This Week in Compliance

Financial Advisor Pleads Guilty for Conspiring to Launder Money in Ecuador

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 we cover the case of a Miami-based financial advisor who plead guilty for conspiring to launder money and bribing public officials in Ecuador. Read the full story and more news below:

Top Story

Financial Advisor Pleads Guilty for Conspiring to Launder Money in Ecuador:

A Miami-based financial advisor pleaded guilty this week to conspiracy for his role laundering money and concealing bribe payments to officials of Ecuador’s state-owned oil company, PetroEcuador. According to the indictment, Roberto Chatburn was found to help an oil services contractor disburse USD 3 million in bribes to government officials in order to get contracts with PetroEcuador. The bribes were paid via shell companies and bank accounts created in Panama and Switzerland on behalf of two former PetroEcuador officials. In addition, Chatburn also pleaded guilty for helping another Ecuadorian government official conceal bribes obtained from the Brazilian construction giant Odebrecht. Chatburn was thus found guilty to promote violations of the Foreign Corrupt Practices Act (FCPA) and Ecuadorian bribery law. Ten other individuals, including oil service contractors, former Ecuadorian government officials,  and financial advisors have confessed their involvement in the PetroEcuador bribery and money laundering schemes in U.S. courts.

Business

Citi pays $30 million fine to settle real-estate violations:

CitiBank will pay USD 30 million to settle charges for repeated violations of real estate holding rules and for failing to implement corrective actions in due time. Federal laws place a cap on the amount of time a national bank is allowed to hold foreclosed and “other real estate owned” (OREO) assets.In the latest judgement, the U.S. Office of the Comptroller of the Currency found that the bank committed over 200 violations in South Dakota where it breached the statutory holding period of OREO assets. In 2015, Citibank expressed that the organization was lacking adequate processes to effectively monitor the holding period of OREO assets and also stated their commitment to developing internal corrective actions to comply with federal laws.  A CitiBank spokesman admitted that the bank failed to adhere to its previous commitments but stated that since identifying the issue, Citi has allegedly strengthened internal controls to ensure better compliance with federal laws. 

Deutsche Bank took years to flag suspect Danske money flows:

Prosecutors are investigating new claims about Deutsche Bank’s involvement in Danske Bank’s 2017 money-laundering scandal. The allegations, which originate from an anonymous person with direct knowledge of the matter, accuse Deutsche Bank of failing to flag suspicious transactions with Danske Bank on due time. The transactions involve more than USD 1.1 million in transfers from Deutsche to Russia and other former Soviet States from 2014 to 2015. The probe is trying to find out whether Deutsche Bank staff attempted to cover up their involvement in these transactions or not. A spokesman from Deutsche stated that they terminated relations with Danske Bank after identifying suspicious transactions from Danske clients over an extended period of time and subsequently strengthened internal money laundering controls. The probe to the German bank comes after Danske Bank admitted that 200 billion euros of suspicious money flowed through its branch in Estonia between 2007-2015. 

Government

Guatemala court halts inquiry of UN-backed anti-corruption body:

Guatemala’s highest court has issued an immediate halt the creation of a commission investigating the work of the United Nations backed anti corruption body. The UN-backed International Commission Against Impunity in Guatemala (CICIG), which retained the support of more than 70% of the population, worked in the country for more than 12 years alongside local prosecutors to pursue high profile corruption cases until it was shut down in September 2019. The CICIG was closed by the government after two years of facing constant backlash over a probe on Guatemalan President Jimmy Morales and his close network. After its closure, the retaliatory actions continued, as Guatemalan politicians issued a decree to create a commission investigating the work of the CICIG in the country. The proposal, known as the anti-CICIG, aimed to probe “the existence of the commission of illegal or arbitrary acts” and to potentially recommend legal reprisals. While the Constitutional court ordered an injunction on the proposal, the initiative has been condemned by various civil society members, opposition and political analysts. 

Colombia Court – Ex-President Bribery Investigation to Continue:

The Supreme Court of Colombia stated that it will continue its probe into allegations of corruption of former president Alvaro Uribe. The former president testified before the Supreme Court over accusations of bribing members of a right wing paramilitary group who claimed to have damaging information on him in 2012. After the questioning, the Court issued an official statement confirming they deemed there were sufficient grounds to move further in the investigation. Uribe, who served as Colombia’s president from 2002 to 2010 and is now a senator, spoke to supporters saying the court should recognize his respect for the truth. While Uribe’s party – Centro Democratico – has accused the investigation to be politically motivated, Court President, Jose Luis Barcelo has defended the investigation and dismissed all claims of political motivation.

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