Financial Crime Wave – Fintrac pushes more monitoring of PEPs, AML site visualizes data, and more

Financial Crime Wave

In this week’s Financial Crime Wave, the Financial Transactions and Reports Analysis Centre of Canada pushes financialinstitutions to do more screening, monitoring of domestic, foreign politically-exposed persons (PEPs), AML site visualizes data with details on enforcement, criminal trends, state regulator threatens to pull casino license on federal AML concerns, and more.


Fintrac requiring banks to go further in determining domestic, foreign PEP status

On December 20, 2016, the Financial Transactions and Reports Analysis Centre of Canada (Fintrac) released new guidelines around how financial institutions subject to anti-money laundering (AML) rules should screen for and handle foreign, as well as domestic, politically-exposed persons (PEPS). As a result of these amendments, effective June 17, financial entities will be required to take “reasonable measures” to determine whether a client is a domestic or foreign PEP or a head of an international organization (HIO), or a “close associate” or family member of such a person at several stages of the relationship. They include: at account opening; on a “periodic basis”; if the financial entity “detects a fact” that leads it to suspect the client is a PEP, HIO, or close associate or family member of such person; and upon receiving or sending an electronic funds transfer of $100,000 or more, (via Mondaq, from law firm McCarthy Tétrault LLP).


In Fall Risk Perspective, OCC highlights need for AML oversight, expertise

The Office of the Comptroller of the Currency (OCC) released its Semiannual Risk Perspective for Fall 2016, which analyzes pertinent data and industry trends using four key components: the operating environment, bank performance, trends in key risks, and regulatory actions. AML rules are in need of high security, and due to technology and innovation, tight regulations need to be put in place to maintain the needed levels of expertise and security controls, (via DS News).

Deutsche Bank AML chief quits post after six months over staffing clashes, program concerns

The head of Deutsche Bank AG’s financial-crime-fighting unit and chief AML reporting officer has left his job after just six months. Peter Hazlewood stepped down because of an internal dispute over the size of his group’s budget and workforce, the Wall Street Journal reported. Hazlewood wanted to hire more than 600 people in 2017 for compliance and AML functions. Management approved about 400 additional employees. Hazlewood worried that without the 200 more people, the bank “would lag behind competitors and struggle to complete projects and adequately beef up its anti-crime teams and technology,” (via the FCPA Blog).

New site visualizes AML, terror country data, breaks out trends, penalty totals

Want to get a quick visual representation of combined anti-money laundering (AML) and terror financing risk in the world, without reading reams of documents from global watchdog groups and other sources of global risk ranking data? Well, the team at BMR Advisors has created a financial crime compliance heat map that melds the Basel AML Index and the Global Terrorism Index. When clicking on a country, you get the score and also details, where available, on penalties, actions, regulators, methodologies, cases and trends, (via AML Maps).

In compliance operational risk, go beyond AML to include cyber threats

Operational risk should expand beyond AML and fraud threats to include cybersecurity, including human mistakes and tech tightening, say two compliance consultants, (via the Mortgage Finance Gazette).


Banks president gets probation for failing to file SAR on aberrant deposit, check activity

A former banker from Plains was sentenced Monday to one year of federal probation for not reporting suspicious activity in a customer’s bank account. James Kirk Friend, 53, pleaded guilty to one count of failing to file a Suspicious Activity Report while he worked at the Plains State Bank. Friend, who was president of the bank, failed to report activity in the account of George and Agatha Enns, bank customers who were indicted on charges of laundering proceeds from drug trafficking, including large currency and third-party check deposits, (via

Real estate

New AML rules in China could cool off Canadian real estate market

China has adopted stringent new anti-money-laundering rules that will make it nearly impossible for small investors — for example, middle-class families who pool their savings — to get their money out of the country in order to buy condos in Canada’s superheated property market. This represents another threat to the property bubbles in Vancouver and Toronto, which have already shown signs of bursting after Vancouver imposed a 15 percent tax on foreign speculators, which had the side effect of forcing buyers to reveal their identities, exposing them to crackdowns in their home countries, (via BoingBoing).

Criminals, the corrupt turning to real estate to launder funds

From the sandy shores of South Beach to the steel and gray glitz of Manhattan, criminals, fraudsters and the corrupt are putting their ill-gotten proceeds into real estate, a tactic being actively attacked by the U.S. government through new sanctions, GTOs and forfeitures, (via the Harvard International Review).


Chinese graft watchdog requires more independent oversight, transparency, says commission

The Communist Party’s top graft watchdog needs independent oversight and transparency to protect its own team from corruption, analysts say, as the agency convenes its last key meeting of the current session in Beijing. How to ensure the graft fighting team remains clean is a key matter to be discussed at the Central Commission for Discipline Inspection’s (CCDI) plenary meeting. In the lead up to the plenum, the CCDI aired a documentary on state television this week, revealing shocking details of how graft busters abused their power over other officials and their access to confidential information on graft probes in exchange for bribes and favors, (via the South China Morning Post).

Father and son in family business of grabbing revenues by graft

Federal prosecutors charge father-son-duo with foreign bribery for nearly $3 million in graft payments for inside track on $800 million sale of building in Vietnam to a Middle Eastern sovereign wealth fund, (via the U.S. Department of Justice).


Central Bank of Ireland releases first AML bulletin covering risks, reliance on third parties 

Last month, Ireland’s Central Bank published the first in a series of Anti-Money Laundering (AML) bulletins to provide guidance and feedback to credit and financial institutions. This inaugural missive covers reliance and risks around third-parties, and related expectations, such as the need for signed agreements on such bedrock tenets as customer due diligence, overall compliance program testing and ensuring documents, decision-making details and data are available to examiners. Future bulletins will cover areas including Money Laundering/Terrorist Financing Risk Assessments and Suspicious Transaction Reports, (via Lexology from law firm Arthur Cox). You can read the bulletin itself here.

Money laundering

Jockeys, loan sharking and laundering, oh my!

Seven people were arrested after Hong Kong police dismantled a money laundering and loan sharking racket that allegedly handled more than HK$7 million over the past 18 months, cleansing the illicit funds through three Jockey Club accounts since mid-2015, (via the South China Morning Post).

Box spring bonanza leads to international telecom scam

About $20 million in cash hidden inside a box spring in a Massachusetts apartment is part of a fraudulent internet telecom acting as a massive international pyramid scheme, (via ABC News).

New AML laws in Philippines could upset status quo

With six months left in his term as the chief banking regulator, a top Philippine official is pushing to strengthen anti-money laundering laws that could chafe lawmakers, (via the Inquirer).


State regulators want to pull casino license due to federal AML issues, non-disclosure of action

A grand reopening for The Gardens Casino — to show off the fruits of a $90 million renovation — could take place later this month, but state gambling regulators want to revoke the licenses that allow the casino’s principals to operate. An accusation, dated Oct. 17, outlines California Bureau of Gambling Control officials’ contention that the casino and key figures there, including Chief Executive David Moskowitz, should be denied gambling licenses due to not disclosing a federal anti-money laundering (AML) action, (via the Press Telegram).