Bribery and Corruption
SFO opens investigation into Ultra Electronic Holdings PLC
The Serious Fraud Office (SFO) has announced that it has opened a criminal investigation into Ultra Electronics Holdings plc in connection with suspected corruption in its conduct of business in Algeria. As part of the investigation, the SFO will look at the actions of Ultra, its subsidiaries, employees and associated persons. The investigation is a result of a self-report by Ultra.
SFO, 19 April 2018
Vincent Bollore under investigation for suspected corruption of officials
It has been reported that billionaire Vincent Bollore is under investigation in France for alleged complicity in the corruption of foreign officials. The investigation is focused on allegations that Groupe Bollore worked on a number of African presidential election campaigns in exchange for securing profitable port contracts. Mr Bollore denies all wrongdoing.
Reuters, 24 April 2018
International Monetary Fund to review bribery and corruption in advanced economies
It has been reported that the International Monetary Fund (IMF) is planning to produce a revised framework for governance around the world, after reviewing the role bribery and corruption plays in advanced economies. As part of this, the IMF will increase its observation of corruption in countries it lends to. It will also study the systems at work in the nations that volunteer to be part of the review, including whether bribery abroad is criminalised under those nations' legal regimes, and what measures they have in place to combat money laundering. The volunteer countries taking part are the Group of Seven nations, Austria, and the Czech Republic.
Reuters, 22 April 2018
Caixabank under investigation for alleged money laundering
Caixabank is reportedly under formal investigation by the High Court in Spain in connection with the suggestion that it was involved in laundering circa 100 million euros for alleged criminals from China. According to the court, the alleged wrongdoing by Caixabank was brought to its attention by a separate investigation into Chinese bank ICBC, which was allegedly responsible for laundering hundreds of millions of euros through its Madrid office on behalf of organised crime groups.
It is reportedly alleged that Caixabank employees across Madrid assisted suspected Chinese criminals in transferring 99 million euros to China and Hong Kong between 2013 and 2015. A spokesman for the bank denied any participation in the alleged scheme.
Reuters, 19 April 2018
Former official of subsidiary of Venezualan state oil company pleads guilty to money laundering
It has been reported that Cesar Rincon, a former official of a subsidiary of the Venezualan state oil company PDVSA, has pleaded guilty to a US charge of conspiracy to commit money laundering. Mr Rincon was charged along with four other former Venezualan officials after a US investigation into an alleged bribery plot worth circa $1 billion involving payments made to PDVSA officials. The five's alleged wrongdoing took place between 2011 and 2013 and came to light in 2015, after two businessmen were arrested. Mr Rincon was extradited to the US from Spain last year as a result of the investigation, and has now reportedly agreed to forfeit $7.03 million. He will be sentenced on 9 July 2018.
Reuters, 19 April 2018
Fraudulent medical device scheme conspirators sentenced
Three defendants have pleaded guilty to offences connected to marketing and selling light-emitting medical devices to customers, claiming that they could cure a wide variety of serious illnesses including cancer, emphysema, diabetes, autism, HIV, and heart disease. The perpetrators, Robert Lytle, Irina Kossovskaia and Ronald D. Weir Jr, targeted mainly elderly customers with their "QLaser" product, the effectiveness of which was not actually backed by any published clinical or scientific studies. They persevered with the scheme even after a series of injunctions ordered them to stop selling and refund all QLaser purchasers in 2015. Mr Lytle was sentenced to 12 years in prison, followed by 2 years of supervised release, Mr Weir was sentenced to 24 months in prison, followed by 3 years of supervised release, and Ms Kossovskaia was sentenced to 15 months in prison, followed by 2 years of supervised release. Criminal contempt charges against a fourth individual, Fredretta Eason, were dismissed.
DoJ, 23 April 2018
Florida man sentenced for $10 million health care fraud scheme
Vladimir Prado Sr. has been sentenced to 97 months in prison following his guilty plea to involvement in a health care fraud scheme worth $10 million. Mr Prado pleaded guilty in February 2018 to conspiracy to commit health care fraud and wire fraud after indictments in October 2017 and November 2017. The offences to which Mr Prado admitted included his ownership of medical and rehabilitation clinics, which between them obtained approximately $4 million through false and fraudulent claims to Blue Cross Blue Shield, and fraudulent claims for reimbursement submitted to the Medicare program.
DoJ, 20 April 2018
Altaba, formerly Yahoo!, agrees to pay $35 million after cybersecurity breach
Altaba, the entity formerly known as Yahoo! Inc., has agreed to pay $35 million to the US Securities and Exchange Commission (SEC) as a penalty in connection with its failure to disclose a data breach through which Russian hackers stole personal data from hundreds of millions of user accounts. The breach took place in December 2014, with usernames, email addresses, phone numbers, birthdates, encrypted passwords, and security questions and answers reportedly taken. While the breach was reported to Yahoo senior management, it was not then adequately investigated and the question of whether it should be disclosed to investors was not properly considered. The breach was not in the end disclosed to the public until 2016 when Verizon Communications, Inc. was acquiring Yahoo's operating business.
SEC, 24 April 2018
Vekselberg has assets frozen due to US sanctions
Viktor Vekselberg, the Russian oligarch at the head of the Renova Group conglomerate, has reportedly had assets totalling between $1.5 billion and $2 billion frozen by US sanctions authorities. Mr Vekselberg is based in Switzerland, and Renova Group is headquartered in Moscow with a Swiss subsidiary. As a result of these connections, all US dollar bank accounts of companies controlled by Renova have been blocked. It is reported that several European firms have experienced difficulties as a result of links to Renova, since the sanctions were imposed. For example, Swiss-based engineering company Sulzer was forced to buy back 5 million shares from Renova in order to avoid sanction. The Swiss government was reportedly instrumental in facilitating this process, and Mr Vekselberg and Renova are likely to look for further assistance along similar lines to resolve their business problems.
Reuters, 21 April 2018
Latvian banks end relationships with Russian oligarchs after US sanctions
It is reported that Peters Putnins, the director of Latvian regulator the Financial Capital Market Commission, has claimed that a number of domestic banks have had to end relationships with businesses and individuals affected by the latest wave of sanctions imposed on Russia by the US. Latvia has recently embarked on a process of cleaning up its banking system amid allegations of bribery and harbouring illicit cash. The nation is focused on tightening oversight of its financial system, which has reportedly resulted in deposits held in the country dropping by circa 2.5 billion euros in the last two months. There are suggestions that the banks are looking to revamp their businesses to adapt to changing circumstances, and that some may relocate abroad.
Bloomberg, 23 April 2018
FCA warns of increased threat from loan scams
The FCA has published a press release warning of the risk of loan fee fraud, with over £3.5 million being lost to it in 2017. According to the press release, loan fee fraud normally occurs where a victim is searching online for a loan and is then offered one by a scammer. The scammer requests an upfront fee in order to access the loan, and then the victim is often persuaded to make multiple payments. In reality, no loan ever materialises. Action Fraud reportedly fielded 4,700 reports of loan fee scams in 2017, and it is now the most common scam reported to the FCA.
FCA, 24 April 2018
Severn Trent Water Limited fined £350,000 for River Amber pollution
Severn Trent Water was fined £350,000 on 19 April 2018 and ordered to pay the Environment Agency's costs of £68,003.
In a pollution incident in November 2015, around 30,000 fish were estimated to have been killed and 5km of ecology estimated to have been damaged along the River Amber. The incident involved the release of sodium hydroxide from the Ogston Water Treatment (operated by Severn Trent Water) works into the river. The Environment Agency has been monitoring the recovery of the river's ecology for the last two years. Severn Trent Water apologised for the incident and also donated £228,000 to the Derbyshire Wildlife Trust.
Gov.uk, 20 April 2018
Shropshire farmer fined £16,000 for environmental offences
On 16 April 2018, Edward Fair pled guilty to nine charges relating to nitrate pollution management and one charge relating to water abstraction in Telford Magistrates Court. He was fined £16,000 and ordered to pay £20,000 in costs.
Between May 2015 and April 2017, the EA found that he had abstracted over 20,000 litres of water per day from a borehole on the farmland without an abstraction licence. Between October 2016 and April 2017, he was abstracting more than three times the legal limit of water (on average up to 67,000 litres per day) and using this water for farming activities and supplying eight nearby tenanted properties.
Mr Fair also failed to carry out the necessary planning and recording of his use of fertilisers and manures as per the local farming requirements and failed to produce these records to the EA in breach of the Nitrate Pollution Prevention Regulations 2008.
Gov.uk, 18 April 2018
Health and Safety
Companies fined £2 million following fatal crush incident
R K Civil Engineers Ltd and R K District Heating Ltd have each been fined £1 million following an incident in which an employee was crushed whilst unloading heating pipes.
David Beresford was working at the EON Renewable Energy Plant in Blackburn when the incident happened. An excavator was being used to lift and move the pipes which were incorrectly stacked. Two pipes rolled of the stack and crushed Mr Beresford.
Costs of £15,847 were also imposed by the judge to be agreed between the two defendants.
SHP, 24 April 2018
Farming Partnership fined £400,000 for fatality
A farming partnership has been fined following an incident in which a 19 year old employee was killed in a vehicle accident. Harry Christian-Allan was using a tractor and tandem-axle trailer to transport grain from the Partnership's farm to another of its farms in Weybridge. The vehicle failed to negotiate a roundabout and struck a bridge leaving Mr Christian-Allan with major injuries, he later died in hospital.
The HSE found that the brakes on the trailer were ineffective as it was fitted with drum type brakes that had not been correctly adjusted.
G W Topham & Son of North East Farm, Cambridge Road, Cambridgeshire, was found guilty after a trial of breaching Section 2 of the Health and Safety at Work etc Act 1974 and Regulation 5 of the Provision and Use of Work Equipment Regulations 1998. The partnership was fined £400,000 and ordered to pay costs of £67,274.12.