Bribery and Corruption

Panasonic subsidiary settles US criminal and civil bribery charges

Panasonic Avionics Corp, a subsidiary of Panasonic that designs in-flight entertainment systems, has agreed a settlement payment of over $280 million with the United States government. The Justice Department had filed charges against the company on the basis that it had falsified its financial records to conceal payments to sales agents in China and other parts of Asia. Panasonic has agreed to improve its compliance programme and to cooperate in any ongoing investigations. 

Reuters, 30 April 2018

Brazilian president allegedly laundered bribes through real estate transactions

The Folha de S.Paulo newspaper reported on Friday 27 April 2018 that federal police are investigating President Michel Termer over the alleged laundering of 2 million reais in bribes through real estate. Termer has faced corruption allegations since the start of his presidency in 2016. He has twice escaped trial in the Supreme Court for corruption following votes from congress to protect him. He will leave office on 1 January 2019 and will be stripped of Congressional protections. He may then face the corruption charges in lower courts.

Reuters, 30 April 2018


Oleg Deripaska to reduce shareholding in En+ Group in light of US sanctions

En+ Group, the parent company of Russian aluminium producer RUSAL, has announced that its largest shareholder Oleg Deripaska has agreed in principle to reduce his shareholding in the company to below 50%. The company has also confirmed that Mr Deripaska has agreed to resign from the Board and consent to the appointment of new independent directors.

This comes in response to new US sanctions targeted at particular elements of the Russian economy. Mr Deripaska was designated as a Specially Designated National by the US on 6 April 2018. En+ and RUSAL have been implementing a plan to achieve relief from the US sanctions measures.

Reuters, 2 May 2018

UK to include Magnitsky-style measures in new sanctions bill

The House of Commons backed an amendment to the new Sanctions and Anti-Money Laundering Bill to include a "Magnitsky" clause. This would allow sanctions to be imposed on persons considered to be involved in gross human rights abuses and reflects similar measures adopted or proposed in other countries, including the United States' Magnitsky Act. The move towards such sanctions was initiated in response to the treatment of Russian anti-corruption lawyer Sergei Magnitsky, who died in police custody in 2009 following his arrest for alleged involvement in tax fraud.

Reuters, 1 May 2018

Money Laundering

Government backs new transparency requirements for overseas territories

As part of the Commons debate on the new Sanctions and Anti-Money Laundering Bill, the UK Government has announced that it will back an amendment requiring 14 overseas territories (including the British Virgin Islands, Cayman Islands and Gibraltar) to introduce public ownership registers by the end of 2020.  The Government had previously opposed the inclusion of the amendment but faced significant opposition from MPs and lobby groups.  The change is intended to increase transparency and help prevent tax avoidance and money laundering, but has been met with criticism from authorities and regulators in the overseas jurisdictions.

Reuters, 1 May 2018

UK government to announce reforms on abuse of UK businesses for foreign money laundering

The Department for Business, Energy & Industrial Strategy is set to launch a new consultation on money laundering using UK partnership structures. This follows growing evidence of the abuse of Scottish Limited Partnerships and Limited Partnerships in complex money laundering schemes linked to international criminal networks. One scheme used over 100 SLPs to launder $80 billion out of Russia. The consultation launched on 30 April 2018 and responses can be made here.

GOV.UK, 30 April 2018

Danske Bank criticised over weak money laundering controls

Denmark's largest bank, Danske Bank, has been criticised by the Danish Financial Supervisory Authority over weak or non-existent internal controls that allowed suspected criminal funds to be laundered through its Estonian operations.

The regulator has issued the bank with eight reprimands and eight orders over money laundering allegations and serious weaknesses in the bank's governance, concluding that the bank "is exposed to significantly higher compliance and reputational risks than previously assessed".  This is thought to have allowed the bank's Estonian branch to be used for "criminal activities involving vast amounts".  The FSA estimated that a minimum of DKK 5 billion (£592 million) in capital will need to be set aside to address these compliance matters.

Financial Times, 3 May 2018


NCA announces new investigation into HBOS Reading fraud

The National Crime Agency has announced that it will lead a new pre-investigative review, in conjunction with Thames Valley Police, into outstanding allegations of fraud involving HBOS's Impaired Assets Division.

The review will consider allegations that fell outside the scope of Operation Hornet, the police investigation into allegations of fraud by former employees of the division, which resulted in a number of convictions in 2017, and is a result of complaints from businesses alleging "significant fraud involving a former employee of HBOS and associates", including allegations of asset stripping, the use of corrupt consultants and fraud and money laundering.  The review is expected to take six months to complete.

NCA, 30 April 2018

Former Autonomy Corp. CFO found guilty of accounting fraud

The San Francisco Federal Court convicted Sushovan Hussain, the former chief financial officer of the software business Autonomy Corp, on 16 counts of wire and securities fraud. Hussain was found guilty of incorrectly valuing the company during its sale to Hewlett-Packard Co. six years ago.

The US Justice Department accused Hussain of misconstruing the company's accounts to create a false appearance of growth.  After the sale, Hewlett-Packard wrote down the company's value by $8.8 billion. This case also will be heard at trial in London next year, in $5 billion civil proceedings against Hussain and Autonomy's former chief executive officer Mike Lynch.

Bloomberg, 30 April 2018

Cyber Crime

ECB published framework for protecting against cyber attack

The European Central Bank published the European Framework for Threat Intelligence-based Ethical Red Teaming (TIBER-EU) on 2 May 2018. This is the first European-wide framework for controlled, bespoke tests against cyber-attacks designed to test the resilience of the financial market. TIBER-EU tests simulate a cyber-attack on an entity's critical functions and underlying systems. The entities are then able to assess their protection, detection and response capabilities.

ECB, 2 May 2018

City of London Police launch new initiative to fight online crime

The City of London Police has announced the launch of a new cyber-crime programme named "Cyber Griffin", which will see specially-trained officers lead a series of community focused exercises which will include threat briefings, incident response training and more. The initiative is targeted at businesses within the City and aims to reach those with little knowledge of cyber-enabled crime threats through to individuals who hold IT security and risk roles.

City of London Police, 1 May 2018

Financial Regulation

Charity Commission investigates Croydon Tabernacle following serious regulatory concerns

The Charity Commission has commenced a statutory inquiry into Croydon Tabernacle, a charitable organisation working in Surrey, following substantial unexplained expenditure and potentially conflicted payments. The inquiry will look at any misconduct or mismanagement.

GOV.UK, 1 May 2018 

Environmental Crime

Three men from Plymouth banned from waste trade for fly-tipping

Wayne Plummer, Michael Baggally and Ashley Brown of Plymouth admitted to illegally depositing household, industrial and commercial waste (whilst not being registered waste carriers) and were given community orders requiring 100 hours of work. Waste including sofas and carpets was dumped in scenic locations around Plymouth and the three men were ordered to pay £520 each in compensation and given a Criminal Behaviour Order for 5 years preventing them from being involved in the waste business.

The prosecution of the men was brought about as a result of a joint investigation between the Environment Agency, South Hams Council, Plymouth City Council, Cornwall Council and Devon and Cornwall Police. The cost of the clean-up of the dumped waste was more than £5,000.

GOV.UK, 27 April 2018

Health and Safety

Waste firm fined £237,555 for worker fatality

Viridor Waste Management Limited have been fined following an incident on 8 June 2015. Employee Lee Jane was removing skips of ash from an incinerator within in a hospital premises and had parked on a sloping road outside the building. As he was coupling the vehicle and trailer he lost control and was drawn under the trailer.

Failings found by the HSE investigation included the absence of a suitable and sufficient specific risk assessment and failure to plan the work. The handbrake of the lorry had also not been applied. During a trial, Viridor Waste Management Limited pleaded guilty to breaching Regulation 3(1)(a) of the Management of Health and Safety at Work Regulations 1999. The Company was fined £237,500 and ordered to pay costs of £128,428.94.

SHP Online, 23 April 2018

Fines for working at height incident

Dantherm Limited, Wessex Building Services Limited and Wessex Insulation Ltd have all been fined following an incident in which an employee of Wessex Insulation Limited fell through a fragile roof light. The employee was installing insulation to ventilation ductwork at a leisure centre. He suffered six fractures to his back in the incident.

The HSE investigation found that all three companies failed to plan and manage the fall risk sufficiently. Dantherm Limited pleaded guilty to breaching Regulation 13(1) of the Construction Design and Management Regulations 2015 and was fined £30,666 plus costs of £6,646.16. Wessex Building Services Limited pleaded guilty to breaching Regulation 4(1)(a) of the Work at Height Regulations 2005 and was fined £425,000 plus costs of £6,646.16. Wessex Insulation Limited pleaded guilty to breaching Regulation 9(2) of the Work at Height Regulations 2005 and was fined £70,833 plus costs of £6,646.16.

HSE, 30 April 2018