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  • U.S. enforcement authorities seize $3.7 million, arrest 281 for involvement in Business Email Compromise schemes

    Financial Crimes

    On September 10, the DOJ announced a coordinated effort with the U.S. Department of Homeland Security, the U.S. Department of the Treasury, the U.S. Postal Inspection Service, and the U.S. Department of State, against a series of Business Email Compromise (BEC) scams. The effort was conducted over a four-month period, resulting in the seizure of nearly $3.7 million and the arrest of 281 individuals in the U.S. and overseas, including 167 in Nigeria, 18 in Turkey and 15 in Ghana, along with arrests in France, Italy, Japan, Kenya, Malaysia, and the U.K. According to the DOJ, “BEC, also known as ‘cyber-enabled financial fraud,’ is a sophisticated scam often targeting employees with access to company finances and businesses working with foreign suppliers and/or businesses that regularly perform wire transfer payments.” BEC scams can involve requests for paper checks and may not actually “compromise” an email account or computer network. The DOJ notes that many BEC scams are perpetrated by foreign citizens, who are often members of transnational criminal organizations.

    As previously covered by InfoBytes, the Financial Crimes Enforcement Network (FinCEN), in July, discussed efforts designed to restrict and impede Business Email Compromise (BEC) scammers and other illicit actors who profit from email compromise fraud schemes and issued an updated advisory, providing general trends in BEC schemes, information concerning the targeting of non-business entities, and risks associated with the targeting of vulnerable business processes.

    Financial Crimes Fraud DOJ Department of Treasury Of Interest to Non-US Persons Enforcement FinCEN

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  • OFAC announces anti-terrorism sanctions

    Financial Crimes

    On September 10, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the designation of 15 leaders, individuals, and entities affiliated with terror groups, pursuant to the newly issued Executive Order (E.O.) 13886, “Modernizing Sanctions to Combat Terrorism,” which updates E.O. 13224. E.O. 13886 provides Treasury and the State Department with “new tools” to identify and designate perpetrators. Most notably, under E.O. 13886, foreign financial institutions are now subject to secondary sanctions, allowing OFAC to prohibit or impose strict conditions on the opening or maintaining in the U.S. of a correspondent account or a payable-through account by any foreign financial institution that knowingly facilitates a significant transaction for any Specially Designated Global Terrorist (SDGT), or a person acting on behalf of or at the direction of, or owned or controlled by, a SDGT.

    As a result of the sanctions, all property and interests in property of the sanctioned targets subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from entering into transactions with designated persons. Finally, OFAC warns that persons that engage in transactions with the designated individuals “may themselves be exposed to sanctions or subject to an enforcement action.” 

    Financial Crimes Department of Treasury Of Interest to Non-US Persons OFAC Executive Order Iraq Syria Sanctions

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  • OFAC issues new Venezuela-related general license

    Financial Crimes

    On September 9, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License (GL) 34, “Authorizing Transactions Involving Certain Government of Venezuela Persons,” related to Executive Order (E.O.) 13884. As previously covered by InfoBytes, E.O. 13884, among other things, prevents all property and property interests of the Government of Venezuela existing within the U.S. or in the possession of a U.S. person from being transferred, paid, exported, withdrawn, or otherwise dealt in.

    GL 34 authorizes transactions with certain Government of Venezuela individuals, including United States citizens; permanent resident aliens of the United States; individuals in the United States who have a valid U.S. immigrant or nonimmigrant visa, other than individuals in the United States as part of Venezuela’s mission to the United Nations; and former employees and contractors of the Government of Venezuela. OFAC also updated FAQ 680 to reflect the new GL.

    Financial Crimes Of Interest to Non-US Persons OFAC Department of Treasury Sanctions Venezuela

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  • OFAC strengthens Cuba sanctions, revokes “U-turn” authorization

    Financial Crimes

    On September 6, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced amendments effective October 9 to the Cuban Assets Control Regulations (CACR), which implement changes in accordance with President Trump’s 2017 National Security Presidential Memorandum “Strengthening the Policy of the United States Towards Cuba.” Key elements of the changes include:

    • Lowering the value of permitted remittances to Cuba. Family remittances will be capped at $1,000 U.S. dollars per quarter that a single remitter can send to an individual Cuban national. Remittances to close family members of prohibited Cuban officials and members of the Cuban Communist Party will be forbidden. While the amendments rescind the authorization for donative remittances, they add a new provision authorizing remittances to certain individuals and independent non-governmental organizations in Cuba “to support the operation of economic activity . . . independent of government control.”
    • “U-turn” transactions. The amended sanctions revoke what is commonly referred to as the Cuban “U-turn” authorization. Effective next month, financial institutions subject to U.S. jurisdiction will no longer be authorized to process Cuba-related payments that originate and terminate outside the United States. However, financial institutions subject to U.S. jurisdiction will be permitted to reject such transactions.

    An updated list of FAQs related to the CACR has also been published, as well as guidance on recent changes to the sanctions.

    Financial Crimes Department of Treasury OFAC Of Interest to Non-US Persons Cuba Sanctions

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  • OFAC sanctions Iranian petroleum shipping network

    Financial Crimes

    On September 4, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13224 against a complex shipping network “that is directed by and financially supports the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and its terrorist proxy Hizballah.” According to OFAC, the IRGC-QF managed to obfuscate its involvement in moving hundreds of millions of dollars’ worth of Iranian oil over the past year through the use of the sanctioned shipping network for the benefit of illicit actors. The sanctioned shipping network includes 16 entities and 10 individuals, as well as 11 vessels identified as “as property in which blocked persons have an interest.”

    As a result of the sanctions, “all property and interests in property of these entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons, and warned foreign financial institutions that if they knowingly facilitate significant financial transactions for any of the designated entities, they may be subject to U.S. correspondent account or payable-through account sanctions. Additionally, OFAC issued a reminder that “the purchase, acquisition, sale, transport, or marketing of petroleum or petroleum products from Iran is sanctionable pursuant to E.O. 13846,” and released a new shipping advisory warning the maritime community of these types of schemes and the sanctions risks associated with blocked persons.

    Financial Crimes Department of Treasury OFAC Of Interest to Non-US Persons Iran Sanctions

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  • OFAC designates shipping network for aiding North Korea

    Financial Crimes

    On August 30, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced additions to the Specially Designated Nationals List pursuant to Executive Order 13810. The additions identify two Taiwanese individuals and three entities, as well as one Hong Kong-based vessel identified as blocked property, for allegedly facilitating the delivery of fuel originally intended for the Philippines to North Korean vessels via ship-to-ship transfers. According to OFAC, the additions highlight “North Korea’s continued use of illicit ship-to-ship (STS) transfers to circumvent United Nations . . . sanctions that restrict the import of petroleum products, as well as the U.S. Government’s commitment to implement existing UN Security Council Resolutions.” As a result of the sanctions, “all property and interests in property of these individuals and entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons, and warned foreign financial institutions that if they knowingly facilitate significant transactions for any of the designated individuals, they may be subject to U.S. correspondent account or payable-through account sanctions.

    Financial Crimes Department of Treasury OFAC Of Interest to Non-US Persons North Korea Sanctions

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  • OFAC sanctions bank connected to Hizballah; identifies several individuals as facilitators for HAMAS

    Financial Crimes

    On August 29, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order 13224 (E.O. 13224) against a Lebanon-based financial institution, along with three of its subsidiaries, for allegedly facilitating banking activities for Hizballah. OFAC designated the financial institution as a Specially Designated Global Terrorist “for assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, Hizballah.” As a result of the sanctions, “all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated persons. The designated entities are also subject to secondary sanctions pursuant to the Hizballah Financial Sanctions Regulations, which implement the Hizballah International Financing Prevention Act of 2015, and allow OFAC the authority to “prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for Hizballah, or a person acting on behalf of or at the direction of, or owned or controlled by, Hizballah.”

    The same day, OFAC also designated several financial facilitators pursuant to E.O. 13224 for allegedly acting as intermediaries between Iran’s Islamic Revolutionary Guard Corps-Qods Force and HAMAS’s operational arm. According to OFAC, the Lebanon and Gaza-based financial facilitators are responsible for moving tens of millions of dollars from Iran through Hizballah to HAMAS, funding violence against people in Gaza. As a result, all property and interests in property of the sanctioned targets subject to U.S. jurisdiction are blocked and must be reported to OFAC. U.S. persons are also generally prohibited from entering into transactions with designated persons. Furthermore, “persons that engage in certain transactions with the individuals designated today may themselves be exposed to sanctions or subject to an enforcement action.” 

    Financial Crimes Department of Treasury OFAC Sanctions Of Interest to Non-US Persons Iran

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  • Cybersecurity company settles FCPA claims for $11.7 million

    Securities

    On August 29, a cybersecurity company agreed to pay over $11.7 million to settle SEC claims that certain subsidiaries operating in Russia and China violated the books and records and internal accounting controls provisions of the FCPA. The alleged misconduct included certain sales employees at the Russian subsidiary who misrepresented “the need for increased discounts to meet competition,” and—instead of passing the incremental discounts on to end-user customers—created “common funds” in off-book accounts that were diverted toward “excessive” travel and entertainment involving foreign officials, which the employees allegedly claimed served business purposes. According to the SEC, the company failed to (i) properly record the expenses; or (ii) implement or maintain an effective internal accounting system to prevent the violations from occurring. During approximately the same time period, sales employees at the Chinese subsidiary also paid for domestic trips and entertainment for foreign officials while allegedly understating the amount of entertainment involved and falsifying trip agendas to the company’s legal department to obtain approval.

    In entering into the administrative order, the SEC considered the company’s cooperation and compliance efforts. Without admitting or denying wrongdoing, the company agreed to pay a $6.5 million civil money penalty and more than $5.2 million in disgorgement and interest.

    Securities SEC FCPA Settlement Financial Crimes

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  • FinCEN division will investigate global money-laundering threats

    Financial Crimes

    On August 28, the Financial Crimes Enforcement Network (FinCEN) announced a new division intended to investigate global money laundering threats. The Global Investigations Division (GID)—led by Matthew Stiglitz, a former senior official in the Department of Justice’s Criminal Division—will target activities such as weapons of mass destruction proliferation, rogue state actors, transnational organized crime, and narcotics trafficking. According to FinCEN, GID will utilize the agency’s Bank Secrecy Act authorities, including Section 311 of the USA PATRIOT Act, to combat both domestic and international illicit terrorist finance and money laundering threats.

    Financial Crimes FinCEN Of Interest to Non-US Persons Bank Secrecy Act Anti-Money Laundering Patriot Act

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  • OFAC sanctions procurement networks supporting Iran’s missile programs

    Financial Crimes

    On August 28, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), pursuant to Executive Order (E.O.) 13382, designated two Iranian networks involved in the procurement of materials for persons related to the Islamic Revolutionary Guard Corps, the Iranian regime’s missile program, and Iran’s Ministry of Defense and Armed Forces Logistics. According to OFAC, one of the identified networks utilized a Hong Kong-front company to evade U.S. and international sanctions in order to “facilitate tens of millions of dollars’ worth of proliferation activities targeting U.S. technology and electronic components.” As a result of the sanctions, “all property and interests in property of these individuals that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC.” OFAC noted that its regulations “generally prohibit” U.S. persons from participating in transactions with the designated individuals, and warned foreign financial institutions that if they knowingly facilitate significant transactions for any of the designated individuals, they may be subject to U.S. correspondent account or payable-through account sanctions.

    Financial Crimes Department of Treasury Sanctions Of Interest to Non-US Persons OFAC Iran

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