Read on for the latest news and updates in money laundering; fraud; bribery and corruption; sanctions; cyber crime; health and safety; and environmental

Money Laundering

FATF publishes updated anti-money laundering and counter-terrorist financing ratings

The Financial Action Task Force (FATF) has published updated country ratings in relation to the implementation of the FATF Recommendations. These ratings rate the 205 jurisdictions committed to implement the Recommendations, on both their effectiveness in implementing and technical compliance with the FATF Recommendations, using the 2013 Assessment Methodology. The consolidated assessment ratings are accompanied by detailed evaluation reports relating to each country.

In addition to the updated ratings, the FATF has also published follow up reports on the AML and CTF regimes in Bangladesh, Cambodia, Fiji and Myanmar.

FATF, 20 August 2019


General Electric denies allegations of fraudulent accounting practices following research report

General Electric (GE) has released a statement defending its financial reporting following a report published on Thursday by Harry Markopolos, the investigator who first blew the whistle on Bernard Madoff's Ponzi scheme.

Markopolos alleges that GE had improperly counted profit from a subsidiary, Baker Hughes. GE officials have responded by arguing that accounting rules in fact require GE, as the majority shareholder, to include the subsidiary’s results in its earnings reports.

The report has been published following GE's 2018 admission that its accounting practices have previously been investigated by the SEC and DoJ, while it is also the subject of a class-action shareholder lawsuit that alleges fraud in GE’s insurance and other accounting practices.

Reuters, 19 August 2019

Company CFO charged with defrauding retail investors of $322 million

The former chief financial officer of bankrupt Florida-based 1 Global Capital LLC, Alan Heide, has been charged by the SEC with defrauding retail investors. The cash advance company is alleged to have fraudulently raised over $322 million from around 3,600 investors and has already seen its former CEO, Carl Ruderman, charged with fraud also.

Heide is alleged to have knowingly signed off investors' monthly statements which overstated the value of their accounts, while also falsely representing that the company had independent auditors. While Heide has agreed to settle the charges with the SEC without admitting or denying the allegations, he will be subject to an injunction and a financial penalty, with potential criminal charges also being announced. 

SEC, 15 August 2019

Bribery and Corruption

Colombia's national airline makes voluntary disclosure of potential breaches of anti-bribery laws

Avianca Holdings S.A. (Avianca), Colombia's national airline, has made a voluntary disclosure to the DOJ and SEC, along with securities regulators in Colombia, over potential violations of the US Foreign Corrupt Practices Act 1977 and other anti-bribery laws.

Avianca said that it is conducting an internal investigation over business practices whereby tickets and upgrades were provided to officials by Avianca's "employees" in breach of anti-bribery laws. Those individuals implicated may, potentially, include members of its senior management and members of the board of directors.

The company said that it had implemented new policies in order to prevent such practices from occurring in the future.

FCPA blog, 15 August 2019 and SEC, 13 August 2019


Atradius Trade Credit Insurance to pay $345k settlement sum to OFAC for its potential breach of sanctions regulations

Atradius Trade Credit Insurance (Atradius) has settled its potential civil liability for dealing in property or interests in property of Grupo Wisa, a company designated by the Office of Foreign Assets Control (OFAC) as a narcotics trafficker under the Foreign Narcotics Kingpin Designation Act. Grupo Wisa was added on to the List of Specially Designated Nationals and Blocked Persons in 2016, following which Atradius acquired the right from an American cosmetics company to collect a debt worth $5.7m from Grupo Wisa.

OFAC alleged that by accepting the assignment and by collecting a debt of $4m following Grupo Wisa's liquidation in Panama, Atradius was in breach of the Kingpin Act by dealing in Grupo Wisa's interests in property., 16 August 2019

Cyber Crime

Local US government departments have been hacked

23 organisations connected to local government in Texas have been hit by a ransomware attack. It is unknown if the hackers have specified a ransom amount but the attack has prompted authorities to bring in cyber-security experts, as well as the military and counter-terrorism units, to help bring systems back online.

A number of US states have been affected by cyber-attacks this year with some of them paying out ransoms of up to $600,000 to have their systems restored.

BBC, 19 August 2019

Health and Safety

Rock drilling firm and director sentenced following HAVS diagnosis

Celtic Rock Services Limited and its director have been sentenced after three employees reported symptoms of hand arm vibration syndrome (HAVS). In one case this was reported as far back as 2000 but no action had been taken. It was not until 2016 that an occupational nurse was employed.  

The employees regularly used rock drills and jack hammers while abseiling down cliff faces and reported symptoms such as pins and needles and aching hands. The HSE investigation found that the risk assessment did not identify the actual exposure to vibration, that there was no health surveillance plan in place until 2016 and that the company had failed to take action when symptoms were reported.

Celtic Rock Services Limited pleaded guilty to breaching Section 2(1) of the Health and Safety at Work etc. Act 1974 and was fined £36,667 plus costs of £3,560.

Company director Alwyn Griffith Hughes Thomas pleaded guilty to breaching Section 37 of the Health and Safety at Work etc. Act 1974 and was given a 12 week custodial sentence suspended for 1 year, a 12 week curfew and ordered to pay costs of £3,560.

SHP, 12 August 2019


Directors found guilty of waste crimes

Two directors of Rowanoak Waste Services Limited have been convicted for their failure to comply with permit conditions and enforcement notices after abandoning nearly 2,000 tonnes of waste at a site in Dudley. Both Rowanoak Waste and one of its directors, Kevin Allan, were found guilty on all counts relating to the illegal waste activities. The company was fined £25,000, while Mr Allan received 12 months’ imprisonment suspended for 12 months (as well as 100 hours’ unpaid work) and was disqualified from acting as a company director for three years.

Another director, Brian McIntosh, had previously admitted his part in the failure to comply with the conditions of the permit on the site and received a sentence of 10 months’ imprisonment suspended for 12 months and was ordered to complete 150 hours’ unpaid work., 14 August 2019

Company admits polluting Fenland watercourses

Pretoria Energy Company (Arable) Limited, responsible for growing crops for energy, has been ordered to pay a total of £45,648.50 in fines, costs and compensation after it was found to have polluted 2 Fenland watercourses. The company admitted causing pollution incidents, which were a result of silage liquor leaking into watercourses in Norfolk and Cambridgeshire., 19 August 2019

Key Contacts

Nichola Peters

Nichola Peters

Partner, Head of Global Investigations/Inquiries

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Michelle de Kluyver

Michelle de Kluyver

Partner, Global Investigations
London, UK

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Erin Shoesmith

Erin Shoesmith

Partner, Health & Safety
United Kingdom

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David Pygott

David Pygott

Partner, Global Investigations
London, UK

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