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The skinny:

In this week’s Financial Crime Wave, global graft watchdog Transparency International sees corruption scores fall in wake of Panama Papers, Hong Kong’s financial regulator looks to boost transparency and anti-money laundering coverage of gatekeepers, criminals turn to “virtual kidnapping” to steal money, without ever leaving their hovels, and more.

Hong Kong Skyscrapers


Laser focus on ownership opacity, Panama Papers scandal lead to falling rankings, says watchdog

Revelations of tax-evasion and money-laundering networks on a global scale in the so-called Panama Papers helped make the world appear more corrupt last year, according to graft watchdog Transparency International. The Berlin-based organization said there were more falling scores than rising ones on its 2016 Corruption Perceptions Index, published on Wednesday. A lower score means a country is seen as more corrupt. Declines were driven by “massive and pervasive” public-sector corruption, the watchdog said in an e-mailed statement. The Panama Papers data-leak also prompted a wave of anger at wealthy individuals and companies using well-established methods of evasion, (via Bloomberg). To read the full report, please click here.

Virtual currency

In wake of historic enforcement action against Western Union, lessons for Bitcoin exchangers

In the aftermath of the nearly $600 million enforcement action against money remitter heavyweight Western Union, there are lessons for more than just the money services business (MSB) sector, including for Bitcoin exchanges, in the key areas of customer due diligence and knowing the commitment to compliance of insiders, (via Bitcoin Magazine).


Accounting giant KPMG on the hot seat in aftermath of Rolls-Royce corruption settlement

The accountancy giant that signed off Rolls-Royce accounts while it bribed its way around the world is now facing its own investigation. KPMG was the auditor for Rolls-Royce during almost all of the 24-year period in which employees secretly paid off middlemen and officials in 11 developing countries to win lucrative business. Last week Rolls agreed to pay £671-million in total to UK, US and Brazilian authorities to settle the allegations of bribery, false accounting and corruption from 1989 to 2013 in countries including Russia, Iraq and China, (via the Daily Mail).


As OCC weighs federal fintech charter, powerful state agencies argue against national rule

With the recent close of the comment period by the Office of the Comptroller of the Currency (OCC)on special purpose charters for fintech companies, several key stakeholders have weighed in on the OCC’s plans, including the Conference of State Bank Supervisors (CSBS), which submitted a comment letter opposing the charter. As well, the New York State Department of Financial Services (NYSDFS) submitted a standalone comment letter opposing the charter. Their arguments against include:

·         Legal basis for the charter.  According to CSBS and NYSDFS, the OCC lacks the statutory authority.

  • Preemption of state laws.  CSBS and NYSDFS argue that federally-chartered fintech banks would be exempt from state consumer protection laws by virtue of federal preemption.
  • Uneven application of federal laws.  CSBS argues that a special purpose fintech charter would result in an ad-hoc, uneven application of federal laws.
  • Effects on innovation.  CSBS and NYSDFS argue that the OCC will be picking winners and losers in the marketplace by granting special purpose fintech charters to a select few applicants.
  • Unique risks.  NYSDFS argues that fintech companies tend to present unique risks that the OCC, unlike state regulators, does not have experience addressing, (via the National Review).

A new financial-technology industry group is drafting a letter to federal bank regulators urging them not to squash screen scraping by casting the net too widely in a proposed rule on cybersecurity, (via Bloomberg BNA).


Australia’s financial intelligence unit has attempted to tackle the global trend of “de-risking,” in particular, tied to money services businesses, concluding that while some firms can have a difficult time getting and keeping bank accounts, overall international remittance figures continue to grow, (via Austrac).


Sands Corp. pays penalty of nearly $7 million to settle FCPA violations tied to China consultant

Las Vegas Sands Corp. agreed Thursday to pay a criminal fine of nearly $7 million for Foreign Corrupt Practices Act offenses in China and Macau. The casino and resort operator admitted that from 2006 through 2009, it paid $5.8 million to a China consultant “without any discernable legitimate business purpose.” A finance department employee and an outside auditor warned Las Vegas Sands that some of the money paid to the consultant couldn’t be accounted for. Las Vegas Sands fired the employee and paid the consultant more money, (via the FCPA Blog). To read the original press release, please click here. 


A rule implemented by the New York State Department of Financial Services that took effect on Jan. 1 will add teeth to federal statutes requiring financial institutions to validate their anti-money laundering compliance programs, (via the Wall Street Journal).

Many cooperative banks in India struggling on AML, countering terror financing, says report

Reports claim that all the cooperative bank employees lack with the potential knowledge of anti-money laundering protocol and regulations. The cooperative banks of India constitute approximately 3.25 percent of the entire banking sector. On the scale of 0-10, the vulnerability of the money laundering processes in any cooperative bank is measured at 0.39 with zero being unsafe in the scale of measurement. The multi-agency analysis survey conducted by the Enforcement Directorate (ED) with the coordination of the Financial Intelligence Unit (FIU), Income Tax department and CBI has stated that the Cooperative bank staffs in particular is observed to be more fragile in overseeing anti-money laundering (AML) and combating terrorist financing (CFT) threats, (via Fingo9).

Corporate transparency

Hong Kong looking to bolster transparency, AML rule coverage on gatekeepers

The Government has issued two consultation papers to address perceived deficiencies in Hong Kong’s anti-money laundering and terrorist financing (AML) regime prior to a Financial Action Task Force (FATF) review due next year, one covering critical beneficial ownership initiatives to bolster transparency and another to extend financial crime compliance obligations to solicitors, accountants, real estate agents, and trust or company service providers, (via Lexology, from Deacons).


U.S. companies, girding for an expected clampdown by the Trump Administration on hiring foreign IT workers, are facing fierce competition for cybersecurity professionals at home, according to a report by job-search site, (via the Wall Street Journal).

Hackers hit the United Kingdom’s Lloyds Bank with a denial of service attack, which caused outages for two days earlier this month, a problem continuing to plague institutions as the sector and regulators struggle to find solutions, (via Reuters).


Criminals using ‘virtual kidnapping’ to scam companies, individuals when absent, traveling

Cybercrime has prospered because it’s often easier to perpetrate than physical crime, and the tools and information behind such crimes have become easy to obtain. An offshoot of cybercrime is known as “virtual kidnap,” and, as with more run-of-the-mill forms of cybercrime, companies are now being affected, in addition to individual households. Virtual kidnap occurs when criminals use information about a person’s absence to claim they have been kidnapped, and then turn around to extort money from other family members, (via the Wall Street Journal).


To tackle laundering through trade, shippers must borrow AML, convergence concepts form banks

The rise in trade-based money laundering (TBML), combined with the enormous regulatory fines and ongoing scrutiny from various government agencies, has created a need for enhanced financial transparency, specifically where documentary credit-based money laundering (DCBML) is considered a subset of Trade Finance Based Money Laundering and ultimately TBML. Find out why firms across the trading supply chain should borrow concepts from their banking brethren, including on knowing customers, analytics and transparency, along with convergence inculcating the cyber side, (via Trade Finance Global).

Real estate

Will Trump end crackdown on dirty cash in luxury real estate, a key aim of the U.S. Treasury? (via the Miami Herald).

See What Certified Financial Crime Specialists Are Saying

"The CFCS tests the skills necessary to fight financial crime. It's comprehensive. Passing it should be considered a mark of high achievement, distinguishing qualified experts in this growing specialty area."


(JD, Washington)

"It's a vigorous exam. Anyone passing it should have a great sense of achievement."


(CFCS, Official Superior

de Cumplimiento Cidel

Bank & Trust Inc. Nueva York)

"The exam tests one's ability to apply concepts in practical scenarios. Passing it can be a great asset for professionals in the converging disciplines of financial crime."


(CFCS, Royal Band of

Canada, Montreal)

"The Exam is far-reaching. I love that the questions are scenario based. I recommend it to anyone in the financial crime detection and prevention profession."


(CFCS, CAMS Lead Compliance

Trainer, FINRA, Member Regulation

Training, Washington, DC)

"This certification comes at a very ripe time. Professionals can no longer get away with having siloed knowledge. Compliance is all-encompassing and enterprise-driven."

Director, Global Risk
& Investigation Practice
FTI Consulting, Los Angeles