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 U.S announces new sanctions targeting corruption in Lebanon. Read the full story and more news below:
U.S. Announces New Sanctions Targeting Corruption in Lebanon:
Following the explosions in Beirut’s on the 4th of August, U.S. authorities announced anti-corruption sanctions against the most prominent politicians and business leaders in Lebanon. The incident left at least 160 casualties and thousands injured. The event prompted a wave of protests against the government and against corruption, two issues that were regarded by protesters as the main reasons behind the country’s failure to manage the ongoing crisis in the nation. As a result of the demonstrations, Lebanon’s eight-month-old coalition government stepped down. While the country struggles to find new leadership, U.S. authorities announced asset-freezing sanctions and travel bans directed at individuals connected to Hezbollah in an effort to target endemic corruption and increase transparency in government operations and finances.
Hunt for Ex-Wirecard Executive Jan Marsalek Goes Public in Germany:
German investigators announced a rare appeal to the public for help in finding Jan Marsalek, Wirecards’s former Chief Operating Officer. Marsalek is presumed to have left Germany upon the company’s collapse in June. The former executive faces accusations of embezzling billions of euros and of contributing to investor fraud by helping inflate the value of the company with fake income to help raise funds in 2015. After the USD 2 B hole of missing funds in Wirecards’s balance sheet was exposed this summer, the firm’s former CEO and three others were arrested. After a failed international search between public authorities in the Philippines and Russia to find the now-defunct Marsalek, Germany’s Bundeskriminalamt (Federal Investigation Bureau) distributed posters online and on television, asking if anyone has seen the former Chief Operations Officer.
Interactive Brokers to Pay USD 38 Million Over Anti-Money Laundering Claims:
Three U.S. regulators settled money-laundering claims for USD 38 million with U.S. broker-dealer, Interactive Brokers LLC. According to the settlements reached with the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading Commission (CFTC) and the Financial Industry Regulatory Authority, the brokerage firm failed to uphold appropriate AML controls throughout more than five years. Authorities report that even after internal warnings, the company – which in that period was one of the country’s largest broker-dealers, failed to register more than 150 cases of suspicious activity. The company settled the allegations without accepting or denying the accusations and stated that they would revamp their AML guarantees going forward.
Germany Charges Audi Executives in Dieselgate Scandal:
Germany charged four former Audi executives for fraud relating to the Dieselgate scandal in which the motor manufacturer manipulated engines to falsify pollution levels. The executives include a retired senior employee and three board members who face accusations of ‘fraud, indirect false certification, and criminal advertising.’ The retired senior employee faces charges for having initiated the emission-cheating software placed in the engines of more than 434,420 Volkswagen, Audi and Porsche cars. The scandal came to light in 2015, since then, Volkswagen paid a USD 4.3 B settlement with US authorities and the CEOs of Volkswagen and Audi are still awaiting trial.
Malaysia’s Ex-Finance Minister Charged Again in Graft Case:
Malaysia’s former finance minister, Lim Guan Eng, was charged for corruption related to a USD 1.5 B infrastructure project in 2011. He is accused of requesting a bribe amounting to 10% of the profits accrued by the project. In a second indictment, he is accused of receiving USD 786,000 in bribes for awarding a construction contract to a company when he held the post of Penang’s chief minister from 2008 to 2018. The former finance minister, who served from 2018 until March 2020 after the previous government was ousted, denied all allegations and dismissed them as politically motivated.
U.S. Treasury Fines Former Army Employee Over Gifts to Alleged Narcotics Trafficker:
The U.S. Treasury Department settled allegations of improper gift-giving with a former employee of the U.S. army. The civil servant was accused of giving gifts to an individual listed by the U.S. as a narcotics trafficker. According to the Office of Foreign Assets Control (OFAC), this settlement reminds U.S. persons to exercise caution when engaging with potentially sanctioned individuals, as any transaction – even under personal circumstances – has the potential of violating U.S. sanctions. The army’s employee allegedly provided jewelry, clothing, hotel rooms, meals, and other gifts for the individual for a value of around USD 3,349. U.S. citizens are barred from dealing with sanctioned entities. While the former Army employee was facing a maximum penalty of USD 36.3 million, the allegations were settled for USD 5,000.