Episode 160

Sanctions

UK Government Threatens Legal Action Over Abramovich’s Frozen Chelsea Sale Funds

The UK government has warned former Chelsea owner Roman Abramovich that it may take legal action over the frozen £2.5 billion ($3.4 billion) from the club’s sale. The funds, which Abramovich intended to donate to victims of Russia’s war in Ukraine, remain locked in a British bank account due to sanctions imposed after Russia’s 2022 invasion. Officials insist the money must be used exclusively for humanitarian aid in Ukraine, while Abramovich seeks broader flexibility. Finance Minister Rachel Reeves and Foreign Minister David Lammy stated they are prepared to pursue the matter in court if negotiations fail. There’s the story and a comment piece from Politico here.

OFSI launches ‘Sanctions Basics’ video series

In the UK, the Office of Financial Sanctions Implementation (‘OFSI’) has released a new video series, ‘Financial Sanctions: The Basics’. ‘This series provides high level, accessible guidance on OFSI’s processes and how to comply with financial sanctions obligations, covering a variety of topics: Introduction to OFSI and financial sanctions; OFSI’s guidance; The consolidated list; Reporting information to OFSI; General licences; Specific licences.

US Sanctions Guyanese and Colombian Drug Traffickers Using Narco-Subs and Airstrips

The US Treasury’s Office of Foreign Assets Control (‘OFAC’) has sanctioned six individuals—four Guyanese and two Colombian nationals—accused of trafficking large quantities of cocaine from South America to the United States, Europe, and the Caribbean. The traffickers used boats, narco-submarines, and clandestine airstrips to transport the drugs. Guyana has long served as a transshipment hub for international drug trafficking, with corruption hindering enforcement efforts. OFAC’s action, taken under Executive Order 14059, blocks the sanctioned individuals’ assets in the US and prohibits transactions involving them. The move underscores ongoing efforts to combat the influence of drug cartels in the region.

Money Laundering

SARs in Action: How Suspicious Activity Reports Strengthen Financial Crime Investigations

In the UK, the May 2025 SARs Reporter Booklet has been published by the UK Financial Intelligence Unit (‘UKFIU’), which provides insights into the use of Suspicious Activity Reports (‘SAR’s) in financial crime investigations. It shares sanitised case studies demonstrating how SAR intelligence aids law enforcement in tackling serious organised crime, including fraud, drug trafficking, money laundering, and tax evasion. The booklet also emphasises best practices for reporters and encourages feedback to refine the SARs regime. The highlighted case studies reveal how SARs contributed to:

-          Drug-related money laundering, leading to account freezing and asset forfeiture.

-          Fraud detection, uncovering shell companies and financial intermediaries used to obscure illicit funds.

-          Crypto-based financial crime, identifying fraudulent transactions linked to chemical trading and online sales.

The booklet complements other UKFIU publications such as the SARs In Action magazine and the UKFIU podcast, which discuss broader financial intelligence trends.

FATF and MONEYVAL Strengthen Global Efforts Against Illicit Finance in Joint June 2025 Plenary

The Financial Action Task Force (‘FATF’) and MONEYVAL, its European regional counterpart, will convene a joint Plenary meeting in Strasbourg on 12–13 June 2025. The meeting, chaired by FATF President Elisa de Anda Madrazo and MONEYVAL Chair Nicola Muccioli, aims to enhance global cooperation in the fight against financial crime. It will bring together representatives from more than 200 jurisdictions to address emerging illicit finance threats and improve risk-based anti-money laundering measures.

Following the Plenary, the Chairs of FATF-style Regional Bodies will meet on 14th June to strengthen partnerships across the Global Network. Additionally, FATF will host a Technical Assistance Peer Exchange to support countries with fewer resources in bolstering their defences against illicit finance.

Czech Bitcoin Scandal Sparks Fears of State-Backed Money Laundering

A €40m bitcoin scandal has rocked Czech politics, forcing Justice Minister Pavel Blažek to resign amid allegations that the state was used to launder criminal proceeds. The controversy stems from a bitcoin donation linked to Tomáš Jiřikovský, a convicted drug trafficker, raising concerns about cybercrime vulnerabilities within government institutions. Prime Minister Petr Fiala has called for intelligence services to investigate, warning of the broader risks posed by financial crime. President Petr Pavel cautioned that the scandal could erode trust in the justice system and damage the Czech Republic’s international reputation. Meanwhile, opposition leader Andrej Babiš is pushing for a no-confidence vote, accusing the government of systemic corruption. The fallout continues to deepen as officials scramble to contain the political crisis.

Malaysian Court Freezes £132m in London Assets Linked to Daim’s Wife Amid Corruption Probe

The Malaysian High Court has authorised the Anti-Corruption Commission (‘MACC’) to freeze assets valued at £132 million in London. These assets are reportedly owned by Toh Puan Na'imah Abdul Khalid, the spouse of the late Tun Daim Zainuddin. The assets include commercial buildings, luxury residences, and a bank account registered to the Ilham Foundation, which Na’imah chairs. The MACC claims these properties were acquired between 2013 and 2021 and are part of a broader investigation into undeclared assets linked to Daim’s family and associates. The commission is working with authorities in Switzerland and the UK to pursue further action. However, Daim’s family and legal representatives have strongly criticised the move, calling it politically motivated and legally unfounded, arguing that Daim was never charged or convicted. The court order will now be sent to jurisdictions of the UK for enforcement.

AUSTRAC CEO Warns of AI-Driven Money Laundering as Australia Expands AML Regulations

AUSTRAC CEO Brendan Thomas has outlined the growing threat of AI-enhanced money laundering networks, emphasising that transnational crime groups now operate as specialised businesses exploiting regulatory gaps. Speaking at the Integrity Insight Financial Crime Summit 2025, Thomas revealed that serious and organised crime costs Australia over $68 billion annually, with global estimates reaching $2 trillion. He highlighted how professional services—lawyers, accountants, and real estate agents—have been used to facilitate illicit financial flows. To combat this, Australia is implementing “tranche 2” AML reforms from July 2026, bringing 80,000 additional businesses into compliance. AUSTRAC is also leveraging big data analytics and AI-driven intelligence to detect financial crime more effectively. Thomas stressed that businesses must take proactive steps to understand their risks, warning that AUSTRAC will enforce penalties for non-compliance.

Thailand Tightens Casino Regulations to Curb Financial Crime Risks

Thailand is moving forward with casino legalisation while introducing stringent financial controls to combat money laundering and gambling-related risks. The government plans to record and monitor visitor transactions and implement responsible gaming policies, including a ban on casino advertisements and entry restrictions for individuals deemed financially vulnerable. Inspired by regulatory models in Singapore and Japan, the legislation proposes a THB100bn minimum investment per casino, with gambling spaces limited to 10% of integrated resorts. Although proponents highlight economic benefits and increased tourism, critics warn of potential social harms and foreign corporate dominance. The bill’s passage remains uncertain as opposition groups push for further revisions.

Bribery and Anti-Corruption

UN Experts Demand Protection for Ruth López Amid Enforced Disappearance in El Salvador

UN human rights experts have urged the Government of El Salvador to provide legal safeguards and due process for Ruth López, a human rights lawyer and director at Fundación Cristosal. López was detained on 18th May 2025 by the National Civil Police on embezzlement charges related to her advisory role at the Supreme Electoral Tribunal from 2009 to 2014. Authorities did not disclose her whereabouts for two days, subjecting her to enforced disappearance. The experts warned that such detentions create a chilling effect on civil society and emphasised the gender-specific harm often faced by women subjected to enforced disappearance. They called on El Salvador to safeguard human rights defenders and uphold freedom of expression. The UN Working Group on Enforced or Involuntary Disappearances is in contact with the authorities regarding the case.

Ruth López is a Salvadoran human rights lawyer and anti-corruption advocate. She serves as the Director of the Justice and Anti-Corruption Unit at Fundación Cristosal, a civil society organisation dedicated to defending human rights and protecting victims of violence in Central America. López has been a vocal critic of President Nayib Bukele, particularly regarding his administration’s state of emergency and alleged human rights violations. Her organisation, Cristosal, has documented abuses, including inhumane prison conditions and the erosion of democratic guarantees in El Salvador.

Civil Society Urges EU to Strengthen Anti-Corruption Standards

A coalition of 57 civil society organisations, including Transparency International chapters, has called on EU policymakers to uphold strong anti-corruption measures in the final negotiations of the proposed EU Anti-Corruption Directive. The directive seeks to set common anti-corruption standards for member states.

The open letter warns against weakening the European Parliament’s stance, citing public frustration with corruption and concerns over recent scandals like Qatargate and the Huawei controversy. Transparency International leaders stress that this directive is a test of the EU’s commitment to integrity and good governance, urging decisive action to set a global standard for transparency and accountability.

Corruption Risks in the Life Sciences Sector: Key Schemes and Mitigation Strategies

The life sciences industry, despite its role in advancing healthcare and innovation, faces significant corruption risks due to complex regulatory frameworks, financial incentives, and global supply chains. Corrupt practices can occur at various stages, including research and development, clinical trials, procurement, and marketing.

Common schemes include bribery disguised as conference sponsorships, fraudulent clinical trial payments, and manipulated procurement processes. Investigations have uncovered cases where pharmaceutical companies bribed healthcare professionals to influence prescription patterns or secure favourable market positions.

To mitigate these risks, companies must implement robust compliance measures, including strict anti-bribery policies, third-party due diligence, and effective whistleblowing mechanisms. Regular audits and employee training are essential to maintaining transparency and preventing unethical practices in the sector. The article is on the International Bar Association website and it can be accessed here.

Mongolian PM Resigns Amid Corruption Scandal Over Son’s Lavish Lifestyle

Mongolian Prime Minister Luvsannamsrain Oyun-Erdene has resigned after losing a parliamentary confidence vote, following mass protests triggered by social media images of his son's extravagant spending. The viral photos, which showed his son and his fiancée flaunting luxury shopping bags during an engagement holiday, fuelled public outrage and an anti-corruption investigation. Protesters, many of them young Mongolians, demanded greater transparency and accountability, questioning how Oyun-Erdene’s family could afford such a lifestyle. While he denied wrongdoing and accused critics of a smear campaign, Mongolia’s worsening corruption rankings under his leadership added to the pressure. His resignation marks a significant political shift, raising concerns about governance stability in the country.

US Lawmakers Push Sweeping Anti-Corruption Reforms

Congressman Pat Ryan has introduced a legislative package aimed at curbing corruption in Washington, D.C. The proposal includes bans on congressional stock trading, lifetime lobbying restrictions for former lawmakers, and stricter oversight of executive branch appointments. The initiative responds to concerns over financial misconduct and self-dealing among officials, with bipartisan support for increased transparency and accountability. Critics argue that enforcement mechanisms remain unclear, but proponents see the reforms as a necessary step toward restoring public trust in government.

Fraud

SCOTUS Expands Wire Fraud Liability: No Need to Prove Economic Loss

On 22nd May 2025, the US Supreme Court ruled in Kousisis v United States that a wire fraud conviction does not require intent to cause net economic loss. In a unanimous decision, the Court found that misleading someone into a transaction with materially false statements constitutes fraud, even if the victim suffers no financial harm. The case involved a contractor falsely claiming compliance with Pennsylvania’s disadvantaged business requirements to secure contracts. Despite fulfilling its obligations, the company was convicted because it had misrepresented key facts. The ruling clarifies the scope of the federal wire fraud statute and reinforces the "fraudulent-inducement theory," meaning fraudsters can be prosecuted regardless of financial impact. The decision bucks a recent trend of Supreme Court rulings favouring white-collar defendants. However, justices urged lower courts to apply the precedent carefully to avoid over inclusively criminal business misrepresentations.

Kano Court Sentences 29 for Internet Fraud as EFCC Intensifies Crackdown

The Economic and Financial Crimes Commission (‘EFCC’) in Nigeria has announced the conviction and sentencing of 29 individuals in Kano for internet fraud-related crimes. The convicted individuals faced charges of impersonation, cybercrime, money laundering, and retention of criminal proceeds. The sentences ranged from two to five years in prison, with options for fines. In addition, the court ordered the forfeiture of mobile devices, laptops, and illicit funds to the Nigerian government. The convictions reinforce Nigeria’s ongoing crackdown on financial crimes and cyber-related fraud.

Phishing Awareness Campaign Urges Public to Report Suspicious Emails and Texts

Action Fraud has launched a phishing awareness campaign to encourage the public to report suspicious emails and text messages. Since April 2020, over 41 million phishing attempts have been reported to the Suspicious Email Reporting Service (‘SERS’), leading to the removal of 217,000 scams across nearly 400,000 web pages.

The campaign highlights the top industries impersonated in phishing scams, including streaming services, tech companies, and UK government schemes. It also promotes the 7726 service, which allows mobile users to report scam texts, helping networks block fraudulent senders.

Officials emphasise the importance of vigilance, urging people to stop, think, and report suspicious messages to report@phishing.gov.uk or forward scam texts to 7726. The initiative aims to disrupt cybercriminal tactics and protect individuals from financial fraud.

Retail Cyber Attacks Fuel Surge in Fraud Attempts, Says Mastercard AI Chief

Mastercard has reported a 40% increase in fraud attempts in the first quarter of 2025 compared to the previous year, driven by cyber-attacks on major retailers. Marks & Spencer was notably impacted, with online orders disrupted and losses expected to reach £300 million. Greg Ulrich, Mastercard's Chief Data and AI Officer, emphasised that fraudsters are increasingly leveraging AI to enhance their attacks. He noted that financial services firms must adopt AI-driven security measures to keep pace. Mastercard has responded by integrating AI into fraud detection and customer service tools, including "Agent Pay," an AI-driven payment assistant. Ulrich advocates for a "co-intelligence" approach, balancing AI efficiency with human oversight.

Met Police Crack Down on Courier Fraud Targeting Vulnerable Londoners

The Metropolitan Police has intensified efforts to combat courier fraud, a scam where criminals impersonate police officers or bank officials to deceive victims into handing over cash, bank cards, or expensive items. In the past two months, officers have arrested 18 suspects, seized £250,000 in cash, and confiscated hundreds of bank cards and phones.

The operation has led to a 46% decrease in reported offences since February 2025. Victims—80% of whom are over 65—have been visited by officers for education and reassurance, while 115,000 crime prevention leaflets have been distributed.

Authorities uncovered a multi-million-pound fraud network, linking suspects to 70 reports of financial crime. The Met continues to collaborate with City of London Police, banks, and businesses to dismantle organised crime groups behind these scams.

Six Indicted in Croatia for Agricultural Funding Fraud and Money Laundering

The European Public Prosecutor’s Office (‘EPPO’) in Zagreb has indicted four individuals and two companies for subsidy fraud, money laundering, and document forgery related to agricultural funding. The case involves fraudulent applications for EU subsidies totalling over €2.5 million, with false claims about eligibility and investments. The defendants allegedly forged documents to secure payments and later laundered the money through cash withdrawals and transfers to affiliated companies. If convicted, they face prison sentences of up to 10 years for subsidy fraud, eight years for money laundering, and five years for forgery, alongside fines for the companies involved.

EPPO Cracks Down on €100 Million VAT Fraud Network

The European Public Prosecutor’s Office (‘EPPO’) has launched a major operation against suspected criminal groups involved in a cross-border VAT fraud scheme worth over €100 million. The fraud, centred on the sale of smartphones and electronic devices, exploited EU tax exemptions on intra-member state transactions. Authorities conducted 90 searches across five countries—France, Germany, Hungary, Lithuania, and the Netherlands—leading to four arrests and the seizure of €37 million in assets, including luxury goods and bank accounts. Investigators also uncovered fraudulent shipping practices, such as boxes filled with stones instead of smartphones, to simulate legitimate transactions. The EPPO’s action underscores its commitment to tackling financial crime within the EU.

Global Experts Tackle Education Fraud at ENIC-NARIC Meeting in Albania

On 27th May 2025, the ETINED platform hosted a workshop titled Spotting the Fakes: Navigating Education Fraud in a Digital Age during the annual ENIC-NARIC meeting in Tirana, Albania. The event gathered international experts and ENIC-NARIC centre representatives to discuss methods for identifying and addressing fraudulent qualifications. Key topics included the economic and societal impact of diploma mills, the rise of rogue credential evaluators, and the need for stronger cooperation among recognition bodies. A panel discussion, chaired by Ursula Sticker (Council of Europe), featured insights from experts across Malta, Italy, and Sweden. The establishment of a Centre for Preventing and Countering Education Fraud in Rome was highlighted as a major initiative to coordinate efforts across Europe. The workshop was held alongside the ETINED Bureau meeting, which focused on strategic planning for the upcoming 9th ETINED Plenary in November 2025.

UK Serious Fraud Office Investigates Multi-Million-Pound Council Fraud Linked to Solar Bond Scheme

The Serious Fraud Office (‘SFO’) has launched an investigation into alleged fraud involving Rockfire Investment Finance plc, a company which sold renewable energy bonds to Thurrock Council between 2016 and 2020. The council invested millions into solar farms through Rockfire’s bond scheme, which promised returns of 3-6% alongside the initial bond repayment. However, Rockfire has since entered liquidation, and Thurrock Council was effectively declared bankrupt in December 2022, leading to council tax increases and cuts to local services. The SFO has issued ‘Section 2 notices’ compelling financial institutions to provide information as part of its inquiry. Nick Ephgrave QPM, Director of the SFO, emphasised the significance of the investigation and acknowledged the cooperation of Essex Police and Thurrock Council in the early stages of the probe.

UK Parliament Debates Serious Fraud Office’s Role in Tackling Economic Crime

The UK Parliament held a debate on 3rd June 2025, discussing the Serious Fraud Office (‘SFO’) and its effectiveness in combating fraud and economic crime. David Pinto-Duschinsky (Lab, Hendon) emphasised the growing threat of fraud, money laundering, and bribery, highlighting that fraud now accounts for 40% of all crime in England and Wales. He criticised the previous government for failing to address the surge in fraud cases, which doubled between 2010 and 2024.

MPs raised concerns about AI-driven fraud, with criminals using deepfake technology to impersonate executives and conduct scams. Deirdre Costigan (Lab, Ealing Southall) called for consistent investigations into complex corporate fraud cases, citing the collapse of JVIP Group, which left victims uncompensated.

Joe Powell (Lab, Kensington and Bayswater), chair of the APPG on Anti-Corruption and Responsible Tax, urged stronger cross-government collaboration and criticised UK overseas territories for failing to meet transparency deadlines on beneficial ownership registers. He also advocated for whistleblower incentives, citing the success of US schemes which recovered $50 billion.

Gill German (Lab, Clwyd North) highlighted the human impact of fraud, particularly romance scams, which leave victims emotionally devastated. Jim Shannon (DUP, Strangford) warned of rising fraud cases in Northern Ireland, including holiday scams and benefit fraud, which cost the region £240 million in 2023-24.

Ben Maguire (Lib Dem, North Cornwall) called for a dedicated online crime agency to tackle cyber-enabled fraud, arguing that only 2% of fraud cases are investigated by police. He criticised banks for failing to compensate victims and urged greater accountability for financial institutions.

The debate underscored the need for stronger enforcement, better collaboration, and modernised fraud prevention strategies, with MPs urging the government to prioritise economic crime as a national security issue. The link to the parliamentary debate is here.

Pentagon Faces Scrutiny Over Fraud Risk Management Failures

Recent hearings and reports highlight the Department of Defence’s (‘DOD’) ongoing struggles with fraud risk management, revealing billions in taxpayer losses due to procurement fraud and financial mismanagement. The House Oversight Committee examined the DOD’s inability to track assets and spending, with officials acknowledging that fraud remains a significant issue despite prior assurances. The Government Accountability Office expanded its High-Risk List to include DOD fraud risk management, citing weak internal controls and leadership inaction. Lawmakers and auditors urge immediate reforms, including enhanced oversight, data analytics, and stricter contractor accountability to prevent further financial losses. These are the press releases on the opening and closing of the session. The Government Accountability Office press release is here.

Market Abuse

AI Enhances Market Abuse Detection in Germany’s Financial Sector

Germany’s financial regulator, BaFin, has integrated artificial intelligence into its market analysis system to improve the detection of suspicious trading patterns and market abuse. BaFin President Mark Branson highlighted that AI-driven alerts have significantly increased the accuracy of identifying offenders. The initiative follows efforts to strengthen BaFin’s oversight after its failure to detect the Wirecard fraud before the company’s collapse in 2020. The regulator has since been granted expanded investigative powers to enhance financial supervision and prevent misconduct.

Other Financial Crime News

Strengthening Anti-SLAPP Protections in Europe: Council of Europe’s Ongoing Initiatives

The Council of Europe has intensified efforts to counter Strategic Lawsuits Against Public Participation (‘SLAPP’s), which threaten media freedom and public interest journalism.

During UNESCO’s World Press Freedom Day, the Council co-organised a side event in Brussels, highlighting SLAPPs as a growing challenge across Europe. Experts, journalists, and civil society representatives discussed legal and policy measures to prevent abusive litigation aimed at silencing critical reporting. The event emphasised the Council’s Recommendation CM/Rec(2024)2 and ongoing cooperation activities to safeguard press freedom.

Separately, a bilateral institutional and judicial exchange in Podgorica convened judges and legal experts from Montenegro and Kosovo to align domestic legislation with European anti-SLAPP standards. Participants reviewed the Council of Europe’s training program on countering SLAPPs and explored strategies for implementing Directive (EU) 2024/1069, which protects individuals engaged in public participation from unfounded legal actions.

FCA Updates Enforcement Guide, Streamlining Investigations

The UK Financial Conduct Authority (‘FCA’) has announced the publication of its revised Enforcement Guide, reducing its length by over 250 pages to improve clarity and efficiency. The updated guide retains the "exceptional circumstances" test for announcing investigations into regulated and listed firms while introducing new transparency measures. These include disclosures in cases of suspected unauthorised financial services, instances where the investigation is publicly known, and anonymised announcements for educational purposes. The FCA also highlighted improved investigation speeds, with recent cases concluding in under 16 months compared to the previous 42-month average. The changes apply to investigations launched from June 2025 onwards.

Cybercrime

HMRC Hit by £47m Phishing Scam, Affecting 100,000 Taxpayer Accounts

HM Revenue and Customs (‘HMRC’) has lost £47 million to an organised phishing scam which compromised 100,000 UK taxpayer accounts. Officials assured MPs that those affected would not suffer financial loss. Criminals used stolen identity data to create or access PAYE accounts and extract fraudulent repayments. The breach, described as fraud rather than a cyber-attack, led to arrests last year. HMRC has locked down affected accounts, deleted login details, and corrected tax records. Letters are being sent to affected individuals, and HMRC is working with law enforcement agencies domestically and internationally to bring perpetrators to justice.