Bribery and Corruption

House of Lords appoints new Select Committee to review Bribery Act

The House of Lords has established a new ad hoc Select Committee that will review certain elements of the Bribery Act 2010. The Committee is to consider whether the Act has had the intended effect of stricter prosecution of corrupt conduct, a higher conviction rate and a reduction in such conduct. Another key focus will be to consider whether small and medium enterprises are sufficiently aware of the Act and how it applies to them. The Committee may also consider the effect of Deferred Prosecution Agreements and their application beyond the scope of Bribery Act offences. The Committee is to report on its findings by the end of March 2019.

Financial Times, 16 May 2018

New Irish anti-corruption legislation on the horizon

The Dáil Éireann, the lower house of the Irish legislature, has passed the Criminal Justice (Corruption) Bill, which was first published in October 2017. The Dáil has made a number of amendments to the Bill and it is now with the Seanad for further amendments at Committee Stage. The Bill is a key element of the Irish government's suite of new anti-corruption measures targeting corporate crime. The government hopes that the new law can be in place by June.

oireachtais.ie, 16 May 2018

Chinese real estate developer jailed in US for bribery offences

Macau-based businessman David Ng Lap Seng, chairman of the Sun Kian Ip Group, has been sentenced in the US for his role in a bribery scheme designed to garner UN ambassadorial support for the building of a conference centre in Macau. Mr Ng was convicted last year of two counts of violating the Foreign Corrupt Practices Act, one count of paying bribes and gratuities, one count of money laundering and two counts of conspiracy. He has now been sentenced to 48 months in prison and three years of supervised release. He will also have to pay a $1 million fine and make a restitution payment to the UN worth $307,977.

DoJ, 11 May 2018

Venezuelan chief prosecutor aims to extradite oil businessmen from US

It is reported that the Venezuelan chief prosecutor is looking to extradite Roberto Rincon and Abraham Shiera, two Venezuelan oil executives who are currently awaiting sentencing in Texas in connection with a bribery scheme.

Mr Rincon and Mr Shiera were previously arrested in the US in 2015 and have since pleaded guilty to bribing Venezuelan state oil company officials to win contracts. Initially this prosecution was reportedly branded "sabotage" on the part of the US by Venezuela, but there has now been a change of approach. Venezuelan chief prosecutor, Tarek Saab, has now said that Mr Rincon and Mr Shiera allegedly participated in a bribery scheme worth $1.16 billion, and is seeking to bring them back to Venezuela to face trial.

Bloomberg, 11 May 2018

Italian bribery prosecution of Shell and Eni adjourned to June

It has been reported that the trial of oil company executives from Eni and Shell due to take place in Milan has started with a procedural hearing and a decision to re-adjourn in June. The corruption case surrounds Eni and Shell's purchase of Nigerian oilfield OPL-245 for circa $1.3 billion in 2011. It is alleged that bribes were paid to win the licence related to exploration of the oilfield. There are altogether 15 defendants in the case, including both companies and 13 individuals. The case has been adjourned as the former Shell executives have reportedly claimed a procedural error and referred the proceedings to the Italian Supreme Court.

Reuters, 14 May 2018

Sanctions

​EU to activate "blocking statute" over US stance on Iran

EU Commission President Jean-Claude Juncker has announced that the EU will be launching the process to activate the "blocking statute" in order to protect European companies' continued investment in Iran. The law in question was adopted by the EU in 1996 to protect European parties "against the effects of the extra-territorial application of legislation adopted by a third country". It was originally developed in response to the US embargo on Cuba and US sanctions on Iran and Libya, but was never enacted because a diplomatic solution was reached. This comes in response to the United States' decision to withdraw from the Joint Comprehensive Plan of Action, the nuclear deal agreed with Iran in 2015, and re-impose wide-reaching sanctions measures.

Reuters, 17 May 2018

Russia considers counter-measures in response to US sanctions

The Russian State Duma has debated a Bill that would make it a criminal offence to comply with US and EU sanctions on Russia. The Bill includes wording to the effect that anyone refusing to do business with a Russian citizen as a result of foreign sanctions will be committing an offence in Russia, with a maximum term of four years in prison. On Thursday, the Duma voted to postpone the second reading of the Bill to next week in order to consult businesses before proceeding with further discussion of the draft law.

Reuters, 17 May 2018

Money Laundering

US doctor charged for health care fraud and money laundering

The US Department of Justice has reported that Jorge Zamora-Quezada has been charged with one count of conspiracy to commit health care fraud, five counts of health care fraud and one count of conspiracy to commit money laundering. The fraud and money laundering scheme is allegedly worth $240 million, and involved administering unnecessary medical procedures such as chemotherapy to patients who did not need them. The proceeds of the scheme were allegedly invested in commercial and residential properties across the US and Mexico.

DoJ, 14 May 2018

Fraud

Police in India charge 22 people in bank fraud case

The former head of Punjab National Bank (PNB) has reportedly been charged with fraud, along with 18 other individuals and three firms. The alleged fraud relates to circa 65 billion rupees, but the wider investigation is into fraud worth $2 billion. PNB disclosed in February that several members of its staff had issued illegal guarantees on behalf of the bank to jewellery groups raising funds from overseas branches of other Indian banks. The bank has also been carrying out its own investigation.

Reuters, 14 May 2018

Cyber Crime

Crypto-currency exchange raided by South Korean prosecutors

The offices of Upbit, one of the world's largest crypto-currency exchanges, have been raided in South Korea as part of a crackdown on money laundering and other illegal activity. In the last few months authorities in South Korea have searched the premises of several smaller exchanges, tightened controls on who can use domestic exchanges and banned initial coin offerings. The raid on Upbit reflects a wider clampdown by Prime Minister Lee Nak-yon's government in response to concerns relating to the proliferation of digital currencies in the country.

Bloomberg, 11 May 2018

Founders of Centra Tech Inc. indicted on federal fraud charges

Sohrab Sharma, Raymond Trapani and Robert Farkas, the founders of crypto-currency start-up Centra Tech Inc., have been indicted following earlier charges of fraud and conspiracy. The charges relate to an allegedly fraudulent initial coin offering (ICO) which drew in millions of dollars from investors. Prosecutors have stated that Mr Sharma, Mr Trapani and Mr Farkas lied about their product and their relationships with financial institutions.

Bloomberg, 14 May 2018

Financial Regulation

FCA successfully applies for confiscation orders against convicted insider dealers

Convicted insider dealers Martyn Dodgson and Andrew Hind have been ordered to pay confiscation orders of £1,074,236 and £624,521 respectively. The orders were made at Southwark Crown Court and must be paid off within three months, or Mr Dodgson and Mr Hind will face a further seven and a half and five and a half years in prison respectively. The original offences were proven in relation to five stocks, but this meant the court could assume a criminal lifestyle on the part of both defendants and take into account proceeds from a further 23 stocks. Mr Dodgson formerly held senior positions at Morgan Stanley, Lehman Brothers and Deutsche Bank, and passed insider information to Mr Hind, a close personal friend, who in turn arranged trades that benefitted both defendants.

FCA, 11 May 2018

Environmental Crime

South West Water ordered to pay fine for pollution in Dartmouth and Salcombe

The Environment Agency has successfully prosecuted South West Water after it failed to correct problems at two sewage treatment works in Devon. The sites in Dartmouth and Salcombe suffered from sea water infiltration, and South West Water failed to "manage and maintain processes and infrastructure" at the sites between 2015 and 2016. The result of this was damage to both sets of treatment works which resulted in unlawful discharges. South West Water has been ordered to pay £71,800 in fines and costs.

Gov.uk, 14 May 2018