Episode 253

25th May – 28th May 2026

Sanctions

US Treasury Sanctions Lebanese Officials Linked to Hizballah for Obstructing Peace Efforts

The US Department of the Treasury has designated nine individuals in Lebanon for actions it says are obstructing the country’s peace process and hindering efforts to disarm Hizballah, according to an official announcement. The Office of Foreign Assets Control stated that the sanctioned individuals, which span political, military, and security roles, have supported or coordinated with Hizballah in ways which undermine state authority and impede disarmament initiatives. The designations, issued under Executive Order 13224, block the individuals’ US-linked assets and restrict transactions involving US persons, with Treasury officials emphasising that the measures aim to counter activities which threaten stability and governance in Lebanon.

UK Removes Seven Individuals from ISIL (Da’esh) and Al‑Qaeda Sanctions List

The UK Foreign, Commonwealth and Development Office has updated the UK Sanctions List to reflect the delisting of seven individuals previously designated under the ISIL (Da’esh) and Al‑Qaeda regime, following decisions made at UN level. According to the notice, the individuals, who had been subject to asset freezes, travel bans and arms embargoes, were removed after UN review processes concluded, with several entries noting that the individuals were confirmed deceased. The update also reiterates ongoing obligations for firms and individuals regarding asset freezes and reporting requirements, and directs stakeholders to existing guidance on compliance and enforcement. The UN press release is here.

UK Introduces New Sanctions Targeting Russian Evasion Networks

The UK government has announced a new package of sanctions aimed at disrupting financial networks used to circumvent existing restrictions on Russia, according to material from the Foreign, Commonwealth & Development Office. The measures focus on cryptocurrency exchanges and the Kremlin‑linked A7 network, which officials say has channelled significant funds through shadow financial systems, including routes involving Kyrgyzstan and Georgia. The government stated that the designations, which take immediate effect, are intended to counter evolving evasion tactics and restrict financial flows supporting Russia’s war effort in Ukraine. The announcement forms part of the UK’s broader sanctions strategy, which has included more than 3,300 designations to date and ongoing coordination with international partners to limit Russia’s access to global financial infrastructure.

UK Amends Personal Remittances General Licence to Incorporate Cryptoasset Definitions and Reporting Mandates

The Personal Remittances General Licence (INT/2024/4761108), which permits non-designated individuals to process specified payments through designated financial institutions up to a set limit, has been amended. The updates introduce a formal definition of a "cryptoasset" as a cryptographically secured digital representation of value or contractual rights using distributed ledger technology for electronic transfer, storage, or trading. Additionally, the amendment establishes a new mandatory reporting requirement for any individual utilising cryptoassets to execute or receive payments under the licence, which has now been extended to expire on 23rd February 2028. Parties intending to use General Licence INT/2024/4761108 are advised to consult the official documentation for full details regarding compliance and usage permissions.

EU Extends Sanctions Framework to Address Iran’s Actions Affecting Freedom of Navigation

The Council of the European Union has expanded its existing sanctions framework to allow measures against individuals and entities involved in Iran’s actions which threaten lawful transit passage and freedom of navigation in the Middle East, particularly in the Strait of Hormuz. According to the Council, the decision builds on earlier measures targeting Iran’s military support to Russia and armed groups in the region, and follows political agreement reached by EU foreign ministers in April 2026. The updated framework enables the EU to impose travel bans, asset freezes, and restrictions on the provision of funds or economic resources, with officials noting that Iran’s interference with vessels transiting the strait contravenes international law and undermines maritime security.

Fraud

Feeding Our Future Ringleader Sentenced to 500 Months in Federal Fraud Case

Aimee Bock, founder and executive director of the non-profit Feeding Our Future, has been sentenced to 500 months in federal prison for orchestrating what prosecutors described as a $240 million fraud scheme targeting the Federal Child Nutrition Programme during the COVID‑19 pandemic. According to the US Department of Justice, Bock and her co‑conspirators created shell companies, falsified meal counts, and submitted fraudulent claims for meals which were never served, using the proceeds to purchase luxury vehicles, real estate, and international travel. Officials said the scheme involved more than 250 sites across Minnesota and represented one of the largest frauds ever committed against a social service programme in the state. The investigation was led by the FBI, IRS‑CI, the US Postal Inspection Service, and Homeland Security Investigations.

Founder of Multinational Investment Firm Sentenced to 12 Years for $2 Billion Fraud and Bribery Schemes

Greg Lindberg, the founder of Eli Global and owner of Global Bankers Insurance Group, was sentenced to 12 years in federal prison for orchestrating large‑scale fraud, money laundering, and a bribery scheme which prosecutors say caused the collapse of multiple insurance companies and left thousands of policyholders with more than $1 billion in losses. Court records show that between 2016 and 2019, Lindberg directed a network of companies across the United States and overseas to divert over $2 billion in insurance assets into entities he controlled, concealing the transactions from regulators while using the funds to support an extravagant lifestyle. As the scheme began to unravel, he and others attempted to bribe North Carolina’s insurance commissioner with campaign contributions in exchange for regulatory actions favourable to his business interests. Lindberg previously pleaded guilty to conspiracy charges and was also convicted by a federal jury in a related bribery case. A special master has been appointed to oversee restitution, with a separate hearing to determine compensation for victims expected at a later date.

Court Rejects "Circular" Fraud Defence in Privatbank's Billion-Dollar Battle

The English Court of Appeal has dismissed an attempt by two Ukrainian billionaires to overturn a judgment involving the systematic looting of what was once Ukraine's largest bank. Igor Kolomoisky and Gennadiy Bogolyubov, the former controlling shareholders of Privatbank, remain liable for a principal sum of approximately US$1.76 billion following a failed appeal which centred on a technicality regarding "repaid" loans.

This long-running legal saga took a turn when the defendants advanced a "Repayment Defence." Their legal team posited that because the original fraudulent drawdowns were eventually cleared on the bank's ledgers, the institution’s claim for damages was essentially extinguished. It appears, however, that this defence relied on the argument that the "repayments" were themselves funded by further fraudulent loans from the same bank. While the appellants claimed the bank "chose" to treat these later transactions as settling the original debt, the court noted that evidence for such a conscious corporate decision seemed largely absent beyond simple accounting entries.

The case also highlights the immense strain such litigation places on the English court system. The original High Court judgment took over 20 months to produce, a delay the appellate court described as serious. This lag might suggest a struggle with the sheer scale of the proceedings, which was scheme involving 270 fraudulent drawdowns and a complex network of shell companies. Nevertheless, the judges found that the enormity of the task, which involved 35,000 documents and 14 expert witnesses, likely explains why the trial judge required so much time to untangle the web of sham supply agreements.

Ultimately, the court was unpersuaded that Ukrainian law would allow a fraudster to wipe the slate clean by using a second fraud to pay off the first. By dismissing the appeal, the judges have reinforced the earlier finding that the pair used their control of the bank to funnel billions into a money-laundering system so intricate it became nearly impossible to trace the final destination of the funds. For the bank, which was nationalised in 2016 after being declared insolvent, the ruling marks a significant stage in its effort to recover assets it claims were misappropriated through a vast network of sham paperwork. The judgment can be accessed here.

Money Laundering

Report warns £325bn in illicit funds pass through UK each year as ministers face pressure ahead of 2026 summit

New analysis from the Finance Innovation Lab suggests that the UK may be hosting far more illicit financial activity than previously acknowledged, with an estimated £325 billion in dirty money moving through the country annually. The figure, which is equivalent to more than a tenth of UK GDP, appears to reinforce long‑standing concerns that the UK remains a key transit point for global financial crime. When Crown Dependencies and Overseas Territories are included, the total rises to over £788 billion, a scale the authors describe as both “shocking” and structurally embedded in the UK’s financial system.

The report arrives at a politically sensitive moment. The UK is preparing to host a major Illicit Finance Summit in 2026, and ministers are being urged to confront what critics say is the City of London’s enabling role in tax evasion, corruption, and money laundering. While the government has repeatedly pledged to tighten controls, the research may raise questions about whether current efforts match the scale of the problem.

Jesse Griffiths, one of the report’s authors, argues that the financial sector, which is often praised as the “crown jewel” of the economy, has a darker side which drains public revenue and indirectly supports criminal networks. He suggests that acknowledging the true scale of illicit flows is a necessary first step toward meaningful reform. Public sentiment appears to align with that view: polling cited in the report shows that nearly nine in ten voters want stronger action on economic crime, yet fewer than half believe the government is taking it seriously.

Cross‑party figures have echoed the call for tougher measures. Baroness Margaret Hodge described the findings as a stark reminder of the UK’s global responsibilities, noting that illicit finance harms both Britain and countries whose public funds are siphoned offshore. Phil Brickell MP said the upcoming summit could be a turning point, if the government chooses to act decisively, while Sir Andrew Mitchell MP criticised the continued use of UK‑linked tax havens which, in his view, strip resources from some of the world’s poorest nations.

The report highlights three areas where immediate action is likely to have the greatest impact: tightening crypto‑asset regulation, ending secrecy in UK‑linked tax havens by requiring full transparency of company ownership, and increasing funding for enforcement bodies such as the National Crime Agency and Serious Fraud Office. The authors note that even cautious assumptions point to a system which is still leaking vast sums, and that the true scale of illicit finance is almost certainly higher than current estimates.

While the government has not yet responded to the report, the timing, merely months before international partners arrive in London, may increase pressure to demonstrate that the UK intends to be part of the solution rather than a continuing gateway for hidden wealth. The press release is here.

Two Chinese Nationals Charged in Long‑Running Scheme to Launder Cartel Drug Proceeds

An indictment unsealed in the Eastern District of Virginia has charged Chinese nationals Ruhuan Zhen and Hongce Wu with conspiracy to commit money laundering on behalf of transnational criminal organisations, including the Sinaloa Cartel and Cartel de Jalisco Nueva Generación, according to the US Department of Justice. Prosecutors allege that from at least November 2016 to April 2025, the defendants and their co‑conspirators used methods such as mirror transfers, foreign bank accounts, encrypted communications, serial‑number verification, and trade‑based money laundering to move substantial volumes of narcotics proceeds across the United States, Mexico, Latin America, China, and other regions. Zhen and Wu, who were indicted in April 2025 and remain at large, each face a maximum sentence of 20 years if convicted. The investigation was led by the DEA’s Special Operations Division with support from multiple domestic and international field offices, and the case is being prosecuted by the US Attorney’s Office for the Eastern District of Virginia and the Justice Department’s Money Laundering, Narcotics and Forfeiture Section.

Bribery and Corruption

Australia’s anti‑corruption chief steps down amid scrutiny over conflicts and pressure to restore public trust

Paul Brereton, the inaugural head of Australia’s National Anti‑Corruption Commission (NACC), will leave his post in early July after months of criticism which he says had begun to distract from the agency’s core mission. His resignation, announced on Monday, appears to signal an attempt to steady the commission’s public standing at a time when confidence in its independence has been repeatedly tested.

Brereton said the “ongoing focus on matters relating to me personally” was pulling attention away from the NACC’s work, adding that the commission’s success “is paramount, and not due to any single person.” The timing is notable: he had been due to appear before Senate this week after the Greens secured a motion compelling his attendance.

The commissioner has faced sustained scrutiny over consulting work he continued to perform for the inspector‑general of the Australian Defence Force, his former employer, while leading the NACC. The work stemmed from his earlier inquiry into alleged war crimes by Australian troops in Afghanistan. Although Brereton described the assistance as “very modest” and informal, the arrangement raised questions about whether it blurred professional boundaries. A draft report on whether he breached rules was provided to the attorney general’s department several weeks ago, though its findings have not yet been released.

The NACC’s own decisions have also been under the microscope. Its initial refusal in 2024 to investigate six individuals referred by the robodebt royal commission drew heavy criticism, only for the body to reverse course the following year. The NACC inspector later found the original decision was “affected by apprehended bias” because Brereton had not recused himself despite acknowledging a perceived conflict involving one of the individuals. While the inspector made no finding of intentional wrongdoing, the episode fuelled concerns about governance and transparency.

A subsequent report released earlier this year found two of the public servants involved had engaged in serious corrupt conduct, a conclusion welcomed by integrity advocates who had argued the commission needed to demonstrate its independence more clearly. Still, the prolonged focus on Brereton’s role appears to have convinced many observers that a reset was overdue.

Reactions from across the political spectrum suggest his departure may help the NACC regain its footing. Greens senator David Shoebridge called the resignation the “right outcome,” while independent MP Helen Haines said a transparent recruitment process for the next commissioner would be essential to rebuilding trust. Transparency International Australia echoed that view, warning that only a merit‑based appointment process is likely to reassure the public that the watchdog can operate without fear or favour.

Brereton’s final day will be 6th July. His exit, coming just three years after the commission’s establishment, may prompt broader debate about how Australia’s integrity bodies are structured, and whether the pressures placed on their leaders are becoming a barrier to long‑term stability. A statement issued by the Attorney-General in response to the announcement is here.

ICPC Urges Niger State Judicial Workers to Strengthen Ethics as Part of Wider Anti‑Corruption Push

The Independent Corrupt Practices and Other Related Offences Commission (ICPC) has urged members of the Niger State Judicial Service Commission to take a more assertive role in promoting transparency and ethical conduct, a message which appears to reflect the agency’s concern about persistent gaps in public‑sector integrity. The call was delivered during a sensitisation session in Minna, where ICPC officials outlined how everyday administrative decisions, from handling case files to managing internal approvals, can either reinforce or weaken public trust.

Assistant Chief Investigator Suleiman Alhaj, who presented the first paper, argued that public servants sit “at the heart of the nation’s anti‑corruption architecture,” though he acknowledged that maintaining discipline and due process can be difficult in environments where pressure, workload, or informal expectations sometimes blur the lines. His remarks suggested that ethical lapses are not always dramatic scandals but may emerge through small, repeated shortcuts which gradually erode confidence in the justice system.

A second presentation, delivered by Deputy Superintendent Fauziya Abubakar, focused on the National Ethics and Integrity Policy. She highlighted values such as patriotism, human dignity, and accountability, noting that these principles are meant to guide daily decision‑making rather than remain as abstract statements in policy documents. Her comments hinted at a recurring challenge: institutions often adopt integrity frameworks, yet staff may struggle to translate them into consistent practice without clear incentives or leadership support.

The event drew 31 participants, including representatives of the Attorney General’s office and senior staff of the Judicial Service Commission. Their attendance may signal a willingness within the state’s justice sector to engage more directly with anti‑corruption reforms, though some observers might question whether one‑off sensitisation sessions can meaningfully shift entrenched behaviours without sustained follow‑through.

For the ICPC, the programme forms part of a broader outreach effort across Niger State aimed at preventing corruption through education, value reorientation, and closer collaboration with public institutions. The agency’s message, repeated throughout the session, was straightforward but ambitious: integrity should not be treated as an occasional aspiration but as the daily standard for anyone entrusted with public authority.

GRECO Says Greece Has Made Notable Strides on Integrity Reforms, but Key Gaps Still Hold Back Full Compliance

Greece’s efforts to strengthen integrity standards across central government and law enforcement appear to be moving in the right direction, though several reforms still lag behind expectations, according to a new assessment by the Council of Europe’s anti‑corruption body, GRECO. The Second Compliance Report, adopted in March and published in May 2026, reviews how far Greece has come in addressing 17 recommendations issued during the Fifth Evaluation Round. While the report acknowledges progress, such as new codes of conduct for ministers and political advisors, expanded asset‑declaration oversight, and early steps toward modernising access‑to‑information rules, it also notes that implementation remains uneven. Some measures look promising on paper but have yet to translate into consistent practice.

GRECO points to areas where Greece has made tangible headway, including the adoption of integrity rules for political advisors, the publication of associate lists across ministries, and the introduction of more structured training and advisory mechanisms for senior officials. The police have also seen incremental improvements, with more women entering senior ranks and new structures being created to assess corruption risks. Yet several reforms still seem to be in a holding pattern. Early stakeholder engagement in law‑making, for instance, continues to be patchy despite procedural improvements, and the long‑discussed “legislative footprint” remains absent. In the police, integrity checks, confidential counselling, and updated ethics guidance are still under development, suggesting that the institutional machinery is not fully operational.

The report also highlights implementation challenges which may not be solved by legislation alone. Access‑to‑information rules have been strengthened, but delays and inconsistent responses reportedly persist. Similarly, while asset‑declaration audits have increased, GRECO notes that long‑term effectiveness will depend on sustained coordination and adequate resources. The organisation’s tone is measured: Greece has clearly invested in reforms, but several of them may require deeper cultural or administrative shifts before they deliver the intended impact. GRECO encourages the authorities to maintain momentum, particularly in areas where progress “appears to be emerging but not yet settled,” and to draw on practices from member states that have successfully embedded integrity safeguards into everyday governance.

Other Financial Crime

Europol Operation Identifies Millions in Suspected Criminal Assets Across 31 Countries

Europol has announced that its latest Project A.S.S.E.T. operational week brought together law enforcement agencies from 31 countries and private‑sector partners to identify millions of euros in suspected criminal assets. According to Europol, the four‑day initiative, which was coordinated by its European Financial and Economic Crime Centre, resulted in the tracing of hundreds of bank accounts, companies, crypto wallets, vehicles, and real estate linked to organised crime, alongside the location of two suspects, one of whom was arrested. The operation also generated intelligence on emerging money‑laundering methods, underscoring the value of cross‑border cooperation and public‑private collaboration in disrupting criminal finances.

FDIC Proposes New BSA and Sanctions Compliance Standards for Stablecoin Issuers

The Federal Deposit Insurance Corporation has issued a notice of proposed rulemaking which would establish Bank Secrecy Act and sanctions compliance standards for FDIC‑supervised permitted payment stablecoin issuers, as required under the GENIUS Act. According to the filing, the rule would mandate full adherence to applicable anti‑money laundering, counter‑terrorist financing, and economic‑sanctions regulations, including those administered by FinCEN and the Office of Foreign Assets Control. The proposal also outlines supervisory and enforcement expectations for AML/CFT programmes aligned with federal requirements, with the FDIC inviting public comments for 60 days following publication in the Federal Register.

Cybercrime

UK and Australia Strike Agreement to Confront Rapidly Evolving AI Security Threats

The UK and Australia have agreed a new partnership aimed at keeping pace with fast‑moving risks posed by advanced artificial intelligence, a move which appears to reflect growing unease about how quickly AI systems are gaining cyber capabilities. Under a Memorandum of Understanding signed in Canberra on Monday, the UK’s AI Security Institute and Australia’s AI Safety Institute will begin sharing research, exchanging staff, and coordinating efforts to evaluate frontier AI models, particularly those which could be exploited for cyber‑attacks or used to strengthen national defences.

Officials say the collaboration may signal a shift toward more formalised international oversight of high‑end AI systems, though some observers might question whether bilateral agreements can keep up with technologies which evolve in months rather than years. The institutes plan to pool insights on emerging risks, compare methods for testing whether AI behaves as intended, and develop shared principles for assessing powerful models. The UK government notes that recent research suggests advanced systems are becoming markedly better at executing complex cyber operations, a trend which is likely to intensify pressure on governments to coordinate.

AI Minister Kanishka Narayan, who signed the agreement alongside Australia’s Assistant Minister for Science, Technology and the Digital Economy, Dr Andrew Charlton, said the two countries have long cooperated on security and that such ties “matter more than ever in the age of AI.” His remarks hint at a broader concern: no single nation, he suggested, can realistically manage the risks alone. The partnership builds on existing links between the UK and Australia and adds to the UK institute’s growing network of international collaborations.

While the agreement is framed as a proactive step, it also raises questions about how quickly governments can translate shared research into practical safeguards. Still, both countries appear intent on positioning themselves ahead of the curve, arguing that closer cooperation will help ensure AI is used to improve daily life rather than expose critical infrastructure to new vulnerabilities.

Cyber Stress Tests Appear to Push Underinvesting Banks to Strengthen Defences

A new BIS working paper suggests that the European Central Bank’s 2024 cyber resilience stress test may have quietly reshaped how some euro area banks approach digital risk. The exercise, which carried no capital consequences and kept individual results confidential, appears to have prompted a noticeable rise in cybersecurity spending, particularly among institutions which had previously lagged behind their peers.

The authors examined confidential supervisory data from 109 large banks between 2019 and 2024. Their analysis indicates that overall cybersecurity investment rose by roughly 45% after the stress test was announced. But the most striking shift came from so‑called “laggard” banks, namely those which had historically invested less than expected given their risk profiles. These firms increased spending by around 80%, and many also reduced their dependence on external contractors, stabilised specialist staffing, and reconsidered their cyber insurance arrangements.

What seems to matter most, the paper argues, is not fear of losses or recent cyber incidents but the weight of supervisory attention itself. Banks subject to more intensive oversight, such as deeper reviews or a history of supervisory findings, showed the strongest reaction. Those facing lighter scrutiny changed little, which may suggest that the perceived cost of inaction rises sharply when supervisors are watching closely.

The findings add nuance to a long‑running debate about how to correct systemic underinvestment in cybersecurity. While some policymakers favour financial penalties or mandatory standards, the study hints that targeted scrutiny alone can shift behaviour, at least among institutions already aware they are behind the curve. Still, the authors stop short of claiming this approach is a cure‑all; cyber risk evolves quickly, and banks’ incentives may shift again as threats, technologies, and regulatory expectations change. The press release is here.