This week, John and Elliot discuss the arrest of a senior aide to several NY governors for violations of the Foreign Agents Registrations Act and money laundering, COVID fraud charges in NJ, the seizure of an airplane owned by Venezuelan president Maduro, the uncovering of corruption in Malta by a US healthcare company, and several other items impacting the financial crime prevention community.
Chinese Influence in NY, Covid Fraud, Maduro’s Plane, and Healthcare Corruption - Transcript
Elliot Berman: Hey John, how are you today?
John Byrne: Good Elliot. We're starting to feel fall weather here in northern Virginia. So that's always nice. And we won't bore people as we do with Marquette basketball, but football season starts this week. So we're gearing up for that. So that's always great.
Elliot Berman: Yes. Marquette basketball will be on us pretty quickly, but first we have to do some NFL so we can either be happy or miserable.
John Byrne: Yeah, people that know me know that sadly, but in most cases not so sad, a Giants fan for many years. And I'm actually going up to the first game against the Vikings. And it's we're in first place, zero, zero. It's pretty good.
Elliot Berman: Yeah, but you're tied for first.
John Byrne: We are tied for first. All right. So a bunch of things. I'm going to jump off first with our friends at OCCRP, the Organized Crime and Corruption Reporting Project, they had a scoop the other day on their site.
I'm just going to give you a brief, the brief headline is that the US based Steward Healthcare had secured a massive public contract in Malta. And according to both reporting from the organization and some leaked documents, a Pakistani businessman who helped do that, his name was Shaukat Ali, he said that he and his son were only paid normal consulting fees, but the documents showed quite a bit more.
And so there's a lengthy story on their website about that, including some of the documents. They were offered according to the reporting participation rights, a 30% cut of dividends, all sorts of other things. So they were not normal consulting fees. Again, OCCRP does a lot of excellent work uncovering corruption throughout the world.
Urge folks that are interested in that space to take a look at them. They also cover some of the payments made to the businessman and his son were done through Switzerland. An interesting scoop for those investigative journalists that do a lot of really good work.
Elliot Berman: They do a lot of great work and and they find things that you and I might not normally, hear about at all. This one, there had been some press about the challenges, but I think the details in this report are quite a bit deeper and make clear the level of corruption that was involved.
So speaking of corruption the US has seized Venezuelan President Maduro's plane. I'm assuming it's not his only plane. But a plane that was purchased by the President through several shell companies. It was in the Dominican Republic at the time. But US officials have seized the plane and moved it to Florida. And it's an indication of concerns in addition to the election concerns about the general approach of the Maduro administration.
John Byrne: One other thing that was just reported as we go to record today a Venezuelan judge has actually ordered the arrest of the presidential candidate Edmundo González who the US and others believe actually did win the election. So that's also something that was just reported today as well. Not just unfortunate, but confirms why the US is doing what they're doing regarding Venezuela.
Elliot Berman: We also saw in the mainstream media over the last 48 hours that a former aide to several New York governors has been charged in New York with acting as an agent for the Chinese government. And this person had administrative or senior support positions in both Hochul and Cuomo administrations, and worked in state government there for over 10 years.
But she and her husband have both been charged with money laundering, conspiracy to commit bank fraud, as well as misusing identification and other things. It's shocking in that, we read a lot about China trying to infiltrate and influence the United States, but this is pretty stunning, I would say.
John Byrne: And based on the unsealed documents they apparently use shell companies, iCloud accounts, and WeChat messages with everything in Mandarin for their alleged crimes. As you mentioned, she was hired over 10 years ago, started off as a chief of staff in a representative's office in the state assembly, then worked for then governor Cuomo. She also worked for the department of financial institutions. So she's been all around the New York Governmental infrastructure. This'll be interesting. I think the case starts toward the end of September, according to the reporting that I've seen.
Just sticking with potential corruption it was also reported that several members of the House Oversight Committee, Democratic members have sent a letter to candidate Trump and asking if they've illegally received money from the government of Egypt and whether that money from Cairo, which is over $10 million, played a role in his run for president in 2016.
Trump is under no obligation to respond, of course, but this is based in large part on an earlier Washington Post article that talked about the details of the Department of Justice probe on this. So that's also something that bears watching. If other members of the media pick up on this. The argument is that the Post said that prosecutors and FBI agents were actually blocked by DOJ officials in the previous administration to stop the investigation.
So more to come on that, I'm sure.
Elliot Berman: We've talked a number of times over the last number of months about the changes that are happening in the EU in their overall anti money laundering regime, and the European Parliament in the last few days has issued a briefing paper that is a very basic overview of what's going on in the EU.
But it does have a section on the EU response and legal framework to the international cooperation efforts and things like that. And I think it's worth noting and being aware that it's out there. If you're either looking to do business in the EU, you already have staff or offices in the EU or a lot of transactions in the EU, and want to know what's a good basic outline and something to introduce your domestic staff to, I'd recommend that you can go to the European Parliament website.
The title is Understanding the EU's Response to Money Laundering, and you can search and find it. It's issued by the European Parliamentary Research Service. Recommend that to people just again as a way to stay up to speed on the changes that are working their way through the EU, some of which don't take full effect until the beginning of 2027.
John Byrne: So back in July, we did our webinar on romance scams. The IRS criminal division announced late last week that a Cincinnati woman was sentenced in the district court to 24 months in prison for laundering money for online romance scammers. She pled guilty in February, 2024, that she laundered more than $8 million in scam proceeds.
She maintained multiple business bank accounts and used purported jewelry business accounts solelyfor money laundering. As part of the sentence she'll have to pay at least $1.7 million in restitution. And the press release goes on to talk about the work that was done by IRS:CI, and obviously in conjunction with the US Attorney's Office in the Southern District of Ohio. So unfortunately, the online romance scams and the other aspects of relationship scams still continue to happen. That's obviously why we did the program in July, but our good partners at the IRS are very much engaged in identifying and prosecuting this crime.
Elliot Berman: We also saw that the US Attorney's Office for the District of New Jersey announced that a Bergen County man had been charged in a COVID-19 fraud scheme. This one was pretty big. Followed the format that we've seen before, filing false information to get access to both PPP funds and other funds.
This is just the charging document. So again much to happen before an actual verdict or some kind of a plea might occur. But we've talked about the fact that, and talked with others about the fact that COVID 19 fraud, even though we're on several years past the end of the pandemic, are still being uncovered and prosecuted. And and this is another example.
John Byrne: Bergen County is where I went to high school, so that's why I popped up on my feed there. But yeah, you're right, COVID fraud still continues to be a major challenge. And we're going to continue to see more examples of that.
I wanted to mention that a good friend of ours, Liz Fraccaro has accepted a job with the Jewelers Vigilance Committee, which is an organization that does work in a variety of spaces, but in anti money laundering and sanctions. And she was a member of the Antiquities Coalition.
So we were happy to see Liz moved to a new role. But I thought it was important to reference two things. One is, at some point in the future, we're going to reach out to the JVC to do a podcast and have them talk to our community about all the work they're doing in AML, CFT, and sanctions. But they just issued fairly recently a paper or training tool on understanding sanctions that's on their website.
This is jvclegl. org, and it goes through a number of recommendations for their community. They have FAQs on Russia related information that they put on there to talk about that and how it impacts the jewelry industry. I just urge folks that have clients in that space or are just generally interested in how a non traditional financial institution handles the Bank Secrecy Act and all the
adjacent challenges, how they do that.
So again, we're hoping to get them Maybe sometime before the end of the year, sit down with a lengthier conversation, but jvclegal.org and it's on the resource page.
Elliot Berman: Very interesting and I think a good look at as you pointed out, how a non traditional financial services part of the industry deals with this, where we have a number of things pending antiquities, maybe at some point art dealers. And this is a good indication that it is in fact doable. It is a matter of getting the right people and putting the right effort behind it. So this is worth a good look.
John, this month our webinar is which will be September 26th, 1 p.m. Eastern time live stream is on the use of adverse media monitoring to enhance EDD and KYC. Both of which are something that are ongoing challenges.
And as developers put more and more effort into improving adverse media monitoring it's becoming a better and better tool. So we're going to talk with two experts, and I think people will find it interesting, particularly if you don't know much about AMM this will be a good learning opportunity, just an hour.
And John I know you've recorded a couple of things. You want to talk about those? They're not up yet, we'll get them put together and posted shortly.
John Byrne: We did one conversation with a researcher from a author from the FACT Coalition on environmental crime. So the policy brief that they posted, they're going to be doing a lengthier report in October. And then just earlier this week, we interviewed several folks from the Antiquities Coalition on whole series of topics, but also their take on the the lack of coverage for the art industry. I think you're going to find that extremely compelling.
And again, they've been excellent partners. And many of us have worked with them. As we've said before, the antiquities world is covered under the Bank Secrecy Act, but there are no regulations just yet.
Elliot Berman: That sounds good, John. So you have a good rest of the week and enjoy the early fall weather and the beginning of football season. And we'll talk again next week.
John Byrne: Take care. Stay safe.
Elliot Berman: You too. Bye bye.