the public to exercise vigilance in order to prevent and disrupt these and other possible criminal scams. In particular:
1. Do not respond to any unsolicited (SPAM) incoming emails.
2. Do not respond to text messages on mobile telephones from unknown sources.
3. Be sceptical of individuals claiming to be surviving victims or foreign government officials asking you to place large sums of money in overseas bank accounts.
4. Ensure that contributions to non-profit organisations are used for intended purposes. Contribute only to known charities and recognised outlets collecting on behalf of these charities.
5. Go directly to recognised charities and aid organisation websites rather than following a link to another site.
6. Try to verify the legitimacy of non-profit organisations (e.g., use Internet-based resources to help confirm the existence of the organisation and its non-profit status).
7. Be wary of emails that claim to show pictures of disaster areas in attached files, as the files may contain viruses. Only open attachments from known senders.
If any suspicious activity is reported to you, forward the details to NCIS at the following email address: tsunamifraud@ncis.x.gsi.gov.uk.
17/10/05 SOME STATS
While holding a press coference concerning some recent arrests, HMRC's Anne-Marie Gordon said:
This case demonstrates Revenue & Customs' commitment to tackling money laundering."
"Law enforcement agencies in the UK confiscated over £63m from criminals in 2003/04 and of that, £36m was seized by Customs.
"Financial gain drives serious and organised crime. Pro-actively tackling money laundering by seizing cash and assets, thwarts the illegal activity of organised crime groups.""
14/10/05 BANK ACCUSED OF ILLICIT N KOREA LINKS
While North Korea appears to be making conciliatory steps with regard to its nuclear ambitions, doubt must remain over its money laundering credentials.
The US government has taken steps against a Macao-based bank that Washington has charged for providing financial services to North Korean front companies involved in illicit fund-raising activities. Banco Delta Asia, has been designated under the Patriot Act for alleged money-laundering activities, this step could result in the bank being barred. The allegation is that the bank has been involved in distributing counterfeit currency and smuggling counterfeit tobacco products, and is suspected of involvement in international drug trafficking.
As would be expected, the Bank is appealing the posiiton.
At a time when negotiations with Korea over its nuclear ambitions are at a delicate stage, the Americans are not frightened of rocking the boat when it comes to money laundering enforcement.
13/10/05 OOPS
You will of course be aware of the controversy surrounding Home Secretary Charles Clarke’s proposed anti-terrorist laws. How embarrassing for him therefore when it was discovered that a letter from his office sent via email as a Word document appeared to back controversial plans to hold terror suspects for up to three months without trial, but anybody applying the Microsoft 'track changes' function was able to see Clarke's original wording which expressed concerns over such measures.
12/10/05 LEGAL AID IMPACT TEST
The Department for Constitutional Affairs (DCA) has agreed to consider the impact on legal aid when formulating policy in the future.
What a shame that the Government has failed to consider the impact of an overly burdensome anti-money laundering regime. All it needs is a proper di minimis policy.
11/10/05 FROM NCIS WEBSITE
NCIS (National Criminal Intelligence Service has issued a warning and it is worth repeating the same verbatim:
Cash Machine Security: You may wish to be aware that gangs of criminals are targeting the cash machines on London Underground and British Rail premises. The criminals have been fitting portable card readers (skimming devices) and, in some instances, pin-hole cameras, to the machines. This enables them to capture your card details and PIN number, and use them to create cloned, or counterfeit, cards with which to empty your bank account. Statistics suggest the criminals involved in ATM crime are pocketing in excess of £6 million a month.
10/10/05 FIFA WILL FIGHT MONEY LAUNDERING
In our news item of 7th September we reported that FIFA was concerned at allegations relating to the possibility of a substantial flow of dirty money into football. We can now report that Fifa is setting up a a special task force to investigate corruption in the game. This development is the result of a meeting between Fifa and Uefa officials in Zurich. The meeting specifically focused on bribery, betting and match-fixing although it also was concerned with the question of multiple ownership of clubs by a single individuals or organisations.
07/10/05 IS TERRORIST FINANCING LOCAL
There has been much debate recently on the question of whether terrorist financing actually is international and likely to be caught by anti-money laundering laws and regulations. Many anti-money laundering professionals are beginning to take the view that Governments are at risk of making fundamental errors, by placing too much reliance on rules and regulations that are controlling the use of ordinary banking and money transfer systems. Whatever terrorists are, they are not stupid. They are aware of the anti-money laundering regulations and they are equally aware of the numerous ‘informal’ systems of money transfer that operate efficiently in many parts of the world.
Why is it widely presumed that terrorists are financed by ‘dirty money’ transferred internationally? The likelihood is that they are financed by legitimately earned money and what is more legitimately earned in the country where it is used.
There can be no question that a sensible anti-money laundering regime can be an effective weapon in the fight against all crime. Equally if regulations are too strictly and too onerously applied then they are a hindrance to ordinary commercial life.
06/10/05 DILEMA ABOUT CASINOS
A couple of days ago we ran an article about the British Dilema on the regulation of Casinos. While not exactly on the same point it is worth noting that the French have a different concern about casinos.
Casino gambling is one of the 10 sectors that the French government has announced that it will protect from foreign bids. Something quite contrary to European free trade regulations.
The French of course have a different approach to the rule of law to those countries who have a common law system!
05/10/05 FSA NOTICE
The FSA and the Police have entered a co-operation agreement. The text of the FSA press release is as follows:
The Financial Services Authority (FSA) has signed a Memorandum of Understanding (MOU) with the Association of Chief Police Officers (ACPO) that sets out how the FSA and police forces in England and Wales will co-operate in relation to the arrest and questioning of suspects and the execution of search warrants in FSA investigations.
This MOU replaces a more limited MOU between the FSA and the City of London Police of 23 July 2003.
Arrest Powers
When the FSA is investigating a criminal offence that it has the power to prosecute, the suspect is usually invited to an interview on a voluntary basis as it is not generally possible to use compelled evidence in a criminal prosecution. Such interviews are carried out in accordance with PACE (The Police and Criminal Evidence Act 1984).
Voluntary interviews are not always appropriate or the suspect may decline the invitation in which case, if the investigation concerns an arrestable offence, the FSA may make a request for assistance to the Police to arrest the individual for questioning by the FSA. The questioning then takes place at the relevant police station and is
conducted in accordance with PACE.
In the main, arrestable offences are those for which a person may potentially be sentenced to imprisonment for a term of five years or more upon conviction. The offences of insider dealing (Section 52 of the Criminal Justice Act 1993) and making false and misleading statements (Section 397 of the Financial Services and Markets Act 2000 - FSMA) are arrestable offences that the FSA may prosecute.
Search warrants
When the FSA is investigating an offence that it has the power to prosecute, it can obtain information and documents by using its statutory powers to require their disclosure. Sometimes though an individual may refuse to comply with such a requirement or the FSA may believe that the information sought might be destroyed or tampered with if the person has prior knowledge of the FSA's requirement. In such circumstances the FSA can apply to the courts for a search warrant that allows an FSA investigator, in the company and under the supervision of a police constable, to enter and search premises and take relevant documents. The FSA might typically obtain a search warrant when investigating unauthorised financial services business.
Use of powers
Since December 2001 when FSMA came into force, the FSA has requested the police to arrest individuals for questioning 5 times in relation to 2 different investigations. It has obtained and executed search warrants 12 times in relation to 5 cases that include investigations into unauthorised business and criminal market abuse cases. Until now, the FSA and relevant police forces have used the MOU between the FSA and the City of London Police as the basis for co-operation. It seemed sensible to agree an MOU that applied to all police forces and to include search warrants within its ambit.
The MOU sets out amongst other things the circumstances in which the police will assist the FSA, how requests for assistance should be made, confidentiality provisions, and the respective responsibilities of the FSA and the Police.
04/10/05 DILEMA ABOUT CASINOS
The Prime Minister has been asked to confirm that he will not weaken our money laundering regime in order to attract casino operators to establish new sites the UK. This is especially significant to Blackpool which hopes to become the UK equivalent of Las Vegas.
The request emanates from the Conservative party following government talks with casino firms about the rules. It is said that there are "clear discrepancies" between the documents and what Ministers have told Parliament, but the government denies that there are discrepancies and is adamant that there will be no question of diluting money laundering rules.
We wouldn’t bet on the eventual outcome.
03/10/05 UKRAINIAN GROUP ARRESTED IN SPAIN
As we reported a few months ago, Spain appears to be the target for Russian money launderers and British ex pats may well lose their homes as a result. We can now add to our reports by confirming that the Spanish police have a arrested a group of Russains who allegedly fraudulently obtained not less than 100 million euros in Spain.
Over 50 properties have been confiscated including a four-star, 400-room hotel. Additionally over 60 banks accounts have been frozen in Spain, Belize, the Bahamas and the Virgin Islands.
The arrested Ukrainians and a Russian woman are accused of being involved in assassinations, robbery, and racketeering in the countries of Eastern Europe and then sending the proceeds of their crimes to Spain, where they invested the funds in real estate deals.
The frozen seizures may offer British ex pats who have been caught by various types of fraud some slight – very slight – hope that sometime in the long distant future they may recover some losses if compensation Orders are made.
30/09/05 FIRST BRITISH PHISHERMAN CONVICTED
Regular readers will know that we have constantly warned of the dangers of phishing. At last we can report that a couple of phishermen have received their come uppance.
This summer saw the conviction of the first phisherman in the UK. The scam was one which the National High Tech Crime Unit says may have netted £6.5 million over a two year period. The two phishermen obtained bank and credit card details from unwary banks customers who thought they were logging into their bank's own website. They weren’t! They were simply transfering their security information to a database set up by Russian crime gang. The Russian syndicate then gave the information to the two defendants who had the equipment necessary to make fake credit cards.
Don’t be an unwary phish. Would you hand your wallet or purse to a total stranger? Giving your personal information to someone via the internet does exactly that.
29/09/05 NEW PROFESSIONAL GUIDANCE
As long ago as 5th August The Institute of Chartered Accountants in England & Wales issued fresh guidance to accounting firms on money laundering. Although far from being current news we have been asked to draw attention to the guidance which follows on implementation of the Serious Organised Crime and Police Act 2005, which has modified the 2002 Proceeds of Crime Act (PoCA). This will help to reduce the burden on both the regulated sector.
Felicity Banks, Head of Business Law at the ICAEW, said at the time that the new guidance was issued:
“The Institute’s guidance has been issued to alert auditors, accountants and tax advisors to where they stand in respect of new changes to the money laundering reporting regime.
We particularly welcome the removal of the obligation to report a financial crime when there is no information about the identity of the culprit or the whereabouts of the property. It is our understanding of the Act that accountants are also no longer obliged to report suspicious activity, such as repeated instances of shoplifting, where their clients may have records of suspects, but where the accountants have not needed to access those records as part of their professional work.
This is an important step as previously this requirement imposed reporting costs on businesses and was of little or no practical use to law enforcers.
These modifications to the money laundering regime make sense. Whilst an effective money laundering regime is fundamental to maintaining confidence in UK businesses, the approach should not be over prescriptive. In stripping away some of the reporting requirements that were of little or no practical use, businesses have been given some welcome relief.”
The full text of the very important guidance may be found on the ICAEW web page. The Law Society has been equally quick to update its guidance to solicitors and that guidance, as will be expected, can been seen on their web page.
28/09/05 JERSEY
The financial press in Australia reports Jersey to be the centre of the biggest tax avoidance crackdown in Australian history. A major firm of accountants is offering to provide clients with "directors, secretaries, registered office, shareholders invoicing, etc", ie, everything necessary to give the appearance of a genuine business. The effect includes lowering income tax to a flat 20 per cent and eliminating inheritance and capital gains and local company taxes.
The big world that we live in is tiny in finance terms
27/09/05 NEW TOUGH MONEY TRANSFER RULES
The European Commission has presented new regulations to tighten control of money transfers. This is intended to cut off funding sources for terrorists and other criminals. The Regulation will require that money transfers will have to be accompanied with the identity of the sender and that such information must be immediately available to the appropriate authorities as a tool to assist them in detecting, investigating and prosecuting terrorists and other criminals and tracing their assets. The requirements apply to transfers of funds in any currency that are sent or received by a payment service provider in the EU.
In a statement, the Commission announced that under the new regime:
"The name, address and account number of the sender of the transfer must always be transmitted together with the funds. This information will only be provided to the competent authorities for the purposes of preventing, investigating, detecting, or prosecuting money laundering or terrorist financing. A simplified version of this regime is proposed for money transfers within the EU, in line with the efforts to build a single market for payments."
"As even small amounts can be used to finance terrorism, banks or money remitters will have to transmit information on the sender regardless of the amounts involved. Similarly, when receiving funds, regardless of the amounts involved, they will have to subject those funds to special scrutiny, and ultimately reject any unidentified transfers or terminate business relationships with their counterparts when these systematically fail to provide information on the sender."
The current UK Presidency of the EU have indicated that it will give priority to this proposal and technical discussions are due to begin imminently.
26/09/05 FSA TO EASE RULES
In line with the easing in the approach of the Court of Appeal this year and the 3rd European Directive in easing to burden imposed by the anti-money laundering regime the Financial Services Authority has published the first phase of its programme to simplify its Handbook. The intention is to remove unnecessary Rules and Guidance. This it says is part of its drive to achieve better regulation for firms.
At the time of publication of the changes, FSA Chairman Callum McCarthy, is reported to have said:
"We are determined to be more rigorous about the costs and burdens that regulation imposes on firms. We are also simplifying our Handbook requirements and the way we express them, which will help all firms but particularly smaller ones who do not have access to expert advice. It sits alongside other major initiatives we have in hand to make us an easier organisation to do business with such as Firms Online, Integrated Regulatory Reporting and the shorter application packs which will reduce the time and effort firms need to spend in dealing with us."
"We will continue to gather views from all our stakeholders about how other parts of the Handbook can be improved to deliver better regulation in practice."
23/09/05 UK EXCESS
To follow up on yesterdays report you may be interested to know that at least 150,000 SARs – Suspicious Activity Reports - are now filed in the UK annually compared to 8 in Germany and 50 in France, and compliance costs are said to have reached £100 million.
Assuming it takes 30 minutes on each report to read, log, and cross-check (for other mentions of this person) it will take 75,000 hours – which is 2140 working weeks. Taking this calculation forward it would take 41-man-years simply to enter them the SARs onto the system! Even at a high-speed 15 minutes per form it will take over 20-man-years to enter the annual submissions!
A di minimis rule would go a long way to solving this problem!
22/09/05 U.K. LAUNDERING REQUIREMENTS TOO RIGOROUS
A report published in June on the anti money laundering regime in the U.K., commissioned by the Corporation of London and the Institute of Chartered Accountants in England & Wales has shown that international anti-money laundering requirements are implemented more rigorously in the U.K. than elsewhere. The report goes onto say that the high cost of implementing such requirements has not resulted in effective deterrence and detection of money laundering.
The City, one of the most important foreign currency earners within our economy, must be feeling the pinch and there are others more than willing to take up the slack. Witness for example the stunning decrease in the Antwerp diamond trade which has been matched by similar increase in Dubai! There is nothing wrong with proper regulation and honest traders will not be put off, the problem is the extent of regulation in the UK which undoubtedly causes unnecessary hurdles and expense.
21/09/05 SOLICITORS HORRENDOUS ORDEAL
In June 2003 solicitor, Mr Basil Dearing, was arrested by the National Crime Squad's as part of their money laundering probe Operation Norfolk and was charged nine months later. We are pleased to report that following 25 months of sheer “horror” the solicitor of 40 years standing has been cleared of all charges. He was cleared when the Crown Prosecution Service offered no evidence against him, fellow solicitor Mr John Greenwood and five co-defendants.
We must ask why it took the CPS so long to come to the decision not to offer any evidence but can surmise that it is the result of the major clarification on the law that has been given this year by the Court of appeal.
Unsurprisingly Mr Dearing said:
"I am delighted that common sense has prevailed and that, after 25 months of anguish, I and my family can put behind us the most horrendous ordeal. Right now I am a very happy man and I am going to take stock and reflect on everything that has happened."
"The fact that police found it necessary, not only to raid my office, but also to raid my home, involving 14 officers, where they found absolutely nothing of any interest to them is something which my wife and I will never accept as being reasonable."
It has been reported that Mr. Dearing is looking to civil remedies. If he does and is successful he will probably be doing our profession s a whole a service, forcing the police/CPS to take a proper and balanced approach to enforcement of an important but draconian regime.
The law may be the law but that does not mean that we should lose a sense of proportion and our common sense in its application.
20/09/05 RUSSIA INCREASING MONEY LAUNDERING VIGILANCE
Moscow newspapers report that the Russian Federal Drug Control Service has announced that a total of 714 criminal cases on the laundering of the proceeds of the illicit drug trade alone were started in Russia during the first 6 months of 2005. This is a stunning increase from 2003 in which only two such crimes were
The world is shrinking in money laundering terms.
19/09/05 A WARNING
Akonix Systems Inc. and Symantec Corp. have issued an alert to users of Microsoft Corp.'s MSN Messenger, and this of course, includes nearly all of our children.
Their alert warns that a new "smart" worm sends a message in one of several languages, including Dutch, English, French, German, Greek, Portuguese, Swedish, Spanish and Turkish.
The message in English is: "haha i found your picture!" If you click on a link included with the message, a copy of the W32.Spyboot worm is automatically downloaded to your computer. Spyboot is a backdoor program that can, among other things, close security applications and help further spread the worm.
16/09/05 PHISHING 5
The last in our series of phishing stories comes from the Wall Street Journal. It recently e-mailed all of its subscribers warning them of the danger of phishers. It gave the following information about protecting yourself from and reporting fraudulent emails, they recommend that you read the FTC's consumer alert entitled "How Not to Get Hooked by a Phishing Scam" at http://www.ftc.gov/bcp/conline/pubs/alerts/phishingalrt.htm "
15/09/05 PHISHING 4
Warning was given of our next Phishing story by World Money Laundering Report’s own newsdesk. They received an e-mail purporting to come from the domain ‘paypal-customer-center.com’ and the e-mail is disguised to appear to come from "PayPal Customer Center." It has the stylised "P" PayPal, the expression "ssl" appears - but the page is not secure and log-in details on the page are an exact copy of the real PayPal login page. But of course the e-mail is not from them.
These phishers are good and it is easy to be fooled – you must ever be on your guard.
14/09/05 PHISHING 3
For our next phishing article we concentrate on E-bay users who should be aware of a scam directed specifically at them. The scam centres around a request for help purportedly emanating from an old lady asking for help in using the eBay auction website. An e-mail which appears to come via eBay says she placed a bid for a wheelchair, but can no longer find the online auction and recipients are asked to click on the "Respond now" button to answer the lady's question. Doing so takes you to a website pretending to be e-Bay where user names and passwords will be stolen.
The text of the email reads as follows:
Hello,
I recently placed a bid on item#5600846099 being a wheelchair for me that I really need do to my age(87 years old) and it seems that I cannot find the auction anymore...
May I please know if you are the seller of the item above?
Regards,
Greta.
BEWARE – you have been warned, don’t let these thieves play on your good nature.
13/09/05 PHISHING 2
This week we are running a series on phishing. We begin with a new type of phish that uses low-tech methods to harvest information. The attempted fraud starts with spam email purporting to come from PayPal which warns of a hacking attack and asks customers to print out a website form with their banking details and fax it in.
The message reads:
'Dear Paypal Customer. Unauthorized persons tried to reset the password from your paypal account. We would like to ensure that your account was not accessed by an unauthorized third party. Because protecting the security of your account is our primary concern, you have to complete the affidavit form. Click here to download the form. Please send a fax in the next 24 hours to [number removed] with the affidavit form completed.'
These phishers were easy to catch as the number that they inserted for the reply fax was their actual phone number in Poland!
12/09/05 PHISHING
Regular readers of this web page will know that we have in the past carried stories about the new phenomenon called phishing. The subject may be completely new to some of our recently joined readers so this week, to emphasise the seriousness of the problem, we intend to run a series of stories about recently reported phishing scams, but first an explanation of what phishing is.
Phishing is a scam in which fraudsters "fish" for personal information by pretending to be a legitimate company. Typically, a phisher sends an email appears to emanate from a trusted source eg a bank. A phisher warns you that your account is at risk and asks you to validate, confirm or update information, such as credit card information. Once you give that information …………………. who knows how badly they will hurt you.
JUST be careful.
09/09/05 ENORMOUS FINE
US authorities are treating breaches of anti-money laundering legislation with increasing seriousness. Banks and other organisations simply must learn that they cannot ignore the rules.
The most recent example of the severity of punishment for breach is the fine of $24 million on Arab Bank, the largest bank in the Middle East. The bank has been linked to terror financing and the fine was imposed to settle federal charges that its money-laundering controls were inadequate.
08/09/05 SPAMMERS
It has been reported from Washington that three people have been indicted in Phoenix on charges of violating the CAN-SPAM Act of 2003. This US law is a vital weapon against spammers. They face various charges including obscenity, money laundering and conspiracy.
While we all welcome steps taken to stop spamming, is the use of anti-money laundering legislation appropriate. The averred intention is that it be used as a weapon against organised crime and terrorism. Every crime involving property by its very nature involves money laundering, but if it was used for every crime then there ultimately would not be a need for other offences! We should keep all of these matters in proper proportion and use laws appropriately and for their intended use.
07/09/05 FOOTBALL INVESTIGATION
There are reports that UEFA (the European Foorball Association) has asked the European Union's money laundering task force to look into the alleged flow of dirty money into football. The Uefa Presdident reacting to rumours that organised criminals are looking to wash their money within the fortunes circularising in the game is said to be very worried about the situation.
The reports say that money launderers are prepared to lose significant sums in investment in clubs if the result is that the rest of their money is cleaned!
06/09/05 BOWMAN -v- FELS
Solicitors are reminded that the decision case of Bowman -v- Fels has significantly changed their reporting obligations. It is now absolutely clear that anything said within privileged conditions exempts a solicitor from reporting obligations. The key is that laymen do not understand what constitutes a privileged communication and few solicitors have the depth of knowledge required.
We have never before used this news page for a commercial plug of our own CD lectures but this case is of such importance to our profession that I trust that you will forgive my reminding you that I have published a talk specifically on this case. Cost is £45 plus VAT per practice and offers 1 hour CPD
05/09/05 WELCOME BACK
This summer has been full of news that is related to money laundering. Our sources reveal that hardly a day passes without a prosecution having been commenced here or there. It is not our intention to fill this news slot with such stories. The newspapers do a good enough job.
We shall bring you, we hope, snippets of information relevant to you and your office and we shall commence with a short series of articles about the major changes that have occured so far this year.
See you tomorrow when, unless something spectacular occurs we shall begin by looking briefly at the very important case of Bowman -v- Fels.
30/08/05 RETURNING SOON
Regular readers will, we hope, be pleased to know that our daily news posts will be returning on Monday, 5th September.
We hope that you have all had a wonderful summer and have returned to your offices refreshed and raring to go.
See you on Monday
01/08/05 WARNING WARNING WARNING
Numerous reports of a Human Rights challenge to current anti-money laundering rules should be read with care. CURRENT RULES STILL STAND.
The simple fact is that a challenge to the rule that a lawyer must report suspicious circumstances has been launched in the European Court of Human Rights. It has been reported that our Law Society and many European bar associations intend to intervene in the proceedings to support the challenge. The basis of the challenge is to do with an individual’s right to a fair trial. It follows that even if the challenge is successful then it will NOT apply to non-lawyers within the regulated sector and probably not apply to lawyers in non-contentious/transactional matters ie the position as it is now since Bowman –v- Fels. We cannot tell the future. It many be a long time until the Court rules and we cannot guess the result.
Our full news service will resume after the holidays.
18/07/05 HOLIDAY
We are now taking what we consider and hope you agree, a well earned holiday.
We shall not be carrying reports in August and will return in September.
Best wishes to all of our readers.
Enjoy the summer break.
15/07/05 ARRESTS IN SPAIN
Regular readers will know that we have been following a series of stings in Spain that have affected British ex pats. We can now report that in what Spanish authorities have called the largest-ever crackdown on international organized crime in Europe Spanish police have arrested 28 "Russian mafia members" on suspicion of money laundering. They were placed under arrest on suspicion of belonging to illegal organizations, money laundering and fraudulent bankruptcy.
We shall continue to monitor the position and report but unfortunately so far have seen nothing which will indicate that affected British ex pats will be able to recover any losses.
14/07/05 MONEY LAUNDERING CRACKDOWN HINDERED
In our last report we in effect said that in our opinion we are over regulated in the UK and that the number of SARs was so high that serious matters could be missed. We appear not to be alone in this view. Philip Robinson, the FSA's financial crime sector leader, is reported to have said recently that financial services groups must prioritise the ultimate goal of detecting and deterring crime, and not follow procedures simply to avoid reprisals from the regulator, he said:
"I want them to defend against their firm being used by criminals, not against the regulator fining them.”
He too clearly considers that those of us within the Regulated sector are more concerned with protecting our own backs than considering and dealing with the real purpose of the law.
Surely that is the fault of a system of over regulation offering no carrot and no discretion while waving a VERY big stick.
13/07/05 PROGRESS MADE IN FIGHTING TERRORIST FINANCING
It has been reported in Hong Kong that international experts from the Financial Action Task Force (FATF) confirm that progress has been made to curb money laundering and terrorism financing. FATF president Jean-Louis Fort said in a recent speech that the fight against money laundering and terrorism financing is on the right track.
That worldwide regulations are having an effect must be obvious, but consideration should be given to the cost and extent of regulation. The UK probably has the highest reporting record of suspicious activity in the world, but regulation to the extent imposed the UK is, in our view, self defeating. We make so many reports that there must be the danger of serious crimes being missed while officers concern themselves with reports of cash transactions that may involve boys washing cars for cash!
12/07/05 ESCROW FRAUD IS COMING - BE ON YOUR GUARD
What is escrow fraud? Quite simply an escrow holder is what we would call a stakeholder, a trusted third party to hold money. In the US clients do not trust their lawyers to handle money in a conveyancing transaction, it goes to an escrow company. Trusted third party holders as a business concern is a growth industry and are used often in on-line auctions by eg. ebay.com and amazon.com.
This may mean that the American phenomina of escrow fraud may be coming our way so look very look carefully at the address of the escrow company to whom you part with any money. Make sure that they are legitimate and reliable.
11/07/05 A NEW APPROACH?
Sir Stephen Lander, chairman of the Serious and Organised Crime Agency, says he wants a better partnership with the private sector when the agency starts work next April. Sir Stephen went on:
"We are not just going to be another National Criminal Intelligence Service. It is important that we are different . . . and translate knowledge into action."
On the other hand just as Sir Stephen Lander made his announcement KPMG accused the government of only belatedly reacting to recommendations made nearly two years ago after they had identified significant failings in the way that suspicious transactions were investigated.
As always there is a major industry in words, when it is substance that counts and far from making things better the coming 3rd EU Directive will be heaven for unproductive paper pushers.
08/07/05 CANADA WASTES REPORTS
It has been reported in Ottawa that the RCMP did not follow up on more than a third of the suspicious activity reports passed on to them by Canada's criminal intelligence service, who themselves only forward information on the most suspicious transactions. The reason for the low follow up – insufficient manpower.
Canada’s number of SARS is tiny compared to ours and one must wonder how much effort by those of us within the regulated sector in the UK is equally wasted.
07/07/05 VIRUS WARNING FROM MaCAFEE
Below see a warning Issued by MacAfee
Microsoft Vulnerability Overview
MS05-024 Vulnerability in Web View Could Allow Remote Code Execution
(894320)
Scope of Potential Compromise
The new bulletin covers one vulnerability in Microsoft Windows that,
if exploited, could allow remote code execution. The remote code execution
vulnerability exists in the way that Web View in Windows Explorer handles
certain HTML characters in preview fields. If a user previews a malicious file,
an attacker could execute arbitrary code in the context of the logged on user.
However, user interaction is required to exploit this vulnerability. More
information on the vulnerability can be found at http://vil.nai.com/vil/newly-discovered-viruses.asp
and http://www.microsoft.com/technet/security/bulletin/ms05-may.mspx .