Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week, the trial against Theranos founder Elizabeth Holmes begins. Read the full story and more news below:
Top Story
‘Failure is Not a Crime’; Theranos Fraud Trial Begins
Opening statements in the trial against Theranos founder Elizabeth Holmes began this week. Holmes is accused of defrauding investors and patients of the blood testing machine developed by Theranos. The machine was billed by Holmes and her company as a revolution in the blood-testing industry, but the company, once valued at nearly USD 9B, ultimately folded after Holmes was accused of lying about the machine’s capabilities. Holmes’ defense team claimed in opening statements Wednesday that Theranos’ blood-testing device was solely a failure to execute on its goals, instead of an intentional fraud against its investors and customers.
Government
UAE Endorses Framework for Cryptocurrency Anti-Money Laundering Regulation
UAE officials have endorsed a framework for regulating virtual currencies such as Bitcoin and other cryptocurrencies. The National Committee for Combating Money-Laundering and Financing of Terrorism and Illegal Organizations said that it has “announced the adoption of a regulatory framework for virtual assets in the UAE, concordant with approved anti-money laundering and combating the financing of terrorism standards.” An official standard could bring new rules to the largely unregulated trading and use of cryptocurrencies.
22 Arrested in Hong Kong and Mainland China Money-Laundering Scheme
Police in Hong Kong and mainland China arrested 22 people in an operation against a cross-border syndicate suspected of using 85 local bank accounts to launder more than USD 95M over the past 17 months. Money was stolen from Hong Kong residents using a variety of schemes including phone scams and investment fraud cases. In total, 43 residents fell victim to the scams, including one Hong Kong woman who parted with USD 82M over just four months.
Business
Raytheon Probed Over Qatari Defense Contractor Dealings
U.S. authorities are investigating payments made by Raytheon Technologies Corp. to a defense contractor for the Qatar Armed Forces. Sources say that these payments may have been bribes intended for a member of the royal family. Last year, a lawsuit was dismissed that included allegations of payoffs of nearly USD 2M from Raytheon to Digital Soula Systems, a different Qatar defense contractor.
The SEC and DOJ, who investigated that lawsuit, both adhere to the Foreign Corrupt Practices Act, which prohibits companies from paying bribes to foreign public officials to gain a business advantage, and requires companies to maintain controls to prevent such payments.
Finnish Officials Clamp Down on Dark Web Drug Trade
The National Bureau of Investigation (KRP) of Finland has increased its efforts in monitoring trafficking of drugs and other substances over the dark web. A 2019 study found that Finland was the country with the highest amount of drug trafficking conducted on the dark web. The dark web refers to hidden websites that cannot be accessed via conventional search engines and require specialised web browsers.
Almost half of the nearly 2,200 Finns surveyed (45 per cent) who had used or purchased drugs in the past year had bought them on the dark web. England came in second, with 29 per cent of respondents who had recently purchased drugs through the dark web, followed by Australia, with 15 per cent.