This Week in Compliance

U.S. Indicts Ex-Goldman Sachs Banker for Graft

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 indictment of a former Goldman Sachs executive for FCPA violations in Indonesia. Keep reading for this breaking story and find more news below:

Top Story

U.S. Indicts Ex-Goldman Sachs Banker for Graft:

A former Goldman Sachs executive has been indicted by the US Securities and Exchange Commission (SEC) for allegedly attempting to bribe public officials in Ghana. According to the SEC, Asante Berko violated the FCPA by setting up a bribery scheme in which a Turkish energy company was used to funnel USD 2.5 million to a Ghanian intermediary that paid bribes to high-level Ghanian public officials. Reportedly, Goldman’s compliance personnel took the appropriate steps to prevent the corrupt acts and collaborated fully with the SEC’s investigation. As a result, only Berko will face individual enforcement action. Even though Goldman is not bearing the costs of the misdemeanor directly, the indictment has been regarded as an additional blow to the investment bank’s reputation. 

Business

Westpac Takes a $900 Million Charge for Potential Laundering Fine:

Australian-based bank Westpac has set aside AUD 900 million (USD 574 million) to settle charges over potential money laundering. Although there is still uncertainty about the Federal Court’s final decision, the fine is still expected to be the largest in Australia’s economic history. Australia’s Transaction Reports and Analysis Centre’s (AUSTRAC) investigation revealed that Westpac had failed to flag 54,000 suspicious transactions from 2013 to 2019 involving a criminal ring in the Philippines. After the scandal came to light, Westpac’s CEO and executive chairman stepped down from their position and the bank announced it would recruit 200 people in financial crime and compliance to ramp up its compliance efforts. 

U.S. Success Puts Focus on Swiss Failures in FIFA Corruption Case:

Last week, the U.S. Department of Justice (DOJ) announced new information on FIFA’s former President Sepp Blatter’s suspected involvement in a long-haul bribery investigation. Swiss authorities, which had opened two cases into the former president, have stated they will drop one of their two ongoing investigations. The dropped case involves corruption suspicions in the selling of broadcasting rights to the Caribbean Football Union in the 2010 and 2014 World Cups. The setback in Blatter’s prosecution has been regarded as a blow to Swiss prosecutors’ credibility who are yet to match the number of successful enforcement actions in the US.

SEC Awards Over USD 27 Million to a Whistleblower: 

The biggest whistleblower award in 2020 was granted this week when the SEC issued a USD 27 million award to an individual that contributed significantly to an investigation. According to the Commission, the whistleblower provided information on overseas misconduct that saved investigators significant resources as well as provided pivotal investigative leads for the case. 

Alstom Bribery Case Cooperator Avoids Prison Sentence:

After Alstom S.A paid a USD 722 million fine for FCPA violations in Indonesia last month, a former executive who collaborated with prosecutors as a witness has been given two years of supervised release.  Larry Pucket, who provided information on his colleagues’ dealings as well as information on his culpability, was also ordered to pay a fine and do 100 hours of community service. Other involved executives have been given up to 15 months in jail for Alstom’s bribery scandal involving money laundering in Indonesia and other locations.

Government

U.S. returns another USD 300 million of recovered 1MDB funds to Malaysia:

The U.S. Department of Justice has announced the repatriation of another USD 300 million of stolen assets from Malaysia’s sovereign wealth fund, the 1DMB fund. Malaysia’s former PM set up the sovereign wealth fund in 2009. It has been estimated that USD 4.5 billion were laundered via different financial institutions in several countries including Switzerland, Singapore, the United States, and Luxembourg. The recovered assets are part of the DOJ’s deal with fugitive financier Jho Low who invested substantial parts of the fund in high-end real estate properties in California, New York, and London.

Vatican Removes Financial Watchdog Head as Scandal Continues:

Amid ongoing skepticism from EU regulators and a long-spanning probe into the Vatican’s anti-money laundering provisions, Tomasso di Ruzza, the director of the Vatican’s Financial Information Authority (AIF), was forced to step down. While the investigation has not yet led to any charges, the step-down has raised further concerns about the Vatican’s ability to build an internationally credible AML system.

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