Episode 169

7th July – 10th July 2025

Sanctions

US Treasury Targets Hizballah’s Financial Backbone with New Sanctions on AQAH Officials

The US Department of the Treasury has sanctioned seven senior officials and one entity linked to Al-Qard Al-Hassan (‘AQAH’), a Hizballah-controlled financial institution previously designated in 2007. These individuals played critical roles in enabling Hizballah’s access to the formal financial system, allegedly helping disguise the group’s interests through deceptive financial practices at Lebanese banks. The move is part of Washington’s ongoing strategy to disrupt Hizballah’s financial networks and support the Lebanese government’s efforts to curtail the group’s economic influence.

The individuals sanctioned include AQAH department heads, branch managers, and procurement coordinators who facilitated millions in transactions, frequently through mirrored activities and joint bank accounts designed to obscure Hizballah’s involvement. Among those named are longtime AQAH affiliates who have also co-owned businesses tied to Hizballah’s financial infrastructure, including the now-sanctioned company Tashilat SARL.

In response, all US-linked assets of these individuals and entities are now frozen, and US persons are barred from engaging with them. The Treasury emphasised that today’s actions reinforce a broader campaign against Hizballah’s use of oil sales, commercial enterprises, and shadow banking to rebuild its operations. Secondary sanctions may apply to foreign financial institutions knowingly facilitating significant transactions on behalf of those designated.

US Sanctions DPRK Cyber Operatives and Russian Partners Over Global IT Worker Scheme

On 8th July 2025, the US Department of the Treasury announced a coordinated sanctions action targeting a covert North Korean IT worker network designed to generate revenue for the Kim regime and its weapons programmes. The designations, led by the Office of Foreign Assets Control (‘OFAC’), aim to disrupt a global operation involving North Korean nationals masquerading as foreign freelancers to secure employment in unwitting tech companies around the world.

Central to the action is Song Kum Hyok, a DPRK-based cyber actor affiliated with the Reconnaissance General Bureau (‘RGB’)’s Andariel hacking group—previously sanctioned for cyberattacks and virtual currency theft. Song orchestrated schemes where North Korean IT workers, often based in China or Russia, used stolen identities of US citizens to apply for remote jobs in American companies. OFAC found that in 2022–2023, Song created false profiles using US social security numbers and addresses to help DPRK nationals infiltrate corporate networks and route earnings back to Pyongyang.

In a related move, the Treasury also sanctioned Russian national Gayk Asatryan, who contracted with two DPRK firms—Korea Songkwang Trading General Corporation and Korea Saenal Trading Corporation—to dispatch nearly 80 North Korean IT workers to his Russia-based entities: Asatryan LLC and Fortuna LLC. These companies facilitated direct transfers of earnings to the DPRK, helping the regime skirt global sanctions while exploiting freelance tech platforms and virtual asset channels.

The sanctions highlight how the DPRK’s cyber apparatus—under military intelligence command—blends traditional espionage, cybercrime, and labour export to finance its illicit ballistic missile and WMD programmes. This action builds on previous designations of groups like Lazarus, Bluenoroff, and the Technical Reconnaissance Bureau, reinforcing that sanctions remain in full force under U.N. and US frameworks.

All assets of designated individuals and entities under US jurisdiction are now blocked. The Treasury has warned global financial institutions and tech platforms to be vigilant against misuse of their services by DPRK-linked actors posing as freelancers. The broader message: despite North Korea’s evolving playbook, exploiting digital ecosystems will face hard limits when entangled with the US financial system.

UK Imposes New Sanctions on Russian Individuals and Entity Over Chemical Weapons Activities

On 7th July 2025, the UK government issued a financial sanctions notice under the Chemical Weapons (Sanctions) (EU Exit) Regulations 2019, targeting two senior Russian military officials and one state-affiliated entity. These measures include an asset freeze and prohibitions on trust services, implemented as part of the UK's ongoing commitment to counter the use and proliferation of chemical weapons.

The designated individuals are Major Generals Andrei Marchenko and Aleksey Viktorovich Rtishchev, both holding leadership roles in the Russian Ministry of Defence’s Radiological, Chemical and Biological Defence Troops. The UK government concluded that they were responsible for engaging in or promoting the use of chemical weapons in Ukraine. Rtishchev, now Head of the Defence Troops, and Marchenko, his Deputy, are specifically linked to the transfer and operational deployment of such weapons.

In addition, the Joint Stock Company Federal Scientific and Production Centre Scientific Research Institute of Applied Chemistry has been sanctioned. The entity reportedly supplied RG-Vo riot control agent grenades to the Russian military, which were then used as weapons of war in Ukraine, contravening the Chemical Weapons Convention.

UK-based institutions are required to freeze any funds or economic resources connected to the listed persons and entity, and report relevant information to the Office of Financial Sanctions Implementation (‘OFSI’). Failure to comply may constitute a criminal offence under UK law. The updated details can be found on the UK Sanctions List and the Consolidated List on gov.uk.

UK Exporter Pays Record £1.16m Penalty for Breaching Russia Sanctions

In its latest enforcement action, HM Revenue and Customs (‘HMRC’) has secured the largest compound settlement to date for a breach of Russia-related export controls. The UK exporter involved paid a penalty of £1,160,725.67 in May after making goods available to Russia in violation of The Russia (Sanctions) (EU Exit) Regulations 2019. This enforcement underscores the UK’s continued commitment to upholding one of the most extensive sanction regimes ever imposed on a major economy—measures which have already deprived Russia of an estimated $450 billion in funding following its invasion of Ukraine.

The government used the occasion to remind businesses trading internationally of the seriousness of sanctions breaches, which may lead to significant financial penalties or criminal prosecution. HMRC urged companies to monitor their supply chains closely and report any irregularities or unlicensed exports promptly. Voluntary disclosure is encouraged for firms which suspect a breach has occurred. Official guidance on sanctions compliance is available on gov.uk to help exporters meet their obligations and avoid exposure to costly penalties.

Money Laundering

Singapore Fines Nine Financial Institutions S$27.45 million for Major Anti-Money Laundering Failures

The Monetary Authority of Singapore (‘MAS’) has imposed S$27.45 million in penalties on nine financial institutions for breaches linked to a major 2023 money laundering case. Institutions fined include major banks such as Credit Suisse, UBS, Citibank, and UOB, as well as capital market and trust entities. While most had AML/CFT frameworks in place, MAS found critical implementation lapses—particularly in customer risk assessments, wealth source verification, transaction monitoring, and response to suspicious activity reports.

Key individuals at Blue Ocean Invest and Trident Trust also faced prohibition orders and reprimands for failing to uphold adequate AML controls. MAS emphasised that failures in governance, oversight, and frontline vigilance exposed Singapore’s financial system to serious money laundering risks. The regulator urged firms to benchmark against supervisory expectations and best practices, particularly in handling high-risk clients and detecting red flags.

Gambling Commission Flags Anti-Money Laundering Failures at Taichi Tech Limited Amid Broader Compliance Crackdown

The UK Gambling Commission has identified serious shortcomings in Taichi Tech Limited’s anti-money laundering (‘AML’) systems following a regulatory investigation. While the operator, trading as Fafabet, was primarily fined £170,000 for unfair terms and conditions, the enforcement action also stemmed from insufficient safeguards against financial crime.

The report noted that Taichi Tech allowed customers to wager significant sums over short time frames despite holding limited customer due diligence (‘CDD’) information. This failure to verify the source of funds and assess potential risks exposed the business to exploitation by illicit actors. The company’s AML protocols lacked robustness in managing customer risk profiles, an essential requirement under both the Licence Conditions and Codes of Practice (‘LCCP’) and broader UK financial regulations.

Additionally, there were deficiencies in ongoing monitoring and customer interaction. In several instances, the company failed to follow up meaningfully when users displayed high-velocity spending—a red flag for both money laundering and problem gambling. The Commission found that automated safer gambling emails were the only intervention and were often ignored without consequence or escalation, highlighting a lack of human oversight in risk management.

As part of the regulatory outcome, Taichi Tech is required to commission an independent third-party audit to verify that appropriate AML controls are now in place. The case underscores the regulator’s continuing emphasis on strong AML frameworks and proactive risk mitigation, regardless of an operator’s size or market share.

Bribery and Corruption

Europe Condemns Police Crackdown on Serbia’s Anti-Corruption Protests

The Council of Europe’s human rights commissioner has raised alarm over the Serbian government’s use of excessive force and arbitrary detentions during anti-corruption protests in Belgrade. Demonstrations, largely led by university students demanding early elections, intensified following a mass rally which ended in clashes with riot police. Rights groups, including Amnesty International and Civil Rights Defenders, denounced the forceful police response to what they describe as peaceful dissent.

Footage has surfaced showing riot police allegedly beating protestors, with reports of multiple injuries and arrests—including minors and university staff. Human rights officials and the EU mission in Serbia are calling for restraint and investigation into these actions. Despite growing international concern, President Aleksandar Vučić has labelled the protests as acts of “terror,” deepening tensions in a country already shaken by a deadly infrastructure collapse blamed on corruption.

Dutch Anti-Corruption Efforts Show Progress, But GRECO Calls for Stronger Safeguards

The Netherlands has made measured progress in strengthening integrity within central government and law enforcement, according to the latest follow-up report by the Council of Europe’s Group of States against Corruption (‘GRECO’), published on 4th July 2025. The report reviews how the Netherlands has implemented 16 recommendations issued in GRECO’s 2018 Fifth Round evaluation.

To date, seven of those recommendations have been fully implemented, eight are partially fulfilled, and one remains untouched. GRECO commended the Dutch authorities for some constructive steps, particularly the appointment of two former ministers as confidential counsellors and initial work on legislation regulating post-employment conduct of government officials.

However, GRECO stressed that the Netherlands must introduce more comprehensive measures to safeguard integrity at the highest levels of public office. Key priorities include adopting a dedicated integrity policy which addresses the most corruption-prone areas, establishing a mechanism to monitor and sanction breaches of the ministerial Code of Conduct, and instituting regular financial declarations for cabinet members while in office.

Regarding law enforcement, six recommendations have been fully met, though GRECO found gaps in the processes for disclosing and registering gifts and financial interests. The watchdog concluded that the overall level of compliance remains insufficient and requested a progress report from the Netherlands by 31st March 2026.

Fraud

Two Men Jailed for £1.5M Cryptocurrency Fraud Following FCA Prosecution

Raymondip Bedi and Patrick Mavanga have been sentenced to a combined 12 years in prison for orchestrating a £1.5 million cryptocurrency investment fraud which misled at least 65 victims. Between 2017 and 2019, the duo cold-called individuals and lured them into investing in fake crypto consultancy schemes via companies including CCX Capital and Astaria Group LLP. The pair flagrantly operated outside regulatory bounds, prompting strong condemnation from the judge, who noted their intent to “drive a coach and horses through the regulatory system.”

At Southwark Crown Court, Bedi received five years and four months, while Mavanga was sentenced to six years and six months, which included activation of a previously suspended sentence. Both had pleaded guilty to conspiracy to defraud, and violations of the Financial Services and Markets Act 2000. Bedi also admitted to money laundering, while Mavanga was further convicted of using false identification and perverting the course of justice by deleting call recordings following Bedi’s arrest.

The FCA, which led the prosecution, continues confiscation proceedings to recover the criminal proceeds. It also urges affected individuals to contact them and reminds the public to consult its ScamSmart campaign to avoid investment frauds. The case adds to the FCA’s recent string of successful legal actions targeting financial misconduct and crypto-related scams.

Texas Flood Scammers Target Residents with Disaster-Themed Fraud Schemes, Warns US Attorney’s Office

In the wake of catastrophic flooding across Texas, the US Attorney’s Office for the Western District of Texas has issued an urgent warning about rising fraud schemes exploiting disaster-struck communities. Criminals are taking advantage of the chaos and vulnerability by impersonating aid workers or charities through phone calls, text messages, emails, postal mail, and even face-to-face interactions, aiming to deceive victims out of money or personal information.

The public is urged to remain vigilant and report any suspicious activity. Authorities are emphasising that natural disasters often create perfect conditions for scammers to operate—especially when victims are under stress or trying to help others. To counter this, federal agencies are offering multiple reporting channels, including the Justice Department’s National Centre for Disaster Fraud and local FBI offices.

Alongside urging residents to be cautious, the advisory includes resources from the Federal Trade Commission and the FBI to help individuals donate safely and understand common fraud tactics. The push highlights a broader effort to protect public trust and prevent secondary harm in the aftermath of natural catastrophes.

Market Abuse

FCA Secures Convictions in £1m Insider Dealing and Laundering Case

Redinel and Oerta Korfuzi have been sentenced to a combined 11 years in prison following their convictions for insider dealing and money laundering worth £1 million. Redinel, a research analyst at Janus Henderson, misused confidential market information from his role to anticipate share price movements. He traded ahead of significant corporate announcements and passed the insights to his sister, Oerta, who helped execute the trades across multiple accounts. Their activity spanned 13 stocks and netted them over £960,000 between December 2019 and March 2021.

The Financial Conduct Authority (‘FCA’), with support from the Metropolitan Police, uncovered the scheme by analysing patterns in trading data. Beyond the trading fraud, authorities also exposed an international money laundering operation: 173 suspicious deposits were tracked from the UK to Albania, and nearly £25,000 in cash was found in a Knightsbridge safety deposit box. Despite the scale of the operation, investigators have yet to identify the source of the laundered funds.

Following the siblings’ guilty verdict in June 2025, the FCA initiated proceedings under the Proceeds of Crime Act 2002 to recover illicit gains. The case underscores the FCA’s commitment to protecting market integrity and ensuring those who abuse privileged access face serious consequences.

Other Financial Crime News

Monzo Fined £21m by FCA for Systemic Failings in Financial Crime Controls

The Financial Conduct Authority (‘FCA’) has imposed a £21.1 million fine on Monzo Bank Ltd for significant deficiencies in its anti-financial crime systems between October 2018 and August 2020. Despite rapid growth—from around 600,000 to over 5.8 million customers in just four years—Monzo failed to scale its financial crime prevention mechanisms accordingly. The FCA highlighted systemic weaknesses in customer onboarding, risk assessment, and transaction monitoring, prompting a mandatory independent review in 2020.

In response to the identified failings, the FCA ordered Monzo to stop onboarding high-risk customers. However, the bank continued to breach this requirement, enrolling over 34,000 high-risk clients between August 2020 and June 2022. According to the FCA, this included customers using “obviously implausible information” such as famous London landmarks as residential addresses.

While Monzo has since implemented a financial crime change programme to strengthen its compliance framework, the regulator deemed its earlier conduct a serious failure of duty. The fine was reduced from £30.1 million after Monzo agreed to settle. This case marks the tenth instance in the past four years where the FCA has fined a bank for financial crime control failings, underscoring its ongoing supervisory emphasis in this area. The Final Notice is here.

Cyber Crime

ICC Targeted in Sophisticated Cyberattack Amid Rising Geopolitical Tensions

The International Criminal Court (‘ICC’) has confirmed that it recently experienced a “sophisticated and targeted” cyberattack, detected through its internal alert and response mechanisms. While the nature and origin of the attack remain undisclosed, officials stated that the breach was contained, and mitigation efforts are underway.

No group has claimed responsibility, but the breach follows the court’s high-profile indictment of Israeli Prime Minister Benjamin Netanyahu—a development which may cast the attack in a geopolitical light. The ICC has not revealed whether sensitive data was compromised or what specific systems were affected, leaving many questions unanswered.

This incident highlights the growing cybersecurity threats faced by international judicial institutions, especially those involved in politically sensitive investigations. The ICC’s measured public response suggests ongoing internal assessments and potential collaboration with cyber forensics and intelligence authorities.

Scottish Councils and NHS Battle Surge in Cyber Attacks Amid Spiralling Security Costs

Scottish public bodies are grappling with a sharp rise in cyber-attacks, prompting soaring spending on digital defences across councils and NHS boards. In the wake of several major breaches, some authorities have had to increase cybersecurity budgets by more than sixfold since 2021. For example, Perth and Kinross Council’s spending rose from just over £48,000 to more than £303,000, while NHS Dumfries and Galloway saw its costs more than double.

Cybersecurity teams are facing an “onslaught” of threats, with NHS Tayside reporting around 25,000 unauthorised access attempts daily. Councils have also experienced disruptions, such as in Glasgow, where malicious server activity forced the shutdown of online services. Education networks in Edinburgh and West Lothian were also targeted, with attacks affecting student access during exam season.

Experts warn that the sophistication of attacks—often bolstered by AI—coupled with tightening budgets, has left public infrastructure vulnerable. Authorities are now attempting to maximise the impact of limited resources while reinforcing their digital frontlines. Critics have called on the Scottish Government to increase funding to protect citizens’ sensitive data from escalating cyber threats.