Personal Liability

FOR IMMEDIATE RELEASE
  August 9, 2019
  Contact: DEA Public Affairs
 

Press Release

 

Lebanese businessman tied by Treasury Department to Hezbollah is sentenced to prison for money laundering scheme involving the evasion of U.S. sanctions

 

WASHINGTON – The operator of a network of businesses in Lebanon and Africa, whom the United States Department of the Treasury designated as a financier of Lebanon-based terrorist group Hezbollah, was sentenced to five years in prison and ordered to forfeit $50 million by U.S. District Judge Reggie B. Walton of the District of Columbia.

 

Kassim Tajideen, 63, had previously pleaded guilty to one count of conspiracy to launder monetary instruments in furtherance of violating the International Emergency Economic Powers Act (IEEPA). In 2009, the U.S. Department of the Treasury designated Tajideen as a Specially Designated Global Terrorist based on his tens of millions of dollars of financial support of Hezbollah. The designation prohibited Tajideen from being involved in, or benefiting from, transactions involving U.S. persons or companies without a license from the Department of the Treasury.

 

“This defendant knowingly violated sanctions and put our nation’s security at risk,” said Assistant Attorney General Brian A. Benczkowski of the Criminal Division.  “His sentencing and the $50 million forfeiture in this case are just the latest public examples of the Department of Justice’s ongoing efforts to disrupt and dismantle Hezbollah and its support networks.”

 

Tajideen’s case falls under the United States Drug Enforcement Administration’s Project Cassandra, which targets Hezbollah’s global criminal support network, which operates as a logistics, procurement and financing arm for Hezbollah. This investigation and others are part of the Department of Justice’s Hezbollah Financing and Narcoterrorism Team. The HFNT was formed in January 2018 to ensure an aggressive and coordinated approach to prosecutions and investigations, including Project Cassandra cases, targeting the individuals and networks supporting Hezbollah. Comprised of experienced international narcotics trafficking, terrorism, organized crime, and money laundering prosecutors and investigators, the HFNT works closely with partners like the DEA, the Department of the Treasury, and the Federal Bureau of Investigation, among others, to advance and facilitate prosecutions of Hezbollah and its support network in appropriate cases.

 

“This is the latest example of the DEA’s success against Hezbollah’s global criminal support network and our commitment to interagency collaboration in combatting the overall threat posed by this transnational criminal organization,” said Acting Special Agent in Charge of DEA’s Special Operations Division Michael J. Machak.

 

“Today’s sentencing highlights our efforts to prosecute those who violate sanctions meant to stem the flow of money to terrorists groups,” said U.S. Attorney Jessie K. Liu for the District of Columbia. “Our message to those who violate sanctions is that you will be found, and you will be prosecuted to the full extent of the law.”

 

According to the statement of facts signed by Tajideen in conjunction with his plea, after his designation, Tajideen conspired with at least five other persons to conduct over $50 million in transactions with U.S. businesses that violated these prohibitions. In addition, Tajideen and his co-conspirators knowingly engaged in transactions outside of the United States, which involved transmissions of as much as $1 billion through the United States financial system from places outside the United States.

 

This case was investigated by DEA SOD’s Counter Narcoterrorism Operations Center and the DEA New Jersey Field Division, with support from the Customs and Border Protection’s National Targeting Center/Counter Network Division, the U.S. Treasury Department’s Financial Crimes Enforcement Network and Office of Foreign Assets Control, the Criminal Division’s Office of International Affairs, and the Counterintelligence and Export Control Section of the National Security Division.

 

The case was prosecuted by Trial Attorney Joseph Palazzo of the Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Thomas A. Gillice, Luke Jones, Karen Seifert and Deborah Curtis and Special Assistant U.S. Attorney Jacqueline L. Barkett of the U.S. Attorney’s Office for the District of Columbia.

FOR IMMEDIATE RELEASE
July 23, 2019
Contact: Bryan Hubbard
(202) 649-6870
 

OCC Issues Consent Order of Prohibition and $50,000 Civil Money Penalty Against Former General Counsel of Rabobank N.A.

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today announced the issuance of a consent order of prohibition and $50,000 civil money penalty against Daniel Weiss, the former General Counsel of Rabobank, N.A., Roseville, Calif. (Bank).

The consent order prohibits Mr. Weiss from participating in the affairs of any federally insured depository institution and assesses a $50,000 civil money penalty for violations of law and unsafe or unsound practices alleged in the notice of charges (notice) issued on March 25, 2019.

The notice alleges that Daniel Weiss, as General Counsel of the Bank, participated in the continuous concealment of a third party report assessing the Bank’s Bank Secrecy Act program from the OCC in violation of 12 USC 481 and made false statements to the OCC in violation of 18 USC 1001.

On February 7, 2018, the Bank pled guilty to conspiracy to obstruct an OCC examination in violation of 18 USC 371 and 1517 in the U.S. District Court in the Southern District of California, and agreed to pay a forfeiture in the amount of $368,701,259 and a civil money penalty to the OCC in the amount of $50 million, based in part on the violation of 12 USC 481.

Links:

OCC Notice

Consent Order

Notice of Charges

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SFC suspends former responsible officer of iSTAR International Futures Co. Limited for six months 

19 Jun 2017

The Securities and Futures Commission (SFC) has suspended Mr Wu Biwei, former responsible officer (RO) and managing director of iSTAR International Futures Co. Limited (iSTAR), now known as Rifa Futures Limited (Rifa), for six months from 16 June 2017 to 15 December 2017 (Note 1).

The disciplinary action follows the SFC’s sanctions against iSTAR over its failures to comply with anti-money laundering regulatory requirements when processing third party fund transfers between January and July 2014 (Note 2).

The SFC found that Wu, who was Rifa’s most senior person at the relevant time, was contributory to Rifa’s failure to have proper safeguards in place against the risks of money laundering and terrorist financing associated with third party fund transfers.

In particular, Wu, who was responsible for approving third party deposits and transfers, failed to:

  • make appropriate enquiries to ensure third party fund transfers were consistent with the customers’ known legitimate activities, and maintain records of such enquiries (Note 3); and
  • implement internal policies effectively for the prevention of money laundering and terrorist financing, and communicate such policies to staff members.

Wu also breached Rifa’s internal policies on employee dealing by exploiting Rifa’s lax controls.  In essence, he made deposits of substantial amounts into various clients’ accounts, and received substantial third party deposits in his trading account at Rifa when he needed additional margin to trade but did not have sufficient funds.

Furthermore, Wu breached the Securities and Futures (Client Money) Rules by causing a payment of US$200,000 from the account of a client to be made into his own (Note 4).

In deciding the disciplinary sanction, the SFC took into account all relevant circumstances including Wu’s otherwise clean disciplinary record.

End

Notes:

  1. Wu is licensed under the Securities and Futures Ordinance to carry on business in Types 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 9 (asset management) regulated activities. Wu was accredited to Rifa as a RO between 25 October 2012 and 30 September 2014 in respect of Rifa’s business in carrying on Type 2 (dealing in futures contracts) regulated activities. He is currently accredited to Futu Securities International (Hong Kong) Limited as a RO.
  2. Rifa was reprimanded and fined $3 million by the SFC over internal control deficiencies and other regulatory breaches. Please refer to the SFC’s press release dated 12 April 2017.
  3. Under paragraphs 5.10 and 5.11 of the second edition of the Guideline on Anti-Money Laundering and Counter-Terrorist Financing, a licensed corporation is required to examine and make enquiries regarding the background, purpose and circumstances of transactions which are complex, large or unusual; the findings and outcomes of such examinations and enquiries should be properly documented in writing and be available to assist the relevant authorities.
  4. Section 5(3) of the Securities and Futures (Client Money) Rules provides that a licensed corporation may not pay any client money to any of its employees unless that employee is the client on whose behalf such client money is being held.
  5. Licensed corporations are reminded to refer to the “Circular to Licensed Corporations and Associated Entities – Anti-Money Laundering / Counter Financing of Terrorism (AML/CFT) Compliance with AML/CFT Requirements” issued by the SFC on 26 January 2017 which sets out key areas of concern identified by the SFC in its review of some licensed corporations’ AML/CFT systems.

Link:

HK SFC Notice

Statement of Disciplinary Action

Financial Penalties Imposed on Credit Suisse and UOB for 1MDB-Related Transactions

Singapore, 30 May 2017…The Monetary Authority of Singapore (MAS) announced today that it has completed its two-year review of banks involved in 1MDB-related transactions known to-date.  In its latest regulatory actions, MAS has imposed financial penalties on Credit Suisse and United Overseas Bank (UOB), as well as issued Prohibition Orders (POs) against three individuals and served notice of its intention to impose the same regulatory action on three others. 

Regulatory actions against Credit Suisse and UOB

MAS has completed the series of bank inspections targeted at 1MDB-related fund flows known to-date. The latest inspections of Credit Suisse and UOB revealed several breaches of anti-money laundering (AML) requirements and control lapses.  These include weaknesses in conducting due diligence on customers and inadequate scrutiny of customers’ transactions and activities.  MAS did not however detect pervasive control weaknesses within these banks.  

MAS has imposed on Credit Suisse and UOB financial penalties amounting to S$0.7 million and S$0.9 million respectively for breaches of MAS Notice 626 – Prevention of Money Laundering and Countering the Financing of Terrorism.  It has directed the banks to appoint independent parties to assess and confirm to MAS that rectification measures have been effectively implemented. MAS has also instructed the management of Credit Suisse and UOB to take disciplinary measures, where appropriate, against errant staff.  The banks are currently taking measures to address the weaknesses identified and strengthen their AML controls.  

Prohibition Orders against convicted bank employees

Further to its announcement on 13 March 2017, MAS has issued lifetime POs against Mr Jens Fred Sturzenegger and Mr Yak Yew Chee, as well as a 15-year PO against Ms Seah Mei Ying1 with effect from 29 May 2017. 

Mr Sturzenegger was the branch manager of Falcon Private Bank Ltd, Singapore branch (Falcon Bank), while Mr Yak and Ms Seah were employees of BSI Bank Limited (BSI Bank). Mr Sturzenegger has been convicted of financial crimes including providing false information to authorities in an attempt to cover up his knowledge of Falcon Bank’s relationship with Mr Low Taek Jho.  Mr Yak and Ms Seah were convicted of multiple counts of failing to report suspicious transactions and of forging reference letters at BSI Bank on behalf of Mr Low.

All three individuals are prohibited from (i) providing any capital markets and financial advisory services; and (ii) taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital markets services or financial advisory firm in Singapore.

Prohibition Orders against Mr Kelvin Ang and officers of NRA Capital Pte Ltd

MAS has served notice of its intention to issue a PO against Mr Ang Wee Keng Kelvin2, a former representative of Maybank Kim Eng Securities Pte Ltd (MKES). MAS also served notice of its intention to issue POs against the Chief Executive Officer of NRA Capital Pte Ltd (NRA), Mr Kevin Scully, and its former Head of Research, Mr Lee Chee Waiy3

Through Mr Ang’s introduction, NRA was appointed to perform the valuation of PetroSaudi Oil Services Limited (PSOSL)4.  On 24 May 2017, Mr Ang was convicted of an offence under the Prevention of Corruption Act for bribing Mr Lee with S$3,000 to expedite the preparation of the valuation report on PSOSL.

Mr Lee had been the primary person in NRA working on the valuation. Apart from accepting the bribe, he was also found to have applied inappropriate methodology and assumptions in the valuation of PSOSL. As CEO of NRA, Mr Scully had failed to ensure that his analyst, Mr Lee, had exercised sufficient care, judgment and objectivity in the valuation of PSOSL.

The proposed POs will prohibit:
(a) Mr Ang, for a period of 6 years, from (i) providing any capital markets and financial advisory services; and (ii) taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital market services and financial advisory firm in Singapore;

(b) Mr Lee and Mr Scully, for a period of 6 and 3 years respectively, from (i) providing any financial advisory services; and (ii) taking part in the management of, acting as a director of, or becoming a substantial shareholder of any financial advisory firm in Singapore.

Most extensive anti-money laundering review to-date

MAS’ supervisory review of financial institutions (FIs) involved in 1MDB-related flows is the most extensive it has ever taken. The review included detailed onsite inspections, offsite examination and analysis of information obtained from the FIs and foreign regulators, and close co-ordination with the Attorney-General Chambers and the Commercial Affairs Department. The review uncovered a complex web of transactions involving numerous shell companies and individuals operating in multiple jurisdictions, including the United States, Switzerland, Hong Kong, Luxembourg and Malaysia.

Singapore agencies responded expeditiously to requests for information or assistance from overseas law enforcement and regulatory authorities.  In turn, Singapore submitted similar requests to, and received vital information from, many countries.  The good progress achieved to-date would not have been possible without close international co-operation.  Investigations are still on-going in many jurisdictions and Singapore will continue to render its assistance where needed. 

Arising from its extensive review, MAS has shut down two merchant banks, BSI Bank and Falcon Bank, due to egregious failures of AML controls and improper conduct by senior management.  Financial penalties of S$29.1 million in aggregate have been imposed on eight banks (BSI Bank, Falcon Bank, DBS, UBS AG, Standard Chartered Bank, Coutts, Credit Suisse and UOB) for various breaches of AML requirements.  POs, ranging from 10  years to lifetime, have been issued against four former employees of financial institutions implicated in these transactions. MAS has notifed another three current and former employees of its intention to issue POs against them, ranging from 3 to 6 years.
 
Conclusion

Mr Ravi Menon, Managing Director, MAS, said, “The two-year long 1MDB-related review holds key lessons for both MAS and financial institutions in Singapore.  MAS has enhanced its AML surveillance and taken unprecedented enforcement actions against errant institutions and individuals.  Financial institutions have increased their risk awareness and strengthened their AML controls.  Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place.  The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance.” 




1 Formerly known as Yvonne Seah Yew Foong.
2 Mr Ang was a representative of MKES from August 2009 to November 2015.  
3 Mr Lee was a representative of NRA from September 2008 to September 2015.
4 Mr Yeo Jiawei, a former employee of BSI Bank Limited, had sought Mr Ang’s help to obtain a valuation of PSOSL.

To put that in perspective, the bigger of the two fines is less than $700,000 USD.

Link:

MAS Notice

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Thursday, May 4, 2017

Acting Manhattan U.S. Attorney Announces Settlement Of Bank Secrecy Act Suit Against Former Chief Compliance Officer At Moneygram For Failure To Implement And Maintain An Effective Anti-Money Laundering Program And File Timely SARS

Thomas E. Haider Agrees to a Three-Year Bar from Performing a Compliance Function at a Money Transmitter and to Pay a Civil Penalty of $250,000

 

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Jamal El-Hindi, the Acting Director of the Financial Crimes Enforcement Network (“FinCEN”), announced today that the United States Department of the Treasury (the “Treasury Department”) has settled its claims under the Currency and Foreign Transactions Reporting Act of 1970 (“Bank Secrecy Act” or “BSA”) against THOMAS E. HAIDER (“HAIDER”), the former chief compliance officer of MoneyGram International, Inc. (“MoneyGram”). During the relevant time period, MoneyGram operated a money transfer service that enabled its customers to transfer money from one MoneyGram outlet to another. In the settlement – which resolves claims that HAIDER is liable under the BSA for failing to ensure that MoneyGram implemented and maintained an effective anti-money laundering (“AML”) program and filed timely suspicious activity reports (“SARs”) with FinCEN – HAIDER has agreed to a three-year injunction barring him from performing a compliance function for any money transmitter. HAIDER has also agreed to pay $250,000, and has admitted, acknowledged, and accepted responsibility for, among other things, (1) failing to terminate specific MoneyGram outlets after being presented with information that strongly indicated the outlets were complicit in consumer fraud schemes, (2) failing to implement a policy for terminating outlets that presented a high risk of fraud, and (3) structuring MoneyGram’s AML program such that information that MoneyGram’s Fraud Department had aggregated about outlets, including the number of reports of consumer fraud that particular outlets had accumulated over specific time periods, was not generally provided to the MoneyGram analysts who were responsible for filing SARs. 

 

The settlement was approved yesterday by U.S. District Judge David S. Doty of the U.S. District Court for the District of Minnesota.

 

Acting U.S. Attorney Joon H. Kim said: “Compliance officers perform an essential function, serving as the first line of defense in the fight against fraud and money laundering. Unfortunately, as today’s settlement shows, Thomas Haider violated his obligations as MoneyGram’s chief compliance officer. By failing to terminate MoneyGram outlets that presented a high risk for fraud and to take other actions clearly required of him, Haider allowed criminals to use MoneyGram to defraud innocent consumers. We are committed to working with FinCEN to enforce the requirements of the Bank Secrecy Act and to hold individuals like Haider accountable.”

 

Acting FinCEN Director Jamal El-Hindi said: “FinCEN relies on compliance professionals from every corner of the financial industry. FinCEN and our law enforcement partners need their judgment and their skills to effectively fight money laundering, fraud, and terrorist financing. Compliance professionals occupy unique positions of trust in our financial system. When that trust is broken, it is important that we take action so that the reputations of thousands of talented compliance officers are not diminished by any one individual’s outlying egregious actions. We have repeatedly said that when we take an action against an individual, the record will clearly reflect the basis for that action. Here, despite being presented with various ways to address clearly illicit use of the financial institution, the individual failed to take required actions designed to guard the very system he was charged with protecting, undermining the purposes of the BSA. Holding him personally accountable strengthens the compliance profession by demonstrating that behavior like this is not tolerated within the ranks of compliance professionals.” 

 

As part of the settlement, filed in federal court in Minneapolis, HAIDER has admitted, acknowledged, and accepted responsibility for the below-described conduct that occurred during the period 2003 through May 23, 2008 (the “Covered Period”). 

 

MoneyGram operated a money transfer service that enabled its customers to transfer money to and from various locations in the United States and abroad through MoneyGram’s global network of agents and outlets. 

 

HAIDER was MoneyGram’s chief compliance officer, and was the most senior MoneyGram employee with direct oversight over MoneyGram’s Fraud Department and AML Compliance Department. As such, HAIDER had the authority to implement a policy for terminating or otherwise disciplining MoneyGram agents and outlets. In 2006 and 2007, members of MoneyGram’s Fraud Department proposed that MoneyGram implement a policy for terminating or otherwise disciplining agents and outlets that presented a high risk of fraud. A draft policy was provided to HAIDER no later than March 2007. However, MoneyGram’s Sales Department objected to a discipline/termination policy for high-fraud agents and outlets, and therefore, during HAIDER’s employment at MoneyGram, no such policy was implemented. 

 

In addition, in April 2007, MoneyGram’s Fraud Department recommended terminating a number of specific MoneyGram outlets that were located in Canada. To support this recommendation, the Director of Fraud provided HAIDER and other senior managers with specific information on 49 Canadian outlets, which included spreadsheets analyzing the 49 outlets’ money transfer activity during the six-month period from September 2006 through February 2007. The spreadsheets revealed that the 49 outlets accounted for approximately 58% of all reported fraud involving money sent through MoneyGram’s money transfer system to Canada during this six-month period. The spreadsheets also reflected, among other things, that each of the 49 outlets had characteristics that HAIDER and the other members of the Fraud and AML Compliance Departments who reported to him viewed as strong indicators that an outlet was complicit in consumer fraud schemes. Among the 49 outlets were four outlets that were owned and/or operated by the same individual, James Ugoh. The April 2007 spreadsheets revealed that, during the six-month period, the four Ugoh outlets alone had collectively accumulated 150 consumer fraud reports, totaling more than $300,000 in consumer losses. Ugoh has since pled guilty to various crimes relating to consumer fraud, and he has admitted that almost all of the money his outlets received constituted fraud proceeds. 

 

HAIDER had ultimate authority to terminate agents and outlets because of fraud or AML compliance concerns, but in the face of pushback from the Sales Department did not exercise that authority with respect to the vast majority of the 49 outlets identified in the April 2007 spreadsheets.

 

By April 2007, HAIDER was aware that MoneyGram’s Fraud Department had the ability to aggregate – and had been aggregating – information relating to MoneyGram’s agents and outlets, including the number of consumer fraud reports particular outlets had accumulated over specific time periods. However, HAIDER structured MoneyGram’s AML program such that this information was not generally provided to the MoneyGram analysts who were responsible for filing SARs. During the Covered Period, there were numerous outlets that the Fraud Department identified as having accumulated a disproportionate number of consumer fraud reports, but for which MoneyGram did not file SARs. In addition, MoneyGram’s AML Compliance Department failed to conduct adequate audits of many of those agents/outlets, and certain of the agents were permitted to open additional outlets. 

* * *

 

The Treasury Department filed its complaint in this lawsuit in the United States District Court for the Southern District of New York in December 2014. In March 2015, the parties agreed to transfer the case to the United States District Court for the District of Minnesota, where MoneyGram was headquartered for the period of time relevant to the Government’s complaint. 

 

Mr. Kim thanked FinCEN’s Enforcement Division, Office of Chief Counsel, and Office of Special Investigations for their extraordinary assistance with this case. 

 

This case has been handled at all times by the Civil Frauds Unit of the United States Attorney’s Office for the Southern District of New York. Assistant United States Attorneys Christopher B. Harwood, Jessica Jean Hu, Caleb Hayes-Deats, and Elizabeth M. Tulis are in charge of the case, having been designated as Special Assistant United States Attorneys for the District of Minnesota for that purpose.

Link:

DOJ Press Release

Consent Judgment

Order Settlement Dismissal

FinCEN Press Release